<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the three months ended June 30, 1999
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
(Name of small business issuer as specified in its charter)
Delaware 36-1276801
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 North LaSalle Street, Chicago, Illinois 60602
(Address of principal executive offices) (Zip Code)
(312) 759-7660
(Issuer's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
(Title of class)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the issuer was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
INDEX
PART I
Page
Item 1. Consolidated Financial Statements . . . . . . . . . . . . . . .3
Consolidated Balance Sheet at June 30, 1999 . . . . . . . . . .4
Consolidated Statements of Operations for the
six months ended June 30, 1999 and 1998 . . . . . . . . . . . .5
Consolidated Statements of Operations for the
three months ended June 30, 1999 and 1998 . . . . . . . . . . .6
Consolidated Statements of Cash Flows for the
six months ended June 30, 1999 and 1998 . . . . . . . . . . . .7
Notes to Consolidated Financial Statements . . . . . . . . . .8
Item 2. Management's Discussion and Analysis or Plan
of Operation. . . . . . . . . . . . . . . . . . . . . . . . . 15
PART II
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 22
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . 22
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . 22
Item 4. Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . 22
Item 6. Exhibits, and Reports on Form 8-K . . . . . . . . . . . . . . 22
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
PART I - FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
The following Consolidated Balance Sheet as of June 30, 1999,
Consolidated Statements of Operations for the six months ended June
30, 1999, Consolidated Statements of Operations for the three
months ended June 30, 1999 and 1998 and Consolidated Statements of
Cash Flows for the six months ended June 30, 1999 and 1998 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 consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes
thereto included in the Partnership's 1998 Annual Report on Form
10-KSB.
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BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30,
1999
ASSETS
Investment in real estate:
Land $ 2,756,651
Buildings and improvements 10,736,901
13,493,552
Less accumulated depreciation (3,984,693)
Net investment in real estate 9,508,859
Cash and cash equivalents 790,874
Rent receivable (net of
allowances of $35,420) 116,354
Escrow and other deposits 612,854
Due from affiliates 15,510
Other assets 146,711
Total Assets $11,191,162
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Mortgage notes payable (Note 3) $ 8,656,414
Accounts payable and accrued
expenses 218,829
Due to affiliates 14,543
Tenant security deposits 13,549
Total Liabilities 8,903,335
PARTNERS' CAPITAL:
General Partners 17,969
Limited Partners (7,842.5
limited partnership units
issued and outstanding) 2,269,858
Total Partners' Capital 2,287,827
Total Liabilities and
Partners' Capital $11,191,162
See accompanying notes to financial statements
BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the six months ended June 30,
(Unaudited)
1999 1998
INCOME
Rental $913,336 $1,021,583
Interest 16,888 26,839
Other, primarily tenant
expense reimbursements 201,533 222,660
Total income 1,131,757 1,271,082
EXPENSES
Interest 428,104 432,919
Depreciation 177,828 182,904
Real estate taxes 57,097 65,544
Repairs and maintenance 13,142 11,881
Management fees (Note 4) 76,419 75,108
Other property operating 79,838 91,949
General and administrative 115,229 137,583
Total expenses 947,657 997,888
Net income $ 184,100 $ 273,194
Net income allocated to the
General Partners $ 1,841 $ 2,732
Net income allocated to the
Limited Partners $ 182,259 $ 270,462
Net income per limited partnership
interest (7,842.5 units) $ 23.24 $ 34.49
See accompanying notes to financial statements
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BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended June 30,
(Unaudited)
1999 1998
INCOME
Rental $412,279 $506,661
Interest 8,438 17,522
Other, primarily tenant
expense reimbursements 99,855 118,492
Total income 520,572 642,675
EXPENSES
Interest 214,406 216,432
Depreciation 88,914 91,839
Real estate taxes 28,549 32,772
Repairs and maintenance 4,832 5,612
Management fees 37,988 35,939
Other property operating 25,747 39,955
General and administrative 74,692 45,870
Total expenses 475,128 468,419
Net income $ 45,444 $ 174,256
Net income allocated to the
General Partners $ 454 $ 1,743
Net income allocated to the
Limited Partners $ 44,990 $ 172,513
Net income per limited partnership
interest (7,842.5 units) $ 5.74 $ 22.00
See accompanying notes to financial statements
BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30,
(Unaudited)
1999 1998
Cash Flows From Operating Activities:
Net income $184,100 $ 273,194
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation 177,828 182,904
Provision for doubtful accounts 8,661 12,194
Changes in:
Rent receivable 73,512 (102,412)
Escrow and other deposits (33,772) 34,613
Due from affiliates (15,510) --
Other assets (23,074) (15,307)
Accounts payable
and accrued expenses (29,191) 3,084
Due to affiliates 4,740 890
Net cash provided by operating
activities 347,294 389,160
Cash Flows From Investing Activities:
Capital expenditures -- (30,229)
Cash used in investing activities -- (30,229)
Cash Flows From Financing Activities:
Repayment of mortgage notes payable (59,675) (54,357)
Cash distributions to Limited
Partners (272,952) (274,040)
Net cash used in financing activities (332,627) (328,397)
Net increase in cash and cash
equivalents 14,667 30,534
Cash and cash equivalents at
beginning of period 776,207 749,946
Cash and cash equivalents at
end of period $ 790,874 $ 780,480
Supplemental disclosure of
cash flow information:
Cash paid for mortgage interest $ 409,010 $ 414,330
See accompanying notes to financial statements
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BRAUVIN INCOME PROPERTIES L.P. 6
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Brauvin Income Properties L.P. 6 (the "Partnership") is a
Delaware limited partnership organized for the purpose of
acquiring, operating, holding for investment and disposing of
commercial properties consisting principally of existing shopping
centers and, to a lesser extent, office and industrial buildings.
The General Partners of the Partnership are Brauvin 6, Inc. and
Jerome J. Brault. On August 8, 1997, Mr. Cezar M. Froelich
resigned as a Individual General Partner effective 90 days from
August 14, 1997. Brauvin 6, Inc. is owned by the A.G.E. Realty
Corporation Inc.(50%) and by Messrs. Brault (beneficially) (25%)
and Froelich (25%). A.G. Edwards & Sons, Inc. and Brauvin
Securities, Inc., affiliates of the General Partners, were the
selling agents of the Partnership. The Partnership is managed by
an affiliate of the General Partners.
The Partnership was formed in April 1986. The Partnership filed
a Registration Statement on Form S-11 with the Securities and
Exchange Commission which became effective on May 30, 1986. The
offering was terminated on August 31, 1987 having sold $7,842,500
in limited partnership interests.
The Partnership has acquired the land and buildings underlying
Delchamps Shopping Center ("Delchamps"), Shoppes on the Parkway
("Shoppes") and a Ponderosa Restaurant ("Ponderosa").
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Management's Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Accounting Method
The accompanying consolidated financial statements have been
prepared using the accrual method of accounting.
Rental Income
Rental income is recognized on a straight line basis over the
life of the related leases. Differences between rental income
earned and amounts due per the respective lease agreements are
credited or charged, as applicable, to deferred rent receivable.
Federal Income Taxes
Under the provisions of the Internal Revenue Code, the
Partnership's income and losses are reportable by the partners on
their respective income tax returns. Accordingly, no provision is
made for Federal income taxes in the consolidated financial
statements.
Consolidation of Special Purpose Entities
The Partnership has two special purpose entities ("SPE"),
Brauvin/Shoppes on the Parkway L.P. and Brauvin/Delchamps L.P.,
which are each owned 99% by the Partnership and 1% by an affiliate
of the General Partners. Distributions from each of the SPE's are
subordinated to the Partnership which effectively precludes any
distributions from an SPE to affiliates of the General Partners.
The creation of each SPE did not affect the Partnership's economic
ownership of the properties. Furthermore, this change in ownership
structure had no material effect on the consolidated financial
statements of the Partnership.
Investment in Real Estate
The Partnership's rental properties are stated at cost including
acquisition costs, leasing commissions, tenant improvements and net
of provision for impairment. Depreciation and amortization are
recorded on a straight-line basis over the estimated economic lives
of the properties, which approximate 31.5 years, and the term of
the applicable leases, respectively. Two of the Partnership's
properties are subject to liens under first mortgages (See Note 3).
The Partnership has performed an analysis of its long-lived
assets, and the Partnership's management determined that there were
no events or changes in circumstances that indicated that the
carrying amount of the assets may not be recoverable at June 30,
1999 and December 1998. Accordingly, no impairment loss has been
recorded in the accompanying consolidated financial statements for
the six months ended June 30, 1999 and the year ended December 31,
1998.
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid debt
instruments with an original maturity within three months of
purchase.
Estimated Fair Value of Financial Instruments
Disclosure of the estimated fair value of financial instruments
is made in accordance with the requirements of Statement of
Financial Accounting Standards No. 107, "Disclosures About Fair
Value of Financial Instruments". The estimated fair value amounts
have been determined by using available market information and
appropriate valuation methodologies. However, considerable
judgement is necessarily required in interpreting market data to
develop estimates of fair value.
The fair value estimates presented herein are based on
information available to management as of June 30, 1999 and
December 31, 1998, but may not necessarily be indicative of the
amounts that the Partnership could realize in a current market
exchange. The use of different assumptions and/or estimation
methodologies may have a material effect on the estimated fair
value amounts.
The carrying amounts of the following items are reasonable
estimates of fair value: cash and cash equivalents; rent
receivable; escrow and other deposits; accounts payable and accrued
expenses and due to affiliate.
(2) PARTNERSHIP AGREEMENT
The restated Limited Partnership Agreement (the "Agreement")
provides that 99% of the net profits and losses from operations of
the Partnership for each fiscal year of the Partnership shall be
allocated to the Limited Partners and 1% of the net profits and
losses from operations during each of said fiscal years shall be
allocated to the General Partners.
All Operating Cash Flow, as such term is defined in the
Agreement, during any calendar year shall be distributed 99% to the
Limited Partners and 1% to the General Partners. The receipt by
the General Partners of such 1% of Operating Cash Flow shall be
subordinated to the receipt by the Limited Partners of Operating
Cash Flow equal to a 10% per annum, cumulative, non-compounded
return on Adjusted Investment, as such term is defined in the
Agreement (the "Preferential Distribution"). In the event the full
Preferential Distribution is not made in any year (herein referred
to as a "Preferential Distribution Deficiency") and Operating Cash
Flow is available in following years in excess of the Preferential
Distribution for said years, then the Limited Partners shall be
paid such excess Operating Cash Flow until they have been paid any
unpaid Preferential Distribution Deficiency from prior years. For
subscribers who were admitted as Limited Partners during 1986, the
term "Preferential Distribution" shall mean a 12% per annum,
cumulative, non-compounded return on Adjusted Investment.
A cash distribution for the second quarter of 1999 was made to
the Limited Partners on August 15, 1999 in the amount of $136,476.
The Preferential Distribution Deficiency equaled $4,135,239 after
this last distribution.
(3) MORTGAGE NOTES PAYABLE
Mortgage notes payable at June 30, 1999, consisted of the
following:
Interest Date
1999 Rate Due
Shoppes on the Parkway(a) $5,804,073 9.55% 5/01/02
Delchamps Plaza
North Shopping Center(b) 2,852,341 9.03% 2/01/02
$8,656,414
The net carrying value of the Delchamps property and the Shoppes
property approximated $2,956,500 and $5,646,900, respectively, at
June 30, 1999. Delchamps and Shoppes serve as collateral under the
respective nonrecourse debt obligations.
Maturities of the mortgages payable are as follows:
1999 61,815
2000 132,707
2001 146,554
2002 8,315,338
$8,656,414
(a) 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 from Morgan Stanley Mortgage Capital, Inc. (the
"Successor Lender"). 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 May 1, 2002. A portion of the proceeds of the First
Mortgage Loan, approximately $4,675,000, were used to retire the
existing mortgage secured by Shoppes from Crown Life Insurance
Company. The remaining proceeds were used to pay loan closing
costs and a $999,919 return of capital distribution to the Limited
Partners.
As a precondition to the new financing, the Successor Lender
required that ownership of the property reside in a special purpose
entity ("SPE"). To accommodate the lender's requirements,
ownership of the property was transferred to the SPE,
Brauvin/Shoppes on the Parkway L.P., which is owned 99% by the
Partnership and 1% by an affiliate of the General Partners.
Distributions of Brauvin/Shoppes on the Parkway L.P. are
subordinated to a cumulative return to the Partnership. This
subordination will effectively preclude any distributions from the
SPE to affiliates of the General Partners. The creation of
Brauvin/Shoppes on the Parkway L.P. did not affect the
Partnership's economic ownership of the Shoppes property.
Furthermore, this change in ownership structure had no material
effect on the consolidated financial statements of the Partnership.
(b) The Partnership was required to make a balloon mortgage
payment for Delchamps in the amount of $2,823,249 in December 1996.
Prior to the scheduled maturity of the first mortgage loan, the
Lender granted the Partnership an extension until February 1, 1997.
On January 14, 1997, the Partnership obtained a first mortgage loan
in the amount of $2,925,000(the "First Mortgage Loan") secured by
Delchamps from NationsBanc Mortgage Capital Corporation. The First
Mortgage Loan bears interest at the rate of 9.03% per annum, is
amortized over a 25-year period, requires monthly payments of
principal and interest of approximately $24,600 and matures on
February 1, 2002. A portion of the proceeds of the First Mortgage
Loan, approximately $2,809,000, was used to retire the existing
mortgage secured by Delchamps from Lincoln National Life Insurance
Company.
As a precondition to the new financing on Delchamps, the lender
required that ownership of the property reside in a SPE. To
accommodate the lender's requirements, ownership of the property
was transferred to the SPE, Brauvin/Delchamps L.P., which is owned
99% by the Partnership and 1% by an affiliate of the General
Partners. Distributions of Brauvin/Delchamps L.P. are subordinated
to the Partnership which effectively precludes any distributions
from the SPE to affiliates of the General Partners. The creation
of Brauvin/Delchamps L.P. did not affect the Partnership's economic
ownership of the Delchamps property. Furthermore, this change in
ownership structure had no material effect on the consolidated
financial statements of the Partnership.
(4) TRANSACTIONS WITH AFFILIATES
Fees and other expenses paid or payable to the General Partners
or their affiliates for the six months ended June 30, 1999 and 1998
were as follows:
1999 1998
Management fees $76,419 $75,108
Reimbursable office expenses 61,740 77,250
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 $14,543 for management fees, as
of June 30, 1999. An amount of $15,510 due from affiliates at June
30, 1999 represents the 1998 overpayment of reimbursable expenses
paid to affiliates of the General Partner.
(5) SUBSEQUENT EVENTS
On July 15, 1999, the Partnership filed a Form 8-K to report the
results of the solicitation of the Limited Partnership for the sale
of the Partnership's assets. The Limited Partners, by a majority
vote, have approved the plan to sell the Partnership's assets.
Item 2. Management's Discussion and Analysis or Plan of
Operation.
General
Certain statements in this Quarterly Report that are not
historical fact constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Without limiting the foregoing, words such as "anticipates",
"expects", "intends", "plans" and similar expressions are intended
to identify forward-looking statements. These statements are
subject to a number of risks and uncertainties. Actual results
could differ materially from those projected in the forward-looking
statements. The Partnership undertakes no obligation to update
these forward-looking statements to reflect future events or
circumstances.
Year 2000
The "Year 2000" problem concerns the inability of computer
technology systems to correctly identify and process date sensitive
information beyond December 31, 1999. Many computers
automatically add the "19" prefix to the last two digits the
computer reads for the year when date information is needed in
computer software programs. Thus when a date beginning on January
1, 2000 is entered into a computer, the computer may interpret this
date as the year "1900" rather than "2000".
The Partnership's computer information technology systems
consists of a network of personal computers linked to a server
built using hardware and software from mainstream suppliers. The
Partnership does not own any equipment that contains embedded
microprocessors, which may also pose a potential Year 2000 problem.
Additionally, the Partnership has no internally generated software
coding to correct as all of the Partnership's software is purchased
and licensed from external providers. These external providers
have assured management that their systems are, or will be, Year
2000 compliant.
The Partnership has two main software packages that contain date
sensitive information, (i) accounting and (ii) investor relations.
In 1997, the Partnership initiated and completed the conversion
from its existing accounting software to a new software program
that is Year 2000 compliant. In 1998, the investor relations
software was also updated to a new software program that is Year
2000 compliant. Management has determined that the Year 2000 issue
will not pose significant operational problems for its remaining
computer software systems. All costs associated with these
conversions are expensed as incurred, and are not material.
Management does not believe that any further expenditures will be
necessary for the Partnership to be Year 2000 compliant. However,
additional personal computers may be purchased from time to time to
replace existing machines.
Also in 1997, management of the Partnership initiated formal
communications with all of its significant third party vendors,
service providers and financial institutions to determine the
extent to which the Partnership is vulnerable to those third
parties failure to remedy their own Year 2000 issue. There can be
no guarantee that the systems of these third parties will be timely
converted and would not have an adverse effect on the Partnership.
The most reasonably likely worst case scenario for the
Partnership with respect to the Year 2000 issue would be the
inability of certain tenants to timely make their rental payments
beginning in January 2000. This could result in the Partnership
temporarily suffering a depletion of the Partnership's cash
reserves as expenses will need to be paid while the cash flows from
revenues are delayed. The Partnership has no formal Year 2000
contingency plan.
Liquidity and Capital Resources
The Partnership intends to satisfy its short-term liquidity needs
through cash reserves and cash flow from the properties. Long-term
needs are expected to be satisfied through mortgage refinancing.
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 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 $53,000 and matures on May
1, 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. The
remaining proceeds were used to pay loan closing costs and a
$999,919 return of capital distribution to the Limited Partners.
The Partnership was required to make a balloon mortgage payment
for Delchamps in December 1996 in the amount of $2,823,000. Prior
to the scheduled maturity of the first mortgage loan, the Lender
granted the Partnership an extension until February 1, 1997. On
January 14, 1997, the Partnership obtained a first mortgage loan in
the amount of $2,925,000 (the "First Mortgage Loan") secured by
Delchamps from NationsBanc Mortgage Capital Corporation. The First
Mortgage Loan bears interest at the rate of 9.03% per annum, is
amortized over a 25-year period, requires monthly payments of
principal and interest of approximately $24,600 and matures on
February 1, 2002. A portion of the proceeds of the First Mortgage
Loan, approximately $2,809,000, was used to retire the existing
mortgage secured by Delchamps from Lincoln National Life Insurance
Company.
The Partnership has paid annual cash distributions to Limited
Partners since 1986, as many of the Partnership's properties have
been operating in strong retail markets.
Below is a table summarizing the historical data for distribution
per Limited Partnership Interest for the last two years:
Distribution
Date 1999 (A) 1998 1997
February 15 $17.59 $16.49 $15.39
May 15 17.21 17.21 16.14
August 15 17.40 17.40 16.31
November 15 17.59 17.63
(A) The May, 1999 distribution was made on May 17, 1999.
A distribution of Operating Cash Flow for the second quarter of
1999 was made to the Limited Partners on August 15, 1999 in the
amount of $136,476. The Preferential Distribution Deficiency
equaled $4,135,239 after this last distribution, a $77,334 increase
over 1998.
On October 15, 1998, the Partnership received notice that an
unsolicited tender offer to purchase up to 10% of the outstanding
Units was to commence with a tender price of $475 per Unit. The
offer was being made, in part, by an entity that owned a nominal
economic interest in the Partnership and was scheduled to terminate
on November 13, 1998. As a result of this tender offer 115
economic interests in the Partnership were transferred.
On October 22, 1998, Limited Partners were mailed, without the
consent or knowledge of the General Partners, an additional tender
offer to purchase up to 4.9% of the outstanding Units of the fund
for $500 per Unit, less any transfer fees. This offer was being
made by an entity that did not own any interests in the Partnership
and was scheduled to expire on December 2, 1998. As a result of
this tender offer 382 economic interests in the Partnership were
transferred.
On May 12, 1999, the Partnership received notice that an
unsolicited tender offer to purchase up to approximately 10% of the
outstanding Units was to commence with a tender price of $650 per
Unit. The offer is made, in part, by an entity that owned a
nominal economic interest in the Partnership and was scheduled to
expire on June 25, 1999.
The General Partners remained neutral as to the particular merits
or risks associated with all of the tender offers to the Limited
Partners. However, the General Partners did notify the Limited
Partners that they are exploring various alternatives to sell the
Partnership's assets. In this regard, the Partnership has engaged
nationally known appraisal firms to value the Partnership's assets.
Additionally, these firms will assist the General Partners in
determining the appropriate method and timing for the disposition
of the Partnership's assets. The General Partners believe an
informed determination of the true value of the Units can be made
at that time. The value of the Units after the receipt of the
appraisals may be more or less than the tender offers.
The General Partners further informed the Limited Partners that,
for those investors who are primarily interested in liquidating
their Units immediately, the tender offers provided such an
opportunity.
In 1998, the General Partners notified the Limited Partners that
they were exploring various alternatives to sell the Partnership's
assets. In this regard, the Partnership engaged a nationally known
appraisal firm to value the Partnership's assets. Additionally,
this firm will assist the General Partners in determining the
appropriate method and timing for the disposition of the
Partnership's assets.
The General Partners determined to pursue disposition of the
Partnership's assets, and began the registration and solicitation
process for the authorization of the Limited Partners for the sale
of all or substantially all of the Partnership's properties. That
solicitation was accomplished by written notice directed by U.S.
mail to each Limited Partner at the address shown on the
Partnership's records, in accordance with the rules of the
Securities and Exchange Commission and the requirements of the
Partnership Agreement.
On July 12, 1999, the General Partners received approval by the
Limited Partners to begin the disposition of the Partnership's
assets.
The General Partners 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 refinancing 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 - Six months ended June 30, 1999 and 1998
(Amounts rounded to nearest $000's)
The Partnership generated net income of $184,000 for the six
months ended June 30, 1999 as compared to net income of $273,000
for the same six month period in 1998. The $89,000 decrease in net
income resulted primarily from a $139,000 decrease in total income
which was partially offset by a $50,000 decrease in total expense.
Total income for the six months ended June 30, 1999 was
$1,132,000 as compared to $1,271,000 for the same six month period
in 1998, a decrease of $139,000. The $139,000 decrease resulted
primarily from a decrease in percentage rental income caused by
lower sales of several tenants at the Shoppes on the Parkway.
For the six months ended June 30, 1999 total expenses were
$948,000 as compared to $998,000 for the same six month period in
1998, a decrease of $50,000. The decrease of $50,000 was due
primarily to a decrease in general and administrative expenses.
General and administrative expense decreased primarily as a result
of decreases in expense at the Shoppes property of $20,000 in bad
debt expense, $15,000 in insurance expense, and $21,000 in
advertising expense.
Results of Operations - Three months ended June 30, 1999 and 1998
(Amounts rounded to nearest $000's)
The Partnership generated net income of $45,000 for the three
months ended June 30, 1999 as compared to net income of $174,000
for the same three month period in 1998. The $129,000 decrease in
net income resulted primarily from a $122,000 decrease in total
income and a $7,000 increase in total expense.
Total income for the three months ended June 30, 1999 was
$521,000 as compared to $643,000 for the same three month period in
1998, a decrease of $122,000. The $122,000 decrease resulted
primarily from a decrease in percentage rental income caused by
lower sales of several tenants at the Shoppes on the Parkway.
For the three months ended June 30, 1999 total expenses were
$475,000 as compared to $468,000 for the same three month period in
1998, an increase of $7,000. The increase of $7,000 was due
primarily to an increase in general and administrative expenses.
General and administrative expense increased primarily as a result
of increases in legal fees paid for the preparation of the
registration and solicitation for the sale of all or substantially
all of the Partnership's properties.
<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.
Exhibit 27. Financial Data Schedule
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant 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: August 16, 1999
BY: /s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer and
Treasurer
DATE: August 16, 1999
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> Jun-30-1999
<CASH> 790,874
<SECURITIES> 0
<RECEIVABLES> 116,354
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 13,493,552 <F1>
<DEPRECIATION> 3,984,693
<TOTAL-ASSETS> 11,191,162
<CURRENT-LIABILITIES> 0
<BONDS> 8,656,414 <F2>
0
0
<COMMON> 2,287,827 <F3>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 11,191,162
<SALES> 0
<TOTAL-REVENUES> 1,131,757 <F4>
<CGS> 0
<TOTAL-COSTS> 519,553 <F5>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 428,104
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 184,100
<EPS-BASIC> 0
<EPS-DILUTED> 0
<FN>
<F1> "PP&E" REPRESENTS INVESTMENT IN REAL ESTATE [LAND AND
BUILDING]
<F2> "BONDS" REPRESENTS MORTGAGES PAYABLE
<F3> "COMMON" REPRESENTS TOTAL PARTNERS CAPITAL
<F4> "TOTAL REVENUES" REPRESENTS RENTAL, INTEREST, AND OTHER
INCOME
<F5> "TOTAL COSTS" REPRESENTS TOTAL EXPENSES LESS INTEREST
EXPENSE
</FN>
</TABLE>
