UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 8, 1997
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SB Partners
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(Exact name of registrant as specified in its charter)
New York 000-08952 13-6294787
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
666 Fifth Avenue, New York, NY 10103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 408-2929
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(Former name or former address, if changed since last report.)
Item 2. Acquisition and Disposition of Assets
On December 8, 1997, the Registrant sold Plantation Shopping
Center to Stiles Corporation, a Florida corporation, for $11,000,000
in an all cash transaction. The proceeds from the sale of Plantation
Shopping Center were used, in part, to retire the mortgage note
secured by the property.
On December 15, 1997, the Registrant purchased the forty-percent
interest in the joint venture which owns Riverbend Apartments in
Atlanta, Georgia, from its co-venturer, an institutional investor, for
$9,800,000, the approximate value of the co-venturer's share of net
assets computed without regard to depreciation and amortization. In
connection with this transaction, the Registrant secured a loan in the
amount of $4,000,000 with Corestates Bank at a variable rate of LIBOR
plus two percent. In addition, proceeds from the sale of Plantation
Shopping Center were applied toward the purchase, with the balance of
the purchase price being funded with cash held by the Registrant.
<PAGE>2
Item 7. Financial Statements
The following pro forma financial statements reflect the sale of
Plantation Shopping Center and the acquisition of the forty-percent
co-venturer's interest in Riverbend Apartments by the Registrant. The
balance sheet as of the last filing, September 30, 1997, has been
restated to reflect the removal of the assets and liabilities related to
Plantation Shopping Center, the removal of the investment in joint
venture, and the addition of the assets and liabilities of the joint
venture. The statements of operations for both the nine months
ended September 30, 1997 and the year ended December 31, 1996 have
been restated to reflect the results of operations of the Registrant
as if the sale and acquisition had been consummated at the beginning
of the periods presented.
In addition, all items of income and related expenses of the
International Jewelry Center and 1010 Market Street Office Building
have been removed from the statements of operations for the year ended
December 31, 1996, in accordance with the rules and regulations
regarding the filing of Form 8-K, as the Registrant disposed of these
properties during that year. Please refer also to the Forms 8-K dated
May 22, 1996 and August 28, 1996, filed in the previous year.
Complete audited financial statements of the entity acquired are
not presently available and will be filed within sixty days in
accordance with the rules and regulations for filing Form 8-K.
<PAGE>3
<TABLE>
SB PARTNERS
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(a New York limited partnership)
------------------------------
PRO FORMA BALANCE SHEET
-----------------------
<CAPTION>
PRO FORMA ADJUSTMENTS
(SEE NOTE 3)
---------------------
September 30, RESTATED
1997 PLANTATION RIVERBEND BALANCE
AS REPORTED SHOPPING CENTER APARTMENTS SHEET
----------- ----------------- ------------ ----------
<S> <C> <C> <C> <C>
Assets:
Investments -
Real Estate, at cost
Land $ 2,924,653 $ 0 $ 0 $ 2,924,653
Buildings, furnishings and improvements 28,726,406 0 0 28,726,406
Less - accumulated depreciation (13,016,464) 0 0 (13,016,464)
------------ ------------ ------------ ------------
18,634,595 0 0 18,634,595
Investment in joint venture 10,961,882 0 (10,961,882) 0
----------- ------------ ------------ ------------
29,596,477 0 (10,961,882) 18,634,595
Other assets-
Real estate assets held for sale 13,021,025 (8,952,599) 20,661,882 24,730,308
Cash and cash equivalents 1,764,304 5,126,000 (5,430,417) 1,459,887
Accounts receivable, accrued interest and other 2,031,557 (537,062) 43,925 1,538,420
----------- ------------ ------------ ------------
Total assets $46,413,363 $ (4,363,661) $ 4,313,508 $ 46,363,210
=========== ============ ============ ============
Liabilities:
Mortgage notes payable $30,179,151 $(5,350,000) $ 4,000,000 $ 28,829,151
Accounts payable and accrued expenses 934,879 (368,967) 220,464 786,376
Tenants security deposits 311,464 (83,432) 93,044 321,076
----------- ----------- ------------ ------------
Total liabilities 31,425,494 (5,802,399) 4,313,508 29,936,603
----------- ----------- ------------ ------------
Partners' Capital:
Units of partnership interest without par value;
Limited partners - 7,753 units 15,004,371 1,438,645 0 16,443,016
General partner - 1 unit (16,502) 93 0 (16,409)
----------- ----------- ------------ ------------
14,987,869 1,438,738 0 16,426,607
----------- ----------- ------------ ------------
Total liabilities & partners' capital $46,413,363 $(4,363,661) $ 4,313,508 $ 46,363,210
=========== =========== ============ ============
See accompanying notes to pro forma financial statements.
</TABLE>
<PAGE>4
<TABLE>
SB PARTNERS
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(a New York limited partnership)
------------------------------
PRO FORMA STATEMENT OF OPERATIONS
---------------------------------
<CAPTION>
For the Nine Months Ended September 30, 1997
--------------------------------------------
PRO FORMA ADJUSTMENTS
(SEE NOTE 3)
---------------------
PLANTATION RESTATED
AS SHOPPING RIVERBEND INCOME
REPORTED CENTER APARTMENTS STATEMENT
---------- ------------ ---------- ---------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 6,487,702 $(1,339,380) $2,743,422 $7,891,744
Interest on short-term investments 84,674 (124) 8,633 93,183
Other 254,050 (36,597) 540,665 758,118
----------- ----------- ---------- ----------
Total revenues 6,826,426 (1,376,101) 3,292,720 8,743,045
----------- ----------- ---------- ----------
Expenses:
Interest on mortgage notes payable 1,779,090 (312,011) 229,600 1,696,679
Real estate operating expenses 2,747,661 (230,366) 1,817,965 4,335,260
Depreciation and amortization 1,425,114 (391,992) 0 1,033,122
Real estate taxes 660,493 (231,345) 190,387 619,535
Management fees 897,651 (128,000) 56,000 825,651
Other 69,683 (12,203) 42,925 100,405
----------- ----------- ---------- ----------
Total expenses 7,579,692 (1,305,917) 2,336,877 8,610,652
----------- ----------- ---------- ----------
Income (loss) from operations (753,266) (70,184) 955,843 132,393
Equity in net income of joint venture 219,689 0 (219,689) 0
Loss on sale of investment in real estate (65,163) 0 0 (65,163)
----------- ----------- ---------- ----------
Net income (loss) before extraordinary items (598,740) (70,184) 736,154 67,230
Income (loss) before extraordinary items
allocated to general partner (77) (9) 95 9
----------- ----------- ---------- ----------
Income (loss) before extraordinary items
allocated to limited partners $ (598,663) $ (70,175) $ 736,059 $ 67,221
=========== =========== ========== ==========
Net income (loss) before extraordinary items
Per Unit of Limited Partnership Interest: $ (77.22) $ (9.05) $ 94.94 $ 8.67
=========== =========== ========== ==========
Weighted Average Number of Units of Limited
Partnership Interest Outstanding 7,753 7,753 7,753 7,753
=========== =========== ========== ==========
See accompanying notes to pro forma financial statements.
</TABLE>
<PAGE>5
<TABLE>
SB PARTNERS
------------
(a New York limited partnership)
------------------------------
PRO FORMA STATEMENT OF OPERATIONS
---------------------------------
<CAPTION>
For the Year Ended December 31, 1996
------------------------------------
PRO FORMA ADJUSTMENTS
(SEE NOTE 3)
---------------------
INTERNATIONAL 1010 RESTATED
AS JEWELRY MARKET STREET FOR 1996
REPORTED CENTER OFFICE BUILDING TRANSACTIONS
----------- ------------- --------------- ------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $14,940,374 $(2,845,052) $(3,528,658) $8,566,664
Interest on short-term investments 50,615 0 (1,079) 49,536
Other 439,063 (4,373) (287,143) 147,547
----------- ----------- ---------- -----------
Total revenues 15,430,052 (2,849,425) (3,816,880) 8,763,747
----------- ----------- ---------- -----------
Expenses:
Interest on mortgage notes payable 7,215,718 (1,793,019) (2,893,234) 2,529,465
Real estate operating expenses 6,993,395 (1,581,750) (1,169,739) 4,241,906
Write-off of uncollectible accounts 2,531,516 (1,931,305) (600,211) 0
Depreciation and amortization 3,465,840 (788,103) (651,860) 2,025,877
Real estate taxes 1,086,477 (85,476) (174,946) 826,055
Management fees 1,634,397 (122,000) (78,000) 1,434,397
Other 567,553 (156,796) (14,363) 396,394
----------- ----------- ---------- -----------
Total expenses 23,494,896 (6,458,449) (5,582,353) 11,454,094
----------- ----------- ---------- -----------
Income (loss) from operations (8,064,844) 3,609,024 1,765,473 (2,690,347)
Equity in net income of joint venture 425,725 0 0 425,725
----------- ----------- ---------- -----------
Net income (loss) before extraordinary items (7,639,119) 3,609,024 1,765,473 (2,264,622)
Income (loss) before extraordinary items
allocated to general partner (985) 465 228 (292)
----------- ----------- ---------- -----------
Income (loss) before extraordinary items
allocated to limited partners $(7,638,134) $ 3,608,559 $1,765,245 $(2,264,330)
=========== =========== ========== ===========
Net income (loss) before extraordinary items
Per Unit of Limited Partnership Interest: $ (985.18) $ 465.44 $ 227.69 $ (292.06)
=========== =========== ========== ===========
Weighted Average Number of Units of Limited
Partnership Interest Outstanding 7,753 7,753 7,753 7,753
=========== =========== ========== ===========
See accompanying notes to pro forma financial statements.
</TABLE>
<PAGE>6
<TABLE>
SB PARTNERS
------------
(a New York limited partnership)
------------------------------
PRO FORMA STATEMENT OF OPERATIONS
---------------------------------
<CAPTION>
For the Year Ended December 31, 1996
------------------------------------
PRO FORMA ADJUSTMENTS
(SEE NOTE 3)
---------------------
RESTATED PLANTATION RESTATED
FOR 1996 SHOPPING RIVERBEND INCOME
TRANSACTIONS CENTER APARTMENTS STATEMENT
------------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
Revenues:
Rental income $8,566,664 $(1,415,866) $3,809,212 $10,960,010
Interest on short-term investments 49,536 (138) 2,803 52,201
Other 147,547 (9,098) 768,150 906,,599
----------- ----------- ---------- -----------
Total revenues 8,763,747 (1,425,102) 4,580,165 11,918,810
----------- ----------- ---------- -----------
Expenses:
Interest on mortgage notes payable 2,529,465 (498,514) 304,000 2,334,951
Real estate operating expenses 4,241,906 (317,524) 2,525,432 6,449,814
Write-off of uncollectible accounts 0 (0) 0 0
Depreciation and amortization 2,025,877 (456,887) 0 1,568,990
Real estate taxes 826,055 (292,432) 251,249 784,872
Management fees 1,434,397 (104,000) 68,000 1,398,397
Other 396,394 (28,188) 111,452 479,658
----------- ----------- ---------- -----------
Total expenses 11,454,094 (1,697,545) 3,260,133 13,016,682
----------- ----------- ---------- -----------
Income (loss) from operations (2,690,347) 272,443 1,320,032 (1,097,872)
Equity in net income of joint venture 425,725 0 (425,725) 0
----------- ----------- ---------- -----------
Net income (loss) before extraordinary items (2,264,622) 272,443 894,307 (1,097,872)
Income (loss) before extraordinary items
allocated to general partner (292) 35 115 (142)
----------- ----------- ---------- -----------
Income (loss) before extraordinary items
allocated to limited partners $(2,264,330) $ 272,408 $ 894,192 $(1,097,730)
=========== =========== ========== ===========
Net income (loss) before extraordinary items
Per Unit of Limited Partnership Interest: $ (292.06) $ 35.14 $ 115.33 $ (141.59)
=========== =========== ========== ===========
Weighted Average Number of Units of Limited
Partnership Interest Outstanding 7,753 7,753 7,753 7,753
=========== =========== ========== ===========
See accompanying notes to pro forma financial statements.
</TABLE>
<PAGE>7
SB PARTNERS
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(a New York limited partnership)
--------------------------------
NOTES TO PRO FORMA FINANCIAL STATEMENTS
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(1) Accounting and Financial Reporting
----------------------------------
The financial statements included herein are unaudited; however,
the information reflects all adjustments (consisting solely of normal
recurring adjustments) that are, in the opinion of management,
necessary to a fair presentation of the financial position and results
of operations for the periods presented. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations,
although the Registrant believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that
these financial statements be read in conjunction with the financial
statements and the notes thereto included in the Registrant's latest
quarterly report on Form 10-Q and annual report on Form 10-K.
(2) Mortgage Notes Payable
----------------------
The net proceeds from the sale of Plantation Shopping Center,
approximately $10,476,000, were used first to retire the mortgage note
of $5,350,000 secured by the property, with the remaining funds
applied to the purchase of the forty percent co-venturer's interest in
Riverbend Apartments. Additional funds for the purchase of the co-
venturer's interest were obtained through a short-term mortgage note,
advanced by the Registrant's lead bank, which carries interest at the
rate of LIBOR plus two percent and matures in June, 1999. The note
may be extended if the property is not sold before the term expires.
(3) Pro Forma Adjustments
---------------------
The following pro forma financial statements reflect the sale of
Plantation Shopping Center and the acquisition of the forty-percent
co-venturer's interest in Riverbend Apartments by the Registrant. The
balance sheet as of the last filing, September 30, 1997, has been
restated to reflect the removal of the assets and liabilities related
to Plantation Shopping Center, the removal of the investment in joint
venture, and the addition of the assets and liabilities of the joint
venture. The statements of operations for both the nine months ended
September 30, 1997 and the year ended December 31, 1996 have been
restated to reflect the results of operations of the Registrant as if
the sale and acquisition had been consummated at the beginning of the
periods presented. In addition, all items of income and related
expenses of the International Jewelry Center and 1010 Market Street
Office Building have been removed from the statements of operations
for the year ended December 31, 1996, in accordance with the rules and
regulations regarding the filing of Form 8-K, as the Registrant
disposed of these properties during that year. Please refer also to
the Forms 8-K dated May 22, 1996 and August 28, 1996, filed in the
previous year.
All the assets and related liabilities of Plantation Shopping
Center have been removed from the historical balance sheet to
reflect the sale of the property. Assets removed include that portion
of "Real estate assets held for sale" pertaining to the shopping
center, and amounts recorded as receivable from tenants. Liabilities
removed include the first mortgage secured by the property and the
related accrued interest payable, and amounts recorded as tenant
security deposits. The partners' capital accounts are adjusted
accordingly. All adjustments are shown as of the date of the last
balance sheet filed, September 30, 1997.
<PAGE>8
The investment in joint venture has been removed from the balance
sheet and the total investment in Riverbend Apartments has been added
to "Real estate assets held for sale". Other assets and liabilities
associated with the operation of the property, such as prepaid
expenses, accrued real estate taxes and tenant security deposits, have
been added to the appropriate captions on the balance sheet. The
partners' capital accounts are adjusted accordingly. All adjustments
are shown as of the date of the last balance sheet filed, September
30, 1997.
All items of income of Plantation Shopping Center have been
removed from the statements of operations for the periods presented,
including rental and other income received from tenants and interest
earned on short-term investments. All expenses relating to the
property, including interest accrued on the mortgage, real estate
operating expenses and taxes, depreciation, and other expenses have
also been removed from the statements of operations. In addition,
management fees have been reduced to reflect the sale of the property.
The aforementioned income and expense adjustments have been prepared
as if the sale had taken place at the beginning of the periods
presented.
"Equity in net income of joint venture" has been removed from the
statements of operations for the periods presented, and instead, all
items of income and expense relating to property operations, including
rental income, and utility, payroll, and maintenance expenses have
been included in the statements of operations for the periods
presented. Management fees have been adjusted as well, to reflect the
increased investment in real estate property. No depreciation expense
is included in the pro forma financial statements since the property
is an asset held for sale. Interest expense on the loan of $4,000,000
has been computed using the historical LIBOR rates plus two percent,
in accordance the terms of the new loan used to acquire the co-
venturer's interest. The aforementioned income and expense
adjustments have been prepared as if the acquisition had taken place
at the beginning of the periods presented.
(4) Gain on Sale of Investment in Real Estate
-----------------------------------------
The sale of Plantation Shopping Center resulted in a gain of
approximately $1,500,000. This gain is not reflected in the pro forma
adjustments to the statements of operations. The gain for tax
purposes will be computed using the tax basis of the asset sold, and
will differ from the gain reported on the financial statements.
<PAGE>9
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 hereunto duly authorized.
SB Partners
--------------------------------------
(Registrant)
By: SB PARTNERS REAL ESTATE CORPORATION
GENERAL PARTNER
Date December 23, 1997 /s/ George N. Tietjen III
------------------------ --------------------------------------
George N. Tietjen III
Vice-President
