FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934.
Commission File Number 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 No.)
2350 North Forest Road
Suite 12-A
Getzville, New York 14068
(Address of Principal Executive Office)
Registrant's Telephone Number: (716) 636-9090
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units of Limited
Partnership Interest
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-K or any
amendment to this Form 10-K. ( X )
DOCUMENTS INCORPORATED BY REFERENCE
See item 14 for a list of all documents incorporated by reference
<PAGE>
PART I
------
ITEM 1: BUSINESS
-----------------
The Registrant, Realmark Property Investors Limited Partnership-V (the
"Partnership"), is a Delaware limited partnership organized in 1986, pursuant to
an Agreement and Certificate of Limited Partnership (the "Partnership
Agreement"), under the Revised Delaware Uniform Limited Partnership Act. The
Partnership's general partners are Realmark Properties, Inc. (the "Corporate
General Partner"), a Delaware corporation, and Joseph M. Jayson (the "Individual
General Partner").
The Registrant commenced the public offering of its limited partnership
units, registered with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, on July 14, 1986, and concluded the offering
on October 31, 1987, having raised a total of $20,999,800 before deducting sales
commissions and expenses of the offering.
The Partnership's primary business and its only industry segment is to
own and operate income-producing real property for the benefit of its partners.
As of December 31, 1999, the Partnership owned one (1) 205 unit apartment
complex in Louisville, KY, one (1) 65,334 square foot office/warehouse building
in Nashville, Tennessee, one (1) 115,021 square foot office complex in Durham,
North Carolina, and two (2) office/warehouse complexes in Amherst, New York,
totaling 196,500 square feet.
The business of the Partnership is not seasonal. As of December 31,
1999, the Partnership did not directly employ any persons in a full-time
position. All persons who regularly rendered services on behalf of the
Partnership through December 31, 1999 were employees of the Corporate General
Partner or its affiliates.
The occupancy for each complex as of December 31, 1999, 1998 and 1997
was as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Camelot 93% 92% 98%
The Paddock 71% 77% 86%
Commercial Park West 100% 97% 100%
Inducon East 94% 93% 89%
Inducon East Phase III 92% 96% 100%
</TABLE>
2
<PAGE>
The percentage of total Partnership revenue generated from each complex
as of December 31, 1999, 1998 and 1997 was as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Camelot 24% 28% 18%
The Paddock 7% 7% 6%
Commercial Park West 32% 31% 20%
Inducon East 29% 26% 3%
Inducon East Phase III 8% 8% 1%
Williamsburg North - - 12%
Fountains - - 15%
O'Hara - - 7%
Wayne Estates - - 11%
Jackson Park - - 7%
</TABLE>
This annual report contains certain forward-looking statements
concerning the Partnership's current expectations as to future results. Such
forward-looking statements are contained in Item 7: Management's Discussion and
Analysis of Financial Conditions and Results of Operations. Words such as
"believes", "forecasts", "intends", "possible", "expects", "estimates",
"anticipates" or "plans" and similar expressions are intended to identify
forward-looking statements.
ITEM 2: PROPERTIES
-------------------
The following is a list of properties owned by the Partnership at December 31,
1999:
<TABLE>
<CAPTION>
Property Name
-------------
and Location General Character of Property Purchase Date
------------ ----------------------------- -------------
<S> <C> <C>
Camelot East Apts. Apartment complex; 23 buildings on 6 acres; May 1988
Louisville, KY 205 units. The outstanding mortgage balance
at December 31, 1999 was $4,810,739 providing
for annual principal and interest payments
of approximately $407,000 including interest
at 7.4%. The mortgage matures November 2027.
The Paddock Building Office/Warehouse Building; 65,334 square May 1987
Nashville, TN feet. The property is currently managed by
an unrelated third party. Realmark
Corporation, an affiliate of the Corporate
General Partner, closely monitors the
operations. The outstanding mortgage balance
at December 31, 1999 was $1,678,683. The
mortgage provides for monthly principal and
interest payments of $12,785 including
interest at 7.70% and matures January 2009
with a balloon payment of approximately
$1,375,000.
3
<PAGE>
ITEM 2: PROPERTIES (Con't.)
---------------------------
Property Name
-------------
and Location General Character of Property Purchase Date
------------ ----------------------------- -------------
Commercial Park West Office complex; 3 buildings totaling June 1991
Durham, NC 115,021 square feet. The property is
managed by an unrelated third party, with
Realmark Corporation, an affiliate of the
Corporate General Partner, closely monitoring
the operations. The outstanding mortgage
balance at December 31, 1999 was
$5,989,366. The mortgage provides for monthly
principal and interest payments of $44,319 including
interest at 8.07% and matures October 2029
Inducon East Office/warehouse complex; 6 buildings on Acquired
Amherst, NY 15 acres; approximately 150,000 sq. ft of April 1987 as
rentable space. The outstanding mortgage Joint Venture;
balance at December 31, 1999 was $6,127,682, fully acquired
providing for monthly principal and interest November 1997
payments of $46,827, including interest at
7.74%. The mortgage matures January 2009.
Inducon East Phase III The development consists of two buildings totaling Acquired
Amherst, NY 46,500 sq. ft. The outstanding mortgage September 1992
balance at December 31, 1999 was $1,851,636, as Joint Venture;
providing for monthly principal and interest fully acquired
payments of $14,150, including interest at November 1997
7.74%. The mortgage matures January 2009.
</TABLE>
ITEM 3: LEGAL PROCEEDINGS
--------------------------
The Partnership is not a party to, nor is any of the Partnership's
property the subject of, any material pending legal proceedings; however, for a
discussion of litigation which is pending against the General Partners and
certain other associates, please see Item 7.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
-------------------------------------------------------------
None.
4
<PAGE>
PART II
-------
ITEM 5: MARKET FOR REGISTRANT'S UNITS OF LIMITED PARTNERSHIP INTEREST.
------- --------------------------------------------------------------
There is currently no established trading market for the units of
Limited Partnership Interest of the Partnership and it is not anticipated that
any will develop in the future.
There were no Partnership distributions for the years ended December
31, 1999 or 1997. Distributions of approximately $3,580,000 were made to the
partners in the year ended December 31, 1998.
As of December 31, 1999, there were 2,180 record holders of units of
Limited Partnership Interest.
5
<PAGE>
<TABLE>
<CAPTION>
ITEM 6: SELECTED FINANCIAL DATA
--------------------------------
Realmark Properties Investors Limited Partnership-V
---------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1997 Dec. 31, 1996 Dec. 31, 1995
-------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Total assets $ 21,184,642 $ 21,760,675 $ 25,243,111 $ 26,050,643 $ 27,477,303
============ ============ ============ ============ ============
Notes payable and
long-term obligations $ 20,458,106 $ 20,035,113 $ 18,507,664 $ 21,337,592 $ 21,606,473
============ ============ ============ ============ ============
-------------------------------------------------------------------------------------------------------------
Revenue $ 5,129,937 $ 4,751,433 $ 7,068,782 $ 7,012,767 $ 7,213,894
Expenses 5,719,275 6,009,276 9,151,387 7,919,987 8,782,511
------------ ------------ ------------ ------------ ------------
Loss before allocated
loss from joint ventures and
gain on sale of properties (589,338) (1,257,843) (2,082,605) (907,220) (1,568,617)
Loss from Joint Ventures -- -- (625,953) (354,921) (394,263)
Gain on sale of properties -- -- 5,009,787 -- --
------------ ------------ ------------ ------------ ------------
Net income (loss) $ (589,338) $ (1,257,843) $ 2,301,229 $ (1,262,141) $ (1,962,880)
============ ============ ============ ============ ============
-------------------------------------------------------------------------------------------------------------
Net cash provided by
(used in) operating
activities $ 791,316 $ (291,367) $ (1,179,623) $ 733,884 $ 360,672
Principal payments on
mortgages (177,007) (537,588) (270,610) (268,881) (311,596)
Proceeds from refinancing 6,000,000 15,180,000 19,310,000 -- --
Principal payments upon
refinancing (5,400,000) (13,114,963) (14,563,042) -- --
------------ ------------ ------------ ------------ ------------
Net cash provided by
(used in) operating
activities plus
proceeds less
principal payments on
long-term debt $ 1,214,309 $ 1,236,082 $ 3,296,725 $ 465,003 $ 49,076
============ ============ ============ ============ ============
-------------------------------------------------------------------------------------------------------------
(Loss) income per limited
partnership unit $ (27.22) $ (58.09) $ 99.31 $ (58.29) $ (90.65)
============ ============ ============ ============ ============
Distributions per limited
partnership unit $ -- $ 65.36 $ -- $ -- $ --
============ ============ ============ ============ ============
Weighted average number
of limited partnership
units outstanding 21,002.8 21,002.8 21,002.8 21,002.8 21,002.8
============ ============ ============ ============ ============
</TABLE>
6
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
----------------------------------------------
Liquidity and Capital Resources:
--------------------------------
The Partnership successfully refinanced the mortgages on The Paddock,
Inducon East and Inducon East Phase III during the year ended December 31, 1998.
A bridge loan which originated in 1998 on Commercial Park West was replaced by
permanent mortgage financing during the year ended December 31, 1999. Upon
obtaining the new financing, the previous mortgages were paid in full with no
gain or loss resulting. The result of the refinancing was additional cash
provided by the new mortgages and lower interest rates. Escrow accounts were set
up as part of the new mortgages on The Paddock and Inducon East; these accounts
are to be used to cover the costs of the necessary improvements and future
tenant improvements at these commercial buildings.
During November of 1997, the Partnership acquired 100% interest in
Inducon East and Inducon East Phase III. Prior to this time, the Partnership had
a 50% interest in each of these commercial properties. These properties began to
be consolidated in the Partnership's financial statements in November 1997.
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 was received and the sale was finalized on December
5, 1997. The sale resulted in a gain of $5,009,787. A distribution of a portion
of the proceeds from the sale of approximately $3,580,000 was made during the
first quarter of 1998. The Partnership made no distributions in the years ended
December 31, 1999 or 1997. It is uncertain as to when the Partnership will be in
a position to make future distributions, although management is hopeful that
distributions will be made again in the future once the capital improvement work
scheduled at the properties is either completed or the full costs may be
measured.
Numerous capital projects were undertaken in 1999. At Camelot East a
total of $77,000 was spent on capital projects. These projects included the
replacement of sidewalks, replacement of exterior siding, hallway painting,
boiler replacement and chiller repairs, appliances, carpeting and flooring. At
the Paddock a total of $99,000 was spent on projects such as asphalt repairs,
curb repairs, exterior wall repairs, replacing flashing on the exterior of
buildings, painting the exterior of buildings, replacement of exterior doors,
repairing electrical distribution boxes, installing handicap parking areas and
installing ramps. At Inducon East (Phase I, II & III) a total of $31,000 was
spent on capital projects. These projects included roof repair and window lentil
and accent painting. At Commercial Park West a total of $25,000 was spent on
capital projects. These projects included the painting of halls, design of an
additional parking lot and window and door frame painting.
7
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Con't.)
------------------------------------------------------
Liquidity and Capital Resources:
--------------------------------
The Partnership conducted a review of its computer systems to identify
the systems that could have been affected by the "year 2000 issue" and
implemented a plan to resolve such issues. The year 2000 issue is the result of
computer programs being written using two digits rather than four digits to
define the applicable year. Computer programs that have time-sensitive software
may recognize a date using "00" as the year 1900 rather than the year 2000. This
could have resulted in a system failure or miscalculations causing disruptions
of operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business activities.
Management contracted with outside independent computer consultants to resolve
this issue. The majority of the software in use is "2000 compliant" or was added
at no significant cost. Management also engaged a computer firm to re-write its
tax software making it Year 2000 compliant. Management did not experience any
significant problems with its computers as a result of the year 2000 issue and
does not anticipate any such problems in the future.
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.
Results of Operations:
----------------------
For the year ended December 31, 1999, the Partnership incurred a loss
of $589,338 or $27.22 per limited partnership unit. For the year ended December
31, 1998, the Partnership reported net loss of $1,257,843 or $58.09 per limited
partnership unit. For the year ended December 31, 1997, the Partnership reported
net income of $2,301,229 or $99.31 per limited partnership unit. The income was
the result of a gain from the sale of five residential apartment complexes
amounting to approximately $5,000,000.
8
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Con't.)
------------------------------------------------------
Results of Operations (Con't.):
-------------------------------
Partnership revenue for the year ended December 31, 1999 totaled
$5,129,937 consisting of rental revenue of $4,443,569 and other income, which
includes interest, laundry income, common area maintenance and other
miscellaneous sources of income of $686,368. For the year ended December 31,
1998, Partnership revenue totaled $4,751,433, consisting of rental revenue of
$4,656,844 and other income, which includes interest, laundry income and other
miscellaneous sources of income, of $94,589. For the same time period in 1997,
total revenue reported was $7,068,782, consisting of rental income of $6,739,210
and other income of $329,572. The primary reason for the decrease in total
revenue when comparing the year ended December 31, 1999 to both 1998 and 1997 is
that the Partnership owned five more residential apartment complexes which were
reporting income for most of 1997 (i.e., in 1997 these complexes reported rental
income of approximately $3,433,000 and other income of approximately $264,000;
total income for 1999 increased by $378,504 over 1998 total income).
Contributing to the increase was the increased occupancy of Inducon East.
Occupancy at Commercial Park West remained at 100%. The Paddock/warehouse
building in Nashville, Tennessee remained at 71% occupancy. Management is
anticipating that a new tenant will take 5,000 square feet in June 2000, this
will bring occupancy up to 78%.
Partnership expenses for year ended December 31, 1999 totaled
$5,719,275 a decrease over the expenses for the year ended December 31, 1998. A
considerable decrease over the expenses of the year ended December 1997. The
major decrease over 1997 can be attributed to there being fewer properties
reporting expenses in the Partnership. The biggest decrease over 1999 and 1998
is the reduction in interest expense of $480,433. This was due to the loan
refinancing which occurred in 1998 and 1999. The expenses for property
operations for 1999 increased $341,485 over those of 1998. The increased
expenses are attributable to significant non-capitalizable repairs and
maintenance work being done at the properties. At Camelot Apartments,
appliances, pool repair, carpets, heating and cooling were major expenses
totaling $200,000. Common area repairs were made at The Paddock and Commercial
Park West that totaled $90,000.
For the year ended December 31, 1999, the tax basis loss was $53,411 or
$2.47 per limited partnership unit compared to a tax loss of $510,373 or $23.57
per unit for the year ended December 31, 1998 and tax income of $1,461,448 or
$67.50 per limited partnership unit for the year ended December 31, 1997.
9
<PAGE>
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
------- ----------------------------------------------------------
The Partnership does not have investments in instruments which are
subject to market risk (e.g., derivatives, options or other interest sensitive
instruments).
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
------- --------------------------------------------
Listed under Item 14 of the report.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
------- ---------------------------------------------
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
---------------------------------------
As reported on Form 8-K/A, filed with the Securities and Exchange
Commission on April 17, 2000, and incorporated herein by reference in its
entirety: (i) Deloitte & Touche, LLP notified the Company on January 11, 2000
that its relationship as the principal accountants to audit the Company's
financial statements had ceased; (ii) effective January 28, 2000, the company
engaged Toski, Schaefer & Co., P.C. as its independent accountants.
10
<PAGE>
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
------------------------------------------------------------
The Partnership, as an entity, does not have any directors or officers.
The Individual General Partner of the Partnership is Joseph M. Jayson. The
directors and executive officers of Realmark Properties, Inc., the Partnership's
Corporate General Partner, as of December 31, 1999, are listed below. Each
director is subject to election on an annual basis.
<TABLE>
<CAPTION>
Title of All Positions Year First
Name Held With the Company Elected to Position
---- --------------------- -------------------
<S> <C>
Joseph M. Jayson President and Director 1979
Judith P. Jayson Vice President and Director 1979
Michael J. Colmerauer Secretary 1991
</TABLE>
Joseph M. Jayson, President and Director of Realmark Properties, Inc.
and Judith P. Jayson, Vice President and Director of Realmark Properties, Inc.,
are married to each other.
The Directors and Executive Officers of the Corporate General Partner
and their principal occupations and affiliations during the last five years or
more are as follows:
Joseph M. Jayson, age 61, is President and Director and sole
stockholder of J.M. Jayson & Company, Inc. and certain of its affiliated
companies: U.S. Apartments LLC, Westmoreland Capital Corporation, Oilmark
Corporation and U.S. Energy Development Corporation. In addition, Mr. Jayson is
President and Director of Realmark Corporation and Realmark Properties, Inc.,
wholly owned subsidiaries of J.M. Jayson & Company, Inc. and co-general partner
of Realmark Property Investors Limited Partnership, Realmark Property Investors
Limited Partnership-II, Realmark Property Investors Limited Partnership-III,
Realmark Property Investors Limited Partnership-IV, Realmark Property Investors
Limited Partnership-V, Realmark Property Investors Limited Partnership-VI A and
Realmark Property Investors Limited Partnership-VI B. Mr. Jayson has been
engaged in real estate business for the last 37 years and is a Certified
Property Manager as designated by the Institute of Real Estate Management
("I.R.E.M."). Mr. Jayson received a B.S. Degree in Education in 1961 from
Indiana University, a Masters Degree from the University of Buffalo in 1963, and
has served on the Educational Faculty of the Institute of Real Estate
Management. Mr. Jayson has for the last 37 years been engaged in various aspects
of real estate brokerage and investment. He brokered residential properties from
1962 to 1964, commercial and investment properties from 1964 to 1967, and in
1967, left commercial real estate to form his own investment firm. Since that
time, Mr. Jayson and J.M. Jayson & Company, Inc. have formed, or participated in
various ways, in forming over 30 real estate related limited partnerships. For
the past eighteen years, Mr. Jayson and J.M. Jayson & Company, Inc. and an
affiliate have also engaged in developmental drilling for gas and oil.
11
<PAGE>
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. (Con't)
--------------------------------------------------------------------
Judith P. Jayson, age 59, is currently Vice-President and a Director of
Realmark Properties, Inc. She is also a Director of the property management
affiliate, Realmark Corporation. Mrs. Jayson has been involved in property
management for the last 28 years and has extensive experience in the hiring and
training of property management personnel and in directing, developing and
implementing property management systems and programs. Mrs. Jayson, prior to
joining the firm in 1973, taught business in the Buffalo, New York high school
system. Mrs. Jayson graduated from St. Mary of the Woods College in Terre Haute,
Indiana, with a degree in Business Administration. Mrs. Jayson is the wife of
Joseph M. Jayson, the Individual General Partner.
Michael J. Colmerauer, 42, is Secretary and in-house legal counsel for
J.M. Jayson & Company, Inc., Realmark Corporation, Realmark Properties, Inc. and
other companies affiliated with the General Partners. He received a Bachelor's
Degree (BA) from Canisius College in 1980 and a Juris Doctors (J.D.) from the
University of Tulsa in 1983. Mr. Colmerauer is a member of the American and Erie
County Bar Association and has been employed by the Jayson group of companies
for the last 16 years.
ITEM 11: EXECUTIVE COMPENSATION.
--------------------------------
No direct remuneration was paid or payable by the Partnership to
directors and officers (since it has no directors or officers) for its fiscal
years ended December 31, 1999, 1998 or 1997; nor was any direct remuneration
paid or payable by the Partnership to directors or officers of Realmark
Properties, Inc., the Corporate General Partner and sponsor, for the years ended
December 31, 1999, 1998 or 1997.
The following table sets forth for the years ended December 31, 1999,
1998 and 1997 the compensation paid by the Partnership, directly or indirectly,
to affiliates of the General Partners:
<TABLE>
<CAPTION>
Entity Receiving Type of
Compensation Compensation 1999 1998 1997
------------ ------------ ---- ---- ----
<S> <C> <C> <C> <C>
US Capital Inc..
(An affiliate of the
General Partners) Loan Placement Fees $ 60,000 $ 151,800 $ 234,500
------------- -------------- ------------
Realmark Properties, Inc.
(The Corporate
General Partner) Reimbursement for
allocated partnership
administration expenses 209,399 235,915 335,197
Partnership Management Fees -- -- 30,600
Realmark Corporation Property Management Fees 208,024 212,285 333,322
Computer Service Fees 6,690 6,690 20,842
------------- ------------- ------------
424,133 454,890 719,961
------------- -------------- ------------
Total $ 484,113 $ 606,690 $ 954,461
============= ============== ============
</TABLE>
12
<PAGE>
ITEM 11: EXECUTIVE COMPENSATION (Con't.).
------------------------------------------
The Corporate General Partner is entitled to a continuing Partnership
Management Fee equal to 7% of net cash flow as defined in the Partnership
Agreement. No such fee was paid in the year ended December 31, 1999. This fee
totaled $30,600 for the year ended December 31, 1997. The General Partners are
also entitled to 3% of Distributable Cash, as defined in the Partnership
Agreement (no such amounts were distributed for the years ended December 31,
1999, 1998 and 1997) and to certain expense reimbursements with respect to
Partnership operations.
The General Partners are also allowed to collect a property disposition
fee upon sale of acquired properties. This fee is not to exceed the lesser of
50% of amounts customarily charged in arm's-length transactions by others
rendering similar services for comparable properties or 2.75% of the sales
price. The property disposition fee is subordinate to payments to the Limited
Partners of a cumulative annual return (not compounded) equal to 7% of their
average adjusted capital balances and to repayment to the Limited Partners of an
amount equal to their original capital contributions.
Since the conditions described above have not been met, no disposition
fee was paid or accrued on the March 1990 sale of Pelham East or on the five
properties sold in 1997 as described in Item 7.
The General Partners may also be entitled to 13% of any remaining sale
or refinancing proceeds after payments to the Limited Partners pursuant to the
terms outlined in the Partnership Agreement
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
------------------------------------------------------------------------
No person is known to the Partnership to own of record or beneficially
more than five percent (5%) of the units of Limited Partnership Interest of the
Partnership. The General Partners, as of December 31, 1999, owned three (3)
units of Limited Partnership Interest.
Affiliates of the General Partners own of record or beneficially 598.2
units of Limited Partnership Interest constituting 2.85% of the Partnership
Interest.
Based upon a review of Forms 3, 4 and 5 and amendments thereto
furnished to the registrant, all reports were filed, however one report was
filed subsequent to its required due date. This report contained a total of two
transactions totaling 48.5 limited partnership units.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
--------------------------------------------------------
During 1999, no transactions occurred between the Partnership and the
officers and directors of Realmark Properties, Inc. All transactions between the
Partnership and Realmark Properties, Inc. (the Corporate General Partner) and
any other affiliated organization are described in Item 11 of this report and in
Note 8 to the financial statements.
As discussed in Item 7, the Partnership sold five residential
properties to U.S. Apartments LLC, a wholly-owned affiliate of the General
Partners, in December 1997.
13
<PAGE>
ITEM 14: EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K.
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
(a) Financial Statements and Schedules.
-----------------------------------
FINANCIAL STATEMENTS
--------------------
PAGE
----
<S> <C>
(i) Independent Auditors' Report F-1
(ii) Independent Auditor's Report for the two fiscal years ended
December 31, 1998 F-2
(iii) Balance Sheets at December 31, 1999 and 1998 F-3
(iv) Statements of Operations for the years ended
December 31, 1999, 1998 and 1997 F-4
(v) Statements of Partners' Equity for the
years ended December 31, 1999, 1998 and 1997 F-5
(vi) Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997 F-6
(vii) Notes to Financial Statements F-7 to F-16
FINANCIAL STATEMENT SCHEDULE
----------------------------
(i) Schedule III - Real Estate and Accumulated Depreciation F-17 to F-18
All other schedules are omitted because they are not
applicable or the required information is shown in the
financial statements or the notes thereto.
(b) Reports on Form 8-K
-------------------
None.
(c) Exhibits
--------
4. Instruments defining the rights of security holder, including indentures
(a) First Amended and Restated Agreement and
Certificate of Limited Partnership filed
with the Registration Statement of the
Registrant Form S-11, filed February 28,
1986, and subsequently amended, incorporated
herein by reference.
10. Material Contracts
(a) Property Management Agreement with Realmark
Corporation included with the Registration
Statement, Form S-11, of the Registrant as
filed and amended to date, incorporated
herein by reference.
(b) Partnership Agreement included with the
Registration Statement of the Registrant as
filed and amended to date, incorporated
herein by reference.
27. Financial Data Schedule
(a) Schedule is included herewith.
</TABLE>
14
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) 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 09/19/00
-------------------------- ----------
JOSEPH M. JAYSON, Date
Individual General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below 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 09/19/00
-------------------------- ----------
JOSEPH M. JAYSON, Date
President and Director
/s/ Judith P. Jayson 09/19/00
-------------------------- ----------
JUDITH P. JAYSON, Date
Director
/s/ Michael J. Colmerauer 09/19/00
-------------------------- ----------
MICHAEL J. COLMERAUER Date
Secretary
15
<PAGE>
INDEPENDENT AUDITOR'S REPORT
----------------------------
The Partners
Realmark Property Investors
Limited Partnership - V
We have audited the accompanying balance sheet of Realmark Property Investors
Limited Partnership - V as of December 31, 1999, and the related statements of
operations, partners' equity, and cash flows for the year ended December 31,
1999. Our audit also included the financial statement schedule listed in the
index at Item 14. These financial statements and the financial statement
schedule are the responsibility of the General Partners. Our responsibility is
to express an opinion on the financial statements and the financial statement
schedule based on our audit. The financial statements of Realmark Property
Investors Limited Partnership - V for the years ended December 31, 1998 and 1997
were audited by other auditors whose report dated April 27, 1999 expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
General Partners, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of Realmark
Property Investors Limited Partnership - V as of December 31, 1999, and the
results of its operations and its cash flows for the year then ended, in
conformity with generally accepted accounting principles. Also, in our opinion,
the financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.
/s/ TOSKI, SCHAEFER & CO., P.C.
Williamsville, New York -----------------------------------
April 12, 2000 TOSKI, SCHAEFER & CO., P.C.
(August 21, 2000 as to note 11)
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Realmark Property Investors Limited Partnership - V
We have audited the accompanying balance sheets of Realmark Property Investors
Limited Partnership - V as of December 31, 1998 and 1997, and the related
statements of operations, partners' capital (deficit), and cash flows for each
of the two years in the period ended December 31, 1998. Our audits also included
the financial statement schedule listed in the index at Item 14.
These financial statements and financial statement schedule are the
responsibility of the General Partners. Our responsibility is to express an
opinion on the financial statements and the financial statement schedule based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
General Partners, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Realmark Property Investors Limited
Partnership - V at December 31, 1998 and 1997, and the results of its operations
and its cash flows for each of the two years in the period ended December 31,
1998 in conformity with generally accepted accounting principles. Also, in our
opinion, such financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, present fairly in all material
respects the information set forth therein.
/s/ DELOITTE & TOUCHE LLP
-------------------------
DELOITTE & TOUCHE LLP
Buffalo, New York
April 27, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Balance Sheets
December 31, 1999 and 1998
Assets 1999 1998
------ ---- ----
<S> <C> <C>
Property and equipment, at cost:
Land and improvements $ 2,435,519 2,435,519
Buildings and improvements 26,386,959 26,089,842
Furniture, fixtures and equipment 516,411 513,807
------------ ------------
29,338,889 29,039,168
Less accumulated depreciation 11,326,039 10,222,305
------------ ------------
Net property and equipment 18,012,850 18,816,863
Investment in land 417,473 417,473
Cash 1,004,644 188,887
Accounts receivable, less allowance for doubtful accounts of
$103,576 in 1999 and $81,000 in 1998 7,882 228,002
Escrow deposits 713,577 980,981
Mortgage costs, less accumulated amortization
of $109,034 in 1999 and $143,560 in 1998 800,175 839,242
Other assets 228,041 289,227
------------ ------------
Total assets $ 21,184,642 21,760,675
============ ============
Liabilities and Partners' Equity
--------------------------------
Liabilities:
Mortgages payable 20,458,106 20,035,113
Accounts payable and accrued expenses 154,046 345,593
Accounts payable - affiliates 107,861 338,251
Accrued interest payable 111,800 65,418
Security deposits and prepaid rents 184,698 218,831
------------ ------------
Total liabilities 21,016,511 21,003,206
------------ ------------
Partners' equity (deficit):
General partners (406,893) (389,213)
Limited partners 575,024 1,146,682
------------ ------------
Total partners' equity 168,131 757,469
Contingency ------------ ------------
Total liabilities and partners' equity $ 21,184,642 21,760,675
============ ============
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Statements of Operations
Years ended December 31, 1999, 1998 and 1997
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Income:
Rental $ 4,443,569 4,656,844 6,739,210
Interest and other income 686,368 94,589 329,572
----------- ---------- ----------
Total income 5,129,937 4,751,433 7,068,782
----------- ---------- ----------
Expenses:
Property operations 2,095,210 1,753,725 3,326,437
Interest 1,742,422 2,222,855 3,306,719
Depreciation 1,167,970 1,212,114 1,094,232
Administrative:
To affiliates 424,113 454,890 719,961
Other 289,560 365,692 704,038
----------- ---------- ----------
Total expenses 5,719,275 6,009,276 9,151,387
----------- ---------- ----------
Loss before allocated loss from joint ventures and
gain on sale of properties (589,338) (1,257,843) (2,082,605)
Allocated loss from joint ventures -- -- (625,953)
Gain on sale of properties -- -- 5,009,787
----------- ---------- ----------
Net income (loss) $ (589,338) (1,257,843) 2,301,229
=========== ========== ==========
Net income (loss) per limited partnership unit $ (27.22) (58.09) 99.31
=========== ========== ==========
Distributions per limited partnership unit $ -- 165.36 --
=========== ========== ==========
Weighted average number of limited partnership
units outstanding 21,002.8 21,002.8 21,002.8
=========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Statements of Partners' Equity
Years ended December 31, 1999, 1998 and 1997
General Limited Partners
Partners Units Amount
-------- ----- ------
<S> <C> <C> <C>
Balance at December 31, 1996 $(459,529) 21,002.8 3,754,082
Net income 215,465 -- 2,085,764
--------- ---------- ----------
Balance at December 31, 1997 (244,064) 21,002.8 5,839,846
Distributions to partners (107,414) -- (3,473,056)
Net loss (37,735) -- (1,220,108)
--------- ---------- ----------
Balance at December 31, 1998 (389,213) 21,002.8 1,146,682
Net loss (17,680) -- (571,658)
--------- ---------- ----------
Balance at December 31, 1999 $(406,893) 21,002.8 575,024
========= ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Statements of Cash Flows
Years ended December 31, 1999, 1998 and 1997
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (589,338) (1,257,843) 2,301,229
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 1,342,882 1,549,691 2,251,774
Allocated loss from joint ventures -- -- 625,953
Gain on sale of properties -- -- (5,009,787)
(Increase) decrease in:
Accounts receivable 220,120 (25,590) (94,691)
Other assets (3,050) (47,802) (94,903)
Increase (decrease) in:
Accounts payable and accrued expenses (191,547) (377,567) (801,974)
Accrued interest payable 46,382 (93,602) (169,523)
Security deposits and prepaid rents (34,133) (38,654) (187,701)
----------- ----------- -----------
Net cash provided by (used in)
operating activities 791,316 (291,367) (1,179,623)
----------- ----------- -----------
Cash flows from investing activities:
(Increase) decrease in investments in mutual funds -- 1,695,559 (1,695,559)
(Increase) decrease in accounts receivable - affiliates -- -- 135,988
(Increase) decrease in escrow deposits 267,404 (624,028) 126,154
Investment in land -- (19,527) (24,664)
Buyout of investment in joint venture -- -- (80,000)
Proceeds from dispositions of properties -- -- 1,491,340
Additions to property and equipment (299,721) (369,032) (571,010)
----------- ----------- -----------
Net cash provided by (used in)
investing activities (32,317) 682,972 (617,751)
----------- ----------- -----------
Cash flows from financing activities:
Increase (decrease) in accounts payable - affiliates (230,390) 338,251 --
Principal payments upon refinancing (5,400,000) (13,114,963) (14,563,042)
Mortgage costs related to refinancing (135,845) (653,437) (1,178,858)
Mortgage proceeds from refinancing 6,000,000 15,180,000 19,310,000
Distributions to partners -- (3,580,470) --
Principal payments on mortgages (177,007) (537,588) (270,610)
----------- ----------- -----------
Net cash provided by (used in)
financing activities 56,758 (2,368,207) 3,297,490
----------- ----------- -----------
Net increase (decrease) in cash 815,757 (1,976,602) 1,500,116
Cash at beginning of year 188,887 2,165,489 665,373
----------- ----------- -----------
Cash at end of year $ 1,004,644 188,887 2,165,489
=========== =========== ===========
Supplemental disclosure of cash flow information -
cash paid during the year for interest $ 1,530,007 1,978,880 2,167,292
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements
December 31, 1999, 1998 and 1997
(1) 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, its only industry segment.
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. All items of income and expense arose subsequent to this date.
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. (the corporate general partner) and Mr.
Joseph M. Jayson (the individual general partner). Mr. 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 (note
8).
The partnership agreement 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.
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; second,
an amount equal to their capital contributions; third, an amount equal
to an additional 5% of the average of their adjusted capital
contributions after the corporate general partner receives a 2.75%
property disposition fee; fourth, 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.
(2) Summary of Significant Accounting Policies
-----------------------------------------------
(a) Basis of Accounting
-----------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting.
(b) Estimates
-------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
F-7
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements, Continued
(2) Summary of Significant Accounting Policies, Continued
----------------------------------------------------------
(c) Property and Equipment
--------------------------
Property and equipment are recorded at cost. Depreciation is provided
for in amounts sufficient to relate the cost of depreciable assets
to operations over their estimated service lives using the
straight-line method. The estimated lives of the Partnership's
assets range from 5 to 25 years. Depreciation expense totaled
$1,103,734, $1,212,114 and $1,094,232 for the years ended December
31, 1999, 1998 and 1997, respectively. Improvements are
capitalized, while expenditures for maintenance and repairs are
charged to expense as incurred. Upon disposal of depreciable
property, the appropriate property accounts are reduced by the
related costs and accumulated depreciation. The resulting gains
and losses are reflected in the statements of operations. The
accelerated cost recovery system and modified accelerated cost
recovery system are used to calculate depreciation expense for tax
purposes.
(d) Cash
--------
For purposes of reporting cash flows, cash includes money market
accounts and any highly liquid debt instruments purchased with a
maturity of three months or less.
(e) Accrued Residential Rent Receivable
---------------------------------------
Due to the nature of accrued rent receivable, all such receivables are
fully reserved at December 31, 1999 and 1998.
(f) Escrow Deposits
-------------------
Escrow deposits represent cash which is restricted for the payment of
property taxes and insurance in accordance with the mortgage
agreement.
(g) Mortgage Costs
------------------
Mortgage costs incurred in obtaining the property mortgage financing
are recorded at cost less applicable amortization. Amortization is
being computed using the straight-line method over the life of the
respective mortgages.
(h) Rental Income
-----------------
Leases for residential properties have terms of one year or less.
Commercial leases generally have terms of one to five years.
Rental income is recognized on the straight line method over the
term of the lease.
(i) Income (Loss) Per Limited Partnership Unit
----------------------------------------------
The income (loss) per limited partnership unit is based on the
weighted average number of limited partnership units outstanding
for the year.
(j) Income Taxes
----------------
No income tax provision has been included in the financial statements
since profit or loss of the Partnership is required to be reported
by the respective partners on their income tax returns.
F-8
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements, Continued
(2) Summary of Significant Accounting Policies, Continued
----------------------------------------------------------
(k) Comprehensive Income
------------------------
The Partnership has adopted Statement of Financial Accounting
Standards (SFAS) No. 130 - "Reporting Comprehensive Income." SFAS
130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general
purpose financial statements. Comprehensive income is defined as
"the change in equity of a business enterprise during a period
from transactions and other events and circumstances from
non-owner sources." Other than net income (loss), the Partnership
has no other sources of comprehensive income.
(l) Segment Information
-----------------------
SFAS No. 131 - "Disclosures about Segments of an Enterprise and Related
Information" establishes standards for the way public business
enterprises report information about operating segments and annual
financial statements. The Partnership's only operating segment is
the ownership and operation of income-producing real property for
the benefit of its partners.
(m) Accounting Changes and Developments
---------------------------------------
In June 1998, the Financial Accounting Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133 - "Accounting for
Derivative Instruments and Hedging Activities" which establishes
revised accounting and reporting standards for derivative
instruments and for hedging activities. It requires that an entity
measure all derivative instruments at fair value and recognize
such instruments as either assets or liabilities in the balance
sheets. The accounting for changes in the fair value of a
derivative instrument will depend on the intended use of the
derivative as either a fair value hedge, a cash flow hedge or a
foreign currency hedge. The effect of the changes in fair value of
the derivatives and, in certain cases, the hedged items are to be
reflected in either the statements of operations or as a component
of other comprehensive income based upon the resulting
designation. As issued, SFAS No. 133 was effective for fiscal
years beginning after June 15, 1999. In June 1999, the FASB issued
SFAS No. 137 - "Accounting for Derivative Instruments and Hedging
Activities-Deferral of the Effective Date of FASB Statement No.
133." SFAS No. 137 defers the effective date of SFAS No. 133 for
one year to fiscal years beginning after June 15, 2000. Since the
Partnership does not currently have any derivative instruments or
hedging activities, management does not believe that SFAS No. 133
will have a material effect on the partnership financial
statements, taken as a whole.
(n) Reclassifications
---------------------
Reclassifications have been made to certain 1998 and 1997 balances in
order to conform them to the 1999 presentation. Additionally, a
reclassification has been recorded on the balance sheet as of
December 31, 1998, increasing accounts receivable and accounts
payable - affiliates by $152,979. This reclassification was
recorded in connection with the December 1998 refinancing of bonds
payable with regard to Inducon East Phase III. The net proceeds of
this refinancing, amounting to $152,979, were received on January
5, 1999.
F-9
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements, Continued
(3) Acquisition and Dispositions of Rental Property
----------------------------------------------------
In April 1987, the Partnership acquired a 50% interest in Inducon - East
Joint Venture, a 150,000 square foot office/warehouse located in
Amherst, New York. The Partnership contributed $2,414,592 of capital to
the joint venture.
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 $3,163,324, which included $148,683 in acquisition fees.
In December 1987, the Partnership acquired a 192 unit apartment complex
(Williamsburg North) 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 100 unit apartment complex for a sale price of
$2,435,000 which generated a net gain for financial statement purposes
of $572,562.
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.
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 Durham, 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 between the Partnership
and Inducon Corporation. Each held a 50% interest in the Phase III
Venture. The Phase III Venture developed two buildings totaling
approximately 46,500 square feet on 4.2 acres of land in Amherst, New
York.
F-10
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements, Continued
(3) Acquisition and Dispositions of Rental Property, Continued
---------------------------------------------------------------
In June 1997, the Partnership entered into a plan to dispose of the
property, plant and equipment of Camelot East with a carrying amount of
$3,825,407 at December 31, 1997. Management had determined that a sale
of the property was in the best interests of the limited partners. An
agreement was signed with a potential buyer for the purchase of the
property. The agreement expired in October 1997, and management
discontinued its plan to dispose of the property.
In November 1997, the Partnership acquired an additional 50% interest in
Inducon East and Inducon East Phase III through a buyout of the other
joint venturers. The Partnership owns 100% of the properties.
In December 1997, the Partnership sold Williamsburg North, the Fountains,
O'Hara, Wayne Estates and Jackson Park for a total purchase price of
$16,107,000, which generated a net gain for financial statement
purposes of $5,009,787. The properties were sold to U.S. Apartments
LLC, a wholly-owned affiliate of Joseph M. Jayson, the individual
general partner.
Statement of Financial Accounting Standards No. 121 - "Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be
Disposed Of " (the Statement) requires that assets to be disposed of be
recorded at the lower of carrying value or fair value, less costs to
sell. The Statement also requires that such assets not be depreciated
during the disposal period, as the assets will be recovered through
sale rather than through operations. In accordance with this Statement,
the long-lived assets of Camelot East, classified as held for sale on
the balance sheet at December 31, 1997, were recorded at the carrying
amount which is the lower of carrying value or fair value less costs to
sell, and were not depreciated during the disposal period. Fair value
is determined based on estimated future cash flows. Depreciation
expense, not recorded during the disposal period, for the year ended
December 31, 1997 totaled approximately $55,000 for Camelot East
Apartments. Depreciation expense not recorded during the same period
for the five properties sold to U.S. Apartments LLC totaled
approximately $281,000.
(4) Investment in Land
-----------------------
The Partnership owns approximately 96 acres of vacant land in Amherst, New
York. The investment totaled $417,473 as of December 31, 1999 and 1998.
The balance approximates the fair value of the investment.
(5) Mortgages Payable
----------------------
The Partnership has the following mortgages payable as of December 31, 1999
and 1998:
(a) The Paddock Building
------------------------
The mortgage outstanding at December 31, 1999 and 1998 of $1,678,683
and $1,700,000, respectively, provides for monthly principal and
interest payments of $12,785 including interest at 7.70%. The
mortgage matures January 2009 with a balloon payment of
approximately $1,375,000.
F-11
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements, Continued
(5) Mortgages Payable, Continued
---------------------------------
(b) Camelot East Apartments
---------------------------
Camelot East Apartments' mortgage had an outstanding balance of
$4,810,739 and $4,855,113 at December 31, 1999 and 1998,
respectively, providing for annual principal and interest payments
of approximately $407,000 including interest at 7.4%. The mortgage
matures November 2027.
(c) Commercial Park West
------------------------
The property's mortgage of $4,826,425 at December 31, 1997 was
refinanced in 1998. The mortgage outstanding (bridge loan) at
December 31, 1998 of $5,400,000 provided for monthly interest
payments at 3.50% above the Euro Libor rate (9.0625% at December
31, 1998). The mortgage outstanding at December 31, 1999 of
$5,989,366, provides for monthly principal and interest payments
of $44,319 including interest at 8.07%. The mortgage matures
October 2029.
(d) Inducon East
----------------
The bonds payable totaling $6,465,646 at December 31, 1997 were
refinanced into a mortgage payable in 1998. The mortgage
outstanding at December 31, 1999 and 1998 of $6,127,682 and
$6,205,000, respectively, provides for monthly principal and
interest payments of $46,827 including interest at 7.74%. The
mortgage matures January 2009.
(e) Inducon East Phase III
--------------------------
The loans outstanding of $523,433 at December 31, 1997 were refinanced
in 1998. The mortgage outstanding at December 31, 1999 and 1998 of
$1,851,636 and $1,875,000, respectively, provides for monthly
principal and interest payments of $14,150 including interest at
7.74%. The mortgage matures January 2009.
The mortgage notes are secured by the individual complexes to which
they relate and are of a non-recourse nature.
The aggregate maturities of mortgages for each of the next five years
and thereafter, assuming principal payments are not accelerated,
are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
2000 $ 246,514
2001 266,261
2002 287,591
2003 310,631
2004 335,519
Thereafter 19,011,590
---------------
$ 20,458,106
===============
</TABLE>
(6) Fair Value of Financial Instruments
----------------------------------------
Statement of Financial Accounting Standards No. 107 requires disclosure
about fair value of certain financial instruments. The fair values of
cash, accounts receivable, accounts receivable - affiliates, accounts
payable, accrued interest payable and deposit liabilities approximate
the carrying value due to the short-term nature of these instruments.
F-12
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements, Continued
(6) Fair Value of Financial Instruments, Continued
---------------------------------------------------
Management has estimated based on current interest rates for similar
mortgages, that the fair value of the mortgages payable at December 31,
1999 are as follows:
The Paddock $ 1,632,000
Inducon East 6,064,000
Camelot East Apartments 4,550,000
Commercial Park West 5,994,000
Inducon East Phase III 1,832,000
=========
The terms of the mortgages are described in note 5.
(7) 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 was to acquire land and construct
office/warehouse buildings as income-producing property. The
development consists of two parcels of land being 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 being approximately 19,000 square feet.
The Partnership had contributed capital of $2,744,901 to the Venture. The
remaining funds needed to complete Phase I came from $3,950,000 taxable
industrial revenue bonds which the Venture received in 1989. The
Venture completed the financing of the Phase II project with an
additional $3,200,000 taxable industrial revenue bond.
The total cost of Phase I and Phase II were approximately $4,425,000 and
$4,600,000, respectively.
The Joint Venture agreement provided that income and losses be allocated
95% to the Partnership and 5% to the Corporation. Net cash flow from
the joint venture was to be distributed to the Partnership and
Corporation in accordance with the terms of the joint venture
agreement.
In November 1997, the Partnership acquired the interest of Curtlaw
Corporation for $40,000. The Partnership now owns 100% of the Inducon
East property. The results of the property's operations for the period
from January 1, 1997 through October 31, 1997 were allocated in
accordance with the Joint Venture Agreement. The property began to be
consolidated in the Partnership's financial statements beginning
November 1, 1997.
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 (Inducon). The primary purpose of
the Phase III Venture was to acquire land and construct
office/warehouse buildings as income-producing property. The
development consists of 4.2 acres of land and two buildings with
approximately 25,200 and 21,300 square feet, respectively.
F-13
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements, Continued
(7) Investments in Joint Ventures, Continued
---------------------------------------------
The Partnership contributed $1,582,316 to the Phase III Venture. The
remaining funds needed to complete construction came from a $750,000
construction loan described in note 5.
The total cost of the Phase III venture was approximately $2,450,000.
The Joint Venture agreement provided that income and losses be allocated
95% to the Partnership and 5% to Inducon. Net cash flow from the joint
venture was to be distributed to the Partnership and Inducon in
accordance with the terms of the joint venture agreement.
In November 1997, the Partnership acquired the interest of Inducon for
$40,000. The Partnership now owns 100% of the Phase III property. The
results of the property's operations for the period from January 1,
1997 through October 31, 1997 were allocated in accordance with the
joint venture agreement. The property began to be consolidated in the
Partnership's financial statements beginning November 1, 1997.
(8) Related Party Transactions
-------------------------------
The corporate general partner and its affiliates earned the following fees
and commissions as provided for in the partnership agreement for the
years ended December 31, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Loan placement fees equal to 1% of loan
balance at time service is rendered $ 60,000 151,800 234,500
---------- --------- ---------
Partnership management fee - equal to 7% of
the net cash flow of the partnership as
defined in the partnership agreement $ -- -- 30,600
Reimbursement for allocated administrative
costs of the corporate general partner and
its affiliates in connection with the
administration of the Partnership, including
payroll, legal, rent, depreciation, printing,
audit, travel and communications related
to partnership accounting, partner communi-
cations and property marketing 209,399 235,915 335,197
Computer service charges based on number of
apartment units 6,690 6,690 20,842
Property management fees computed at 3-6%
of gross monthly rental receipts on properties
managed 208,024 212,285 333,322
---------- --------- ---------
424,113 454,890 719,961
---------- --------- ---------
$ 484,113 606,690 954,461
========== ========= =========
</TABLE>
F-14
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements, Continued
(8) Related Party Transactions, Continued
------------------------------------------
Accounts payable - affiliates totaled $107,861 and $338,251 at December 31,
1999 and 1998, respectively.
Partnership accounting and portfolio management fees, investor services
fees and brokerage fees are allocated based on total assets, the number
of partners, and number of units, respectively. In addition to the
above, other property specific expenses, such as payroll, benefits,
etc. are charged to property operations on the statement of operations.
The general partners are also allowed to collect a property disposition fee
upon sale of acquired properties. This fee is not to exceed the lesser
of 50% of amounts customarily charged in arm's-length transactions by
others rendering similar services for comparable properties or 2.75% of
the sales price. The property disposition fee is subordinate to
payments to the limited partners of a cumulative annual return (not
compounded) equal to 7% of their average adjusted capital balances and
to repayment to the limited partners of an amount equal to their
original capital contributions. Since these conditions described above
have not been met, no disposition fees were paid or accrued on the
March 1990 sale of Pelham East or on the five properties sold in 1997
as described in note 3.
(9) Leases
-----------
In connection with the commercial properties owned, the Partnership has
entered into lease agreements with terms of one to five years. Minimum
future rentals to be received for each of the next five years, under
noncancelable operating leases are as follows:
2000 $ 2,619,198
2001 1,706,381
2002 1,102,924
2003 349,641
2004 33,714
===========
(10) Income Taxes
------------------
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.
F-15
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Notes to Financial Statements, Continued
(10) Income Taxes, Continued
-----------------------------
The reconciliation of partners' capital as of December 31, 1999, 1998 and
1997, as reported in the balance sheets, and as reported for tax
return purposes, is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Partners' capital - balance sheets $ 168,131 757,469 5,595,782
Add to (deduct from):
Accumulated difference in depreciation 2,826,864 2,640,073 2,240,303
Gain on sale of properties (905,955) (905,955) (905,955)
Difference in investment in Joint Venture 543,845 543,845 543,845
Syndication fees 2,352,797 2,352,797 2,352,797
Accumulated difference in amortization
of organization costs 21,738 21,738 21,738
Other nondeductible expenses 478,230 129,095 (218,605)
----------- ---------- ---------
Partners' capital - tax return purposes $ 5,485,650 5,539,062 9,629,905
=========== ========== =========
</TABLE>
The reconciliation of net (loss) income for the years ended December 31,
1999, 1998 and 1997 and as reported in the statements of operations,
and as reported for tax return purposes, is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net (loss) income - statements of operations $(589,338) (1,257,843) 2,301,229
Add to (deduct from):
Difference in depreciation 186,791 399,770 604,420
Gain on sale of properties -- -- (905,955)
Difference in investment in
joint venture -- -- 114,377
Other nondeductible expenses 349,136 347,700 (652,623)
--------- ---------- ---------
Net income (loss) - tax return purposes $ (53,411) (510,373) 1,461,448
========= ========== =========
</TABLE>
(11) Subsequent Event - 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.
F-16
<PAGE>
<TABLE>
<CAPTION>
Schedule III
------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Real Estate and Accumulated Depreciation
December 31, 1999
Initial cost to Gross amounts at which
Partnership carried at close of period
----------- Cost --------------------------
Buildings capitalized Buildings
Land and and subsequent to Land and and
Property description Encumbrances improvements improvements acquisition improvements improvements Total
-------------------- ------------ ------------ ------------ ----------- ------------ ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
The Paddock Building
Nashville, TN $ 1,678,683 261,000 2,902,324 287,872 261,000 3,190,196 3,451,196
Camelot Apartments
Louisville, KY 4,810,739 297,250 5,518,613 170,283 297,250 5,688,896 5,986,146
Commercial Park West
Durham, NC 5,989,366 800,000 5,191,538 1,303,415 800,000 6,494,953 7,294,953
Inducon East
Amherst, NY 6,127,682 177,709 -- 9,283,419 935,869 8,525,259 9,461,128
Inducon East Phase III
Amherst, NY 1,851,636 141,400 -- 2,487,655 141,400 2,487,655 2,629,055
----------- --------- ---------- ---------- --------- ---------- ----------
Total $20,458,106 1,677,359 13,612,475 13,532,644 2,435,519 26,386,959 28,822,478
=========== ========= ========== ========== ========= ========== ==========
(RESTUBBED TABLE)
Life on which
depreciation
in latest
statement
Accumulated Date of Date of operations
depreciation construction acquired is computed
------------ ------------ -------- -----------
<C> <C> <C> <C>
The Paddock Building
Nashville, TN 1,673,040 5/87 5/87 25 Years
Camelot Apartments
Louisville, KY 2,545,134 5/88 5/88 25 Years
Commercial Park West
Durham, NC 2,524,355 6/91 6/91 25 Years
Inducon East
Amherst, NY 3,704,101 4/87 4/87 25 Years
Inducon East Phase III
Amherst, NY 365,997 9/92 9/92 25 Years
---------- ==== ==== ========
Total 10,812,627
==========
</TABLE>
F-17
<PAGE>
<TABLE>
<CAPTION>
Schedule III, Cont.
-------------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
Real Estate and Accumulated Depreciation
December 31, 1999
(1) Cost for Federal income tax purposes is $28,822,478.
(2) A reconciliation of the carrying amount of land and buildings for the
years ended December 31, 1999, 1998 and 1997 follows:
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $ 28,525,361 28,157,635 31,713,804
Additions 297,117 367,726 12,563,819
Dispositions -- -- (16,119,988)
------------ ---------- ----------
Balance at end of year $ 28,822,478 28,525,361 28,157,635
============ ========== ==========
</TABLE>
<TABLE>
<CAPTION>
(3) A reconciliation of accumulated depreciation for the years ended December
31, 1999, 1998 and 1997 follows:
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $ 9,709,674 8,497,690 9,639,620
Depreciation expense 1,102,953 1,211,984 1,094,232
Additions of joint ventures - - 3,078,424
Dispositions - - (5,314,586)
------------ --------- ---------
Balance at end of year (a) $ 10,812,627 9,709,674 8,497,690
============ ========= =========
(a) Balance applies entirely to buildings and improvements.
</TABLE>
F-18
