FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
June 30, 2000 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 12A
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 [ ]
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Form 10-Q
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
Page
----
<S> <C> <C>
Item 1. Financial Statements
Balance Sheets - June 30, 2000 and December 31, 1999 3
Statements of Operations - Three and six month periods ended
June 30, 2000 and 1999 4
Statement of Partners' Equity - Six months ended June 30, 2000 5
Statements of Cash Flows - Six months ended June 30, 2000 and 1999 6
Notes to Financial Statements 7 - 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2 - 5. Not applicable 10
Item 6. Exhibits and Reports on Form 8-K 10
</TABLE>
2
<PAGE>
PART I - Item 1. Financial Statements
--------------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Balance Sheets
June 30, 2000 and December 31, 1999
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
Assets 2000 1999
------ ---- ----
<S> <C> <C>
Property and equipment, at cost:
Land and improvements $ 2,435,519 2,435,519
Buildings and improvements 26,459,281 26,386,959
Furniture, fixtures and equipment 516,411 516,411
------------ ------------
29,411,211 29,338,889
Less accumulated depreciation 11,840,604 11,326,039
------------ ------------
Net property and equipment 17,570,607 18,012,850
Investment in land 417,473 417,473
Cash and cash equivalents 1,178,328 1,004,644
Accounts receivable, less allowance for doubtful accounts of
$143,188 in 2000 and $103,576 in 1999 82,939 7,882
Escrow deposits 970,832 713,577
Mortgage costs, less accumulated amortization
of $139,656 in 2000 and $109,034 in 1999 769,553 800,175
Other assets 165,907 228,041
------------ ------------
Total assets $ 21,155,639 21,184,642
============ ============
Liabilities and Partners' Equity
--------------------------------
Liabilities:
Mortgage loans payable 20,346,608 20,458,106
Accounts payable and accrued expenses 219,504 154,046
Payables to affiliated parties 136,396 107,861
Accrued interest payable 122,526 111,800
Security deposits and prepaid rents 223,840 184,698
------------ ------------
Total liabilities 21,048,874 21,016,511
------------ ------------
Partners' equity (deficit):
General partners (408,734) (406,893)
Limited partners 515,499 575,024
------------ ------------
Total partners' equity 106,765 168,131
------------ ------------
Contingency
Total liabilities and partners' equity $ 21,155,639 21,184,642
============ ============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Statements of Operations
Three and six month periods ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
------------------ ----------------
(As restated) (As restated)
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income:
Rental $ 1,151,697 1,084,232 2,335,400 2,189,209
Interest and other income 212,751 157,397 416,693 304,158
----------- ----------- ----------- -----------
Total income 1,364,448 1,241,629 2,752,093 2,493,367
----------- ----------- ----------- -----------
Expenses:
Property operations 508,618 476,732 1,024,167 1,070,089
Interest 417,345 420,537 842,326 833,708
Depreciation 257,493 276,982 514,565 553,182
Administrative:
Affiliated parties 132,623 70,137 251,190 173,110
Other 115,593 97,055 181,211 151,287
----------- ----------- ----------- -----------
Total expenses 1,431,672 1,341,443 2,813,459 2,781,376
----------- ----------- =========== -----------
Net loss $ (67,224) (99,814) (61,366) (288,009)
=========== =========== =========== ===========
Net loss per limited partnership
unit $ (3.10) (4.61) (2.83) (13.30)
=========== =========== =========== ===========
Weighted average number of
limited partnership units
outstanding 21,002.8 21,002.8 21,002.8 21,002.8
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Statement of Partners' Equity
Six months ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
General Limited Partners
Partners Units Amount
-------- ----- ------
<S> <C> <C> <C>
Balance at January 1, 2000 $(406,893) 21,002.8 575,024
Net loss (1,841) -- (59,525)
--------- -------- ---------
Balance at June 30, 2000 $(408,734) 21,002.8 515,499
========= ======== =========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Statements of Cash Flows
Six months ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
----------------
(As restated)
June 30, June 30,
2000 1999
---- ----
<S> <C> <C>
Cash Flows from operating activities:
Net loss $ (61,366) (288,009)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 574,061 637,085
Changes in:
Accounts receivable (75,057) (48,724)
Receivables from affiliated parties -- (59,655)
Escrow deposits (257,255) (104,549)
Other assets 33,260 66,692
Accounts payable and accrued expenses 65,458 363,504
Payables to affiliated parties 28,535 (185,272)
Accrued interest payable 10,726 (22,201)
Security deposits and prepaid rents 39,142 27,128
----------- -----------
Net cash provided by operating activities 357,504 385,999
----------- -----------
Cash flows used by investing activities - additions to property
and equipment (72,322) (154,936)
----------- -----------
Cash flows from financing activities:
Mortgage costs related to refinancing -- (18,460)
Principal payments on mortgage loans (111,498) (88,579)
----------- -----------
Net cash used in financing activities (111,498) (107,039)
----------- -----------
Net increase in cash and cash equivalents 173,684 124,024
Cash and cash equivalents at beginning of period 1,004,644 188,887
----------- -----------
Cash and cash equivalents at end of period $ 1,178,328 312,911
=========== ===========
Supplemental disclosure of cash flow information -
cash paid during the period for interest $ 800,979 801,599
=========== ===========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements
Six months ended June 30, 2000 and 1999
(Unaudited)
(1) Basis of Presentation
--------------------------
The accompanying interim financial statements have been prepared in
accordance with generally accepted accounting principles and, in the
opinion of management, contain all necessary adjustments for a fair
presentation. The Partnership's significant accounting policies are set
forth in its December 31, 1999 Form 10-K. The interim financial
statements should be read in conjunction with the financial statements
included therein. The interim results should not be considered
indicative of the annual results. Certain reclassifications of prior
period numbers may have been made to conform to the current period
presentation.
(2) Organization
-----------------
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. The general partners are Realmark Properties, Inc. (the
corporate general partner) and Joseph M. Jayson (the individual general
partner). Joseph M. Jayson is the sole shareholder of J.M. Jayson &
Company, Inc. Realmark Properties, Inc. is a wholly-owned subsidiary 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.
(3) Current Accounting Pronouncements
--------------------------------------
In June 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 138 - "Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an Amendment of
Statement No. 133" which amends certain provisions of Statement of
Financial Accounting Standards No. 133 - "Accounting for Derivative
Instruments and Hedging Activities." These statements establish
accounting and financial reporting standards for derivative instruments
and hedging activities. These statements become effective for the
Partnership on January 1, 2001. The effect, if any, that Statements No.
133 and 138 will have on the Partnership's operations and financial
position will not be material.
7
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements, Continued
(4) Contingency
----------------
The Partnership, as a nominal defendant, the General Partners of the
Partnership and the three individuals constituting the officers and
directors of the Corporate General Partner, as defendants, were served
with a Summons and Complaint on April 19, 2000 in a class and
derivative action instituted by Ira Gaines and on August 21, 2000 in a
class and derivative action instituted by Sean O'Reilly and Louise
Homburger, each in Supreme Court, County of Erie, State of New York.
The actions allege breaches of contract and breaches of fiduciary duty
and seek, among other things, an accounting, the removal of the General
Partners, the liquidation of the Partnership and the appointment of a
receiver to supervise the liquidation, and damages. The General
Partners and the officers and directors of the Corporate General
Partner have filed a motion to dismiss the first complaint and are
presently reviewing the second complaint and intend to vigorously
pursue their defense.
(5) Prior Period Adjustment
----------------------------
The net loss for the three and six month periods ended June 30, 1999 have
been corrected to give effect to a year-end 1999 adjustment as follows:
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
1999 1999
---- ----
<S> <C> <C>
As previously reported $ (159,314) (407,009)
Elimination of depreciation expense incorrectly
recorded during the period 59,500 119,000
------------- -----------
As restated $ (99,814) (288,009)
============= ===========
</TABLE>
The net loss per limited partnership unit decreased $2.75 to $4.61 for
the three months ended June 30, 1999 and decreased $5.50 to $13.30 for
the six months ended June 30, 1999.
8
<PAGE>
PART I - Item 2. Management's Discussion and Analysis of Financial Condition
-----------------------------------------------------------
and Results of Operations
-------------------------
Liquidity and Capital Resources
-------------------------------
The Partnership continues to maintain sufficient cash flow from operations to
enable it to fund its debt obligations and capital expenditures. No
distributions to partners were made in either the first six months of 2000 or
1999. The General Partner hopes to resume making distributions, although it is
not certain when the Partnership will be in such a position.
Occupancies at the properties in the Partnership continued in most locations to
be favorable; i.e., exceeding 90 percent on average. Management continues to
actively pursue new tenants by making capital improvements to the properties and
through the use of rental promotions and concessions.
Results of Operations
---------------------
The results of operations improved approximately $32,000 in the quarter ended
June 30, 2000 and approximately $127,000 in the six months then ended as
compared to the same 1999 periods. The principal elements of the improvement
were: (1) an increase in rental income of $67,000 in the quarter and $146,000 in
the six months as a result of higher rates and increased collections,
particularly at the commercial properties and; (2) an increase in other income
of $55,000 in the quarter and $112,000 in the six months primarily due to
increases in interest income and common area maintenance charges. These revenue
increases were partially offset by total expense increases of $90,000 and
$42,000 in the three and six months ended June 30, 2000, respectively, mainly
because of increases in the amount of administrative costs resulting from
increased accounting and portfolio management expenses charged to, or incurred
on behalf of, the Partnership. While property operations expense increased about
6% in the 2000 quarter, it decreased $46,000 in the six-month period because of
less capital improvement expense in the current year.
PART I - Item 3 Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
The Partnership's cash equivalents are short-term, interest bearing bank
accounts and its mortgage loans are fixed-rate. It has not entered into
any derivative contracts. Therefore, it has no market risk exposure.
9
<PAGE>
PART II - OTHER INFORMATION
-----------------
Item 1. Legal Proceedings
--------------------------
The Partnership, as a nominal defendant, the General Partners of the
Partnership and the three individuals constituting the officers and
directors of the Corporate General Partner, as defendants, were served
with a Summons and Complaint on April 19, 2000 in a class and
derivative action instituted by Ira Gaines and on August 21, 2000 in a
class and derivative action instituted by Sean O'Reilly and Louise
Homburger, each in Supreme Court, County of Erie, State of New York.
The actions allege breaches of contract and breaches of fiduciary duty
and seek, among other things, an accounting, the removal of the General
Partners, the liquidation of the Partnership and the appointment of a
receiver to supervise the liquidation, and damages. The General
Partners and the officers and directors of the Corporate General
Partner have filed a motion to dismiss the first complaint and are
presently reviewing the second complaint and intend to vigorously
pursue their defense.
Items 2, 3, 4 and 5
-------------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
The Partnership reported a change in independent accountants under item 4
of Form 8-K, filed on January 19, 2000 and amended on February 3, 2000,
April 17, 2000 and May 2, 2000.
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 PARTNERHIP V
By: /s/ Joseph M. Jayson 12/01/00
------------------------------------ ----------------
Joseph M. Jayson, Date
Individual General Partner and
Principal Financial Officer
10
