SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
(Amendment No. 1)
BALCOR EQUITY PENSION INVESTORS-IV
(Name of Subject Company)
BALCOR EQUITY PENSION INVESTORS-IV
(Name of Person(s) Filing Statement)
Limited Partnership Interests
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
Thomas E. Meador
Chairman
The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
(847) 267-1600
(Name, Address and Telephone Number of Persons Authorized to Receive Notice
and Communications on Behalf of the Person(s) Filing Statement)
Copy To:
Herbert S. Wander
Lawrence D. Levin
Katten Muchin & Zavis
Suite 1600
525 West Monroe Street
Chicago, Illinois 60661-3693
(312) 902-5200
<PAGE>
This Amendment No. 1 to Schedule 14D-9 amends the Schedule 14D-9 (the
"Schedule 14D-9") filed by Balcor Equity Pension Investors-IV, an Illinois
limited partnership (the "Partnership"), filed with the Securities and Exchange
Commission on May 28, 1996. All capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to such terms in the
Schedule 14D-9.
Item 9. Material to be Filed as Exhibits
Item 9 hereby is amended by removing "5. (c)(4) The Darby Valuation
Report [to be filed by amendment]" and substituting in its place "5. (c)(4)
The Darby Valuation Report"
Signature. After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: June 5, 1996 BALCOR EQUITY PENSION
INVESTORS-IV
By: Balcor Equity Partners-IV, its
general partner
By: The Balcor Company, a
general partner
By: /s/Thomas E. Meador
---------------------------
Thomas E. Meador, Chairman
<PAGE>
APPRAISAL OF
A TAX-EXEMPT LIMITED PARTNERSHIP INTEREST
AND
A TAXABLE LIMITED PARTNERSHIP INTEREST
IN
BALCOR EQUITY PENSION INVESTORS - IV
(BEPI - IV)
SKOKIE, ILLINOIS
AS OF MARCH 31, 1996
Valuation Counselors
<PAGE>
May 8, 1996
Balcor Equity Partners - IV
The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
Attn: Mr. John K. Powell, Jr. - First Vice President
Gentlemen:
In accordance with your request, we are pleased to submit our opinion of the
Value of a Tax-Exempt Limited Partnership Interest and a Taxable Limited
Partnership Interest in:
Balcor Equity Pension Investors - IV
(An Illinois Limited Partnership)
as of March 31, 1996.
The term "Value" is defined as follows:
The amount, in dollars, which a Limited Partnership Interest in Balcor
Equity Pension Investors - IV is worth to an investor who owns the
Interest with the intention of holding it to maturity, who fully
understands the complexities of the investment, and has an interest in the
potential interest income and capital appreciation of the Limited
Partnership Interest. The valuation does not represent the amount that
would be received by a holder of a Limited Partnership Interest would
he/she decide to liquidate the Interest prior to the maturity of the
Partnership. The value is subject to the terms and conditions set forth in
this report.
The Partnership is forecasted to close at the end of the year 2002.
Based on our analyses and conclusions set forth in this report, the estimated
Value of the Limited Partnership Interests in Balcor Equity Pension Investors -
IV, as of March 31, 1996, was in the rounded amount of:
Adjusted
Original
Capital
1. Tax-Exempt Limited Partnership Interest$192.00 $249.75
------- -------
2. Taxable Limited Partnership Interest $199.00 $249.75
------- -------
As of December 31, 1995, the Tax-Exempt Partners and the Taxable Partners have
received $0.25 as a return of capital.
<PAGE>
For the quarter ended March 31, 1996, the value of a Tax-Exempt Limited
Partnership Interest remained the same, and a Taxable Limited Partnership
Interest decreased $1.00. There are no longer any mortgage loans in this
Partnership.
For the quarter ended December 31, 1995, the value of a Tax-Exempt Limited
Partnership Interest increased $1.00, and a Taxable Limited Partnership
Interest increased $3.00. As of that date, the value of the Partnership's
proportionate share in the equity of 45 W. 45th St. decreased $403,000, or 24%
based on revised cash flow. There were no transactions in this quarter.
For the quarter ended September 30, 1995, there was no change in the value of a
Tax-Exempt Limited Partnership Interest, but a decrease of $1.00 in the value
of a Taxable Limited Partnership Interest.
For the quarter ended June 30, 1995, there was no change in the value of a
Tax-Exempt Limited Partnership Interest or a Taxable Limited Partnership
Interest.
For the quarter ended December 31, 1994, the value of a Tax-Exempt Limited
Partnership Interest decreased $6.00 and a Taxable Limited Partnership Interest
decreased $6.00, mainly due to an increase of 0.25% in the discount rates
applied and a decrease of $1.3 million in the overall value of the Equity
Investments in Real Estate.
As of March 31, 1996, the Partnership had funded two real estate acquisitions:
Gleneagles Apartments, North Miami, FL and Evanston Plaza Shopping Center,
Evanston, IL. On September 30, 1988 the Partnership funded $2,739,130 of a
$3,500,000 mortgage loan commitment, which was a participation in a $23,000,000
participating mortgage loan on 45 West 45th Street Office Building, New York,
NY. The remainder of the commitment and funding was assumed by three affiliated
partnerships. The balance of the $3,500,000 was funded in the quarter ended
December 31, 1988. In the quarter ended March 31, 1995, the property was
foreclosed and became Real Estate Owned proportionate to the Partnership's
15.22% interest.
Because of the many potential permutations and combinations of tax benefits
available and/or not available to the taxable investor under current tax
legislation, any tax benefits have been excluded from the calculation of the
value per interest. The Partnership will provide the tax benefit data to the
taxable investor in order for the owner of the Partnership Interest to apply it
to his or her individual tax situation.
<PAGE>
A copy of this report is retained in our files, together with the information
from which the report was compiled.
Respectfully submitted,
/s/Raymond Ghelardi /s/Clement H. Darby
Valuation Counselors Group, Inc. Darby & Associates
Raymond Ghelardi Clement H. Darby
Managing Director President
REG/CHD/ded
cc: Mr. David P. Bennett
Ms. Mary J. Mojica
Ms. Jayne Kosik
Ms. Jane Cody
<PAGE>
TABLE OF CONTENTS
Statement of Facts and Limiting Conditions
Introduction
Distributions to Limited Partners
Description of the Assets
Valuation of a Limited Partnership Interest
Discussion of Risk Rates
Valuation of the Equity Investments In Real Estate And
Real Estate Owned Investments
Valuation of the Offering Expenses and Loan Fees
Conclusion of Value
Schedule
A-1 Balance Sheet - March 31, 1996
A-2 Statements of Income and Expenses for the quarters
ended March 31, 1996 and 1995
A-3 Statements of Cash Flows for the quarters ended
March 31, 1996 and 1995
B-1 Cash Flow From Operations
B-2 Calculation of Excess Net Cash Proceeds and
Excess Net Cash Receipts
B-3 Discounted Cash Flow Analysis
C Valuation Summary
<PAGE>
STATEMENT OF FACTS AND LIMITING CONDITIONS
Valuation Counselors Group, Inc./Darby & Associates Joint Venture strives to
clearly and accurately disclose the assumptions and limiting conditions that
directly affect an appraisal analysis, opinion or conclusion. In order to
assist the reader in interpreting this report, such assumptions are set forth
as follows:
Valuation Counselors Group, Inc./Darby & Associates Joint Venture reserves the
right to make adjustments to the analysis, opinion and conclusions set forth in
the report as deemed necessary by consideration of additional or more reliable
data that subsequently may become available.
No opinion is rendered as to legal fee, property title or mortgage notes
related to the appraised assets, which are assumed to be good and marketable.
It is assumed that no opinion is intended in matters that require legal,
engineering or other professional advice which has been or will be obtained
from professional sources; the valuation report will not be used for guidance
in professional matters exclusive of the appraisal and valuation discipline.
Information furnished by others is presumed to be reliable, and where so
specified in the report, has been verified; however, no responsibility, whether
legal or otherwise, is assumed for its accuracy and cannot be guaranteed as
being certain. All facts and data set forth in the report are true and accurate
to the best of the Appraiser's knowledge and belief. No single item of
information was completely relied upon to the exclusion of other information.
All financial data, operating histories, forecasts, allocations to Tax-Exempt
and Taxable Limited Partnership Interests and other data relating to income and
expenses attributed to the assets and the Partnerships have been provided by
Management or its representatives and have been accepted without further
verification except as specifically stated in the report.
It should be specifically noted that the valuation assumes the appraised assets
will be competently managed and maintained by financially sound owners over the
expected period of ownership except where noted, specifically in assets during
the period of foreclosure where Balcor may not have control. This appraisal
engagement does not entail an evaluation of management's effectiveness, nor are
we responsible for future marketing efforts and other management or ownership
actions upon which actual results will depend.
Neither the report nor any portions thereof, especially any conclusions as to
value, the identity of the appraiser or Valuation Counselors Group, Inc./Darby
& Associates Joint Venture shall be disseminated to the public through public
relations media, news media, sales media, prospectus or any other public means
of communications without the prior written consent and approval of Valuation
Counselors Group, Inc./Darby & Associates Joint Venture. The date of the
valuation to which the value estimate conclusion applies is set forth in the
report.
The preponderance of working paper support for this valuation is maintained in
the offices of management, Balcor Mortgage Advisors.
<PAGE>
Neither the fees nor any of the terms and conditions of the appraisal
assignments given to Valuation Counselors Group, Inc./Darby & Associates Joint
Venture by Balcor Mortgage Advisors are contingent upon the values reported.
No independent investigation of the fair market value of the underlying real
estate assets has been made by Valuation Counselors Group, Inc./Darby &
Associates Joint Venture. We have reviewed the real estate appraisals for
reasonableness, but have assumed the real estate appraisals obtained by Balcor
Mortgage Advisors are independent and accurate. Valuation Counselors Group,
Inc. assumes responsibility for real estate appraisals prepared by their own
staff.
No independent investigation of the terms and conditions of the mortgage loans
made by Balcor Equity Pension Investors - IV has been made. We have relied on
data furnished to us by Balcor Mortgage Advisors and the validity of the
information was assumed to be correct.
In the event that this appraisal is used as basis to set a market price for a
Limited Partnership Interest in Balcor Equity Pension Investors - IV, no
responsibility is assumed for the seller's inability to obtain a purchaser at
the value reported herein.
The reader of this valuation report should be fully conversant with the terms
and conditions of Balcor Equity Pension Investors - IV Limited Partnership as
set forth in the Prospectus, other related documents, and the prior appraisals
of a Limited Partnership Interest in Balcor Equity Pension Investors - IV.
We have discussed the current status and condition of the mortgage loans and
real estate owned with the management of Balcor Mortgage Advisors and have
accepted their comments as being factual.
<PAGE>
INTRODUCTION
The Partnership, Balcor Equity Pension Investors - IV, was formed on June 20,
1986. The Partnership Agreement provides for Balcor Equity Partners - IV to be
the General Partner and for the admission of Limited Partners through the sale
of Limited Partnership Interests at $250 per Interest. The Partnership
commenced the offering of Limited Partnership Interests to the public on
December 15, 1986; closing date of its minimum offering was February 20, 1987,
after certain minimum sales of Limited Partnership Interests had been achieved,
as provided for in the Partnership Agreement. Prior to February 20, 1987, the
Partnership was in a pre-operating status. The Partnership issued 185,486
Limited Partnership Interests on or prior to December, 1987, the termination
date of the offering. The total number of units sold was segregated into
167,673 tax-exempt units and 17,813 taxable units.
The Partnership serves as an investment vehicle for qualified profit sharing,
pension and other retirement trusts; bank commingled trust funds for such
trusts; HR-10 (Keogh) Plans and Individual Retirement Accounts (IRA);
government pension and retirement trusts; other entities intended to be exempt
from Federal income taxation such as certain religious, charitable, scientific,
literary and educational corporations, funds and foundations; and also
individuals and entities not exempt from Federal income tax.
The Partnership's operations consisted of (1) investing in commercial and
residential real properties which the Partnership will acquire with no
permanent mortgage indebtedness and (2) placing equity participating first
mortgages on income-producing real property.
The Partnership Agreement provides that the General Partner, or affiliates,
will receive selling commissions on the sale of Limited Partnership Interests;
real estate acquisition fees, either paid by the sellers or the Partnership
when the Partnership acquires real properties; and loan application and
processing fees and mortgage brokerage fees, paid by borrowers and/or the
Partnership when the Partnership funds first mortgage loans or issues
commitments to fund loans, subject to certain limitations as set forth in the
Partnership Agreement.
The Partnership Agreement also provides that an affiliate of the General
Partner will service the mortgage loans made by the Partnership and will
receive a mortgage servicing fee at an annual rate equal to 1/4 of 1% of the
amounts advanced by the Partnership and outstanding from time to time; and that
an affiliate of the General Partner will perform property management services
in connection with the properties acquired by the Partnership and thereby earn
fees at rates and on terms no less favorable to the Partnership than those
customary for similar property management and leasing services in the relevant
geographical area of the properties managed, subject to certain limitations.
<PAGE>
"Operating Income from Real Properties" of the Partnership will be allocated
10% to the General Partner and 90% to the Limited Partners; "Operating Losses
from Real Properties" and other certain components will be allocated 1% to the
General Partner and 99% to the Limited Partners; "Other 'Operating Income' or
'Operating Losses'" will be allocated 10% to the General Partner and 90% to the
Limited Partners pursuant to terms set forth in the Partnership Agreement. "Net
Cash Receipts" are distributed on a quarterly basis commencing in April 1988.
90% of Net Cash Receipts available for distribution will be distributed to
Limited Partners. To the extent possible, Taxable Limited Partners will receive
an allocation of such available Net Cash Receipts generated by the operation of
the properties, in the same manner as if their investment in the Partnership
had been attributable solely to the properties. Taxable Limited Partners will
commence sharing in such available Net Cash Receipts generated by the mortgage
loans at such time as the Taxable Limited Partners' investment in the
Partnership is not then solely attributable to the properties (which time is
anticipated to be upon the sale of substantially all of the properties). The
Tax-exempt Limited Partners will be allocated all other Net Cash Receipts to be
allocated to the Limited Partners, expected to consist of (I) 100% of such
available Net Cash Receipts generated by the mortgage loans (until such time as
substantially all of the properties are sold, as described above) plus (ii) the
Net Cash Receipts generated by the operation of the properties, to the extent
not allocated to the Taxable Limited Partners as described above. Of the
remaining 10% of Net Cash Receipts, 7 1/2% will be paid to the General Partner
as its distributive share from Partnership operations and an additional 2 1/2%
will be paid to the General Partner for allocation to the Repurchase Fund which
may be utilized to repurchase Interests from Limited Partners pursuant to terms
set forth in the Partnership Agreement. Amounts allocated to the Repurchase
Fund will be returned to the Partnership at the liquidation of the Partnership
to the extent necessary to permit payment to the Limited Partners of their
"Original Capital" plus any deficiency in their "Liquidation Preference".
Subject to the provisions of the Partnership Agreement, "Net Cash Proceeds"
which are available for distribution will be distributed only to the Limited
Partners until such time as the Limited Partners have received a return of
their "Original Capital" and their "Liquidation Preference"; thereafter, the
remaining "Net Cash Proceeds" will be distributed 90% of the Limited Partners
and 10% to the General Partners. The General Partner's share shall be returned
to the Partnership if necessary to permit payment to the Limited Partners of
any deficiency in the return of their Original Capital and their Preferential
Cumulative Distribution on Adjusted Original Capital of 10% per annum.
Although there were no assurances in this regard, the General Partner had
originally anticipated that approximately one-half of the proceeds of the
offering available for investment would be invested in real properties and
approximately one-half would be used to make mortgage loans. As of March 31,
1996, all of the investments were in real properties.
The Partnership Agreement provides that, except in certain limited
circumstances, the proceeds of any sale, refinancing or other disposition of
properties will not be reinvested, but will be distributed to the extent not
required to meet the Registrant's cash requirements. The Partnership Agreement
also provides that proceeds from the repayment of mortgage loans within 14
years of the termination of the offering may be used to make new mortgage
loans. Any such new mortgage loan would provide for repayment in full within
15 years after the termination of the offering.
<PAGE>
Originally, the Partnership expected to sell or otherwise dispose of its real
property investments between the fifth and tenth years after acquisition and
expected to sell or obtain repayment of its mortgage loans between the twelfth
and fifteenth years after such loans are made. Since the time the original real
estate investments and mortgage loans were made at the inception of the
Partnership, material adverse changes occurred in the real estate market. The
Partnership only has Investments in Real Estate. The management of the
Partnership has determined that it may be in the best interests of the Limited
Partners to retain title to a substantial portion of the real estate for
approximately ten years from December 31, 1992. As of March 31, 1996, the
forecasted closing of the Partnership is the year 2002.
<PAGE>
DISTRIBUTIONS TO LIMITED PARTNERS
Net Cash Receipts available for distribution commenced distribution to Limited
Partners on a quarterly basis commencing in April of 1988. 90% of all Net Cash
Receipts available for distribution are distributed to Limited Partners. 7 1/2%
of such Net Cash Receipts are paid to the General Partner as its distributive
share from Partnership operations, and an additional 2 1/2% of such Net cash
Receipts are paid to the General Partner for allocation to the Repurchase Fund.
Amounts allocated to the Repurchase Fund are commingled with other assets of
the General Partner and may be utilized to repurchase Interests from Limited
Partners. Amounts allocated to the Repurchase Fund will be returned to the
Partnership at the liquidation of the Partnership if necessary to permit
payment to the Limited Partners of their Original Capital plus any deficiency
in their Liquidation Preference.
In general, the Partnership had expected to sell its real properties between
the fifth and twelfth years after acquisition and expects to sell or obtain
repayment of its equity participating mortgage loans between the twelfth and
fifteenth years after the termination of the offering. For reasons previously
explained, these time horizons have been extended beyond the Year 2000. The
Partnership anticipates that its non-participating mortgage loans, if any, will
generally have terms ranging from five to ten years. The Partnership expects
that Mortgage Reductions received within 14 years of the termination of the
offering will be used to fund new first mortgage loans which will provide for
repayment between 12 and 15 years after the termination of the offering.
Subject to the provisions of the eighth sentence of this paragraph, Net Cash
Proceeds which are available for distribution will be distributed only to
Limited Partners until such time as they have received a return of their
Original Capital and their Liquidation Preference. 90% of the remaining Net
Cash Proceeds available for distribution will be distributed to Limited
Partners. The General Partner will receive 10% of such remaining Net Cash
Proceeds. During the liquidation stage of the Partnership, the General Partner,
to the extent necessary, shall return to the Partnership all or any portion of
its 10% share of Net Cash Proceeds in order to enable the Partnership to make
distributions to all Limited Partners (in accordance with their participating
percentages) until such time as all Limited Partners have received a return of
their Original Capital and a Preferential Cumulative Distribution on Adjusted
Original Capital of 10% per annum. For purposes of determining distributable
Net Cash Proceeds, an amount equal to the Adjusted Mortgage Investment for each
year shall be deemed an amount available for distribution and shall also be
deemed the initial amount distributed for such year.
Cash available for distribution will be determined by the General Partner after
it creates any reserves or makes expenditures reasonably necessary or
appropriate for the operation of the Partnership.
There is no assurance that the Partnership will generate Net Cash Receipts or
Net Cash Proceeds, or that, if generated, they will be available for
distribution or be sufficient to provide the full amount of the Preferential
Cumulative Distribution.
All Partnership distributions are made quarterly to those recognized as the
holders of Interests as of the last day of each fiscal quarter. Distributions
are expected to commence the third full calendar quarter after termination of
the offering.
<PAGE>
Payments were made to Limited Partners during the period of the public offering
of Interests.
As set forth in the Partnership Agreement, the Partnership was obligated to pay
to the purchasers of Interests an amount equivalent to interest at an initial
rate of 6.00% per annum on the total purchase price of an Interest. The amounts
so payable under this provision ceased to accumulate in December, 1987, the
termination date of the offering. Payments accrued to the Limited Partners
during the offering period totaled $1,077,203 and were paid in February 1988.
Distributions to the Limited Partnership
Tax-Exempt Interest Taxable Interest
Effective Amount Amount
Date Per Interest Annual Rate Per Interest Annual Rate
3/31/88 $2.87 4.59% $2.16 3.46%
6/30/88 3.12 4.99% 4.44 7.10%
9/30/88 3.35 5.36% 3.70 5.92%
12/31/88 3.35 5.36% 3.70 5.92%
3/31/89 3.70 5.92% 3.70 5.92%
4/89 0.25 - 0.25 -
(Return of capital)
6/30/89 1.64 2.63% 0.60 0.96%
9/30/89 1.71 2.74% 1.05 1.68%
12/31/89 2.19 3.51% 1.98 3.17%
3/31/90 2.40 3.84% 2.26 3.62%
6/30/90 2.50 4.00% 2.34 3.74%
9/30/90 2.50 4.00% 2.32 3.72%
12/31/90 2.50 4.00% 2.27 3.64%
3/31/91 2.50 4.00% 2.33 3.73%
6/30/91 2.50 4.00% 2.46 3.94%
9/30/91 2.50 4.00% 2.81 4.50%
12/31/91 2.50 4.00% 2.74 4.39%
3/31/92 2.50 4.00% 2.75 4.39%
6/30/92 2.50 4.00% 2.77 4.44%
9/30/92 2.50 4.00% 2.57 4.11%
12/31/92 2.50 4.00% 2.57 4.12%
3/31/93 2.50 4.00% 2.45 3.92%
6/30/93 2.50 4.00% 2.56 4.09%
9/30/93 3.03 4.85% 2.50 4.00%
12/31/93 2.59 4.15% 2.50 4.00%
3/31/94 2.94 4.70% 2.50 4.00%
6/30/94 3.08 4.90% 2.50 4.00%
9/30/94 2.76 4.40% 2.50 4.00%
12/31/94 2.50 4.00% 3.24 5.19%
3/31/95 2.50 4.00% 2.98 4.76%
6/30/95 2.50 4.00% 2.86 4.58%
9/30/95 2.26 3.62% 2.29 3.68%
12/31/95 2.26 3.62% 2.29 3.68%
3/31/96 2.26 3.62% 2.29 3.68%
<PAGE>
DESCRIPTION OF THE ASSETS
Early Investments in Real Estate
1. Gleneagles Apartments, North Miami, FL
On June 30, 1987 the Partnership acquired the Gleneagles Apartments, an
existing 292 unit garden apartment complex located in northwest Dade
County on NW 67th Avenue. The property was completed in June, 1987 and, at
closing, was 98% occupied. The purchase price was $13,400,000; allocating
$2,270,000 to the land and $11,130,000 to the buildings and improvements.
As of March 31, 1996, the property was valued at $14,866,735 based on
forecasted 1996 cash flow. As of March 31, 1996, the property was 99%
occupied.
2. Evanston Plaza Shopping Center, Evanston, IL
On November 3, 1987 the Partnership acquired Evanston Plaza Shopping
Center, an existing shopping center at Dempster and Dodge Streets,
Evanston, IL. The center, which was completed in September, 1987, is
situated on 13.4 acres with total gross leasing area of 148,098 square
feet. The center was 89% leased to tenants in occupancy at closing with
the balance of the space leased to the Seller under an 18 month Master
Lease. The purchase price was $18,500,000, with $5,075,000 allocated to
the land and $13,425,000 to the buildings and improvements. On September
2, 1988, the Partnership paid $900,000 for the cost of constructing an
addition to Evanston Plaza and paid $191,667 fee to Banbury Development in
regards to that addition, making a total funding of $1,091,667. As of
March 31, 1996, the property was valued at $16,045,090 based on forecasted
1996 cash flow. As of March 31, 1996, the property was 88% occupied.
Real Estate Owned Investments
1. 45 West 45th Street Office Building, New York, NY
On September 30, 1988 the Partnership funded $2,739,130 of a $3,500,000
commitment as participant in a total mortgage loan commitment of
$23,000,000 on the 45 West 45th Street Office Building in New York City.
The Commitment percentage of the total loan was 15.22%. The building is 16
stores high with a total net rentable area of 114,351 square feet. It was
constructed in 1923 on a 8,130 square foot site and the funds were used
for renovation. The loan was for 10 years, 9% in years 1-2, 9.5% years 3-7
and 9.75% years 8-10, with participations in net cash flow and
appreciation. The remaining $760,870 was funded in the quarter for a total
funding of $3,500,000 ended December 31, 1988. In the quarter ended March
31, 1995, the property was foreclosed and became Real Estate Owned
proportionate to the 15.22% interest. In the quarter ended March 31, 1996,
the Partnership's proportionate share of equity was valued at $1,274,945
based on forecasted 1996 cash flow. As of March 31, 1996, the property was
86% occupied.
<PAGE>
VALUATION OF A LIMITED PARTNERSHIP INTEREST
Valuation Counselors Group, Inc./Darby & Associates Joint Venture has been
retained by Balcor Equity Partners - IV to estimate the Value of a Limited
Partnership Interest in Balcor Equity Pension Investors - IV on a quarterly
basis.
The methodology used in estimating the Value of a Limited Partnership Interest
in Balcor Equity Pension Investors - IV is based upon substituting the
estimated (1) present value of the Equity Cash Flows and Return of Capital in
place of the Investments in Real Estate and Real Estate Owned, (2) appraised
value of certain Real Estate Owned assets acquired in foreclosure and scheduled
for disposition in the near-term (if applicable to this Partnership), and (3)
the present value of the Debt Cash Flows in place of Investment in Loan
Receivable, First Mortgage as shown on March 31, 1996 Balance Sheet of Balcor
Equity Pension Investors - IV (Schedule A-1) (if applicable to this
Partnership). As of February 2, 1995, when 45 W. 45th Street became Real Estate
Owned, there no longer were any mortgage loans in this Partnership. In
addition, the unamortized portions of the Offering Expenses and Loan Fees as
well as the present value of the Repurchase Fund are added to the Assets on the
same Balance Sheet. The amortization is calculated by reducing the total
Offering Expenses, as set forth in the financial statements, on a straight line
basis, quarterly, to the expiration date of the loan portfolio. For financial
reporting purposes, Balcor Equity Partners - IV initially deducted the total
Offering Expenses from the proceeds of the Limited Partnership Interest.
Current Assets and Current Liabilities remained as stated and subsequently are
called "Net Current Assets."
Cash, the present value of the Equity Cash Flows, Return of Capital and
Repurchase Fund, appraised Real Estate Owned (where applicable) and the present
value of the Debt Cash Flows (if any) were segregated into the interests of the
Tax-exempt Limited Partnership Interests, Taxable Limited Partnership Interests
and General Partner Interest Shares in accordance with the terms of the Limited
Partnership Agreement and the proportionate share of the Partnership Interests.
As of December 31, 1992, the holding period for the Investments in Real Estate
and Real Estate Owned not scheduled for near-term sale were extended, on the
average, to ten years for the purpose of attempting to realize a greater return
to the Limited Partners. In addition the cash flows were refined in order to
calculate excess cash proceeds and excess net cash receipts since certain of
those proceeds are applied to assets where the acquisition costs have not been
achieved.
Historically, the valuation process has allocated certain proceeds to the
Tax-Exempt and Taxable Limited Partnership Interests on the basis of certain
procedures set forth in the Partnership Agreement. Based on additional formulae
in the Partnership Agreement, as the Fund has "matured" it has become necessary
to reallocate certain proceeds between the Tax-Exempt and Taxable Limited
Partnership Interests so that the Tax-Exempt Limited Partnership Interests will
be made whole prior to returning capital to the Taxable Limited Partnership
Interest.
<PAGE>
With the extension of the holding period and redefining the Real Estate Owned,
the Repurchase Fund has become material and is included separately as an Asset.
It is allocated prorata between Tax-Exempt Limited Partnership Interest and
Taxable Limited Partnership Interest. Note that the terms of this Partnership
had been modified at inception from Balcor Equity Pension Investors - I, II &
III concerning the application of the proceeds from sales of assets so that
those funds are allocated on a prorata basis rather than giving priority
treatment to the Tax-Exempt Limited Partnership Interest.
DISCUSSION OF RISK RATES
The discount rate applied to the cash flow mathematically expresses risk. Risk
represents the uncertainty related to achievement of the prospective cash
flows. The primary components of risk exposure in fixed income securities are
interest rate risk, inflation risk, market risk, liquidity risk and risk of
default. As previously discussed, the valuation of the assets in question have
been predicated upon the present valuing of the components of the loan
portfolio. Therefore, determination of an appropriate risk rate is essential in
the valuation of the net investment in loans receivable.
Financial theory dictates the necessity of incremental return resulting from
incremental risk. Accordingly, the typical risk/return tradeoff indicates that
investors should demand greater rates of return as the perceived riskiness of
the asset or security increases. In examining an investment situation, a
hypothetical investor would weigh the perceived level of risk against the
return expected from the subject investment. In determining the required rate
of return or discount rate on a particular asset or investment, the
hypothetical investor would also consider returns available from alternative
investment opportunities such as government securities, corporate bonds,
mortgages, real estate and common stock, if applicable.
The subject assets consist of a self-liquidating real estate investment fund
with investments in both real estate loans with varying maturities and real
estate assets. Accordingly, in determining an appropriate risk rate associated
with the subject assets, we have considered alternative and comparable rates of
return in the lending and real estate marketplace as indicated by such sources
as the Wall Street Journal, Real Estate Research Corporation Real Estate
Report, Investment Dealers Digest, Corporate Financing Week, American Council
of Life Insurance Investment Bulletin and the National Association of Real
Estate Investment Trusts.
The following table presents yield rates associated with various types of
government and corporate securities as indicated by the March 29,1996 and
January 3, 1996 Wall Street Journals.
<PAGE>
Yield Rates as Indicated by the Wall Street Journal
Security First Quarter 1996 Fourth Quarter 1995
Three Month U.S. Treasury Bills 4.99% 5.04%
Six Month U.S. Treasury Bills 4.97% 5.03%
Prime Rate 8.25% 8.50%
Ten Year U.S. Treasury Bonds 6.60% 5.64%
Twenty Year U.S. Treasury Bonds 6.90% 6.02%
Corporate Bonds
Aaa, Aa 6.72% to 7.60% 6.02% to 6.96%
A, Baa 6.95% to 7.91% 6.23% to 7.31%
Ba, C 9.8% 9.7%
Collateralized Mortgage
Obligations
10 Year 7.90% 6.94%
20 year 8.05% 7.17%
Additionally, information from Moody's Corporate Bond Survey and the Investment
Dealer's Digest indicates the corporate original issue Real Estate Mortgage
Investment Conduit (REMIC) yields from 1988 to 1995 ranged from 7% to 11.3% for
obligations with terms in excess of ten years. A yield difference of one to
three points was exhibited within multiple class REMIC issues where accrued
interest payments did not commence on the (higher yielding) security until
senior class notes were paid in full. A short term issuance collateralized by
elderly living properties exhibited a four point yield differential between
classes.
According to information from the Mortgage-Based Securities Letter, REMIC
issuances in 1994 have decreased substantially from the levels exhibited during
1992 and 1993. Reportedly, many REMIC underwriters and investors incurred
losses due to price corrections in the derivative mortgage securities market.
The price decline was believed to be attributable to several factors including
rising interest rates, increased volatility, average-life extension and lack of
liquidity. According to the Wall Street Journal, new issues of mortgage-backed
securities were down 57% in 1994 as compared to the prior year.
In addition to the previously noted yields on various market securities, we
have also considered mortgage rates associated with various types of commercial
real estate properties. This data is relevant in that it provides an indication
of rates of return associated with similar types of investments. These
statistics have been extracted from the December 29, 1995 and October 1, 1995
editions of the Investment Bulletin published by the American Council of Life
Insurance, is as follows:
<PAGE>
Averages
Contract Interest
Rate
Type of Loan
Property Type Third Quarter Second Quarter
1995 1995
FIXED RATE-FIXED TERM 7.83% 8.23%
Apartment 7.64% 8.13%
Office Building 7.98% 8.23%
Retail 7.79% 8.17%
Industrial 7.84% 8.21%
Other Commercial 7.73% 8.47%
Yield With
Fees
Type of Loan
Property Type Third Quarter Second Quarter
1995 1995
FIXED RATE-FIXED TERM 7.85% 8.24%
Apartment 7.67% 8.15%
Office Building 8.00% 8.24%
Retail 7.81% 8.18%
Industrial 7.85% 8.22%
Other Commercial 7.74% 8.51%
Maturity
(Years/Months)
Type of Loan
Property Type Third Quarter Second Quarter
1995 1995
FIXED RATE-FIXED TERM 11/06 11/02
Apartment 10/11 10/09
Office Building 10/0 09/07
Retail 13/05 13/06
Industrial 10/08 10/00
Other Commercial 11/04 12/02
Additionally, we have considered expected capitalization rates and internal
rates of return extracted from "Korpacz Real Estate Investor Surveys, First
Quarter 1996". For comparative purposes, we have also presented similar data
extracted from "Korpacz Real Estate Investor Surveys, Fourth Quarter 1995".
<PAGE>
National Market Indicators: First Quarter 1996
Retail Office
(National Regional (Central Business
Malls) District)
Range Average Range Average
Free and Clear Equity IRR 10.00%-14.00% 11.50% 10.00%-15.00% 12.10%
Free and Clear Equity Cap
Rate 6.25%-11.00% 8.11% 8.00%-12.50% 9.58%
Terminal Cap Rate 7.00%-11.00% 8.56% 8.25%-12.00% 9.62%
Office National
(National Suburban) Industrial
Range Average Range Average
Free and Clear Equity IRR 10.00%-14.00% 11.90% 9.00%-14.00% 11.27%
Free and Clear Equity Cap
Rate 8.00%-11.00% 9.47% 7.25%-13.00% 9.29%
Terminal Cap Rate 8.50%-12.00% 9.68% 8.00%-11.00% 9.51%
National
Apartment
Range Average
Free and Clear Equity IRR 10.50%-13.00% 11.38%
Free and Clear Equity Cap
Rate 7.50%-10.50% 8.97%
Terminal Cap Rate 8.00%-11.00% 9.29%
<PAGE>
National Market Indicators: Fourth Quarter 1995
Retail Office
(National Regional (Central Business
Malls) District)
Range Average Range Average
Free and Clear Equity IRR 10.00%-14.00% 11.55% 10.00%-15.00% 12.15%
Free and Clear Equity Cap
Rate 6.25%-11.00% 7.86% 7.50%-12.50% 9.52%
Terminal Cap Rate 7.00%-11.00% 8.45% 8.25%-12.00% 9.63%
Office National
(National Suburban) Industrial
Range Average Range Average
Free and Clear Equity IRR 10.00%-15.00% 12.04% 9.00%-14.00% 11.31%
Free and Clear Equity Cap
Rate 8.00%-11.50% 9.57% 7.25%-13.00% 9.36%
Terminal Cap Rate 8.50%-12.00% 9.75% 8.00%-11.00% 9.58%
National
Apartment
Range Average
Free and Clear Equity IRR 10.00%-13.00% 11.50%
Free and Clear Equity Cap
Rate 7.50%-10.50% 8.99%
Terminal Cap Rate 8.00%-11.00% 9.31%
Our discount rates have been selected based upon the returns exhibited on
alternative securities and real estate properties as previously presented, in
conjunction with the attributes of the subject assets.
<PAGE>
Risk Measurement in Real Estate
As previously discussed, the primary components of risk exposure for fixed
income securities include interest rate risk, inflation risk, market risk,
liquidity risk and default risk. For real estate, these risks are similar and
can be segmented into two categories. The first is systematic risk which
includes all risks external to the property. The remaining risks can be
categorized as nonsystematic risk and includes all risks directly related to
the property. Generally, systematic risk affects the overall market as a whole
and is often referred to as market risk. However, nonsystematic risk is
generally more attributable to the property specifics. Nonsystematic risk can
be further broken down into risk relative to the immediate neighborhood or
local market with the residual risks being unique to the property.
When viewing an investment in a single property, the systematic overall market
risk, the nonsystematic local market risk and the nonsystematic unique property
risks must be weighed in the derivation of an appropriate risk rate (discount
rate) to be applied to anticipated cash flows. The overall market risks would
include such factors which effect the market as a whole. Among these factors
would be the level of interest rates, the economic condition of the nation,
federal tax incentives related to real estate and the expected inflation rate.
Nonsystematic local market risks are those that effect a regional area or
neighborhood and are not part of the overall market risk. There are many types
of possible local market risks. Some examples of local market risk include
fluctuations in the local economy, changes in transportation systems, local
crime rates and overbuilding. These local market risks may be severe enough to
override the effects of the overall market risk.
Property unique risks are those which effect the subject property in a manner
more specific than the local market risks. Many of the property unique risks
are similar to the local market risks but are more significant for the subject
property. Some examples of property specific risks would include dependence on
single industries or tenants, crime frequency on the property, changes in
immediate traffic patterns, changes in adjacent zoning or adjacent property
conditions and unanticipated capital improvement requirements. These property
specific risks may have a material impact on the property but may not be
reflected in the local market risks.
Investments in individual property would reflect three groups of risks
including the systematic overall market risks, the nonsystematic local market
risks and the nonsystematic property unique risks. However, modern portfolio
theory recognizes that through investment diversification, the nonsystematic
risks associated with the local market and the unique attributes of the
property can be reduced. Furthermore, with sufficient diversification, a
portfolio can virtually eliminate nonsystematic risk.
The benefits of portfolio diversification are reflected in the improvement of
the portfolio's return-risk ratio. The return-risk ratio measures the return of
the investment relative to the volatility of the return. Generally, the
volatility of return is measured by the standard deviation of the return over a
period of time. Therefore, the return-risk ratio is simply the return of the
investment divided by the standard deviation of the return.
<PAGE>
As an example of the application of this ratio, assume that portfolio A invests
in only one type of property in one local market and experiences an average
annual return of 13% over fifteen years with a standard deviation of return of
17%. The return-risk ratio is computed to be 0.76 (13% divided by 17%).
Portfolio A's risk-return ratio can then be compared to the ratio of other
portfolios to evaluate the level of return relative to the risk taken.
To illustrate, assume portfolio B invests in a wide variety of property types
in a numerous geographical regions and only generated an annual return of 12%
over fifteen years. However, the standard deviation of return was only 13%. The
return-risk ratio is computed to be 0.86 (12% divided by 13%). Even though
portfolio A's return exceeded portfolio B's return, the superior return was not
enough to offset the increase in risk. Therefore, an investor would likely
prefer an investment in Portfolio B.
It should be noted, however, that with the reduction in the volatility of
returns, modern portfolio theory also recognizes that there is a reduction in
the level of potential return. This is because that volatility generally
provides the opportunity for added returns. This is the basis for the axiom
that greater risk equals greater reward. However, an investor generally
requires that the increase in risk is offset by an increase in potential
return. Conversely, if an investor is looking for a lower risk, the investor
would expect lower returns.
In the instant case, the discount rates selected for the appraisal of
individual properties which are expected to be sold in the near future reflect
all the systematic and nonsystematic risks associated with each individual
property. The discount rates are derived considering overall market factors,
local market factors and property unique factors. However, for those properties
which are valued as real estate investments on the basis of their cash flows,
the discount rate applied reflects the benefits of reduced nonsystematic risks
through portfolio diversification. These benefits include the offsetting of
local market risks and property unique risks of each property with the local
market risks and property unique risks of the other properties in the
portfolio. As a result, the volatility of returns for each property is offset
by the volatility of returns of the other properties in the portfolio. The
discount rates applied to the latter category of properties are derived from
market data on portfolio returns, which reflect the dichotomies described
above.
<PAGE>
SCHEDULE A-1
BALCOR EQUITY PENSION INVESTORS - IV
(AN ILLINOIS LIMITED PARTNERSHIP)
BALANCE SHEET
MARCH 31, 1996
(AUDITED)
Assets
Current Assets
Cash and Cash Equivalents $3,216,610
Deferred Expense, Net 44,708
Prepaid Expenses 8,983
Accounts and Accrued Interest Receivable 126,412
----------
Total Current Assets $3,396,713
----------
Investments
Investment in joint venture with affiliates 1,090,715
Investment in Real Estate, at Cost:
Land 6,958,341
Buildings and Improvements 24,248,600
-----------
31,206,941
Less accumulated depreciation 9,374,001
-----------
Total Investment Properties, Net
of Accumulated Depreciation 21,832,940
-----------
Total Assets $26,320,368
===========
Liabilities and Partners' Capital
Accrued real estate taxes $ 841,412
Accounts Payable 40,259
Due to Affiliates 26,370
Security Deposits 85,264
---------
Total Liabilities 993,305
Partners' Capital (Limited Partnership
Interests Issued and Outstanding: 185,486) 25,327,063
-----------
Total Liabilities and Partners' Capital $26,320,368
===========
<PAGE>
SCHEDULE A-2
BALCOR EQUITY PENSION INVESTORS - IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1996 and 1995
(Unaudited)
1996 1995
------------- -------------
Income:
Rental $ 1,008,520 $ 920,219
Service 154,512 200,604
Interest on short-term investments 42,355 51,556
------------- -------------
Total income 1,205,387 1,172,379
------------- -------------
Expenses:
Depreciation 202,012 202,012
Property operating 276,972 220,333
Real estate taxes 324,237 307,374
Property management fees 56,414 60,326
Administrative 54,070 81,682
------------- -------------
Total expenses 913,705 871,727
------------- -------------
Income before participation in
loss of joint venture with
affiliates 291,682 300,652
Participation in income (loss) of joint
venture with affiliates 12,390 (15,984)
------------- -------------
Net income $ 304,072 $ 284,668
============= =============
Net income allocated to General Partner $ 48,714 $ 46,774
============= =============
Net income allocated to Limited Partners $ 255,358 $ 237,894
============= =============
Net income per Limited Partnership Interest
(185,486 issued and outstanding) $ 1.38 $ 1.28
============= =============
Distribution to General Partner $ 46,637 $ 52,987
============= =============
Distribution to Limited Partners $ 419,733 $ 476,897
============= =============
Distribution per Limited Partnership
Interest:
Taxable $ 2.29 $ 3.24
============= =============
Tax-exempt $ 2.26 $ 2.50
============= =============
<PAGE>
SCHEDULE A-3
BALCOR EQUITY PENSION INVESTORS - IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1996 and 1995
(Unaudited)
1996 1995
------------- -------------
Operating activities:
Net income $ 304,072 $ 284,668
Adjustments to reconcile net income
to net cash provided by
operating activities:
Participation in (income) loss of
joint venture with affiliates (12,390) 15,984
Depreciation of properties 202,012 202,012
Amortization of deferred expenses 1,397 1,397
Net change in:
Accounts and accrued interest
receivable (38,782) (47,138)
Prepaid expenses 26,948 (14,238)
Accounts payable (65,524) (16,747)
Due to affiliates 10,084 29,377
Accrued liabilities (192,939) (181,147)
Security deposits (2,912) (4,292)
------------- -------------
Net cash provided by operating activities 231,966 269,876
------------- -------------
Investing activities:
Capital contribution to joint
venture - affiliates (38,919)
Distribution from joint
venture - affiliates 61,188
------------- -------------
Cash provided by (used in)
investing activities 61,188 (38,919)
------------- -------------
Financing activities:
Distribution to Limited Partners (419,733) (476,897)
Distribution to General Partner (46,637) (52,987)
------------- -------------
Cash used in financing activities (466,370) (529,884)
------------- -------------
Net change in cash and cash equivalents (173,216) (298,927)
Cash and cash equibalents at beginning
of period 3,389,826 3,612,180
------------- -------------
Cash and cash equivalents at end of period $ 3,216,610 $ 3,313,253
============= =============
<PAGE>
VALUATION OF THE EQUITY INVESTMENTS IN REAL ESTATE
AND REAL ESTATE OWNED INVESTMENTS
The value of the Equity Investments in Real Estate and the Real Estate Owned
Investments is equal to the sum of the present values of the Operating Cash
Flows and the Sales Proceeds. As of March 31, 1996, the Partnership owned two
equities: Gleneagles Apartments, North Miami, FL and Evanston Plaza Shopping
Center, Evanston, IL. In the quarter ended September 30, 1988 the Partnership
paid $1,091,667 for an addition to the Evanston Plaza Shopping Center. As of
March 31, 1996, the Partnership had title to one Real Estate Owned; 45 W. 45th
Street which was acquired through foreclosure on February 2, 1995.
The General Partner, Balcor Equity Partners - I, has prepared individual cash
flows for each property. The projected annual Operating Cash Flows from the
properties have been discounted at an annual rate of 10.00% to a net present
value quarterly, imputed by the straight-line method. The Agreement calls for
the General Partner to receive 10.0% of the Operating Cash Flows, and the
remaining 90% is allocated to the Tax-exempt and Taxable Limited Partnership
Interests on the basis of 10.1360% to the Taxable Limited Partnership Interests
and 89.8640% to the Tax-exempt Limited Partnership Interests.
Sales Proceeds on residential properties are calculated on the basis of the net
operating cash flow less taxes and insurance, capped at 9%, less stabilized
capital improvements and 2.5% sales commission. The sales proceeds for
commercial properties are calculated on the basis of net operating cash flow
(already net of taxes and insurance) capped at 9%, less stabilized capital
improvements, tenant improvements and leasing commissions and 2.5% sales
commission. The net proceeds from the sale have been discounted at an annual
rate of 10.50% to a net present value. A higher risk rate of 10.50% is used for
Sales Proceeds vs. a 10.00% rate for Operating Cash Flows to reflect the higher
risk rate of projecting a capitalization rate deferred for several years.
As of the quarter ended December 31, 1992, all of the Equities were valued on
the basis of their cash flows. Prior to that quarter, Real Estate Owned Assets
were valued on the basis of an independent appraisal since it was the intent to
sell those assets in the near-term. As described elsewhere in this report,
these assets, unless indicated otherwise, will be held to maturity.
A summary of the Cash Flows from Operations is in the following Exhibit B-1.
Exhibit B-2 summarizes the calculations used to determine Excess Net Cash
Proceeds where they may exist. Exhibit B-3 (2 schedules) is the Discounted Cash
Flow Analysis.
As of March 31, 1996, the total Asset Value of the two Equity Investments in
Real Estate and one Real Estate Owned Investment was $32,186,770, an increase
of $220,045 from the previous quarter's value.
<PAGE>
SCHEDULE B-1
as of: 31-Mar-96 BEPI IV Cash Flow From Operations
Quarter Factor (for formula reference) Actual Budget Pro-ject
1994 1995 1996
Net Cash Receipts ---------------------------------
Equity Investments
Evanston Plaza
NOI B4 TI/LC/Capital 2,152,155 1,813,033 1,383,829
TI/LC/Capital 476,530 143,434 136,621
Internal CF Projections ---------------------------------
Net Cash Receipts 1,675,625 1,669,599 1,247,208
Gleneagles NOI B4 TI/LC/Capital 1,087,301 1,304,254 1,223,530
TI/LC/Capital 176,926 119,720 185,420
Internal CF Projections ---------------------------------
Net Cash Receipts 910,375 1,184,534 1,038,110
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
Total NCR-Equity Investments 2,586,000 2,854,133 2,285,318
---------------------------------
REO Investments
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
Total NCR-REO Investments 0 0 0
---------------------------------
<PAGE>
REO (originally a loan investments)
45 W 45TH Street(15.22%)
Internal CF Projections
NOI B4 TI/LC/Capita 185,169 155,352 146,672
TI/LC/Capital 0 1,664 94,512
---------------------------------
Total NCR-REO Investments
Net Cash Receipts 185,169 153,689 52,160
TOTAL NCR FROM INVESTMENTS 2,771,169 3,007,822 2,337,478
LESS: GP 7.5% Share 207,838 225,587 175,311
Repurchase Fund @ 2.5% 69,279 75,196 58,437
---------------------------------
Net to Limited Partners @ 90% 2,494,052 2,707,039 2,103,730
=================================
- ----------> Shaded Cash Flow numbers used for capping purpose only.
Pro-ject Pro-ject Pro-ject
1997 1998 1999
Net Cash Receipts ---------------------------------
Equity Investments
Evanston Plaza
NOI B4 TI/LC/Capital 1,438,113 1,621,136 1,638,977
TI/LC/Capital 290,210 30,740 19,326
Internal CF Projections ---------------------------------
Net Cash Receipts 1,147,903 1,590,396 1,619,651
Gleneagles
NOI B4 TI/LC/Capital 1,281,011 1,341,620 1,398,333
TI/LC/Capital 116,800 116,800 189,800
Internal CF Projections ---------------------------------
Net Cash Receipts 1,164,211 1,224,820 1,208,533
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
Total NCR-Equity Investments 2,312,114 2,815,216 2,828,184
---------------------------------
REO Investments
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
<PAGE>
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
Total NCR-REO Investments 0 0 0
---------------------------------
REO (originally a loan investments)
45 W 45TH Street(15.22%)
Internal CF Projections
NOI B4 TI/LC/Capita 131,068 118,855 126,154
TI/LC/Capital 35,090 32,819 9,891
---------------------------------
Total NCR-REO Investments
Net Cash Receipts 95,978 86,037 116,263
TOTAL NCR FROM INVESTMENTS 2,408,092 2,901,253 2,944,447
LESS: GP 7.5% Share 180,607 217,594 220,834
Repurchase Fund @ 2.5% 60,202 72,531 73,611
---------------------------------
Net to Limited Partners @ 90% 2,167,283 2,611,127 2,650,002
=================================
Pro-ject Pro-ject Pro-ject
2000 2001 2002
Net Cash Receipts ---------------------------------
Equity Investments
Evanston Plaza
NOI B4 TI/LC/Capital 1,658,143 1,653,449 1,654,425
TI/LC/Capital 0 0 432,894
---------------------------------
Internal CF Projections
Net Cash Receipts 1,658,143 1,653,449 1,221,531
Gleneagles
NOI B4 TI/LC/Capital 1,457,383 1,518,867 1,582,883
TI/LC/Capital 161,297 161,297 161,297
---------------------------------
Internal CF Projections
Net Cash Receipts 1,296,086 1,357,570 1,421,586
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
Total NCR-Equity Investments 2,954,229 3,011,019 2,643,117
---------------------------------
<PAGE>
REO Investments
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
Total NCR-REO Investments 0 0 0
---------------------------------
REO (originally a loan investments)
45 W 45TH Street(15.22%)
Internal CF Projections
NOI B4 TI/LC/Capita 135,992 135,458
TI/LC/Capital 3,227 12,452
Total NCR-REO Investments ---------------------------------
Net Cash Receipts
TOTAL NCR FROM INVESTMENTS 2,954,229 3,011,019 2,643,117
LESS: GP 7.5% Share 221,567 225,826 198,234
Repurchase Fund @ 2.5% 73,856 75,275 66,078
---------------------------------
Net to Limited Partners @ 90% 2,658,806 2,709,917 2,378,805
=================================
Pro-ject Pro-ject Pro-ject
2003 2004 2005
Net Cash Receipts ---------------------------------
Equity Investments
Evanston Plaza
NOI B4 TI/LC/Capital 1,682,554
TI/LC/Capital 161,637
Internal CF Projections ---------------------------------
Net Cash Receipts
Gleneagles
NOI B4 TI/LC/Capital 1,649,532
TI/LC/Capital 161,297
Internal CF Projections ---------------------------------
Net Cash Receipts 0
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0
<PAGE>
Total NCR-Equity Investments 0 0 0
---------------------------------
REO Investments
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0
Total NCR-REO Investments 0 0 0
---------------------------------
REO (originally a loan investments)
45 W 45TH Street(15.22%)
Internal CF Projections
NOI B4 TI/LC/Capital
TI/LC/Capital
Total NCR-REO Investments ---------------------------------
Net Cash Receipts
TOTAL NCR FROM INVESTMENTS 0 0 0
LESS: GP 7.5% Share 0 0 0
Repurchase Fund @ 2.5% 0 0 0
---------------------------------
Net to Limited Partners @ 90% 0 0 0
=================================
Pro-ject Pro-ject Pro-ject
2006 2007 2008
Net Cash Receipts ---------------------------------
Equity Investments
Evanston Plaza
NOI B4 TI/LC/Capital
TI/LC/Capital
Internal CF Projections ---------------------------------
Net Cash Receipts 0
Gleneagles
NOI B4 TI/LC/Capital
TI/LC/Capital
Internal CF Projections ---------------------------------
Net Cash Receipts 0
<PAGE>
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
Total NCR-Equity Investments 0 0 0
---------------------------------
REO Investments
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts 0 0 0
Total NCR-REO Investments 0 0 0
---------------------------------
REO (originally a loan investments)
45 W 45TH Street(15.22%)
Internal CF Projections
NOI B4 TI/LC/Capital
TI/LC/Capital
---------------------------------
Total NCR-REO InvestmeNet Cash Receipts
TOTAL NCR FROM INVESTMENTS 0 0 0
LESS: GP 7.5% Share 0 0 0
Repurchase Fund @ 2.5% 0 0 0
---------------------------------
Net to Limited Partners @ 90% 0 0 0
=================================
Asset PV as of
31-Mar-96
Net Cash Receipts -----------
Equity Investments
Evanston Plaza
NOI B4 TI/LC/Capita 6,845,504 NCR PV
TI/LC/Capital 9,199,586 Residual PV
Internal CF Projections -----------
Net Cash Receipts 16,045,090 Asset Value
<PAGE>
Gleneagles
NOI B4 TI/LC/Capita 5,849,144 NCR PV
TI/LC/Capital 9,017,592 Residual PV
Internal CF Projections -----------
Net Cash Receipts 14,866,735 Asset Value
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts
Total NCR-Equity Investments
REO Investments
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts
NOI B4 TI/LC/Capital
TI/LC/Capital
Net Cash Receipts
Total NCR-REO Investments
REO (originally a loan investments)
45 W 45TH Street(15.22%)
Internal CF Projections
NOI B4 TI/LC/Capita 264,956 NCR PV
TI/LC/Capital 1,009,989 Residual PV
Total NCR-REO Investments -----------
Net Cash Receipts 1,274,945 Asset Value
<PAGE>
SCHEDULE B-2
CAP RATE @ 9.00%
Sale Commission: 2.5%
Sale Activity 1994 1995 1996 1997 1998
-----------------------------------------------
Evanston Plaza
Sales Price
20,866,766 Orig Cap Invest
Excess NCP 0 0 0 0 0
Gleneagles Sales Price
14,155,814 Orig Cap Invest
Excess NCP 0 0 0 0 0
Sales Price
Orig Cap Invest
Excess NCP 0 0 0 0 0
Total Capital Invested
Capital invested 0 0 0 0 0
Sale Proceeds 0 0 0 0 0
35,022,580 Return of Cap 0 0 0 0 0
Excess NCP 0 0 0 0 0
Deficiency NCP 0 0 0 0 0
Sale Activity - REO
Sales Price
Cap Invest
Excess NCR 0 0 0 0 0
Sales Price
Cap Invest
Excess NCR 0 0 0 0 0
Sales Price
Cap Invest
Excess NCR 0 0 0 0 0
Total Capital Invested
Capital invested 0 0 0 0 0
Sale Proceeds 0 0 0 0 0
0 Return of Cap 0 0 0 0 0
Excess NCR 0 0 0 0 0
Deficiency NCP 0 0 0 0 0
Loan Repayments
45 W. 45th Street Balloon
Amortized Principal
Capital returned from
Loan Investments 0 0 0 0 0
Total Return of Capital 0 0 0 0 0
Total Excess NCP 0 0 0 0 0
Total Excess NCR 0 0 0 0 0
<PAGE>
Sale Activity 1999 2000 2001 2002 2003
-----------------------------------------------
Evanston Plaza
Sales Price 18,066,031
20,866,766 Orig Cap Invest 20,866,766
Excess NCP 0 0 0 (2,800,735) 0
Gleneagles Sales Price 17,708,633
14,155,814 Orig Cap Invest 14,155,814
Excess NCP 0 0 0 3,552,819 0
Sales Price 0
Orig Cap Invest 0
Excess NCP 0 0 0 0 0
Total Capital Invested
Capital invested 0 0 0 35,022,580 0
Sale Proceeds 0 0 0 35,774,664 0
35,022,580 Return of Cap 0 0 0 35,022,580 0
Excess NCP 0 0 0 752,084 0
Deficiency NCP 0 0 0 0 0
Sale Activity - REO
Sales Price 0
Cap Invest 0
Excess NCR 0 0 0 0 0
Sales Price 0
Cap Invest 0
Excess NCR 0 0 0 0 0
Sales Price 0
Cap Invest 0
Excess NCR 0 0 0 0 0
Total Capital Invested
Capital invested 0 0 0 0 0
Sale Proceeds 0 0 0 0 0
0 Return of Cap 0 0 0 0 0
Excess NCR 0 0 0 0 0
Deficiency NCP 0 0 0 0 0
Loan Repayments
45 W. 45th Street
Balloon 1,470,024
Amortized Principal
Capital returned from
Loan Investments 1,470,024 0 0 0 0
Total Return of Capital 0 0 0 35,022,580 0
Total Excess NCP 0 0 0 752,084 0
Total Excess NCR 0 0 0 0 0
<PAGE>
Sale Activity 2004 2005 2006 2007
--------------------------------------
Evanston Plaza
Sales Price
20,866,766 Orig Cap Invest
Excess NCP 0 0 0 0
Gleneagles Sales Price
14,155,814 Orig Cap Invest
Excess NCP 0 0 0 0
Sales Price
Orig Cap Invest
Excess NCP 0 0 0 0
Total Capital Invested
Capital invested 0 0 0 0
Sale Proceeds 0 0 0 0
35,022,580 Return of Cap 0 0 0 0
Excess NCP 0 0 0 0
Deficiency NCP 0 0 0 0
Sale Activity - REO
Sales Price
Cap Invest
Excess NCR 0 0 0 0
Sales Price
Cap Invest
Excess NCR 0 0 0 0
Sales Price
Cap Invest
Excess NCR 0 0 0 0
Total Capital Invested
Capital invested 0 0 0 0
Sale Proceeds 0 0 0 0
0 Return of Cap 0 0 0 0
Excess NCR 0 0 0 0
Deficiency NCP 0 0 0 0
Loan Repayments
45 W. 45th Street Balloon
Amortized Principal
Capital returned from
Loan Investments 0 0 0 0
Total Return of Capital 0 0 0 0
Total Excess NCP 0 0 0 0
Total Excess NCR 0 0 0 0
<PAGE>
SCHEDULE B-3
NCR ALLOCATION PERCENTAGES NCP ALLOCATION PERCENTAGES
Tax-Exempt 89.4095% 90.3963%
Taxable 10.5905% 9.6037%
---------- ----------
100.00% 100.00%
BEPI IV Discounted Cash Flow Analysis
1996 1997 1998 1999 2000
--------------------------------------------------
EQUITY NCR ALLOCATION
Equity Cash Flow after
TI/LC/Capital (NCR) 2,285,318 2,312,114 2,815,216 2,828,184 2,954,229
Tax-Exempt Share of 90%
Cash Flow (NCR) 1,838,962 1,860,525 2,265,363 2,275,799 2,377,225
Discounted @ 10.00% 10,215,199 9,602,117 8,701,804 7,306,621 5,761,485
per unit 60.92 57.27 51.90 43.58 34.36
Taxable Share of 90%
Cash Flow (NCR) 217,824 220,378 268,331 269,567 281,581
Discounted 10.00% 1,209,984 1,137,365 1,030,723 865,465 682,444
per unit 67.93 63.85 57.86 48.59 38.31
REO NCR ALLOCATION
REO Cash Flow after
TI/LC/Capital (NCR) 0 0 0 0 0
Tax-Exempt Share of 90%
Cash Flow (NCR) 0 0 0 0 0
Discounted 10.00% 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
Taxable Share of 90%
Cash Flow (NCR) 0 0 0 0 0
Discounted 10.00% 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
REO NCR ALLOCATION (prior Loan)
REO Cash Flow after
TI/LC/Capital (NCR) 52,160 95,978 86,037 116,263 0
Tax-Exempt Share of 90%
Cash Flow (NCR) 46,944 86,380 77,433 104,637 0
Discounted 10.25% 237,114.95 220,135 156,319 94,909 0
per unit 1.41 1.31 0.93 0.57 0.00
Taxable Share of 90%
Cash Flow (NCR) 0 0 0 0 0
Discounted 10.25% 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
<PAGE>
TOTAL NCR ALLOCATION (PER UNIT)
Tax-Exempt Share 62.34 58.58 52.83 44.14 34.36
Taxable Share 67.93 63.85 57.86 48.59 38.31
DISCOUNTED NCP ALLOCATION
Discounted 10.25%
NET CAPITAL RETURNED ON
REO/ LOAN PAYOFFS 0 0 0 1,328,847 0
Tax-Exempt Share of NCP 920,818 991,606 1,093,246 1,205,303 0
per unit 5.49 5.91 6.52 7.19 0.00
NET CAPITAL RETURNED ON
REO/ LOAN PAYOFFS 0 0 0 141,177 0
Taxable Share of NCP 97,828 105,348 116,146 128,051 0
per unit 5.49 5.91 6.52 7.19 0.00
NET CAPITAL TO
RETURN 10.50% 0 0 0 0 0
Tax-Exempt Share of NCP 16,467,65417,764,48219,629,75321,690,87723,968,419
per unit 98.21 105.95 117.07 129.36 142.95
NET CAPITAL TO RETURN 0 0 0 0 0
Taxable Share of Cash
Flow (NCP) 1,749,523 1,887,298 2,085,464 2,304,438 2,546,404
per unit 98.22 105.95 117.08 129.37 142.95
TOTAL NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 103.70 111.86 123.59 136.55 142.95
Taxable Share 103.71 111.86 123.60 136.56 142.95
EXCESS NET CASH
PROCEEDS (EQUITY) 0 0 0 0 0
Discounted 10.50% 0 0 0 0 0
Tax-Exempt Share of NCP 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
Taxable Share of NCP 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
EXCESS NET CASH
RECEIPTS (LOANS/REOS) 0 0 0 0 0
Discounted 10.50% 0 0 0 0 0
Tax-Exempt Share of 90% 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
Taxable Share of 90% NCR 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
<PAGE>
TOTAL NCR & NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 166.04 170.44 176.42 180.70 177.31
Taxable Share 171.64 175.71 181.46 185.14 181.26
2001 2002 2003 2004 2005
--------------------------------------------------
EQUITY NCR ALLOCATION
Equity Cash Flow after
TI/LC/Capital (NCR) 3,011,019 2,643,117 0 0 0
Tax-Exempt Share of 90%
Cash Flow (NCR) 2,422,923 2,126,878 0 0 0
Discounted 10.00% 3,960,408 1,933,525 0 0 0
per unit 23.62 11.53 0.00 0.00 0.00
Taxable Share of 90%
Cash Flow (NCR) 286,994 251,927 0 0 0
Discounted 10.00% 469,108 229,025 0 0 0
per unit 26.34 12.86 0.00 0.00 0.00
REO NCR ALLOCATION
REO Cash Flow after
TI/LC/Capital (NCR) 0 0 0 0 0
Tax-Exempt Share of 90%
Cash Flow (NCR) 0 0 0 0 0
Discounted 10.00% 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
Taxable Share of 90%
Cash Flow (NCR) 0 0 0 0 0
Discounted 10.00% 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
REO NCR ALLOCATION (prior Loan)
REO Cash Flow after
TI/LC/Capital (NCR) 0 0 0 0 0
Tax-Exempt Share of 90%
Cash Flow (NCR) 0 0 0 0 0
Discounted 10.25% 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
Taxable Share of 90%
Cash Flow (NCR) 0 0 0 0 0
Discounted 10.25% 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
TOTAL NCR ALLOCATION (PER UNIT)
Tax-Exempt Share 23.62 11.53 0.00 0.00 0.00
Taxable Share 26.34 12.86 0.00 0.00 0.00
DISCOUNTED NCP ALLOCATION
Discounted 10.25%
<PAGE>
NET CAPITAL RETURNED ON
REO/ LOAN PAYOFFS 0 0 0 0 0
Tax-Exempt Share of NCP 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
NET CAPITAL RETURNED ON
REO/ LOAN PAYOFFS 0 0 0 0 0
Taxable Share of NCP 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
NET CAPITAL TO
RETURN 10.50% 0 32,338,973 0 0 0
Tax-Exempt Share of NCP26,485,103 29,266,039 0 0 0
per unit 157.96 174.54 0.00 0.00 0.00
NET CAPITAL TO RETURN 0 3,435,691 0 0 0
Taxable Share of Cash
Flow (NCP) 2,813,776 3,109,223 0 0 0
per unit 157.96 174.55 0.00 0.00 0.00
TOTAL NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 157.96 174.54 0.00 0.00 0.00
Taxable Share 157.96 174.55 0.00 0.00 0.00
EXCESS NET CASH
PROCEEDS (EQUITY) 0 0 0 0 0
Discounted 10.50% 0 0 0 0 0
Tax-Exempt Share of NCP 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
Taxable Share of NCP 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
EXCESS NET CASH
RECEIPTS (LOANS/REOS) 0 0 0 0 0
Discounted 10.50% 0 0 0 0 0
Tax-Exempt Share of 90% 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
Taxable Share of 90% NCR 0 0 0 0 0
per unit 0.00 0.00 0.00 0.00 0.00
TOTAL NCR & NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 181.58 186.07 0.00 0.00 0.00
Taxable Share 184.30 187.41 0.00 0.00 0.00
<PAGE>
2006 2007 2008
------------------------------
EQUITY NCR ALLOCATION
Equity Cash Flow after
TI/LC/Capital (NCR) 0 0 0
Tax-Exempt Share of 90%
Cash Flow (NCR) 0 0 0
Discounted 10.00% 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of 90%
Cash Flow (NCR) 0 0 0
Discounted 10.00% 0 0 0
per unit 0.00 0.00 0.00
REO NCR ALLOCATION
REO Cash Flow after
TI/LC/Capital (NCR) 0 0 0
Tax-Exempt Share of 90%
Cash Flow (NCR) 0 0 0
Discounted 10.00% 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of 90%
Cash Flow (NCR) 0 0 0
Discounted 10.00% 0 0 0
per unit 0.00 0.00 0.00
REO NCR ALLOCATION (prior Loan)
REO Cash Flow after
TI/LC/Capital (NCR) 0 0 0
Tax-Exempt Share of 90%
Cash Flow (NCR) 0 0 0
Discounted 10.25% 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of 90%
Cash Flow (NCR) 0 0 0
Discounted 10.25% 0 0 0
per unit 0.00 0.00 0.00
TOTAL NCR ALLOCATION (PER UNIT)
Tax-Exempt Share 0.00 0.00 0.00
Taxable Share 0.00 0.00 0.00
DISCOUNTED NCP ALLOCATION
Discounted 10.25%
NET CAPITAL RETURNED ON
REO/ LOAN PAYOFFS 0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
<PAGE>
NET CAPITAL RETURNED ON
REO/ LOAN PAYOFFS 0 0 0
Taxable Share of NCP 0 0 0
per unit 0.00 0.00 0.00
NET CAPITAL TO
RETURN 10.50% 0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
NET CAPITAL TO RETURN 0 0 0
Taxable Share of Cash
Flow (NCP) 0 0 0
per unit 0.00 0.00 0.00
TOTAL NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 0.00 0.00 0.00
Taxable Share 0.00 0.00 0.00
EXCESS NET CASH
PROCEEDS (EQUITY) 0 0 0
Discounted 10.50% 0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of NCP 0 0 0
per unit 0.00 0.00 0.00
EXCESS NET CASH
RECEIPTS (LOANS/REOS) 0 0 0
Discounted 10.50% 0 0 0
Tax-Exempt Share of 90% 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of 90% NCR 0 0 0
per unit 0.00 0.00 0.00
TOTAL NCR & NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 0.00 0.00 0.00
Taxable Share 0.00 0.00 0.00
<PAGE>
SCHEDULE B-3 (continued)
BEPI IV Discounted Cash Flow Analysis (con't.)
1996 1997 1998 1999 2000
--------------------------------------------------
CASH BALANCES
Working Capital
Contingency Reserves
SUBTOTAL WC & CR
Undistributed NCR
Fund Liquidation Reserve
SUBTOTAL UNDISTRIBUTED NCR
TOTAL CASH
Short-Term Interest
@ 4.00% 127,645 127,645 127,645 127,645 127,645
Fund Expenses
DISCOUNTED CASH BALANCES
Discount Rate @ 4.00%
NCP(Working Capital &
Reserves) 0 0 0 0 0
0 0 0 0 0
Tax-Exempt Share of NCP 583,323 600,822 624,855 649,849 675,843
per unit 3.48 3.58 3.73 3.88 4.03
0 0 0 0 0
Taxable Share of NCP 61,972 63,831 66,385 69,040 71,802
per unit 3.48 3.58 3.73 3.88 4.03
NCR (Undistributed NCR) 1,803,245 1,857,342 1,931,636 2,008,901 2,089,257
LESS: Fund Expenses 0 0 0 0 0
NCR (Short-Term
Interest) 742,590 669,133 568,254 463,339 354,227
--------------------------------------------------
TOTAL NCR 2,545,834 2,526,475 2,499,889 2,472,240 2,443,484
Less: GP 10% Share 254,583 252,648 249,989 247,224 244,348
--------------------------------------------------
Net to Limited Partners 2,291,251 2,273,828 2,249,900 2,225,016 2,199,136
Tax-Exempt Share of NCR 2,048,596 2,033,018 2,011,625 1,989,375 1,966,236
per unit 12.22 12.12 12.00 11.86 11.73
Taxable Share of NCR 242,655 240,810 238,276 235,640 232,899
per unit 13.62 13.52 13.38 13.23 13.07
LOAN FEES 24,074 16,856 7,232 0 0
(straight-line
amortization)
<PAGE>
OFFERING EXPENSES 1,180,805 670,922 147,619 93,939 40,259
(straight-line
amortization)
--------------------------------------------------
TOTAL 1,204,879 687,778 154,851 93,939 40,259
FEES & OFF EXP(PER UNIT)
Tax-Exempt Share 6.50 3.71 0.83 0.51 0.22
Taxable Share 6.50 3.71 0.83 0.51 0.22
REPURCHASE FUND 0 0 0 0 0
Discounted 10.00% 787,833 846,921 931,613 1,024,774 1,127,251
Tax-Exempt Share 0 0 0 0 0
Discounted 712,234 765,652 842,217 926,439 1,019,082
Taxable Share 0 0 0 0 0
Discounted 75,599 81,269 89,396 98,335 108,169
Tax-Exempt per unit 4.25 4.57 5.02 5.53 6.08
Taxable per unit 4.24 4.56 5.02 5.52 6.07
TOTAL ALLOCATION(PER UNIT)
Tax-Exempt Share @ 192.48 194.42 198.00 202.47 199.36
Taxable Share @ 199.48 201.09 204.42 208.27 204.66
2001 2002 2003 2004 2005
--------------------------------------------------
CASH BALANCES
Working Capital 708,000
Contingency Reserves 132,999
----------
SUBTOTAL WC & CR 840,999
==========
Undistributed NCR 2,350,130
Fund Liquidation Reserve 0
SUBTOTAL UNDISTRIBUTED NCR 2,350,130
----------
TOTAL CASH 3,191,129
Short-Term Interest
@ 4.00% 127,645 127,645 0 0 0
Fund Expenses
DISCOUNTED CASH BALANCES
Discount Rate @ 4.00%
NCP(Working Capital &
Reserves) 0 840,999 0 0 0
<PAGE>
0 760,232 0 0 0
Tax-Exempt Share of NCP 702,877 730,992 0 0 0
per unit 4.19 4.36 0.00 0.00 0.00
0 80,767 0 0 0
Taxable Share of NCP 74,674 77,661 0 0 0
per unit 4.19 4.36 0.00 0.00 0.00
NCR (Undistributed NCR) 2,172,827 2,259,740 0 0 0
LESS: Fund Expenses 0 0 0 0 0
NCR (Short-Term 240,751 122,736 0 0 0
Interest) --------------------------------------------------
2,413,578 2,382,476 0 0 0
TOTAL NCR 241,358 238,248 0 0 0
Less: GP 10% Share --------------------------------------------------
2,172,220 2,144,229 0 0 0
Net to Limited Partners
1,942,171 1,917,144 0 0 0
Tax-Exempt Share of NCR 11.58 11.43 0.00 0.00 0.00
per unit
230,049 227,085 0 0 0
Taxable Share of NCR 12.91 12.75 0.00 0.00 0.00
per unit
0 0 0 0 0
LOAN FEES
(straight-line
amortization) 0 0 0 0 0
OFFERING EXPENSES --------------------------------------------------
(straight-line 0 0 0 0 0
amortization)
FEES & OFF EXP (PER UNIT)
Tax-Exempt Share 0.00 0.00 0.00 0.00 0.00
Taxable Share 0.00 0.00 0.00 0.00 0.00
REPURCHASE FUND 0 1,500,371 0 0 0
Discounted 10.00% 1,239,976 1,363,974 0 0 0
Tax-Exempt Share 0 1,356,399 0 0 0
Discounted 1,120,991 1,233,090 0 0 0
Taxable Share 0 143,973 0 0 0
Discounted 118,986 130,884 0 0 0
Tax-Exempt per unit 6.69 7.35 0.00 0.00 0.00
Taxable per unit 6.68 7.35 0.00 0.00 0.00
TOTAL ALLOCATION (PER UNIT)
Tax-Exempt Share @ 204.04 209.22 0.00 0.00 0.00
Taxable Share @ 208.08 211.86 0.00 0.00 0.00
<PAGE>
2006 2007 2008
------------------------------
CASH BALANCES
Working Capital
Contingency Reserves
SUBTOTAL WC & CR
Undistributed NCR
Fund Liquidation Reserve
SUBTOTAL UNDISTRIBUTED NCR
TOTAL CASH
Short-Term Interest
@ 4.00% 0 0 0
Fund Expenses
DISCOUNTED CASH BALANCES
Discount Rate @ 4.00%
NCP(Working Capital &
Reserves) 0 0 0
0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
0 0 0
Taxable Share of NCP 0 0 0
per unit 0.00 0.00 0.00
NCR (Undistributed NCR) 0 0 0
LESS: Fund Expenses 0 0 0
NCR (Short-Term 0 0 0
Interest) --------------------------------------------------
0 0 0
TOTAL NCR 0 0 0
Less: GP 10% Share --------------------------------------------------
0 0 0
Net to Limited Partners
0 0 0
Tax-Exempt Share of NCR 0.00 0.00 0.00
per unit
0 0 0
Taxable Share of NCR 0.00 0.00 0.00
per unit
0 0 0
LOAN FEES
(straight-line
amortization) 0 0 0
OFFERING EXPENSES --------------------------------------------------
(straight-line 0 0 0
amortization)
<PAGE>
FEES & OFF EXP (PER UNIT)
Tax-Exempt Share 0.00 0.00 0.00
Taxable Share 0.00 0.00 0.00
REPURCHASE FUND 0 0 0
Discounted 10.00% 0 0 0
Tax-Exempt Share 0 0 0
Discounted 0 0 0
Taxable Share 0 0 0
Discounted 0 0 0
Tax-Exempt per unit 0.00 0.00 0.00
Taxable per unit 0.00 0.00 0.00
TOTAL ALLOCATION (PER UNIT)
Tax-Exempt Share @ 0.00 0.00 0.00
Taxable Share @ 0.00 0.00 0.00
<PAGE>
VALUATION OF THE OFFERING EXPENSES AND LOAN FEES
The valuation methodology of the Partnership Interests includes the
capitalization of the Offering Expenses and their amortization over the life of
the equity assets. As of March 31, 1996, the total unamortized portion of the
Offering Expenses was $1,180,805. The total amount of the Offering Expenses is
allocated proportionally to the Equity Assets and Debt Assets, if any, and
amortized on the basis of depreciating the Equity on a straight-line basis over
10 years and the Debt on a straight-line basis to maturity. expenses and loan
fees as incurred from the proceeds of the Limited Partnership Interest.
The loan fees paid to the General Partner are capitalized and amortized over
the life of the loans. They are allocated between Tax-Exempt and Taxable
Interests.
A summary of the Offering Expense and Loan Fees Balances are as follows.
General
Tax-exempt Taxable Partner Total
Offering
Expenses $1,067,404 $113,401 $ 0$1,180,805
Loan Fees 21,762 2,312 0 24,074
<PAGE>
CONCLUSION OF VALUE
Based on the various analyses of the components of the Partnership's Interests
presented in this report, our conclusions of value are summarized in the
following Schedule C.
SCHEDULE C
BEPI IV
VALUATION SUMMARY
as of : 31-Mar-96
GENERAL
TAX-EXEMPT TAXABLE PARTNER TOTAL
================================================
CASH:
Working Capital &
Contingency Reserves 583,323 61,972 0 645,295
Current Undistributed NCR 2,048,596 242,655 254,583 2,545,834
2,631,918 304,627 254,583 3,191,129
EQUITY INVESTMENTS
Net Cash Receipts 10,215,199 1,209,984 1,269,465 12,694,648
LOAN/REO INVESTMENTS
Net Cash Receipts 237,115 0 26,346 263,461
EXCESS NET CASH PROCEEDS
(EQUITY) 0 0 0 0
EXCESS NET CASH RECEIPTS
(LOANS/REOS) 0 0 0 0
RETURN OF CAPITAL
(PROCEEDS) 17,388,473 1,847,351 0 19,235,823
REPURCHASE FUND 712,234 75,599 0 787,833
LOAN FEES 21,762 2,312 0 24,074
OFFERING EXPENSES 1,067,404 113,401 0 1,180,805
------------------------------------------------
TOTAL VALUE OF ASSETS 32,274,105 3,553,274 1,550,394 37,377,773
================================================
NUMBER OF UNITS 167,673 17,813
VALUE PER UNIT 192.48 199.48
ADJUSTED CAPITAL PER UNIT 249.75 249.75
4th Qtr 1995 (act 192.37 199.50
Change in value 0.06% -0.01%
