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
March 31, 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 March 31, 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 -
March 31, 1997 and December 31, 1996 3
Statements of Operations -
Three Months Ended March 31, 1997 and 1996 4
Statements of Cash Flows -
Three Months Ended March 31, 1997 and 1996 5
Statements of Partners' (Deficit) Capital -
Three Months Ended March 31, 1997 and 1996 6
Notes to Financial Statements 7 - 21
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- -------- FINANCIAL CONDITION & RESULTS OF
--------------------------------
OPERATIONS 22 - 23
----------
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
Property, at cost:
Land $ 2,221,900 $ 2,221,900
Buildings and improvements 29,491,904 29,491,904
Furniture, fixtures and equipment 2,430,000 2,430,000
------------ ------------
34,143,804 34,143,804
Less accumulated depreciation 12,421,262 12,087,478
------------ ------------
Property, net 21,722,542 22,056,326
Investments in real estate joint ventures 1,693,568 1,939,576
Investment in land 373,282 373,282
Cash 678,179 800,741
Accounts receivable, net of allowance for doubtful
accounts of $606,120 and $541,099, respectively 66,985 19,588
Accounts receivable - affiliate 73,045 17,233
Mortgage escrow 532,622 483,107
Mortgage costs, net of accumulated amortization
of $328,536 and $303,347 203,496 230,581
Prepaid commissions, net of accumulated amortization
of $44,813 and $42,327 64,042 64,721
Other assets 89,376 65,488
------------ ------------
Total Assets $ 25,497,137 $ 26,050,643
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgages and notes payable $ 21,264,135 $ 21,337,592
Accounts payable and accrued expenses 927,619 874,387
Accrued interest 164,388 177,135
Security deposits and prepaid rents 377,857 366,976
------------ ------------
Total Liabilities 22,733,999 22,756,090
------------ ------------
Partners' (Deficit) Capital:
General partners (475,471) (459,529)
Limited partners 3,238,609 3,754,082
------------ ------------
Total Partners' Capital 2,763,138 3,294,553
------------ ------------
Total Liabilities and Partners' Capital $ 25,497,137 $ 26,050,643
============ ============
</TABLE>
See notes to financial statements
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
---- ----
Income:
Rental $ 1,640,578 $ 1,694,982
Interest and other income 103,724 134,068
----------- -----------
Total income 1,744,302 1,829,050
----------- -----------
Expenses:
Property operations 819,563 835,625
Interest 530,558 536,532
Depreciation and amortization 361,458 354,589
Administrative:
Paid to affiliates 151,365 109,293
Other 166,764 144,039
----------- -----------
Total expenses 2,029,708 1,980,078
----------- -----------
Loss before allocated loss from joint venture (285,406) (151,028)
Allocated loss from joint ventures (246,008) (92,462)
----------- -----------
Net loss ($ 531,414) ($ 243,490)
=========== ===========
Loss per limited partnership unit ($ 24.54) ($ 11.25)
=========== ===========
Distributions per limited partnership unit $ 0.00 $ 0.00
=========== ===========
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 CASH FLOWS
Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
---- ----
Cash flow from operating activities:
Net loss ($531,414) ($243,490)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 361,458 354,589
Net loss from joint ventures 246,008 92,462
Changes in operating assets and liabilities:
Accounts receivable (47,397) 6,920
Mortgage escrow (49,515) (158,726)
Leasing commissions (1,807) 0
Other assets (23,888) 19,413
Accounts payable and accrued expenses 53,232 84,405
Accrued interest (12,747) (12,924)
Security deposits and prepaid rent 10,881 (5,103)
--------- ---------
Net cash provided by operating activities 4,811 137,546
--------- ---------
Cash flow from investing activities:
Accounts receivable - affiliates (55,812) 20,714
Capital expenditures 0 0
--------- ---------
Net cash (used in) provided by investing activities (55,812) 20,714
--------- ---------
Cash flows from financing activities:
Principal payments on mortgages and notes (73,457) (56,815)
Mortgage costs related to refinancing 0 (9,260)
Decrease in mortgage costs 1,896 0
--------- ---------
Net cash (used in) financing activities (71,561) (66,075)
--------- ---------
(Decrease) increase in cash (122,562) 92,185
Cash - beginning of period 800,741 453,883
--------- ---------
Cash - end of period $ 678,179 $ 546,068
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 543,305 $ 549,456
========= =========
See notes to financial statements
-5-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
Three Months Ended March 31, 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 (7,305) 0 (236,186)
----------- ---------- -----------
Balance, March 31, 1996 ($ 428,970) 21,002.8 $ 4,742,173
=========== ========== ===========
Balance, January 1, 1997 ($ 459,529) 21,002.8 $ 3,754,082
Net loss (15,942) 0 (515,473)
----------- ---------- -----------
Balance, March 31, 1997 ($ 475,471) 21,002.8 $ 3,238,609
=========== ========== ===========
See notes to financial statements
-6-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
NOTES TO FINANCIAL STATEMENTS
Three Months Ended March 31, 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 three month periods ended March 31, 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.
-7-
<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.
-8-
<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.
-9-
<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
March 31, 1996, both buildings have been fully constructed and placed in
service.
5. INVESTMENT IN LAND
------------------
The Partnership owns approximately 96 acres of vacant land in Amherst, New
York. The investment balance of $373,282 as of March 31, 1997 and December
31, 1996 approximates its fair market value.
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 March 31, 1997, both buildings had been placed in
service in Phase I and all four buildings in Phase II were also in service.
-10-
<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.
-11-
<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 March 31, 1997 and December 31, 1996 and the results of its
operations for the three months ended March 31, 1997 and 1996 follows:
-12-
<PAGE>
INDUCON-EAST JOINT VENTURE
BALANCE SHEETS
March 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
March 31, 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 2,619,542 2,517,641
----------- -----------
Property, net 6,744,309 6,846,210
Accounts receivable - affiliates 43,684 0
Mortgage costs, net of amortization 91,661 107,036
Other assets 172,318 201,297
----------- -----------
Total Assets $ 7,051,972 $ 7,154,543
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash overdraft $ 96,766 $ 7,915
Bonds payable 6,574,327 6,591,423
Accounts payable and accrued expenses 418,660 283,157
Accounts payable - affiliates 0 96,312
----------- -----------
Total Liabilities 7,089,753 6,978,807
----------- -----------
Partners' Capital (Deficit):
The Partnership 107,720 310,561
Other joint venturer (145,501) (134,825)
----------- -----------
Total Partners' Capital (37,781) 175,736
----------- -----------
Total Liabilities and Partners' Capital $ 7,051,972 $ 7,154,543
=========== ===========
</TABLE>
-13-
<PAGE>
INDUCON-EAST JOINT VENTURE
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
---- ----
Income:
Rental $ 338,533 $ 335,465
Interest and other income 179 37
--------- ---------
Total income 338,712 335,502
--------- ---------
Expenses:
Property operations 218,740 131,200
Interest 165,175 166,426
Depreciation and amortization 117,876 117,074
Administrative 50,438 15,137
--------- ---------
Total expenses 552,229 429,837
--------- ---------
Net loss ($213,517) ($ 94,335)
========= =========
Allocation of net loss:
The Partnership ($202,841) ($ 89,618)
Other Joint Venturer (10,676) (4,717)
--------- ---------
($213,517) ($ 94,335)
========= =========
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 0
Allocated loss (202,841)
--------
Investment in joint venture - end of period $107,720
========
-14-
<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 March 31, 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 March 31, 1997 is $593,224.
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 March 31, 1997 and December 31, 1996 and the results of
operations for the three months ended March 31, 1997 and 1996 is as
follows:
-15-
<PAGE>
INDUCON-EAST PHASE III JOINT VENTURE
BALANCE SHEETS
March 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
Property, at cost:
Land $ 141,400 $ 141,400
Buildings 2,465,903 2,465,057
---------- ----------
2,607,303 2,606,457
Less accumulated depreciation 181,262 164,743
---------- ----------
Property, net 2,426,041 2,441,714
Accounts receivable 12,899 1,149
Accounts receivable - affiliates 125,417 116,475
Prepaid expenses 5,045 2,204
Deferred financing cost, net of accumulated amortization
of $17,314 and $17,314 35,589 35,589
Leasing commissions, net of accumulated amortization
of $40,848 and $38,547 40,640 42,942
---------- ----------
Total Assets $2,645,631 $2,640,073
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash overdraft $ 361,244 $ 272,928
Construction loan payable 593,224 622,077
Accounts payable and accrued expenses 105,131 113,597
---------- ----------
Total Liabilities 1,059,599 1,008,602
---------- ----------
Partners' Capital:
The Partnership 1,585,848 1,629,015
Other joint venturer 184 2,456
---------- ----------
Total Partners' Capital 1,586,032 1,631,471
---------- ----------
Total Liabilities and Partners' Capital $2,645,631 $2,640,073
========== ==========
</TABLE>
-16-
<PAGE>
INDUCON-EAST PHASE III JOINT VENTURE
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
---- ----
Income:
Rental $ 81,734 $ 68,439
Interest and other income 10,395 1,745
--------- ---------
Total income 92,129 70,184
--------- ---------
Expenses:
Property operations 94,999 42,046
Interest 14,904 10,043
Depreciation and amortization 18,820 14,457
Administrative 8,845 6,632
--------- ---------
Total expenses 137,568 73,178
--------- ---------
Net (loss) income ($ 45,439) ($ 2,994)
========= =========
Allocation of net (loss) income:
The Partnership ($ 43,167) ($ 2,844)
Other Joint Venturer (2,272) (150)
--------- ---------
($ 45,439) ($ 2,994)
========= =========
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 0
Allocated loss (43,167)
-----------
Investment in joint venture - end of period $1,585,848
===========
-17-
<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 $1,672,452 and $1,742,363 at March 31,
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 March 31, 1997 providing for monthly interest
payments of $1,500 and an 8% note payable at March 31, 1996 with a balance
of $160,682 providing for monthly payments of $2,216, including interest at
8%.
The Williamsburg North Apartments
---------------------------------
A 10.445% mortgage with a balance of $1,839,892 and $1,864,833 at March 31,
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.
The Fountains Apartments
------------------------
A 9.815% mortgage with a balance of $3,440,938 and $3,494,284 at March 31,
1997 and 1996, respectively, which provides for annual principal and
interest payments of $393,953 payable in equal monthly installments with
the final payment of $3,450,193 due on February 1, 1997. No extension has
been granted and although the lender continues to accept payments, the
mortgage is payable on demand. Management is currently looking for new
financing for this property.
Camelot East Apartments, O'Hara Apartments, Wayne Estates Apartments
--------------------------------------------------------------------
A 10% mortgage with a balance of $8,046,991 and $9,248,048 at March 31,
1997 and 1996, respectively, allocated $4,095,913 to Camelot East,
$1,311,669 to O'Hara and $2,639,409 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.
-18-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
---------------------------------------
Jackson Park
------------
A 12.375% mortgage note with a balance of $1,233,404 and $1,249,356 March
31, 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.
Commercial Park West
--------------------
A mortgage with a balance of $4,850,458 and $4,882,144 at March 31, 1997
and 1996, respectively, which provided for annual principal and interest
payments through June 1996 at an interest rate of 9.25%. On July 1, 1996,
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
1997 $ 5,737,559
1998 9,608,213
1999 60,978
2000 1,220,551
2001 4,710,291
-------------
TOTAL $ 21,337,592
=============
-19-
<PAGE>
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 $94,350 and $121,880 for the three months ended March 31, 1997 and
1996, respectively.
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 three months ended March 31, 1997 and
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 $5,000 for the three months ended March 31,
1997 and 1996, 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.
-20-
<PAGE>
10. INCOME TAXES (CONTINUED)
------------------------
The reconciliation of net loss for the three months ended March 31, 1997
and 1996 as reported in the statements of operations, and as would be
reported for tax purposes, is as follows:
March 31, March 31,
1997 1996
---- ----
Net loss - statement of operations $ (531,414) $ (267,038)
Add to (deduct from):
Difference in depreciation 62,989 86,212
Difference in investment in
Joint Ventures 28,323 26,855
Allowance for doubtful accounts 43,858 24,598
---------- -----------
Net loss - tax return purposes $ (396,244) $ (129,373)
========== ===========
The reconciliation of Partners' (Deficit) Capital as of March 31, 1997 and
December 31, 1996 as reported in the balance sheet, and as reported for tax
purposes, is as follows:
March 31, December 31,
1997 1996
---- ----
Partners' Capital - balance sheet $ 2,763,138 $ 3,294,553
Add to (deduct from):
Accumulated difference in
depreciation 1,698,872 1,635,883
Accumulated difference in investments
in Joint Ventures 457,791 429,468
Syndication fees 2,352,797 2,352,797
Accumulated difference in amortization
of organization costs 21,738 21,738
Allowance for doubtful accounts 477,875 434,017
----------- -----------
Partners' Capital -
tax return purposes $ 7,772,211 $ 8,168,456
=========== ===========
-21-
<PAGE>
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Liquidity and Capital Resources
- -------------------------------
The Partnership experienced a poor quarter from a cash flow point of view; the
cash flow from operations decreased by just under $133,000. Management is
concentrating on the implementation of controls over expenses, through closer
monitoring of payroll and other operating expenses, to balance the loss of
revenues which resulted in the first quarter of 1997 over that which management
had expected. More aggressive marketing campaigns are being put in place and
reinforced through routine/regular charting of which ads are successful in
attracting renters and through which sources the ads are bringing in the
traffic. Management is optimistic that occupancy levels at the properties in
this Partnership will begin seeing an improvement in the next quarter as the
"peak" rental season reaches its height. Attractive incentive plans have been
put in place to bring in new tenants; plans for capital improvements, such as
exterior painting and repairs to woodwork, are also in place. It is hoped that
the combination of strategies being followed by management will lead to the
generation of higher revenues, thus improving the cash flow of the Partnership.
There were no distributions made during the three month periods ended March 31,
1997 and 1996. The Partnership does not anticipate resuming distributions until
sufficient cash flow is generated to cover the Partnership's liabilities and set
up reserves for construction work which is necessary at several of the
residential complexes.
Results of Operations
- ---------------------
Partnership operations for the three month period ended March 31, 1997 resulted
in a net loss of $531,414 or $24.54 per limited partnership unit versus a first
quarter 1996 net loss of $243,490 or $11.25 per unit.
Tax basis loss for the three month period ended March 31, 1997 amounted to
$396,244 or $18.30 per limited partnership unit compared to a tax loss of
$129,373 or $5.98 per unit for the corresponding period in 1996.
-22-
<PAGE>
Results of Operations (continued)
- ----------------------------------
Total revenue for the three month period ended March 31, 1997 amounted to
$1,744,302 as compared to $1,829,050 for the three month period ended March 31,
1996. There was a decrease in rental revenue of slightly more than $54,000 which
was directly attributable to a drop in rental revenue earned at The Paddock
Building of over $23,600. There was also a significant increase in bad debts at
Williamsburg North, O'Hara Apartments and Jackson Park Apartments, as well as a
large increase in concessions offered at Williamsburg North and The Fountains.
Such concessions were offered to new tenants as a means of increasing occupancy
levels. Interest and other income meanwhile decreased approximately $30,000 due
to a decrease of over $20,000 in common area maintenance reimbursements from
Commercial Park West due to the ages of the various "stepped leases".
For the three month period ended March 31, 1997, expenses totaled $2,029,708,
increasing just under $50,000 from the corresponding quarter ended March 31,
1996. Property operations expenses decreased approximately $16,000, largely the
result of decreases in payroll and related expenses, contracted services, and
slight decreases in fixed expenses such as insurance and real estate taxes.
Total administrative expenses meanwhile, increased almost $65,000 between the
two periods, due primarily to increases in legal fees related to collections,
advertising, and investor service, brokerage and portfolio management and
accounting fees. Depreciation and amortization expense remained relatively
unchanged between the periods ended March 31, 1997 and 1996. Interest expense
also remained fairly constant between the two periods.
Management is hopeful that overall occupancy will increase in future months and
collections will improve. Considerable effort is being put forth to collect all
amounts due, and credit policies are being tightened and reinforced as a means
of avoiding bad debts in the future. Several of the complexes in this
Partnership are scheduled to be refinanced during the coming months with the
result being decreased debt service due to securing of lower interest rates.
For the three month period ended March 31, 1997, the Inducon East Joint Venture
generated a net loss of $213,517 versus a net loss of $94,335 for the three
months ended March 31, 1996. This jump was primarily due to increases in
property operations expenses. Management is investigating ways of decreasing
such expenses for example by doing more repair and maintenance work in-house as
opposed to contracting out the work.
The Inducon East Phase III Joint Venture generated a net loss of $45,439 for the
three month period ended March 31, 1997. Net loss for the joint venture for the
three month period ended March 31, 1996 amounted to $2,994.
-23-
<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.
-24-
<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 July 10, 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 July 10, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
President and Director
/s/Michael J. Colmerauer July 10, 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
THREE MONTHS ENDED MARCH 31, 1997, 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> 678,179
<SECURITIES> 0
<RECEIVABLES> 140,030
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 818,209
<PP&E> 34,143,804
<DEPRECIATION> 12,421,262
<TOTAL-ASSETS> 25,497,137
<CURRENT-LIABILITIES> 1,469,864
<BONDS> 21,264,135
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 25,497,137
<SALES> 0
<TOTAL-REVENUES> 1,744,302
<CGS> 0
<TOTAL-COSTS> 2,029,708
<OTHER-EXPENSES> 246,008
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 530,558
<INCOME-PRETAX> (531,414)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (531,414)
<EPS-PRIMARY> (24.54)
<EPS-DILUTED> 0
</TABLE>
