FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
June 30, 1997 0-16561
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
(Exact Name of Registrant as specified in its charter)
Delaware 16-1275925
- -------------------- -----------------------------------
(State of Formation) (IRS Employer Identification Number)
2350 North Forest Road
Suite 12 A
Getzville, New York 14068
(Address of Principal Executive Office)
Registrant's Telephone Number: (716) 636-0280
Indicate by a 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
--- ---
Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation 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-Q or any
amendment to this Form 10-Q. (X)
As of June 30, 1997 the issuer had 21,002.8 units of limited partnership
interest outstanding. The aggregate value of the units of limited partnership
interest held by non-affiliates of the Registrant was $21,001,800.
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
-------------------------------------------------
INDEX
-----
PAGE NO.
--------
PART I: FINANCIAL INFORMATION
- ------- ---------------------
Balance Sheets -
June 30, 1997 and December 31, 1996 3
Statements of Operations -
Three Months Ended June 30, 1997 and 1996 4
Statements of Operations -
Six Months Ended June 30, 1997 and 1996 5
Statements of Cash Flows -
Six Months Ended June 30, 1997 and 1996 6
Statements of Partners' (Deficit) Capital -
Six Months Ended June 30, 1997 and 1996 7
Notes to Financial Statements 8 - 23
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- -------- FINANCIAL CONDITION & RESULTS OF
--------------------------------
OPERATIONS 24 - 25
----------
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
BALANCE SHEETS
June 30, 1997 and December 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
Property, at cost:
Land $ 2,221,900 $ 2,221,900
Buildings and improvements 29,551,369 29,491,904
Furniture, fixtures and equipment 2,430,000 2,430,000
------------ ------------
34,203,269 34,143,804
Less accumulated depreciation 12,755,048 12,087,478
------------ ------------
Property, net 21,448,221 22,056,326
Investments in real estate joint ventures 1,694,955 1,939,576
Investment in land 373,282 373,282
Cash 1,556,620 800,741
Accounts receivable, net of allowance for doubtful
accounts of $645,046 and $541,099, respectively 44,206 19,588
Accounts receivable - affiliate -- 17,233
Mortgage escrow 1,384,253 483,107
Mortgage costs, net of accumulated amortization
of $58,795 and $303,347 833,605 230,581
Prepaid commissions, net of accumulated amortization
of $47,996 and $42,327 68,615 64,721
Other assets 86,581 65,488
------------ ------------
Total Assets $ 27,490,338 $ 26,050,643
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgages and notes payable $ 23,607,733 $ 21,337,592
Accounts payable and accrued expenses 885,815 874,387
Accounts payable - affiliates 20,084 --
Accrued interest 165,888 177,135
Security deposits and prepaid rents 379,103 366,976
------------ ------------
Total Liabilities 25,058,623 22,756,090
------------ ------------
Partners' (Deficit) Capital:
General partners (485,414) (459,529)
Limited partners 2,917,129 3,754,082
------------ ------------
Total Partners' Capital 2,431,715 3,294,553
------------ ------------
Total Liabilities and Partners' Capital $ 27,490,338 $ 26,050,643
============ ============
</TABLE>
See notes to financial statements
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
STATEMENTS OF OPERATIONS
Three Months Ended June 30, 1997 and 1996
(Unaudited)
Three Months Three Months
Ended Ended
June 30, June 30,
1997 1996
---- ----
Income:
Rental $ 1,686,270 $ 1,584,388
Interest and other income 146,562 109,252
----------- -----------
Total income 1,832,832 1,693,640
----------- -----------
Expenses:
Property operations 691,547 621,673
Interest 602,117 558,512
Depreciation and amortization 575,683 317,573
Administrative:
Paid to affiliates 152,591 325,177
Other 143,705 170,186
----------- -----------
Total expenses 2,165,643 1,993,121
----------- -----------
Loss before allocated loss from joint venture (332,811) (299,481)
Allocated loss from joint ventures 1,387 (425,056)
----------- -----------
Net loss $ (331,424) $ (724,537)
=========== ===========
Loss per limited partnership unit $ (15.31) $ (33.46)
=========== ===========
Distributions per limited partnership unit $ -- $ --
=========== ===========
Weighted average number of
limited partnership units
outstanding 21,002.8 21,002.8
=========== ===========
See notes to financial statements
-4-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1997 and 1996
(Unaudited)
Six Months Six Months
Ended Ended
June 30, June 30,
1997 1996
---- ----
Income:
Rental $ 3,326,848 $ 3,279,370
Interest and other income 250,286 243,320
----------- -----------
Total income 3,577,134 3,522,690
----------- -----------
Expenses:
Property operations 1,511,110 1,457,298
Interest 1,132,675 1,095,044
Depreciation and amortization 937,141 672,162
Administrative:
Paid to affiliates 303,956 434,470
Other 310,469 314,225
----------- -----------
Total expenses 4,195,351 3,973,199
----------- -----------
Loss before allocated loss from joint venture (618,217) (450,509)
Allocated loss from joint ventures (244,621) (125,604)
----------- -----------
Net loss $ (862,838) $ (576,113)
=========== ===========
Loss per limited partnership unit $ (39.85) $ (26.61)
=========== ===========
Distributions per limited partnership unit $ -- $ --
=========== ===========
Weighted average number of
limited partnership units
outstanding 21,002.8 21,002.8
=========== ===========
See notes to financial statements
-5-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 1997 and 1996
(Unaudited)
Six Months Six Months
Ended Ended
June 30, June 30,
1997 1996
---- ----
Cash flow from operating activities:
Net loss $ (862,838) $ (576,113)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization 937,141 672,162
Net loss from joint ventures 244,621 125,604
Changes in operating assets and liabilities:
Accounts receivable (24,618) 47,362
Mortgage escrow (901,146) (186,348)
Leasing commissions (9,563) --
Other assets (21,093) (105,093)
Accounts payable and accrued expenses 11,428 256,828
Accrued interest (11,247) 1,050
Security deposits and prepaid rent 12,127 17,709
----------- -----------
Net cash (used in) provided by operating activities (625,188) 253,161
----------- -----------
Cash flow from investing activities:
Accounts receivable - affiliates 17,233 (26,697)
Capital expenditures (59,465) (6,692)
----------- -----------
Net cash (used in) investing activities (42,232) (33,389)
----------- -----------
Cash flows from financing activities:
Accounts payable - affiliates 20,084 --
Principal payments on mortgages and notes (95,058) (125,327)
Mortgage costs related to refinancing (866,926) (9,260)
Mortgage proceeds 2,365,199 --
----------- -----------
Net cash provided by (used in) financing activities 1,423,299 (134,587)
----------- -----------
Increase (decrease) in cash 755,879 85,185
Cash - beginning of period 800,741 453,883
----------- -----------
Cash - end of period $ 1,556,620 $ 539,068
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 1,143,922 $ 1,093,994
=========== ===========
See notes to financial statements
-6-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
Six Months Ended June 30, 1997 and 1996
(Unaudited)
General Limited Partners
Partners ------------------------
Amount Units Amount
------ ----- ------
Balance, January 1, 1996 $ (421,665) 21,002.8 $ 4,978,359
Net loss (17,283) -- (558,830)
----------- -------- -----------
Balance, June 30, 1996 $ (438,948) 21,002.8 $ 4,419,529
=========== ======== ===========
Balance, January 1, 1997 $ (459,529) 21,002.8 $ 3,754,082
Net loss (25,885) -- (836,953)
----------- -------- -----------
Balance, June 30, 1997 $ (485,414) 21,002.8 $ 2,917,129
=========== ======== ===========
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
NOTES TO FINANCIAL STATEMENTS
Six Months Ended June 30, 1997 and 1996
(Unaudited)
1. GENERAL PARTNERS' DISCLOSURE
----------------------------
In the opinion of the General Partners of Realmark Property Investors
Limited Partnership V, all adjustments necessary for a fair presentation of
the Partnership's financial position, results of operations and changes in
cash flows for the six month periods ended June 30, 1997 and 1996, have
been made in the financial statements. Such financial statements are
unaudited and subject to any year-end adjustments which may be necessary.
2. FORMATION AND OPERATION OF PARTNERSHIP
--------------------------------------
Realmark Property Investors Limited Partnership V (the "Partnership"), a
Delaware Limited Partnership, was formed on February 28, 1986, to invest in
a diversified portfolio of income-producing real estate investments.
In July 1986, the Partnership commenced the public offering of units of
limited partnership interest. Other than matters relating to organization,
it had no business activities and, accordingly, had not incurred any
expenses or earned any income until the first interim closing (minimum
closing) of the offering, which occurred on December 5, 1986. As of
December 31, 1987, 20,999.8 units of limited partnership interest were sold
and outstanding, excluding 3 units held by an affiliate of the General
Partners. The offering terminated on October 31, 1987 with gross offering
proceeds of $20,999,800. The General Partners are Realmark Properties,
Inc., a wholly-owned subsidiary of J.M. Jayson & Company, Inc. and Joseph
M. Jayson, the Individual General Partner. Joseph M. Jayson is the sole
shareholder of J.M. Jayson & Company, Inc.
Under the partnership agreement, the general partners and their affiliates
can receive compensation for services rendered and reimbursement for
expenses incurred on behalf of the Partnership.
-8-
<PAGE>
FORMATION AND OPERATION OF PARTNERSHIP (CONTINUED)
--------------------------------------------------
Net income or loss and proceeds arising from a sale or refinancing shall be
distributed first to the limited partners in amounts equivalent to a 7%
return on the average of their adjusted capital contributions, then an
amount equal to their capital contributions, then an amount equal to an
additional 5% of the average of their adjusted capital contributions after
the general partners receive a disposition fee, then to all partners in an
amount equal to their respective positive capital balances and, finally, in
the ratio of 87% to the limited partners and 13% to the general partners.
The partnership agreement also provides that distribution of funds,
revenues, costs and expenses arising from partnership activities, exclusive
of any sale or refinancing activities, are to be allocated 97% to the
limited partners and 3% to the general partners.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Cash
----
For purposes of reporting cash flows, cash includes the following items:
cash on hand; cash in checking; and money market savings.
Property and Depreciation
-------------------------
Depreciation is provided using the straight-line method over the estimated
useful lives of the respective assets. Expenditures for maintenance and
repairs are expensed as incurred, and major renewals and betterment's are
capitalized. The Accelerated Cost Recovery System and Modified Accelerated
Cost Recovery System are used to determine depreciation expense for tax
purposes.
Investments in Real Estate Joint Ventures
-----------------------------------------
The investments in real estate joint ventures are accounted for on the
equity method.
Rental Income
-------------
Leases for residential properties have terms of one year or less.
Commercial leases generally have terms of from one to five years. Rental
income is recognized on the straight line method over the term of the
lease.
-9-
<PAGE>
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
------------------------------------------------------
Other Assets
------------
Amortization of other assets includes amortizing mortgage costs that are
incurred in obtaining property mortgage financing and are being amortized
over the terms of the respective mortgages.
4. ACQUISITION AND DISPOSITION OF RENTAL PROPERTY
----------------------------------------------
In May 1987 the Partnership acquired a 65,334 square foot office building
(The Paddock Building) located in Nashville, Tennessee for a purchase price
of $3,163,323, which included $148,683 in acquisition fees.
In December 1987 the Partnership acquired a 192 unit apartment complex
(Williamsburg) located in Columbus, Indiana for a purchase price of
$3,525,692, which included $285,369 in acquisition fees.
In February 1988 the Partnership acquired a 215 unit apartment complex (The
Fountains) located in Westchester, Ohio for a purchase price of $5,293,068,
which included $330,155 in acquisition fees.
In May 1988 the Partnership acquired a 100 unit apartment complex (Pelham
East) located in Greenville, South Carolina for a purchase price of
$2,011,927, which included $90,216 in acquisition fees. In March 1990 the
Partnership sold the apartment complex for a sale price of $2,435,000.
In May 1988 the Partnership acquired a 205 unit apartment complex (Camelot
East) located in Louisville, Kentucky for a purchase price of $6,328,363,
which included $362,540 in acquisition fees.
In June 1988 the Partnership acquired a 100 unit apartment complex (O'Hara)
located in Greenville, South Carolina for a purchase price of $2,529,390,
which included $498,728 in acquisition fees.
In July 1988 the Partnership acquired a 158 unit apartment complex (Wayne
Estates) located in Huber Heights, Ohio for a purchase price of $4,250,013,
which included $793,507 in acquisition fees.
-10-
<PAGE>
ACQUISITION AND DISPOSITION OF RENTAL PROPERTY (CONTINUED)
----------------------------------------------------------
In April 1989 the Partnership acquired a 102 unit apartment complex
(Jackson Park) located in Seymour, Indiana for a purchase price of
$1,911,585, which included $111,585 in acquisition fees.
In June 1991 the Partnership acquired a 115,021 square foot office complex
(Commercial Park West) located in Research Triangle Park, North Carolina
for a purchase price of $5,773,633, which included $273,663 in acquisition
fees.
In September 1992 Inducon East Phase III Joint Venture (the "Phase III
Venture") was formed pursuant to an agreement dated September 8, 1992
between the Partnership and Inducon Corporation. The primary purpose of the
Phase III Venture is to acquire land and construct office/warehouse
buildings as income-producing property. The development, located in
Amherst, New York, consists of 4.2 acres of land and two buildings
measuring approximately 25,200 and 21,300 square feet, respectively. As of
June 30, 1997, both buildings have been fully constructed and placed in
service.
5. INVESTMENTS IN JOINT VENTURES
-----------------------------
Inducon East Joint Venture (the "Venture") was formed pursuant to an
agreement dated April 22, 1987 between the Partnership and Curtlaw
Corporation, a New York Corporation (the "Corporation"). The primary
purpose of the Venture is to acquire land and construct office/warehouse
buildings as income-producing property. The development consists of two
parcels of land measuring approximately 8.4 acres for Phase I and 6.3 acres
for Phase II. Phase I consists of two (2) buildings of approximately 38,000
and 52,000 square feet, while Phase II consists of four (4) buildings
totaling approximately 75,000 square feet, with each building approximately
19,000 square feet. At June 30, 1997, both buildings had been placed in
service in Phase I and all four buildings in Phase II were also in service.
-11-
<PAGE>
INVESTMENTS IN JOINT VENTURES (CONTINUED)
-----------------------------------------
The Partnership contributed capital of $2,414,592 to the Venture. The
remaining funds needed to complete Phase I came from a $3,950,000 taxable
industrial revenue bond which the Venture received in 1989. The Venture
completed the financing of Phase II with an additional $3,200,000 taxable
industrial revenue bond.
The total cost of Phase I and Phase II was approximately $4,425,000 and
$4,600,000, respectively.
The Joint Venture agreement provides for the following:
Ownership of the Joint Venture is divided equally between the Partnership
and Curtlaw. The Joint Venture agreement provides that the Partnership will
be allocated 95% of any losses incurred.
Net cash flow from the Joint Venture is to be distributed in the following
order:
To the Partnership until it has received a return of 7% per annum on
its underwritten equity (the Partnership's "underwritten equity" is
defined to be the initial contributable capital divided by sixty-five
(65) percent). To the extent a 7% return is not received from year to
year, it will accumulate and be paid from the next available cash flow.
To Curtlaw in an amount equal to that paid to the other Partnership. No
amount will accumulate in favor of the other venturer.
Any remaining amount will be divided equally.
To the extent there are net proceeds from any sale or refinancing of the
subject property, said net proceeds will be payable in the following order
of priority:
To the Partnership to the extent the 7% per annum return on its
underwritten equity is unpaid.
Next, to the Partnership until it has received an overall 9% cumulative
return on its underwritten equity.
Next, to the Partnership until it has received an amount equal to its
total underwritten equity, reduced by any prior distribution of sale,
finance or refinancing proceeds.
-12-
<PAGE>
INVESTMENTS IN JOINT VENTURES (CONTINUED)
-----------------------------------------
Next, to the Partnership until it has received a cumulative 20% per
year return on its total underwritten equity.
Thereafter, any remaining net proceeds will be divided 50% to the
Partnership and 50% to Curtlaw.
A summary of the assets, liabilities, and capital of the Inducon East Joint
Venture as of June 30, 1997 and December 31, 1996 and the results of its
operations for the six months ended June 30, 1997 and 1996 follows:
-13-
<PAGE>
INDUCON-EAST JOINT VENTURE
BALANCE SHEETS
June 30, 1997 and December 31, 1996
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
Property, at cost:
Land $ 500,100 $ 500,100
Land improvements 435,769 435,769
Buildings 8,427,982 8,427,982
----------- -----------
9,363,851 9,363,851
Less accumulated depreciation 2,721,443 2,517,641
----------- -----------
Property, net 6,642,408 6,846,210
Mortgage costs, net of amortization 85,286 107,036
Other assets 141,065 201,297
----------- -----------
Total Assets $ 6,868,759 $ 7,154,543
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash overdraft $ 71,475 $ 7,915
Bonds payable 6,416,291 6,591,423
Accounts payable and accrued expenses 342,529 283,157
Accounts payable - affiliates 99,653 96,312
----------- -----------
Total Liabilities 6,929,948 6,978,807
----------- -----------
Partners' Capital (Deficit):
The Partnership 85,482 310,561
Other joint venturer (146,671) (134,825)
----------- -----------
Total Partners' Capital (61,189) 175,736
----------- -----------
Total Liabilities and Partners' Capital $ 6,868,759 $ 7,154,543
=========== ===========
</TABLE>
-14-
<PAGE>
INDUCON-EAST JOINT VENTURE
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1997 and 1996
Six Months Six Months
Ended Ended
June 30, June 30,
1997 1996
---- ----
Income:
Rental $ 539,422 $ 565,645
Interest and other income 118,345 115,040
--------- ---------
Total income 657,767 680,685
--------- ---------
Expenses:
Property operations 245,733 245,410
Interest 329,911 332,850
Depreciation and amortization 235,752 198,359
Administrative 83,296 44,620
--------- ---------
Total expenses 894,692 821,239
--------- ---------
Net loss $(236,925) $(140,554)
========= =========
Allocation of net loss:
The Partnership $(225,079) $(133,526)
Other Joint Venturer (11,846) (7,028)
--------- ---------
$(236,925) $(140,554)
========= =========
A reconciliation of the Partnership's investment in the Joint Venture is as
follows:
1997
----
Investment in joint venture - beginning of period $ 310,561
Capital contributions --
Allocated loss (225,079)
---------
Investment in joint venture - end of period $ 85,482
=========
-15-
<PAGE>
INVESTMENTS IN JOINT VENTURES (CONTINUED)
-----------------------------------------
Inducon East Phase III Joint Venture (the "Phase III Venture") was formed
pursuant to an agreement dated September 8, 1992 between the Partnership
and Inducon Corporation. The primary purpose of the Phase III Venture is to
acquire land and construct office/warehouse buildings as income producing
property. The proposed development consists of 4.2 acres of land and two
buildings with approximately 25,200 and 21,300 square feet, respectively.
As of June 30, 1997, both buildings have been fully constructed and placed
in service.
The Partnership has contributed $1,582,316 to the Phase III Venture. The
remaining funds needed to complete construction came from a $750,000
construction loan. The balance of this loan at June 30, 1997 is $563,465.
The total cost of the Phase III Venture was approximately $2,450,000.
The Joint Venture agreement provides for the following:
Ownership of the Joint Venture is divided equally between the Partnership
and the Corporation. The Joint Venture agreement provides that income and
losses be allocated 95% to the Partnership and 5% to the Corporation. Net
cash flow from the Joint Venture is to be distributed to the Partnership
and the Corporation in accordance with the terms of the Joint Venture
agreement.
A summary of the assets, liabilities and partners' capital of the Phase III
Venture as of June 30, 1997 and December 31, 1996 and the results of
operations for the six months ended June 30, 1997 and 1996 is as follows:
-16-
<PAGE>
INDUCON-EAST PHASE III JOINT VENTURE
BALANCE SHEETS
June 30, 1997 and December 31, 1996
June 30, December 31,
1997 1996
---- ----
ASSETS
Property, at cost:
Land $ 141,400 $ 141,400
Buildings 2,466,023 2,465,057
---------- ----------
2,607,423 2,606,457
Less accumulated depreciation 197,781 164,743
---------- ----------
Property, net 2,409,642 2,441,714
Accounts receivable 16,833 1,149
Accounts receivable - affiliates 116,306 116,475
Prepaid expenses 10,000 2,204
Deferred financing cost, net of accumulated
amortization of $17,314 and $17,314 35,590 35,589
Leasing commissions, net of accumulated
amortization of $43,149 and $38,547 57,570 42,942
---------- ----------
Total Assets $2,645,941 $2,640,073
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash overdraft $ 365,218 $ 272,928
Construction loan payable 563,465 622,077
Accounts payable and accrued expenses 106,358 113,597
---------- ----------
Total Liabilities 1,035,041 1,008,602
---------- ----------
Partners' Capital:
The Partnership 1,609,473 1,629,015
Other joint venture 1,427 2,456
---------- ----------
Total Partners' Capital 1,610,900 1,631,471
---------- ----------
Total Liabilities and Partners' Capital $2,645,941 $2,640,073
========== ==========
-17-
<PAGE>
INDUCON-EAST PHASE III JOINT VENTURE
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1997 and 1996
Six Months Six Months
Ended Ended
June 30, June 30,
1997 1996
---- ----
Income:
Rental $ 185,904 $ 131,761
Interest and other income -- --
--------- ---------
Total income 185,904 131,761
--------- ---------
Expenses:
Property operations 110,780 56,988
Interest 30,340 25,380
Depreciation and amortization 39,010 28,914
Administrative 26,345 12,140
--------- ---------
Total expenses 206,475 123,422
--------- ---------
Net (loss) income $ (20,571) $ 8,339
========= =========
Allocation of net (loss) income:
The Partnership $ (19,542) $ 7,922
Other Joint Venturer (1,029) 417
--------- ---------
$ (20,571) $ 8,339
========= =========
A reconciliation of the Partnership's investment in the Phase III Venture is as
follows:
1997
----
Investment in joint venture - beginning of period $ 1,629,015
Capital contributions --
Allocated loss (19,542)
-----------
Investment in joint venture - end of period $ 1,609,473
===========
-18-
<PAGE>
6. MORTGAGES AND NOTES PAYABLE
---------------------------
The Partnership has the following mortgages and notes payable:
The Paddock Building
--------------------
An 8.75% mortgage with a balance of $1,654,001 and $1,731,131 at June 30,
1997 and 1996, respectively, which provides for annual principal and
interest payments of $219,612 payable in equal monthly installments with a
final payment of $1,589,511 due in June 1998. Also, a 10% note payable with
a balance of $180,000 as of June 30, 1997 providing for monthly interest
payments of $1,500 and an 8% note payable at June 30, 1996 with a balance
of $153,565 providing for monthly payments of $2,216, including interest at
8%; this note was refinanced.
The Williamsburg North Apartments
---------------------------------
A 10.445% mortgage with a balance of $1,833,241 and $1,858,839 at June 30,
1997 and 1996, respectively, which provides for annual principal and
interest payments of $218,556 payable in equal monthly installments with a
final payment of $1,833,241 due on July 1, 1997. Management expects to have
this mortgage refinanced in July 1997.
The Fountains Apartments
------------------------
A mortgage with a balance of $3,900,000 at June 30, 1997, providing for
monthly principal and interest payments of $29,777, bearing interest at
8.50%. The note matures November 2005.
A 9.815% mortgage with a balance of $0 and $3,481,432 at June 30, 1997 and
1996, respectively, which provides for annual principal and interest
payments of $393,953 payable in equal monthly installments with a final
payment of $3,450,193 due on February 1, 1997. The mortgage was fully paid
off in May of 1997 when the mortgage was refinanced.
Camelot East Apartments, O'Hara Apartments, Wayne Estates Apartments
--------------------------------------------------------------------
A 10% mortgage with a balance of $0 and $8,115,289 at June 30, 1997 and
1996, respectively, allocated $4,131,574 to Camelot East, $1,321,666 to
O'Hara and $2,662,049 to Wayne Estates. The loan provides for annual
principal and interest payments of $899,616 payable in equal monthly
installments with the remaining balance of $7,894,059 due October 1998.
This mortgage was refinanced in May of 1997 with each individual property
being financed separately.
-19-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
---------------------------------------
Camelot East Apartments
-----------------------
A mortgage with a balance of $4,900,000 at June 30, 1997, providing for
monthly interest payments only, bearing interest at 9.1875%. The note
matures June 1999.
O'Hara Apartments
-----------------
A mortgage with a balance of $1,600,000 at June 30, 1997, providing for
monthly principal and interest payments of $12,105, bearing interest at
8.40%. The note matures November 2005.
Wayne Estates Apartments
------------------------
A mortgage with a balance of $3,095,000 at June 30, 1997, providing for
monthly principal and interest payments of $23,415, bearing interest at
8.40%. The note matures November 2005.
Jackson Park
------------
A mortgage with a balance of $1,600,000 at June 30, 1997, providing for
monthly principal and interest payments of $12,178, bearing interest at
8.39%. The note matures November 2005.
A 12.375% mortgage note with a balance of $0 and $1,245,551 at June 30,
1997 and 1996, respectively, which provides for annual principal and
interest payments of $169,680 payable in equal monthly installments with a
final payment of $1,159,223 due on October 1, 2000. The mortgage was fully
paid off in May of 1997 when the mortgage was refinanced.
Commercial Park West
--------------------
A 9.25% mortgage with a balance of $4,845,491 and $4,872,762 at June 30,
1997 and 1996, respectively, which provided for interest only payments
through June 1995. On July 1, 1995, interest changed to 10% with annual
principal and interest payments of $516,012 payable in equal monthly
installments. The remaining balance of $4,691,234 is due June 2001.
-20-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
---------------------------------------
The mortgages described above are secured by the individual apartment
complexes to which they relate.
The Partnership's mortgages and note payable are of a non-recourse nature.
The aggregate maturities of mortgages and note payable for each of the next
five years and thereafter are as follows:
Year Amount
---- ------
1997 $ 1,963,279
1998 1,712,069
1999 5,052,050
2000 90,693
2001 5,023,478
Thereafter 9,766,164
------------
TOTAL $ 23,607,733
============
7. RELATED PARTY TRANSACTIONS
--------------------------
Management fees for the management of certain of the Partnership's
properties are paid to an affiliate of the General Partners. The management
agreement provides for 5% of gross monthly receipts of the complexes to be
paid as fees for administering the operations of the properties. These fees
totaled $151,123 and $165,857 for the six months ended June 30, 1997 and
1996, respectively.
Accounts receivable - affiliates amounted to $0 and $174,543 at June 30,
1997 and 1996 respectively.
Accounts payable - affiliates amounted to $20,084 and $0 at June 30, 1997
and 1996 respectively. The amount due is payable on demand.
-21-
<PAGE>
RELATED PARTY TRANSACTIONS (CONTINUED)
--------------------------------------
The Partnership entered into a management agreement with unrelated third
parties for the management of The Paddock and Commercial Park West. The
agreements provide for the payment of a management fee equal to 3% and 2%
of monthly gross rental income, respectively.
According to the terms of the Partnership Agreement, the Corporate General
Partner is also entitled to receive a partnership management fee equal to
7% of net cash flow (as defined in the Partnership Agreement). This fee
totaled approximately $0 for the six months ended June 30, 1997.
Computer service charges for the partnerships are paid or accrued to an
affiliate of the General Partner. The fee is based upon the number of
apartment units and totaled $10,000 for the six months ended June 30, 1997
and 1996, respectively.
8. INCOME TAXES
------------
No provision has been made for income taxes since the income or loss of the
partnership is to be included in the tax returns of the Individual
Partners.
The tax returns of the Partnership are subject to examination by the
Federal and state taxing authorities. Under federal and state income tax
laws, regulations and rulings, certain types of transactions may be
accorded varying interpretations and, accordingly, reported partnership
amounts could be changed as a result of any such examination.
-22-
<PAGE>
9. INCOME TAXES (CONTINUED)
------------------------
The reconciliation of net loss for the six months ended June 30, 1997 and
1996 as reported in the statements of operations, and as would be reported
for tax purposes, is as follows:
June 30, June 30,
1997 1996
---- ----
Net loss - statement of operations $ (862,838) $ (991,575)
Add to (deduct from):
Difference in depreciation 125,980 172,424
Difference in investment in
Joint Ventures 56,700 53,710
Allowance for doubtful accounts 87,715 49,196
---------- ----------
Net loss - tax return purposes $ (592,443) $ (716,245)
========== ===========
The reconciliation of Partners' Capital as of June 30, 1997 and December
31, 1996 as reported in the balance sheet, and as reported for tax
purposes, is as follows:
June 30, December 31,
1997 1996
---- ----
Partners' Capital - balance sheet $ 2,431,715 $ 3,294,553
Add to (deduct from):
Accumulated difference in
depreciation 1,761,863 1,635,883
Accumulated difference in investments
in Joint Ventures 486,168 429,468
Syndication fees 2,352,797 2,352,797
Accumulated difference in amortization
of organization costs 21,738 21,738
Allowance for doubtful accounts 521,732 434,017
----------- -----------
Partners' Capital -
tax return purposes $ 7,576,013 $ 8,168,456
=========== ===========
-23-
<PAGE>
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
------------------------------------------------------------------------
OF OPERATIONS.
--------------
Liquidity and Capital Resources
- -------------------------------
The Partnership has maintained sufficient cash to enable it to not only fund
current operations, but also to provide for future capital improvements. No
distributions to partners were made in either the first six months of 1997 or
1996. The General Partner does hope to resume making distributions at some time
during the remainder of 1997. Although the Partnership experienced a loss for
the first six months of 1997, management feels that with the new financing
obtained (and resulting decrease in debt service payments) during this period,
scheduled rent increases and efforts to control and manage expenses,
profitability should increase.
Occupancies at the properties in the Partnership continued in most locations to
be favorable (i.e., exceeding 90 percent on average). Williamsburg North
Apartments and several of the commercial properties in the Partnership are
expected to be refinanced during the next quarter of 1997, further improving
cash flow in the Partnership. Management continues to actively pursue new
tenants by making capital improvements to the properties and through the use of
rental promotions and concessions.
Management also continues to search for buyers for the properties in the
Partnership as this is deemed to be in the best interest of the Limited
Partners. A contract for the sale of Camelot East Apartments which would result
in a very favorable sales price is currently being finalized.
Results of Operations
- ---------------------
Partnership operations for the three month period ended June 30, 1997 resulted
in a net loss of $331,424 or $15.31 per limited partnership unit compared to a
loss of $724,537 or $33.46 per limited partnership unit for the same period in
1996. The Partnership operations for the six month period ended June 30, 1997
resulted in a net loss of $862,838 or $39.85 per limited partnership unit versus
a six month 1996 net loss of $576,113 or $26.61 per unit.
Tax basis loss for the six month period ended June 30, 1997 amounted to $592,443
or $27.36 per limited partnership unit compared to a tax loss of $716,245 or
$33.08 per unit for the corresponding period in 1996. For the second quarter of
1997, the tax basis loss amounted to $196,199 or $9.06 per limited partnership
unit.
-24-
<PAGE>
Results of Operations (continued)
- ----------------------------------
Total revenue for the three month period ended June 30, 1997 amounted to
$1,832,832 increasing approximately $139,000 from the three month period ended
June 30, 1996. For the first six months of 1997 there was an increase in total
partnership revenue of slightly more than $54,000 as compared to the same period
in 1996. Of this total, there was only a slight increase in interest and other
income of almost $7,000 which primarily resulted from an increase in termination
fees and month-to-month surcharges at the residential properties. The majority
of the increase was the result of an increase in net rental revenues due to
increased occupancies, primarily at the commercial properties in the
Partnership. Management continues to aggressively market the residential
properties through attractive concessions and "regular" or steady advertising in
an effort to increase occupancies which appear to be steadily rising.
For the six month period ended June 30, 1997, expenses totaled $4,195,351,
increasing just over $222,000 from the corresponding period in 1996. For the
quarter ended June 30, 1997, Partnership expenses amounted to $2,165,643,
increasing by $172,500 from the 1996 quarter amount. For the first six months of
1996, an increase in property operations expenditures amounting to almost
$54,000 resulted due to increased repairs and maintenance work being done at
several of the residential complexes in the Partnership. Management is stressing
the importance of the physical appearance of the properties as a means of
improving occupancy, and thus more improvements (e.g., new carpets and
appliances, fresh coats of paint, etc.) are being brought about/completed. The
increase in these expenses is expected to continue through the end of 1997 as
improvements are continuing and completed at the properties. There was a
decrease of over $134,000 in administrative expenses in total when comparing the
six month periods ended June 30, 1997 and 1996 which can be attributed to a
decrease in Partnership management expenses. A large increase in amortization
expense was also noted. This increase was the result of new financing obtained
during the second quarter of 1997 on several of the residential complexes in the
Partnership; the new financing led to the write-off of the majority of the
previously capitalized mortgage acquisition costs.
For the six month period ended June 30, 1997, the Inducon East Joint Venture
generated a net loss of $236,925 versus a net loss of $140,554 for the six
months ended June 30, 1996. This jump was primarily due to increases in
administrative expenses.
The Inducon East Phase III Joint Venture generated a net loss of $20,571 for the
six month period ended June 30, 1997 with $19,542 being allocated to the
Partnership. Net income for the joint venture for the six month period ended
June 30, 1996 amounted to $8,339.
-25-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
-------------------------------------------------
PART II
-------
OTHER INFORMATION
-----------------
Item 1 - Legal Proceedings
- --------------------------
The Partnership is not party to, nor is it the subject of, any material pending
legal proceedings other than ordinary routine litigation incidental to the
Partnership's business.
Item 2, 3, 4 and 5
- ------------------
Not applicable.
Item 6 - Exhibits and reports on Form 8-K
- -----------------------------------------
None.
-26-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP V
By: /s/Joseph M. Jayson August 13, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
Individual General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By: REALMARK PROPERTIES, INC.
Corporate General Partner
/s/Joseph M. Jayson August 13, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
President and Director
/s/Michael J. Colmerauer August 13, 1997
------------------------------ ------------------------
Michael J. Colmerauer Date
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V FOR
SIX MONTHS ENDED JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,556,620
<SECURITIES> 0
<RECEIVABLES> 689,252
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,140,275
<PP&E> 34,203,269
<DEPRECIATION> 12,755,048
<TOTAL-ASSETS> 27,490,338
<CURRENT-LIABILITIES> 1,450,890
<BONDS> 23,607,733
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 27,490,338
<SALES> 0
<TOTAL-REVENUES> 3,577,134
<CGS> 0
<TOTAL-COSTS> 4,195,351
<OTHER-EXPENSES> 244,621
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,132,675
<INCOME-PRETAX> (862,838)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (862,838)
<EPS-PRIMARY> (39.85)
<EPS-DILUTED> 0
</TABLE>
