FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
June 30, 1997 0-17466
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
(Exact Name of Registrant as specified in its charter)
Delaware 16-1309987
- -------------------- ------------------------------------
(State of Formation) (IRS Employer Identification Number)
2350 North Forest Road
Suite 12 A
Getzville, New York 14068
(Address of Principal Executive Office)
Registrant's Telephone Number: (716) 636-0280
Indicate by a 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 a 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 the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-Q or any
amendment to this Form 10-Q. (X)
As of June 30, 1997 the registrant had 157,377.9 units of limited partnership
interest outstanding.
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
INDEX
-----
PAGE NO.
--------
PART I: FINANCIAL INFORMATION
- ------- ---------------------
Balance Sheets -
June 30, 1997 and December 31, 1996 3
Statements of Operations -
Three Months Ended June 30, 1997 and 1996 4
Statements of Operations -
Six Months Ended June 30, 1997 and 1996 5
Statements of Cash Flows -
Six Months Ended June 30, 1997 and 1996 6
Statements of Partners' (Deficit) Capital -
Six Months Ended June 30, 1997 and 1996 7
Notes to Financial Statements 8 - 23
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- ------- FINANCIAL CONDITION & RESULTS OF
--------------------------------
OPERATIONS 24 - 26
----------
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
BALANCE SHEETS
June 30, 1997 and December 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
Property, at cost:
Land and land improvements $ 2,116,448 $ 2,116,448
Buildings 16,646,607 16,614,849
Furniture and fixtures 1,101,500 1,101,500
------------ ------------
19,864,555 19,832,797
Less accumulated depreciation 5,674,205 5,289,574
------------ ------------
Property, net 14,190,350 14,543,223
Investments in real estate joint ventures 304,932 368,287
Escrow deposits 1,067,275 44,179
Accounts receivable 50,337 50,337
Prepaid commissions, net of accumulated amortization
of $51,851 and $45,867 10,462 16,446
Mortgage costs, net of accumulated amortization
of $118,630 and $268,186 491,947 76,845
Other assets 52,269 39,808
------------ ------------
Total Assets $ 16,167,572 $ 15,139,125
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash overdraft $ 497,725 $ 181,074
Mortgages payable 10,734,646 9,573,161
Accounts payable and accrued expenses 472,907 617,877
Accounts payable - affiliates 27,397 --
Security deposits and prepaid rents 235,633 204,352
------------ ------------
Total Liabilities 11,968,308 10,576,464
------------ ------------
Partners' (Deficit) Capital:
General partners (275,800) (264,898)
Limited partners 4,475,064 4,827,559
------------ ------------
Total Partners' Capital 4,199,264 4,562,661
------------ ------------
Total Liabilities and Partners' Capital $ 16,167,572 $ 15,139,125
============ ============
</TABLE>
See notes to financial statements
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
STATEMENTS OF OPERATIONS
Three Months Ended June 30, 1997 and 1996
(Unaudited)
Three Months Three Months
Ended Ended
June 30, June 30,
1997 1996
---- ----
Income:
Rental $ 900,870 $ 887,450
Interest and other income 87,928 17,574
----------- -----------
Total income 988,798 905,024
----------- -----------
Expenses:
Property operations 383,753 492,960
Interest 255,192 235,106
Depreciation and amortization 193,989 179,619
Administrative:
Paid to affiliates 102,159 65,693
Other 99,026 108,583
----------- -----------
Total expenses 1,034,119 1,081,961
----------- -----------
Loss before allocated loss from joint ventures (45,321) (176,937)
Allocated loss from joint ventures (39,366) (106,330)
----------- -----------
Net loss $ (84,687) $ (283,267)
=========== ===========
Loss per limited partnership unit $ (0.52) $ (1.75)
=========== ===========
Distributions per limited partnership unit $ -- $ --
=========== ===========
Weighted average number of
limited partnership units
outstanding 157,378 157,378
=========== ===========
See notes to financial statements
-4-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1997 and 1996
(Unaudited)
Six Months Six Months
Ended Ended
June 30, June 30,
1997 1996
---- ----
Income:
Rental $ 1,785,759 $ 1,861,612
Interest and other income 176,964 163,349
----------- -----------
Total income 1,962,723 2,024,961
----------- -----------
Expenses:
Property operations 920,745 1,085,222
Interest 485,283 441,382
Depreciation and amortization 411,867 448,050
Administrative:
Paid to affiliates 195,509 214,026
Other 249,361 126,238
----------- -----------
Total expenses 2,262,765 2,314,918
----------- -----------
Loss before allocated loss from joint ventures (300,042) (289,957)
Allocated loss from joint ventures (63,355) (65,985)
----------- -----------
Net loss $ (363,397) $ (355,942)
=========== ===========
Loss per limited partnership unit $ (2.24) $ (2.19)
=========== ===========
Distributions per limited partnership unit $ -- $ --
=========== ===========
Weighted average number of
limited partnership units
outstanding 157,378 157,378
=========== ===========
See notes to financial statements
-5-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
June 30, June 30,
1997 1996
---- ----
<S> <C> <C>
Cash flow from operating activities:
Net loss $ (363,397) $ (355,942)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization 411,867 448,050
Net loss from joint ventures 63,355 65,985
Changes in operating assets and liabilities:
Escrow deposits (1,023,096) --
Accounts receivable -- (12,303)
Other assets (12,461) (66,984)
Accounts payable and accrued expenses (144,970) (31,311)
Security deposits and prepaid rent 31,281 24,429
----------- -----------
Net cash (used in) provided by operating activities (1,037,421) 71,924
----------- -----------
Cash flow from investing activities:
Accounts receivable - affiliates -- (7,620)
Capital expenditures (31,758) (140,000)
Contributions to joint ventures, net of distributions -- --
----------- -----------
Net cash (used in) investing activities (31,758) (147,620)
----------- -----------
Cash flows from financing activities:
Cash overdraft 316,651 100,558
Principal payments on mortgages (42,897) (24,862)
Proceeds from mortgage refinancing, net 1,204,382 --
Mortgage acquisition costs (436,354) --
Accounts payable - affiliates 27,397 --
----------- -----------
Net cash provided by financing activities 1,069,179 75,696
----------- -----------
Increase (decrease) in cash -- --
Cash - beginning of period -- --
----------- -----------
Cash - end of period $ -- $ --
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 548,119 $ 441,382
=========== ===========
</TABLE>
See notes to financial statements
-6-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
Six Months Ended June 30, 1997 and 1996
(Unaudited)
General Limited Partners
Partners -------------------------
Amount Units Amount
------ ----- ------
Balance, January 1, 1996 $ (235,312) 157,377.9 $ 5,784,165
Net loss (10,678) -- (345,264)
----------- --------- -----------
Balance, June 30, 1996 $ (245,990) 157,377.9 $ 5,438,901
=========== ========= ===========
Balance, January 1, 1997 $ (264,898) 157,377.9 $ 4,827,559
Net loss (10,902) -- (352,495)
----------- --------- -----------
Balance, June 30, 1997 $ (275,800) 157,377.9 $ 4,475,064
=========== ========= ===========
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
NOTES TO FINANCIAL STATEMENTS
Six Months Ended June 30, 1997 and 1996
(Unaudited)
1. GENERAL PARTNERS' DISCLOSURE
----------------------------
In the opinion of the General Partners of Realmark Property Investors
Limited Partnership VI-A, all adjustments necessary for a fair
presentation of the Partnership's financial position, results of
operations and changes in cash flows for the six month periods ended June
30, 1997 and 1996, have been made in the financial statements. Such
financial statements are unaudited and subject to any year-end adjustments
which may be necessary.
2. FORMATION AND OPERATION OF PARTNERSHIP
--------------------------------------
Realmark Property Investors Limited Partnership VI-A (the "Partnership"),
a Delaware Limited Partnership, was formed on September 21, 1987, to
invest in a diversified portfolio of income-producing real estate
investments.
In November 1987, the Partnership commenced the public offering of units
of limited partnership interest. Other than matters relating to
organization, it had no business activities and, accordingly, had not
incurred any expenses or earned any income until the first interim closing
(minimum closing) of the offering, which occurred on February 12, 1988.
The offering was concluded on November 10, 1988, at which time 157,377.9
units of limited partnership interest were sold and outstanding, including
30 units held by an affiliate of the General Partners. The offering
terminated on November 10, 1988 with gross offering proceeds of
$15,737,790. The General Partners are Realmark Properties, Inc., a
wholly-owned subsidiary of J.M. Jayson & Company, Inc. and Joseph M.
Jayson, the Individual General Partner. Joseph M. Jayson is the sole
shareholder of J.M. Jayson & Company, Inc.
Under the partnership agreement, the general partners and their affiliates
can receive compensation for services rendered and reimbursement for
expenses incurred on behalf of the Partnership.
-8-
<PAGE>
FORMATION AND OPERATION OF PARTNERSHIP (CONTINUED)
--------------------------------------------------
Net income or loss and proceeds arising from a sale or refinancing shall
be distributed first to the limited partners in amounts equivalent to a 7%
return on the average of their adjusted capital contributions, then an
amount equal to their capital contributions, then an amount equal to an
additional 5% of the average of their adjusted capital contributions after
the general partners receive a 3% property disposition fee. Such fees
shall be reduced, but not below zero, by the amounts necessary to pay to
limited partners whose subscriptions were accepted by January 31, 1988, an
additional cumulative annual return (not compounded) equal to 2% based on
their average adjusted capital contributions, and to limited partners
whose subscriptions were accepted between February 1, 1988 and June 30,
1988, an additional cumulative annual return (not compounded) equal to 1%
based on their average adjusted capital contributions commencing with the
first fiscal quarter following the termination of the offering of units,
then to all partners in an amount equal to their respective positive
capital balances, and finally, in the ratio of 87% to the limited partners
and 13% to the general partners.
The partnership agreement also provides that distribution of funds,
revenues, costs and expenses arising from partnership activities,
exclusive of any sale or refinancing activities, are to be allocated 97%
to the limited partners and 3% to the general partners.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Cash
----
For purposes of reporting cash flows, cash includes the following items:
cash on hand; cash in checking; and money market savings.
Property and Depreciation
-------------------------
Depreciation is provided using the straight-line method over the estimated
useful lives of the respective assets. Expenditures for maintenance and
repairs are expensed as incurred, and major renewals and betterments are
capitalized. The Accelerated Cost Recovery System and Modified Accelerated
Cost Recovery System are used to determine depreciation expense for tax
purposes.
-9-
<PAGE>
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
------------------------------------------------------
Acquisition Fees
----------------
Acquisition fees are paid to the general partner as properties are
specified, which generally occurs when a contract to purchase the property
is entered into. Acquisition fees are allocated to specific properties
when actual closing takes place. Acquisition fees paid for properties that
ultimately are not acquired will be applied toward other properties that
are acquired or reallocated to existing properties.
Unconsolidated Joint Ventures
-----------------------------
The Partnership's investment in affiliated real estate joint ventures are
accounted for on the equity method.
Rental Income
-------------
Leases for residential properties have terms of one year or less.
Commercial leases generally have terms ranging from one to five years.
Rental income is recognized on the straight line method over the term of
the lease.
Rents Receivable
----------------
Due to the nature of these accounts, residential rents receivable are
fully reserved as of June 30, 1997 and 1996.
4. ACQUISITION AND DISPOSITION OF RENTAL PROPERTY
----------------------------------------------
Inducon Joint Venture - Columbia (the "Venture") was formed pursuant to an
agreement dated March 16, 1988 between the Partnership and Trion
Development Group, Inc., a New York corporation (the "Corporation"). The
primary purpose of the Venture was to acquire and lease land and construct
office/warehouse buildings as income producing property. The Partnership
contributed initial capital to the Venture of $1,064,950, which was used
to fund the development costs. On May 19, 1989 the Partnership purchased
the minority venturer's interest in the Inducon Joint Venture - Columbia
for $130,000. The office complex, located in Columbia, South Carolina,
consists of four (4) buildings. The first phase was placed in service in
July 1989 and has a total cost of $1,793,276, which includes $311,358 in
acquisition fees. The second phase was put in service in December 1991 and
has a total cost of $1,815,206, which includes $48,796 of capitalized
interest.
-10-
<PAGE>
ACQUISITION AND DISPOSITION OF RENTAL PROPERTY (CONTINUED)
----------------------------------------------------------
In February 1989 the Partnership acquired an 80 unit apartment complex
(Beaver Creek) located in Beaver County, Pennsylvania for a purchase price
of $1,872,887, which included $347,404 in acquisition fees.
In June 1989 the Partnership acquired a 240 unit apartment complex
(Countrybrook Estates, formerly West Creeke) located in Louisville,
Kentucky for a purchase price of $5,670,984, which included $334,285 in
acquisition fees.
In March 1990 the Partnership purchased a 131 unit apartment complex
(Stonegate) located in Mobile, Alabama for a purchase price of $4,145,367,
which included $225,620 in acquisition fees.
In March 1991 the Partnership purchased a 230 unit apartment complex (The
Commons on Lewis Avenue, formerly Williamsburg Commons) located in Tulsa,
Oklahoma for a purchase price of $2,965,803, which included $269,721 in
acquisition fees.
In September 1991 the Partnership entered into an agreement and formed a
joint venture with Realmark Property Investors Limited Partnership II and
VI-B (RPILP II and VI-B) for the purpose of operating the 250 unit Foxhunt
Apartments in Kettering, Ohio and owned by RPILP II. In April 1992 the
Partnership's capital contribution of $389,935 plus interest was returned
by RPILP II and the Partnership's interest in the joint venture ended.
In May 1992 the Partnership entered into an agreement to form a joint
venture with Realmark Property Investors Limited Partnership (RPILP) for
the purpose of operating the 144 unit Gold Key Apartments located in
Englewood, Ohio and owned by RPILP.
In August 1992 the Partnership entered into a joint venture agreement for
the purpose of operating Research Triangle Industrial Park West, a 150,000
square foot office/warehouse facility located in Durham, North Carolina.
The original joint venture agreement to develop and operate the property,
created between Realmark Property Investors Limited Partnership II (RPILP
II) and Adaron Group (Adaron), was dissolved, and the Partnership acquired
all rights held by Adaron.
-11-
<PAGE>
5. MORTGAGES AND NOTES PAYABLE
In connection with the acquisition of rental property, the Partnership
obtained mortgages as follows:
Countrybrook Estates (formerly West Creeke)
-------------------------------------------
A mortgage with a balance of $3,415,000 at June 30, 1997, providing for
monthly principal and interest payments of $40,501, bearing interest at
9.1875%. The note matures June 1999.
A mortgage with a balance of $0 and $3,964,286 at June 30, 1997 and 1996,
respectively, bearing interest at 9.75%. The mortgage provides for annual
principal and interest payments of $413,570 payable in equal monthly
installments with a final payment of $3,964,286 due on July 1, 1996. The
mortgage was fully paid off in June of 1997 when the mortgage was
refinanced.
Inducon - Columbia
------------------
On July 27, 1989 a construction loan was approved. Interest on the amount
advanced is at the prime rate, as announced by Nations Bank, plus 1.25%.
Interest is payable in monthly installments commencing the first month
following the first advance, and continuing until July 10, 1994. On that
date the Partnership had the option of purchasing two one-year extensions
by paying, at the time of each extension, a fee equal to one-half of one
percent of the then outstanding principal balance. The Partnership
exercised both of its options, and has extended the due date to July 10,
1996 at which time another extension was granted to April 1997. On July
26, 1993 the construction loan was restructured to allow up to $500,000 to
be advanced solely for tenant upfit expenses. All terms under the original
agreement are still in effect. As of June 30, 1997 and 1996 loan advances
amounted to $1,750,000 and $1,816,081, respectively. The loan has not been
formally extended, and is therefore due on demand as of June 30, 1997.
-12-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
---------------------------------------
Stonegate
---------
A mortgage with a balance of $2,645,000 at June 30, 1997, providing for
monthly principal and interest payments of $20,207, bearing interest at
8.43%. The note matures August 2005.
A mortgage with a balance of $0 and $1,973,717 at June 30, 1997 and 1996,
respectively. The mortgage provided for monthly principal and interest
payments of $18,800 through March 31, 1994. On April 1, 1994 the interest
rate changed to 1% over the corporate base rate charged by the Boatman's
National Bank. Monthly payments from April 1, 1994 through maturity on
March 1, 1997 will equal $1,726 in principal plus accrued interest. A
final payment of $1,960,592 plus accrued interest is due April 1, 1997.
The mortgage was fully paid off in June of 1997 when the mortgage was
refinanced.
The Commons on Lewis Avenue (formerly Williamsburg Commons)
-----------------------------------------------------------
A mortgage with a balance of $1,874,446 and $1,895,000 at June 30, 1997
and 1996 obtained at the time of purchase, providing for monthly interest
only payments ranging from 8% to 12% annually. Principal and interest
payments began May 1996 with an effective interest rate of 10% per the
loan agreement. The entire principal balance, plus accrued interest, is
due and payable April 1, 2001.
Beaver Creek
------------
A mortgage with a balance of $1,039,000 and $0 at June 30, 1997 and 1996
respectively, providing for monthly principal and interest payments of
$7,864, bearing interest at 8.33%. The note matures August 2005.
The mortgages described above are secured by the individual properties to
which they relate.
-13-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
---------------------------------------
The aggregate maturities of mortgages payable for each of the next five
years and thereafter are as follows:
Year Amount
1997 $ 1,839,863
1998 222,680
1999 5,038,521
2000 28,303
2001 30,816
Thereafter 3,574,463
----------
TOTAL $10,734,646
===========
6. RELATED PARTY TRANSACTIONS
--------------------------
Management fees for the management of certain of the Partnership's
properties are paid to an affiliate of the General Partners. The
management agreement provides for 5% of gross monthly receipts of the
complexes to be paid as fees for administering the operations of the
properties. These fees totaled $102,885 and $98,324 for the six months
ended June 30, 1997 and 1996, respectively.
According to the terms of the Partnership Agreement, the General Partner
is also entitled to receive a partnership management fee equal to 7% of
net cash flow (as defined in the Partnership Agreement), 2% of which is
subordinated to the limited partners having received an annual cash return
equal to 7% of their adjusted capital contributions. There were no such
fees paid or accrued for the six months ended June 30, 1997 or 1996.
-14-
<PAGE>
RELATED PARTY TRANSACTIONS (CONTINUED)
--------------------------------------
The general partners are also allowed to collect a property disposition
fee upon the sale of acquired properties. This fee is not to exceed the
lesser of 50% of amounts customarily charged in arm's-length transactions
by others rendering similar services for comparable properties, or 3% of
the sales price. The property disposition fee is subordinate to payments
to the limited partners of a cumulative annual return (not compounded)
equal to 7% of their average adjusted capital balances and to repayment to
the limited partners of an amount equal to their original capital
contributions. No properties have been sold as of June 30, 1997 and
accordingly, there have been no property disposition fees paid or earned
by the general partner.
Pursuant to the terms of the Partnership agreement, the corporate general
partner charges the Partnership for reimbursement of certain costs and
expenses incurred by the corporate general partner and its affiliates in
connection with the administration of the Partnership and acquisition of
properties. These charges are for the Partnership's allocated share of
such costs and expenses as payroll, travel, communication costs related to
partnership accounting, partner communication and relations, and
acquisition of properties. Partnership accounting, communication,
marketing and acquisition expenses are allocated based on total assets,
number of partners and number of units, respectively.
Computer service charges for the partnerships are paid or accrued to an
affiliate of the General Partner. The fee is based upon the number of
apartment units and totaled $5,280 for both the six months ended June 30,
1997 and 1996.
Accounts payable - affiliates amounted to $27,397 at June 30, 1997. This
balance is payable to the General Partners and/or its affiliates on
demand.
7. INCOME TAXES
------------
No provision has been made for income taxes since the income or loss of
the partnership is to be included in the tax returns of the Individual
Partners.
The tax returns of the Partnership are subject to examination by the
Federal and state taxing authorities. Under federal and state income tax
laws, regulations and rulings, certain types of transactions may be
accorded varying interpretations and, accordingly, reported partnership
amounts could be changed as a result of any such examination.
-15-
<PAGE>
INCOME TAXES (CONTINUED)
------------------------
The reconciliation of net loss for the six months ended June 30, 1997 and
1996 as reported in the statements of operations, and as would be reported
for tax purposes, is as follows:
June 30, June 30,
1997 1996
---- ----
Net loss - statement of operations $ (363,397) $ (355,943)
Add to (deduct from):
Difference in depreciation 54,728 72,172
Tax basis adjustments -
Joint Ventures 78,068 111,288
Allowance for doubtful accounts 60,202 28,898
----------- ------------
Net (loss) - tax return purposes $ (170,399) $ (143,585)
=========== ============
The reconciliation of Partners' Capital as of June 30, 1997 and December
31, 1996 as reported in the balance sheet, and as reported for tax
purposes, is as follows:
June 30, December 31,
1997 1996
---- ----
Partners' Capital - balance sheet $ 4,199,264 $ 4,562,661
Add to (deduct from):
Accumulated difference in
depreciation 310,291 255,563
Tax basis adjustment -
Joint Ventures 948,601 870,533
Syndication fees 2,312,863 2,312,863
Other non-deductible expenses 451,409 391,207
------------ ------------
Partners' Capital - tax return purposes $ 8,222,428 $ 8,392,827
============ =============
-16-
<PAGE>
8. INVESTMENT IN JOINT VENTURES
----------------------------
On September 27, 1991 the Partnership entered into an agreement to form a
joint venture with Realmark Property Investors Limited Partnership II
(RPILP II) and Realmark Property Investors Limited Partnership VI-B (RPILP
VI-B). The joint venture was formed for the purpose of operating the
Foxhunt Apartments located in Dayton, Ohio and owned by RPILP II. Under
the terms of the original agreement, the Partnership contributed $390,000
and RPILP VI-B contributed $1,041,568 to buy out the wraparound promissory
note on the property. RPILP II contributed the property net of the first
mortgage.
On April 1, 1992 the Partnership's interest in the joint venture was
bought out by RPILP II for $389,935 plus accrued interest at 15%. The
joint venture agreement had provided that any income, loss, gain, cash
flow or sale proceeds be allocated 63.14% to RPILP II, 10.04% to the
Partnership, and 26.82% to RPILP VI-B. The allocated net loss of the joint
venture from the date of inception through April 1, 1992 was accounted for
on the equity method due to the general partner's active relationship with
each venturer.
On May 5, 1992 the Partnership entered into an agreement to form a joint
venture with Realmark Property Investors Limited Partnership (RPILP) for
the purpose of operating the Gold Key Apartments located in Englewood,
Ohio and owned by RPILP. Under the terms of the original joint venture
agreement, the Partnership contributed $497,912 and RPILP contributed the
property net of the outstanding mortgage.
On March 1, 1993 the Partnership contributed an additional $125,239, in
the process increasing its ownership percentage in the joint venture. The
joint venture agreement had provided that any income, loss, gain, cash
flow or sale proceeds be allocated 68% to RPILP and 32% to the
Partnership. The additional 1993 capital contribution changed the
allocation to 60% and 40%, respectively.
Due to the general partner's active relationship with each venturer, the
Partnership accounts for its interest on the equity method. The equity
ownership has been determined based upon the cash paid into the general
partner's estimate of the fair market value of the apartment complex and
other assets at the date of inception.
A summary of the assets, liabilities and partners' capital (deficiency) of
the joint venture as of June 30, 1997 and December 31, 1996 and the
results of its operations for the six months ended June 30, 1997 and 1996
is as follows:
-17-
<PAGE>
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
BALANCE SHEETS
June 30, 1997 and December 31, 1996
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
Property, at cost:
Land and land improvements $ 367,500 $ 367,500
Building 2,445,738 2,413,805
Building equipment 12,141 12,141
----------- -----------
2,825,379 2,793,446
Less accumulated depreciation 1,662,334 1,601,995
----------- -----------
Property, net 1,163,045 1,191,451
Escrow deposits 148,816 187,815
Other assets 331,136 573,634
----------- -----------
Total Assets $ 1,642,997 $ 1,952,900
=========== ===========
LIABILITIES AND PARTNERS' (DEFICIT)
Liabilities:
Cash overdraft $ 273,476 $ 201,367
Mortgages payable 2,920,940 2,930,266
Accounts payable and accrued expenses 201,908 205,524
Deposits on sale -- 220,000
Accrued interest 21,907 21,977
Security deposits and prepaid rent 32,401 31,858
----------- -----------
Total Liabilities 3,450,632 3,610,992
----------- -----------
Partners' Capital (Deficit):
The Partnership 214,363 274,180
RPILP (2,021,998) (1,932,272)
----------- -----------
Total Partners' (Deficit) (1,807,635) (1,658,092)
----------- -----------
Total Liabilities and Partners' (Deficit) $ 1,642,997 $ 1,952,900
=========== ===========
</TABLE>
-18-
<PAGE>
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1997 and 1996
Six Months Six Months
Ended Ended
June 30, June 30,
1997 1996
---- ----
Income:
Rental $ 309,453 $ 343,689
Interest and other income 15,608 19,854
--------- ---------
Total income 325,061 363,543
--------- ---------
Expenses:
Property operations 195,799 161,228
Interest 144,809 153,064
Depreciation and amortization 63,210 63,015
Administrative 70,786 99,264
--------- ---------
Total expenses 474,604 476,571
--------- ---------
Net loss $(149,543) $(113,028)
========= =========
Allocation of net loss:
The Partnership $ (59,817) $ (45,211)
RPILP (89,726) (67,817)
--------- ---------
$(149,543) $(113,028)
========= =========
-19-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
----------------------------------------
A reconciliation of the Partnership's investment in the joint venture is
as follows:
1997 1996
---------- ----------
Investment in joint venture, January 1 $ 274,180 $ 486,272
Allocation of net loss (59,817) (45,211)
---------- ----------
Investment in joint venture, June 30 $ 214,363 $ 441,061
========== ==========
On August 20, 1992 the Partnership entered into a joint venture agreement
for the purpose of operating Research Triangle Industrial Park West, an
office/warehouse facility located in Durham, North Carolina. The original
joint venture agreement to develop and operate the property created
between Realmark Property Investors Limited Partnership II (RPILP II) and
Adaron Group (Adaron) was dissolved, and the Partnership acquired Adaron's
interest in the joint venture. In the transaction, the Partnership paid
$575,459 to Adaron and acquired all rights previously held by Adaron. The
agreement provides for 50% of any income or loss to be allocated to both
the Partnership and RPILP II.
A summary of the assets, liabilities and equity of the joint venture as of
June 30, 1997 and December 31, 1996 and the results of its operations for
the six months ended June 30, 1997 and 1996 is as follows:
-20-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
BALANCE SHEETS
June 30, 1997 and December 31, 1996
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 867,419 $ 745,127
Property, net of accumulated depreciation 1,383,391 1,601,125
Other assets 359,400 317,914
----------- -----------
Total Assets $ 2,610,210 $ 2,664,166
=========== ===========
LIABILITIES AND PARTNERS' (DEFICIT)
Liabilities:
Notes payable $ 4,956,326 $ 4,996,884
Accounts payable and accrued expenses 29,829 96,440
Accounts payable - affiliates 97,699 37,406
----------- -----------
Total Liabilities 5,083,854 5,130,730
----------- -----------
Partners' (Deficit):
General partners (1,137,405) (1,332,697)
Other investors (1,336,239) (1,133,867)
----------- -----------
Total Partners' (Deficit) (2,473,644) (2,466,564)
----------- -----------
Total Liabilities and Partners' (Deficit) $ 2,610,210 $ 2,664,166
=========== ===========
</TABLE>
-21-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1997 and 1996
Six Months Six Months
Ended Ended
June 30, June 30,
1997 1996
Income:
Rental $ 499,029 $ 506,807
Interest and other income 2,562 380
--------- ---------
Total income 501,591 507,187
--------- ---------
Expenses:
Property operations 30,299 66,756
Interest 214,654 218,250
Depreciation and amortization 227,735 255,315
Administrative 35,978 28,961
--------- ---------
Total expenses 508,666 569,282
--------- ---------
Net loss $ (7,075) $ (62,095)
========= =========
Allocation of net loss:
The Partnership $ (3,538) $ (31,048)
RPILP II (3,537) (31,047)
--------- ---------
$ (7,075) $ (62,095)
========= =========
-22-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
----------------------------------------
A reconciliation of the Partnership's investment in the joint venture is
as follows:
1997 1996
--------- ---------
Investment in joint venture, January 1 $ 6,155 $ 60,907
Allocation of net loss ( 3,538) (20,774)
--------- ---------
Investment in joint venture, June 30 $ 2,617 $ 40,133
========= =========
-23-
<PAGE>
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS.
--------------
Liquidity and Capital Resources:
- --------------------------------
The Partnership struggled this quarter with continued low occupancies at The
Commons on Lewis Avenue, Countrybrook Estates and Carriage House of Englewood
(formerly Gold Key Apartments). The other properties in the Partnership
continued to enjoy stable, and in many cases, high occupancies. Although
operating revenue decreased from the same six month period in the previous year,
total expenses also decreased by almost the same amount thus causing the
Partnership's net loss to remain almost unchanged. Management is optimistic that
the decrease in expenses will continue as more control is being exercised over
expenditures; with more control over spending now in place, management continues
to focus great effort on finding ways to increase operating revenue.
The Partnership successfully refinanced several mortgages during the second
quarter of 1997. The refinancings resulted in decreased interest rates and
should therefore lead to increased cash flow. The refinancings also resulted in
the setting up of repair and replacement escrow accounts which should help the
Partnership complete necessary improvements to the properties.
There were no distributions for the six month periods ended June 30,1997 and
1996. The Partnership has been utilizing its cash to fund capital improvements;
management expects to continue making improvements (e.g. painting, carpet and
appliance replacements, etc.) to the properties in an effort to increase
occupancies, so it is unlikely that any distributions will be made during 1997.
Results of Operations:
- ----------------------
For the quarter ended June 30, 1997, the Partnership's net loss was $84,687 or
$0.52 per limited partnership unit. Net loss for the quarter ended June 30, 1996
amounted to $283,267 or $1.75 per unit. For the six month period ended June 30,
1997, the net loss was $363,397 or $2.24 per limited partnership unit as
compared to $355,942 or $2.19 per limited partnership unit for the six month
period ended June 30, 1996.
-24-
<PAGE>
Results of Operations (continued):
- -----------------------------------
Partnership revenue for the quarter ended June 30, 1997 totaled $988,798, an
increase of approximately $84,000 from the 1996 amount of $905,024. Total rental
revenue increased almost $13,500, while interest and other income rose by just
over $70,000 thus making up most of the increase in total revenue. The majority
of the increase in other income is the result of increases in laundry income and
cancellation fees charged. For the six month period ended June 30, 1997, there
was a significant decrease in rental revenue when compared to the same period in
the previous year. Such decrease can be attributed to continued low occupancy
levels at Countrybrook Estates (formerly West Creeke) and The Commons on Lewis
Avenue.
Compared to the prior year, physical occupancy dropped, while rental concessions
and delinquencies drastically increased from $106,886 in 1996 to $196,774 for
the first six months of 1997. Management continues to offer rental concessions
and other promotions in an attempt to increase the occupancies.
For the quarter ended June 30, 1997, Partnership expenses amounted to
$1,034,119, decreasing by almost $48,000 from the same 1996 quarter amount. For
the six month period ended June 30, 1997, Partnership expenses decreased by
approximately $52,000 from the same period in 1996. A large decrease in property
operations expenditures was responsible for essentially all of the decrease in
expenses. Although there were slight increases in various operations expenses,
such as payroll, contracted services and utilities, significant insurance
proceeds were received as a result of a flood that occurred at Countrybrook.
These funds were then used to complete the resulting, as well as additional,
repairs and maintenance items to the property. There was an increase in
administrative expenses between the two six month periods totaling almost
$105,000. This increase continues, as was noted during the first quarter of
1997, to be the result of increased legal fees associated with collections, as
well as increased portfolio management charges, investor service fees and
brokerage fees (the result of efforts to sell Countrybrook).
For the six month period ended June 30, 1997, the Carriage House of Englewood
Joint Venture generated a net loss of $149,543, an increase from the net loss of
$113,028 for the six month period ended June 30, 1996. Pursuant to the terms of
the joint venture agreement, the Partnership was allocated $59,817 of the loss
in 1997 and $45,211 of the loss in 1996.
-25-
<PAGE>
Results of Operations (continued):
- -----------------------------------
The Research Triangle Industrial Park Joint Venture had a net loss of $7,075 for
the six month period ended June 30, 1997 with $3,538 of the loss allocated to
the Partnership. For the six month period ended June 30, 1996, the Joint Venture
had a net loss of $62,095 with one-half or $31,048 of the loss allocated to the
Partnership. The Research Triangle Office Complex continues to enjoy high
occupancy and positive cash flow.
On a tax basis, the partnership had a net loss of $70,399 or $0.43 per limited
partner unit for the six month period ended June 30, 1997 versus a tax loss of
$143,585 or $0.88 per unit for the six month period ended June 30, 1996.
-26-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
PART II
-------
OTHER INFORMATION
-----------------
Item 1 - Legal Proceedings
- --------------------------
The Partnership is not party to, nor is it the subject of, any material pending
legal proceedings other than ordinary routine litigation incidental to the
Partnership's business.
Item 2, 3, 4 and 5
- ------------------
Not applicable.
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
None.
-27-
<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.
REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP VI-A
By: /s/Joseph M. Jayson August 13, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
Individual General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By: REALMARK PROPERTIES, INC.
Corporate General Partner
/s/Joseph M. Jayson August 13, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
President and Director
/s/Michael J. Colmerauer August 13, 1997
------------------------------ ------------------------
Michael J. Colmerauer Date
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A FOR
SIX MONTHS ENDED JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 50,337
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,180,343
<PP&E> 19,864,555
<DEPRECIATION> 5,674,205
<TOTAL-ASSETS> 16,167,572
<CURRENT-LIABILITIES> 1,233,662
<BONDS> 10,734,646
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 16,167,572
<SALES> 0
<TOTAL-REVENUES> 1,962,723
<CGS> 0
<TOTAL-COSTS> 2,262,765
<OTHER-EXPENSES> 63,355
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 485,283
<INCOME-PRETAX> (363,397)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (363,397)
<EPS-PRIMARY> (2.24)
<EPS-DILUTED> 0
</TABLE>
