SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1996
------------------
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 0-16712
-------
BALCOR CURRENT INCOME FUND-87
A REAL ESTATE LIMITED PARTNERSHIP
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3451878
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Rd., Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
-------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- ----
<PAGE>
BALCOR CURRENT INCOME FUND-87
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
BALANCE SHEETS
September 30, 1996 and December 31, 1995
(Unaudited)
ASSETS
1996 1995
-------------- -------------
Cash and cash equivalents $ 5,728,700 $ 229,105
Accounts and accrued interest receivable 335,537
Escrow deposits 153,190
Prepaid expenses 28,541
Deferred expenses, net of accumulated
amortization of $82,305 in 1995 76,995
-------------- -------------
6,064,237 487,831
-------------- -------------
Investment in real estate:
Land 940,021
Buildings and improvements 16,578,369
-------------
17,518,390
Less accumulated depreciation 7,970,988
-------------
Investment in real estate, net of
accumulated depreciation 9,547,402
-------------- -------------
$ 6,064,237 $ 10,035,233
============== =============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Loan payable - affiliate $ 1,010,262
Accounts payable $ 2,258 50,888
Due to affiliates 115,178 96,437
Accrued liabilities, principally
real estate taxes 274,351
Security deposits 39,478
Mortgage note payable 9,525,894
-------------- -------------
Total liabilities 117,436 10,997,310
-------------- -------------
Affiliate's participation in joint venture 22,373
-------------
Unitholders' capital (deficit) (996,146
Units issued and outstanding) 6,016,531 (873,609)
General Partner's deficit (69,730) (110,841)
-------------- -------------
Total partners' capital (deficit) 5,946,801 (984,450)
-------------- -------------
$ 6,064,237 $ 10,035,233
============== =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR CURRENT INCOME FUND-87
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the nine months ended September 30, 1996 and 1995
(Unaudited)
1996 1995
-------------- -------------
Income:
Rental and service $ 1,631,532 $ 2,073,754
Interest on short-term investments 54,407 19,236
-------------- -------------
Total income 1,685,939 2,092,990
-------------- -------------
Expenses:
Interest on mortgage note payable 484,575 627,974
Interest on short-term loan
payable - affiliate 36,262 52,228
Depreciation 459,517 587,817
Amortization 18,585 23,895
Property operating 798,826 901,732
Real estate taxes 145,038 196,275
Property management fees 81,700 102,941
Incentive partnership management fees 16,809 16,809
Administrative 112,782 136,784
-------------- -------------
Total expenses 2,154,094 2,646,455
-------------- -------------
Loss before gain on sale of property,
affiliate's participation in joint venture
and extraordinary item (468,155) (553,465)
Gain on sale of property 7,902,305
Affiliate's participation in (income) loss
of joint venture (28,457) 970
-------------- -------------
Income (loss) before extraordinary item 7,405,693 (552,495)
Extraordinary item:
Debt extinguishment expense (248,440)
-------------- -------------
Net income (loss) $ 7,157,253 $ (552,495)
============== =============
Income (loss) before extraordinary item
allocated to General Partner $ 45,464 $ (5,525)
============== =============
Income (loss) before extraordinary item
allocated to Unitholders $ 7,360,229 $ (546,970)
============== =============
Income (loss) before extraordinary item
per Unit (996,146 issued and
outstanding) $ 7.39 $ (0.55)
============== =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR CURRENT INCOME FUND-87
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the nine months ended September 30, 1996 and 1995
(Unaudited)
(Continued)
1996 1995
-------------- -------------
Extraordinary item allocated to
General Partner $ (2,484) None
============== =============
Extraordinary item allocated to
Unitholders $ (245,956) None
============== =============
Extraordinary item per Unit
(996,146 issued and outstanding) $ (0.25) None
============== =============
Net income (loss) allocated to General Partner $ 42,980 $ (5,525)
============== =============
Net income (loss) allocated to Unitholders $ 7,114,273 $ (546,970)
============== =============
Net income (loss) per Unit (996,146
issued and outstanding) $ 7.14 $ (0.55)
============== =============
Distributions to General Partner $ 1,869 $ 1,869
============== =============
Distributions to Unitholders $ 224,133 $ 224,133
============== =============
Distributions per Unit (996,146
issued and outstanding) $ 0.225 $ 0.225
============== =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR CURRENT INCOME FUND-87
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended September 30, 1996 and 1995
(Unaudited)
1996 1995
-------------- -------------
Income:
Rental and service $ 214,323 $ 694,178
Interest on short-term investments 49,029 8,163
-------------- -------------
Total income 263,352 702,341
-------------- -------------
Expenses:
Interest on mortgage note payable 69,068 208,890
Interest on short-term loan
payable - affiliate 5,491 17,564
Depreciation 67,640 195,940
Amortization 2,655 7,965
Property operating 306,673 440,028
Real estate taxes 25,354 68,588
Property management fees 12,091 35,359
Incentive partnership management fees 5,603 5,603
Administrative 32,949 40,466
-------------- -------------
Total expenses 527,524 1,020,403
-------------- -------------
Loss before gain on sale of property,
affiliate's participation in joint venture
and extraordinary item (264,172) (318,062)
Gain on sale of property 7,902,305
Affiliate's participation in (income) loss
of joint venture (28,687) 699
-------------- -------------
Income (loss) before extraordinary item 7,609,446 (317,363)
Extraordinary item:
Debt extinguishment expense (248,440)
-------------- -------------
Net income (loss) $ 7,361,006 $ (317,363)
============== =============
Income (loss) before extraordinary item
allocated to General Partner $ 47,502 $ (3,174)
============== =============
Income (loss) before extraordinary item
allocated to Unitholders $ 7,561,944 $ (314,189)
============== =============
Income (loss) before extraordinary item
per Unit (996,146 issued and
outstanding) $ 7.59 $ (0.32)
============== =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR CURRENT INCOME FUND-87
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended September 30, 1996 and 1995
(Unaudited)
(Continued)
1996 1995
-------------- -------------
Extraordinary item allocated to
General Partner $ (2,484) None
============== =============
Extraordinary item allocated to
Unitholders $ (245,956) None
============== =============
Extraordinary item per Unit
(996,146 issued and outstanding) $ (0.25) None
============== =============
Net income (loss) allocated to General Partner $ 45,018 $ (3,174)
============== =============
Net income (loss) allocated to Unitholders $ 7,315,988 $ (314,189)
============== =============
Net income (loss) per Unit (996,146
issued and outstanding) $ 7.34 $ (0.32)
============== =============
Distribution to General Partner $ 623 $ 623
============== =============
Distribution to Unitholders $ 74,711 $ 74,711
============== =============
Distribution per Unit (996,146
issued and outstanding) $ 0.075 $ 0.075
============== =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR CURRENT INCOME FUND-87
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
for the nine months ended September 30, 1996 and 1995
(Unaudited)
1996 1995
-------------- -------------
Operating activities:
Net income (loss) $ 7,157,253 $ (552,495)
Adjustments to reconcile net income (loss)
to net cash (used in) or provided by
operating activities:
Extraordinary item:
Debt extinguishment expense 248,440
Gain on sale of property (7,902,305)
Affiliate's participation in income
(loss) from joint venture 28,457 (970)
Depreciation of property 459,517 587,817
Amortization of deferred expenses 18,585 23,895
Accrued interest expense due at
maturity - affiliate 36,262 52,228
Net change in:
Accounts receivable (335,537)
Escrow deposits 153,190 (87,177)
Prepaid expenses 28,541 (49,201)
Accounts payable (48,630) (3,408)
Due to affiliates 18,741 (19,244)
Accrued liabilities (274,351) 59,099
Security deposits (39,478) 2,810
-------------- -------------
Net cash (used in) or provided by
operating activities (451,315) 13,354
-------------- -------------
Investing activities:
Proceeds from sale of property 17,400,000
Payment of selling costs (409,810)
-------------- -------------
Net cash provided by investing activities 16,990,190
-------------- -------------
Financing activities:
Distributions to Unitholders (224,133) (224,133)
Distributions to General Partner (1,869) (1,869)
Distributions to joint venture
partner - affiliate (50,830) (853)
Repayment of loan payable - affiliate (1,046,524)
Repayment of mortgage note payable (9,483,014)
Payment of prepayment penalty (190,030)
Principal payments on mortgage note payable (42,880) (59,607)
-------------- -------------
Cash used in financing activities (11,039,280) (286,462)
-------------- -------------
Net change in cash and cash equivalents 5,499,595 (273,108)
Cash and cash equivalents at beginning
of period 229,105 639,493
-------------- -------------
Cash and cash equivalents at end of period $ 5,728,700 $ 366,385
============== =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR CURRENT INCOME FUND-87
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the nine months and quarter
ended September 30, 1996, and all such adjustments are of a normal and
recurring nature.
2. Interest Expense:
During the nine months ended September 30, 1996 and 1995, the Partnership
incurred and paid interest expense on the mortgage note payable of $484,575 and
$627,974, respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
nine months and quarter ended September 30, 1996 are:
Paid
------------------------
Nine Months Quarter Payable
------------ --------- ----------
Incentive partnership management $16,809 $5,603 $88,557
fees
Reimbursement of expenses to
the General Partner, at cost 26,982 4,506 26,621
In conjunction with the May 1993 financing of Autumn Woods Apartments, the
monthly debt service payments due on the first mortgage loan were required to
be funded by advances from the General Partner through December 16, 1994, at
which time the General Partner loan became due, and was extended. The General
Partner loan was repaid in full in August 1996 from proceeds received in
connection with the sale of Autumn Woods Apartments. During the nine months
ended September 30, 1996 and 1995, the Partnership incurred interest expense on
this loan of $36,262 and $52,228, respectively, which was added to the
principal balance of the loan. Interest expense was computed at the American
Express Company cost of funds rate plus a spread to cover administrative costs.
As of September 30, 1996, this rate was 5.931%.
<PAGE>
4. Property Sale:
The Autumn Woods Apartments was owned by a joint venture consisting of the
Partnership and an affiliate. The Partnership and the affiliate hold
participating percentages in the joint venture of 99.7291% and 0.2709%,
respectively. In August 1996, the joint venture sold the property in an all
cash sale for $17,400,000. From the proceeds of the sale, the joint venture
paid $9,483,014 to the third party mortgage holder in full satisfaction of the
first mortgage loan, and paid $409,810 in selling costs and $190,030 of
prepayment penalties. The basis of the property was $9,087,885, which is net of
accumulated depreciation of $8,430,505. For financial statement purposes, the
Partnership recognized a gain of $7,902,305 from the sale of this property, of
which $30,302 is the minority joint venture partner's share.
5. Extraordinary Items:
In connection with the sale of Autumn Woods Apartments, the Partnership paid a
prepayment penalty of $190,030. In addition, the Partnership wrote off the
remaining unamortized deferred financing fees of $58,410. Both of these
amounts are recorded as debt extinguishment expense and classified as an
extraordinary item in the financial statements.
6. Partnership Termination:
The Partnership sold the Autumn Woods Apartments in August 1996. A portion of
the proceeds from the sale were distributed to Limited Partners in October
1996. The Partnership has retained a portion of the cash to satisfy
obligations of the Partnership as well as establish a reserve for
contingencies. The timing of the termination of the Partnership and final
distribution of cash will depend upon the nature and extent of liabilities and
contingencies which exist or may arise. Such contingencies may include legal
and other fees stemming from litigation involving the Partnership including,
but not limited to, the proposed class action case discussed elsewhere in this
report. In the absence of any such contingency, the reserves will be paid
within twelve months of the property sale. In the event a contingency
continues to exist or arises, reserves may be held by the Partnership for a
longer period of time. Net income for the nine months ended September 30, 1996
was allocated to the partners' capital account balances to reflect the
remaining distributions or contributions the partners are expected to receive
or contribute.
7. Subsequent Event:
In October 1996, the Partnership made a distribution of $4,532,464 ($4.55 per
Unit) to the Unitholders for the third quarter of 1996. Of this amount,
$37,854 ($0.038 per Unit) represents a distribution of Net Cash Receipts for
the third quarter of 1996 and $4,494,610 ($4.512 per Unit) represents a
distribution of Net Cash Proceeds from the sale of Autumn Woods Apartments.
<PAGE>
BALCOR CURRENT INCOME FUND-87
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Current Income Fund-87 A Real Estate Limited Partnership (the
"Partnership") is a limited partnership formed in 1986 to invest in and operate
income-producing real property. The Partnership raised $14,942,190 from sales
of Limited Partnership Depositary Units and utilized these proceeds to acquire
Autumn Woods Apartments. The Partnership sold Autumn Woods Apartments in August
1996.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1995 for a more complete understanding of
the Partnership's financial position.
Operations
- ----------
The Partnership recognized a gain related to the sale of Autumn Woods
Apartments in August 1996, which was the primary reason the Partnership
generated net income during the nine months and quarter ended September 30,
1996 as compared to a loss during the same periods in 1995. Further discussion
of the Partnership's operations is summarized below.
1996 Compared to 1995
- ---------------------
Unless otherwise noted, discussions of fluctuations between 1996 and 1995 refer
to both the nine months and quarters ended September 30, 1996 and 1995.
As a result of the sale of Autumn Woods Apartments in August 1996, the
Partnership recognized a decrease in rental and service income, interest
expense on mortgage note payable, depreciation expense, amortization expense,
property operating expense, real estate taxes and property management fees
during 1996 as compared to 1995.
As a result of higher average cash balances due to proceeds received from the
sale of Autumn Woods Apartments, interest income on short-term investments
increased during 1996 as compared to 1995.
The General Partner loan was repaid in August 1996 from a portion of the
proceeds received from the sale of Autumn Woods Apartments. As a result,
interest expense on short-term loan payable - affiliate decreased during 1996
as compared to 1995.
Primarily as a result of decreased accounting fees, administrative expenses
decreased during 1996 when compared to 1995.
The Partnership sold Autumn Woods Apartments in August 1996 and recognized a
gain on sale of $7,902,305. See Note 4 of Notes to Financial Statements for
additional information.
<PAGE>
In connection with the sale, the Partnership fully amortized the remaining
deferred expenses in the amount of $58,410. In addition, the Partnership
incurred a prepayment penalty of $190,030 in connection with the repayment of
the underlying mortgage note payable. For financial statement purposes, these
two amounts were recognized as extraordinary items and classified as debt
extinguishment expense.
As a result of the gain recognized from the sale of Autumn Woods Apartments,
there was an affiliate's participation in income of joint venture in 1996 as
compared to affiliate's participation in loss of joint venture in 1995.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership increased by approximately $5,500,000 as
of September 30, 1996 when compared to December 31, 1995 due to proceeds
received from the sale of Autumn Woods Apartments. Operating activities used
cash of approximately $451,000 and consisted of cash flow from the operations
of the Autumn Woods Apartments, the payment to the purchaser for certain
corrective work to be done at the property and for the cost to repair certain
apartment units damaged by a fire. The Partnership expects to be reimbursed by
its insurance carrier for the costs of the damage. Operating activities also
include interest income on short term investments, and the payment of
administrative expenses and incentive partnership management fees. Investing
activities consisted of net proceeds received from the sale of Autumn Woods
Apartments of approximately $16,990,000. Financing activities consisted of
distributions to Unitholders and the General Partner totaling approximately
$226,000 and distributions to the joint venture partner of approximately
$51,000. Financing activities also included the repayment of the loan payable-
affiliate of approximately $1,010,000, the repayment of the mortgage note
payable of approximately $9,483,000, the payment of a prepayment penalty of
approximately $190,000, and the payments of principal on the mortgage note
payable of approximately $43,000. The Partnership made a special distribution
to Limited Partners in October 1996 from proceeds received from the sale of
Autumn Woods Apartments, as discussed below.
During 1995 and prior to its sale in 1996, the Autumn Woods Apartments
generated positive cash flow, which the Partnership defines as an amount equal
to the property's revenue receipts less property related expenditures, which
includes debt service payments.
During August 1996, the Autumn Woods Apartments, which was owned by a joint
venture consisting of the Partnership and an affiliate, was sold in an all cash
sale for $17,400,000. From the proceeds of the sale, the joint venture paid
$9,483,014 to the third party mortgage holder in full satisfaction of the first
mortgage loan and paid $409,810 in selling costs and prepayment penalties of
$190,030. The net proceeds of the sale were $7,317,146, of which $7,271,634 was
the Partnership's share. Pursuant to the terms of the sale, the Partnership
was required to holdback $250,000 of the sale proceeds until October 1996. The
full amount of the holdback was released in October 1996. A portion of the
Partnership's share of the net proceeds of the sale was used to repay the
General Partner loan. See Note 3 of Notes to Financial Statements for
additional information. A portion of the remaining net proceeds of the sale
was distributed to Limited Partners in October 1996. See Note 7 of Notes to
Financial Statements for additional information.
<PAGE>
In conjunction with the May 1993 financing of Autumn Woods Apartments, the
monthly debt service payments due on the first mortgage loan were required by
the Prospectus to be funded by advances from the General Partner on a zero
coupon basis until December 1994, at which time the General Partner loan
matured. The General Partner loan of $1,046,516 was repaid in full from
property sale proceeds in August 1996.
In October 1996, the Partnership made a distribution of $4,532,464 ($4.55 per
Unit) to the Unitholders for the third quarter of 1996. Of this amount,
$37,854 ($0.038 per unit) represents a regular quarterly distribution of Net
Cash Receipts for the third quarter of 1996 and $4,494,610 ($4.512 per Unit)
represents a distribution of Net Cash Proceeds from the sale of Autumn Woods
Apartments. The level of the regular quarterly distribution of Net Cash
Receipts decreased from the prior quarter due to the property sale. To date,
including the October 1996 distribution, the Partnership has distributed $11.24
per $15.00 Unit, of which $6.728 represents Cash Flow from operations and
$4.512 represents Net Cash Proceeds.
The Partnership sold the Autumn Woods Apartments in August 1996. A portion of
the proceeds from the sale were distributed to Limited Partners in October
1996. The Partnership has retained a portion of the cash to satisfy
obligations of the Partnership as well as establish a reserve for
contingencies. The timing of the termination of the Partnership and final
distribution of cash will depend upon the nature and extent of liabilities and
contingencies which exist or may arise. Such contingencies may include legal
and other fees stemming from litigation involving the Partnership including,
but not limited to, the proposed class action case discussed elsewhere in this
report. In the absence of any such contingency, the reserves will be paid
within twelve months of the property sale. In the event a contingency
continues to exist or arises, reserves may be held by the Partnership for a
longer period of time.
Since the Preferred Distribution levels to Unitholders specified in the
Partnership Agreement have not been attained in any year, the General Partner
will not be paid the 25% share of its Net Cash Receipts which was subordinated
to the Unitholders' Preferred Distributions in accordance with the Partnership
Agreement.
<PAGE>
BALCOR CURRENT INCOME FUND-87
A REAL ESTATE LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- -------------------------
Proposed class action
- ---------------------
On August 30, 1996, a proposed class action complaint was filed, Lenore Klein
vs. Lehman Brothers, Inc., et al. (Superior Court of New Jersey, Law Division,
Union County, Docket No. Unn-L-5162-96). The Partnership, additional limited
partnerships which were sponsored by The Balcor Company (together with the
Partnership, the "Affiliated Partnerships"), American Express Company, Lehman
Brothers, Inc., additional limited partnerships sponsored by the predecessor of
Lehman Brothers, Inc. (together with the Partnership and the Affiliated
Partnerships, the "Defendant Partnerships") and Smith Barney Holdings, Inc. are
the named defendants in the action. The complaint was amended on October 18,
1996 to add additional plaintiffs. The amended complaint alleges, among other
things, common law fraud and deceit, negligent misrepresentation, breach of
contract, breach of fiduciary duty and violation of certain New Jersey statutes
relating to the disclosure of information in the offering of limited
partnership interests in the Defendant Partnerships. The amended complaint
seeks judgment for compensatory damages equal to the amount invested in the
Defendant Partnerships by the proposed class plus interest accrued thereon;
general damages for injuries arising from the defendants' actions; equitable
relief, including rescission, on certain counts; punitive damages; treble
damages on certain counts; recovery from the defendants of all profits received
by them as a result of their actions relating to the Defendant Partnerships;
attorneys' fees and other costs.
The defendants intend to vigorously contest this action. No class has been
certified as of this date. Management of each of the defendants believes they
have meritorious defenses to contest the claims. It is not determinable at this
time whether or not an unfavorable decision in this action would have a
material adverse impact on the Partnership.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Form of Subscription Agreement set forth as Exhibit_4.1 to Amendment No. 2
to the Registrant's Registration Statement on Form S-11 dated December 17, 1986
(Registration No. 33-7858) and Form of Confirmation regarding Depositary Units
in the Registrant set forth as Exhibit 4.2 to the Registrant's Report on Form
10-Q for the quarter ended September_30, 1992 (Commission File No. 0-16712) are
incorporated herein by reference.
(10) Agreement of Sale and letter dated July 12, 1996 relating to the sale of
Autumn Woods Apartments previously filed as Exhibits (2)(a) and (b) to the
Registrant's Current Report on Form 8-K dated July 5, 1996, is incorporated
herein by reference.
(27) Financial Data Schedule of the Registrant for the nine month period ending
September 30, 1996 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended September 30, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR CURRENT INCOME FUND-87
A REAL ESTATE LIMITED PARTNERSHIP
By: /s/Thomas E. Meador
-----------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor CIF
Partners, the General Partner
By: /s/Jayne A. Kosik
-----------------------------
Jayne A. Kosik
Vice President, and Chief Financial Officer
(Principal Accounting Officer) of Balcor CIF
Partners, the General Partner
Date: November 14, 1996
----------------------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 5729
<SECURITIES> 0
<RECEIVABLES> 336
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6064
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6064
<CURRENT-LIABILITIES> 117
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5947
<TOTAL-LIABILITY-AND-EQUITY> 6064
<SALES> 0
<TOTAL-REVENUES> 9560
<CGS> 0
<TOTAL-COSTS> 1026
<OTHER-EXPENSES> 608
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 521
<INCOME-PRETAX> 7406
<INCOME-TAX> 0
<INCOME-CONTINUING> 7406
<DISCONTINUED> 0
<EXTRAORDINARY> (248)
<CHANGES> 0
<NET-INCOME> 7157
<EPS-PRIMARY> 7.14
<EPS-DILUTED> 7.14
</TABLE>
