FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
(As last amended by 34-32231, eff. 6/3/93.)
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
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 0-16684
MULTI-BENEFIT REALTY FUND '87-1
(Exact name of small business issuer as specified in its charter)
California 94-3026785
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Check whether the issuer (1) 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 .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) MULTI-BENEFIT REALTY FUND '87-1
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 1,531
Restricted--tenant security deposits 140
Accounts receivable 10
Escrows for taxes 139
Restricted escrows 346
Other assets 345
Investment properties:
Land $ 1,742
Buildings and related personal property 21,871
23,613
Less accumulated depreciation (10,242) 13,371
$ 15,882
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 98
Accrued taxes 301
Tenant security deposits 140
Other liabilities 213
Mortgage notes payable 12,335
Partners' Capital (Deficit)
General Partner $ (125)
Limited Partner "A" Unitholders -
96,284 units outstanding (915)
Limited Partner "B" Unitholders -
75,152 units outstanding 3,835 2,795
$ 15,882
See Accompanying Notes to Consolidated Financial Statements
b) MULTI-BENEFIT REALTY FUND '87-1
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
1997 1996
Revenues:
Rental income $1,164 $1,131
Interest Income 26 20
Other income 56 48
Total revenues 1,246 1,199
Expenses:
Operating 442 419
General and administrative 23 34
Partnership management fees 61 20
Maintenance 130 105
Depreciation 239 242
Interest 251 262
Property taxes 92 92
Total expenses 1,238 1,174
Net income $ 8 $ 25
Net income allocated to general partner (1%) $ -- $ --
Net income allocated to limited partners (99%) 8 25
$ 8 $ 25
Net income per A Unit: $ .05 $ .14
Net income per B Unit: $ .05 $ .14
See Accompanying Notes to Consolidated Financial Statements
c) MULTI-BENEFIT REALTY FUND '87-1
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
Total
Partners'
General LIMITED PARTNERS Equity
Partner "A" Units "B" Units (Deficit)
Original capital contributions $ 1 $ 9,706 $ 7,538 $ 17,245
Limited partnership units at
December 31, 1996 and
March 31, 1997 -- 96,284 75,152 171,436
Partners' capital (deficit) at
December 31, 1996 $ (118) $ (238) $ 3,832 $ 3,476
Distributions to partners (7) (682) -- (689)
Net income for the three
months ended March 31, 1997 -- 5 3 8
Partners' capital (deficit) at
March 31, 1997 $ (125) $ (915) $ 3,835 $ 2,795
See Accompanying Notes to Consolidated Financial Statements
d) MULTI-BENEFIT REALTY FUND '87-1
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1997 1996
Cash flows from operating activities:
Net income $ 8 $ 25
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 239 242
Amortization of loan costs 16 11
Change in accounts:
Restricted cash -- (2)
Accounts receivable 37 67
Escrows for taxes 70 (12)
Other assets 8 14
Accounts payable (66) (249)
Tenant security deposit liabilities -- 2
Accrued taxes 37 43
Other liabilities (4) (48)
Net cash provided by operating activities 345 93
Cash flows from investing activities:
Property improvements and replacements (59) (52)
Deposits to restricted escrows (57) (11)
Receipts from restricted escrows 148 --
Net cash provided by (used in)
investing activities 32 (63)
Cash flows from financing activities:
Loan costs (1) --
Payments on mortgage notes payable (16) (42)
Distributions to partners (689) (230)
Net cash used in financing activities (706) (272)
Net decrease in cash (329) (242)
Cash and cash equivalents at beginning of period 1,860 1,234
Cash and cash equivalents at end of period $ 1,531 $ 992
Supplemental disclosure of cash flow information:
Cash paid for interest $ 236 $ 251
See Accompanying Notes to Consolidated Financial Statements
e) MULTI-BENEFIT REALTY FUND '87-1
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Multi-Benefit
Realty Fund '87-1 ("Partnership") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of ConCap Equities, Inc. ("General Partner"), all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three month period
ended March 31, 1997, are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1997. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Partnership's annual report on Form 10-KSB for the year ended December 31,
1996.
Certain reclassifications have been made to the 1996 information to conform to
the 1997 presentation.
Limited Partnership Units
The Partnership has issued two classes of Units, "A" Units and "B" Units. The
two classes of Units are entitled to different rights and priorities as to cash
distributions and partnership allocations. The Units represent economic rights
attributable to the limited partnership interests in the Partnership and entitle
the holders thereof ("Unitholders") to participate in certain allocations and
distributions of the Partnership.
NOTE B - RELATED PARTY TRANSACTIONS
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all partnership activities.
The Partnership paid property management fees based upon collected gross rental
revenues for property management services as noted below for the three month
periods ended March 31, 1997 and 1996, respectively. Such fees are included in
operating expense on the consolidated statement of operations and are reflected
in the following table. The Limited Partnership Agreement ("Agreement")
provides for reimbursement to the General Partner and its affiliates for costs
incurred in connection with the administration of Partnership activities. The
General Partner and its affiliates received reimbursements and fees as reflected
in the following table:
For the Three Months Ended
March 31,
1997 1996
(in thousands)
Property management fees $ 61 $ 59
Reimbursements for services of affiliates (1) 30 29
Partnership management fees (2) 61 20
(1) Included in "reimbursements for services of affiliates" for 1997, is
approximately $2,000 in reimbursements for construction oversight costs.
(2) The Agreement provides for a fee equal to 9% of distributable cash from
operations (as defined in the Agreement) received by the limited partners be
paid to the General Partner for executive and administrative management
services.
The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the General Partner. An affiliate of the General
Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the master policy. The current agent assumed the financial obligations to
the affiliate of the General Partner who receives payments on these obligations
from the agent. The amount of the partnership's insurance premiums accruing to
the benefit of the affiliate of the General Partner by virtue of the agent's
obligations is not significant.
NOTE C - COMMITMENT
The Partnership is required by the Agreement to maintain working capital
reserves of not less than 5% of Net Invested Capital, as defined in the
Agreement. In the event expenditures are made from this reserve, operating
revenue shall be allocated to such reserve to the extent necessary to maintain
the foregoing level. Reserves, including cash and cash equivalents and
investments totaling approximately $1.5 million, exceeded the reserve
requirement of approximately $754,000 at March 31, 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of three apartment complexes.
The following table sets forth the average occupancy of the properties for the
three months ended March 31, 1997 and 1996:
Average
Occupancy
Property 1997 1996
Carlin Manor Apartments
Columbus, Ohio 90% 89%
Hunt Club Apartments
Indianapolis, Indiana 93% 93%
Shadow Brook Apartments
West Valley City, Utah 97% 99%
Results of Operations
The Partnership's net income as shown in the financial statements for the three
months ended March 31, 1997, was approximately $8,000 as compared to net income
of approximately $25,000 for the three months ended March 31, 1996. The
decrease in net income is due primarily to increases in partnership management
fees and maintenance expenses. The increase in property management fees is the
result of increases in distributions made to limited partners from "cash
available for distribution" (as defined in the Agreement). Maintenance expenses
increased primarily due to a paving project at Hunt Club. Included in
maintenance expense for the three months ended March 31, 1997, is approximately
$27,000 of major repairs and maintenance comprised primarily of parking lot
paving, swimming pool repairs and window coverings.
Offsetting these increased expenses were increases in interest income and other
income, and a decrease in general and administrative costs. The increase in
interest income is due to an increase in invested cash and cash equivalents.
Other income increased due to increases in pet fees, lease cancellation fees and
cleaning and damage fees.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of its investment properties to assess
the feasibility of increasing rents, maintaining or increasing occupancy levels
and protecting the Partnership from increases in expense. As part of this plan,
the General Partner attempts to protect the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level. However, due to changing market conditions which
can result in the use of rental concessions and rental reductions to offset
softening market conditions, there is no guarantee that the General Partner will
be able to sustain such a plan.
Liquidity and Capital Resources
At March 31, 1997, the Partnership had unrestricted cash of approximately
$1,531,000 versus approximately $992,000 at March 31, 1996. Net cash provided
by operating activities increased primarily due to the decrease in the escrow
for taxes and a decrease in cash used for payment of accounts payable. Net cash
provided by investing activities increased due to increased receipts from
restricted escrows. Net cash used in financing activities increased due to an
increase in distributions to partners. This increase was partially offset by a
decrease in the payments made on mortgages notes payable.
The Partnership has no material capital projects scheduled to be performed in
1997, although certain routine capital expenditures and maintenance expenses
have been budgeted. These capital expenditures and maintenance expenses will be
incurred only if cash is available from operations, is received from the capital
reserve account or is available from cash and cash equivalents on hand.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership. Such assets are currently thought
to be sufficient for any near-term needs of the Partnership. The mortgage
indebtedness of approximately $12,335,000 is amortized over varying periods and
requires balloon payments in October 2000 and November 2003 at which time the
properties will be refinanced or sold. During the three months ended March 31,
1997, a distribution of approximately $682,000 was made to the A Unit limited
partners, and a distribution of approximately $7,000 was made to the General
Partner. A distribution of approximately $228,000 was made to the A Unit
limited partners and a distribution of approximately $2,000 was made to the
General Partner during the three months ended March 31, 1996. Future cash
distributions will depend on the levels of net cash generated from operations,
refinancings, property sales and cash reserves.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report.
b) Reports on Form 8-K:
None filed for the quarter ended March 31, 1997.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MULTI-BENEFIT REALTY FUND '87-1
By: CONCAP EQUITIES, INC.
General Partner
By: /s/ William H. Jarrard, Jr.
William H. Jarrard, Jr.
President
By: /s/ Ronald Uretta
Ronald Uretta
Vice President/Treasurer
Date: May 1, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Multi-Benefit Realty Fund 87-1 1997 First Quarter 10-QSB and is qualified in its
entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000802200
<NAME> MULTI-BENEFIT REALTY FUND 87-1
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,531
<SECURITIES> 0
<RECEIVABLES> 10
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 23,613
<DEPRECIATION> (10,242)
<TOTAL-ASSETS> 15,882
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 12,335
0
0
<COMMON> 0
<OTHER-SE> 2,795
<TOTAL-LIABILITY-AND-EQUITY> 15,882
<SALES> 0
<TOTAL-REVENUES> 1,246
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,238
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 251
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8
<EPS-PRIMARY> .05<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
