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
March 31, 1999 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 March 31, 1999 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 -
March 31, 1999 and December 31, 1998 3
Statements of Operations -
Three Months Ended March 31, 1999 and 1998 4
Statements of Cash Flows -
Three Months Ended March 31, 1999 and 1998 5
Statements of Partners' (Deficit) Capital -
Three Months Ended March 31, 1999 and 1998 6
Notes to Financial Statements 7 - 22
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION & RESULTS OF
OPERATIONS 23 - 25
PART III: FINANCIAL DATA SCHEDULE
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
BALANCE SHEETS
March 31, 1999 and December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---- ----
ASSETS
- ------
<S> <C> <C>
Property, at cost:
Land and land improvements $ 2,159,398 $ 2,159,398
Buildings 17,312,629 17,307,636
Furniture and fixtures 1,103,695 1,103,695
------------------ ------------------
20,575,722 20,570,729
Less accumulated depreciation 6,712,503 6,555,171
------------------ ------------------
Property, net 13,863,219 14,015,558
Investments in real estate joint ventures 80,664 88,197
Cash 83,076 87,551
Accounts receivable 9,358 4,203
Escrow deposits 459,791 414,762
Mortgage costs, net of accumulated amortization
of $305,520 and $272,395 397,278 430,404
Other assets 53,146 65,374
------------------ ------------------
Total Assets $ 14,946,532 $ 15,106,049
================== ==================
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Mortgages payable $ 11,368,202 $ 11,392,501
Accounts payable and accrued expenses 698,479 637,504
Interest payable 107,927 122,616
Accounts payable - affiliates 522,833 517,337
Security deposits and prepaid rents 223,427 210,517
------------------ ------------------
Total Liabilities 12,920,868 12,880,475
------------------ ------------------
Partners' (Deficit) Capital:
General partners (341,008) (335,011)
Limited partners 2,366,672 2,560,585
------------------ ------------------
Total Partners' Capital 2,025,664 2,225,574
------------------ ------------------
Total Liabilities and Partners' Capital $ 14,946,532 $ 15,106,049
================== ==================
See notes to financial statements
</TABLE>
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, March 31,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $ 1,029,272 $ 953,366
Interest and other income 70,141 54,734
------------------ ------------------
Total income 1,099,413 1,008,100
------------------ ------------------
Expenses:
Property operations 671,067 704,122
Interest 249,278 239,327
Depreciation and amortization 190,458 209,777
Administrative:
To affiliates 84,926 80,584
Other 96,061 126,879
------------------ ------------------
Total expenses 1,291,790 1,360,689
------------------ ------------------
Loss before allocated loss from joint ventures (192,377) (352,589)
Allocated income (loss) from joint ventures (7,533) 2,508
------------------ ------------------
Net loss $ (199,910) $ (350,081)
================== ==================
Loss per limited partnership unit $ (1.23) $ (2.16)
================== ==================
Distributions per limited partnership unit $ - $ -
================== ==================
Weighted average number of
limited partnership units
outstanding 157,378 157,378
================== ==================
See notes to financial statements
</TABLE>
-4-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, March 31,
1999 1998
---- ----
<S> <C> <C>
Cash flow from operating activities:
Net loss $ (199,910) $ (350,081)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 190,458 209,777
Net loss (income) from joint ventures 7,533 (2,508)
Changes in operating assets and liabilities:
Accounts receivable (5,155) (10,538)
Other assets 12,228 (18,431)
Accounts payable and accrued expenses 60,975 (79,859)
Interest payable (14,689) -
Security deposits and prepaid rent 12,910 6,940
------------------ ------------------
Net cash provided by (used in) operating activities 64,350 (244,700)
------------------ ------------------
Cash flow from investing activities:
Capital expenditures (4,993) (13,969)
Escrow deposits (45,029) (37,253)
Accounts payable - affiliates 5,496 97,595
------------------ ------------------
Net cash (used in) provided by investing activities (44,526) 46,373
------------------ ------------------
Cash flows from financing activities:
Cash overdraft - 185,735
Principal payments on mortgages (24,299) (23,260)
Mortgage acquisition costs - 35,852
------------------ ------------------
Net cash provided by financing activities (24,299) 198,327
------------------ ------------------
Decrease in cash (4,475) -
Cash - beginning of period 87,551 -
------------------ ------------------
Cash - end of period $ 83,076 $ -
================== ==================
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 164,656 $ 691,893
================== ==================
See notes to financial statements
</TABLE>
-5-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
Three Months Ended March 31, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
General Limited Partners
Partners
Amount Units Amount
------ ----- ------
<S> <C> <C> <C> <C>
Balance, January 1, 1998 $ (283,600) 157,377.9 $ 3,638,238
Net loss (10,502) - (339,579)
----------------- -------------- ------------------
Balance, March 31, 1998 $ (294,102) 157,377.9 $ 3,298,659
================= ============== ==================
Balance, January 1, 1999 $ (335,011) 157,377.9 $ 2,560,585
Net loss (5,997) - (193,913)
----------------- -------------- ------------------
Balance, March 31, 1999 $ (341,008) 157,377.9 $ 2,366,672
================= ============== ==================
See notes to financial statements
</TABLE>
-6-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
NOTES TO FINANCIAL STATEMENTS
Three Months Ended March 31, 1999 and 1998
(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 three month periods ended
March 31, 1999 and 1998, 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.
-7-
<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.
-8-
<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. These joint ventures are not
consolidated in the Partnership's financial statements because the
Partnership is not the majority owner.
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 March 31, 1999 and 1998.
Comprehensive Income
--------------------
The Partnership has adopted Statement of Financial Accounting Standards
(SFAS) No. 130, Reporting Comprehensive Income. SFAS 130 establishes
standards for reporting and display of comprehensive income and its
components in a full set of general purpose financial statements.
Comprehensive income is defined as "the change in equity of a business
during a period from transactions and other events and circumstances
from non-owner sources". Other than net income (loss), the Partnership
has no other sources of comprehensive income.
-9-
<PAGE>
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
------------------------------------------ -----------
Segment Information
-------------------
SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information establishes standards for the way public business
enterprises report information about operating segments in annual
financial statements. The Partnership's only operating segment is the
ownership and operation of income- producing real property for the
benefit of its limited partners.
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.
-10-
<PAGE>
ACQUISITION AND DISPOSITION OF RENTAL PROPERTY (CONTINUED)
---------------------------------------------- -----------
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.
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 March 31, 1999 and 1998,
providing for monthly interest only payments at a rate of 3.50% above
the one-month LIBOR rate (8.50% at March 31, 1999). The note matures
June 1999. Management is currently looking for permanent financing for
this complex.
Inducon - Columbia
------------------
A mortgage payable with a balance of $2,157,166 and $2,188,530 at March
31, 1999 and 1998 with monthly payments of $16,787 including interest at
7.867%. The maturity date of the mortgage is October 2022.
-11-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
--------------------------- -----------
Stonegate
---------
A mortgage with a balance of $2,615,597 and $2,633,617 at March 31, 1999
and 1998, 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 $1,845,652 and $1,860,731 at March 31, 1999
and 1998, respectively, providing for monthly interest only payments
ranging from 8% to 12% annually (11% at March 31, 1999). The mortgage is
due and payable April 1, 2001.
Beaver Creek
------------
A mortgage with a balance of $1,334,788 and $1,346,250 at March 31, 1999
and 1998, respectively, providing for monthly principal and interest
payments of $10,137, bearing interest at 8.23%. The note matures July
2027.
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
---- ------
1999 $ 3,519,794
2000 95,033
2001 1,869,001
2002 84,789
2003 91,941
Thereafter 5,731,943
------------
TOTAL $ 11,392,501
============
-12-
<PAGE>
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 Stonegate Townhouses, Inducon-Columbia, The Commons
and Beaver Creek, with approximate carrying values of $2,620,000,
$2,200,000, $1,900,000 and $1,400,000 at March 31, 1999, 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
Countrybrook Estates approximates its carrying value of $3,415,000
because the mortgage has a variable interest rate.
Refer to Note 5 for a description of the terms of the mortgages payable.
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 approximately $45,000 and $54,000 for the
three months ended March 31, 1999 and 1998, 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 three months ended March 31, 1999
or 1998.
-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
March 31, 1999 and accordingly, there have been no property disposition
fees paid or earned by the general partner.
Partnership accounting and portfolio management fees, investor services
fees and brokerage fees are allocated based on total assets, the number
of partners, and number of units, respectively. In addition to the
above, other property specific expenses, such as payroll, benefits, etc.
are charged to property operations on the Statement of Operations.
Computer service charges for the Partnership are paid or accrued to an
affiliate of the General Partner based, in part, upon the number of
apartment units and complexes. Such amounts totaled approximately $2,865
and $2,640 for the three months ended March 31, 1999 and 1998,
respectively.
Accounts payable - affiliates amounted to $522,833 and $135,557 at March
31, 1999 and 1998, 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.
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 three months ended March 31, 1999
and 1998 as reported in the statements of operations, and as would be
reported for tax purposes, is as follows:
<TABLE>
<CAPTION>
March 31, March 31,
1999 1998
---- ----
<S> <C> <C>
Net loss - statement of operations $ (199,910) $ (350,081)
Add to (deduct from):
Difference in depreciation ( 4,800) 20,254
Tax basis adjustments -
Joint Ventures (38,000) 2,509
Allowance for doubtful accounts 8,900 31,720
------------ -------------
Net (loss) - tax return purposes $ (233,810) $ (295,598)
============ =============
The reconciliation of Partners' Capital as of March 31, 1999 and
December 31, 1998 as reported in the balance sheet, and as reported for
tax purposes, is as follows:
March 31, December 31,
1999 1998
Partners' Capital - balance sheet $ 2,025,664 $ 2,225,574
Add to (deduct from):
Accumulated difference in
depreciation 196,193 200,993
Tax basis adjustment -
Joint Ventures 762,244 800,244
Syndication fees 2,312,863 2,312,863
Other non-deductible expenses 587,645 578,745
------------- -------------
Partners' Capital - tax return purposes $ 5,884,609 $ 6,118,419
============= =============
</TABLE>
-15-
<PAGE>
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.
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 March 31, 1999 and December 31, 1998 and the
results of its operations for the three months ended March 31, 1999 and
1998 is as follows:
-16-
<PAGE>
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
BALANCE SHEETS
March 31, 1999 and December 31, 1998
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---- ----
ASSETS
- ------
<S> <C> <C>
Property, at cost:
Land and land improvements $ 367,500 $ 367,500
Building 2,487,823 2,487,823
Building equipment 164,142 164,142
-------------------- --------------------
3,019,465 3,019,465
Less accumulated depreciation 1,753,995 1,753,995
-------------------- --------------------
Property, net 1,265,470 1,265,470
Cash 31,838 26,716
Escrow deposits 76,787 65,464
Other assets 268,581 179,410
-------------------- --------------------
Total Assets $ 1,642,676 $ 1,537,060
==================== ====================
LIABILITIES AND PARTNERS' (DEFICIT)
- -----------------------------------
Liabilities:
Mortgages payable $ 2,884,798 $ 2,890,315
Accounts payable and accrued expenses 247,434 205,236
Accounts payable - affiliates 688,704 555,404
Accrued interest 21,636 21,677
Security deposits and prepaid rent 37,557 42,470
-------------------- --------------------
Total Liabilities 3,880,129 3,715,102
-------------------- --------------------
Partners' Capital (Deficit):
The Partnership 42,436 66,200
RPILP (2,279,889) (2,244,242)
-------------------- --------------------
Total Partners' (Deficit) (2,237,453) (2,178,042)
-------------------- --------------------
Total Liabilities and Partners' (Deficit) $ 1,642,676 $ 1,537,060
==================== ====================
</TABLE>
-17-
<PAGE>
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1999 and 1998
Three Months Three Months
Ended Ended
March 31, March 31,
1999 1998
---- ----
Income:
Rental $ 161,940 $ 144,562
Interest and other income 14,783 7,513
------------------- ------------------
Total income 176,723 152,075
------------------- ------------------
Expenses:
Property operations 113,632 172,011
Interest 64,950 65,426
Depreciation and amortization 1,436 1,436
Administrative 56,116 25,593
------------------- ------------------
Total expenses 236,134 264,466
------------------- ------------------
Net loss $ (59,411) $ (112,391)
=================== ==================
Allocation of net loss:
The Partnership $ (23,764) $ (44,956)
RPILP (35,647) (67,435)
------------------- ------------------
$ (59,411) $ (112,391)
=================== ==================
-18-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
----------------------------------------
A reconciliation of the Partnership's investment in the joint venture is
as follows:
1999 1998
---- ----
Investment in joint venture, January 1 $ 66,200 $ 256,052
Allocation of net loss (23,764) (44,956)
---------- ----------
Investment in joint venture, March 31 $ 42,436 $ 211,096
========== ==========
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 March 31, 1999 and December 31, 1998 and the results of its
operations for the three months ended March 31, 1999 and 1998 is as
follows:
-19-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
BALANCE SHEETS
March 31, 1999 and December 31, 1998
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---- ----
ASSETS
- ------
<S> <C> <C>
Cash and cash equivalents $ 855,505 $ 688,674
Property, net of accumulated depreciation 1,647,027 1,677,366
Other assets 765,864 846,731
------------------- -------------------
Total Assets $ 3,268,396 $ 3,212,771
=================== ===================
LIABILITIES AND PARTNERS' (DEFICIT)
- -----------------------------------
Liabilities:
Notes payable $ 5,433,256 $ 5,504,596
Accounts payable - affiliates 8,718 -
Accounts payable and accrued expenses 852,041 106,256
------------------- -------------------
Total Liabilities 6,294,015 5,610,852
------------------- -------------------
Partners' (Deficit):
General partners (1,413,395) (1,099,626)
Other investors (1,612,224) (1,298,455)
------------------- -------------------
Total Partners' (Deficit) (3,025,619) (2,398,081)
------------------- -------------------
Total Liabilities and Partners' (Deficit) $ 3,268,396 $ 3,212,771
=================== ===================
</TABLE>
-20-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1999 and 1998
Three Months Three Months
Ended Ended
March 31, March 31,
1999 1998
---- ----
Income:
Rental $ 265,029 $ 289,403
Interest and other income 75 218
------------------ ----------------
Total income 265,104 289,621
------------------ ----------------
Expenses:
Property operations 34,666 24,704
Interest 144,913 115,521
Depreciation and amortization 35,310 37,881
Administrative 17,753 16,585
------------------ ----------------
Total expenses 232,642 194,691
------------------ ----------------
Net income $ 32,462 $ 94,930
================== ================
Allocation of net income (loss):
The Partnership $ 16,231 $ 47,465
RPILP II 16,231 47,465
------------------ ----------------
$ 32,462 $ 94,930
================== ================
-21-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
----------------------------------------
A reconciliation of the Partnership's investment in the joint venture is
as follows:
1999 1998
---- ----
Investment in joint venture, January 1 $ 21,997 $ 193,588
Distribution - -
Allocation of net income 16,231 47,465
--------- ---------
Investment in joint venture, March 31 $ 38,228 $ 241,053
============ =========
-22-
<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 Carriage House of Englewood, a joint venture in which the
Partnership owns 40%. The other properties in the Partnership continued to enjoy
stable, and in many cases, high occupancies. Management is optimistic that the
occupancy, and resulting rental revenue, will continue to rise (or be
maintained) during the remainder of 1999 as significant physical improvements
are being made at the properties which make them more attractive and desirable
to potential renters. Management continues to concentrate on decreasing expenses
in order to turn the financial position of the Partnership around.
The General Partners and their affiliates have loans outstanding to the
Partnership of $244,456 as of March 31, 1999. 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. No distributions were made during the three months ended
March 31, 1999 or 1998. The Partnership has been, and expects to continue, using
the cash generated from operations to complete necessary capital improvements
(both capitalizable and non-capitalizable) and deferred and routine maintenance
at the properties in the Partnership. Until such time as all necessary
improvements are completed and the loans from the General Partners and/or their
affiliates are repaid, management does not expect to resume making
distributions.
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.
The Partnership has conducted a review of its computer systems to identify the
systems that could be affected by the "year 2000 issue" and has substantially
developed an implementation plan to resolve such issues. The year 2000 issue is
the result of computer programs being written using two digits rather than four
digits to define the applicable year. Computer programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
-23-
<PAGE>
Liquidity and Capital Resources (continued):
- --------------------------------------------
Management has discussed with outside independent computer consultants its
readiness for the Year 2000. The majority of the software in use is either "2000
compliant" or will be with little adaptation and at no significant cost per
information provided by their software providers. Management has also engaged a
computer firm to re-write its tax software making it Year 2000 compliant. This
work began May 1, 1999 and is expected to take three months. Management has a
complete inventory of its computers and feels that the cost of replacing those
which will not be "2000 compliant" will be relatively minor (i.e., most likely
under $20,000). Non-informational systems have also been evaluated and
management feels that there will be little, if any, cost to preparing these for
the Year 2000 (i.e., most likely under $20,000). Management expects to be fully
Year 2000 compliant with all testing done by September 30, 1999. The Partnership
is working on a contingency plan in the unlikely event that its systems do not
operate as planned. It is management's belief that in the unlikely event that
its informational systems do not operate as planned in the year 2000, all
records could be maintained manually until the problems with its systems are
resolved. Management feels that its external vendors, suppliers and customers,
for the most part, will be unaffected by the Year 2000 as most do not rely on
information systems in their businesses.
Results of Operations:
- ----------------------
For the quarter ended March 31, 1999, the Partnership's net loss was $199,910 or
$1.23 per limited partnership unit. Net loss for the quarter ended March 31,
1998 amounted to $350,081 or $2.16 per unit.
Partnership revenue for the three months ended March 31, 1999 totaled
$1,099,413, an increase of approximately $91,000 from the 1998 amount of
$1,008,100. Total rental revenue increased approximately $76,000, while interest
and other income increased by just over $15,000. The increase in rental revenue
can be attributed to continued high occupancy levels at Inducon-Columbia, Beaver
Creek and Stonegate Townhouses, all of which averaged occupancies between 95 and
100% for the first three months of 1999. Management continues to offer rental
concessions and other promotions in an attempt to increase the occupancies at
the other complexes in the Partnership; management feels the concessions offered
at The Commons and Countrybrook Estates have been successful as occupancy
percentages have remained in the 90's for several months at both complexes which
have in the past been troubled by declining occupancy.
-24-
<PAGE>
Results of Operations (continued):
- --------------------- ------------
For the quarter ended March 31, 1999, Partnership expenses amounted to
$1,291,790, decreasing approximately $69,000 from the same 1998 quarter amount
of $1,360,689. A decrease in property operations expenditures of approximately
$33,000 was responsible for almost 48% of the total decrease in expenses.
Payroll and related costs and repairs and maintenance expenses have begun to
decrease as the physical improvement work being done at the properties nears
completion. Such work included 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. Much of this work was
being done by on-site personnel in an attempt to keep the cost of such work
lower than would otherwise be incurred if outside contractors were used. There
was also a decrease in total administrative expenses between the two three month
periods totaling just over $26,000. This decrease is due to less management fees
paid to outside parties (i.e., other than an affiliate of the General Partners),
decreased legal fees due to decreased delinquencies, and decreased leasing fees
due to somewhat stable occupancies.
For the three month period ended March 31, 1999, the Carriage House of Englewood
Joint Venture generated a net loss of $59,411, a decrease from the net loss of
$112,391 for the three month period ended March 31, 1998. Pursuant to the terms
of the joint venture agreement, the Partnership was allocated $23,764 of the
loss in 1999 and $44,956 of the loss in 1998. This property is in need of
continued repairs and deferred maintenance; accordingly, management anticipates
continuing high property operations expenses throughout 1999.
The Research Triangle Industrial Park Joint Venture had net income of $32,462
for the three month period ended March 31, 1999 with $16,231 of the income
allocated to the Partnership. For the three month period ended March 31, 1998,
the Joint Venture had net income of $94,930 with one-half or $47,465 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 $233,810 or $1.44 per limited
partner unit for the three month period ended March 31, 1999 versus a tax loss
of $295,598 or $1.82 per unit for the three month period ended March 31, 1998.
-25-
<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.
-26-
<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 4, 1999
--------------------- --------------
Joseph M. Jayson, Date
Individual General Partner and
Principal Financial Officer
-27-
<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 three months ended March 31, 1999, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> MAR-31-1999
<CASH> 83,076
<SECURITIES> 0
<RECEIVABLES> 9,358
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 605,371
<PP&E> 20,575,722
<DEPRECIATION> 6,712,503
<TOTAL-ASSETS> 14,946,532
<CURRENT-LIABILITIES> 1,552,666
<BONDS> 11,368,202
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14,946,532
<SALES> 0
<TOTAL-REVENUES> 1,099,413
<CGS> 0
<TOTAL-COSTS> 1,291,790
<OTHER-EXPENSES> 7,533
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 249,278
<INCOME-PRETAX> (199,910)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (199,910)
<EPS-BASIC> (1.23)
<EPS-DILUTED> 0
</TABLE>
