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
September 30, 1996 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 September 30, 1996 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 -
September 30, 1996 and December 31, 1995 3
Statements of Operations -
Three Months Ended September 30, 1996 and 1995 4
Statements of Operations -
Nine Months Ended September 30, 1996 and 1995 5
Statements of Cash Flows -
Nine Months Ended September 30, 1996 and 1995 6
Statements of Partners' (Deficit) Capital -
Nine Months Ended September 30, 1996 and 1995 7
Notes to Financial Statements 8 - 22
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- -------- FINANCIAL CONDITION & RESULTS OF OPERATIONS 23 - 24
-------------------------------------------
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
BALANCE SHEETS
September 30, 1996 and December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
- ------
Property, at cost:
Land and land improvements $ 2,114,098 $ 2,114,098
Buildings 16,577,583 16,407,368
Furniture and fixtures 1,101,500 1,101,500
------------ ------------
19,793,181 19,622,966
Less accumulated depreciation 5,101,751 4,506,015
------------ ------------
Property, net 14,691,430 15,116,951
Investments in real estate joint ventures 401,002 547,177
Cash -- --
Accounts receivable 70,226 57,923
Accounts receivable - affiliate 358,987 349,027
Property acquisition costs capitalized -- --
Other assets 205,526 180,018
------------ ------------
Total Assets $ 15,727,171 $ 16,251,096
============ ============
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Cash overdraft $ 312,589 $ 174,919
Mortgages payable 9,628,507 9,672,590
Accounts payable and accrued expenses 761,441 681,920
Security deposits and prepaid rents 211,257 172,814
------------ ------------
Total Liabilities 10,913,794 10,702,243
------------ ------------
Partners' (Deficit) Capital:
General partners (257,376) (235,312)
Limited partners 5,070,753 5,784,165
------------ ------------
Total Partners' Capital 4,813,377 5,548,853
------------ ------------
Total Liabilities and Partners' Capital $ 15,727,171 $ 16,251,096
============ ============
</TABLE>
See notes to financial statements
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
STATEMENTS OF OPERATIONS
Three Months Ended September 30, 1996 and 1995
(Unaudited)
Three Months Three Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
Income:
Rental $ 1,026,411 $ 1,040,617
Interest and other income (29,935) 68,662
----------- -----------
Total income 996,476 1,109,279
----------- -----------
Expenses:
Property operations 626,571 768,139
Interest 244,480 249,862
Depreciation and amortization 186,274 196,256
Administrative:
Paid to affiliates 72,194 219,901
Other 166,301 38,694
----------- -----------
Total expenses 1,295,819 1,472,852
----------- -----------
Loss before allocated loss from joint ventures (299,343) (363,573)
Allocated loss from joint ventures (80,190) (32,443)
----------- -----------
Net loss $ (379,533) $ (396,016)
=========== ===========
Loss per limited partnership unit $ (2.34) $ (2.44)
=========== ===========
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
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
Income:
Rental $ 2,888,023 $ 3,106,321
Interest and other income 133,414 159,314
----------- -----------
Total income 3,021,437 3,265,635
----------- -----------
Expenses:
Property operations 1,711,794 1,973,235
Interest 685,862 687,021
Depreciation and amortization 634,324 601,503
Administrative:
Paid to affiliates 286,220 438,439
Other 292,538 261,506
----------- -----------
Total expenses 3,610,738 3,961,704
----------- -----------
Loss before allocated loss from joint ventures (589,301) (696,069)
Allocated loss from joint ventures (146,175) (78,346)
----------- -----------
Net loss $ (735,476) $ (774,415)
=========== ===========
Loss per limited partnership unit $ (4.53) $ (4.77)
=========== ===========
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
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
<S> <C> <C>
Cash flow from operating activities:
Net loss $(735,476) $(774,415)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 634,324 601,503
Net loss from joint ventures 146,175 78,346
Changes in operating assets and liabilities:
Accounts receivable (12,303) (6,150)
Other assets (64,095) (44,334)
Accounts payable and accrued expenses 79,521 17,685
Security deposits and prepaid rent 38,443 53,774
--------- ---------
Net cash provided by (used in) operating activities 86,589 (73,591)
--------- ---------
Cash flow from investing activities:
Accounts receivable - affiliates (9,960) 154,264
Capital expenditures (170,215) (171,285)
Contributions to joint ventures, net of distributions -- --
--------- ---------
Net cash (used in) investing activities (180,175) (17,021)
--------- ---------
Cash flows from financing activities:
Cash overdraft 137,670 --
Distributions to partners -- --
Principal payments on mortgages (44,083) (25,150)
Mortgage proceeds -- --
--------- ---------
Net cash provided by (used in) financing activities 93,587 (25,150)
--------- ---------
Increase (decrease) in cash -- (115,762)
Cash - beginning of period -- 118,039
--------- ---------
Cash - end of period $ -- $ 2,277
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 685,862 $ 610,795
========= =========
</TABLE>
See notes to financial statements
-6-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
General Limited Partners
Partners
Amount Units Amount
------ ----- ------
Balance, January 1, 1995 $ (196,105) 157,377.9 $ 7,051,862
Net loss (23,232) -- (751,183)
----------- --------- -----------
Balance, September 30, 1995 $ (219,337) 157,377.9 $ 6,300,679
=========== ========= ===========
Balance, January 1, 1996 $ (235,312) 157,377.9 $ 5,784,165
Net loss (22,064) -- (713,412)
----------- --------- -----------
Balance, September 30, 1996 $ (257,376) 157,377.9 $ 5,070,753
=========== ========= ===========
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
NOTES TO FINANCIAL STATEMENTS
Nine Months Ended September 30, 1996 and 1995
(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 nine month periods ended September 30, 1996 and 1995,
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 September 30, 1996 and 1995.
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 $3,957,540 and $3,983,791 at September 30,
1996 and 1995, 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. A temporary extension on this mortgage was granted to November 1,
1996; management continues to try to find permanent financing for this
property.
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. 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 September 30, 1996
and 1995 loan advances amounted to $1,816,081 and $1,748,557, respectively.
This mortgage came due in July, but has been temporarily extended until
June of 1997.
Stonegate
---------
A mortgage with a balance of $1,968,539 and $1,988,795 at September 30,
1996 and 1995, 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.
-12-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
The Commons on Lewis Avenue (formerly Williamsburg Commons)
-----------------------------------------------------------
A mortgage with a balance of $1,895,000 at September 30, 1996 and 1995
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.
The mortgages described above are secured by the individual properties to
which they relate.
The aggregate maturities of mortgages payable for each of the next five
years and thereafter are as follows:
Year Amount
---- ------
1996 $ 5,814,229
1997 1,963,361
1998 0
1999 0
2000 0
Thereafter 1,895,000
----------
TOTAL $ 9,672,590
===========
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 $153,407 and $169,336 for the nine months ended September 30, 1996
and 1995, 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 nine months ended September 30, 1996 or 1995.
-13-
<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 September 30, 1996 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.
Accounts receivable - affiliates amounted to $358,987 at September 30,
1996. As of December 31, 1996, this balance has been fully reimbursed.
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 $7,290 for both the nine months ended September
30, 1996 and 1995.
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.
-14-
<PAGE>
INCOME TAXES (CONTINUED)
The reconciliation of net loss for the nine months ended September 30, 1996
and 1995 as reported in the statements of operations, and as would be
reported for tax purposes, is as follows:
September 30, September 30,
1996 1995
---- ----
Net loss - statement of operations $ (735,476) $ (774,415)
Add to (deduct from):
Difference in depreciation 108,258 90,128
Tax basis adjustments -
Joint Ventures 166,932 60,090
Allowance for doubtful accounts 43,347 130,500
----------- -----------
Net loss - tax return purposes $ (416,939) $ (493,697)
=========== ===========
The reconciliation of Partners' Capital as of September 30, 1996 and
December 31, 1995 as reported in the balance sheet, and as reported for tax
purposes, is as follows:
September 30, December 31,
1996 1995
---- ----
Partners' Capital - balance sheet $ 4,813,377 $ 5,548,853
Add to (deduct from):
Accumulated difference in
depreciation 254,364 146,106
Tax basis adjustment -
Joint Ventures 881,331 714,399
Syndication fees 2,312,863 2,312,863
Other non-deductible expenses 314,149 270,802
------------ -----------
Partners' Capital - tax return purposes $ 8,576,084 $ 8,993,023
============ ===========
-15-
<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 September 30, 1996 and December 31, 1995 and the
results of its operations for the nine months ended September 30, 1996 and
1995 is as follows:
-16-
<PAGE>
GOLD KEY APARTMENTS JOINT VENTURE
BALANCE SHEETS
September 30, 1996 and December 31, 1995
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
- ------
Property, at cost:
Land and land improvements $ 367,500 $ 367,500
Building 2,404,785 2,404,785
Building equipment 12,141 12,141
----------- -----------
2,784,426 2,784,426
Less accumulated depreciation 1,621,921 1,531,705
----------- -----------
Property, net 1,162,505 1,252,721
Cash -- 28,101
Escrow deposits 284,951 277,523
Other assets 766,472 797,919
----------- -----------
Total Assets $ 2,213,927 $ 2,356,264
=========== ===========
LIABILITIES AND PARTNERS' (DEFICIT)
- -----------------------------------
Liabilities:
Cash overdraft $ 182,394 $ --
Mortgages payable 2,934,775 2,947,711
Accounts payable and accrued expenses 649,885 702,735
Accrued interest 22,022 22,108
Security deposits and prepaid rent 36,457 42,710
----------- -----------
Total Liabilities 3,825,534 3,715,264
----------- -----------
Partners' Capital (Deficit):
The Partnership 292,774 393,817
RPILP (1,904,381) (1,752,817)
----------- -----------
Total Partners' (Deficit) (1,611,606) (1,359,000)
----------- -----------
Total Liabilities and Partners' (Deficit) $ 2,213,927 $ 2,356,264
=========== ===========
</TABLE>
-17-
<PAGE>
GOLD KEY APARTMENTS JOINT VENTURE
STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 1996 and 1995
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
Income:
Rental $ 491,948 $ 541,356
Interest and other income 27,041 32,924
--------- ---------
Total income 518,988 574,280
--------- ---------
Expenses:
Property operations 302,548 347,037
Interest 230,091 199,697
Depreciation and amortization 94,522 91,996
Administrative 144,433 113,959
--------- ---------
Total expenses 771,595 752,689
--------- ---------
Net loss $(252,606) $(178,409)
========= =========
Allocation of net loss:
The Partnership $(101,043) $ (71,364)
RPILP (151,564) (107,045)
--------- ---------
$(252,606) $(178,409)
========= =========
-18-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
A reconciliation of the Partnership's investment in the joint venture is as
follows:
1996 1995
---- ----
Investment in joint venture, January 1 $ 486,272 $ 582,605
Allocation of net loss (101,043) ( 71,364)
---------- ----------
Investment in joint venture, September 30 $ 385,229 $ 511,241
========== ==========
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
September 30, 1996 and December 31, 1995 and the results of its operations
for the nine months ended September 30, 1996 and 1995 is as follows:
-19-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
BALANCE SHEETS
September 30, 1996 and December 31, 1995
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 366,754 $ 92,150
Property, net of accumulated depreciation 2,113,337 2,439,455
Accounts receivable - affiliates 317,287 322,212
Other assets 373,412 461,237
----------- -----------
Total Assets $ 3,170,790 $ 3,315,054
=========== ===========
LIABILITIES AND PARTNERS' (DEFICIT)
- -----------------------------------
Liabilities:
Notes payable $ 5,023,109 $ 5,073,225
Accounts payable and accrued expenses 165,781 169,665
----------- -----------
Total Liabilities 5,188,890 5,242,890
----------- -----------
Partners' (Deficit):
General partners (909,635) (864,503)
Other investors (1,108,465) (1,063,333)
----------- -----------
Total Partners' (Deficit) (2,018,100) (1,927,836)
----------- -----------
Total Liabilities and Partners' (Deficit) $ 3,170,790 $ 3,315,054
=========== ===========
</TABLE>
-20-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 1996 and 1995
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
Income:
Rental $ 769,709 $ 817,949
Interest and other income 518 157
--------- ---------
Total income 770,227 818,106
--------- ---------
Expenses:
Property operations 95,835 43,962
Interest 342,560 367,908
Depreciation and amortization 378,093 380,748
Administrative 44,005 39,452
--------- ---------
Total expenses 860,491 832,070
--------- ---------
Net loss $ (90,264) $ (13,964)
========= =========
Allocation of net loss:
The Partnership $ (45,132) $ (6,982)
RPILP II (45,132) (6,982)
--------- ---------
$ (90,264) $ (13,964)
========= =========
-21-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
A reconciliation of the Partnership's investment in the joint venture is as
follows:
1996 1995
---- ----
Investment in joint venture, January 1 $ 60,907 $ 263,046
Allocation of net loss (45,132) ( 6,982)
----------- -----------
Investment in joint venture, September 30 $ 15,775 $ 256,064
=========== ===========
-22-
<PAGE>
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources:
- --------------------------------
The Partnership continues to operate with occupancy problems and high
delinquencies at its residential properties, thus resulting in poor cash flow.
Management is putting considerable efforts into a marketing program to both
attract new tenants and to maintain existing tenants. Additionally, managers at
all properties have been instructed to concentrate heavily on collection
efforts. As the end of the year approaches, the General Partner is optimistic
that the efforts being put forth will result in increased occupancies and
therefore improved cash flow. The commercial properties in this Partnership
(including the Joint Venture property) continue to operate at 100% occupancy.
The market in the areas where these buildings are located is deemed by
management to be very strong, and expansion of existing buildings is strongly
being considered to help improve cash flow for the entire Partnership.
Management is also seeking new financing for several of the properties in the
Partnership in hopes of lowering the interest rates being paid currently which
would also improve cash flow.
Management continues to put a lot of emphasis on methods of increasing the
appeal of the property including, but not limited to, rental concessions,
additional emphasis on advertising campaigns, and implementation of a plan for
capital improvements such as new carpeting, appliances and improvements to
landscaping. National carpet and paint companies have been contacted and price
comparison studies have been made to keep control over the costs associated with
improving the property.
The Partnership did not make any distributions during the nine month periods
ended September 30, 1996 and 1995. The General Partner does not anticipate
resuming distributions until sufficient cash flow is generated.
The General Partner has a signed contract for the sale of the Goldkey
Apartments, although a firm closing date has not been established, and the sale
is dependent on the completion of due diligence and mortgage contingencies.
Results of Operations:
- ----------------------
For the quarter ended September 30, 1996, the Partnership's net loss was
$379,533 or $2.34 per limited partnership unit. Net loss for the quarter ended
September 30, 1995 amounted to $396,016 or $2.44 per unit. For the nine month
period ended September 30, 1996, the net loss was $735,476 or $4.53 per limited
partnership unit as compared to $774,415 or $4.77 per limited partnership unit
for the nine month period ended September 30, 1995.
-23-
<PAGE>
Results of Operations (continued):
- -----------------------------------
Partnership revenue for the quarter ended September 30, 1996 totaled $996,476, a
decrease of approximately $113,000 from the 1995 amount of $1,109,279. Total
rental revenue dropped just over $14,000 from the same quarter in 1995; this is
a vast improvement over the decrease incurred in the previous quarter of 1996.
The decrease in rental income can be attributed to an increase in rental
concessions and other promotions offered to increase occupancies at all
properties. Economic occupancy levels at Stonegate dropped from the second to
the third quarter of 1996 by almost ten percent, which was very damaging to this
property's performance; occupancy at The Commons on Lewis Avenue also dropped,
however by only a slight amount. Continued vacancies and delinquencies at Gold
Key Apartments has also effected the Partnerships performance.
For the quarter ended September 30, 1996, Partnership expenses amounted to
$1,295,819, decreasing by $177,000 from the same 1995 quarter amount. For the
nine month period ended September 30, 1996, Partnership expenses decreased by
approximately $351,000 from the same period in 1995. The most prominent decrease
can be seen in property operations expenditures. There were small decreases in
payroll and associated costs noted this quarter; management has tried to cut
back site personnel in order to help the cash flow difficulties encountered in
the Partnership. Additionally, management continues to make several changes in
personnel at the properties in favor of more experienced resident managers and
leasing staff. This quarter also saw a decrease in contracted services expenses
as compared to those of the prior year third quarter. Most notably were
decreases in landscaping charges at Beaver Creek and Countrybrook (formerly West
Creeke). As was noted last quarter, there were decreases in utility cost, with
water expenses decreases most significantly; the drop in these expenses can most
likely be attributed to the increase in vacancies. At most of the complexes
insurance and real estate taxes remained fairly constant as compared to the same
nine month period in the previous year. Continuing with the pattern that has
been noted all year, there was also a large decrease in affiliate administrative
expenses resulting from decreases in investor service fees, brokerage fees, and
decreased management fees due to dropping occupancy at several complexes.
On a tax basis, the partnership had a net loss of $416,939 or $2.57 per limited
partner unit for the nine month period ended September 30, 1996 versus a tax
loss of $493,697 or $3.04 per unit for the nine month period ended September 30,
1995.
-24-
<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
- -----------------------------------------
Exhibit 27 - Financial Data Schedule (Electronic filing only)
Reports on Form 8-K - None.
-25-
<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 January 2, 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 January 2, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
President and Director
/s/Michael J. Colmerauer January 2, 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
NINE MONTHS ENDED SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 429,213
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,035,741
<PP&E> 19,793,181
<DEPRECIATION> 5,101,751
<TOTAL-ASSETS> 15,727,171
<CURRENT-LIABILITIES> 1,285,287
<BONDS> 9,628,507
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,727,171
<SALES> 0
<TOTAL-REVENUES> 3,021,437
<CGS> 0
<TOTAL-COSTS> 3,610,738
<OTHER-EXPENSES> 146,175
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 685,862
<INCOME-PRETAX> (735,476)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (735,476)
<EPS-PRIMARY> (4.53)
<EPS-DILUTED> 0
</TABLE>
