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) June 30, 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. Disposition of Assets
On June 30, 1998, the Registrant sold Riverbend Apartments to
LeCraw Development LLC, a Georgia limited liability company, for
$24,500,000 in an all cash transaction.
<PAGE>2
Item 7. Financial Statements
The following pro forma financial statements reflect the sale of
Riverbend Apartments by the Registrant. The balance sheet as of the
last filing, March 31, 1998, has been restated to reflect the removal
of the assets and liabilities of this 594 unit apartment community.
The statements of operations for both the three months ended March 31,
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.
In addition, as Cherry Hill Office center was sold on April 16,
1998, the assets and liabilities of Cherry Hill Office Center have been
removed from the balance sheet as of March 31, 1998, and the statements
of operations for the periods ended March 31, 1998 and 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 to 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 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 dated December 8, 1997, as amended,
filed in connection with this transaction.
<PAGE>3
<TABLE>
SB PARTNERS
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(a New York limited partnership)
------------------------------
PRO FORMA BALANCE SHEET
-----------------------
<CAPTION>
PRO FORMA ADJUSTMENTS
(SEE NOTE 2)
MARCH 31, --------------------- PRO FORMA
1998 CHERRY HILL RIVERBEND BALANCE
AS REPORTED OFFICE 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 28,998,552 0 0 28,998,552
Less - accumulated depreciation (13,560,104) 0 0 (13,560,104)
------------ ----------- ------------ ------------
18,363,101 0 0 18,363,101
Real estate assets held for sale 24,984,134 (4,100,422) (20,883,712) 0
------------ ----------- ------------ ------------
43,347,235 (4,100,422) (20,883,712) 18,363,101
Other assets-
Cash and cash equivalents 1,001,907 4,645,000 20,118,000 25,764,907
Other 1,349,348 (184,877) (44,534) 1,119,937
------------ ----------- ------------ ------------
Total assets $ 45,698,490 $ 359,701 $ (810,246) $ 45,247,945
============ =========== ============ ============
Liabilities:
Mortgage notes and other loans payable $ 28,942,173 $ 0 $ (4,000,000) $ 24,942,173
Accounts payable and accrued expenses 493,611 (34,352) (111,486) 347,773
Tenant security deposits 316,130 (83,111) (98,938) 134,081
------------ ----------- ------------ ------------
Total liabilities 29,751,914 (117,463) (4,210,424) 25,424,027
------------ ----------- ------------ ------------
Partners' Capital:
Units of partnership interest without par value;
Limited partners - 7,753 units 15,962,954 477,102 3,399,739 19,839,795
General partner - 1 unit (16,378) 62 439 (15,877)
------------ ----------- ------------ ------------
Total partners' capital 15,946,576 477,164 3,400,178 19,823,918
------------ ----------- ------------ ------------
Total liabilities & partners' capital $ 45,698,490 $ 359,701 $ (810,246) $ 45,247,945
============ =========== ============ ============
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
---------------------------------
<CAPTION>
For the Three Months Ended March 31, 1998
-----------------------------------------
PRO FORMA ADJUSTMENTS
(SEE NOTE 2)
---------------------
CHERRY HILL PRO FORMA
AS OFFICE RIVERBEND INCOME
REPORTED CENTER APARTMENTS STATEMENT
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 2,610,548 $(380,981) $ (948,096) $1,281,471
Interest on short-term investments 18,624 0 0 18,624
Other 239,882 (814) (182,788) 56,280
----------- ----------- ----------- ----------
Total revenues 2,869,054 (381,795) (1,130,884) 1,356,375
----------- ----------- ----------- ----------
Expenses:
Real estate operating expenses 1,453,002 (196,678) (635,446) 620,878
Interest on mortgage notes and other loans payable 550,503 0 (76,853) 473,650
Depreciation and amortization 327,270 (1,405) 0 325,865
Management fees 270,963 (19,000) (104,000) 147,963
Real estate taxes 209,364 (42,796) (72,560) 94,008
Write-off of uncollectible accounts 0 53,210 0 53,210
Other 97,755 (4,179) (7,040) 86,536
----------- ----------- ----------- ----------
Total expenses 2,908,857 (210,848) (895,899) 1,802,110
----------- ----------- ----------- ----------
Net income (loss) from continuing operations (39,803) (170,947) (234,985) (445,735)
Net income (loss) from continuing operations
allocated to general partner (5) (22) (30) (57)
----------- ----------- ---------- ----------
Net income (loss) from continuing operations
allocated to limited partners $ (39,798) $ (170,925) $ (234,955) $ (445,678)
=========== =========== =========== ==========
Net income (loss) from continuing operations
per unit of limited partnership interest $ (5.13) $ (22.05) $ (30.30) $ (57.48)
=========== =========== =========== ==========
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, 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 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, 1997
------------------------------------
PRO FORMA ADJUSTMENTS
(SEE NOTE 2)
RESTATED ---------------------
FOR SALE OF SALE OF SALE OF PRO FORMA
PLANTATION CHERRY HILL RIVERBEND INCOME
SHOPPING CENTER OFFICE CENTER APARTMENTS STATEMENT
--------------- ------------- ---------- ---------
<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 financial statements.
</TABLE>
<PAGE>7
SB PARTNERS
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(a New York limited partnership)
--------------------------------
NOTES TO PRO FORMA FINANCIAL STATEMENTS
---------------------------------------
(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
annual report on Form 10-K, and quarterly report on Form 10-Q.
(2) Pro Forma Adjustments
---------------------
The accompanying pro forma financial statements reflect the sale
of Riverbend Apartments by the Registrant. The balance sheet as of the
last filing date, March 31, 1998, has been restated to reflect the
removal of the assets and liabilities related to Riverbend Apartments,
including 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
the apartment community. The statements of operations for the three
month period ended March 31, 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 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. Therefore, the net effect of the transactions
has been reflected in the pro forma statement of operations for the
year ended December 31, 1997. Please refer to the Form 8-K filed
December 22, 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.
In addition, the accompanying pro forma financial statements
reflect the sale of Cherry Hill Office Center by the Registrant on
April 16, 1998. The balance sheet as of the last filing, March 31,
1998, has been restated to reflect the removal of the assets and
liabilities of the office center. The statements of operations for
both the three months ended March 31, 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 dated April
16, 1998 filed in connection with this transaction.
<PAGE>8
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. 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 dated December 8, 1997, as amended,
filed in connection with this transaction.
All the assets and related liabilities of Riverbend Apartments
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 Riverbend Apartments,
$20,883,712, and prepaid expenses totalling $44,534. Liabilities
removed include 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, accrued operating
expenses of $85,090, $26,396 of interest accrued on the short-term
note, and $98,938 of tenant security deposits. The balance of cash
has been increased to reflect the proceeds of sale reduced by the
retirement of the short-term note. The partners' capital accounts are
adjusted accordingly. All adjustments are shown as of the date of the
last balance sheet filed, March 31, 1998.
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, $4,100,422,
amounts recorded as receivable from tenants, $152,379, and
miscellaneous other assets totalling $32,498. Amounts recorded as
receivable from tenants include accrued rental income of $99,169,
(representing straight-line rent as provided by generally accepted
accounting principles which is 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, $83,111, accrued property operating expenses
totalling $26,396, and prepaid rents of $7,956. The balance of cash
has been increased for the proceeds from the sale of the office center.
Although the proceeds from the sale of Cherry Hill Office Center,
approximately $4,645,000, were used, in part, to retire the bank loan
which was used to finance a portion of the purchase of the forty
percent co-venturer's interest in Riverbend Apartments, since the
balance sheet is restated to reflect the sale of both the apartment
community and the office center, the retirement of the bank loan is
attributed to the sale of Riverbend Apartments on the pro forma
financial statements. 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, March 31, 1998.
<PAGE>9
All items of income of Riverbend Apartments have been removed
from the 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 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. (See also Note
3.)
All items of income of Cherry Hill Office Center have been removed
from the 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. (See also Note 3.)
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.
(3) Gain on Sale of Investment in Real Estate
-----------------------------------------
The sale of Riverbend Apartments resulted in a gain for financial
reporting purposes of approximately $3,400,000. The sale of Cherry
Hill Office Center resulted in a gain for financial reporting purposes
of approximately $630,000. The gains for tax purposes will be computed
using the tax bases of the assets sold, and will differ from the gains
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 statements of
operations.
<PAGE>10
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 July 15, 1998 /s/ George N. Tietjen III
------------------------ --------------------------------------
George N. Tietjen III
Vice-President
