UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-16805
ASSOCIATED PLANNERS REALTY FUND, (A CALIFORNIA LIMITED PARTNERSHIP)
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4036980
State or other jurisdiction of (IRS Employer
incorporation or organization identification)
5933 WEST CENTURY BLVD., 9TH FLOOR, LOS ANGELES, CA 90045-5454
(Address of principal executive offices)
Registrant's telephone number, including area code (310) 670-0800
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulations S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ]
1
<PAGE>
PART I
ITEM 1. BUSINESS
Associated Planners Realty Fund (the "Partnership"), was organized in
November 1985, under the California Revised Limited Partnership Act. The
General Partner is West Coast Realty Advisors, Inc. ("WCRA"), a California
corporation.
The Partnership was organized for the purpose of investing in, holding, and
managing improved, unleveraged income-producing property, such as residential
properties, office buildings, commercial buildings, industrial properties, mini-
warehouse facilities, and shopping centers ("Properties"), which are believed to
have potential for cash flow and capital appreciation. The Partnership intends
to own and operate such Properties for investment over an anticipated holding
period of approximately five to ten years. At December 31, 1996, the
Partnership had no employees.
The Partnership's principal investment objectives are to invest the net
proceeds in real 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 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 Partnership acquired an 81.2% interest in two office buildings on
December 31, 1986 in a joint venture with a related party, a 100% interest in a
shopping center on January 23, 1987, a 100% interest in a commercial office
building on November 12, 1987, and a 100% interest in a mini-warehouse
facility on May 9, 1988. The terms of the joint venture call for Associated
Planners Realty Fund to receive 81.2% of the operating profits and depreciation
expense on the property. Upon disposition of the property, the Partnership will
be entitled to 81.2% of the proceeds received from the sale of the property.
All properties are located in California except for the mini-warehouse which is
located in Washington. The mini-warehouse was sold in May 1995 (See Item 7 -
Management's Discussion And Analysis of Financial Condition And Results of
Operations).
The ownership and operation of any income-producing real estate is subject to
those risks inherent in all real estate investments. These include national and
local economic conditions, the supply of and demand for similar types of real
property, competitive marketing conditions, zoning changes, possible casualty
losses, and increases in real estate taxes, assessments, and operating expenses,
as well as others.
The Partnership is subject to competitive conditions that exist in the local
markets where it operates rental real estate. These conditions are discussed in
Item 2-- "Properties".
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 WCRA.
ITEM 2. PROPERTIES
The properties acquired and disposed of by the Partnership are described
below:
2
<PAGE>
SANTA FE BUSINESS PARK (TWO PROPERTIES)
On December 31, 1986, the Partnership purchased two out of six office buildings
("Building 3" and "Building 5"), located in a complex known as Santa Fe Business
Park (the "Park"). The Park is located in Encinitas, California, near the
intersection of Encinitas Boulevard and Interstate 5. The existence of a major
highway (Interstate 5) near the office park makes it a desirable and accessible
location for tenants. As the Partnership owns two of six buildings that make up
Santa Fe Business Park, it is subject to competition from the other four
buildings in the complex.
The buildings were acquired in a joint venture with Prado Land Company (Prado),
a California General Partnership, which is an affiliate of the General Partner.
The Partnership has an 81.2% interest in the buildings and related profits and
losses, and Prado has an 18.8% interest.
The Park was completed in 1982, and is situated on 163,765 square feet of land.
The buildings are two-story, constructed with steel and wood frames, with
exterior walls of concrete and wood. There is extensive use of windows in the
modern design, and ample parking is available around both buildings.
Building 3 contains 6,944 rentable square feet. As of December 31, 1996, the
building was 76 % occupied and the average rent per occupied square foot was
$1.11. Building 5 contains 6,944 rental square feet, and its offices range in
size from 90 to 350 square feet. Building 5 is operated as an executive suite
with on-site management and several desirable shared amenities, such as
conference rooms, showers, secretarial services, and wet bars. As of December
31, 1996, the occupancy rate was 96 %, and the average monthly rent per occupied
square foot was approximately $1.40 . No one tenant occupied 10% or of the
rental square footage for Building 5 as of December 31, 1996. Tenants occupying
more than 10% of Building 3 are noted below:
John Powell & Associates: 31.2% of rentable square footage; rent is
$28,487 per year (44% of total rent for the building). Lease expires January
31, 1999.
Synteract: 29% of rentable square footage; Rent is $20,057 per year (31% of
total rent for the building). Lease expires September 30, 1997. Renewal
options: One year for $22,000.
PLG: 16.3% of rentable square footage; Rent is $15,819 per year (25% of total
rent for the building). Lease expires September 30, 1998. Renewal options:
None.
The building and improvements are depreciated over 5 to 19 years using a
straight-line method for both financial and income tax reporting purposes. The
financial and income tax basis for the property are the same. In the opinion of
the General Partner, the property is adequately insured. The property is
managed by West Coast Realty Management, Inc. ("WCRM"), an affiliate of the
General Partner.
SHAW VILLA SHOPPING CENTER
On January 23, 1987, the Partnership purchased the Shaw Villa Shopping Center
(the "Center"), a 12,678 net leasable square foot shopping center located in
Clovis, California.
The Center was completed in 1978, and is situated on 69,260 square feet of land.
The Center consisted of two buildings of 8,250 and 4,428 square feet each.
Stores range in size from 1,000 to 3,000 square feet in the larger building.
There are ninety-two parking spaces available within the Center.
3
<PAGE>
Wherehouse Entertainment, Inc. (a nationally known audio/video store) occupied
the entire smaller building under a lease that expired January 1994, and at
which time it then began paying $3,540 per month in rent ($0.80 per square foot
plus a percentage of rent based on taxable sales) on a month to month lease. On
June 15, 1995, The Wherehouse moved into a larger space (4,000 square feet) and
began paying rent at the rate of $4,000 per month on a month-to-month basis. On
November 4, 1995, the Wherehouse moved into a larger, newly constructed space,
and signed a lease which runs through October 31, 2010, and calls for minimum
monthly rent of $10,588 per month. (No other tenant besides Wherehouse
Entertainment, Inc., occupies 10% or more of the rental square footage of the
Shaw Villa Shopping Center).
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 financed by a one year
construction loan provided by Valliwide Bank of Fresno. The total construction
loan commitment was for $1,365,000 which matured on October 5, 1996. Borrowings
on the construction loan totaled $1,225,950. The constructions amortization was
interest only with payments of $89,045 paid during the nine months ended
September 30, 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.
Construction at the shopping center was completed in two phases. First, 4,000
square feet of additional space was erected on the new parcel, contiguous to an
existing building at Shaw Villa. Construction of this phase was completed June
1, 1995. The Wherehouse then moved into this space on June 15, 1995. The
space occupied by the Wherehouse was then remodeled and expanded by
approximately 3,900 more square feet, for a total of 8,272 square feet. This
construction was completed by November 1, 1995. The Wherehouse was then
relocated to the remodeled space on November 4, 1995, and the Partnership was in
a position to lease the new 4,000 square foot space. As of December 31, 1996,
the Partnership has thus far been successful in obtaining a new tenant for the
4,000 square foot space.
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 20
years; due November 1, 2006; and current monthly payments of principal and
interest of $13,593.
In August 1995, Wherehouse Entertainment (the parent company of the
Wherehouse), sought protection under Chapter 11of the Bankruptcy Code and
emerged from Bankruptcy on February 1, 1997. The terms of the Partnership's
lease with The Wherehouse remains unchanged. Despite this filing, the
Wherehouse store in the Shaw Villa Center has continued to operate and the
Partnership has continued to collect payments due. The Wherehouse has contacted
the Partnership regarding a possible reduction in its rent obligation in
connection with its new enlarged space. In addition, the Partnership reimbursed
The Wherehouse $165,000 per an agreement to reimburse the tenant for
improvement costs that the tenant has incurred in connection with the
construction and move-in to the new space.
4
<PAGE>
This Center is dependent upon the vitality of the consumer market in the general
area. There are several other small shopping centers in the area, similar to
the one owned by the Partnership. There is, however, a large enough customer
base for the retail and service business in the general area. Although all
areas of California have been affected by the economic slowdown, layoffs, plant
closings and military cutbacks, these economic factors are not expected to
significantly impact the occupancy of the shopping center.
The building and improvements are depreciated over 31.5 to 40 years using a
straight-line method for both financial and income tax reporting purposes. The
financial and income tax basis for the property are the same. In the opinion of
the General Partner, the property is adequately insured. The property is
managed by WCRM.
PACIFIC BELL BUILDING, SIMI FREEWAY COMMERCE CENTER
On November 12, 1987, the Partnership purchased the Pacific Bell Building
located in the Simi Freeway Commerce Center in Simi Valley, California.
The building's construction was completed in 1986, though the sole tenant,
Pacific Bell, did not occupy the building until August 1987. The building
provides 26,154 rentable square feet and is centrally located on the property's
2.06 acres of land.
The average monthly rent per occupied square foot was approximately $.76
($19,780 per month) up until September 15, 1997. The lease is a "triple net"
lease, requiring Pacific Bell to pay insurance, taxes, maintenance, and all
other operating costs.
In August 1995, as part of a general Company-wide consolidation, Pacific
Bell vacated the property. Subsequent to that date, in November 1995, a
subsidiary of Pacific Bell moved into the building to occupy a small portion of
the property (1,700 square feet). Pacific Bell continues to pay its lease
obligation on a regular basis.
The building and improvements are depreciated over 31.5 to 40 years using a
straight-line method for both financial and income tax reporting purposes. The
financial and income tax bases for the property are the same. In the opinion of
the General Partner, the property is adequately insured. The property is
managed by WCRM.
Country Wide Inc. subleased the property from Pacific Bell on a lease that
expires concurrently with the lease with Pacific Bell. Country Wide has an
option to extend the lease for three years to expire on September 15, 2000.
This election must be made by May 15, 1997.
SHURGARD MINIWAREHOUSE
On May 9, 1988, the Partnership purchased the Shurgard Mini-warehouse located
in Puyallup, Washington.
The building's construction was completed in 1978. The property is located
on 2.76 acres of land, and has 485 storage spaces providing 44,040 square feet
of rentable area. The property contains four separate single story storage
buildings and a small building in the front which serves as the office and
living quarters for the on-site manager. A network of asphalt driveways
connects the storage buildings. There is ample parking available, the open area
in the front is landscaped with grass, trees, and shrubs, and a computerized
gate provides security access to the storage buildings. The General Partner
engaged Shurgard Capital Management Corporation to manage this property.
5
<PAGE>
On May 15, 1995, the Shurgard Mini-Warehouse was sold to Shurgard Storage
centers, Inc. ("the Buyer"). The gross sales price was $1,550,000, although the
Partnership received $1,510,976 in net proceeds as a result of the transaction.
This net proceeds amount is calculated as the gross sale price of $1,550,000
less $23,486 in excise taxes paid to the State of Washington, less $4,332 in
miscellaneous escrow closing costs, less $11,206 in prepaid user rents, net of
rent receivable and property taxes, attributable to the Partnership. Net sales
proceeds for tax reporting purposes are $1,522,182. The amount of consideration
received from the sale of the property was arrived at through an arms-length
negotiation process with the Buyer. The sale was consummated for all cash
without the use of seller provided financing, or other installment sale
techniques. the Buyer of the property is an affiliate of the original seller of
the property that the Partnership acquired the property from in 1987. The sale
of the Shurgard property resulted in a $116,749 gain on sale.
The building and improvements were depreciated over 31.5 to 40 years using a
straight-line method for both financial and income tax reporting purposes. The
financial and income tax basis for the property were the same.
SUMMARY
As of December 31, 1996, the combined occupancy rate of all the Partnership's
properties, was 93%. In the opinion of the General Partner, all properties are
adequately covered by insurance.
The schedule below indicates the average annual occupancy rate expressed as a
percentage of rentable square feet for the last five years:
Year Santa Fe Shaw Villa Pacific Bell Shurgard Mini-
Business Park Shopping Building warehouse
- 2 properties Center
1996 Bldg.#3 = 76% 100% 100% n/a
Bldg.#5 = 92%
1995 Bldg.#3 = 66% 81% 100% n/a
Bldg.#5 = 82%
1994 Bldg.#3 = 0% 76% 100% 85%
Bldg.#5 = 80%
1993 Bldg.#3 = 0% 92% 100% 80%
Bldg.#5 = 62%
1992 Bldg.#3 = 100% 100% 100% 80%
Bldg.#5 = 84%
6
<PAGE>
The total original acquisition cost to the Partnership of each property and
the dates of acquisition were as follows:
DESCRIPTION ACQUISITION ACQUISITION
COST DATES
Santa Fe Business Park (Building 3) $ 705,918 12/31/86
Santa Fe Business Park (Building 5) 853,560 12/31/86
Shaw Villa Shopping Center 2,833,241 01/23/87
Pacific Bell Building 2,616,523 11/12/87
Shurgard Mini-warehouse (Sold May 15, 1,603,144 05/09/88
1995)
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
7
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
At December 31, 1996, there were 7,499 limited partnership units outstanding
and 669 unit holders of record. The units sold are not freely transferable and
no public market for the sold units presently exists or is likely to develop.
There are no units available for sale at December 31, 1996.
Distributions totaling $236,894, $1,769,282 and $348,703, were made to
limited partners in 1996, 1995, and 1994, respectively, and were made to unit
holders of record at the end of the calendar quarters indicated below. These
distributions constituted a return of capital of $59,838, $1,492,408 and
$130,811, in 1996, 1995, and 1994. The general partner distributions totaled
$26,320, $35,953 and $38,745 for 1996, 1995, and 1994. In addition, $68,991 in
distributions were paid to unit holders subsequent to the year-end in February
1997.
The distribution amounts for 1996 and 1995 are summarized below:
Record Date Date Paid Per Unit Units Total Paid
Outstanding
12/31/94 02/03/95 10.00 7,499 74,990
03/31/95 07/07/95 $182.69-207.39* 7,499 1,506,817
06/30/95 11/06/95 7.50 7,499 56,243
09/30/95 11/06/95 7.50 7,499 56,242
12/31/95 02/06/96 7.14 7,499 53,543
03/31/96 04/30/96 8.15 7,499 61,117
06/30/96 08/06/96 8.15 7,499 61,117
09/30/96 11/05/96 8.15 7,499 61,117
* Pertains to distribution of proceeds from the sale of the Shurgard property.
Distributions are made based on income from operations, before depreciation
and amortization, available as a result of the previous quarter's operations.
8
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data should be read in conjunction with the financial
statements and related notes and Item 7--" Management Discussion and Analysis of
Financial Condition and Results of Operations" appearing elsewhere in this
report.
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Operations for the years ended December 31:
Revenues $722,358 $639,039 $ 754,950 861,238 $ 848,087
Net Income 177,055 276,874 217,892 302,687 263,087
Net Income per Limited Partner 19.69 33.23 24.45 34.60 29.81
Unit*
Distributions per Limited Partner 33.65 235.94 46.50 47.50 40.00
Unit *
Financial position at December 31:
Total Assets 6,146,615 6,011,070 6,255,376 6,459,247 6,491,943
Partners' Equity 4,392,108 4,478,268 5,985,898 6,116,709 6,170,224
</TABLE>
[FN]
*Net income and distributions per limited partner unit were based on the
weighted average number of outstanding units.
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - 1996 VS. 1995
Operations for the year ended December 31, 1996 reflect an entire period of
operations for the four Partnership properties.
Rental revenue increased $95,247 (15%) from 1995 to 1996, due to increased
occupancy of the Santa Fe Business Park Building, offset by the sale of the
Shurgard Mini-Warehouse facility on May 15, 1995, which resulted in
approximately $165,000 less in rental revenue if the property had been held the
entire year (based on current and prior year results). Interest income
decreased $11,928 (57%) during 1996 as compared to 1995 due primarily to a
large amount of funds held from approximately May 16 to July 7,1995 as a result
of the sale of the Shurgard property. In addition, the sale of the Shurgard
property in May 1995 resulted in a $116,749 gain on sale, which increased net
income for the year ended December 31, 1995 to $276,874, or 36% higher than the
year ended December 31, 1996 level.
9
<PAGE>
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The Partnership overall costs and expenses increased in 1996 as compared to
1995. These totaled $561,288--a $90,724 (19.3%) increase from 1995's level of
$470,564. This increase was the result of increases in three major expense
categories, offset by a decrease in general and administrative expenses.
Interest expense increased $100,420 (100%) as a result of interest charges
incurred after the completion of construction at the Clovis, California
property. Property operating costs increased $11,740 (4.5%) primarily due to an
increase in property management fees and repairs and maintenance in
connection with the Clovis property. Depreciation expense increased $7,939
(6.5%) due to the completion of the construction in progress of the Clovis
property, offset by the sale of the Shurgard property in 1995. The construction
was completed during 1995 and total construction costs of $1,372,000 was
allocated to land, building and improvements. General and administrative costs
decreased $29,277 (33%) due to lower general partnership insurance costs and
lower partnership management fees.
The net result of these more significant variances is that the net income for
1996 was $99,819 (36%) lower than for 1995. This decrease can be attributed to
the gain of $116,749 on the sale of the Shurgard property in May 1995, offset by
increased occupancy at the Santa Fe Business Park Building. On an operating
cashflow basis (net income plus depreciation expense, less the gain on sale of
property) the Partnership realized $282,491 in 1995, compared to $307,360 in
1996. This $24,869 increase is primarily due to the increased occupancy at the
Santa Fe Business Park Building.
RESULTS OF OPERATIONS - 1995 VS. 1994
Operations for the year ended December 31, 1995 reflect only four and one
half months of operations for the Shurgard property, as this property was sold
on May 15,1995 to an unaffiliated third party. As such, the overall results of
the Partnership are not directly comparative to those of 1994, due to the
ownership of less property, and the distribution of sales proceeds from the
Shurgard property on July 7, 1995 (shortly after the sale).
Rental revenue decreased $131,694 (18%) from 1994 to 1995, primarily due to the
sale of the Shurgard property in May which resulted in approximately $165,000
less in rental revenue if the property had been held the entire year (based on
current and prior year results). The loss of revenue on Shurgard was offset by
an increase in revenue on the 179 Calle Magdalena property which was vacant
during 1994, but had $26,410 in revenue during 1995, due to some leasing
activity at the end of the year. Interest income increased $15,783 (308%)
during 1995 as compared to 1994 due primarily to a large amount of funds held
from approximately May 16 to July 7 as a result of the sale of the Shurgard
property. In addition, the sale of the Shurgard property resulted in a $116,749
gain on sale, which increased net income for the year to $276,874, or 2.7%
higher than 1994's level.
The Partnership benefited from lower overall costs and expenses in 1995 as
compared to 1994. These totaled $470,564--a $77,601 (14.1%) decrease from
1994's level of $548,165. This decrease was the result of decreases in three
major expense categories. Property operating costs decreased $36,116 (12%) due
to the sale of the Shurgard mini-warehouse. In addition, there was less repair
and maintenance costs on all other properties in 1995 as compared to 1994.
General and administrative costs decreased $19,699 (18%) due to lower general
partnership insurance costs and lower partnership management fees (due to lower
distributions of quarterly income to the limited partners resulting in lower
partnership management fees being paid to the General Partner). Depreciation
expense decreased $19,127 (14%) due to the sale of the Shurgard property.
10
<PAGE>
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The net result of these more significant variances is that the net income for
1995 was $58,982 (27%) higher than for 1994. Even though the Shurgard property
was sold in May, the gain reported in connection with the sale greatly offset
the loss of revenues from that property. In addition, several categories of
expenses dropped as well. The gain on the sale of the property is of course a
one-time occurrence, but the drop in these categories of expenses is anticipated
to be an ongoing occurrence. On an operating cashflow basis (net income plus
depreciation expense, less the gain on sale of property) the Partnership
realized $282,491 in 1995, compared to $359,385 in 1994. This $76,894 drop is
primarily due to the loss in positive cash flow from the Shurgard property.
In summary then, a significant amount of cash was generated in 1995 as the
result of the sale of the Shurgard Mini-warehouse and continuing operating
profits from the various properties. The Partnership elected to distribute most
of these amounts to the partners. The large construction project undertaken at
the Shaw Villa Shopping Center was funded primarily with the use of proceeds
received from a construction loan. In comparison, 1994's results were
reflective primarily of a full year of operations for all of the properties
originally acquired by the Partnership, without any construction activities or
property dispositions.
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 (the Santa Fe Business Park (two
buildings)). During 1987, the Partnership purchased two additional properties
for $3,829,207 cash (the Shurgard Mini-Warehouse and the Shaw Villa Shopping
Center). 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 (the
Pacific Bell Building). As of December 31, 1988, the Partnership completed its
property acquisition phase.
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
$1,365,000 which matured on October 5, 1996. Borrowings on the construction
loan totaled $1,225,950 as of December 31, 1995. The construction loan
amortization is interest only with payments of $89,045 paid during the nine
months ended September 30, 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.
11
<PAGE>
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
In May 1995, the Partnership began the first step of the disposition phase
of the Partnership's life cycle through the sale of the mini-warehouse located
in Puyallup, Washington to Shurgard Storage Centers, Inc. The Partnership
received approximately $1,510,976 in cash in connection with the sale (there was
no debt assumed in connection with the sale). The General Partner did not
receive any compensation in connection with its services provided in selling the
property. The sale of the Shurgard property resulted in a gain of $116,749.
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 $1,497,782 at December 31,
1996.
The Pacific Bell Building was vacated by its tenant (Pacific Bell) in
August 1995. However, the tenant continues to pay its rental obligation on the
building. The Pacific Bell lease ends September 1997. The Partnership has an
ongoing effort to locate a suitable tenant for the building prior to the
termination of this lease.
The Partnership is currently not actively marketing any of the Partnership's
remaining properties for sale at this time.
During the year ended December 31, 1996, the Partnership made distributions
to the general and limited partners totaling $263,215 of which $86,180
constituted a return of capital. The $263,215 in distributions compared
favorably to the $307,360 in cash generated from property operations (net
income plus depreciation expense). On February 4, 1997, the Partnership made a
distribution to limited partners totaling $68,991. Additionally, the
partnership distributed $$3,565 to the minority interest partner during the year
ended December 31, 1996. 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.
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.
12
<PAGE>
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
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.
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 and 1995. 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. Although the Partnership did sell the Shurgard Property in 1995,
there are currently no plans to sell additional properties in 1997. However,
the General Partner will review any unsolicited offers for the purchase of the
Partnership's properties to determine if a negotiated sale would be in the
Partnership's best interests.
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. In the 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, 1996, the General Partner earned partnership
management fees of $26,321. Subsequent to year-end, the General Partner
received a partnership management fee of $7,666. Partnership management fees
were paid and calculated 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 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:
13
<PAGE>
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
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.
CASH FLOWS 1996 VS. 1995
Cash and cash equivalents increased $103,113 for the year ended December 31,
1996 as opposed to a $67,073 increase for the year ended December 31, 1995. Net
cash from operating activities was $130,242 (31%) lower due primarily to changes
in various asset and liability account balances that resulted in an increase in
cash of $293,801 for the year ended December 31, 1996. Investing activities
resulted in a $195,741 decrease in cash as opposed to a $201,584 increase in
1995. 1996 decrease was to due the tenant improvements relating to the Shaw
Villa property and 1995's increase was due to cash received from the sale of
the Shurgard property ($1,522,182) exceeding cash applied towards construction
of the improvements at Shaw Villa ($1,389,009). Cash from financing activities
increased $5,053 in 1996 as opposed to a decrease of $558,554 in 1995. This was
due to the cash used for distributions to limited and general partners, less
proceeds from the construction loan in 1995.
CASH FLOWS 1995 VS. 1994
Cash and cash equivalents increased $67,073 for the year ended December 31, 1995
as opposed to a $103,521 decrease for the year ended December 31, 1994. Net
cash from operating activities was $116,863 (38%) higher due primarily to
changes in various asset and liability account balances that resulted in an
increase in cash. Investing activities resulted in a $201,584 increase in cash
as opposed to a $60,762 decrease in 1994. 1994's decrease was due to cash used
towards construction work at the Shaw Villa Shopping Center. 1995's increase
was due to cash received from the sale of the Shurgard property ($1,522,182)
exceeding cash applied towards construction of the improvements at Shaw Villa
($1,389,009). Cash used by financing activities was $558,554 in 1995 as opposed
to $349,939 in 1994. This was due to the cash used for distributions to limited
and general partners, less proceeds from the construction loan in 1995,
exceeding the distributions to limited partners and the Santa Fe Business Park
minority interest partner in 1994.
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.
14
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
PAGE
Report of Independent Certified Public Accountants 16
Consolidated Balance Sheets - December 31, 1996 and 1995 17
Consolidated Statements of Income for the years ended
December 31, 1996, 1995 and 1994 18
Consolidated Statements of Partners' Equity for the years ended
December 31, 1996, 1995 and 1994 19
Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994 20-21
Summary of Accounting Policies 22-23
Notes to Consolidated Financial Statements 24-28
Financial Statement Schedules
Schedule III - Real Estate and Accumulated Depreciation 34
Schedule IV - Mortgage Loans on Real Estate 35
15
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Associated Planners Realty Fund
(a California limited partnership)
Los Angeles, California
We have audited the accompanying consolidated balance sheets of Associated
Planners Realty Fund (a California limited partnership) and consolidated
entities, as of December 31, 1996 and 1995 and the related consolidated
statements of income, partners' equity, and cash flows for each of the three
years in the period ended December 31, 1996. We have also audited the schedules
listed in the accompanying index. These consolidated financial statements and
schedules are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements and
schedules are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements and schedules. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Associated Planners
Realty Fund (a California limited partnership) and consolidated entities, at
December 31, 1996 and 1995, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.
Also, in our opinion, the schedules presents fairly, in all material respects,
the information set forth therein
BDO SEIDMAN, LLP
Los Angeles, California
February 12, 1997
16
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEETS
<CAPTION>
December 31, 1996 1995
<S> <C> <C>
ASSETS
Rental real estate, less accumulated
depreciation (Note 2) $5,909,116 5,843,681
Cash and cash equivalents 206,413 103,300
Other assets 31,086 64,089
Total assets $6,146,615 $6,011,070
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accounts payable:
Trade $4,989 $2,368
Related party (Note 5) 6,894 26,668
Notes payable (Note 3) 1,497,782 1,225,950
Security deposits and prepaid rent 31,424 44,848
Total liabilities 1,541,089 1,299,834
MINORITY INTEREST 213,418 232,968
PARTNERS' EQUITY (NOTES 6 AND 7)
Limited partners:
$1,000 stated value per unit - authorized
7,500 units' issued and outstanding 4,350,158 4,133,882
General partner 41,950 344,386
Total partners' equity 4,392,108 4,478,268
Total liabilities and partners' equity $6,146,615 $6,011,070
</TABLE>
[FN]
See accompanying summary of accounting policies and notes to consolidated
financial statements.
17
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Years ended December 31, 1996 1995 1994
<S> <C> <C> <C>
REVENUES
Rental (Notes 2 and 4) $713,377 $618,130 $749,824
Interest 8,981 20,909 5,126
722,358 639,039 754,950
COSTS AND EXPENSES
Operating 271,514 259,774 295,890
General and administrative 59,049 88,326 108,025
Depreciation and amortization 130,305 122,366 141,493
Interest expense 100,420 --- ---
Loss on government securities --- 98 2,757
561,288 470,564 548,165
INCOME FROM OPERATIONS 161,070 168,475 206,785
GAIN ON SALE OF PROPERTY --- 116,749 ---
MINORITY INTEREST IN NET LOSS (INCOME)
OF JOINT VENTURES (NOTE 5) 15,985 (8,350) 11,107
NET INCOME $177,055 $276,874 $217,892
NET INCOME PER LIMITED
PARTNERSHIP UNIT (Note 6) $19.69 $33.23 $24.45
</TABLE>
[FN]
See accompanying summary of accounting policies and notes to consolidated
financial statements.
18
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1995
<CAPTION>
Limited Partners General
Total Units Amount Partner
<S> <C> <C> <C> <C>
BALANCE, January 1, 1994 $6,116,709 7,499 5,819,311 297,398
Net income for the year 217,892 --- 183,369 34,523
Distribution to limited (348,703) --- (348,703) ---
partners
BALANCE, December 31, 1994 5,985,898 7,499 5,653,977 331,921
Net income for the year 276,874 --- 249,187 27,687
Distribution to limited (1,769,282) --- (1,769,282) ---
partners
Distribution to general (15,222) --- --- (15,222)
partner
BALANCE, December 31, 1995 4,478,268 7,499 4,133,882 344,386
Net income for the year 177,055 --- 147,622 29,433
Distribution to limited (236,894) --- (236,894) ---
partners
Distribution to general (26,321) --- --- (26,321)
partner
Reallocation of capital --- --- 305,548 (305,548)
(Note 7)
BALANCE, December 31, 1996 $4,392,108 7,499 $4,350,158 $41,950
</TABLE>
[FN]
See accompanying summary of accounting policies and notes to consolidated
financial statements.
19
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOW
<CAPTION>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Years ended December 31, 1996 1995 1994
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $177,055 $276,874 $217,892
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 130,305 122,366 141,493
Gain on sale of property --- (116,749) ---
Minority interest in net (loss) income (15,985) 8,350 (11,107)
Increase (decrease) from changes in:
Government securities --- 55,554 74,649
Other assets 33,003 48,624 (55,030)
Accounts payable-trade 2,621 (21,587) (2,386)
Accounts payable-related party (19,774) 26,567 (38,002)
Security deposits and prepaid rents (13,424) 24,745 (19,528)
Other liabilities --- (701) (801)
Net cash provided by operating 293,801 424,043 307,180
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property --- 1,522,182 ---
Additions to rental real estate (195,740) (1,389,009) ---
Additions (deletions) to construction --- 68,411 (60,762)
in progress
Net cash provided by (used in) (195,740) 201,584 (60,762)
investing activities
</TABLE>
20
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOW (CONT.)
<CAPTION>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Years ended December 31, 1996 1995 1994
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from refinancing 271,832 1,225,950 ---
Distributions to limited partners (236,894) (1,769,282) (348,703)
Distributions to general partners (26,321) (15,222) ---
Distributions to minority interest (3,565) ---- (1,236)
Net cash provided by (used in) financing 5,052 (558,554) (349,939)
activities
NET INCREASE (DECREASE) IN CASH AND CASH 103,113 67,073 (103,521)
EQUIVALENTS
CASH AND CASH EQUIVALENTS, beginning of 103,300 36,227 139,748
year
CASH AND CASH EQUIVALENTS, end of year $206,413 $103,300 $36,227
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION:
CONSTRUCTION LOAN EXTINGUSIHMENT $1,225,950
NOTES PAYABLE ORIGINATION $1,497,782
</TABLE>
[FN]
See accompanying summary of accounting policies and notes to consolidated
financial statements.
21
<PAGE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(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 and southwestern
states. The Partnership purchases such properties on an all
cash basis or on a moderately leveraged basis and intends to own
and operate such properties for investment over an anticipated
holding period of approximately five to ten years.
BASIS OF The consolidated financial statements do not give effect to
PRESENTATION any assets that the partners may have outside of their
interest in the partner ship, 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 Assets are stated at cost. Depreciation is computed using the
ESTATE AND straight-line method over estimated useful lives ranging from
DEPRECIATION 5 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 Rental revenue is recognized on a straight-line basis to the
INCOME extent that rental revenue is deemed collectible.
INVESTMENTS The difference between historical cost and market value are
reported as unrealized gains or losses in the consolidated
statements of income.
For the purposes of the statements of cash flows, the
STATEMENTS Partnership considers cash in the bank and all highly liquid
OF investments purchased with original maturities of three
CASH FLOWS months or less, to be cash and cash equivalents.
USE OF The preparation of financial statements in conformity with
ESTIMATES 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.
22
<PAGE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
NEW ACCOUNTING Statement of Financial Accounting Standards No. 125,
PRONOUNCEMENTS "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.
23
<PAGE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF The Partnership began accepting subscriptions in March
PARTNERSHIP 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 (loss) allocations
varying from 1% to 15% and 1% depreciation and
amortization in accordance with the partnership
agreement.
2. RENTAL REAL The Partnership currently has interests in the following
ESTATE 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 Magdelena) December 31, 1986 $ 705,918
Encinitas, California
(187 Calle Magdelena) December 31, 1986 853,560
Clovis, California January 23, 1987 2,833,241
Simi Valley, California November 12, 1987 2,616,523
The major categories of property are:
December 31, 1996 1995
Land $2,361,894 $2,361,894
Buildings and improvements 4,600,688 4,404,947
Furniture and fixtures 46,660 46,660
7,009,242 6,813,501
Less accumulated depreciation 1,100,126 969,820
Net rental real estate $5,909,116 $5,843,681
24
<PAGE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Rental Real A significant portion of the Partnership's rental revenue
Estate was earned from tenants whose individual rents represent
(Continued) more than 10% of total rental revenue. Specifically:
Two tenants accounted for 34% and 18% in 1996;
One tenant accounted for 38% in 1995;
One tenant accounted for 30% in 1994;
3. 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
is for $1,365,000 which matured on October 5, 1996.
Borrowings on the construction loan totaled $1,225,950 as
of December 31, 1995. The construction loan amortization
is interest only with payments of $89,045 paid during the
year ended December 31, 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 $1,497,782 at December 31,
1996.
The carrying amount of the loan is a reasonable estimate
of fair value because the interest rates approximate the
borrowing rates currently available for mortgage loans
with similar terms and average maturities.
25
<PAGE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Notes Payable The aggregate annual future maturities at December 31,
(Continued) 1996 are as follows:
YEAR ENDING DECEMBER 31, 1996
1997 ..................................$25,730
1998 ................................. 30,619
1999 .................................. 33,524
2000 ................................. 36,706
2001 ................................. 40,189
Thereafter ................................1,331,014
Total $1,497,782
4. Future As of December 31, 1996, future minimum rental income
Minimum under existing leases, excluding month to month rental
Rental agreements, that have remaining noncancelable terms in
Income excess of one year are as follows:
Year Ending December 31, Amount
1997 $642,098
1998 421,831
1999 370,840
2000 360,655
2001 302,422
Thereafter 957,730
Total $ 3,055,576
Future minimum rental income does not include lease
renewals or new leases that may result after a noncan-
celable-lease expires.
5. Related Party (a) In accordance with the partnership agreement,
Transactions compensation earned by or services reimbursed to the
General Partner consisted of the following:
Year ended December 31, 1996 1995 1994
Partnership management fees $26,321 $35,953 $ 38,745
Administrative services:
Data processing 4,802 4,609 4,774
Postage 2,625 2,782 1,910
Investor processing 1,869 1,844 2,452
Investor communications 1,333 1,383 1,432
Duplication 923 922 955
Miscellaneous 448 461 477
$38,321 $47,954 $50,745
26
<PAGE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Related Party (b) Property management fees to West Coast Realty
Transactions Management, Inc. ("WCRM"), an affiliate of the General
(Continued) Partner, were $35,501, $22,930 and $22,728 for 1996, 1995
and 1994.
(c) Distributions of $3,566, $-0-, and $1,236 for 1996,
1995 and 1994 were made to an affiliate in connection
with the minority interest. The minority interest in
earnings (loss) income was $15,985, $(8,350) and $11,107
for 1996, 1995 and 1994.
(d) Related party accounts payable (receivable) are as
follows:
December 31, 1996 1995
Associated Financial Group, Inc. $ --- $ 13,351
West Coast Realty Advisors 3,000 6,000
West Coast Realty Management 8,965 7,317
Prado Land Co. (5,071) ---
$6,894 $26,668
6. Net Income The Net Income per Limited Partnership Unit was computed
and Cash in accordance with the partnership agreement using the
Distributions weighted average number of outstanding limited
Per Limited partnership units of 7,499 for 1996, 1995 and 1994.
Partnership
List
27
<PAGE>
ASSOCIATED PLANNERS REALTY FUND AND CONSOLIDATED ENTITIES
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Net Income
and Cash The Limited Partner cash distributions, computed in
Distributions accordance with the Partnership Agreement, were as
Per Limited follows:
Partnership
List Outstanding Amount Total
(Continued) Units Per Unit Distribution
September 30, 1995 7,499 $ 7.50 $ 56,242
June 30, 1995 7,499 7.50 56,243
March 31, 1995 7,499 10.00 74,990
December 31, 1994 7,499 10.00 74,990
Sub-total 262,465
Additional distribution
upon sale of property $182.69 - $207.39 1,506,817
Total $ 1,769,282
September 30, 1996 7,499 $ 8.15 $61,117
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 $ 236,894
Distributions were paid in the fiscal quarter following
the record date.
7. Reallocation Per the provisions of Section 11.1 (V)(ii) of the
of Partner Partnership Agreement, the General Partner determined
Balances that action was necessary to "cure the ambiguities"
within the Agreement. The ambiguity involved the
treatment of the partnership management fee, being paid
to the General Partner, as an expense of the Partnership,
as opposed to a general partner withdrawal of capital.
It was determined that the partnership management fees
shall be treated as a withdrawal of capital in 1996 and
beyond with a retroactive reallocation of capital for
partnership management fees paid prior to 1996. In order
to properly reflect the allocation, 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.
28
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
29
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership is managed by the General Partners and the Limited Partners
have no right to participate in the management of the Partnership or its
business. The General Partner is West Coast Realty Advisors, Inc., a California
corporation.
Resumes of the General Partners' principal officers and directors and a
description of the General Partners are set forth in the following paragraphs.
See description below.
WEST COAST REALTY ADVISORS, INC.
West Coast Realty Advisors, Inc. is a California corporation formed on May
10, 1983 for the purpose of structuring real estate programs and to act as
general partner of such programs. It is a subsidiary of Associated Financial
Group, Inc.
PHILIP N. GAINSBOROUGH (Born 1938) is Chairman and a Director of West Coast
Realty Advisors, Inc. He is also currently the President of Associated
Financial Group, Inc., Associated Securities Corp., Associated Planners
Insurance Services, Inc., and Associated Planners Investment Advisory, Inc. In
addition, from January 1981 to the present, he has served as President of
Gainsborough Financial Consultants, Inc., a financial planning firm located in
Los Angeles, California. From January 1981 to December 1982, Mr. Gainsborough
served as a Registered Principal of Private Ledger Financial Services, Inc.
From January 1977 to December 1980, he was employed by E.F.Hutton & Co. as a
Registered Representative.
W. THOMAS MAUDLIN JR. (Born 1936) is a Director and President of West Coast
Realty Advisors, Inc. ("WCRA"). He is also co-General Partner (with WCRA) of
the Partnership. Mr. Maudlin has been active in the real estate area for over
30 years, serving as co-developer of high-rise office buildings and
condominiums. He has structured transactions for syndicators in apartment
housing, including sale leaseback's, all-inclusive trust deeds, buying and
restructuring transactions to suit a particular buyer, and as a buyer acting as
a principal. Mr. Maudlin was co-developer of the Gateway Los Angeles office
building, a 165, 000 square foot, fourteen-story office building located in
West Los Angeles. Form 1980 to 1985, in partnership with the Muller Company, he
developed eleven acres in San Bernardino which include a 42,000-square foot
office building, a six-plex movie theater and two restaurants. From 1980 to
1985, Mr. Maudlin was involved in building in San Bernardino, California,
a 134-unit condominium development, a shopping center, and a restaurant in
Ventura. He is a graduate of the University of Southern California.
30
<PAGE>
NEAL NAKAGIRI (Born 1954 ) serves as Executive Vice President, General
Counsel, Chief Operating Officer and Secretary of Associated Financial Group,
Inc. He is Vice President for two subsidiaries, Associated Securities Corp. and
Associated Planners Investment Advisory, Inc. He joined the "Associated" group
of companies in March 1985. He was Vice President of Compliance with Morgan,
Olmstead, Kennedy & Gardner from 1984 to 1985. He was First Vice President and
Director of Compliance with Jefferies and Co., Inc. from 1981 to 1984. He was
Vice President and Director of Compliance at W & D Securities, Inc. from 1980 to
1983. He was an Investigator with the National Association of Securities
Dealers, Inc. from 1976 to 1980. He has a B.A. degree in Economics from UCLA
(1976) and a J.D. from Loyola Law School of Los Angeles (1991). He is a member
of the California Bar and the Compliance and Legal Division of the Securities
Industry Association.
MICHAEL G. CLARK (Born 1956) is Senior Vice President/Treasurer of West
Coast Realty Advisors, Inc., Associated Financial Group, Inc., and Associated
Securities Corp. Prior to joining AFG in 1986, he served as Controller for
Quest Resources, a Los Angeles-based syndicator and operator of alternative
energy projects, from October 1984 to March 1986, and Assistant Controller for
Valley Cable T.V., from March 1982 through September 1984. In addition, Mr.
Clark served as an auditor for Arthur Young & Co. in Los Angeles, from July 1978
to March 1982. He is a graduate of the University of California, Santa Barbara
(BA) and California State University, Northridge (MS).
ITEM 11. EXECUTIVE COMPENSATION
During its last calendar year, the Registrant paid no direct or indirect
compensation to directors or officers.
The Registrant has no annuity, pension or retirement plans, or existing
plan or arrangement pursuant to which compensatory payments are proposed to be
made in the future to directors or officers.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The Registrant is a limited partnership and has no officers or directors.
The Registrant has no outstanding securities possessing general voting rights.
31
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Registrant was organized in November 1985 as a California Limited
Partnership. Its General Partner is WCRA. The Registrant has no executive
officers or directors. Philip N. Gainsborough, an officer of the General
Partner, made an original limited partnership contribution to the Partnership in
November 1985, which was subsequently paid back to him in March 1988 when the
Partnership met its minimum funding requirement. The General Partner and its
affiliates are entitled to compensation from the Partnership for the following
services rendered:
1. For Partnership management services rendered to the Partnership, the
General Partner is entitled to receive up to 10% of all distributions of cash
operations. For the year ended December 31, 1996, the amount paid to the
General Partner was $26,321. In addition, the General Partner is entitled to
reimbursement for certain public offering expenses, the cost of certain
personnel employed in the organization of the Partnership, and certain
administrative services performed by the General Partner. For the year ended
December 31, 1996, the Partnership reimbursed $12,000 to the General Partner for
these expenditures.
2. For property management services, the General Partner engaged WCRM an
affiliate of the General Partner. For the year ended December 31, 1996, WCRM
earned property management fees of $35,501 from the Partnership. On December
31, 1996, the Partnership was indebted to WCRM for $8,965, which was paid
subsequent to year-end.
3. The General Partner received a 10% allocation of net income before
depreciation and amortization and 1% of depreciation. For the year ended
December 31, 1996 this resulted in a $30,736 allocation of net income before
depreciation and a $1,303 allocation of depreciation or a net income allocation
of $29,433.
4. In connection with the joint venture in the Santa Fe Business Park
properties, the Partnership made distributions totaling $3,566 to Prado Land
Company, an affiliate of the General Partner's President, during the year ended
December 31, 1996. For the year ended December 31, 1996, Prado Land Company was
allocated $15,895 of net loss for its minority interest in the joint
venture's earnings.
32
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS
The following financial statements of Associated Planners Realty Fund,
a California Limited Partnership, are included in PART II, ITEM 8:
PAGE
Report of Independent Certified Public Accountants......... 16
Consolidated Balance Sheets -- December 31, 1996 and 1995.... 17
Consolidated Statements of Income for the years ended
December 31, 1996, 1995, and 1994..................... 18
Consolidated Statements of Partners' Equity for the years ended
December 31, 1996, 1995, and 1994 .................... 19
Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994...................... 20-21
Summary of Accounting Policies.............................. 22-23
Notes to Consolidated Financial Statements.................. 24-28
2. FINANCIAL STATEMENT SCHEDULES
Schedule III --Real Estate and Accumulated Depreciation......... 34
Schedule IV --Mortgage Loan on Real Estate...................... 35
All other schedules have been omitted because they are either not
required, not applicable or the information has been otherwise supplied.
(b) REPORTS ON FORM 8-K
NONE
(c) EXHIBITS
NONE
33
<PAGE>
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1996
INFORMATION REQUIRED BY RULE 12-28 IS AS FOLLOWS:
<CAPTION>
Initial Cost Gross Amount at
which
Carried at Close of Period
Cost Life (Years)
Capitalized on which
Building Subsequent to Building Depreciation is
& Acquisition on & Year Computed
Improve- Improve- Improve- Total Accumulated Construction Date Building &
Description Emcumbrances Land ments ments Land ments Cost Depreciation Completed Acquired Improvements
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Santa Fe
Business
Park
Encinitas, - 726,827 798,427 34,224 729,928 829,550 1,559,478 397,007 1982 12-86 5 - 19
CA
Shaw Villa
Shopping
Center
Clovis, CA 1,497,782 657,924 551,066 1,624,251 878,646 1,954,595 2,833,241 197,378 1978 1-87 31.5- 40
Pacific
Bell
Office
Building
Simi - 753,320 1,863,203 - 753,320 1,863,203 2,616,523 505,741 1986 11-87 31.5-40
Valley, CA
TOTAL 1,497,782 2,138,071 3,212,696 1,658,475 2,361,894 4,647,348 7,009,242 1,100,126
</TABLE>
<TABLE>
<CAPTION>
A reconciliation of accumulated A reconciliation of cost for the
depreciation for the years ending years ending December 31, 1994, 1995 and 1996
December 31, 1994, 1995, 1996 follows: follows:
<S> <C> <S> <C>
Balance at January 1, 1994 $939,535 Balance at January 1, 1994 $7,063,499
1994 Additions 141,493 1994 Additions 0
Balance at December 31,1994 1,081,028 Balance at December 31, 1994 7,063,499
1995 Additions 122,366 1995 Additions 1,427,466
1995 Deletions (233,574) 1995 Deletions (1,677,464)
Balance at December 31, 1995 969,820 Balance at December 31, 1995 6,813,501
1996 Additions 130,306 1996 Additions 195,741
Balance at December 31, 1996 $1,100,126 Balance at December 31, 1996 $ 7,009,242
</TABLE>
34
<PAGE>
<TABLE>
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
Information required by Rule 12-29 is as follows:
December 31, 1996
<CAPTION>
Final Periodic Delinquent
Interest Maturity Payment Prior Face Carrying Principal/
Description Rate Date Terms Liens Amount Amount Interest
<S> <C> <C> <C> <C> <C> <C> <C>
Monthly
Principal
& Interest
Shaw Villa Payments:
Shopping Center 9.1% 11/1/2006 Amortized over None $1,500,000 1,497,782 None
Clovis, CA 20 years;
Balloon
Payment @
Maturity
</TABLE>
<TABLE>
<CAPTION>
A reconciliation of mortgage loans payable for the years ended December 31, 1995
and 1996 as follows:
<S> <C>
Balance at January 1, 1995 -
1995 Additions 1,225,950
1995 Paydowns -
Balance at December 31, 1995 1,225,950
1996 Additions 1,500,000
1996 Paydowns <1,228,168>
Balance at December 31, 1996 $1,497,782
</TABLE>
35
SIGNATURES
Pursuant to the requirements of the 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)
W. THOMAS MAUDLIN JR.
(A General Partner)
By: WEST COAST REALTY ADVISORS, INC.
(A General Partner)
NEAL NAKAGIRI
(Director and Executive Vice President/General Counsel)
MICHAEL G. CLARK
(Vice President/Treasurer)
Date: March 1, 1997
36
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000785791
<NAME> ASSOCIATED PLANNERS REALTY FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 206,413
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 234,847
<PP&E> 7,009,242
<DEPRECIATION> (1,100,126)
<TOTAL-ASSETS> 6,146,615
<CURRENT-LIABILITIES> 43,307
<BONDS> 1,497,782
0
0
<COMMON> 0
<OTHER-SE> 4,392,108
<TOTAL-LIABILITY-AND-EQUITY> 6,146,615
<SALES> 713,377
<TOTAL-REVENUES> 722,358
<CGS> 460,868
<TOTAL-COSTS> 460,868
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 100,420
<INCOME-PRETAX> 177,055
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 177,055
<EPS-PRIMARY> 19.69
<EPS-DILUTED> 19.69
</TABLE>
