UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 20, 1998
-------------------------
SB Partners
- -------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 000-08952 13-6294787
- -------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
666 Fifth Avenue, New York, NY 10103
- -------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 408-2929
-----------------------
- -------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
Item 7. Financial Statements
The following audited and pro forma financial information is included
as an amendment to the Form 8-K dated August 20, 1998, filed on
September 4, 1998 and incorporated herein by reference.
In assessing the acquisition of Cypress Key Apartments, the
Registrant considered estimates of cash flow, physical condition,
location, the competitive nature of the market, existing tenancies and
opportunities to retain and attract additional tenants. Furthermore,
current and anticipated maintenance and repair costs, real estate taxes
and capital improvement requirements were evaluated. After reasonable
inquiry, the Registrant is not aware of any material factors that would
cause the reported financial information in the accompanying Statements
of Revenue and Certain Expenses not to be indicative of future
operating results, although no assurance can be given that the
historical financial information will be representative of future
results.
<PAGE>2
The following pro forma consolidated financial statements reflect
the purchase of Cypress Key Apartments by the Registrant. The
consolidated balance sheet as of the last filing, June 30, 1998, has
been restated to reflect the inclusion of the assets and liabilities of
this 360 unit apartment community, as if the acquisition had occurred
at the end of the period. The consolidated statements of operations
for both the six months ended June 30, 1998 and the year ended December
31, 1997 have been restated to reflect the results of operations of the
Registrant as if the acquisition had been consummated at the beginning
of the periods presented.
In addition, as Cherry Hill Office center was sold on April 16,
1998, and Riverbend Apartments was sold on June 30, 1998, the
consolidated statements of operations for the periods ended June 30,
1998 and December 31, 1997 have been restated to reflect the results of
operations of the Registrant as if these sales had been consummated at
the beginning of the periods presented. Furthermore, all items of
income and related expenses of Plantation Shopping Center, which was
sold on December 8, 1997, have been removed from the consolidated
statement of operations for the year ended December 31, 1997.
The Registrant is reflecting these transactions in accordance with
the rules and regulations regarding the filing of Form 8-K, as the
sales were consummated during the fiscal periods presented. Please
refer to Forms 8-K filed April 30, 1998, July 15, 1998, and December
23, 1997, as amended, filed in connection with these transactions.
<PAGE>3
SB PARTNERS
-----------
FORM 8-K/A
----------
INDEX TO FINANCIAL STATEMENTS
-----------------------------
Statement of Revenue and Certain Expenses
for the six months ended June 30, 1998 (Unaudited) . . . . . . 4
Notes to Statement of Revenue and Certain Expenses (Unaudited) . . 5
Report of Independent Public Accountants . . . . . . . . . . . . . 6
Statement of Revenue and Certain Expenses
for the year ended December 31, 1997 . . . . . . . . . . . . . 7
Notes to Statement of Revenue and Certain Expenses . . . . . . . . 8
Pro Forma Consolidated Balance Sheet as of June 30, 1998 . . . . . 9
Pro Forma Consolidated Statement of Operations
for the six months ended June 30, 1998 . . . . . . . . . 10 - 11
Pro Forma Consolidated Statement of Operations
for the year ended December 31, 1997 . . . . . . . . . . 12 14
Notes to Pro Forma Consolidated Financial Statements . . . . 15 - 17
<PAGE>4
<TABLE>
<CAPTION>
CYPRESS KEY APARTMENTS
----------------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 1998
--------------------------------------
UNAUDITED
---------
<S> <C>
REVENUES:
Base rent $1,434,177
Other income 61,115
----------
Total revenues 1,495,292
----------
EXPENSES:
General and administrative 58,529
Maintenance and repairs 204,092
Utilities 74,294
Promotions and marketing 58,764
Real estate and personal property taxes 152,880
Management fees 59,128
Professional services 3,222
Insurance 19,911
----------
Total expenses 630,820
----------
REVENUE IN EXCESS OF CERTAIN EXPENSES $ 864,472
==========
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>5
CYPRESS KEY APARTMENTS
----------------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 1998
--------------------------------------
UNAUDITED
---------
BASIS OF PRESENTATION
The accompanying Statement Of Revenue And Certain Expenses relates to the
operations of Cypress Key Apartments, a 360 unit residential apartment
community located in Orlando, Florida.
The accompanying financial statement has been prepared for the purpose of
complying with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission and thus excludes certain expenses, such as depreciation and
amortization, not related to the future operations of the property.
Management is not aware of any material factors relating to the property
which would cause the reported financial information not to be indicative
of future operating results.
SIGNIFICANT ACCOUNTING POLICIES
The accompanying Statement Of Revenue And Certain Expenses was prepared on
the accrual basis of accounting in accordance with generally accepted
accounting principles. Rental income is recorded as earned pursuant to the
terms of leases entered into with tenants, generally for periods not longer
than a year. The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of certain
estimates in determining the reported amounts of revenues and expenses.
Actual results could differ from those estimates.
<PAGE>6
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Owners of
Cypress Key Apartments:
We have audited the accompanying Statement of Revenue and Certain Expenses of
Cypress Key Apartments (the Company) for the year ended December 31, 1997. The
Statement of Revenue and Certain Expenses is the responsibility of the
Company's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statement of Revenue and Certain
Expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures made in the
Statement of Revenue and Certain Expenses. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the Statement of Revenue and
Certain Expenses. We believe that our audit provides a reasonable basis for
our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in a current report on Form 8-K to be filed
by SB Partners, as described in Note 2, and is not intended to be a complete
presentation of the Company's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses of
the Company, as described in Note 2, for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
/s/ Arthur Andersen LLP
Boston, Massachusetts
September 3, 1998
<PAGE>7
<TABLE>
<CAPTION>
CYPRESS KEY APARTMENTS
----------------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
YEAR ENDED DECEMBER 31, 1997
----------------------------
<S> <C>
REVENUES:
Base rent $ 2,674,000
Other income 101,966
-----------
Total revenues 2,775,966
-----------
EXPENSES:
General and administrative 341,520
Maintenance and repairs 392,547
Utilities 154,869
Promotions and marketing 61,810
Real estate and personal property taxes 303,319
Management fees 103,063
Professional services 1,625
Insurance 41,737
----------
Total expenses 1,400,490
----------
REVENUE IN EXCESS OF CERTAIN EXPENSES $1,375,476
==========
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>8
CYPRESS KEY APARTMENTS
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
DECEMBER 31, 1997
BUSINESS
Cypress Key Apartments (Cypress) is a residential apartment community,
built in 1988, consisting of 360 units in Orlando, Florida. The complex is
located on 23 acres of land and encompasses 369,851 square feet of building
space. The accompanying financial statement includes all of the direct
costs of the business of Cypress. Cypress was acquired by SB Partners in
August 1998.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying Statement of Revenue and Certain Expenses was prepared for
the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in a current report on Form 8-K to be
filed by SB Partners. The statement is not indicative of future operations
as certain expenses, primarily depreciation, amortization and interest
expenses, which may not be comparable to the expenses expected to be
incurred by SB Partners in future operations of Cypress, have been excluded.
Revenue Recognition
Rental income, principally from short-term leases on apartment units, is
recognized as income under the operating method as the rentals become due.
Use of Estimates
The preparation of the Statement of Revenue and Certain Expenses in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
<PAGE>9
<TABLE>
SB PARTNERS
-----------
(a New York limited partnership)
------------------------------
PRO FORMA CONSOLIDATED BALANCE SHEET
------------------------------------
(UNAUDITED)
---------
<CAPTION>
June 30, PRO FORMA PRO FORMA
1998 ADJUSTMENTS BALANCE
AS REPORTED (SEE NOTE 2) SHEET
----------- ---------- ---------
<S> <C> <C> <C>
Assets:
Investments -
Real Estate, at cost
Land $ 2,924,653 $ 2,260,000 $ 5,184,653
Buildings, furnishings and improvements 29,318,059 20,404,725 49,722,784
Less - accumulated depreciation (13,830,104) 0 (13,830,104)
----------- ------------ ------------
18,412,608 22,664,725 41,077,333
Other assets-
Cash and cash equivalents 25,625,968 (22,357,940) 3,268,028
Other 1,254,044 0 1,254,044
----------- ------------ ------------
Total assets $45,292,620 $ 306,785 $ 45,599,405
=========== ============ ============
Liabilities:
Mortgage notes and other loans payable $24,852,391 $ 0 $ 24,852,391
Accounts payable and accrued expenses 388,209 196,454 584,663
Tenant security deposits 139,566 110,331 249,897
----------- ------------ ------------
Total liabilities 25,380,166 306,785 25,686,951
----------- ------------ ------------
Partners' Capital:
Units of partnership interest without par value;
Limited partners - 7,753 units 19,928,321 0 19,928,321
General partner - 1 unit (15,867) 0 (15,867)
----------- ------------ ------------
Total partners' capital 19,912,454 0 19,912,454
----------- ------------ ------------
Total liabilities & partners' capital $45,292,620 $ 306,785 $ 45,599,405
=========== ============ ============
See accompanying notes to pro forma consolidated financial statements.
</TABLE>
<PAGE>10
<TABLE>
SB PARTNERS
------------
(a New York limited partnership)
------------------------------
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
----------------------------------------------
(UNAUDITED)
---------
<CAPTION>
For the Six Months Ended June 30, 1998
-----------------------------------------
PRO FORMA ADJUSTMENTS
(SEE NOTE 2)
---------------------
SALE OF
CHERRY HILL SALE OF RESTATED
AS OFFICE RIVERBEND FOR SALE
REPORTED CENTER APARTMENTS TRANSACTIONS
---------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $4,932,996 $(416,047) $(1,925,117) $2,591,832
Interest on short-term investments 44,544 0 0 44,544
Other 472,833 (1,069) (357,714) 114,050
----------- ----------- ------------ ----------
Total revenues 5,450,373 (417,116) (2,282,831) 2,750,426
----------- ----------- ------------ ----------
Expenses:
Real estate operating expenses 2,850,975 (250,472) (1,377,203) 1,223,300
Interest on mortgage notes and other loans payable 1,033,584 0 (96,430) 937,154
Depreciation and amortization 611,390 (4,873) 0 606,517
Real estate taxes 382,460 (49,380) (145,061) 188,019
Management fees 374,296 (12,000) (72,000) 290,296
Other 145,326 (17,216) (16,552) 111,558
---------- ----------- ------------ ----------
Total expenses 5,398,031 (333,941) (1,707,246) 3,356,844
---------- ----------- ------------ ----------
Net income (loss) from continuing operations 52,342 (83,175) (575,585) (606,418)
Net income (loss) from continuing operations
allocated to general partner 7 (11) (74) (78)
---------- ------------ ----------- ----------
Net income (loss) from continuing operations
allocated to limited partners $ 52,335 $ (83,164) $ (575,511) $ (606,340)
========== =========== =========== ==========
Net income (loss) from continuing operations
per unit of limited partnership interest $ 6.75 $ (10.73) $ (74.23) $ (78.21)
=========== =========== =========== ==========
Weighted Average Number of Units of Limited
Partnership Interest Outstanding 7,753 7,753 7,753 7,753
=========== =========== =========== ==========
See accompanying notes to pro forma consolidated financial statements.
</TABLE>
<PAGE>11
<TABLE>
SB PARTNERS
------------
(a New York limited partnership)
------------------------------
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
----------------------------------------------
(UNAUDITED)
---------
<CAPTION>
For the Six Months Ended June 30, 1998
-----------------------------------------
PRO FORMA ADJUSTMENTS
(SEE NOTE 2)
---------------------
RESTATED PURCHASE OF PRO FORMA
FOR SALE CYPRESS KEY INCOME
TRANSACTIONS APARTMENTS STATEMENT
------------ ----------- ----------
<S> <C> <C> <C>
Revenues:
Rental income $2,591,832 $1,434,177 $4,026,009
Interest on short-term investments 44,544 0 44,544
Other 114,050 61,115 175,165
----------- ----------- ----------
Total revenues 2,750,426 1,495,292 4,245,718
----------- ----------- ----------
Expenses:
Real estate operating expenses 1,223,300 474,718 1,698,018
Interest on mortgage notes and other loans payable 937,154 0 937,154
Depreciation and amortization 606,517 340,000 946,517
Real estate taxes 188,019 152,880 340,899
Management fees 290,296 128,000 418,296
Other 111,558 3,222 114,780
---------- ----------- ----------
Total expenses 3,356,844 1,098,820 4,455,664
---------- ----------- ----------
Net income (loss) from continuing operations (606,418) 396,472 (209,946)
Net income (loss) from continuing operations
allocated to general partner (78) 51 (27)
---------- ------------ ----------
Net income (loss) from continuing operations
allocated to limited partners $ (606,340) $ 396,421 $ (209,919)
========== =========== ==========
Net income (loss) from continuing operations
per unit of limited partnership interest $ (78.21) $ 51.13 $ (27.08)
=========== =========== ==========
Weighted Average Number of Units of Limited
Partnership Interest Outstanding 7,753 7,753 7,753
=========== =========== ==========
See accompanying notes to pro forma consolidated financial statements.
</TABLE>
<PAGE>12
<TABLE>
SB PARTNERS
------------
(a New York limited partnership)
------------------------------
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
----------------------------------------------
(UNAUDITED)
---------
<CAPTION>
For the Year Ended December 31, 1997
------------------------------------
PRO FORMA ADJUSTMENTS
(SEE NOTE 2)
---------------------
SALE OF RESTATED
PLANTATION FOR SALE OF
AS SHOPPING PLANTATION
REPORTED CENTER SHOPPING CENTER
---------- ----------- ---------------
<S> <C> <C> <C>
Revenues:
Rental income $ 8,647,671 $(1,660,552) $ 6,987,119
Interest on short-term investments 110,680 0 110,680
Other 307,301 (38,856) 268,445
----------- ----------- -----------
Total revenues 9,065,652 (1,699,408) 7,366,244
----------- ----------- -----------
Expenses:
Real estate operating expenses 3,826,057 (309,882) 3,516,175
Interest on mortgage notes and other loans payable 2,213,440 (390,484) 1,822,956
Depreciation and amortization 1,723,683 (391,992) 1,331,691
Management fees 1,196,611 (160,000) 1,036,611
Real estate taxes 815,086 (245,724) 569,362
Write-off of uncollectible accounts 369,635 (328,615) 41,020
Other 241,951 (32,208) 209,743
----------- ----------- -----------
Total expenses 10,386,463 (1,858,905) 8,527,558
----------- ----------- -----------
Income (loss) from operations (1,320,811) 159,497 (1,161,314)
Equity in net income of joint venture 316,320 0 316,320
----------- ----------- -----------
Net income (loss) from continuing operations (1,004,491) 159,497 (844,994)
Net income (loss) from continuing operations
allocated to general partner (130) 21 (109)
----------- ----------- -----------
Net income (loss) from continuing operations
allocated to limited partners $(1,004,361) $ 159,476 $ (844,885)
=========== =========== ===========
Net income (loss) from continuing operations
per unit of limited partnership interest $ (129.54) $ 20.56 $ (108.98)
=========== =========== ===========
Weighted Average Number of Units of Limited
Partnership Interest Outstanding 7,753 7,753 7,753
=========== =========== ===========
See accompanying notes to pro forma consolidated financial statements.
</TABLE>
<PAGE>13
<TABLE>
SB PARTNERS
------------
(a New York limited partnership)
------------------------------
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
----------------------------------------------
(UNAUDITED)
---------
<CAPTION>
For the Year Ended December 31, 1997
------------------------------------
PRO FORMA ADJUSTMENTS
(SEE NOTE 2)
RESTATED ---------------------
FOR SALE OF SALE OF SALE OF RESTATED
PLANTATION CHERRY HILL RIVERBEND FOR SALE
SHOPPING CENTER OFFICE CENTER APARTMENTS TRANSACTIONS
--------------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 6,987,119 $(1,496,841) $(151,705) $ 5,338,573
Interest on short-term investments 110,680 0 0 110,680
Other 268,445 (6,842) (32,193) 229,410
----------- ----------- --------- -----------
Total revenues 7,366,244 (1,503,683) (183,898) 5,678,663
----------- ----------- --------- -----------
Expenses:
Real estate operating expenses 3,516,175 (909,706) (104,496) 2,501,973
Interest on mortgage notes and other loans payable 1,822,956 (15,342) (17,778) 1,789,836
Depreciation and amortization 1,331,691 (174,406) 0 1,157,285
Management fees 1,036,611 (72,000) (331,000) 633,611
Real estate taxes 569,362 (168,971) (10,915) 389,476
Write-off of uncollectible accounts 41,020 0 0 41,020
Other 209,743 (3,421) (1,138) 205,184
----------- ----------- --------- -----------
Total expenses 8,527,558 (1,343,846) (465,327) 6,718,385
----------- ----------- --------- -----------
Income (loss) from operations (1,161,314) (159,837) 281,429 (1,039,722)
Equity in net income of joint venture 316,320 0 (316,320) 0
----------- ----------- --------- -----------
Net income (loss) from continuing operations (844,994) (159,837) (34,891) (1,039,722)
Net income (loss) from continuing operations
allocated to general partner (109) (21) (4) (134)
----------- ----------- --------- -----------
Net income (loss) from continuing operations
allocated to limited partners $ (844,885) $ (159,816) $ (34,887) $(1,039,588)
=========== =========== ========= ===========
Net income (loss) from continuing operations
per unit of limited partnership interest $ (108.98) $ (20.61) $ (4.50) $ (134.09)
=========== =========== ========= ===========
Weighted Average Number of Units of Limited
Partnership Interest Outstanding 7,753 7,753 7,753 7,753
========== =========== ========= ===========
See accompanying notes to pro forma consolidated financial statements.
</TABLE>
<PAGE>14
<TABLE>
SB PARTNERS
------------
(a New York limited partnership)
------------------------------
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
----------------------------------------------
(UNAUDITED)
---------
<CAPTION>
For the Year Ended December 31, 1997
------------------------------------
PRO FORMA ADJUSTMENTS
(SEE NOTE 2)
---------------------
RESTATED PURCHASE OF RESTATED
FOR SALE CYPRESS KEY INCOME
TRANSACTIONS APARTMENTS STATEMENT
------------ ---------- ---------
<S> <C> <C> <C>
Revenues:
Rental income $ 5,338,573 $2,674,000 $ 8,012,573
Interest on short-term investments 110,680 0 110,680
Other 229,410 101,966 331,376
----------- ---------- -----------
Total revenues 5,678,663 2,775,966 8,454,629
----------- ---------- -----------
Expenses:
Real estate operating expenses 2,501,973 1,095,546 3,597,519
Interest on mortgage notes and other loans payable 1,789,836 0 1,789,836
Depreciation and amortization 1,157,285 680,000 1,837,285
Management fees 633,611 256,000 889,611
Real estate taxes 389,476 303,319 692,795
Write-off of uncollectible accounts 41,020 0 41,020
Other 205,184 1,625 206,809
----------- ---------- -----------
Total expenses 6,718,385 2,336,490 9,054,875
----------- ---------- -----------
Income (loss) from operations (1,039,722) 439,476 (600,246)
Equity in net income of joint venture 0 0 0
----------- ---------- -----------
Net income (loss) from continuing operations (1,039,722) 439,476 (600,246)
Net income (loss) from continuing operations
allocated to general partner (134) 57 (77)
----------- ---------- -----------
Net income (loss) from continuing operations
allocated to limited partners $(1,039,588) $ 439,419 $ (600,169)
=========== ========== ===========
Net income (loss) from continuing operations
per unit of limited partnership interest $ (134.09) $ 56.68 $ (77.41)
=========== ========= ===========
Weighted Average Number of Units of Limited
Partnership Interest Outstanding 7,753 7,753 7,753
========== ========= ===========
See accompanying notes to pro forma consolidated financial statements.
</TABLE>
<PAGE>15
SB PARTNERS
-----------
(a New York limited partnership)
--------------------------------
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(1) Accounting and Financial Reporting
----------------------------------
The consolidated 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 annual report on Form 10-K,
quarterly report on Form 10-Q, and Forms 8-K filed April 30, 1998, July
15, 1998, and December 23, 1997, as amended.
(2) Pro Forma Adjustments
---------------------
The consolidated balance sheet as of the last filing date, June
30, 1998, has been restated to reflect the addition of the assets and
liabilities related to Cypress Key Apartments as if the transaction had
occurred on such date. The consolidated statements of operations for
the six month period ended June 30, 1998 and the year ended December
31, 1997 have been restated to reflect the results of operations of the
Registrant as if the acquisition had been consummated at the beginning
of the periods presented.
The accompanying pro forma consolidated statements of operations
also reflect the sale of Riverbend Apartments by the Registrant. The
consolidated statements of operations for the six month period ended
June 30, 1998 and the year ended December 31, 1997 have been restated
to reflect the results of operations of the Registrant as if the sale
had been consummated at the beginning of the periods presented. As
previously reported, the Registrant purchased the forty percent co-
venturer's interest in the apartment community on December 15, 1997.
However, the pro forma effect on the consolidated statement of
operations of the Registrant as a result of the acquisition of the
forty percent co-venturer's interest in Riverbend Apartments is negated
by the subsequent sale on June 30, 1998. Therefore, the net effect of
the transactions has been reflected in the pro forma consolidated
statement of operations for the year ended December 31, 1997. Please
refer to the Form 8-K filed December 23, 1997, and the annual report on
Form 10-K, for additional discussion regarding the acquisition of the
forty percent co-venturer's interest in Riverbend Apartments.
<PAGE>16
In addition, the accompanying pro forma consolidated financial
statements reflect the sale of Cherry Hill Office Center by the
Registrant on April 16, 1998. The consolidated statements of
operations for both the six months ended June 30, 1998 and the year
ended December 31, 1997 have been restated to reflect the results of
operations of the Registrant as if the sale had been consummated at the
beginning of the periods presented. Please refer also to the Form 8-K
filed April 30, 1998 in connection with this transaction.
Furthermore, all items of income and related expenses of
Plantation Shopping Center, which was sold on December 8, 1997, have
been removed from the consolidated statement of operations for the year
ended December 31, 1997. The Registrant is reflecting this transaction
in accordance with the rules and regulations regarding the filing of
Form 8-K, as the sale was consummated during the fiscal year presented.
Please refer also to the Form 8-K filed December 23, 1997, as amended,
filed in connection with this transaction.
The pro forma consolidated balance sheet reflects the addition of
the total costs to acquire Cypress Key Apartments, $22,664,725, to the
Registrant's portfolio of investments in real estate properties, and
the related decrease in cash resulting from this all cash transaction,
$22,357,940. Liabilites assumed, including 1998 real estate taxes
accrued through the date of purchase totalling $196,454 and tenant
security deposits payable of $110,331 are added to the total
liabilities of the Registrant. All adjustments are shown as of the
date of the last balance sheet filed, June 30, 1998.
The income of Cypress Key Apartments has been added to the
consolidated statement of operations for the periods presented,
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 included.
Management fees have been adjusted to reflect the investment in the
property. The aforementioned income and expense adjustments have been
prepared as if the purchase had taken place at the beginning of the
periods presented.
All items of income of Riverbend Apartments have been removed from
the consolidated statements of operations for the periods presented,
including rental and other income received from tenants. All expenses
relating to the property, including interest accrued on the mortgage,
real estate operating expenses, taxes, 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.
No depreciation expense is included in the pro forma consolidated
financial statements since the property had been classified as an asset
held for sale. The aforementioned income and expense adjustments have
been prepared as if the sale had taken place at the beginning of the
periods presented. 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 statements of operations.
<PAGE>17
All items of income of Cherry Hill Office Center have been removed
from the consolidated statement of operations for the periods
presented, 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 the periods
presented. 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 statements of operations.
All items of income of Plantation Shopping Center have been
removed from the consolidated 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
consolidated statement of operations. The aforementioned income and
expense adjustments have been prepared as if the sale had taken place
at the beginning of 1997.
<PAGE>18
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 November 3, 1998 /s/ George N. Tietjen III
------------------------ --------------------------------------
George N. Tietjen III
Vice-President
