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) April 16, 1998
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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 April 16, 1998, the Registrant sold Cherry Hill Office
Center to BGK Equities, Inc., a New Mexico corporation, for
$4,825,000 in an all cash transaction. The proceeds from the
sale of Cherry Hill Office Center were used, in part, to retire
the short-term bank loan of $4,000,000, the proceeds of which
had been used to finance a portion of the purchase of the forty
percent co-venturer's interest in Riverbend Apartments in
December, 1997.
<PAGE>2
Item 7. Financial Statements
The following pro forma financial statements reflect the
sale of Cherry Hill Office Center by the Registrant, and the
retirement of the bank loan which was used to finance a portion
of the purchase of the forty percent co-venturer's interest in
Riverbend Apartments. The balance sheet as of the last filing,
December 31, 1997, has been restated to reflect the removal of
the assets and liabilities of Cherry Hill Office Center, and the
retirement of the bank loan. The statement of operations for
the year ended December 31, 1997 has been restated to reflect
the results of operations of the Registrant as if the sale and
retirement of debt had been consummated at the beginning of
1997.
Furthermore, all items of income and related expenses of
Plantation Shopping Center, which was sold on December 8, 1997,
have been removed from the statement of operations for the year
ended December 31, 1997. "Equity in net income of joint
venture" has been removed and the income and expenses of
Riverbend Apartments have been added to the statement of
operations for the year ended December 31, 1997, as the
Registrant purchased the forty percent co-venturer's interest in
the apartment community on December 15, 1997. The Registrant is
reflecting these transactions in accordance with the rules and
regulations regarding the filing of Form 8-K, as the sale and
acquisition were consummated during 1997. Please refer also to
the Form 8-K dated December 8, 1997, as amended, filed in
connection with these transactions.
<PAGE>3
<TABLE>
SB PARTNERS
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(a New York limited partnership)
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PRO FORMA BALANCE SHEET
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<CAPTION>
DECEMBER 31, PRO FORMA PRO FORMA
1997 ADJUSTMENTS BALANCE
AS REPORTED (SEE NOTE 2) SHEET
----------- ------------ ---------
<S> <C> <C> <C>
Assets:
Investments -
Real Estate, at cost
Land $ 2,924,653 $ 0 $ 2,924,653
Buildings, furnishings and improvements 28,867,658 0 28,867,658
Less - accumulated depreciation (13,290,104) 0 (13,290,104)
----------- ----------- -----------
18,502,207 0 18,502,207
Real estate assets held for sale 24,925,795 (4,093,032) 20,832,763
----------- ----------- -----------
43,428,002 (4,093,032) 39,334,970
Other assets-
Cash and cash equivalents 549,760 645,000 1,194,760
Other 1,689,366 (184,663) 1,504,703
----------- ----------- -----------
Total assets $45,667,128 $(3,632,695) $42,034,433
=========== =========== ===========
Liabilities:
Mortgage notes and other loans payable $28,741,975 $(4,000,000) $24,741,975
Accounts payable and accrued expenses 628,938 (30,984) 597,954
Tenants security deposits 309,836 (79,601) 230,235
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Total liabilities 29,680,749 (4,110,585) 25,570,164
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Partners' Capital:
Units of partnership interest without par value;
Limited partners - 7,753 units 16,002,752 477,828 16,480,580
General partner - 1 unit (16,373) 62 (16,311)
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Total partners' capital 15,986,379 477,890 16,464,269
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Total liabilities & partners' capital $45,667,128 $(3,632,695) $42,034,433
=========== =========== ===========
See accompanying notes to pro forma financial statements.
</TABLE>
<PAGE>4
<TABLE>
SB PARTNERS
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(a New York limited partnership)
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PRO FORMA STATEMENT OF OPERATIONS
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<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1997
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PRO FORMA ADJUSTMENTS
(SEE NOTE 2)
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PLANTATION RESTATED
AS SHOPPING RIVERBEND FOR 1997
REPORTED CENTER APARTMENTS TRANSACTIONS
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<S> <C> <C> <C> <C>
Revenues:
Rental income $ 8,647,671 $(1,660,552) $3,552,552 $10,539,671
Interest on short-term investments 110,680 0 33,000 143,680
Other 307,301 (38,856) 690,063 958,508
----------- ----------- ---------- -----------
Total revenues 9,065,652 (1,699,408) 4,275,615 11,641,859
----------- ----------- ---------- -----------
Expenses:
Real estate operating expenses 3,826,057 (309,882) 2,405,833 5,922,008
Interest on mortgage notes and other loans payable 2,213,440 (390,484) 0 1,822,956
Depreciation and amortization 1,723,683 (391,992) 0 1,331,691
Management fees 1,196,611 (160,000) 115,000 1,151,611
Real estate taxes 815,086 (245,724) 273,855 843,217
Write-off of uncollectible accounts 369,635 (328,615) 0 41,020
Other 241,951 (32,208) 99,567 309,310
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Total expenses 10,386,463 (1,858,905) 2,894,255 11,421,813
----------- ----------- ---------- -----------
Income (loss) from operations (1,320,811) 159,497 1,381,360 220,046
Equity in net income of joint venture 316,320 0 (316,320) 0
----------- ----------- ---------- -----------
Net income (loss) from continuing operations (1,004,491) 159,497 1,065,040 220,046
Net Income (loss) from continuing operations
allocated to general partner (130) 21 137 28
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Net Income (loss) from continuing operations
allocated to limited partners $(1,004,361) $ 159,476 $1,064,903 $ 220,018
=========== =========== ========== ===========
Net income (loss) from continuing operations
per Unit of Limited Partnership Interest: $ (129.54) $ 20.57 $ 137.35 $ 28.38
=========== =========== ========== ===========
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
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(a New York limited partnership)
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PRO FORMA STATEMENT OF OPERATIONS
---------------------------------
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1997
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PRO FORMA ADJUSTMENTS
(SEE NOTE 2)
RESTATED --------------------- PRO FORMA
FOR 1997 CHERRY HILL INCOME
TRANSACTIONS OFFICE CENTER STATEMENT
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<S> <C> <C> <C>
Revenues:
Rental income $10,539,671 $(1,496,841) $ 9,042,830
Interest on short-term investments 143,680 0 143,680
Other 958,508 (6,842) 951,666
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Total revenues 11,641,859 (1,503,683) 10,138,176
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Expenses:
Real estate operating expenses 5,922,008 (909,706) 5,012,302
Interest on mortgage notes and other loans payable 1,822,956 (15,342) 1,807,614
Depreciation and amortization 1,331,691 (174,406) 1,157,285
Management fees 1,151,611 (72,000) 1,079,611
Real estate taxes 843,217 (168,971) 674,246
Write-off of uncollectible accounts 41,020 0 41,020
Other 309,310 (3,421) 305,889
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Total expenses 11,421,813 (1,343,846) 10,077,967
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Income (loss) from operations 220,046 (159,837) 60,209
Equity in net income of joint venture 0 0 0
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Net income (loss) from continuing operations 220,046 (159,837) 60,209
Net Income (loss) from continuing operations
allocated to general partner 28 (21) 7
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Net Income (loss) from continuing operations
allocated to limited partners $ 220,018 $ (159,816) $ 60,202
=========== =========== ===========
Net income (loss) from continuing operations
per Unit of Limited Partnership Interest: $ 28.38 $ (20.61) $ 7.77
=========== =========== ===========
Weighted Average Number of Units of Limited
Partnership Interest Outstanding 7,753 7,753 7,753
=========== =========== ===========
See accompanying notes to pro forma financial statements.
</TABLE>
<PAGE>6
SB PARTNERS
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(a New York limited partnership)
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NOTES TO PRO FORMA FINANCIAL STATEMENTS
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(1) Accounting and Financial Reporting
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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 period 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 annual report on Form
10-K.
(2) Pro Forma Adjustments
---------------------
The accompanying pro forma financial statements reflect the
sale of Cherry Hill Office Center by the Registrant, and the
retirement of the bank loan which was used to finance a portion of
the purchase of the forty percent co-venturer's interest in
Riverbend Apartments. The balance sheet as of the last filing,
December 31, 1997, has been restated to reflect the removal of the
assets and liabilities of Cherry Hill Office Center, and the
retirement of the bank loan. The statement of operations for the
year ended December 31, 1997 has been restated to reflect the
results of operations of the Registrant as if the sale and
retirement of debt had been consummated at the beginning of 1997.
Furthermore, all items of income and related expenses of
Plantation Shopping Center, which was sold on December 8, 1997,
have been removed from the statement of operations for the year
ended December 31, 1997. In addition, "equity in net income of
joint venture" has been removed, and the income and expenses of
Riverbend Apartments have been added to the statement of operations
for the year ended December 31, 1997, as the Registrant purchased
the forty percent co-venturer's interest in the apartment community
on December 15, 1997. The Registrant is reflecting these
transactions in accordance with the rules and regulations regarding
the filing of Form 8-K, as the sale and acquisition were
consummated during 1997. Please refer also to the Form 8-K dated
December 8, 1997, as amended, filed in connection with these
transactions.
<PAGE>7
The assets and related liabilities of Cherry Hill Office 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 office center,
$4,093,032, amounts recorded as receivable from tenants, $152,379,
and miscellaneous other assets totalling $32,284. Amounts recorded
as receivable from tenants include accrued rental income of $99,169
representing straight-line rent as provided by generally accepted
accounting principles, calculated as the difference between cash
rent paid under the lease and the average rent due over the non-
cancelable term of the lease, and other amounts due from tenants
totalling $53,210. Liabilities removed include amounts recorded as
tenant security deposits, $79,601, accrued property operating
expenses totalling $28,903, and prepaid rents of $2,081. The
proceeds from the sale of Cherry Hill Office Center, approximately
$4,645,000, were used, in part, to retire the short-term bank loan
of $4,000,000 that had been used to finance a portion of the
purchase of the forty percent co-venturer's interest in Riverbend
Apartments. Accordingly, the liability for this loan has been
removed, and the balance of cash has been increased for the
remaining proceeds from the sale. The partners' capital accounts
are adjusted to reflect the net effect of the gain on sale of
approximately $630,000 (see Note 3), and the write-off of amounts
recorded as receivable from tenants of $152,379. All adjustments
are shown as of the date of the last balance sheet filed, December
31, 1997.
All items of income of Cherry Hill Office Center have been
removed from the statement of operations for the year ended
December 31, 1997, including rental and other income received from
tenants. All expenses relating to the property, including real
estate operating expenses, taxes, depreciation, and other expenses
have also been removed. 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 1997. In accordance with the rules and
regulations regarding the filing of Form 8-K, no gain or loss from
the sale of the real estate is reflected in the pro forma statement
of operations. (See also Note 3.)
<PAGE>8
All items of income of Plantation Shopping Center have been
removed from the statement of operations for the year ended
December 31, 1997, including rental and other income received from
tenants. 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
statement of operations. In addition, management fees have been
reduced to reflect the sale of the property. In accordance with the
rules and regulations regarding the filing of Form 8-K, no gain or
loss from the sale of the real estate is reflected in the pro forma
statement of operations. The aforementioned income and expense
adjustments have been prepared as if the sale had taken place at
the beginning of 1997.
"Equity in net income of joint venture" has been removed from
the statement of operations for the year ended December 31, 1997,
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 statement of
operations for the year. 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 classified as an asset held for
sale. The aforementioned income and expense adjustments have been
prepared as if the acquisition had taken place at the beginning of
1997.
(3) Gain on Sale of Investment in Real Estate
-----------------------------------------
The sale of Cherry Hill Office Center resulted in a gain for
financial reporting purposes of approximately $630,000. 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. In accordance with the rules and regulations regarding
the filing of Form 8-K, no gain or loss from the sale of the real
estate is reflected in the pro forma statement of operations.
<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
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(Registrant)
By: SB PARTNERS REAL ESTATE CORPORATION
GENERAL PARTNER
Date April 30, 1998 /s/ George N. Tietjen III
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George N. Tietjen III
Vice-President
