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, 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 September 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.
--------
<S> <C> <C> <C>
PART I: FINANCIAL INFORMATION
- ------- ---------------------
Balance Sheets -
September 30, 1999 and December 31, 1998 3
Statements of Operations -
Three Months Ended September 30, 1999 and 1998 4
Statements of Operations -
Nine Months Ended September 30, 1999 and 1998 5
Statements of Cash Flows -
Nine Months Ended September 30, 1999 and 1998 6
Statements of Partners' (Deficit) Capital -
Nine Months Ended September 30, 1999 and 1998 7
Notes to Financial Statements 8 - 24
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- -------- FINANCIAL CONDITION & RESULTS OF
--------------------------------
OPERATIONS 25 - 28
----------
PART III: FINANCIAL DATA SCHEDULE 31
- --------- -----------------------
</TABLE>
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
BALANCE SHEETS
--------------
September 30, 1999 and December 31, 1998
----------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
---- ----
ASSETS
- ------
<S> <C> <C>
Property, at cost:
Land and land improvements $ 2,162,398 $ 2,159,398
Buildings 17,320,161 17,307,636
Furniture, fixtures and equipment 1,103,695 1,103,695
------------ ------------
20,586,254 20,570,729
Less accumulated depreciation 7,027,169 6,555,171
------------ ------------
Property, net 13,559,085 14,015,558
Investments in real estate joint ventures (211,256) 88,197
Cash 69,924 87,551
Investment in mutual funds 339,930 --
Escrow deposits 392,357 414,762
Accounts receivable 4,184 4,203
Mortgage costs, net of accumulated amortization
of $189,985 and $272,395 452,348 430,404
Other assets 98,623 65,374
------------ ------------
Total Assets $ 14,705,195 $ 15,106,049
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgages payable $ 11,919,497 $ 11,392,501
Accounts payable and accrued expenses 786,055 637,504
Accounts payable - affiliates 170,284 517,337
Accrued interest 143,028 122,616
Security deposits and prepaid rents 234,633 210,517
------------ ------------
Total Liabilities 13,253,497 12,880,475
------------ ------------
Partners' (Deficit) Capital:
General partners (358,227) (335,011)
Limited partners 1,809,925 2,560,585
------------ ------------
Total Partners' Capital 1,451,698 2,225,574
------------ ------------
Total Liabilities and Partners' Capital $ 14,705,195 $ 15,106,049
============ ============
</TABLE>
See notes to financial statements
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Three Months Ended September 30, 1999 and 1998
----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
September 30, September 30,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $ 994,832 $ 1,016,002
Interest and other income 55,892 66,180
----------- -----------
Total income 1,050,724 1,082,182
----------- -----------
Expenses:
Property operations 779,280 715,800
Interest 342,539 250,325
Depreciation and amortization 175,467 199,866
Administrative:
To affiliates 95,503 83,266
Other 114,384 83,967
----------- -----------
Total expenses 1,507,173 1,333,224
----------- -----------
Loss before allocated income (loss) from joint ventures (456,449) (251,042)
Allocated income (loss) from joint ventures 11,115 (79,457)
----------- -----------
Net loss $ (445,334) $ (330,499)
=========== ===========
Loss per limited partnership unit $ (2.74) $ (2.04)
=========== ===========
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 Rnded September 30, 1999 and 1998
---------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $ 3,073,519 $ 2,947,258
Interest and other income 204,161 187,915
----------- -----------
Total income 3,277,680 3,135,173
----------- -----------
Expenses:
Property operations 2,109,406 2,139,749
Interest 865,846 769,604
Depreciation and amortization 556,383 599,598
Administrative:
To affiliates 268,484 246,518
Other 281,984 302,451
----------- -----------
Total expenses 4,082,103 4,057,920
----------- -----------
Loss before allocated income (loss) from joint ventures (804,423) (922,747)
Allocated income (loss) from joint ventures 30,547 (74,335)
----------- -----------
Net loss $ (773,876) $ (997,082)
=========== ===========
Loss per limited partnership unit $ (4.77) $ (6.15)
=========== ===========
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, 1999 and 1998
---------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1999 1998
---- ----
<S> <C> <C>
Cash flow from operating activities:
Net loss $(773,876) $(997,082)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 556,383 599,598
Net (income) loss from joint ventures (30,547) 74,335
Changes in operating assets and liabilities:
Escrow deposits 22,405 (255,784)
Accounts receivable 19 1,369
Other assets (33,249) 10,569
Accounts payable and accrued expenses 148,551 199,581
Accrued interest 20,412 --
Security deposits and prepaid rent 24,116 8,973
--------- ---------
Net cash used in operating activities (65,786) (358,441)
--------- ---------
Cash flow from investing activities:
Capital expenditures (15,525) 41,944
Investment in mutual funds (339,930) --
Distributions from joint ventures 330,000 250,000
--------- ---------
Net cash (used in) provided by investing activities (25,455) 291,944
--------- ---------
Cash flows from financing activities:
Cash overdraft -- (27,362)
Principal payments on mortgages (73,004) (98,778)
Proceeds from mortgage refinancing, net 600,000 --
Mortgage acquisition costs (106,329) (16,290)
Accounts payable - affiliates (347,053) 208,927
--------- ---------
Net cash provided by financing activities 73,614 66,497
--------- ---------
Decrease in cash (17,627) --
Cash - beginning of period 87,551 --
--------- ---------
Cash - end of period $ 69,924 $ --
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 845,434 $ 684,982
========= =========
</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, 1999 AND 1998
---------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
General Limited Partners
Partners
Amount Units Amount
------ ----- ------
<S> <C> <C> <C> <C>
Balance, January 1, 1998 $ (298,557) 157,377.9 $ 3,739,262
Net loss (29,912) -- (967,170)
----------- --------- -----------
Balance, September 30, 1998 $ (328,469) 157,377.9 $ 2,772,092
=========== ========= ===========
Balance, January 1, 1999 $ (335,011) 157,377.9 $ 2,560,585
Net loss (23,216) -- (750,660)
----------- --------- -----------
Balance, September 30, 1999 $ (358,227) 157,377.9 $ 1,809,925
=========== ========= ===========
</TABLE>
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-A
----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Nine Months Ended September 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 nine month periods ended
September 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)
-------------------------------------------------------
Investment in mutual funds
--------------------------
The investments in mutual funds are stated at fair value, which
approximates cost, at September 30, 1999.
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 September 30, 1999 and 1998.
-10-
<PAGE>
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
-------------------------------------------------------
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.
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.
-11-
<PAGE>
ACQUISITION AND DISPOSITION OF RENTAL PROPERTY (CONTINUED)
-----------------------------------------------------------
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
(Pomeroy Park, formerly The Commons on Lewis Avenue) located in Tulsa,
Oklahoma for a purchase price of $2,965,803, which included $269,721 in
acquisition fees.
In September 1991 the Partnership entered into an agreement and formed a
joint venture with Realmark Property Investors Limited Partnership II
and VI-B (RPILP II and VI-B) for the purpose of operating the 250 unit
Foxhunt Apartments in Kettering, Ohio and owned by RPILP II. In April
1992 the Partnership's capital contribution of $389,935 plus interest
was returned by RPILP II and the Partnership's interest in the joint
venture ended.
In May 1992 the Partnership entered into an agreement to form a joint
venture with Realmark Property Investors Limited Partnership (RPILP) for
the purpose of operating the 144 unit Gold Key Apartments located in
Englewood, Ohio and owned by RPILP.
In August 1992 the Partnership entered into a joint venture agreement
for the purpose of operating Research Triangle Industrial Park West, a
150,000 square foot office/warehouse facility located in Durham, North
Carolina. The original joint venture agreement to develop and operate
the property, created between Realmark Property Investors Limited
Partnership II (RPILP II) and Adaron Group (Adaron), was dissolved, and
the Partnership acquired all rights held by Adaron.
-12-
<PAGE>
5. MORTGAGES AND NOTES PAYABLE
---------------------------
In connection with the acquisition of rental property, the Partnership
obtained mortgages as follows:
Countrybrook Estates (formerly West Creeke)
-------------------------------------------
A mortgage with a balance of $4,000,000 at September 30, 1999, providing
for monthly principal and interest payments bearing interest at the rate
of 7.89%. The note is being amortized over a period of thirty years and
matures September 11, 2009.
A mortgage with a balance of $3,415,000 at September 30, 1998, providing
for monthly interest only payments at a rate of 3.50% above the
one-month LIBOR rate. The note matured June 1999 and was subsequently
refinanced with permanent financing. The former mortgage note was
satisfied in full with no gain or loss being recorded.
Inducon - Columbia
------------------
A mortgage payable with a balance of $2,146,618 and $2,128,245 at
September 30, 1999 and 1998, respectively, with monthly payments of
$16,787 including interest at 7.867%. The maturity date of the mortgage
is October 2022.
Stonegate
---------
A mortgage with a balance of $2,606,895 and $2,628,633 at September 30,
1999 and 1998, providing for monthly principal and interest payments of
$20,207, bearing interest at 8.43%. The note matures July 2027.
Pomeroy Park (formerly The Commons on Lewis Avenue)
----------------------------------------------------
A mortgage with a balance of $1,835,777 and $1,853,788 at September 30,
1999 and 1998, respectively, providing for monthly interest only
payments ranging from 8% to 12% annually (12% at September 30, 1999).
The mortgage is due and payable April 1, 2001.
Beaver Creek
------------
A mortgage with a balance of $1,330,208 and $1,340,033 at September 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.
-13-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
----------------------------------------
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
============
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, Pomeroy Park (formerly The
Commons), Stonegate Townhouses, Inducon-Columbia and Beaver Creek, with
carrying values of $4,000,000, $1,835,777, $2,606,895, $2,146,618 and
$1,330,208 at September 30, 1999, respectively, are believed to
approximate their carrying value since new mortgages were obtained
recently.
Refer to Note 5 for a description of the terms of the mortgages payable.
-14-
<PAGE>
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 $133,385 and $128,225 for
the nine months ended September 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 nine months ended September 30,
1999 or 1998.
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, 1999 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 approximately $7,920 for both the nine
months ended September 30, 1999 and 1998.
-15-
<PAGE>
RELATED PARTY TRANSACTIONS (CONTINUED)
---------------------------------------
Accounts payable - affiliates amounted to $170,284 and $244,456 at
September 30, 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.
The reconciliation of net loss for the nine months ended September 30,
1999 and 1998 as reported in the statements of operations, and as would
be reported for tax purposes, is as follows:
September 30, September 30,
1999 1998
---- ----
Net loss - statement of operations $(773,876) $(997,082)
Add to (deduct from):
Difference in depreciation (14,400) (26,460)
Tax basis adjustments -
Joint Ventures (114,000) 61,000
Allowance for doubtful accounts 27,000 114,000
--------- ---------
Net (loss) - tax return purposes $(875,276) $(848,542)
========= =========
-16-
<PAGE>
INCOME TAXES (CONTINUED)
-------------------------
The reconciliation of Partners' Capital as of September 30, 1999 and
December 31, 1998 as reported in the balance sheet, and as reported for
tax purposes, is as follows:
September 30, December 31,
1999 1998
---- ----
Partners' Capital - balance sheet $1,451,698 $2,225,574
Add to (deduct from):
Accumulated difference in
depreciation 186,593 200,993
Tax basis adjustment -
Joint Ventures 686,244 800,244
Syndication fees 2,312,863 2,312,863
Other non-deductible expenses 605,745 578,745
---------- ----------
Partners' Capital - tax return purposes $5,243,143 $6,118,419
========== ==========
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 of the joint
venture as of September 30, 1999 and December 31, 1998 and the results
of its operations for the nine months ended September 30, 1999 and 1998
is as follows:
-18-
<PAGE>
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
-----------------------------------------
BALANCE SHEETS
--------------
September 30, 1999 and December 31, 1998
----------------------------------------
<TABLE>
<CAPTION>
September 30, 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 38,245 26,716
Escrow deposits 30,651 65,464
Other assets 163,646 179,410
----------- -----------
Total Assets $ 1,498,012 $ 1,537,060
=========== ===========
LIABILITIES AND PARTNERS' (DEFICIT)
- -----------------------------------
Liabilities:
Mortgages payable $ 2,873,387 $ 2,890,315
Accounts payable and accrued expenses 233,880 205,236
Accounts payable - affiliates 639,384 555,404
Accrued interest 21,636 21,677
Security deposits and prepaid rent 51,936 42,470
----------- -----------
Total Liabilities 3,820,223 3,715,102
----------- -----------
Partners' Capital (Deficit):
The Partnership 8,532 66,200
RPILP (2,330,743) (2,244,242)
----------- -----------
Total Partners' (Deficit) (2,322,211) (2,178,042)
----------- -----------
Total Liabilities and Partners' (Deficit) $ 1,498,012 $ 1,537,060
=========== ===========
</TABLE>
-19-
<PAGE>
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
-----------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Nine Months Ended September 30, 1999 and 1998
---------------------------------------------
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $ 515,518 $ 450,877
Interest and other income 48,992 17,403
--------- ---------
Total income 564,510 468,280
--------- ---------
Expenses:
Property operations 357,798 452,825
Interest 194,557 196,281
Depreciation and amortization 4,306 69,970
Administrative 152,018 107,495
--------- ---------
Total expenses 708,679 826,571
--------- ---------
Net loss $(144,169) $(358,291)
========= =========
Allocation of net loss:
The Partnership $ (57,668) $(143,316)
RPILP (86,501) (214,975)
--------- ---------
$(144,169) $(358,291)
========= =========
</TABLE>
-20-
<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 (57,668) (143,316)
----------- -----------
Investment in joint venture, September 30 $ 8,532 $ 112,736
=========== ===========
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, 1999 and December 31, 1998 and the results of its
operations for the nine months ended September 30, 1999 and 1998 is as
follows:
-21-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
------------------------------------------------
BALANCE SHEETS
--------------
September 30, 1999 and December 31, 1998
----------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
---- ----
<S> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 188,668 $ 688,674
Property, net of accumulated depreciation 1,601,436 1,677,366
Other assets 1,061,505 846,731
----------- -----------
Total Assets $ 2,851,609 $ 3,212,771
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
- ---------------------------------
Liabilities:
Notes payable $ 5,407,476 $ 5,504,596
Accounts payable - affiliates 162,068 --
Accounts payable and accrued expenses 163,717 106,256
----------- -----------
Total Liabilities 5,733,261 5,610,852
----------- -----------
Partners' Deficit:
General partners (1,540,241) (1,298,455)
Other investors (1,341,412) (1,099,626)
----------- -----------
Total Partners' Deficit (2,881,653) (2,398,081)
----------- -----------
Total Liabilities and Partners' Deficit $ 2,851,609 $ 3,212,771
=========== ===========
</TABLE>
-22-
<PAGE>
RESEARCH TRIANGLE INDUSTRIAL PARK JOINT VENTURES
------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Nine months ended September 30, 1999 and 1998
---------------------------------------------
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $746,554 $796,401
Interest and other income 11,212 590
-------- --------
Total income 757,766 796,991
-------- --------
Expenses:
Property operations 90,824 132,846
Interest 336,482 344,346
Depreciation and amortization 101,072 113,643
Administrative 52,959 68,193
-------- --------
Total expenses 581,337 659,028
-------- --------
Net income $176,429 $137,963
======== ========
Allocation of net income:
The Partnership $ 88,215 $ 68,982
RPILP II 88,214 68,981
-------- --------
$176,429 $137,963
======== ========
</TABLE>
-23-
<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 88,215 68,982
---------- ---------
Investment in joint venture, September 30 $ (219,788) $ 12,570
========== =========
-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 Pomeroy Park (formerly 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. For example,
Stonegate's occupancy at September 30, 1999 was approximately 98%, while Beaver
Creek maintained 100% or full occupancy. Management is optimistic that the
income will continue to rise during the remainder of 1999 as significant
physical improvements are being made at the properties. Management continues,
however, to concentrate on decreasing expenses in order to turn the financial
position (i.e., the cash flow) of the Partnership around.
The Partnership successfully refinanced the mortgage on Countrybrook Apartments
at the end of August 1999. The refinancing resulted in excess proceeds of
approximately $600,000 and a decreased interest rate, which will hopefully lead
to improved cash flow. Management expects to use the excess proceeds, along with
construction and repair and replacement escrow accounts set up under the new
mortgage, to complete necessary improvements to the properties in the
Partnership, such as roofing, wood replacement and painting at several
complexes.
There were no distributions for the nine month periods ended September 30,1999
and 1998. 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 the remainder of 1999 or early into the year 2000.
The General Partners and their affiliates have loans outstanding to the
Partnership of $170,284 as of September 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.
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>
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 be
complete by December 1, 1999. 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 December 1, 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 September 30, 1999, the Partnership's net loss was
$445,334 or $2.74 per limited partnership unit. Net loss for the quarter ended
September 30, 1998 amounted to $330,499 or $2.04 per unit. For the nine month
period ended September 30, 1999, the net loss was $773,876 or $4.77 per limited
partnership unit as compared to $997,082 or $6.15 per limited partnership unit
for the nine month period ended September 30, 1998.
-26-
<PAGE>
Results of Operations (continued):
- -----------------------------------
Partnership revenue for the quarter ended September 30, 1999 totaled $1,050,724,
a decrease of approximately $31,500 from the 1998 amount of $1,082,182. Total
rental revenue decreased approximately $21,000, while interest and other income
decreased by approximately $10,000. For the nine month period ended September
30, 1999, there was an increase in rental revenue when compared to the same
period in the previous year; for the nine month period ended September 30, 1999
rental revenue totaled $3,073,519, while for the nine months ended September 30,
1998, rental revenue totaled $2,947,258. 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 also increased from the nine months
ended September 30, 1999 as compared to the same period in 1998; the increase
amounted to approximately $16,000.
For the quarter ended September 30, 1999, Partnership expenses amounted to
$1,507,173, increasing from the same 1998 quarter amount of $1,333,224. For the
nine month period ended September 30, 1999, Partnership expenses increased only
slightly from the same period in 1998; expenses went from $4,057,920 in 1997 to
$4,082,103 in 1999. The increase was approximately $24,000 or 0.60%. A decrease
in property operations expenditures was responsible for a part of the decrease
in expenses. Payroll and related costs decreased approximately $13,000, while
smaller decreases were noted in repairs and maintenance, deferred maintenance
and contracted service expenses, utilities, insurance and real estate tax
expenses. The first decreases noted previously (i.e., payroll and repairs and
maintenance) are evidence that the capital improvement and maintenance work at
the properties is decreasing as the majority of the scheduled work, including,
but not limited to 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, has either been completed or nears
completion. Interest expense increased by approximately $96,000 from the nine
months ended September 30, 1999 and 1998, while depreciation and amortization
expense decreased by approximately $43,000 during the same period. Total
administrative expenses remained virtually unchanged between the two nine month
periods totaling just over $550,000 during both periods.
For the nine month period ended September 30, 1999, the Carriage House of
Englewood Joint Venture generated a net loss of $144,169, a decrease from the
net loss of $358,291 for the nine month period ended September 30, 1998.
Pursuant to the terms of the joint venture agreement, the Partnership was
allocated $57,668 of the loss in 1998 and $143,316 of the loss in 1998.
-27-
<PAGE>
Results of Operations (continued):
- -----------------------------------
The Research Triangle Industrial Park Joint Venture had net income of $176,429
for the nine month period ended September 30, 1999 with $88,215 of the income
allocated to the Partnership. For the nine month period ended September 30,
1998, the Joint Venture had net income of $137,963 with one-half or $68,982 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 approximately $875,276 or
$5.39 per limited partner unit for the nine month period ended September 30,
1999 versus a tax loss of $848,542 or $5.23 per unit for the nine month period
ended September 30, 1998.
-28-
<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.
-29-
<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 19, 1999
--------------------- -----------------
Joseph M. Jayson, Date
Individual General Partner and
Principal Financial Officer
-30-
<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, 1999, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 69,924
<SECURITIES> 339,930
<RECEIVABLES> 4,184
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 905,018
<PP&E> 20,586,254
<DEPRECIATION> 7,027,169
<TOTAL-ASSETS> 14,705,195
<CURRENT-LIABILITIES> 1,334,000
<BONDS> 11,919,497
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14,705,195
<SALES> 0
<TOTAL-REVENUES> 3,308,227
<CGS> 0
<TOTAL-COSTS> 4,082,103
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 865,846
<INCOME-PRETAX> (773,876)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (773,876)
<EPS-BASIC> (4.77)
<EPS-DILUTED> 0
</TABLE>
