<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 10-K/A
AMENDMENT TO GENERAL FORM FOR REGISTRATION OF
SECURITIES
Filed pursuant to Section 12(g)
THE SECURITIES EXCHANGE ACT OF 1934
ASSOCIATED PLANNERS REALTY GROWTH FUND
(Exact name of registrant as specified in its charter)
AMENDMENT NO. 1
File No. 33-13983
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its General Form for
Registration of Securities on Form 10-K as set forth in the pages
attached hereto:
Cover page, Item 2 (Properties), Item 6 (Selected Financial Data), Item
7(Management Discussion and Analysis)
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Amendment to be signed on its
behalf by the undersigned thereunto duly authorized.
Associated Planners Realty Growth Fund
(Registrant)
Date:
By: West Coast Realty Advisors, Inc. (Advisor)
By:
Michael G. Clark, Vice President/Treasurer
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE
REQUIRED]
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) of
the SECURITIES EXCHANGE ACT OF 1934 [NO FEE
REQUIRED]
For the transition period from to
Commission file number 33-13983
ASSOCIATED PLANNERS REALTY GROWTH FUND, (a California
Limited Partnership)
(Exact name of registrant as specified in its charter)
California 95-4119808
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification)
5933 West Century Blvd., 9th Floor, Los Angeles, CA 90045-5454
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 670-0800
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities pursuant to section 12(g) of the Act:
NONE
(Title of class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K [ ]
<PAGE>
PART I
ITEM 2. PROPERTIES
PARKCENTER OFFICE BUILDING
On November 17, 1989, the Partnership purchased the Parkcenter
Office Building, located in Santa Ana, California.
The office building, constructed in 1978, provides 24,090 rentable
square feet located on a 1.32 acre parcel of land. As of December 31, 1994,
the building was 73% leased to seven tenants. Roselinsky, Gerrick, et al.
and 1st Databank Mortgage Corporation accounted for 40% of the occupied
space in the building and 52% of total revenues during calendar 1994. The
tenants rent space on a full-service gross lease basis, including utilities
and janitorial.
The building and improvements are depreciated over 31.5 to 40 years
using a straight-line method for both financial and income tax reporting
purposes. The financial and income tax bases for the property are the same.
In the opinion of the General Partner, the property is adequately insured.
The property is managed by West Coast Realty Management, Inc. ("WCRM"), an
affiliate of the corporate General Partner.
The center is dependent upon the vitality of the consumer market in
the general area. A drop in occupancy levels among buildings located in the
general area of the office building has required the Partnership's management
to lower rental rates that it has been charging to tenants in order to
maintain an acceptable occupancy level at the property. This has resulted in
a significant drop in operating cash flow that has been generated by the
building.
PROCARE INDUSTRIAL BUILDING
On January 9, 1990, the Partnership, together with Associated
Planners Realty Income Fund (a 10%/90% interest, respectively), purchased
the PROCARE Industrial Building, located in San Marcos, California.
The industrial building, constructed in 1986, consists of 40,720
rentable square feet, including 6,000 square feet of office area, plus 1,300
square feet of mezzanine storage above the office area. It is located on a
2.66 acre parcel of land. The building was 100% occupied by Professional
Care Products, Inc. through January 8th, 1995, on a triple net lease. The
lease requires the tenant to pay insurance, taxes, maintenance and all other
operating costs. During 1994, property taxes paid by the tenant totaled
$32,059.
On February 13, 1995, a new lease was executed with No Fear, Inc.,
which runs through June 30, 1998. This is also a triple net lease, and the
beginning monthly revenue is approximately 70% of the Professional Care
Products lease's ending monthly revenue.
The building and improvements are depreciated over 31.5 to 40 years
using a straight-line method for both financial and income tax reporting
purposes. The financial and income tax bases for the property are the same.
In the opinion of the General Partner, the property is adequately insured.
The property is managed by WCRM.
The building is located in North San Diego County, in an area of
increasing population and desirability for San Diego area professional and
skilled workers and significant employers. It is expected the building will
benefit from projected growth of the North San Diego County area. <PAGE>
<PAGE>
SELECTED FINANCIAL DATA PROPERTY OPERATIONS
The selected property financial data for Partnership's properties
should be read in conjunction with the financial statements and related notes
and Item 7. Management Discussion and Analysis of Financial Condition and
Results of Operations appearing elsewhere in this report. This statement is
not covered by the accountants' opinion included elsewhere in this report.
<TABLE>
<CAPTION>
Operations for the years ended December 31:
1994 1993 1992
<S> <C> <C> <C>
Property Revenues $270,796 $288,094 $296,451
Loss from Property Operations * (48,571) (55,857) (88,124)
Property Net Loss per Limited Partner Unit**(22.33) (26.83) (42.33)
</TABLE>
[FN]
* Determined using revenue and expenses directly related to the
properties. Expense items excluded in arriving at this amount included
General and Administrative expenses ($54,865 in 1994 and $55,155 in 1993) and
Interest Expense that pertains to loans from the General Partner ($11,707 in
1994 and $12,345 in 1993). The data is presented in this manner in order to
present the actual operating results of the Partnership's real estate
property operations.
** Property Net Loss per Limited Partner Unit was based on the Limited
Partners' share of loss and the weighted quarterly average number of units
outstanding.
SUMMARY
As of December 31, 1994, the combined occupancy rate of all the
Partnership's properties was 77%. In the opinion of the General Partner,
all properties are adequately covered by insurance.
The distribution of $78,318 in 1990 was a 100% non-taxable return of
capital on a generally accepted accounting basis due to the net loss for the
year, (the loss was due primarily to depreciation and amortization expense).
The total acquisition cost to the Partnership of each property and
the dates of acquisition are as follows:
Description Acquisition Cost Acquisition Dates
Parkcenter Office Building $3,228,102 11/17/89
San Marcos Industrial Building $311,878 01/09/90
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data should be read in conjunction with the
financial statements and related notes and Item 7. Management Discussion and
Analysis of Financial Condition and Results of Operations appearing elsewhere
in this report. This selected financial data is not covered by the
accountants' opinion included elsewhere in this report.
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Operations for the years ended December 31:
Revenues $271,268 $288,624 $296,969 $320,101 $393,673
Net Income (Loss) (115,143) (123,357) (141,094) (88,631) (3,740)
Net Income (Loss)
Limited Partner Unit* (55.31) (59.25) (67.77) (42.57) (1.80)
Distributions per
Limited Partner Unit* --- --- --- --- 38.00
Financial position at December 31:
Total Assets 3,296,434 3,391,592 3,443,973 3,477,784 3,524,676
Long-Term Debt 1,614,884 1,629,348 1,642,473 1,654,383 1,665,192
Partners' Equity 1,301,837 1,416,980 1,540,337 1,681,431 1,770,062
</TABLE>
[FN]
* Net income (loss) and distributions per limited partner unit were based
on the weighted quarterly average number of outstanding units.
<PAGE>
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership began offering for sale limited partnership units
in October 1987. On August 29, 1988, the Partnership reached its minimum
offering level of $1,200,000 and funds were released from escrow, to the
Partnership. The Partnership sold units throughout the remainder of 1988,
and had raised $1,362,000 in gross proceeds or $1,219,262 net of syndication
costs and sales commissions as of December 31, 1988. As of December 31,
1989, gross proceeds from sales of partnership units totaled $2,061,000 or
$1,823,953 net of syndication costs and sales commissions.
In reading the discussion of operations, the reader should
understand that the Partnership has a 100% interest in an office building in
Santa Ana, California, and a 10% interest in a commercial building in San
Marcos, California. The results of the Partnership's operations have been
dominated by the results of operations for the Santa Ana building; thus, the
discussion of the Partnership's results of operations will emphasize the
operations of that building.
Over the last three years, the overall operations of the Partnership
have gradually improved; however, the Partnership continues to generate
unacceptable net losses and negative cash flows. For example, the net loss
for 1993 was $17,737 (13%) less than the net loss for 1992, while the
negative cash flow (net loss excluding depreciation and amortization)
dropped from $70,738 to $54,276--a $16,462 (23%) decrease. Progress
continued in 1994, with the net loss of $115,143 that year being $8,214 (7%)
less than that for 1993, and the negative cash flow dropping to $47,779--a
$6,497 (12%) decrease from 1993's level. Despite these improvements,
the fact remains that the Partnership's operations are still insufficient
to support the Company without cooperation from the General Partner
in deferring collection of various management fees, interest expense, and
overhead cost allocations. The primary reason behind the lack of
profitability continues to be the lack of sufficient rental income from the
Santa Ana property. Rental income has continued to drop the last three
years, going from $296,451 in 1992, to $288,094 in 1993, down to $270,796 in
the most recent year. In contrast, during 1990, the Partnership's last year
with a positive cash flow, rental income was $389,883 for the year, or
$119,087 (44%) more than 1994's level. Expenses have been relatively steady
for the Partnership, with the exception of 1992 when a relatively large
amount of operating expenses ($156,246) were incurred in order to perform
significant repair and maintenance activities on the Santa Ana property
(in contrast, these costs totalled only $116,896 in 1993 and $94,496
in 1994). The operating costs were especially low in 1994, due to certain
maintenance costs that were deferred until 1995 due to the profitability
problems of the Partnership. It is expected that operating costs will be
higher in 1995 as these postponed costs are actually incurred during that
year.
During the year ended December 31, 1994, the Partnership did not
make distributions to limited partners or pay General Partner management
fees, in an attempt to rebuild cash reserves. Distributions are determined
by management based on cash flow and the liquidity position of the
Partnership. It is the intention of management to make quarterly
distributions of cash, subject to maintenance of reasonable reserves,
if the financial stability of the Partnership can be restored.
During the year, $9,443 in cash was used by operating activities.
This resulted from a net cash basis loss of $47,779 from operations
(net loss plus depreciation expense) plus the $11,786 decrease in security
deposit and prepaid rent balances (due to the net loss of tenants at the
Santa Ana property), offset by an increase in accounts payable of $46,235
(primarily resulting from the deferral of payment of amounts due to the
General Partner and affiliates). There were no investing activities during
the year by the Partnership; in recent years, some cash had been used for
capital improvements to the properties. Financing activities, as always in
recent years, pertained to a $14,464 use of cash in connection with the
repayment of note payable principal.
<PAGE>
Management uses cash as its primary measure of a partnership's
liquidity. The amount of cash that represents adequate liquidity for a real
estate limited partnership depends on several factors. Among them are:
1. Relative risk of the partnership;
2. Condition of the partnership's properties;
3. Time in the partnership's life cycle (e.g., money-raising,
acquisition, operating or disposition phase); and
4. Partner distributions.
Due to the large amount of vacancies and an increase in maintenance
and repair expenses at the Santa Ana Property, the 3% reserve remained
depleted during 1994. In addition, the General Partner has made loans to the
Partnership and deferred collection of miscellaneous amounts owed to it by
the Partnership. For this reason, there were no distributions made to the
limited partners during the year. It is the Partnership's intention to
eliminate partner distributions until such time as the reserves are built
back up to acceptable levels and various deferred liabilities due to the
Advisor and its affiliates are paid. The Partnership's properties are
currently operating at a loss on a cash basis, though the level of vacancy at
the properties has stabilized. It is uncertain at this point how long it
will take the Partnership to rebuild cash reserves and operate profitably on
a cash basis. The Partnership's ability to meet cash requirements in the
short-run is dependent upon the willingness of the General Partner and its
affiliates to defer collection of amounts due for property management fees
and overhead allocations, and the stabilization of the tenant base and rental
rates at the Santa Ana property. In the long run, the Partnership's cash
requirements will be further affected by the need to pay off the Deed of
Trust that secures the Santa Ana property. This note is due on January 1,
2000, and is projected to have a balance of approximately $1,500,000 at that
time. A sale or refinance of the property will of course be necessary prior
to that date. The San Marcos property has no debt financing. In the
short-term, the fact that this property has a quality tenant and operates
under a triple net lease, allows the Partnership to collect a nominal amount
of cash from the operations of this Property. In the long-run, the
Partnership expects to benefit from the sale of this property when
it is sold. The General Partner anticipates that the San Marcos property
will be sold prior to the year 2000.
The condition of the properties is relatively good, therefore there
are no projected capital improvements or unusually large repair costs that
would severely deplete the cash reserves. The General Partner believes in
the long-term the property can generate positive cash flows. The General
Partner is committed to maintaining the economic viability of the Partnership
and is exploring alternatives to maintaining sufficient operating capital.
This includes advancing small loans to the Partnership as needed ($5,000 to
$10,000), soliciting additional Limited Partner contributions to paydown the
mortgage balance, or other forms of debt relief. The General Partner is a
wholly owned subsidiary of Associated Financial Group (the "Parent"), which
consolidated, as of December 31, 1994, had $6.3 million in assets, $2.0
million in cash and cash equivalents, and $3.0 million in equity, and had
net income of $.3 million for the year ended December 31, 1994.
The ability of the General Partner to obtain these advances is dependent
upon the liquidity of the Parent company of the General Partner.
The General Partner is aware that the economic conditions in the
area in which the Santa Ana property is located are not good. There have
been several foreclosures of office buildings in the same general area.
Buildings have had to compete for a dwindling supply of viable tenants by
lowering the rental rates they are offering, to rates that will allow owners
to compete in a difficult marketplace, that is considered to have an
oversupply of available office space. The General Partner is of the opinion
that the surplus of office space in the area has deterred new building in
the general area, and that eventually, given a turnaround in the local
economy, the demand for office space will improve, driving up market rents,
and improving the value of the Santa Ana property. It is the intention of
the General Partner to sell the Santa Ana property when it is reasonably
feasible, given the facts that:
1) The price it could be sold for now would be less than the balance
on the outstanding mortgage debt on the property, thus giving Partnership
incentive to substantially lease-up and maintain the property prior to sale,
2) The debt service on the property is so high that given the
long-term realities of low inflation in the U.S. economy and long-term
economic sluggishness in the Southern California economy (due to Orange and
Los Angeles county fiscal problems, aerospace and defense layoffs, lower
personal income figures, higher than U.S. average unemployment, etc.), rents
could never increase enough in the foreseeable future for this property to
generate significant enough positive cash flow to maintain the viability of
the Partnership, and pay certain accrued and accruing expenses due to the
General Partner and Affiliates.
As previously discussed, the Partnership has a 10% interest in a
building in San Marcos, California. Subsequent to yearend, the building was
leased to a tenant at a rate 70% of the previous rental rate. Because the
Partnership has such a small percentage interest in this property, the
decrease in rent results in only a $750 per month decrease in cash flow.
This decrease is not expected to have a material impact on operations.
The Tax Reform Acts of 1986 and 1987 and the Revenue Reconciliation
Acts of 1990 and 1993 did not have a material impact on the Partnership's
operations.
During the years of the Partnership's existence, inflationary
pressures in the U.S. economy have been minimal, and this has been consistent
with the experience of the Partnership in operating rental real estate in
California. The Partnership has several clauses in its leases with some of
its properties' tenants that will help alleviate some of the negative impact
of inflation. However, as previously alluded to, the lack of inflation is
hurting the Partnership due to the stagnation of office rental rates.
There are currently no plans for any material renovation, improvement
or further development of the properties.
<PAGE>
RESULTS OF OPERATIONS - 1994 VS. 1993
Operations for the years ended December 31, 1994 and 1993 reflect
full years of rental activities for the Partnership's properties. For the
year ended December 31, 1994, the return on funds invested in property was
.3%. However, as has been the case for several years, the Partnership
realized an overall cash basis net loss due to the administrative costs of
operating the Partnership (cash basis is net income plus an addback of
depreciation expense).
The Partnership generated a loss from operations before depreciation
and amortization of $47,779, compared to $54,276 in 1993. Much of this
decrease in loss was due to relief received from the County of Orange in
property tax savings resulting from the lower assessment placed on the
property. High vacancy rates in the general area of the Santa Ana property
have served to lower rental rates far below the rates that were in place
when the property was first purchased by the Partnership in 1989. In
addition, there was an increase in the vacancy rate at the property. Of
the $17,298 decrease in rental revenue from 1993, we would estimate that
$12,000 was due to increased vacancy at the Santa Ana property, with the
balance due to lower overall rental rates in the area.
The number of limited partnership units outstanding remained at 2,061.
RESULTS OF OPERATIONS - 1993 VS. 1992
Operations for the years ended December 31, 1993 and 1992 reflect
full years of rental activities for the Partnership's properties. For the
year ended December 31, 1993, the return on funds invested in property was
.6%.
The Partnership generated a loss from operations before
depreciation and amortization of $54,276 in 1993 compared to $70,738 in 1992.
The primary reasons for this loss in 1993 was an $8,357 decrease in rental
income, a $12,259 increase in general and administrative expenses
(particularly errors and ommisions insurance), and a $9,788 increase in
repairs and maintenance expense.
The Partnership incurred a net loss of $123,357 in 1993.
The number of limited partner units outstanding was 2,061.
<PAGE>
KEY DATA ON REAL ESTATE OPERATIONS
Noted below are some key data pertaining to the operations of improved
property that is operated by the Partnership:
Occupancy Rate as a Percentage of Square Feet:
Santa Ana Building:
1990: 75%
1991: 84
1992: 87
1993: 85
1994: 73
San Marcos Building (10% interest by the Partnership):
1990: 100%
1991: 100
1992: 100
1993: 100
1994: 100
Tenants occupying 10% or more of rentable square footage:
Santa Ana:
Roselinsky, Gerrick, et al (a law firm): 29% of rentable square
footage; $99,185 rent per year; lease expires 1/31/97. Renewal options: No
renewal option.
Note: The tenants of this building consist are primarily service
oriented companies such as mortgage lenders, real estate agents, lawyers,
and escrow companies.
San Marcos:
PROCARE (Professional Care Products, Inc.): 100% of rentable square
footage; $30,024 rental per year (10% of total rent). Lease expires
1/8/95. Renewal options: None (tenant vacated building prior to lease
expiration).
No Fear, Inc.: 100% of rentable square footage; Rent is $21,989 per
year (10% of total rent). Lease expires on June 30, 1998. Tenant began
occupying the building on February 13, 1995. Renewal option: $21,598 per
year in the first year, increasing 104% per year thereafter for a maximum of
five years.
Note: PROCARE was involved in the assembly of medical instruments. No
Fear, Inc. (the current tenant) is involved in the manufacture and sale of
clothing.
Average Effective Annual Rental Per Square Foot:
1990: $13.84
1991: 11.34
1992: 10.53
1993: 10.23
1994: 9.62
<PAGE>
ASSOCIATED PLANNERS REALTY GROWTH FUND
(A California Limited Partnership)
S I G N A T U R E S
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.
ASSOCIATED PLANNERS REALTY GROWTH FUND
A California Limited Partnership
(Registrant)
Date: ____________________ By: WEST COAST REALTY
ADVISORS, INC.
A California Corporation,
A General Partner
William T. Haas
Director and Executive Vice
President / Secretary
Date: ____________________
Michael G. Clark
Vice President / Treasurer
