FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
June 30, 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 June 30, 1999 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> <C>
Balance Sheets -
June 30, 1999 and December 31, 1998 3
Statements of Operations -
Three Months Ended June 30, 1999 and 1998 4
Statements of Operations -
Six Months Ended June 30, 1999 and 1998 5
Statements of Cash Flows -
Six Months Ended June 30, 1999 and 1998 6
Statements of Partners' (Deficit) Capital -
Six Months Ended June 30, 1999 and 1998 7
Notes to Financial Statements 8 - 23
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- -------- FINANCIAL CONDITION & RESULTS OF
--------------------------------
OPERATIONS 24 - 27
----------
PART III: FINANCIAL DATA SCHEDULE 30
- -------- -----------------------
</TABLE>
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
BALANCE SHEETS
--------------
June 30, 1999 and December 31, 1998
-----------------------------------
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---- ----
<S> <C> <C>
ASSETS
- ------
Property, at cost:
Land and land improvements $ 2,161,398 $ 2,159,398
Buildings 17,312,629 17,307,636
Furniture and fixtures 1,103,695 1,103,695
------------ ------------
20,577,722 20,570,729
Less accumulated depreciation 6,869,836 6,555,171
------------ ------------
Property, net 13,707,886 14,015,558
Investments in real estate joint ventures (222,371) 88,197
Cash 39,402 87,551
Escrow deposits 512,342 414,762
Accounts receivable 12,904 4,203
Mortgage costs, net of accumulated amortization
of $338,645 and $272,395 379,153 430,404
Other assets 36,559 65,374
------------ ------------
Total Assets $ 14,465,875 $ 15,106,049
============ ============
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Mortgages payable $ 11,348,123 $ 11,392,501
Accounts payable and accrued expenses 733,380 637,504
Accounts payable - affiliates 145,515 517,337
Accrued interest 117,463 122,616
Security deposits and prepaid rents 224,361 210,517
------------ ------------
Total Liabilities 12,568,842 12,880,475
------------ ------------
Partners' (Deficit) Capital:
General partners (344,867) (335,011)
Limited partners 2,241,900 2,560,585
------------ ------------
Total Partners' Capital 1,897,033 2,225,574
------------ ------------
Total Liabilities and Partners' Capital $ 14,465,875 $ 15,106,049
============ ============
</TABLE>
See notes to financial statements
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Three Months Ended June 30, 1999 and 1998
-----------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
June 30, June 30,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $ 1,049,415 $ 977,890
Interest and other income 78,128 67,001
----------- -----------
Total income 1,127,543 1,044,891
----------- -----------
Expenses:
Property operations 659,059 719,827
Interest 274,029 279,952
Depreciation and amortization 190,458 189,955
Administrative:
To affiliates 88,055 82,668
Other 71,539 91,605
----------- -----------
Total expenses 1,283,140 1,364,007
----------- -----------
Loss before allocated income from joint ventures (155,597) (319,116)
Allocated income from joint ventures 26,965 2,614
----------- -----------
Net loss $ (128,631) $ (316,502)
=========== ===========
Loss per limited partnership unit $ (0.79) $ (1.95)
=========== ===========
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
------------------------
Six Months Ended June 30, 1999 and 1998
---------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
June 30, June 30,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $ 2,078,687 $ 1,931,256
Interest and other income 148,269 121,735
----------- -----------
Total income 2,226,956 2,052,991
----------- -----------
Expenses:
Property operations 1,330,126 1,423,949
Interest 523,307 519,279
Depreciation and amortization 380,916 399,732
Administrative:
To affiliates 172,981 163,252
Other 167,600 218,484
----------- -----------
Total expenses 2,574,930 2,724,696
----------- -----------
Loss before allocated income from joint ventures (347,974) (671,705)
Allocated income from joint ventures 19,432 5,122
----------- -----------
Net loss $ (328,541) $ (666,583)
=========== ===========
Loss per limited partnership unit $ (2.02) $ (4.11)
=========== ===========
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
------------------------
Six Months Ended June 30, 1999 and 1998
---------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
June 30, June 30,
1999 1998
---- ----
<S> <C> <C>
Cash flow from operating activities:
Net loss $(328,541) $(666,583)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 380,916 399,732
Net income from joint ventures (19,432) (5,122)
Changes in operating assets and liabilities:
Escrow deposits (97,580) (135,974)
Accounts receivable (8,701) (2)
Other assets 28,815 (777)
Accounts payable and accrued expenses 95,876 188,696
Accrued interest (5,153) --
Security deposits and prepaid rent 13,844 1,080
--------- ---------
Net cash provided by (used in) operating activities 60,043 (218,950)
--------- ---------
Cash flow from investing activities:
Capital expenditures (6,993) 41,944
Distributions from joint ventures 330,000 250,000
--------- ---------
Net cash provided by investing activities 323,007 291,944
--------- ---------
Cash flows from financing activities:
Cash overdraft -- (59,352)
Principal payments on mortgages (44,378) (113,793)
Mortgage acquisition costs (15,000) (5,588)
Accounts payable - affiliates (371,822) 105,739
--------- ---------
Net cash used in financing activities (431,200) (72,994)
--------- ---------
Decrease in cash (48,149) --
Cash - beginning of period 87,551 --
--------- ---------
Cash - end of period $ 39,402 $ --
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 528,460 $ 425,062
========= =========
</TABLE>
See notes to financial statements
-6-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
-----------------------------------------
Six Months Ended June 30, 1999 and 1998
---------------------------------------
(Unaudited)
General Limited Partners
Partners
Amount Units Amount
------ ----- ------
Balance, January 1, 1998 $ (298,557) 157,377.9 $ 3,739,262
Net loss (19,997) -- (646,586)
----------- --------- -----------
Balance, June 30, 1998 $ (318,554) 157,377.9 $ 3,092,676
=========== ========= ===========
Balance, January 1, 1999 $ (335,011) 157,377.9 $ 2,560,585
Net loss (9,856) -- (318,685)
----------- --------- -----------
Balance, June 30, 1999 $ (344,867) 157,377.9 $ 2,241,900
=========== ========= ===========
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Six Months Ended June 30, 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 six month periods ended
June 30, 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.
-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. 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 June 30, 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.
-10-
<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.
-11-
<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 June 30, 1999 and 1998,
providing for monthly interest only payments at a rate of 3.50% above
the one-month LIBOR rate (8.43750% at June 30, 1999). The note matured
June 1999. Subsequent to June 30, 1999, management obtained permanent
financing on this property and the prior mortgage was satisfied in full
with no gain or loss being recorded. See Note 10.
Inducon - Columbia
------------------
A mortgage payable with a balance of $2,152,349 and $2,182,126 at June
30, 1999 and 1998 with monthly payments of $16,787 including interest at
7.867%. The maturity date of the mortgage is October 2022.
-12-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
----------------------------------------
Stonegate
---------
A mortgage with a balance of $2,609,477 and $2,632,634 at June 30, 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 $1,839,764 and $1,859,236 at June 30, 1999
and 1998, respectively, providing for monthly interest only payments
ranging from 8% to 12% annually (12% at June 30, 1999). The mortgage is
due and payable April 1, 2001.
Beaver Creek
------------
A mortgage with a balance of $1,331,533 and $1,342,223 at June 30, 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
============
-13-
<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 $2,610,000,
$2,150,000, $1,840,000 and $1,332,000 at June 30, 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 $90,118 and $102,885 for
the six months ended June 30, 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 six months ended June 30, 1999 or
1998.
-14-
<PAGE>
RELATED PARTY TRANSACTIONS (CONTINUED)
---------------------------------------
The general partners are also allowed to collect a property disposition
fee upon the sale of acquired properties. This fee is not to exceed the
lesser of 50% of amounts customarily charged in arm's-length
transactions by others rendering similar services for comparable
properties, or 3% of the sales price. The property disposition fee is
subordinate to payments to the limited partners of a cumulative annual
return (not compounded) equal to 7% of their average adjusted capital
balances and to repayment to the limited partners of an amount equal to
their original capital contributions. No properties have been sold as of
June 30, 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 $5,280
for both the six months ended June 30, 1999 and 1998.
Accounts payable - affiliates amounted to $127,775 and $141,268 at June
30, 1999 and 1998, respectively. This balance is payable to the General
Partners and/or its affiliates on demand. The outstanding payable is
accruing interest at the rate of 11% on the average outstanding balance
compounded quarterly. Interest accrued for the six months ended June 30,
1999 totaled approximately $17,740.
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.
-15-
<PAGE>
INCOME TAXES (CONTINUED)
-------------------------
The reconciliation of net loss for the six months ended June 30, 1999
and 1998 as reported in the statements of operations, and as would be
reported for tax purposes, is as follows:
<TABLE>
<CAPTION>
June 30, June 30,
1999 1998
---- ----
<S> <C> <C>
Net loss - statement of operations $(310,801) $(666,583)
Add to (deduct from):
Difference in depreciation (9,600) (17,640)
Tax basis adjustments -
Joint Ventures (76,000) 40,678
Allowance for doubtful accounts 18,000 75,978
--------- ---------
Net (loss) - tax return purposes $(378,401) $(567,567)
========= =========
The reconciliation of Partners' Capital as of June 30, 1999 and December
31, 1998 as reported in the balance sheet, and as reported for tax
purposes, is as follows:
June 30, December 31,
1999 1998
---- ----
Partners' Capital - balance sheet $1,914,773 $2,225,574
Add to (deduct from):
Accumulated difference in
depreciation 191,393 200,993
Tax basis adjustment -
Joint Ventures 724,244 800,244
Syndication fees 2,312,863 2,312,863
Other non-deductible expenses 596,745 578,745
---------- ----------
Partners' Capital - tax return purposes $5,740,018 $6,118,419
========== ==========
</TABLE>
-16-
<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 June 30, 1999 and December 31, 1998 and the
results of its operations for the six months ended June 30, 1999 and
1998 is as follows:
-17-
<PAGE>
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
-----------------------------------------
BALANCE SHEETS
--------------
June 30, 1999 and December 31, 1998
-----------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---- ----
<S> <C> <C>
ASSETS
- ------
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 32,858 26,716
Escrow deposits 98,338 65,464
Other assets 250,841 179,410
----------- -----------
Total Assets $ 1,647,507 $ 1,537,060
=========== ===========
LIABILITIES AND PARTNERS' (DEFICIT)
- -----------------------------------
Liabilities:
Mortgages payable $ 2,879,156 $ 2,890,315
Accounts payable and accrued expenses 251,852 205,236
Accounts payable - affiliates 710,086 555,404
Accrued interest 21,636 21,677
Security deposits and prepaid rent 49,123 42,470
----------- -----------
Total Liabilities 3,911,853 3,715,102
----------- -----------
Partners' Capital (Deficit):
The Partnership 31,678 66,200
RPILP (2,296,024) (2,244,242)
----------- -----------
Total Partners' (Deficit) (2,264,346) (2,178,042)
----------- -----------
Total Liabilities and Partners' (Deficit) $ 1,647,507 $ 1,537,060
=========== ===========
</TABLE>
-18-
<PAGE>
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
-----------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Six Months Ended June 30, 1999 and 1998
---------------------------------------
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
June 30, June 30,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $ 337,367 $ 314,974
Interest and other income 35,804 13,906
--------- ---------
Total income 373,171 328,880
--------- ---------
Expenses:
Property operations 225,930 328,569
Interest 129,815 131,026
Depreciation and amortization 2,871 2,871
Administrative 100,859 59,998
--------- ---------
Total expenses 459,475 522,464
--------- ---------
Net loss $ (86,304) $(193,584)
========= =========
Allocation of net loss:
The Partnership $ (34,522) $ (77,434)
RPILP (51,782) (116,150)
--------- ---------
$ (86,304) $(193,584)
========= =========
</TABLE>
-19-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
-----------------------------------------
A reconciliation of the Partnership's investment in the joint venture is
as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Investment in joint venture, January 1 $ 66,200 $ 256,052
Allocation of net loss (34,522) (77,434)
------- -------
Investment in joint venture, June 30 $ 31,678 $ 178,618
======== =========
</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 June 30, 1999 and December 31, 1998 and the results of its operations
for the six months ended June 30, 1999 and 1998 is as follows:
-20-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
------------------------------------------------
BALANCE SHEETS
--------------
June 30, 1999 and December 31, 1998
-----------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---- ----
<S> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ -- $ 688,674
Property, net of accumulated depreciation 1,616,689 1,677,366
Other assets 1,010,991 846,731
----------- -----------
Total Assets $ 2,627,680 $ 3,212,771
=========== ===========
LIABILITIES AND PARTNERS' (DEFICIT)
- -----------------------------------
Liabilities:
Cash overdraft $ 22,237 $ --
Notes payable 5,421,374 5,504,596
Accounts payable and accrued expenses 134,243 106,256
----------- -----------
Accounts payable - affiliates 5,577,854 5,610,852
----------- -----------
Total Liabilities
Partners' (Deficit):
The Partnership (1,574,502) (1,298,455)
RPILP II (1,375,672) (1,099,626)
----------- -----------
Total Partners' (Deficit) (2,950,174) (2,398,081)
----------- -----------
Total Liabilities and Partners' (Deficit) $ 2,627,680 $ 3,212,771
=========== ===========
</TABLE>
-21-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Six Months Ended June 30, 1999 and 1998
---------------------------------------
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
June 30, June 30,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $493,973 $542,902
Interest and other income 7,091 407
-------- --------
Total income 501,064 543,309
-------- --------
Expenses:
Property operations 70,275 22,222
Interest 219,532 229,470
Depreciation and amortization 68,192 75,763
Administrative 35,157 50,743
-------- --------
Total expenses 393,156 378,198
-------- --------
Net income $107,908 $165,111
======== ========
Allocation of net income:
The Partnership $ 53,954 $ 82,556
RPILP II 53,954 82,555
-------- --------
$107,908 $165,111
======== ========
</TABLE>
-22-
<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 (330,000) (250,000)
Allocation of net income 53,954 82,556
--------- ---------
Investment in joint venture, June 30 $(254,049) $ 26,144
========= =========
10. SUBSEQUENT EVENTS
-----------------
On August 24, 1999, permanent financing was obtained for Countrybrook
Apartments located in Louisville, Kentucky. The new mortgage has a
principal balance of $4 million with monthly payments including interest
at 7.89%. The note is to be amortized over a period of 30 years and
matures September 11, 2009. The previous mortgage was paid in full upon
the refinancing with no gain or loss being recognized.
-23-
<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 $145,515 as of June 30, 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 six months ended June
30, 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 mortgage on Countrybrook Estates was successfully refinanced during the
third quarter of 1999; the principal balance on the mortgage was increased and
the interest rate obtained is believed by management to be very favorable
compared to what is being offered in the market.
-24-
<PAGE>
Liquidity and Capital Resources (continued):
- ---------------------------------------------
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. 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
October 31, 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 June 30, 1999, the Partnership's net loss was $128,631 or
$0.79 per limited partnership unit. Net loss for the quarter ended June 30, 1998
amounted to $316,502 or $1.95 per unit. For the six months ended June 30, 1999
and 1998, the net loss for the Partnership totaled $328,541 and $666,583,
respectively, or $2.02 and $4.11 per limited partnership unit.
On a tax basis, the partnership had a net loss of $378,401 or $2.33 per limited
partner unit for the six month period ended June 30, 1999 versus a tax loss of
$567,567 or $3.50 per unit for the six month period ended June 30, 1998.
-25-
<PAGE>
Results of Operations (continued):
- -----------------------------------
Partnership revenue for the three months ended June 30, 1999 totaled $1,127,543,
an increase of approximately $83,000 from the 1998 amount of $1,044,891. For the
six months ended June 30, 1999, total revenue amounted to $2,226,956, an
increase of approximately $174,000 from the same period in the previous year
when total revenue was $2,052,991. Total rental revenue increased approximately
$147,000 between the two six month periods, while interest and other income
increased by just over $26,500. 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% at
June 30, 1999 and for most of the six months ended June 30, 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 either increased or remained steady for
several months, as noted in the first three months of 1999, at both complexes
which have in the past been troubled by declining occupancy.
For the quarter ended June 30, 1999, Partnership expenses amounted to
$1,283,140, decreasing approximately $81,000 from the same 1998 quarter amount
of $1,364,007. Likewise, a decrease in total expenses between the six months
ended June 30, 1999 and 1998 was seen as expenses went from $2,724,696 in 1998
to $2,574,930 for the first six months of 1999. This amounts to a decrease of
approximately $150,000. A decrease in property operations expenditures of
approximately $94,000 was responsible for almost 63% 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 six month
periods totaling just over $41,000. 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.
-26-
<PAGE>
Results of Operations (continued):
- -----------------------------------
For the six month period ended June 30, 1999, the Carriage House of Englewood
Joint Venture generated a net loss of $86,304, a decrease from the net loss of
$193,584 for the six month period ended June 30, 1998. Pursuant to the terms of
the joint venture agreement, the Partnership was allocated $34,522 of the loss
in 1999 and $77,434 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 $107,908
for the six month period ended June 30, 1999 with $53,954 of the income
allocated to the Partnership. For the six month period ended June 30, 1998, the
Joint Venture had net income of $165,111 with one-half or $82,556 of the income
allocated to the Partnership. The Research Triangle Office Complex continues to
enjoy high occupancy and positive cash flow.
-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 October 3, 1999
--------------------- ---------------
Joseph M. Jayson, Date
Individual General Partner and
Principal Financial Officer
-29-
<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 six months ended June 30, 1999, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 39,402
<SECURITIES> 0
<RECEIVABLES> 12,904
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 601,207
<PP&E> 20,577,722
<DEPRECIATION> 6,869,836
<TOTAL-ASSETS> 14,465,875
<CURRENT-LIABILITIES> 1,220,719
<BONDS> 11,348,123
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14,465,875
<SALES> 0
<TOTAL-REVENUES> 2,246,388
<CGS> 0
<TOTAL-COSTS> 2,574,929
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 523,307
<INCOME-PRETAX> (328,541)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (328,541)
<EPS-BASIC> (2.02)
<EPS-DILUTED> 0
</TABLE>
