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, 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 September 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 -
September 30, 1997 and December 31, 1996 3
Statements of Operations -
Three Months Ended September 30, 1997 and 1996 4
Statements of Operations -
Nine Months Ended September 30, 1997 and 1996 5
Statements of Cash Flows -
Nine Months Ended September 30, 1997 and 1996 6
Statements of Partners' (Deficit) Capital -
Nine Months Ended September 30, 1997 and 1996 7
Notes to Financial Statements 8 - 24
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- ------- FINANCIAL CONDITION & RESULTS OF
--------------------------------
OPERATIONS 25 - 27
----------
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
BALANCE SHEETS
September 30, 1997 and December 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
- ------
Property, at cost:
Land $ 2,221,900 $ 2,221,900
Buildings and improvements 29,977,941 29,491,904
Furniture, fixtures and equipment 2,430,000 2,430,000
------------ ------------
34,629,841 34,143,804
Less accumulated depreciation 13,089,965 12,087,478
------------ ------------
Property, net 21,539,876 22,056,326
Investments in real estate joint ventures 1,643,752 1,939,576
Investment in land 373,282 373,282
Cash 1,536,185 800,741
Accounts receivable, net of allowance for doubtful
accounts of $711,514 and $541,099, respectively 53,134 19,588
Accounts receivable - affiliate -- 17,233
Mortgage escrow 1,788,159 483,107
Mortgage costs, net of accumulated amortization
of $136,399 and $303,347 929,327 230,581
Prepaid commissions, net of accumulated amortization
of $84,027 and $42,327 105,911 64,721
Other assets 114,481 65,488
------------ ------------
Total Assets $ 28,084,107 $ 26,050,643
============ ============
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Mortgages and notes payable $ 24,232,048 $ 21,337,592
Accounts payable and accrued expenses 1,136,950 874,387
Accounts payable - affiliates 43,561 --
Accrued interest 194,251 177,135
Security deposits and prepaid rents 366,494 366,976
------------ ------------
Total Liabilities 25,973,304 22,756,090
------------ ------------
Partners' (Deficit) Capital:
General partners (495,042) (459,529)
Limited partners 2,605,844 3,754,082
------------ ------------
Total Partners' Capital 2,110,803 3,294,553
------------ ------------
Total Liabilities and Partners' Capital $ 28,084,107 $ 26,050,643
============ ============
</TABLE>
See notes to financial statements
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
STATEMENTS OF OPERATIONS
Three Months Ended September 30, 1997 and 1996
(Unaudited)
Three Months Three Months
Ended Ended
September 30, September 30,
1997 1996
---- ----
Income:
Rental $ 1,648,968 $ 1,584,388
Interest and other income 79,959 109,252
----------- -----------
Total income 1,728,927 1,693,640
----------- -----------
Expenses:
Property operations 808,729 621,673
Interest 547,083 558,512
Depreciation and amortization 390,136 317,573
Administrative:
Paid to affiliates 138,267 214,499
Other 114,421 170,186
----------- -----------
Total expenses 1,998,636 1,882,443
----------- -----------
Loss before allocated loss from joint venture (269,709) (188,803)
Allocated loss from joint ventures (51,203) (425,056)
----------- -----------
Net loss $ (320,912) $ (613,859)
=========== ===========
Loss per limited partnership unit $ (14.82) $ (28.35)
=========== ===========
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, 1997 and 1996
(Unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
---- ----
Income:
Rental $ 4,975,816 $ 4,994,347
Interest and other income 330,245 223,158
----------- -----------
Total income 5,306,061 5,217,505
----------- -----------
Expenses:
Property operations 2,319,839 2,427,094
Interest 1,679,758 1,628,717
Depreciation and amortization 1,327,277 1,024,549
Administrative:
Paid to affiliates 442,223 492,112
Other 424,890 399,080
----------- -----------
Total expenses 6,193,987 5,971,552
----------- -----------
Loss before allocated loss from joint venture (887,926) (754,047)
Allocated loss from joint ventures (295,824) (229,003)
----------- -----------
Net loss $(1,183,750) $ (983,050)
=========== ===========
Loss per limited partnership unit $ (54.67) $ (45.40)
=========== ===========
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, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
---- ----
<S> <C> <C>
Cash flow from operating activities:
Net loss $(1,183,750) $ (983,050)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization 1,327,277 1,024,549
Net loss from joint ventures 295,824 229,003
Changes in operating assets and liabilities:
Accounts receivable (33,546) 25,236
Mortgage escrow (1,305,052) (304,101)
Leasing commissions (82,890) --
Other assets (48,993) (44,778)
Accounts payable and accrued expenses 262,563 480,923
Accrued interest 17,116 (14,022)
Security deposits and prepaid rent (482) 21,180
----------- -----------
Net cash (used in) provided by operating activities (751,933) 434,940
----------- -----------
Cash flow from investing activities:
Accounts receivable - affiliates 17,233 29,748
Capital expenditures (486,037) (6,692)
----------- -----------
Net cash (used in) provided by investing activities (468,804) 23,056
----------- -----------
Cash flows from financing activities:
Accounts payable - affiliates 43,561 --
Principal payments on mortgages and notes (137,502) (195,344)
Mortgage costs related to refinancing (981,836) (94,394)
Mortgage proceeds 3,031,958 --
----------- -----------
Net cash provided by (used in) financing activities 1,956,181 (289,738)
----------- -----------
Increase (decrease) in cash 735,444 168,258
Cash - beginning of period 800,741 453,883
----------- -----------
Cash - end of period $ 1,536,185 $ 622,141
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 1,662,642 $ 1,642,739
=========== ===========
</TABLE>
See notes to financial statements
-6-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
Nine Months Ended September 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 (29,492) -- (953,559)
----------- -------- -----------
Balance, September 30, 1996 $ (451,157) 21,002.8 $ 4,024,801
=========== ======== ===========
Balance, January 1, 1997 $ (459,529) 21,002.8 $ 3,754,082
Net loss (35,513) -- (1,148,238)
----------- -------- -----------
Balance, September 30, 1997 $ (495,042) 21,002.8 $ 2,605,844
=========== ======== ===========
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP V
NOTES TO FINANCIAL STATEMENTS
Nine Months Ended September 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 nine month periods ended September 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
September 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 September 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 September 30, 1997 and December 31, 1996 and the results of
its operations for the nine months ended September 30, 1997 and 1996
follows:
-13-
<PAGE>
INDUCON-EAST JOINT VENTURE
BALANCE SHEETS
September 30, 1997 and December 31, 1996
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
Property, at cost:
Land $ 500,100 $ 500,100
Land improvements 435,769 435,769
Buildings 8,430,482 8,427,982
----------- -----------
9,366,351 9,363,851
Less accumulated depreciation 2,823,669 2,517,641
----------- -----------
Property, net 6,542,682 6,846,210
Cash and cash equivalents 17,224 --
Mortgage costs, net of amortization 93,176 107,036
Other assets 144,324 201,297
----------- -----------
Total Assets $ 6,797,406 $ 7,154,543
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash overdraft $ -- $ 7,915
Mortgages and bonds payable 6,539,011 6,591,423
Accounts payable and accrued expenses 334,328 283,157
Accounts payable - affiliates 45,228 96,312
----------- -----------
Total Liabilities 6,918,567 6,978,807
----------- -----------
Partners' Capital (Deficit):
The Partnership 28,509 310,561
Other joint venturer (149,670) (134,825)
----------- -----------
Total Partners' Capital (121,161) 175,736
----------- -----------
Total Liabilities and Partners' Capital $ 6,797,406 $ 7,154,543
=========== ===========
</TABLE>
-14-
<PAGE>
INDUCON-EAST JOINT VENTURE
STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 1997 and 1996
Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
---- ----
Income:
Rental $ 809,212 $ 853,092
Interest and other income 180,378 171,531
----------- -----------
Total income 989,590 1,024,623
----------- -----------
Expenses:
Property operations 343,153 356,809
Interest 465,245 499,291
Depreciation and amortization 365,281 349,247
Administrative 112,808 69,493
----------- -----------
Total expenses 1,286,487 1,274,840
----------- -----------
Net loss $ (296,897) $ (250,217)
=========== ===========
Allocation of net loss:
The Partnership $ (282,052) $ (237,706)
Other Joint Venturer (14,845) (12,511)
----------- -----------
$ (296,897) $ (250,217)
=========== ===========
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 (282,052)
---------
Investment in joint venture - end of period $ 28,509
=========
-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, 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 September 30, 1997 is
$554,711.
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, 1997 and December 31, 1996 and the results of
operations for the nine months ended September 30, 1997 and 1996 is as
follows:
-16-
<PAGE>
INDUCON-EAST PHASE III JOINT VENTURE
BALANCE SHEETS
September 30, 1997 and December 31, 1996
<TABLE>
<CAPTION>
September 30, December
31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
Property, at cost:
Land $ 141,400 $ 141,400
Buildings 2,466,057 2,465,057
---------- ----------
2,607,457 2,606,457
Less accumulated depreciation 214,889 164,743
---------- ----------
Property, net 2,392,568 2,441,714
Accounts receivable 5,195 1,149
Accounts receivable - affiliates 59,676 116,475
Prepaid expenses 9,812 2,204
Deferred financing cost, net of accumulated amortization
of $24,398 and $17,314 28,506 35,589
Leasing commissions, net of accumulated amortization
of $52,458 and $38,547 40,646 42,942
---------- ----------
Total Assets $2,536,403 $2,640,073
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash overdraft $ 276,393 $ 272,928
Construction loan payable 554,711 622,077
Accounts payable and accrued expenses 88,325 113,597
---------- ----------
Total Liabilities 919,429 1,008,602
---------- ----------
Partners' Capital:
The Partnership 1,615,243 1,629,015
Other joint venture 1,731 2,456
---------- ----------
Total Partners' Capital 1,616,974 1,631,471
---------- ----------
Total Liabilities and Partners' Capital $2,536,403 $2,640,073
========== ==========
</TABLE>
-17-
<PAGE>
INDUCON-EAST PHASE III JOINT VENTURE
STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 1997 and 1996
Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
---- ----
Income:
Rental $ 269,035 $ 219,002
Interest and other income -- --
--------- ---------
Total income 269,035 219,002
--------- ---------
Expenses:
Property operations 131,399 85,037
Interest 40,293 40,685
Depreciation and amortization 71,140 59,082
Administrative 40,700 25,035
--------- ---------
Total expenses 283,532 209,839
--------- ---------
Net (loss) income $ (14,497) $ 9,163
========= =========
Allocation of net (loss) income:
The Partnership $ (13,772) $ 8,705
Other Joint Venturer (725) 458
--------- ---------
$ (14,497) $ 9,163
========= =========
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 (13,772)
-----------
Investment in joint venture - end of period $ 1,615,243
===========
-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 $1,635,144 and $1,736,482 at September
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 September 30, 1997 providing for monthly
interest payments of $1,500 and an 8% note payable at September 30, 1996
with a balance of $153,566 providing for monthly payments of $2,216,
including interest at 8%; this note was refinanced by the note described
previously.
The Williamsburg North Apartments
---------------------------------
A mortgage with a balance of $2,500,000 at September 30, 1997, providing
for monthly principal and interest payments of $17,859, bearing interest at
7.72%. The note matures January 2006.
A 10.445% mortgage with a balance of $0 and $1,852,687 at September 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. The mortgage was fully
paid off in July of 1997 when the mortgage was refinanced.
The Fountains Apartments
------------------------
A mortgage with a balance of $3,895,346 at September 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 $3,468,263 at September 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.
-19-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
Camelot East Apartments, O'Hara Apartments, Wayne Estates Apartments
--------------------------------------------------------------------
A 10% mortgage with a balance of $0 and $8,126,253 at September 30, 1997
and 1996, 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.
This mortgage was refinanced in May of 1997 with each individual property
being financed separately.
Camelot East Apartments
-----------------------
A mortgage with a balance of $4,900,000 at September 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 $1,598,016 at September 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 $3,091,162 at September 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 $1,597,753 at September 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 $1,241,461 at September
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.
-20-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
Commercial Park West
--------------------
A 9.25% mortgage with a balance of $4,834,629 and $4,865,498 at September
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.
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 $265,889 and $269,332 for the nine months ended September 30, 1997
and 1996, respectively.
Accounts receivable - affiliates amounted to $0 and $118,098 at September
30, 1997 and 1996 respectively.
Accounts payable - affiliates amounted to $43,561 and $0 at September 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 both the nine months ended September 30, 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 $10,000 for the nine months ended September 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 nine months ended September 30, 1997
and 1996 as reported in the statements of operations, and as would be
reported for tax purposes, is as follows:
September 30, September 30,
1997 1996
---- ----
Net loss - statement of operations $(1,183,750) $ (983,050)
Add to (deduct from):
Difference in depreciation 188,970 258,636
Difference in investment in
Joint Ventures 85,050 80,565
Allowance for doubtful accounts 131,572 73,794
----------- ----------
Net loss - tax return purposes $ ( 778,158) $ (570,055)
=========== ===========
The reconciliation of Partners' Capital as of September 30, 1997 and
December 31, 1996 as reported in the balance sheet, and as reported for tax
purposes, is as follows:
September 30, December 31,
1997 1996
---- ----
Partners' Capital - balance sheet $ 2,110,803 $ 3,294,553
Add to (deduct from):
Accumulated difference in
depreciation 1,824,853 1,635,883
Accumulated difference in investments
in Joint Ventures 514,518 429,468
Syndication fees 2,352,797 2,352,797
Accumulated difference in amortization
of organization costs 21,738 21,738
Allowance for doubtful accounts 565,589 434,017
------------ -----------
Partners' Capital -
tax return purposes $ 7,390,298 $ 8,168,456
============ ===========
-23-
<PAGE>
10. SUBSEQUENT EVENTS
On November 4, 1997, a consent solicitation statement was sent to all
Limited Partners of this Partnership. The offering was for the purchase of
five of the residential complexes in the Partnership: Williamsburg North
Apartments, The Fountains Apartments, O'Hara Apartments, Wayne Estates
Apartments, and Jackson Park Apartments. The price offered in the document
for the properties, including the proceeds from the sale and distributions
from other sources, was $16,107,000 or approximately $171 per Limited
Partnership unit. The purchaser is an affiliate by common ownership of the
General Partners. Consent under the offering must be received by November
26, 1997.
-24-
<PAGE>
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Liquidity and Capital Resources
- -------------------------------
The Partnership continues to maintain 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 nine months of 1997 or
1996. The General Partner does hope to make a distribution some time in the near
future as a result of a positive vote on the consent solicitation statement sent
out in early November of 1997. The consent statement was an offer for the
purchase of five of the residential complexes in the Partnership. The sales
proceeds to be distributed and additional distributions are expected to be
approximately $171 per Limited Partnership unit if the consent solicitation
agreement is approved.
The Partnership has successfully refinanced all of the residential complexes in
the Partnership. The result was additional cash provided by the new financing
and significantly lower interest rates. Management feels that with a decrease in
debt service, it will be able to continue to complete the capital improvements
necessary at the properties. Escrow accounts were set up as part of the new
mortgages; these accounts are to be used to cover the costs of the improvements
necessary, but because releases of escrowed funds are not immediate, in the
meantime for cash flow purposes the cash from operations is being used to pay
for the improvements.
Management also continues to search for buyers for the properties in the
Partnership (management is also continuing to accept offers on those properties
included in the consent solicitation) 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 still being
finalized with the potential purchaser.
Results of Operations
- ---------------------
Partnership operations for the three month period ended September 30, 1997
resulted in a net loss of $320,912 or $14.82 per limited partnership unit
compared to a loss of $613,859 or $28.35 per limited partnership unit for the
same period in 1996. The Partnership operations for the nine month period ended
September 30, 1997 resulted in a net loss of $1,183,750 or $54.67 per limited
partnership unit versus a nine month 1996 net loss of $983,050 or $45.40 per
unit.
Tax basis loss for the nine month period ended September 30, 1997 amounted to
$778,158 or $35.94 per limited partnership unit compared to a tax loss of
$570,055 or $26.33 per unit for the corresponding period in 1996.
-25-
<PAGE>
Results of Operations (continued)
- ----------------------------------
Total revenue for the three month period ended September 30, 1997 amounted to
$1,728,927 increasing approximately $35,000 from the three month period ended
September 30, 1996. For the first nine months of 1997 there was an increase in
total partnership revenue of slightly more than $88,500 as compared to the same
period in 1996. Of this total, there was a decrease in rental revenue of just
over $18,500 which primarily resulted from a decrease in the third quarter of
1997 in occupancies at several of the residential apartment complexes in the
Partnership. The commercial buildings in the Partnership continue to maintain
stable and relatively high occupancies. There was an increase in interest and
other income of over $100,000 when comparing the nine months ended September 30,
1997 and 1996. termination fees and month-to-month surcharges at the residential
properties. As was noted in previous quarters, management continues to
aggressively market the residential properties to potential renters through
attractive concessions and "regular" or steady advertising in an effort to
increase occupancies.
For the nine month period ended September 30, 1997, expenses totaled $6,193,987,
increasing just over $222,000 from the corresponding period in 1996. For the
quarter ended September 30, 1997, Partnership expenses amounted to $1,998,636,
increasing by $116,000 from the 1996 quarter amount. For the first nine months
of 1997, an increase in property operations expenditures in excess of $187,000
resulted due to increased repairs and maintenance work being done at several of
the residential complexes in the Partnership. A decrease in contracted service
expenses was also noted at all of the residential complexes in the Partnership.
Management continues to stress the importance of the physical appearance of the
properties as a means of improving occupancy. As a result, property management
is concentrating heavily on improving both the exterior of the complexes as well
as the interior through the installation of new carpets and appliances, fresh
coats of paint, etc. 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 slight increase of approximately $24,000 in total
administrative expenses when comparing the nine month periods ended September
30, 1997 and 1996. This increase is primarily the result of increased legal
costs for The Fountains Apartments resulting from an increased number of
evictions; bad debts at this complex increased by approximately 60% when
comparing the first nine months of 1997 and 1996. A large increase in
amortization expense was also noted. This increase was the result of new
financing obtained during 1997 on all 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 totaling approximately
$200,000.
-26-
<PAGE>
Results of Operations (continued)
- ----------------------------------
For the nine month period ended September 30, 1997, the Inducon East Joint
Venture generated a net loss of $296,897 versus a net loss of $250,217 for the
nine months ended September 30, 1996. This jump was primarily due to increases
in administrative expenses resulting from higher management fees and an increase
in service charges incurred.
The Inducon East Phase III Joint Venture generated a net loss of $14,497 for the
nine month period ended September 30, 1997 with $13,772 being allocated to the
Partnership. Net income for the joint venture for the nine month period ended
September 30, 1996 amounted to $9,163. Increases in payroll and associates costs
and repairs and maintenance caused the large increase in property operations
expenses, while increased management fees due to higher occupancy resulted in an
increase in administrative costs when comparing the nine months ended September
30, 1997 and 1996.
-27-
<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.
-28-
<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 November 12, 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 November 12, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
President and Director
/s/Michael J. Colmerauer November 12, 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, 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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,536,185
<SECURITIES> 0
<RECEIVABLES> 764,648
<ALLOWANCES> 711,514
<INVENTORY> 0
<CURRENT-ASSETS> 3,491,959
<PP&E> 34,629,841
<DEPRECIATION> 13,089,965
<TOTAL-ASSETS> 28,084,107
<CURRENT-LIABILITIES> 1,741,256
<BONDS> 24,232,048
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 28,084,107
<SALES> 0
<TOTAL-REVENUES> 5,306,061
<CGS> 0
<TOTAL-COSTS> 6,193,987
<OTHER-EXPENSES> 295,824
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,679,758
<INCOME-PRETAX> (1,183,750)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,183,750)
<EPS-PRIMARY> (54.67)
<EPS-DILUTED> 0
</TABLE>
