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 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 June 30, 1999 the registrant had 78,625.10 units of limited partnership
interest outstanding.
<PAGE>
<TABLE>
<CAPTION>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
INDEX
-----
PAGE NO.
--------
<S> <C>
PART I: FINANCIAL INFORMATION
- ------- ---------------------
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 - 22
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- -------- -------------------------------------
FINANCIAL CONDITION & RESULTS OF OPERATIONS 23 - 26
-------------------------------------------
PART III: FINANCIAL DATA SCHEDULE
- --------- -----------------------
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
BALANCE SHEETS
--------------
June 30, 1999 and December 31, 1998
-----------------------------------
(Unaudited)
June 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 1,997,739 1,874,186
------------------ ------------------
Property, net 5,066,843 5,190,396
Investments in real estate joint ventures 106,333 230,429
Cash 769,284 842,779
Escrow deposits 402,379 328,770
Accounts receivable - affiliate 6,704 99,995
Mortgage costs, net of accumulated amortization
of $23,869 and $18,207 respectively 315,837 321,499
Other assets 26,832 31,676
------------------ ------------------
Total Assets $ 6,694,212 $ 7,045,544
================== ==================
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Mortgages payable $ 5,267,124 $ 5,309,087
Accounts payable and accrued expenses 203,254 232,180
Security deposits and prepaid rents 104,079 91,261
Accrued interest 57,108 -
------------------ ------------------
Total Liabilities 5,631,565 5,632,528
------------------ ------------------
Partners' (Deficit) Capital:
General partners (152,648) (142,137)
Limited partners 1,215,296 1,555,153
------------------ ------------------
Total Partners' Capital 1,062,647 1,413,016
------------------ ------------------
Total Liabilities and Partners' Capital $ 6,694,212 $ 7,045,544
================== ==================
</TABLE>
See notes to financial statements
-3-
<PAGE>
<TABLE>
<CAPTION>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Three Months Ended June 30, 1999 and 1998
-----------------------------------------
(Unaudited)
Three Months Three Months
Ended Ended
June 30, June 30,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $ 429,899 $ 352,906
Interest and other income 14,540 21,694
-----------------
------------------
Total income 444,439 374,600
------------------ -----------------
Expenses:
Property operations 328,460 307,059
Interest 111,671 113,552
Depreciation and amortization 64,608 64,608
Administrative:
To affiliates 46,324 41,867
Other 55,018 61,527
-----------------
------------------
Total expenses 606,081 588,613
------------------ -----------------
Loss before allocated loss from joint ventures (161,642) (214,013)
Allocated loss from joint ventures (4,145) (25,293)
------------------ -----------------
Net loss $ (165,787) $ (239,306)
================== =================
Loss per limited partnership unit $ (2.05) $ (2.95)
================== =================
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>
<TABLE>
<CAPTION>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
STATEMENTS OF OPERATIONS
------------------------
Six Months Ended June 30, 1999 and 1998
---------------------------------------
(Unaudited)
Six Months Six Months
Ended Ended
June 30 June 30
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $ 871,840 $ 764,329
Interest and other income 34,787 38,836
------------------
------------------
Total income 906,627 803,165
------------------ ------------------
Expenses:
Property operations 667,122 711,229
Interest 224,268 229,536
Depreciation and amortization 129,216 129,216
Administrative:
To affiliates 87,467 83,330
Other 110,552 117,918
------------------
------------------
Total expenses 1,218,625 1,271,229
------------------ ------------------
Loss before allocated loss from joint ventures (311,998) (468,064)
Allocated loss from joint ventures (38,371) (53,679)
------------------ ------------------
Net loss $ (350,369) $ (521,743)
================== ==================
Loss per limited partnership unit $ (4.32) $ (6.44)
================== ==================
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>
<TABLE>
<CAPTION>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
STATEMENTS OF CASH FLOWS
------------------------
Six Months Ended June 30, 1999 and 1998
---------------------------------------
(Unaudited)
Six Months Six Months
Ended Ended
June 30, June 30,
1999 1998
---- ----
<S> <C> <C>
Cash flow from operating activities:
Net loss $ (350,369) $ (521,743)
Adjustments to reconcile net loss to net cash
(used in) operating activities:
Depreciation and amortization 129,216 129,216
Net loss from joint ventures 38,371 53,679
Changes in operating assets and liabilities:
Escrow deposits (73,609) (21,046)
Other assets 4,844 (15,133)
Accounts payable and accrued expenses (28,926) 85,361
Security deposits and prepaid rent 12,818 (51,878)
Accrued interest 57,108 -
------------------ ------------------
Net cash (used in) operating activities (210,547) (341,544)
------------------ ------------------
Cash flow from investing activities:
Accounts receivable - affiliates 93,291 16,176
------------------ ------------------
Net cash provided by investing activities 93,291 16,176
------------------ ------------------
Cash flows from financing activities:
Mortgage acquisition costs - 142
Principal payments on mortgages (41,963) (14,689)
Distributions from joint ventures 85,724 -
------------------ ------------------
Net cash provided by (used in) financing activities 43,761 (14,547)
------------------ ------------------
Decrease in cash (73,495) (339,915)
Cash - beginning of period 842,779 1,422,361
------------------ ------------------
Cash - end of period $ 769,284 $1,082,446
================== ==================
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 167,160 $ 167,917
================== ==================
</TABLE>
See notes to financial statements
-6-
<PAGE>
<TABLE>
<CAPTION>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
-----------------------------------------
Six Months Ended June 30, 1998 and 1997
---------------------------------------
(Unaudited)
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 (15,652) - (506,091)
----------------- -------------- ------------------
Balance, June 30, 1998 $ (131,994) 78,625.1 $ 1,883,084
================= ============== ==================
Balance, January 1, 1999 $ (142,137) 78,625.1 $ 1,555,153
Net loss (10,511) - (339,857)
----------------- -------------- ------------------
Balance, June 30, 1999 $ (152,648) 78,625.1 $ 1,215,296
================= ============== ==================
</TABLE>
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
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-B, 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-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 June 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 $2,594,059 and $2,635,392 at June 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 $2,673,065 and $2,695,946 at June 30, 1999
and 1998, 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. 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 $40,182 for both the six
months ended June 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 six months ended June 30, 1999 or
1998.
-12-
<PAGE>
RELATED PARTY TRANSACTIONS (CONTINUED)
--------------------------------------
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.
Accounts receivable - affiliates amounted to $6,704 and $41,726 at June
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 $3,168 for the six months
ended June 30, 1999 and 1998.
7. 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 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 $ ( 350,369) $ ( 521,743)
Add to (deduct from):
Difference in depreciation 15,000 100
Tax basis adjustments -
Joint Ventures 72,000 ( 250)
Other non-deductible expenses 31,000 9,000
------------- ---------------
Net loss - tax return purposes $ ( 232,369) $ ( 512,893)
============= ===============
</TABLE>
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:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---- ----
<S> <C> <C>
Partners' Capital - balance sheet $ 1,062,647 $ 1,413,016
Add to (deduct from):
Accumulated difference in
depreciation 6,167 ( 8,833)
Tax basis adjustment -
Joint Ventures 155,555 83,555
Syndication fees 1,179,381 1,179,381
Other non-deductible expenses 362,298 331,298
------------ ------------
Partners' Capital - tax return purposes $ 2,766,048 $ 2,998,417
============ ============
</TABLE>
-14-
<PAGE>
8. 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 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:
-15-
<PAGE>
<TABLE>
<CAPTION>
FOX HUNT JOINT VENTURE
----------------------
BALANCE SHEETS
--------------
June 30, 1999 and December 31, 1998
-----------------------------------
June 30 December 31
1999 1998
---- ----
<S> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 591,331 $ 1,014,583
Property, net of accumulated depreciation 2,512,657 2,530,775
Accounts receivable - affiliates - 228,256
Mortgage costs 241,345 128,910
Other assets 389,980 361,253
----------------- -----------------
Total Assets $ 3,735,313 $ 4,263,777
================= =================
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Mortgage payable $ 4,482,579 $ 6,000,000
Accounts payable and accrued expenses 228,969 294,685
Other liabilities 114,991 112,747
----------------- -----------------
Total Liabilities 4,826,539 6,407,432
----------------- -----------------
Partners' Capital (2,563,037) (2,143,655)
----------------- -----------------
Total Liabilities and Partners' Capital $ 2,263,502 $ 4,263,777
================= =================
</TABLE>
-16-
<PAGE>
<TABLE>
<CAPTION>
FOX HUNT JOINT VENTURE
----------------------
STATEMENTS OF OPERATIONS
------------------------
Six Months Ended June 30, 1999 and 1998
---------------------------------------
Six Months Six Months
Ended Ended
June 30, June 30,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $ 688,211 $ 679,086
Interest and other income 46,282 57,921
----------------- -----------------
Total income 734,493 737,007
----------------- -----------------
Expenses:
Property operations 445,844 426,001
Depreciation and amortization 241,106 149,809
Interest 257,501 206,279
Administrative 123,699 132,109
----------------- -----------------
Total expenses 1,068,150 914,198
----------------- -----------------
Net income (loss) $ (333,657) $ (177,191)
================= =================
Allocation of net income (loss):
The Partnership $ (38,371) $ (20,377)
Other Joint Venturer (RPILP II) (295,286) (156,814)
----------------- -----------------
$ (333,657) $ (177,191)
================= =================
</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
Allocation of net loss (38,371) (20,377)
Distribution (85,724) -
------------ ------------
Investment in joint venture, June 30 $ 143,288 $ 355,523
============ ============
</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 six month period
ended June 30, 1997 has been included in the statement of operations for
the Partnership.
In July of 1996, the Partnership entered into a plan to dispose of the
property, plant and equipment of Lakeview Village Apartments with a
carrying amount of $2,507,241 and a net loss of $222,600 for the year
ended December 31, 1996. Management has determined that a sale of the
property is in the best interest of the investors. As of December 31,
1996, an agreement, cancelable by the buyer, was signed with an
anticipated sales price of $4,090,000. The agreement was subsequently
canceled in 1997 by the buyer. In December 1998, management closed on
the sale of this property. 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.
-18-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
----------------------------------------
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.
A summary of the assets, liabilities and partners' capital 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:
-19-
<PAGE>
<TABLE>
<CAPTION>
LAKEVIEW JOINT VENTURE
----------------------
BALANCE SHEETS
--------------
June 30, 1999 and December 31, 1998
-----------------------------------
June 30, December 31,
1999 1998
---- ----
<S> <C> <C>
ASSETS
- ------
Property, net of accumulated depreciation $ - $ -
Other assets 25,264 25,264
----------------- ------------------
Total Assets $ 25,264 $ 25,264
================= ==================
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Accounts payable and accrued expenses 90,452 $ 90,452
Accounts payable - affiliates 410,862 410,862
----------------- ------------------
Total Liabilities 501,314 501,314
----------------- ------------------
Partners' (Deficit) (476,050) (476,050)
----------------- ------------------
Total Liabilities and Partners' (Deficit) Capital $ 25,264 $ 25,264
================= ==================
</TABLE>
-20-
<PAGE>
<TABLE>
<CAPTION>
LAKEVIEW JOINT VENTURE
----------------------
STATEMENTS OF OPERATIONS
------------------------
Six Months Ended June 30, 1999 and 1998
Six Months Six Months
Ended Ended
June 30, June 30,
1999 1998
---- ----
<S> <C> <C>
Income:
Rental $ - $ 142,122
Interest and other income - 6,131
----------------- ------------------
Total income - 148,253
----------------- ------------------
Expenses:
Property operations - 165,244
Depreciation and amortization - 72,906
Interest - 85,509
Administrative - 29,906
----------------- ------------------
Total expenses - 353,565
----------------- ------------------
Net loss $ - $ (205,312)
================= ==================
Allocation of net loss:
The Partnership $ - $ (33,302)
Other Joint Venturer - (172,010)
----------------- ------------------
$ - $ (205,312)
================= ==================
</TABLE>
-21-
<PAGE>
INVESTMENT IN JOINT VENTURES (CONTINUED)
----------------------------------------
A reconciliation of the Partnership's investment in the joint venture is
as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Investment in joint venture, January 1 $ (36,954) $ (28,675)
Allocation of net loss - (33,302)
----------- ------------
Investment in joint venture, June 30 $ (36,954) $ (61,977)
=========== ============
</TABLE>
-22-
<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 has been replacing all worn
carpets and old appliances at both Players Club and Fairway Club (formerly The
Villa Apartments). Other capital improvements and/or physical improvements
planned 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. Management feels these properties are located in desirable areas where
the market is strong for apartment rentals; the physical appearance of these
properties is what management believes will set them apart from the competition.
No distributions were made during the six months ended June 30, 1999 or 1998.
The General Partner does hope to resume making distributions during the last six
months of 1999.
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 during 1999.
-23-
<PAGE>
Liquidity and Capital Resources (continued)
- -------------------------------------------
The General Partners successfully refinanced the mortgage on Foxhunt Apartments
in July 1998. The new mortgage calls for interest only payments for one year and
matures August 1, 1999. Management received an extension on this loan until
September 30, 1999. The General Partners believe the mortgage will have
permanent financing by that date.
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.
-24-
<PAGE>
Result of Operations
- --------------------
For the quarter ended June 30, 1999, the Partnership's net loss was $165,787 or
$2.05 per limited partnership unit. Net loss for the quarter ended June 30, 1998
amounted to $239,306 or $2.95 per unit. For the six month period ended June 30,
1999, the net loss was $350,369 or $4.32 per limited partnership unit as
compared to $521,743 or $6.44 per limited partnership unit for the six month
period ended June 30, 1998.
Partnership revenue for the quarter ended June 30, 1999 totaled $444,439, an
increase of approximately $70,000 from the 1998 amount of $374,600. Total rental
revenue during this quarter increased almost $77,000, with the majority of the
increase being attributed to decreased vacancies at Fairway Club (formerly The
Villa); vacancies at this complex decreased by approximately 39%. For the first
six months of 1999, rental revenue increased approximately $107,500 as compared
to the first six months of 1998; other income decreased a modest $4,000 mostly
due to decreased late charges at Fairway Club.
For the quarter ended June 30, 1999, Partnership expenses amounted to $606,081
which is an increase of approximately $17,000 from those incurred in the same
quarter in 1998. For the six month period ended June 30, 1999, Partnership
expenses amounted to $1,218,625 which is a decrease of approximately $52,600 as
compared to the same period in 1998 when expenses totaled $1,271,229. 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
quarter of 1999) in the second quarter of 1999 in contracted services at both
properties in the Partnership due to the fact that more maintenance work is
being done by in-house maintenance staff. Payroll and related costs increased
for the six months ended June 30, 1999 as compared to the same period during
1998 due to more maintenance at the property being done by on-site personnel.
Management expects to see some increases in property operations expenses at
Fairway Club in the remaining six months of 1999 as contracts have either been
signed or management is in the process of obtaining bids for roof repairs,
concrete repairs to sidewalks, resurfacing of the tennis courts and patching,
sealing and re-striping of the parking lot(s). The estimated cost to complete
these items is approximately $30,000. At Players Club, the only capital
improvement scheduled/planned is the replacement of stairs to the second floor
of apartments; this is estimated to cost approximately $8,000. Administrative
expenses in total remained fairly consistent between the two six month periods
with only a small decrease of approximately $3,200 being recorded.
-25-
<PAGE>
Result of Operations (continued)
- --------------------------------
For the six month period ended June 30, 1999, the Foxhunt Joint Venture had a
loss of $333,657 as compared to a loss of $177,191 for the same period in 1998.
According to the Joint Venture agreement, the Partnership was allocated $38,371
of the loss for the six months ended June 30, 1999. The increased loss is
primarily the result of increased depreciation expense recorded during the six
months ended June 30, 1999; during a portion of the six months ended June 30,
1998, Foxhunt Apartments were deemed to be held for sale and according to
accounting pronouncements were therefore not depreciated during this period.
On a tax basis, the Partnership loss totaled $232,369 or $2.87 per limited
partnership unit for the six month period ended June 30, 1999 as compared to the
tax loss for the six month period ended June 30, 1998 which was $512,893 or
$6.33 per limited partnership unit.
-26-
<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.
-27-
<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 September 29, 1999
--------------------- ------------------
Joseph M. Jayson, Date
Individual General Partner and
Principal Financial Officer
-28-
<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 six months ended June 30, 1999, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> JUN-30-1999
<CASH> 769,284
<SECURITIES> 0
<RECEIVABLES> 6,704
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,205,199
<PP&E> 7,064,582
<DEPRECIATION> 1,997,739
<TOTAL-ASSETS> 6,694,212
<CURRENT-LIABILITIES> 364,441
<BONDS> 5,267,124
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,694,212
<SALES> 0
<TOTAL-REVENUES> 906,627
<CGS> 0
<TOTAL-COSTS> 1,218,625
<OTHER-EXPENSES> 38,371
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 224,268
<INCOME-PRETAX> (350,369)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (350,369)
<EPS-BASIC> (4.32)
<EPS-DILUTED> 0
</TABLE>
