UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1995
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number 0-16857
Brauvin Income Properties L.P. 6
(Exact name of registrant as specified in its charter)
Delaware 36-1276801
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 South Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
(312) 443-0922
(Registrant's telephone number, including area code)
Indicate by 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 .
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BRAUVIN INCOME PROPERTIES L.P. 6
INDEX
Page
PART I Financial Information
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . 3
Balance Sheets at March 31, 1995 and December 31, 1994 . 4
Statements of Operations for the three months ended
March 31, 1995 and 1994. . . . . . . . . . . . . . . . . 5
Statement of Partners' Capital for the period
January 1, 1995 to March 31, 1995. . . . . . . . . . . . 6
Statements of Cash Flows for the three months ended
March 31, 1995 and 1994. . . . . . . . . . . . . . . . . 7
Notes to Financial Statements. . . . . . . . . . . . . . 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . 10
PART II Other Information
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . 12
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . 12
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . 12
Item 4. Submissions of Matters to a Vote of Security Holders . . 12
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Except for the December 31, 1994 Balance Sheet, the following Balance
Sheet as of March 31, 1995, Statements of Operations for the three months
ended March 31, 1995 and 1994, Statement of Partners' Capital for the
period January 1, 1995 to March 31, 1995 and Statements of Cash Flows for
the three months ended March 31, 1995 and 1994 for Brauvin Income
Properties L.P. 6 (the "Partnership") are unaudited but reflect, in the
opinion of the management, all adjustments necessary to present fairly the
information required. All such adjustments are of a normal recurring
nature.
These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Partnership's 1994
Annual Report on Form 10-K.
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BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
BALANCE SHEETS
(UNAUDITED)
March 31, 1995 December 31, 1994
ASSETS
Cash and cash equivalents $ 651,542 $ 445,771
Escrow and other deposits 84,726 74,840
Due from affiliates 26,415 29,171
Tenant receivables 151,689 269,955
Other assets 82,704 71,536
Investment in (liability to)
affiliated joint venture (233,753) (231,115)
763,323 660,158
Investment in real estate, at cost:
Land 2,756,651 2,756,651
Buildings 10,596,134 10,596,134
13,352,785 13,352,785
Less: accumulated depreciation (2,434,762) (2,344,202)
Total investment in real estate, net 10,918,023 11,008,583
Total Assets $11,681,346 $11,668,741
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 184,770 $ 108,644
Security deposits 6,747 6,747
Mortgages payable 7,626,331 7,658,921
Total Liabilities 7,817,848 7,774,312
Partners' Capital
General Partners 4,584 4,498
Limited Partners 3,858,914 3,889,931
Total Partners' Capital 3,863,498 3,894,429
Total Liabilities and
Partners' Capital $11,681,346 $11,668,741
See notes to financial statements (unaudited).
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BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1995 and 1994
(UNAUDITED)
1995 1994
INCOME
Rental $456,434 $504,789
Interest 5,777 1,042
Other, primarily expense reimbursements 81,147 122,871
Total income 543,358 628,702
EXPENSES
Mortgage and other interest 262,955 192,513
Depreciation and amortization 93,769 101,181
Real estate taxes 33,300 31,801
Repairs and maintenance 20,517 18,160
Other property operating 71,493 64,241
General and administrative 50,081 43,065
Total expenses 532,115 450,961
Net income before equity interest
in Joint Venture 11,243 177,741
Equity interest in Joint Venture's
net loss (2,638) (24,037)
Net Income $ 8,605 $153,704
NET INCOME PER LIMITED PARTNERSHIP
INTEREST (7,842.5 UNITS): $ 1.09 $ 19.40
See notes to financial statements (unaudited).
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BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
STATEMENT OF PARTNERS' CAPITAL
For the Period January 1, 1995 to March 31, 1995
(UNAUDITED)
General Limited
Partners Partners Total
BALANCE at January 1, 1995 $4,498 $3,889,931 $3,894,429
Net income 86 8,519 8,605
Cash distributions -- (39,536) (39,536)
BALANCE at March 31, 1995 $4,584 $3,858,914 $3,863,498
Cash distribution per limited partnership interest:
1995 $ -- $ 5.04 $ 5.04
See notes to financial statements (unaudited).
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BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
(UNAUDITED)
1995 1994
Cash Flows From Operating Activities:
Net income $ 8,605 $153,704
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 93,769 101,181
Equity interest in Joint Venture's
net loss 2,638 24,037
Changes in operating assets and
liabilities:
Decrease (increase) in tenant
receivables 118,266 (22,099)
Increase in escrow and other deposits (9,886) (35,848)
Decrease (increase) in due from
affiliates 2,756 (416)
(Increase) decrease in other assets (14,377) 2,860
Increase (decrease) in accounts
payable and accrued expenses 76,126 (10,981)
Net cash provided by operating
activities 277,897 212,438
Cash Flow From Investing Activities:
Cash contribution to Joint Venture -- (4,600)
Cash used in investing activities -- (4,600)
Cash Flows From Financing Activities:
Repayment of mortgages (32,590) (29,570)
Cash distributions to Limited Partners (39,536) (88,952)
Cash used in financing activities (72,126) (118,522)
Net increase in cash and cash
equivalents 205,771 89,316
Cash and cash equivalents at
beginning of period 445,771 176,990
Cash and cash equivalents at
end of period $651,542 $266,306
See notes to financial statements (unaudited).
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BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the
three month period ended March 31, 1995 are not necessarily indicative of
the results that may be expected for the year ended December 31, 1995. For
further information, refer to the financial statements and footnotes
thereto included in the Annual Report on Form 10-K for the year ended
December 31, 1994.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reclassifications
Certain amounts in the 1994 financial statements have been
reclassified to conform to the 1995 presentation. This has not affected
the previously reported resulted of operations.
(3) MORTGAGE PAYABLE REFINANCING
The Partnership was required to make a balloon mortgage payment for
Shoppes in April 1995 in the amount of $4,671,392. On April 6, 1995, the
Partnership obtained a first mortgage loan in the amount of $6,100,000 (the
"First Mortgage Loan") secured by Shoppes, located in Hilton Head, South
Carolina, from Morgan Stanley Mortgage Capital, Inc. The First Mortgage
Loan bears interest at the rate of 9.55% per annum, amortizes over a 25-
year period, requires monthly payments of principal and interest of
approximately $53,500 and matures on April 6, 2002. A portion of the
proceeds of the First Mortgage Loan, approximately $4,675,000, were used to
retire an existing mortgage secured by Shoppes from Crown Life Insurance
Company.
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(4) TRANSACTIONS WITH AFFILIATES
Fees and other expenses paid to the General Partners or its
affiliates for the three months ended March 31, 1995 and 1994 were as
follows:
1995 1994
Legal fees $ 2,070 $ 141
Management fees 39,714 39,005
Reimbursable office expenses 20,760 29,036
The Partnership believes the amounts paid to affiliates are
representative of amounts which would have been paid to independent parties
for similar services. The Partnership had made all payments to affiliates,
except for $2,297 for legal services, as of March 31, 1995.
(5) INVESTMENT IN AFFILIATED JOINT VENTURE
The Partnership owns a 46% interest in the Annex and accounts for
its investment under the equity method.
On August 23, 1994, the Brauvin/The Annex of Schaumburg (the "Joint
Venture") filed a voluntary petition for bankruptcy (Chapter 11) in the
United States Bankruptcy Court in the Northern District of Illinois. On
February 10, 1995, the Bankruptcy Court ordered the dismissal of the
voluntary petition for bankruptcy effectively eliminating the protection of
the property from its creditors. Also on February 10, 1995, AUSA Life
Insurance Company ("AUSA") filed a motion for appointment of a receiver
against the Joint Venture. On February 17, 1995 the motion was granted and
an order was issued. The receiver will have full power and authority to
operate, manage and conserve the Annex pursuant to the order. On February
15, 1995, the Joint Venture received an amended notice of mortgage
foreclosure from AUSA. The Joint Venture had until March 17, 1995 to file
an answer to the amended notice. If the Joint Venture did not answer on
or before March 17, 1995, default may be entered against the Joint Venture
and a judgement in accordance with the request for relief. On April 3,
1995, a judgment of foreclosure and sale was entered into against the Joint
Venture. A sheriff's sale of the Annex is scheduled to be held on May 10,
1995. The equity in joint venture's loss for the three months ended March
31, 1995, does not include any other adjustments that might result from the
outcome of the foreclosure action by AUSA.
The following are condensed income statements for the Annex:
INCOME STATEMENTS:
Three Months Ended March 31,
1995 1994
Rental income $130,887 $191,953
Other income 63,139 129,890
194,026 321,843
Mortgage and other interest 12,677 125,000
Depreciation 35,358 46,986
Real estate taxes 119,100 129,900
Operating and administrative 32,626 72,211
199,761 374,097
Net loss $ (5,735) $(52,254)
(6) SUBSEQUENT EVENT
A cash distribution for the first quarter of 1995 will be made to
the Limited Partners on May 15, 1995 in the amount of $96,688.
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
The Partnership intends to satisfy its short-term liquidity needs
through cash reserves and cash flow from the properties.
The Partnership's mortgage debt which matured in 1995 was refinanced
on April 6, 1995, see Note 3 of Notes to Financial Statements for more
details.
On August 23, 1994, the Brauvin/The Annex of Schaumburg (the "Joint
Venture") filed a voluntary petition for bankruptcy (Chapter 11) in the
United States Bankruptcy Court in the Northern District of Illinois. On
February 10, 1995, the Bankruptcy Court ordered the dismissal of the
voluntary petition for bankruptcy effectively eliminating the protection of
the property from its creditors. Also on February 10, 1995, AUSA Life
Insurance Company ("AUSA") filed a motion for appointment of a receiver
against the Joint Venture. On February 17, 1995 the motion was granted and
an order was issued. The receiver will have full power and authority to
operate, manage and conserve the Annex pursuant to the order. On February
15, 1995, the Joint Venture received an amended notice of mortgage
foreclosure from AUSA. The Joint Venture had until March 17, 1995 to file
an answer to the amended notice. If the Joint Venture did not answer on
or before March 17, 1995, default may be entered against the Joint Venture
and a judgement in accordance with the request for relief. On April 3,
1995, a judgment of foreclosure and sale was entered into against the Joint
Venture. A sheriff's sale of the Annex is scheduled to be held on May 10,
1995.
The Partnership has paid annual cash distributions to Limited
Partners since 1986, as many (i.e., three of four) of the Partnership's
properties have been operating in strong retail markets. Rental rates at
Shoppes have increased as new leases have been signed and existing leases
renewed. However, operating cash flow of the Partnership had decreased in
1994 primarily due to the poor performance of the Annex.
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Below is a table summarizing the historical data for quarterly
distribution rates of Operating Cash Flow per annum:
Quarter
Ended 1995 1994 1993 1992 1991
March 31 5.00% 3.75% 5.00% 7.25% 7.25%
June 30 3.75 4.00 6.00 7.25
September 30 -- 4.50 6.00 7.25
December 31 2.00 4.50 5.00 7.25
The trend of decreasing distributions is primarily attributed to the
poor performance of the Annex.
A distribution of Operating Cash Flow for the first quarter of 1995 was
made to the Limited Partners on May 15, 1995 in the amount of $96,688. The
Preferential Distribution Deficiency equaled $3,064,683 after this last
distribution, a $112,904 increase compared to December 31, 1994.
The occupancy level at Del Champs at March 31, 1995 and December 31,
1994 was 100%. The Partnership is continuing to work to sustain the
occupancy level of Del Champs. Del Champs operated at a positive cash flow
for the three months ended March 31, 1995.
Shoppes continued to generate positive cash flow for the three months
ended March 31, 1995. The occupancy level at Shoppes at March 31, 1995 and
December 31, 1994 was 100%.
Ponderosa continues to operate at a positive cash flow for the three
months ended March 31, 1995.
The General Partners of the Partnership expect to distribute proceeds
from operating cash flow, if any, and from the sale of real estate, to
Limited Partners in a manner that is consistent with the investment
objectives of the Partnership. Management of the Partnership believes that
cash needs may arise from time to time which will have the effect of
reducing distributions to Limited Partners to amounts less than would be
available from refinancings or sale proceeds. These cash needs include,
among other things, maintenance of working capital reserves in compliance
with the Agreement as well as payments for major repairs, tenant
improvements and leasing commissions in support of real estate operations.
Results of Operations - Three Months Ended March 31, 1995 and 1994
(Amounts rounded to 000's)
The Partnership generated net income of $9,000 in the first quarter of
1995 compared to net income of $154,000 in 1994. The $145,000 decrease in
net income resulted primarily from a $70,000 increase in mortgage and other
interest and a $ 64,000 decrease in percentage rent income.
First quarter total income was $543,000 in 1995 as compared to
$629,000 in 1994, a decrease of $86,000. The $86,000 decrease in total
income was primarily the result of a $64,000 decrease in percentage rent
income at Shoppes. Also contributing to the decline in total income is a
$25,000 decrease in tenant reimbursements at Del Champs.
Total expenses incurred in the first quarter of 1995 were $532,000
compared to $451,000 in 1994, an increase of $81,000. The $81,000 increase
in expenses is primarily a result of total interest expense increasing
$70,000. The increase in interest expense is the result of the Shoppes
mortgage rate increasing to a default interest rate (during the four month
extension of the mortgage) effective December 1, 1994.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
None.
ITEM 2. Changes in Securities.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
ITEM 4. Submission Of Matters To a Vote of Security Holders.
None.
ITEM 5. Other Information.
None.
ITEM 6. Exhibits and Reports On Form 8-K.
The Partnership filed the following report on Form 8-K
during the three months ended March 31, 1995:
1. On March 1, 1995, the Partnership filed Form 8-K
dated February 15, 1995 which reported as Item 3 the
appointment of a receiver for Brauvin/The Annex of
Schaumburg.
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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.
BY: Brauvin 6, Inc.
Corporate General Partner of
Brauvin Income Properties L.P. 6
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of Directors
and President
DATE: May 12, 1995
BY: /s/ Thomas J. Coorsh
Thomas J. Coorsh
Chief Financial Officer
and Treasurer
DATE: May 12, 1995
