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, 1998 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, 1998 the registrant had 157,377.9 units of limited
partnership interest outstanding.
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
INDEX
-----
<TABLE>
<CAPTION>
PAGE NO.
--------
PART I: FINANCIAL INFORMATION
- ------ ---------------------
<S> <C> <C>
Balance Sheets -
September 30, 1998 and December 31, 1997 3
Statements of Operations -
Three Months Ended September 30, 1998 and 1997 4
Statements of Operations -
Nine Months Ended September 30, 1998 and 1997 5
Statements of Cash Flows -
Nine Months Ended September 30, 1998 and 1997 6
Statements of Partners' (Deficit) Capital -
Nine Months Ended September 30, 1998 and 1997 7
Notes to Financial Statements 8 - 24
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- ------- FINANCIAL CONDITION & RESULTS OF OPERATIONS 25 - 27
-------------------------------------------
</TABLE>
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
BALANCE SHEETS
--------------
September 30, 1998 and December 31, 1997
----------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---- ----
<S> <C> <C>
ASSETS
- ------
Property, at cost:
Land and land improvements $ 2,159,398 $ 2,159,398
Buildings 17,155,990 17,197,934
Furniture and fixtures 1,101,500 1,101,500
------------------ ------------------
20,416,888 20,458,832
Less accumulated depreciation 6,303,581 5,831,582
------------------ ------------------
Property, net 14,113,307 14,627,250
Investments in real estate joint ventures 125,305 449,640
Escrow deposits 826,081 570,297
Accounts receivable 29,716 31,085
Mortgage costs, net of accumulated amortization
of $240,922 and $141,547 478,167 561,252
Other assets 6,545 45,338
------------------ ------------------
Total Assets $ 15,579,121 $ 16,284,862
================== ==================
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Cash overdraft $ 201,940 $ 229,302
Mortgages payable 11,365,114 11,463,892
Accounts payable and accrued expenses 1,076,897 877,316
Accounts payable - affiliates 244,456 35,529
Security deposits and prepaid rents 247,091 238,118
------------------ ------------------
Total Liabilities 13,135,498 12,844,157
------------------ ------------------
Partners' (Deficit) Capital:
General partners (328,469) (298,557)
Limited partners 2,772,093 3,739,262
------------------ ------------------
Total Partners' Capital 2,443,623 3,440,705
------------------ ------------------
Total Liabilities and Partners' Capital $ 15,579,121 $ 16,284,862
================== ==================
</TABLE>
See notes to financial statements
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Three Months Ended September 30, 1998 and 1997
----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
September 30, September 30,
1998 1997
---- ----
<S> <C> <C>
Income:
Rental $ 1,016,002 $ 963,139
Interest and other income 66,180 15,227
--------------- ---------------
Total income 1,082,182 978,366
--------------- ---------------
Expenses:
Property operations 715,800 624,771
Interest 250,325 267,574
Depreciation and amortization 199,866 247,267
Administrative:
Paid to affiliates 83,266 85,099
Other 83,967 110,131
--------------- ---------------
Total expenses 1,333,224 1,334,842
--------------- ---------------
Loss before allocated loss from joint ventures (251,042) (356,476)
Allocated loss from joint ventures (79,457) (56,013)
--------------- ---------------
Net loss $ (330,499) $ (412,489)
=============== ===============
Loss per limited partnership unit $ (2.04) $ (2.54)
=============== ===============
Distributions per limited partnership unit $ - $ -
=============== ===============
Weighted average number of
limited partnership units
outstanding 157,378 157,378
=============== ===============
</TABLE>
See notes to financial statements
-4-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Nine Months Ended September 30, 1998 and 1997
---------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
---- ----
<S> <C> <C>
Income:
Rental $ 2,947,258 $ 2,748,897
Interest and other income 187,915 192,191
------------------ ------------------
Total income 3,135,173 2,941,088
------------------ ------------------
Expenses:
Property operations 2,139,749 1,545,516
Interest 769,604 752,857
Depreciation and amortization 599,598 659,134
Administrative:
Paid to affiliates 246,518 280,608
Other 302,451 359,492
------------------ ------------------
Total expenses 4,057,920 3,597,607
------------------ ------------------
Loss before allocated loss from joint ventures (922,747) (656,519)
Allocated income (loss) from joint ventures (74,335) (119,368)
------------------ ------------------
Net loss $ (997,082) $ (775,887)
================== ==================
Loss per limited partnership unit $ (6.15) $ (4.78)
================== ==================
Distributions per limited partnership unit $ - $ -
================== ==================
Weighted average number of
limited partnership units
outstanding 157,378 157,378
================== ==================
</TABLE>
See notes to financial statements
-5-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
STATEMENTS OF CASH FLOWS
------------------------
Nine Months Ended September 30, 1998 and 1997
---------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
---- ----
<S> <C> <C>
Cash flow from operating activities:
Net loss $ (997,082) $ (775,887)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization 599,598 659,134
Net (income) loss from joint ventures 74,335 119,368
Changes in operating assets and liabilities:
Escrow deposits (255,784) (1,010,920)
Accounts receivable 1,369 (5,165)
Other assets 10,569 16,763
Accounts payable and accrued expenses 199,581 33,338
Security deposits and prepaid rent 8,973 31,281
------------------ ------------------
Net cash (used in) provided by operating activities (358,441) (932,088)
------------------ ------------------
Cash flow from investing activities:
Capital expenditures 41,944 (233,477)
Distributions from joint ventures 250,000 -
------------------ ------------------
Net cash (used in) investing activities 291,944 (233,477)
------------------ ------------------
Cash flows from financing activities:
Cash overdraft (27,362) 186,415
Principal payments on mortgages (98,778) (60,919)
Proceeds from mortgage refinancing, net - 1,654,382
Mortgage acquisition costs (16,290) (653,747)
Accounts payable - affiliates 208,927 39,434
------------------ ------------------
Net cash provided by financing activities 66,497 1,165,565
------------------ ------------------
Increase (decrease) in cash - -
Cash - beginning of period - -
------------------ ------------------
Cash - end of period $ - $ -
================== ==================
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 684,982 $ 691,893
================== ==================
</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, 1998 and 1997
---------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
General Limited Partners
Partners
Amount Units Amount
------ ----- ------
<S> <C> <C> <C>
Balance, January 1, 1997 $ (264,898) 157,377.9 $ 4,827,559
Net loss (23,277) - (752,610)
------------------ ---------------- -----------------
Balance, September 30, 1997 $ (288,175) 157,377.9 $ 4,074,949
================== ================ =================
Balance, January 1, 1998 $ (298,557) 157,377.9 $ 3,739,262
Net loss (29,912) - (967,169)
------------------ ---------------- -----------------
Balance, September 30, 1998 $ (328,469) 157,377.9 $ 2,772,093
================== ================ =================
</TABLE>
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Nine Months Ended September 30, 1998 and 1997
---------------------------------------------
(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, 1998 and 1997,
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
------------------------------------------
Use of estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Cash
----
For purposes of reporting cash flows, cash includes the following items:
cash on hand; cash in checking; and money market savings.
-9-
<PAGE>
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
-----------------------------------------------------
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.
Mortgage Costs
--------------
Mortgage costs consist of fees for obtaining financing and are being
amortized over the life of the mortgage.
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, 1998 and 1997.
-10-
<PAGE>
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.
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.
-11-
<PAGE>
ACQUISITION AND DISPOSITION OF RENTAL PROPERTY (CONTINUED)
---------------------------------------------------------
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.
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 September 30, 1998 and 1997,
providing for monthly interest payments of $40,501, bearing interest at
9.1875%. The note matures June 1999. The note is secured by the
Countrybrook Estates complex.
Inducon - Columbia
------------------
A mortgage payable with a balance of $2,128,245 at September 30, 1998 with
monthly payments of $16,787 including interest at 7.867%. The maturity date
of the mortgage is October 2022. The mortgage is secured by the
Inducon-Columbia Office/Warehouse buildings.
-12-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
--------------------------------------
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 September 30, 1997 loan advances
amounted to $2,200,000. This loan was refinanced into the mortgage
described above during 1997. No significant gain or loss on the refinancing
occurred.
Stonegate
---------
A mortgage with a balance of $2,628,633 and $2,642,980 at September 30,
1998 and 1997, providing for monthly principal and interest payments of
$20,207, bearing interest at 8.43%. The note matures July 2027.
The Commons on Lewis Avenue (formerly Williamsburg Commons)
----------------------------------------------------------
A mortgage with a balance of $1,853,788 and $1,870,469 at September 30,
1998 and 1997, respectively, 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 $1,340,033 and $1,039,000 at September 30,
1998 and 1997, respectively, providing for monthly principal and interest
payments of $10,137 and $7,864, bearing interest at 8.23% and 8.33%,
respectively. The note was re-sized with additional proceeds being taken
out; the note matures July 2027.
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
---- ------
1998 $ 231,748
1999 3,634,473
2000 221,719
2001 1,989,071
2002 198,196
Thereafter 5,188,685
------------
TOTAL $ 11,463,892
============
6. FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
Statement of Financial Accounting Standards No. 107 requires disclosure
about fair value of certain financial instruments. The fair value of cash,
accounts receivable, accounts payable, accrued expenses, accounts payable -
affiliates and deposit liabilities approximate the carrying value due to
the short-term nature of these instruments.
Management has determined that the estimated fair values of the mortgages
payable on Countrybrook Estates, Stonegate Townhouses, Inducon-Columbia and
Beaver Creek, with carrying values of $3,415,000, $2,628,633, $2,128,245
and $1,340,033 at September 30, 1998, respectively, are believed to
approximate their carrying value since new mortgages were obtained
recently.
Management has estimated the fair value of the mortgage payable on The
Commons on Lewis Avenue, based on currently available rates, is
approximately $2,018,000. The carrying value of the mortgage is $1,853,788.
7. 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 $128,225 and $148,989 for the nine months ended September 30, 1998
and 1997, respectively.
-14-
<PAGE>
RELATED PARTY TRANSACTIONS (CONTINUED)
-------------------------------------
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, 1998 or 1997.
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, 1998 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 $7,920 for both the nine months ended September
30, 1998 and 1997.
Accounts payable - affiliates amounted to $244,456 and $39,434 at September
30, 1998 and 1997, respectively. This balance is payable to the General
Partners and/or its affiliates on demand.
8. 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.
-15-
INCOME TAXES (CONTINUED)
-----------------------
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.
The reconciliation of net loss for the nine months ended September 30, 1998
and 1997 as reported in the statements of operations, and as would be
reported for tax purposes, is as follows:
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
---- ----
<S> <C> <C>
Net loss - statement of operations $ (997,082) $ (775,887)
Add to (deduct from):
Difference in depreciation (26,460) 82,000
Tax basis adjustments -
Joint Ventures 61,000 117,000
Allowance for doubtful accounts 114,000 90,000
------------- --------------
Net (loss) - tax return purposes $ (848,542) $ (486,887)
============= ==============
</TABLE>
-16-
<PAGE>
INCOME TAXES (CONTINUED)
-----------------------
The reconciliation of Partners' Capital as of September 30, 1998 and
December 31, 1997 as reported in the balance sheet, and as reported for tax
purposes, is as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---- ----
<S> <C> <C>
Partners' Capital - balance sheet $ 2,443,623 $ 3,440,705
Add to (deduct from):
Accumulated difference in
depreciation 193,823 220,283
Tax basis adjustment -
Joint Ventures 1,012,889 951,889
Syndication fees 2,312,863 2,312,863
Other non-deductible expenses 657,162 543,162
-------------- --------------
Partners' Capital - tax return purposes $ 6,620,360 $ 7,468,902
============== ==============
</TABLE>
9. 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.
-17-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
----------------------------------------
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, 1998 and December 31, 1997 and the
results of its operations for the nine months ended September 30, 1998 and
1997 is as follows:
-18-
<PAGE>
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
-----------------------------------------
BALANCE SHEETS
--------------
September 30, 1998 and December 31, 1997
----------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---- ----
<S> <C> <C>
ASSETS
- ------
Property, at cost:
Land and land improvements $ 367,500 $ 367,500
Building 2,475,133 2,475,133
Building equipment 164,142 164,141
--------------- ---------------
3,006,775 3,006,774
Less accumulated depreciation 1,819,658 1,753,995
--------------- ---------------
Property, net 1,187,117 1,252,779
Cash 17,062 -
Escrow deposits 99,988 155,194
Other assets 159,341 213,679
--------------- ---------------
Total Assets $ 1,463,508 $ 1,621,652
=============== ===============
LIABILITIES AND PARTNERS' (DEFICIT)
- ----------------------------------
Liabilities:
Cash overdraft $ - $ 286,850
Mortgages payable 2,895,748 2,914,486
Accounts payable and accrued expenses 362,925 223,856
Accounts payable - affiliates 399,201 -
Accrued interest 22,029 65,539
Security deposits and prepaid rent 53,944 42,969
--------------- ---------------
Total Liabilities 3,733,847 3,533,700
--------------- ---------------
Partners' Capital (Deficit):
The Partnership 29,282 172,598
RPILP (2,299,621) (2,084,646)
--------------- ---------------
Total Partners' (Deficit) (2,270,339) (1,912,048)
--------------- ---------------
Total Liabilities and Partners' (Deficit) $ 1,463,508 $ 1,621,652
=============== ===============
</TABLE>
-19-
<PAGE>
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
-----------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Nine Months Ended September 30, 1998 and 1997
---------------------------------------------
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
---- ----
<S> <C> <C>
Income:
Rental $ 450,877 $ 461,763
Interest and other income 17,403 16,618
--------------- ---------------
Total income 468,280 478,381
--------------- ---------------
Expenses:
Property operations 452,825 351,383
Interest 196,281 234,788
Depreciation and amortization 69,970 94,815
Administrative 107,495 91,203
--------------- ---------------
Total expenses 826,571 772,189
--------------- ---------------
Net loss $ (358,291) $ (293,808)
=============== ===============
Allocation of net loss:
The Partnership $ (143,316) $ (117,523)
RPILP (214,975) (176,285)
--------------- ---------------
$ (358,291) $ (293,808)
=============== ===============
</TABLE>
-20-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
----------------------------------------
A reconciliation of the Partnership's investment in the joint venture is as
follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Investment in joint venture, January 1 $ 256,052 $ 274,180
Allocation of net loss (143,316) (117,523)
------------ -----------
Investment in joint venture, September 30 $ 112,736 $ 156,657
============ ===========
</TABLE>
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, 1998 and December 31, 1997 and the results of its operations
for the nine months ended September 30, 1998 and 1997 is as follows:
-21-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
------------------------------------------------
BALANCE SHEETS
--------------
September 30, 1998 and December 31, 1997
----------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---- ----
<S> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 249,115 $ 1,127,231
Property, net of accumulated depreciation 1,707,705 1,798,721
Other assets 1,357,721 649,541
--------------- ---------------
Total Assets $ 3,314,541 $ 3,575,493
=============== ===============
LIABILITIES AND PARTNERS' (DEFICIT)
- ----------------------------------
Liabilities:
Notes payable $ 5,518,887 $ 5,558,723
Accounts payable - affiliates 5,341 -
Accounts payable and accrued expenses 225,649 90,069
--------------- ---------------
Total Liabilities 5,749,877 5,648,792
--------------- ---------------
Partners' (Deficit):
General partners (1,386,065) (1,136,064)
Other investors - (937,235)
--------------- ---------------
Total Partners' (Deficit) (1,386,065) (2,073,299)
--------------- ---------------
Total Liabilities and Partners' (Deficit) $ 4,363,812 $ 3,575,493
=============== ===============
</TABLE>
-22-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Nine Months Ended September 30, 1998 and 1997
---------------------------------------------
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
---- ----
<S> <C> <C>
Income:
Rental $ 796,401 $ 915,475
Interest and other income 590 34,551
--------------- ---------------
Total income 796,991 950,026
--------------- ---------------
Expenses:
Property operations 132,846 46,554
Interest 344,346 311,807
Depreciation and amortization 113,643 341,602
Administrative 68,193 62,161
--------------- ---------------
Total expenses 659,028 762,124
--------------- ---------------
Net income $ 137,963 $ 187,902
=============== ===============
Allocation of net income (loss):
The Partnership $ 68,982 $ 93,951
RPILP II 68,981 93,951
--------------- ---------------
$ 137,963 $ 187,902
=============== ===============
</TABLE>
-23-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
---------------------------------------
A reconciliation of the Partnership's investment in the joint venture is as
follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Investment in joint venture, January 1 $ 193,588 $ 6,155
Distribution (250,000) -
Allocation of net income 68,982 93,951
------------ ----------
Investment in joint venture, September 30 $ 12,570 $ 100,106
============ ==========
</TABLE>
-24-
<PAGE>
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS.
---------------------
Liquidity and Capital Resources:
- -------------------------------
The Partnership continued to struggle this quarter with continued low
occupancies at The Commons on Lewis Avenue, Countrybrook Estates and Carriage
House of Englewood. The other properties in the Partnership continued to enjoy
stable, and in many cases, high occupancies. As noted in the previous quarter,
operating revenue increased from the same period in the previous year, however,
total expenses also increased, thus resulting in the Partnership's net loss
increasing by a notable amount. Management is optimistic that the income will
continue to rise during the remainder of 1998 as significant physical
improvements are being made at the properties. Management must now concentrate
fully on decreasing expenses in order to turn the financial position of the
Partnership around.
The Partnership successfully refinanced several mortgages during the second
quarter of 1997. The refinancings resulted in decreased interest rates and will
hopefully lead to improved cash flow. The refinancings also resulted in the
setting up of construction and repair and replacement escrow accounts which have
helped the Partnership complete necessary improvements to the properties, such
as roofing, wood replacement and painting at several complexes.
There were no distributions for the nine month periods ended September 30,1998
and 1997. The Partnership continues to utilize 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 1998 or early 1999.
The General Partners and their affiliates have loans outstanding to the
Partnership of $244,456 as of September 30, 1998. Such loans were made to either
cover cash flow shortages or in the form of expenses paid by the corporate
General Partner on behalf of the Partnership. The outstanding advances to the
Partnership are payable on demand, and there is no assurance that such
advances/loans will continue since the General Partners are under no obligation
to fund shortfalls.
The General Partners continue to look for potential buyers for the properties in
the Partnership as the sales of the properties is deemed to be in the best
interest of the Limited Partners.
-25-
<PAGE>
Results of Operations:
- ---------------------
For the quarter ended September 30, 1998, the Partnership's net loss was
$330,499 or $2.04 per limited partnership unit. Net loss for the quarter ended
September 30, 1997 amounted to $412,489 or $2.54 per unit. For the nine month
period ended September 30, 1998, the net loss was $997,082 or $6.15 per limited
partnership unit as compared to $775,887 or $4.78 per limited partnership unit
for the nine month period ended September 30, 1997.
Partnership revenue for the quarter ended September 30, 1998 totaled $1,082,182,
an increase of approximately $104,000 from the 1997 amount of $978,366. Total
rental revenue increased just under $53,000, while interest and other income
increased by almost $51,000. For the nine month period ended September 30, 1998,
there was a significant increase in rental revenue when compared to the same
period in the previous year; for the nine month period ended September 30, 1998
rental revenue totaled $2,947,258, while for the nine months ended September 30,
1997, rental revenue totaled $2,748,897. Such increase can be attributed to
continued high occupancy levels at Inducon-Columbia, Beaver Creek and Stonegate
Townhouses. Management continues to offer rental concessions and other
promotions in an attempt to increase the occupancies at the other complexes in
the Partnership. Interest and other income decreased slightly from the nine
months ended June 30, 1998 as compared to the same period in 1997; the decrease
amounted to under $5,000.
For the quarter ended September 30, 1998, Partnership expenses amounted to
$1,333,224, decreasing slightly from the same 1997 quarter amount of $1,334,842.
For the nine month period ended September 30, 1998, Partnership expenses
increased by approximately $460,000 from the same period in 1997; expenses went
from $3,597,607 in 1997 to $4,057,920 in 1998. A large increase in property
operations expenditures was responsible for essentially all of the increase in
expenses. Payroll and related costs and repairs and maintenance expenses
continued the increase noted in previous quarters due to the amount of physical
improvement work being done at the properties. Such work includes painting, both
interior and exterior, carpet and appliance replacement and other improvements
to the outside of all of the residential complexes in order to attract new
tenants. There was a decrease in administrative expenses between the two nine
month periods totaling just over $91,000. This decrease is primarily due to less
management fees paid to an affiliate of the General Partners due to lower
occupancies and higher delinquencies at several complexes. Legal fees associated
with collections continue to remain high, but management once again feels this
will be controlled by the end of the year.
-26-
<PAGE>
Results of Operations (continued):
- ---------------------
For the nine month period ended September 30, 1998, the Carriage House of
Englewood Joint Venture generated a net loss of $358,291, an increase from the
net loss of $293,808 for the nine month period ended September 30, 1997.
Pursuant to the terms of the joint venture agreement, the Partnership was
allocated $143,316 of the loss in 1998 and $117,523 of the loss in 1997.
The Research Triangle Industrial Park Joint Venture had net income of $137,963
for the nine month period ended September 30, 1998 with $68,982 of the income
allocated to the Partnership. For the nine month period ended September 30,
1997, the Joint Venture had net income of $187,902 with one-half or $93,951 of
the income 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 $848,542 or $5.23 per limited
partner unit for the nine month period ended September 30, 1998 versus a tax
loss of $486,887 or $3.00 per unit for the nine month period ended September 30,
1997.
-27-
<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.
-28-
<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 November 13, 1998
---------------------- -----------------
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 November 13, 1998
---------------------- -----------------
Joseph M. Jayson, Date
President and Director
/s/ Michael J. Colmerauer November 13, 1998
--------------------------- -----------------
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 the nine months ended September 30, 1998, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 29,716
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 862,342
<PP&E> 20,416,888
<DEPRECIATION> 6,303,581
<TOTAL-ASSETS> 15,579,121
<CURRENT-LIABILITIES> 1,770,384
<BONDS> 11,365,114
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,579,121
<SALES> 0
<TOTAL-REVENUES> 3,135,173
<CGS> 0
<TOTAL-COSTS> 4,132,255
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 769,604
<INCOME-PRETAX> (997,082)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (997,082)
<EPS-PRIMARY> (6.15)
<EPS-DILUTED> 0
</TABLE>
