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 33-17579
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
(Exact Name of Registrant as specified in its charter)
Delaware 16-1309988
- -------------------- ------------------------------------
(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 78,625.10 units of limited
partnership interest outstanding.
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
INDEX
-----
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <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 - 21
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- ------- FINANCIAL CONDITION & RESULTS OF
OPERATIONS 22 - 24
----------
PART III: FINANCIAL DATA SCHEDULE 27
- --------- -----------------------
</TABLE>
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
BALANCE SHEETS
--------------
September 30, 1999 and December 31, 1998
----------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
---- ----
<S> <C> <C>
ASSETS
- ------
Property, at cost:
Land $ 780,500 $ 780,500
Buildings and improvements 6,028,430 6,028,430
Furniture, fixtures and equipment 255,652 255,652
------------------ ------------------
7,064,582 7,064,582
Less accumulated depreciation 2,059,517 1,874,186
------------------ ------------------
Property, net 5,005,065 5,190,396
Investments in real estate joint ventures 83,829 230,429
Cash 823,665 842,779
Escrow deposits 284,671 328,770
Accounts receivable - affiliate 37,612 99,995
Mortgage costs, net of accumulated amortization
of $26,700 and $18,207 respectively 313,006 321,499
Other assets 56,920 31,676
------------------ ------------------
Total Assets $ 6,604,768 $ 7,045,544
================== ==================
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Mortgages payable $ 5,279,863 $ 5,309,087
Accounts payable and accrued expenses 238,324 232,180
Security deposits and prepaid rents 99,082 91,261
Accrued interest 57,108 -
------------------ ------------------
Total Liabilities 5,674,377 5,632,528
------------------ ------------------
Partners' (Deficit) Capital:
General partners (156,616) (142,137)
Limited partners 1,087,007 1,555,153
------------------ ------------------
Total Partners' Capital 930,391 1,413,016
------------------ ------------------
Total Liabilities and Partners' Capital $ 6,604,768 $ 7,045,544
================== ==================
</TABLE>
See notes to financial statements
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
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 $ 434,582 $ 357,287
Interest and other income 21,236 15,204
-----------------
------------------
Total income 455,818 372,491
------------------ -----------------
Expenses:
Property operations 290,532 275,676
Interest 107,696 114,165
Depreciation and amortization 64,608 64,608
Administrative:
To affiliates 47,050 41,319
Other 55,684 50,332
-----------------
------------------
Total expenses 565,570 546,100
------------------ -----------------
Loss before allocated loss from joint ventures (109,752) (173,609)
Allocated loss from joint ventures (22,504) (25,328)
------------------ -----------------
Net loss $ (132,256) $ (198,937)
================== =================
Loss per limited partnership unit $ (1.63) $ (2.45)
================== =================
Distributions per limited partnership unit $ - $ -
================== =================
Weighted average number of
limited partnership units
outstanding 78,625.1 78,625.1
================== =================
</TABLE>
See notes to financial statements
-4-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------
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>
Income:
Rental $ 1,306,422 $ 1,121,616
Interest and other income 56,023 54,040
------------------ ------------------
Total income 1,362,445 1,175,656
------------------ ------------------
Expenses:
Property operations 957,654 986,905
Interest 331,964 343,701
Depreciation and amortization 193,824 193,824
Administrative:
To affilaites 134,517 124,649
Other 166,236 168,250
------------------ ------------------
Total expenses 1,784,195 1,817,329
------------------ ------------------
Loss before allocated loss from joint venture (421,750) (641,673)
Allocated loss from joint ventures (60,875) (79,007)
------------------ ------------------
Net loss $ (482,625) $ (720,680)
================== ==================
Loss per limited partnership unit $ (5.95) $ (8.89)
================== ==================
Distributions per limited partnership unit $ - $ -
================== ==================
Weighted average number of
limited partnership units
outstanding 78,625.1 78,625.1
================== ==================
</TABLE>
See notes to financial statements
-5-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
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 $ (482,625) (720,680)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 193,824 193,824
Net loss from joint ventures 60,875 79,007
Changes in operating assets and liabilities:
Escrow deposits 44,099 (101,895)
Other assets (25,244) 1,533
Accounts payable and accrued expenses 6,144 124,615
Security deposits and prepaid rent 7,821 (61,776)
Accrued interest 57,108 -
------------------ ------------------
Net cash used in operating activities (137,998) (485,372)
------------------ ------------------
Cash flow from investing activities:
Capital expenditures - -
Accounts receivable - affiliates 62,383 12,254
------------------ ------------------
Net cash provided by investing activities 62,383 12,254
------------------ ------------------
Cash flows from financing activities:
Mortgage acquisition costs - 141
Distributions from joint ventures 85,725 -
Principal payments on mortgages (29,224) (27,722)
------------------ ------------------
Net cash used in financing activities 56,501 (27,581)
------------------ ------------------
Decrease in cash (19,114) (500,699)
Cash - beginning of period 842,779 1,422,361
------------------ ------------------
Cash - end of period $ 823,665 $ 921,662
================== ==================
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 274,856 $ 346,596
================== ==================
</TABLE>
See notes to financial statements
-6-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
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>
Balance, January 1, 1998 $ (116,342) 78,625.1 $ 2,389,175
Net loss (21,620) - (699,060)
----------------- -------------- ------------------
Balance, September 30, 1998 $ (137,962) 78,625.1 $ 1,690,115
================= ============== ==================
Balance, January 1, 1999 $ (142,137) 78,625.1 $ 1,555,153
Net loss (14,479) - (468,146)
----------------- -------------- ------------------
Balance, September 30, 1999 $ (156,616) 78,625.1 $ 1,087,007
================= ============== ==================
</TABLE>
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
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-B, 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-B (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 1988, 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 2,
1989. The offering was concluded on February 28, 1990, at which time
78,625.1 units of limited partnership interest were sold and
outstanding. 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,
1989, 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, 1989 and
June 30, 1989, 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 incurred in obtaining property mortgage financing have
been deferred and are being amortized over the terms of the respective
mortgages.
Unconsolidated Joint Ventures
-----------------------------
The Partnership's investment in affiliated real estate joint ventures
are accounted for on the equity method. The joint venture(s) 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. 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.
Income (Loss) per Limited Partnership Unit
------------------------------------------
The income (loss) per limited partnership unit is based on the weighted
average number of limited partnership units outstanding during the
period.
-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
----------------------------------------------
In June 1991 the Partnership acquired a 192 unit apartment complex
(Fairway Club, formerly the Villa) located in Greenville, South Carolina
for a purchase price of $3,165,456, which included $373,493 in
acquisition fees.
In June 1991 the Partnership acquired a 144 unit apartment complex
(Players Club) located in Lutz, Florida for a purchase price of
$3,070,800, which included $190,737 in acquisition fees.
5. MORTGAGES PAYABLE
-----------------
In connection with the acquisition of rental property, the Partnership
obtained mortgages as follows:
Fairway Club (formerly The Villa)
---------------------------------
A mortgage with a balance of $2,609,466 and $2,631,206 at September 30,
1999 and 1998, respectively, providing for monthly principal and
interest payments of $19,864, bearing interest at 8.30%. The note
matures June 2027.
-11-
<PAGE>
MORTGAGES PAYABLE (CONTINUED)
------------------------------
Players Club
------------
A mortgage with a balance of $2,670,397 and $2,686,713 at September 30,
1999 and 1998, respectively, providing for principal and interest
payments of $20,824, bearing interest at 8.48%. The note matures June
2027.
The above mortgages are secured by the properties to which they relate.
The aggregate maturities of mortgages payable for each of the next five
years are as follows:
Year Amount
---- ------
1999 $ 46,170
2000 50,196
2001 54,574
2002 59,333
2003 64,507
Thereafter 5,034,307
-------------
TOTAL $ 5,309,087
============
6. FAIR VALUE OF FINANCIAL INTERESTS
---------------------------------
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 Fairway Club (formerly The Villa) and Players Club
with carrying values of approximately $2,600,000 and $2,670,000 at
September 30, 1999, respectively, are believed to approximate their
carrying value since new mortgages were obtained recently.
-12-
<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 $60,273 for both the nine
months ended September 30, 1999 and 1998.
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.
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.
Accounts receivable - affiliates amounted to $37,612 and $45,648 at
September 30, 1999 and 1998 respectively. This balance is in the process
of being reimbursed.
Computer service charges for the partnerships are paid or accrued to an
affiliate of the General Partner. The fee is based upon the number of
apartment units and totaled approximately $4,752 for both the nine
months ended September 30, 1999 and 1998.
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.
-13-
<PAGE>
INCOME TAXES (CONTINUED)
-------------------------
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:
<TABLE>
<CAPTION>
September 30, September 30,
1999 1998
---- ----
<S> <C> <C>
Net loss - statement of operations $( 482,625) $ ( 689,130)
Add to (deduct from):
Difference in depreciation 22,500 150
Tax basis adjustments -
Joint Ventures 100,000 ( 375)
Other non-deductible expenses 45,000 13,500
---------- ------------
Net loss - tax return purposes $( 315,125) $ ( 675,855)
========== ============
</TABLE>
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:
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
---- ----
<S> <C> <C>
Partners' Capital - balance sheet $ 930,391 $ 1,413,016
Add to (deduct from):
Accumulated difference in
depreciation 13,667 ( 8,833)
Tax basis adjustment -
Joint Ventures 183,555 83,555
Syndication fees 1,179,381 1,179,381
Other non-deductible expenses 376,298 331,298
----------- ------------
Partners' Capital - tax return purposes $ 2,683,292 $ 2,998,417
=========== ============
</TABLE>
-14-
<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 RPILP II returned RPILP VI-A's entire capital
contribution and $580,000 of the capital originally invested by the
Partnership. The amended joint venture agreement now provides that any
income, loss, gain, cash flow or sale proceeds be allocated 88.5% to
RPILP II and 11.5% to the Partnership. Prior to the buyout the
allocations were 63.14% to RPILP II, 26.82% to the Partnership and
10.04% to the RPILP VI-A. The allocated net loss of the joint venture
has been included in the statements of operations of the Partnership.
The following financial statements of the joint venture are presented on
a historical-cost basis. The equity ownership was determined based upon
the cash paid into the joint venture by the Partnership as a percentage
of the general partner's estimate of the fair market value of the
apartment complex and other net assets at the date of inception.
A summary of the assets, liabilities and partner's 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:
-15-
<PAGE>
FOX HUNT JOINT VENTURE
----------------------
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 $ 150,189 $ 1,014,583
Property, net of accumulated depreciation 2,312,356 2,530,775
Accounts receivable - affiliates 5,011 228,256
Mortgage costs 25,769 128,910
Other assets 41,939 361,253
------------------- ------------------
Total Assets $ 2,535,264 $ 4,263,777
=================== ==================
LIABILITIES AND PARTNERS' DEFICIENCY
- ------------------------------------
Liabilities:
Mortgage payable $ 6,000,000 $ 6,000,000
Accounts payable and accrued expenses 131,967 294,685
Other liabilities 97,153 112,747
------------------- ------------------
Total Liabilities 6,229,120 6,407,432
------------------- ------------------
Partners' Deficiency (2,673,003) (2,143,655)
------------------- ------------------
Total Liabilities and Partners' Deficiency $ 3,556,117 $ 4,263,777
=================== ==================
</TABLE>
-16-
<PAGE>
FOX HUNT 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 $ 1,065,915 $ 990,454
Interest and other income 61,209 78,368
------------------- ------------------
Total income 1,127,124 1,068,822
------------------- ------------------
Expenses:
Property operations 740,165 746,472
Depreciation and amortization 361,660 465,538
Interest 382,468 353,099
Administrative 172,179 190,731
------------------- ------------------
Total expenses 1,656,472 1,755,840
------------------- ------------------
Net loss $ (529,348) $ (687,018)
=================== ==================
Allocation of net loss:
The Partnership $ (60,875) $ (79,007)
Other Joint Venturer (RPILP II) (468,473) (608,011)
------------------- ------------------
$ (529,348) $ (687,018)
=================== ==================
</TABLE>
-17-
<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 $ 267,383 $ 375,900
Distributions (85,725) -
Allocation of net loss (60,875) (79,007)
----------- ----------
Investment in joint venture, September 30 $ 120,783 $ 296,893
=========== ==========
</TABLE>
On August 30, 1992 the Partnership entered into a joint venture
agreement with Realmark Property Investors Limited Partnership IV (RPILP
IV) for the purpose of operating the Lakeview Apartment complex located
in Milwaukee, Wisconsin and owned by RPILP IV. Under the terms of the
agreement, the Partnership contributed $175,414 while RPILP IV
contributed the property net of the outstanding mortgage.
The joint venture agreement provides that any income, loss, cash flow or
sale proceeds be allocated 16.22% to the Partnership and 83.78% to RPILP
IV. The allocated net loss of the joint venture for the nine month
period ended September 30, 1999 has been included in the statement of
operations for the Partnership.
The equity ownership percentage was determined based upon the cash paid
into the joint venture by the Partnership as a percentage of the general
partner's estimate of the fair market value of the apartment complex and
other net assets at the date of inception.
The Lakeview Apartments were sold December 29, 1998. The sales price was
$3,400,000, and the resulting gain for financial statement purposes was
$851,317. The Lakeview Joint Venture satisfied the majority of its
mortgage liability using the proceeds from the sale of its property. The
remaining obligation was forgiven by the lender, resulting in an
extraordinary gain of $253,159 for financial statement purposes. It is
expected that the Joint Venture will pay off its remaining liabilities
and liquidate some time before the end of 1999.
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>
LAKEVIEW JOINT VENTURE
----------------------
BALANCE SHEETS
--------------
September 30, 1999 and December 31, 1998
----------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
---- ----
ASSETS
- ------
<S> <C> <C>
Propery, net of accumulated depreciation $ - $ -
Other assets 25,264 25,264
---------------- ----------------
Total Assets $ 25,264 $ 25,264
================ ================
LIABILITIES AND PARTNERS' DEFICIENCY
- ------------------------------------
Liabilities:
Accounts payable and accrued expenses $ 375,042 $ 90,452
Accounts payable - affiliates 410,603 410,862
---------------- ----------------
Total Liabilities 785,645 501,314
---------------- ----------------
Partners' Deficiency (476,050) (476,050)
---------------- ----------------
Total Liabilities and Partners' Deficiency $ 309,595 $ 25,264
================ ================
</TABLE>
-19-
<PAGE>
LAKEVIEW 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 $ - $ 252,189
Interest and other income - 73,842
---------------- ----------------
Total income - 326,031
---------------- ----------------
Expenses:
Property operations - 287,144
Depreciation and amortization - 131,231
Interest - 153,409
Administrative - 129,077
---------------- ----------------
Total expenses - 700,861
---------------- ----------------
Net loss $ - $ (374,830)
================ ================
Allocation of net loss:
The Partnership $ - $ (60,797)
Other Joint Venturer - (314,033)
---------------- ----------------
$ - $ (374,830)
================ ================
</TABLE>
-20-
<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 $ (36,954) $ (28,675)
Allocation of net loss - (60,797)
----------- ------------
Investment in joint venture, September 30 $ (36,954) $ (89,472)
=========== =============
</TABLE>
-21-
<PAGE>
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
----------------------
Liquidity and Capital Resources
- -------------------------------
The Partnership continues to maintain sufficient cash balances to enable it to
provide for future capital improvements. Management continues with its plans to
replace all worn carpets and old appliances at both Players Club and Fairway
Club (formerly The Villa Apartments). Other capital improvements and/or physical
improvements either planned, scheduled or already completed include both
interior and exterior painting and completion of roof repairs at The Villa
Apartments. Management continues to stress to its on-site employees the
importance of physical appearance as a means of attracting new tenants.
No distributions were made during the three months ended September 30, 1999 or
1998. The General Partner does hope to resume making distributions some time
during the year 2000 once all capital improvement work scheduled at the
properties is complete and/or the cost can be fully measured.
During 1998, Lakeview Apartments located in Milwaukee, Wisconsin was put into
receivership by the lender. This was done as a result of the Partnership's
failure to make regular principal and interest payments on its mortgage. Due to
the poor financial condition of this property and the extremely low occupancy,
management put significant efforts and time into selling the property and were
eventually successful in December of 1998. The sales price was $3,400,000, and
the resulting gain for financial statement purposes was $851,317. The Lakeview
Joint Venture satisfied the majority of its mortgage liability using the
proceeds from the sale of its property. The remaining obligation was forgiven by
the lender, resulting in an extraordinary gain of $253,159 for financial
statement purposes. It is expected that the Joint Venture will pay off its
remaining liabilities and liquidate some time before the end of 1999.
The General Partners successfully refinanced the mortgage on Foxhunt Apartments
in July 1998. The new mortgage called for interest only payments for one year
and matured August 1, 1999. Management received an extension on this loan until
September 30, 1999. The General Partners are currently completing the process of
obtaining permanent financing for this property and expect to be completed by
mid-November 1999.
-22-
<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 now 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.
Result of Operations
- --------------------
For the quarter ended September 30, 1999, the Partnership's net loss was
$132,256 or $1.63 per limited partnership unit. Net loss for the quarter ended
September 30, 1998 amounted to $198,937 or $2.45 per unit. For the nine month
period ended September 30, 1999, the net loss was $482,625 or $5.95 per limited
partnership unit as compared to $720,680 or $8.89 per limited partnership unit
for the nine month period ended September 30, 1998.
-23-
<PAGE>
Results of Operations (continued)
- ----------------------------------
Partnership revenue for the quarter ended September 30, 1999 totaled $455,818,
an increase of approximately $83,000 from the 1998 amount of $372,491. Total
rental revenue during this quarter increased just over $77,000, with the
majority of the increase being attributed to increased occupancy and improved
collections at Fairway Club (formerly The Villa). For the first nine months of
1999, rental revenue increased approximately $185,000 from the same period in
1998; other income increased modestly by approximately $2,000.
For the quarter ended September 30, 1999, Partnership expenses amounted to
$565,570 which is an increase of approximately $19,000 or 3.60% from those
incurred in the same quarter in 1998. For the nine month period ended September
30, 1999, Partnership expenses amounted to $1,784,195 which is a decrease of
approximately $33,000 as compared to the same period in 1998 when expenses
totaled $1,817,329. The most notable decrease was found in property operations
expenditures. More specifically, decreases were noted again (i.e., the same was
noted in the first two quarters of 1999) in the third quarter of 1999 in
contracted services at both properties in the Partnership (note: the total
decrease was approximately $24,000) due to the fact that more maintenance work
is being done by in-house maintenance staff. There was also a corresponding
increase in payroll and related expenses due to much of the work being performed
by on-site personnel. The decrease in property operation costs is in large part
due to a decrease in deferred expenses as much of the capital improvement work
(both capitalizable and non-capitalizable) nears completion. Total
administrative expenses remained fairly consistent between the two nine month
periods with only a small increase of $7,900 being recorded.
For the nine month period ended September 30, 1999, the Foxhunt Joint Venture
had a loss of $529,348 as compared to a loss of $687,018 for the same period in
1998. The Partnership was allocated $60,875 and $79,007 of the total net loss
for the nine month periods ended September 30, 1999 and 1998, respectively.
The Lakeview Joint Venture incurred a net loss of $374,830 for the nine month
period ended September 30, 1998. The Partnership was allocated $60,797 of the
loss for the nine month period ended September 30, 1998. This property was sold
December 29, 1998 for a sales price of $3,400,000. The sale resulted in a gain
from the extinguishment of debt totaling approximately $253,000 as the lender
forgave a portion of the mortgage and/or accrued interest on the debt.
On a tax basis, the Partnership loss totaled approximately $315,125 or $3.89 per
limited partnership unit for the nine month period ended September 30, 1999 as
compared to the tax loss for the nine month period ended September 30, 1998
which was $675,855 or $8.34 per limited partnership unit.
-24-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
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.
-25-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP VI-B
By: /s/ Joseph M. Jayson November 21, 1999
--------------------- -----------------
Joseph M. Jayson, Date
Individual General Partner and
Principal Financial Officer
-26-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Realmark Property Investors Limited Partnership VI-B for
the nine months ended September 30, 1999, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1.000
<CASH> 823,665
<SECURITIES> 0
<RECEIVABLES> 37,612
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,202,868
<PP&E> 7,064,582
<DEPRECIATION> 2,059,517
<TOTAL-ASSETS> 6,604,768
<CURRENT-LIABILITIES> 394,514
<BONDS> 5,279,863
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,604,768
<SALES> 0
<TOTAL-REVENUES> 1,362,445
<CGS> 0
<TOTAL-COSTS> 1,784,195
<OTHER-EXPENSES> 60,875
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 331,964
<INCOME-PRETAX> (482,625)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (482,625)
<EPS-BASIC> (5.95)
<EPS-DILUTED> 0
</TABLE>
