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
September 30, 1996 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 September 30, 1996 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 -
September 30, 1996 and December 31, 1995 3
Statements of Operations -
Three Months Ended September 30, 1996 and 1995 4
Statements of Operations -
Nine Months Ended September 30, 1996 and 1995 5
Statements of Cash Flows -
Nine Months Ended September 30, 1996 and 1995 6
Statements of Partners' (Deficit) Capital -
Nine Months Ended September 30, 1996 and 1995 7
Notes to Financial Statements 8 - 22
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- -------- FINANCIAL CONDITION & RESULTS OF OPERATIONS 23 - 25
-------------------------------------------
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
BALANCE SHEETS
September 30, 1996 and December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
- ------
Property, at cost:
Land $ 2,221,900 $ 2,221,900
Buildings and improvements 29,198,142 29,191,450
Furniture, fixtures and equipment 2,430,000 2,430,000
------------ ------------
33,850,042 33,843,350
Less accumulated depreciation 11,617,564 10,689,782
------------ ------------
Property, net 22,232,478 23,153,568
Investments in real estate joint ventures 2,065,493 2,294,497
Cash 622,141 453,883
Accounts receivable, net of allowance for doubtful
accounts of $477,017 and $377,812, respectively 26,360 51,596
Accounts receivable - affiliate 118,098 147,846
Mortgage escrow 878,678 574,577
Mortgage costs, net of accumulated amortization
of $310,078 and $259,823 292,906 295,280
Other assets 550,834 506,056
------------ ------------
Total Assets $ 26,786,989 $ 27,477,303
============ ============
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Mortgages and notes payable $ 21,411,129 $ 21,606,473
Accounts payable and accrued expenses 1,250,355 769,432
Accrued interest 165,496 179,518
Security deposits and prepaid rents 386,365 365,186
------------ ------------
Total Liabilities 23,213,345 22,920,609
------------ ------------
Partners' (Deficit) Capital:
General partners (451,156) (421,665)
Limited partners 4,024,801 4,978,359
------------ ------------
Total Partners' Capital 3,573,644 4,556,694
------------ ------------
Total Liabilities and Partners' Capital $ 26,786,989 $ 27,477,303
============ ============
</TABLE>
See notes to financial statements
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
STATEMENTS OF OPERATIONS
Three Months Ended September 30, 1996 and 1995
(Unaudited)
Three Months Three Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
Income:
Rental $ 1,584,388 $ 1,648,596
Interest and other income 109,252 123,442
----------- -----------
Total income 1,693,640 1,772,038
----------- -----------
Expenses:
Property operations 621,673 880,320
Interest 558,512 538,248
Depreciation and amortization 317,573 388,159
Administrative:
Paid to affiliates 214,499 220,922
Other 170,186 98,764
----------- -----------
Total expenses 1,882,443 2,126,413
----------- -----------
Loss before allocated loss from joint venture (188,803) (354,375)
Allocated loss from joint ventures (425,056) (179,637)
----------- -----------
Net loss $ (613,859) $ (534,012)
=========== ===========
Loss per limited partnership unit $ (28.35) $ (24.66)
=========== ===========
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
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
Income:
Rental $ 4,994,347 $ 4,930,453
Interest and other income 223,158 406,199
----------- -----------
Total income 5,217,505 5,336,652
----------- -----------
Expenses:
Property operations 2,427,094 2,534,209
Interest 1,628,717 1,654,662
Depreciation and amortization 1,024,549 1,152,374
Administrative:
Paid to affiliates 492,112 683,398
Other 399,080 304,746
----------- -----------
Total expenses 5,971,552 6,329,389
----------- -----------
Loss before allocated loss from joint venture (754,047) (992,737)
Allocated loss from joint ventures (229,003) (241,438)
----------- -----------
Net loss $ (983,050) $(1,234,175)
=========== ===========
Loss per limited partnership unit $ (45.40) $ (57.00)
=========== ===========
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
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
<S> <C> <C>
Cash flow from operating activities:
Net loss $ (983,050) $(1,234,175)
Adjustments to reconcile net loss to net cash
provided by (used in) operating
activities:
Depreciation and amortization 1,024,549 1,152,374
Net loss from joint ventures 229,003 241,438
Changes in operating assets and liabilities:
Accounts receivable 25,236 (64,767)
Mortgage escrow (304,101) --
Other assets (44,778) (47,716)
Accounts payable and accrued expenses 480,923 669,287
Accrued interest (14,022) (16,575)
Security deposits and prepaid rent 21,179 (77,405)
----------- -----------
Net cash provided by operating activities 434,940 622,461
----------- -----------
Cash flow from investing activities:
Accounts receivable - affiliates 29,748 148,933
Capital expenditures (6,692) --
Contributions to joint ventures, net of distributions -- --
----------- -----------
Net cash (used in) provided by investing activities 23,056 148,933
----------- -----------
Cash flows from financing activities:
Accounts payable - affiliates -- 40,000
Distributions to partners -- --
Principal payments on mortgages and notes (195,344) --
Mortgage costs related to refinancing (94,394) --
Mortgage proceeds -- (233,311)
----------- -----------
Net cash (used in) financing activities (289,738) (193,311)
----------- -----------
Increase (decrease) in cash 168,258 578,083
Cash - beginning of period 453,883 226,213
----------- -----------
Cash - end of period $ 622,141 $ 804,296
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 1,642,739 $ 1,654,662
=========== ===========
</TABLE>
See notes to financial statements
-6-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
General Limited Partners
Partners
Amount Units Amount
------ ----- ------
Balance, January 1, 1995 $ (362,779) 21,002.8 $ 6,882,353
Net loss (37,025) -- (1,197,150)
----------- -------- -----------
Balance, September 30, 1995 $ (399,804) 21,002.8 $ 5,685,203
=========== ======== ===========
Balance, January 1, 1996 $ (421,665) 21,002.8 $ 4,978,359
Net loss (29,491) -- (953,558)
----------- -------- -----------
Balance, September 30, 1996 $ (451,156) 21,002.8 $ 4,024,801
=========== ======== ===========
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
NOTES TO FINANCIAL STATEMENTS
Nine Months Ended September 30, 1996 and 1995
(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 nine month periods ended September 30, 1996 and 1995,
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, 1996, both buildings have been fully constructed and placed in
service.
5. NOTE RECEIVABLE
In connection with the sale of Pelham East, the Partnership received a
$250,000 promissory note bearing interest at an annual rate of 9%. Interest
only was due in quarterly installments through May 1, 1995 when the entire
principal balance was paid.
6. 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 September 30, 1996, 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 September 30, 1996 and December 31, 1995 and the results of
its operations for the nine months ended September 30, 1996 and 1995
follows:
-13-
<PAGE>
INDUCON-EAST JOINT VENTURE
BALANCE SHEETS
September 30, 1996 and December 31, 1995
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
- ------
Property, at cost:
Land $ 500,100 $ 500,100
Land improvements 435,768 435,769
Buildings 8,423,610 8,427,089
----------- -----------
9,359,478 9,362,958
Less accumulated depreciation 2,409,193 2,110,752
----------- -----------
Property, net 6,950,285 7,252,206
Cash and cash equivalents 328,807 123,643
Mortgage costs, net of amortization 112,240 140,365
Other assets 103,786 117,502
----------- -----------
Total Assets $ 7,495,119 $ 7,633,716
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Bonds payable $ 6,658,953 $ 6,705,044
Accounts payable and accrued expenses 552,701 297,691
Accounts payable - affiliates 29,647 126,946
----------- -----------
Total Liabilities 7,241,301 7,129,681
----------- -----------
Partners' Capital (Deficit):
The Partnership 384,738 622,445
Other joint venturer (130,921) (118,410)
----------- -----------
Total Partners' Capital 253,818 504,035
----------- -----------
Total Liabilities and Partners' Capital $ 7,495,119 $ 7,633,716
=========== ===========
</TABLE>
-14-
<PAGE>
INDUCON-EAST JOINT VENTURE
STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 1996 and 1995
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
Income:
Rental $ 853,092 $ 849,948
Interest and other income 171,531 116,350
----------- -----------
Total income 1,024,623 966,298
----------- -----------
Expenses:
Property operations 356,809 248,144
Interest 499,291 503,814
Depreciation and amortization 349,247 330,935
Administrative 69,493 52,559
----------- -----------
Total expenses 1,274,840 1,135,452
----------- -----------
Net loss $ (250,217) $ (169,154)
=========== ===========
Allocation of net loss:
The Partnership $ (237,707) $ (160,696)
Other Joint Venturer (12,511) (8,458)
----------- -----------
$ (250,217) $ (169,154)
=========== ===========
A reconciliation of the Partnership's investment in the Joint Venture is as
follows:
1996
Investment in joint venture - beginning of period $ 622,445
Capital contributions -
Allocated loss (237,707)
----------
Investment in joint venture - end of period $ 384,738
==========
-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 September 30, 1996, 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 September 30, 1996 is
$598,136.
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 September 30, 1996 and December 31, 1995 and the results of
operations for the nine months ended September 30, 1996 and 1995 is as
follows:
-16-
<PAGE>
INDUCON-EAST PHASE III JOINT VENTURE
BALANCE SHEETS
September 30, 1996 and December 31, 1995
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
- ------
Property, at cost:
Land $ 141,400 $ 141,400
Buildings 2,400,416 2,300,806
---------- ----------
2,541,816 2,442,206
Less accumulated depreciation 145,522 100,426
---------- ----------
Property, net 2,396,294 2,341,780
Cash and cash equivalents -- --
Accounts receivable 13,933 3,665
Accounts receivable - affiliates 128,469 117,805
Other assets 23,218 5,346
Deferred financing cost, net of accumulated amortization
of $14,953 and $7,870 32,269 39,352
Leasing commissions, net of accumulated amortization
of $30,192 and $23,289 50,426 46,207
---------- ----------
Total Assets $2,644,609 $2,554,155
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Cash overdraft $ 273,880 $ 130,584
Construction loan payable 598,136 619,779
Accounts payable and accrued expenses 86,657 127,019
---------- ----------
Total Liabilities 958,674 877,382
---------- ----------
Partners' Capital:
The Partnership 1,680,755 1,672,051
Other joint venture 5,180 4,722
---------- ----------
Total Partners' Capital 1,685,935 1,676,773
---------- ----------
Total Liabilities and Partners' Capital $2,644,609 $2,554,155
========== ==========
</TABLE>
-17-
<PAGE>
INDUCON-EAST PHASE III JOINT VENTURE
STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 1996 and 1995
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
Income:
Rental $ 219,002 $ 139,117
Interest and other income -- 12,700
----------- -----------
Total income 219,002 151,817
----------- -----------
Expenses:
Property operations 85,037 185,264
Interest 40,685 3,972
Depreciation and amortization 59,082 36,288
Administrative 25,035 11,286
----------- -----------
Total expenses 209,840 236,810
----------- -----------
Net income (loss) $ 9,162 $ (84,993)
=========== ===========
Allocation of net income (loss):
The Partnership $ 8,704 $ (80,743)
Other Joint Venturer 458 (4,250)
----------- -----------
$ 9,162 $ (84,993)
=========== ===========
A reconciliation of the Partnership's investment in the Phase III Venture is as
follows:
1996
Investment in joint venture - beginning of period $ 1,672,051
Capital contributions --
Allocated income 8,704
-----------
Investment in joint venture - end of period $ 1,680,755
===========
-18-
<PAGE>
7. MORTGAGES AND NOTES PAYABLE
The Partnership has the following mortgages and notes payable:
The Paddock Building
--------------------
An 8.75% mortgage with a balance of $1,736,482 and $1,782,926 at September
30, 1996 and 1995, 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, an 8% note payable with
a balance of $153,566 and $165,770 as of September 30, 1996 and 1995,
respectively, providing for monthly payments of $2,216, including interest
at 8%, with a balloon payment due June 1998.
The Williamsburg North Apartments
---------------------------------
A 10.445% mortgage with a balance of $1,852,687 and $1,876,396 at September
30, 1996 and 1995, 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.
The Fountains Apartments
------------------------
A 9.815% mortgage with a balance of $3,468,263 and $3,519,064 at September
30, 1996 and 1995, 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.
Camelot East Apartments, O'Hara Apartments, Wayne Estates Apartments
--------------------------------------------------------------------
A 10% mortgage with a balance of $8,126,253 and $8,186,143 at September 30,
1996 and 1995, respectively, allocated $4,152,460 to Camelot East,
$1,319,211 to O'Hara and $2,654,582 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.
Jackson Park
------------
A 12.375% mortgage note with a balance of $1,241,461 and $1,256,626 at
September 30, 1996 and 1995, 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.
-19-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
Commercial Park West
--------------------
A 9.25% mortgage with a balance of $4,865,498 and $4,897,832 at September
30, 1996 and 1995, 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.
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
---- ------
1996 $ 290,052
1997 5,536,388
1998 9,788,213
1999 60,978
2000 1,220,551
Thereafter 4,710,291
--------------
TOTAL $ 21,606,473
==============
8. 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 $269,332 and $274,667 for the nine months ended September 30, 1996
and 1995, respectively.
-20-
<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 $0 for the nine months ended September 30, 1996.
Accounts receivable - affiliates amounted to $118,098 at September 30,
1996. This balance has been fully reimbursed as of December 31, 1996.
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 nine months ended September 30,
1996 and 1995, respectively.
9. 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.
-21-
<PAGE>
10. INCOME TAXES (CONTINUED)
The reconciliation of net loss for the nine months ended September 30, 1996
and 1995 as reported in the statements of operations, and as would be
reported for tax purposes, is as follows:
September 30, September 30,
1996 1995
---- ----
Net loss - statement of operations $ (983,050) $(1,234,175)
Add to (deduct from):
Difference in depreciation 258,636 234,960
Difference in investment in
Joint Ventures 80,565 79,500
Allowance for doubtful accounts 73,794 87,527
----------- -----------
Net loss - tax return purposes $ (570,055) $ (832,188)
=========== ===========
The reconciliation of Partners' (Deficit) Capital as of September 30, 1996
and December 31, 1995 as reported in the balance sheet, and as reported for
tax purposes, is as follows:
September 30, December 31,
1996 1995
---- ----
Partners' Capital - balance sheet $ 3,573,644 $ 4,556,694
Add to (deduct from):
Accumulated difference in
depreciation 1,642,565 1,383,929
Accumulated difference in investments
in Joint Ventures 396,741 316,176
Syndication fees 2,352,797 2,352,797
Accumulated difference in amortization
of organization costs 21,738 21,738
Allowance for doubtful accounts 332,377 258,583
----------- ------------
Partners' Capital -
tax return purposes $ 8,319,862 $ 8,889,917
=========== ============
-22-
<PAGE>
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Liquidity and Capital Resources
- -------------------------------
Although the Partnership experienced drops in occupancy levels resulting in less
revenues collected at several complexes/buildings, sufficient cash from
operations continues to allow the Partnership to make capital improvements to
the properties. Management has plans for improvements such as new carpeting,
appliances and fresh paint at all complexes. Roof repairs are on-going at The
Fountains, Camelot East and Jackson Park; these will also be funded out of cash
flow. It is felt that with an improved appearance will come new interest (i.e.
new tenants).
Several changes in personnel were made at various properties in this
Partnership, with emphasis being put on more experienced resident managers and
leasing staff. Management is continually stressing the importance of collection
efforts and tenant retention to its on-site personnel. As the end of the year
approaches, the General Partner is optimistic that the efforts being put forth
will result in increased occupancies and therefore additional positive cash
flow. Also a result of increases in occupancies will be the halting of rental
concessions which are currently being offered as a primary incentive to attract
new tenants. Control over expenditures will continue to be tight in the last
quarter in an effort to maintain the trend of declining expenses which has been
seen thus far in 1996.
The Partnership did not make any distributions for the nine month periods ended
September 30, 1996 and 1995. The General Partner does hope to resume making
distributions soon, although it is not likely that any will be made in 1996 as
the cash is needed for capital improvements and general maintenance type items.
Results of Operations
- ---------------------
For the quarter ended September 30, 1996, the Partnership's net loss was
$613,859 or $28.35 per limited partnership unit. Net loss for the quarter ended
September 30, 1995 amounted to $534,012 or $24.66 per unit. For the nine month
period ended September 30, 1996, the net loss was $983,050 or $45.40 per limited
partnership unit as compared to $1,234,175 or $57.00 per limited partnership
unit for the same nine month period in 1995.
-23-
<PAGE>
Results of Operations (continued)
- ---------------------------------
Partnership revenue for the quarter ended September 30, 1996 totaled $1,693,640,
a decrease of slightly over $78,000 from the 1995 amount of $1,772,038. The
majority of the drop in total revenue can be attributed to the $64,000 decrease
in rental revenue between the quarters ended September 30, 1996 and 1995. The
drop in rental revenue is primarily due to declines in economic occupancy at
four of the six residential complexes and the loss of an anchor tenant at The
Paddock Office Building in Nashville, Tennessee. In order to stimulate new
interest in these complexes, management continues to offer rental concessions
and other promotions. Delinquencies at several of the complexes has also been a
noted problem during this past quarter of 1996; management has instructed all
site personnel to aggressively pursue collections as a means of improving cash
flow. Other income continued to decrease as it did in previous quarters of 1996
dropping by approximately $14,000 this quarter. With efforts being put forth on
collections, and new marketing through heavy use of advertisements, it is
expected that in the final quarter of 1996 occupancies will increase, thus
allowing management to halt the concessions currently being offered as we head
into 1997.
For the quarter ended September 30, 1996, Partnership expenses amounted to
$1,882,443 which is an impressive decrease of almost $244,000 from that of the
previous year. For the nine month period ended September 30, 1996, Partnership
expenses decreased by over $357,000 as compared to the same period in 1995.
Specifically, there was a large decrease in property operations expenditures
when comparing the two quarters. Management continues to monitor spending very
carefully, especially in the areas of payroll and associated costs, repairs and
maintenance expenses and contracted services. As an example, Williamsburg North
has experienced a drop in its contracted service costs thus far in 1996 of over
$20,000 compared to the first three quarters of 1995. There were slight
increases at almost all complexes in utility costs (primarily gas), while real
estate taxes and insurance costs remained fairly stable as compared to last
year. The most prominent decrease in expenses was in the area of administrative
expenses paid to affiliates. The total for the first three quarters of 1996 was
$492,112, a drop of over $191,000 from that of 1995. This decrease is due to
lower management fees resulting from lower occupancies, as well as decreases in
accounting and portfolio management fees and investor services fees. Other
administrative expenses showed increases in advertising expenses due to more
aggressive marketing and in credit check costs due to more applications being
processed/taken.
-24-
<PAGE>
Results of Operations (continued)
- ---------------------------------
For the nine month period ended September 30, 1996, the Inducon East Joint
Venture generated a net loss of $250,217 versus a loss of $169,154 for the nine
months ended September 30, 1995. The increased loss continues to be due to an
increase in property operations expenses, which have increased by more than
$108,000 over those of the previous year.
The Inducon East Phase III Joint Venture generated net income of $9,162 for the
nine month period ended September 30, 1996. For the nine month period ended
September 30, 1996, the joint venture posted a loss of $84,993.
Tax basis loss for the nine month period ended September 30, 1996 amounted to
$570,055 or $26.33 per limited partnership unit compared to a tax loss of
$832,188 or $38.43 per unit for the corresponding period in 1995.
-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
- -----------------------------------------
Exhibit 27 - Financial Data Schedule (Electronic filing only)
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 January 2, 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 January 2, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
President and Director
/s/Michael J. Colmerauer January 2, 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
NINE MONTHS ENDED SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 622,141
<SECURITIES> 0
<RECEIVABLES> 621,475
<ALLOWANCES> 477,017
<INVENTORY> 0
<CURRENT-ASSETS> 4,554,511
<PP&E> 33,850,042
<DEPRECIATION> 11,617,564
<TOTAL-ASSETS> 26,786,989
<CURRENT-LIABILITIES> 1,802,216
<BONDS> 21,411,129
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 26,786,989
<SALES> 0
<TOTAL-REVENUES> 5,217,505
<CGS> 0
<TOTAL-COSTS> 5,971,552
<OTHER-EXPENSES> 229,003
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,628,717
<INCOME-PRETAX> (983,050)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (983,050)
<EPS-PRIMARY> (45.40)
<EPS-DILUTED> 0
</TABLE>
