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 MARCH 31, 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
<PAGE>
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 months ended March 31, 1997 and 1996, have
been made in the following financial statements which are normal recurring
entries in nature. However, such financial statements are unaudited and are
subject to any year-end adjustments that may be necessary.
<TABLE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
MARCH 31, 1997 (UNAUDITED) AND DECEMBER 31, 1996
<CAPTION>
March 31, 1997 December 31, 1996
<S> <C> <C>
ASSETS
Rental real estate, less accumulated
depreciation (Note 2) $5,888,844 $5,909,116
Cash and cash equivalents 205,013 206,413
Other assets 31,407 31,086
TOTAL ASSETS $6,125,264 $6,146,615
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accounts payable:
Trade $15,847 $4,989
Related party (Note 3) 12,488 6,894
Notes payable (Note 4) 1,491,027 1,497,782
Security deposits and prepaid rent 29,622 31,424
TOTAL LIABILITIES 1,548,984 1,541,089
Minority interest 212,241 213,418
PARTNERS' EQUITY (NOTES 6 AND 7)
Limited partners:
$1,000 stated value per unit - authorized
7,500 units;issued and outstanding 7,499 4,321,183 4,350,158
General partner 42,856 41,950
TOTAL PARTNERS' EQUITY 4,364,039 4,392,108
TOTAL LIABILITIES AND PARTNERS' EQUITY $6,125,264 $6,146,615
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY
THREE MONTHS ENDED MARCH 31, 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 48,588 -- 40,016 8,572
Distributions to limited partners (68,991) -- (68,991) --
Distributions to general partner (7,666) -- -- (7,666)
BALANCE AT MARCH 31, 1997 $4,364,039 7,499 $4,321,183 $42,856
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1996
(UNAUDITED)
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 47,250 -- 39,659 7,591
Reallocation of balances prior
to January 1, 1996 (Note 6) -- -- 305,548 (305,548)
Distributions to limited partners (53,543) -- (53,543) --
Distributions to general partner (5,949) -- -- (5,949)
BALANCE AT MARCH 31, 1996 $4,466,026 7,499 $4,425,546 $40,480
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(UNAUDITED)
<CAPTION>
Three Three
Months Months
Ended Ended
March 31, March 31,
1997 1996
<S> <C> <C>
REVENUES
Rental (Note 2) $188,956 $173,965
Interest 2,388 983
191,344 174,948
COSTS AND EXPENSES
Operating 33,086 31,209
Property taxes 9,646 7,631
Property management fees (Note 3(c)) 9,303 8,576
General and administrative 16,802 11,438
Depreciation and amortization 41,253 31,842
Interest expense 34,024 19,409
144,114 110,105
INCOME FROM OPERATIONS 47,230 64,843
Minority interest in net loss (income)
of joint ventures (1,358) 17,593
NET INCOME $48,588 $47,250
NET INCOME PER LIMITED PARTNERSHIP
UNIT (Note 5) $5.34 $5.29
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1997 MARCH 31, 1996
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $48,588 $47,250
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 41,253 31,842
Minority interest in net income (loss) 1,358 (17,593)
Increase (decrease) from changes in:
Other assets (321) 19,217
Accounts payable 16,452 (4,649)
Security deposits (1,803) 594
NET CASH PROVIDED BY OPERATING ACTIVITIES 105,527 76,661
CASH FLOWS USED IN INVESTING ACTIVITIES:
Tenant improvement additions (20,980) ---
NET CASH PROVIDED BY INVESTING ACTIVITIES (20,980) ---
CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:
Repayment of notes payable (6,755) ---
Distributions to minority interests (2,535) ---
Distributions to limited partners (68,991) (53,543)
Distributions to general partner (7,666) (5,949)
NET CASH USED IN FINANCING ACTIVITIES (85,947) (59,492)
NET CASH INCREASE IN CASH AND CASH EQUIVALENTS (1,400) 17,169
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 206,413 103,300
CASH AND CASH EQUIVALENTS AT END OF PERIOD $205,013 $120,469
</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 and southwestern states. The
Partnership purchased such properties on an all cash basis, or operated them on
a moderately leveraged basis, and 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 MONTHS ENDED MARCH 31, 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 (loss) allocations varying from
1% to 15% and 1% depreciation and amortization 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:
March 31, 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 1,141,378 1,100,126
Net rental real estate $5,888,844 $5,909,116
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 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
tenants whose individual rents represent 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 $7,666 for the quarter ended March 31, 1997
and $5,949 for the quarter ended March 31, 1996. See also Note 6.
(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 three months ended
March 31, 1997 and March 31, 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 $9,303 for the quarter ended March 31, 1997, and $8,576
for the quarter ended March 31, 1996.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 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 is
for $1,365,000 that matured on October 5, 1996. Borrowings on the construction
loan totaled $1,225,950 as of December 31, 1995. 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 $1,491,027 at March 31,
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 March 31, 1997 are as follows:
1997 ..................................$18,975
1998 .................................. 30,619
1999 .................................. 33,524
2000 .................................. 36,706
2001 .................................. 40,189
Thereafter ..........................1,331,014
Total $1,491,027
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1996
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
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
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
262,465
Additional $182.69 to
Distribution 7,499 $207.39 1,506,817
upon sale of property
Total $1,769,282
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.
NOTE 7 - SUBSEQUENT EVENTS
The Partnership distributed $68,991 ($9.20 per unit) on May 9, 1997 to Limited
Partners of record as of March 31, 1997.
<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 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.
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.
<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
Operations for the quarter ended March 31, 1997, reflect an entire period of
operations for the Partnership's properties. Rental revenue for the three
months ended March 31, 1997 increased from that for the three months ended March
31, 1996 by approximately $15,000, 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 $1,405 (143%) during the
quarter ended March 31, 1997 when compared to the quarter ending March 31, 1995.
This increase is due to larger amounts of cash held in interest bearing accounts
during the quarter ending March 31, 1997 as opposed to March 31, 1996.
The Partnership generated $89,841 in income from operations before depreciation
of $41,253 for the three months ended March 31, 1997 compared to $79,092 in
income from operations before depreciation of $31,842 for the three months ended
March 31, 1996. Depreciation expense increased $9,411 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. Costs and expenses related to the properties
operation increased for the three months ended March 31, 1997 compared to the
three months ended March 31, 1996 by $24,598 due primarily to an increase in
interest expense of $14,615 that was incurred after the completion of
construction at the Shaw Villa Shopping Center. Additionally, total operating
and general and administrative expenses increased by $7,241 (17%) for the three
months ended March 31, 1997 compared to the three months ended March 31, 1996,
primarily due to increased repair and maintenance expenditures, consulting
services, legal and accounting fees and property management fees.
<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
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 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 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 that matured on October 5, 1996. The construction was completed
during 1995 and total construction costs of $1,372,900 were allocated to land,
building and improvements. Included in construction costs was $87,838 in
construction loan interest that was capitalized.
<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 (CONT.)
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 $1,491,027 at March 31,
1997.
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 quarter ended March 31, 1997, the Partnership made distributions
to the general and limited partners totaling $76,657 of which $28,069
constituted a return of capital. The $76,657 in distributions compared
favorably to the $89,841 in cash generated from property operations (net income
plus depreciation expense). On May 9, 1997, the Partnership made a distribution
to limited partners totaling $68,991. Additionally, the partnership distributed
$4,076 to the minority interest partner during the quarter ended March 31, 1997.
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.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONT.)
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 originally paid for in cash.
Subsequent debt was taken on by the Partnership is relatively moderate in size.
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. However, the Partnership realizes that a vacancy at the Pacific
Bell Building might require the expenditure of funds for leasehold improvements,
and has appropriately allocated a portion of revenues towards that purpose.
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 quarter ended March 31, 1997, the General Partner earned partnership
management fees 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.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONT.)
The slowdown in the economy, inflation and changing prices have had a nominal
effect on the Partnership's revenues and income from continuing operations.
During the eight years of the Partnership's existence, inflationary pressures in
the U.S. economy have been minimal, and this has been consistent with the
experience of the Partnership in operating rental real estate in California.
The Partnership has several lease clauses with its properties' tenants that will
help alleviate much of the negative impact of inflation. Among these are:
A. Several month-to-month leases at the Santa Fe Business Park that would
allow the Partnership to raise rents on a monthly basis.
B. Triple net leases at the Shaw Villa Shopping Center and Pacific Bell
Building that give the Partnership an ability to pass on higher operating costs
to its tenants.
CASH FLOWS - MARCH 31, 1997 VS. MARCH 31, 1996
Cash resources decreased $1,400 during the three months ended March 31, 1997
compared to a $17,169 increase in cash resources for the three months ended
March 31, 1996. Cash provided by operating activities increased by $105,527
with the largest contributor being $89,841 in cash basis net income for the
three months ended March 31, 1997. In contrast, the three months ended March
31, 1996 provided $76,661 in cash from operating activities due primarily to
$79,092 in cash basis net income. The sole use of cash in investing activities
for the three months ended March 31, 1997 was $20,980 expended for tenant
improvements to an existing tenant at the Shaw Villa Shopping Center. In
contrast, the three months ended March 31, 1996 did not have any investing
activities. For the three months ended March 31, 1997, financing activities
used $85,947 via distributions to limited, general and minority partners
totaling $79,192 and repayments on notes payable of $6,755. In contrast, the
three months ended March 31, 1996, financing activities used an additional
$59,492 via distributions to these same parties.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
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.
<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
None
<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)
May 14, 1997 By: WEST COAST REALTY ADVISORS, INC.
A California Corporation,
General Partner
Neal E. Nakagiri
Director and Executive Vice President/Secretary
May 14, 1997
Michael G. Clark
Vice President/Treasurer
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<NAME> ASSOCIATED PLANNERS REALTY FUND LP
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
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