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, 2000 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 12A
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 [ ]
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI-B
Form 10-Q
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
Page
<S> <C> <C>
Item 1. Financial Statements
Balance Sheets - June 30, 2000 and December 31, 1999 3
Statements of Operations - Three and six month periods ended
June 30, 2000 and 1999 4
Statement of Partners' Equity - Six months ended June 30, 2000 5
Statements of Cash Flows - Six months ended June 30, 2000 and 1999 6
Notes to Financial Statements 7 - 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2 - 5. Not applicable 11
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
2
<PAGE>
PART I - Item 1. Financial Statements
--------------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Balance Sheets
June 30, 2000 and December 31, 1999
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
Assets 2000 1999
------ ---- ----
<S> <C> <C>
Property and equipment, at cost:
Land and improvements $ 780,500 780,500
Buildings and improvements 6,040,520 6,028,430
Furniture, fixtures and equipment 257,865 257,865
----------- -----------
7,078,885 7,066,795
Less accumulated depreciation 2,214,101 2,097,343
----------- -----------
Net property and equipment 4,864,784 4,969,452
Investment in joint ventures 107,135 101,543
Cash and cash equivalents 841,163 798,022
Receivables from affiliated parties 96,866 90,816
Escrow deposits 211,591 231,206
Mortgage costs, less accumulated amortization
of $35,192 in 2000 and $29,530 in 1999 304,514 310,176
Other assets 21,129 33,502
----------- -----------
Total assets $ 6,447,182 6,534,717
=========== ===========
Liabilities and Partners' Equity
--------------------------------
Liabilities:
Mortgage loans payable 5,248,748 5,269,300
Accounts payable and accrued expenses 183,779 167,611
Security deposits and prepaid rents 133,698 129,613
----------- -----------
Total liabilities 5,566,225 5,566,524
----------- -----------
Partners' equity (deficit):
General partners (158,099) (155,482)
Limited partners 1,039,056 1,123,675
----------- -----------
Total partners' equity 880,957 968,193
----------- -----------
Contingency
----------- -----------
Total liabilities and partners' equity $ 6,447,182 6,534,717
=========== ===========
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Statements of Operations
Three and six month periods ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
------------------ ----------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income:
Rental $ 491,323 429,899 951,278 871,840
Interest and other income 17,909 14,540 51,792 34,787
---------- ---------- ---------- ----------
Total income 509,232 444,439 1,003,070 906,627
---------- ---------- ---------- ----------
Expenses:
Property operations 285,899 328,460 559,951 667,122
Interest 114,229 114,503 228,691 229,931
Depreciation 58,490 61,776 116,758 123,553
Administrative:
Affiliated parties 44,184 46,324 90,676 87,467
Other 58,602 55,018 99,822 110,552
---------- ---------- ---------- ----------
Total expenses 561,404 606,081 1,095,898 1,218,625
---------- ---------- ---------- ----------
Loss before equity in earnings (loss)
of joint venture (52,172) (161,642) (92,828) (311,998)
Equity in earnings (loss) of joint venture (1,315) (4,145) 5,592 (38,371)
---------- ---------- ---------- ----------
Net loss $ (53,487) (165,787) (87,236) (350,369)
========== ========== ========== ==========
Net loss per limited partnership unit $ (.66) (2.05) (1.08) (4.33)
========== ========== ========== ==========
Weighted average number of limited
partnership units outstanding 78,625.1 78,625.1 78,625.1 78,625.1
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Statement of Partners' Equity
Six months ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
General Limited Partners
Partners Units Amount
-------- ----- ------
<S> <C> <C> <C>
Balances at January 1, 2000 $ (155,482) 78,625.1 1,123,675
Net loss (2,617) -- (84,619)
---------- -------- ----------
Balances at June 30, 2000 $ (158,099) 78,625.1 1,039,056
========== ======== ==========
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Statements of Cash Flows
Six months ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
----------------
June 30, June 30,
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (87,236) (350,369)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 122,420 129,216
Equity in joint venture operations (5,592) 38,371
Changes in:
Receivables from affiliated parties (6,050) 93,291
Escrow deposits 19,615 (73,609)
Other assets 12,373 4,844
Accounts payable and accrued expenses 16,168 28,182
Security deposits and prepaid rents 4,085 12,818
--------- ---------
Net cash provided (used) by
operating activities 75,783 (117,256)
--------- ---------
Cash flows used by investing activities - additions to property
and equipment (12,090) --
--------- ---------
Cash flows from financing activities:
Principal payments on mortgage loans (20,552) (41,963)
Distributions from joint ventures -- 85,724
--------- ---------
Net cash provided (used) by financing
activities (20,552) 43,761
--------- ---------
Net increase (decrease) in cash and cash equivalents 43,141 (73,495)
Cash and cash equivalents at beginning of period 798,022 842,779
--------- ---------
Cash and cash equivalents at end of period $ 841,163 769,284
========= =========
Supplemental disclosure of cash flow information -
cash paid during the period for interest $ 224,401 167,160
========= =========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements
Six months ended June 30, 2000 and 1999
(Unaudited)
(1) Basis of Presentation
--------------------------
The accompanying interim financial statements have been prepared in
accordance with generally accepted accounting principles and, in the
opinion of management, contain all necessary adjustments for a fair
presentation. The Partnership's significant accounting policies are set
forth in its December 31, 1999 Form 10-K. The interim financial
statements should be read in conjunction with the financial statements
included therein. The interim results should not be considered
indicative of the annual results. Certain reclassifications of prior
period numbers may have been made to conform to the current period
presentation.
(2) Organization
-----------------
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. The general partners are Realmark Properties, Inc.
(the corporate general partner) and Joseph M. Jayson (the individual
general partner). Joseph M. Jayson is the sole stockholder of J.M.
Jayson & Company Inc. Realmark Properties, Inc. is a wholly-owned
subsidiary 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.
(3) Investment in Joint Venture
--------------------------------
The Partnership has an 11.5% interest in a joint venture with Realmark
Property Investors Limited Partnership-II (RPILP-II), an entity
affiliated through common general partners, owning 88.5%. The Joint
Venture was formed to own and operate the Foxhunt Apartments, located
in Dayton, Ohio.
In July 1999, management of the joint venture established a plan to
dispose of Foxhunt Apartments. The Foxhunt property is carried at the
lower of depreciated cost or fair value less costs to sell and is not
depreciated during the disposal period. Depreciation expense not
recorded in the three and six months ended June 30, 2000 was
approximately $72,000 and $144,000, respectively.
7
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(3) Investment in Joint Venture, Continued
-------------------------------------------
A summary of the assets, liabilities, and partners' deficiency of the
Foxhunt joint venture as of June 30, 2000 and December 31, 1999 and the
results of its operations for the six months ended June 30, 2000 and
1999 is as follows:
<TABLE>
<CAPTION>
June 30, December 31,
Assets 2000 1999
------ ---- ----
<S> <C> <C>
Property and equipment, net of accumulated depreciation $ 2,440,665 2,442,352
Cash and cash equivalents 130,502 128,829
Other assets 190,113 154,553
-------------- -----------
Total assets $ 2,761,280 2,725,734
============== ===========
Liabilities and Partners' Deficiency
------------------------------------
Liabilities:
Mortgage loan payable 5,975,684 6,000,000
Other liabilities 322,715 311,482
-------------- -----------
Total liabilities 6,298,399 6,311,482
Partners' deficiency (3,537,119) (3,585,748)
-------------- -----------
Total liabilities and partners' deficiency $ 2,761,280 2,725,734
============== ===========
</TABLE>
<TABLE>
<CAPTION>
Six months ended
----------------
June 30, June 30,
2000 1999
---- ----
<S> <C> <C>
Income:
Rental $ 759,089 688,211
Interest and other income 29,003 46,282
---------- -----------
Total income 788,092 734,493
---------- -----------
Expenses:
Property operations 348,383 445,844
Interest 288,767 352,995
Depreciation 1,687 145,612
Administrative 100,626 123,699
---------- -----------
Total expenses 739,463 1,068,150
---------- -----------
Net income (loss) $ 48,629 (333,657)
========== ===========
Allocation of net income (loss):
The Partnership 5,592 (38,371)
RPILP-II 43,037 (295,286)
---------- -----------
$ 48,629 (333,657
========== ===========
</TABLE>
8
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(4) Current Accounting Pronouncements
--------------------------------------
In June 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 138 - "Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an Amendment of
Statement No. 133" which amends certain provisions of Statement of
Financial Accounting Standards No. 133 - "Accounting for Derivative
Instruments and Hedging Activities". These statements establish
accounting and financial reporting standards for derivative instruments
and hedging activities. These statements become effective for the
Partnership on January 1, 2001. The effect, if any, that Statements No.
133 and 138 will have on the Partnership's operations and financial
position will not be material.
(5) Contingency
----------------
The Partnership, as a nominal defendant, the General Partners of the
Partnership and the three individuals constituting the officers and
directors of the Corporate General Partner, as defendants, were served
with a Summons and Complaint on April 19, 2000 in a class and
derivative action instituted by Ira Gaines and on August 21, 2000 in a
class and derivative action instituted by Sean O'Reilly and Louise
Homburger, each in Supreme Court, County of Erie, State of New York.
The actions allege breaches of contract and breaches of fiduciary duty
and seek, among other things, an accounting, the removal of the General
Partners, the liquidation of the Partnership and the appointment of a
receiver to supervise the liquidation, and damages. The General
Partners and the officers and directors of the Corporate General
Partner have filed a motion to dismiss the first complaint and are
presently reviewing the second complaint and intend to vigorously
pursue their defense.
9
<PAGE>
PART I - Item 2. Management's Discussion and Analysis of Financial Condition
-----------------------------------------------------------
and Results of Operations
-------------------------
Liquidity and Capital Resources
-------------------------------
The Partnership continues to maintain a cash position adequate to fund its
scheduled capital improvements for 2000 that include replacement of carpeting
and appliances to enhance the attractiveness of apartments to both current and
future residents. Other improvements planned and/or in process include interior
painting and completion of roof and gutter repairs at Fairway Club Apartments
(formerly The Villas). Landscaping improvements have been made to both sites. No
distributions to partners were made during the six months ended June 30, 2000 or
1999. The ability to make distributions later in the current year will be
evaluated.
Results of Operations
---------------------
As compared to the comparable 1999 periods, the Partnership's net loss decreased
approximately $112,000 and $263,000, respectively, for the quarter and six
months ended June 30, 2000. The primary components of the decreases were as
follows:
<TABLE>
<CAPTION>
Three months Six months
ended June 30, 2000 Ended June 30, 2000
------------------- -------------------
<S> <C> <C>
Income increases:
Rental $ 62,000 79,000
Equity in joint venture operations 3,000 44,000
Other 3,000 17,000
Expense decreases:
Property operations 43,000 114,000
Depreciation 3,000 7,000
Other (2,000) 2,000
--------- ---------
Total $ 112,000 $ 263,000
========= =========
</TABLE>
The increase in rental income in both periods is the result of higher occupancy
at Fairway Club Apartments (formerly The Villas), offsetting relatively small
decreases in rental income at Players Club. The Partnership's equity in the
operations of the Foxhunt joint venture showed improvement as a result of
improved operations at Foxhunt and a discontinuance of depreciating this
property that is covered by a sales plan. Note 3 to the financial statements
provides a summary of Foxhunt's financial statements.
The reductions in property operations expense are totally attributable to the
decreases in the cost of repairs, replacements and maintenance at both
properties.
10
<PAGE>
PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
The Partnership's cash equivalents are short-term, interest-bearing bank
accounts and its mortgage loans are fixed-rate. It has not entered into
any derivative contracts. Therefore, it has no market risk exposure.
PART II - OTHER INFORMATION
-----------------
Item 1. Legal Proceedings
--------------------------
The Partnership, as a nominal defendant, the General Partners of the
Partnership and the three individuals constituting the officers and
directors of the Corporate General Partner, as defendants, were served
with a Summons and Complaint on April 19, 2000 in a class and
derivative action instituted by Ira Gaines and on August 21, 2000 in a
class and derivative action instituted by Sean O'Reilly and Louise
Homburger, each in Supreme Court, County of Erie, State of New York.
The actions allege breaches of contract and breaches of fiduciary duty
and seek, among other things, an accounting, the removal of the
General Partners, the liquidation of the Partnership and the
appointment of a receiver to supervise the liquidation, and damages.
The General Partners and the officers and directors of the Corporate
General Partner have filed a motion to dismiss the first complaint and
are presently reviewing the second complaint and intend to vigorously
pursue their defense.
Items 2, 3, 4 and 5
-------------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
The Partnership reported a change in independent accountants under item 4
of Form 8-K, filed on January 19, 2000 and amended on February 3, 2000,
April 17, 2000 and May 2, 2000.
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 PARTNERHIP VI-B
By: /s/ Joseph M. Jayson 12/01/00
----------------------------------- -------------------
Joseph M. Jayson, Date
Individual General Partner and
Principal Financial Officer
11
