UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
(Mark One)
[X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2007
[ ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________to _________
Commission file number 0-11095
NATIONAL PROPERTY INVESTORS 5
(Exact name of small business issuer as specified in its charter)
California
22-2385051
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ___
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X
PART I – FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
NATIONAL PROPERTY INVESTORS 5
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2007
Assets | ||
Cash and cash equivalents | $ 466 | |
Receivables and deposits | 110 | |
Other assets | 271 | |
Investment property: | ||
Land | $ 574 | |
Buildings and related personal property | 9,331 | |
9,905 | ||
Less accumulated depreciation | (7,600) | 2,305 |
$ 3,152 | ||
Liabilities and Partners' Deficit | ||
Liabilities | ||
Accounts payable | $ 51 | |
Tenant security deposit liabilities | 49 | |
Accrued property taxes | 92 | |
Other liabilities | 113 | |
Mortgage notes payable (Note D) | 6,981 | |
Partners' Deficit | ||
General partner | $ (1,166) | |
Limited partners (82,508 units | ||
issued and outstanding) | (2,968) | (4,134) |
$ 3,152 |
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 5
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended | Nine Months Ended | |||
September 30, | September 30, | |||
2007 | 2006 | 2007 | 2006 | |
Revenues: | ||||
Rental income | $ 385 | $ 403 | $ 1,164 | $ 1,149 |
Other income | 51 | 44 | 137 | 139 |
Total revenues | 436 | 447 | 1,301 | 1,288 |
Expenses: | ||||
Operating | 223 | 250 | 654 | 622 |
General and administrative | 30 | 28 | 101 | 120 |
Depreciation | 71 | 70 | 210 | 191 |
Interest | 122 | 117 | 356 | 366 |
Property taxes | 27 | 24 | 92 | 72 |
Total expenses | 473 | 489 | 1,413 | 1,371 |
Loss from continuing | ||||
operations | (37) | (42) | (112) | (83) |
Loss from discontinued | ||||
operations (Notes A and C) | -- | -- | -- | (1,566) |
Gain from sale of discontinued | ||||
operations (Note C) | -- | -- | -- | 15,320 |
Net (loss) income | $ (37) | $ (42) | $ (112) | $13,671 |
Net (loss) income allocated to | ||||
general partner (3%) | $ (1) | $ (1) | $ (3) | $ 410 |
Net (loss) income allocated to | ||||
limited partners (97%) | (36) | (41) | (109) | 13,261 |
$ (37) | $ (42) | $ (112) | $13,671 | |
Per limited partnership unit: | ||||
Loss from continuing | ||||
operations | $ (0.44) | $ (0.50) | $ (1.32) | $ (0.97) |
Loss from discontinued | ||||
operations | -- | -- | -- | (18.41) |
Gain from sale of discontinued | ||||
operations | -- | -- | -- | 180.10 |
Net (loss) income | $ (0.44) | $ (0.50) | $ (1.32) | $160.72 |
Distributions per limited | ||||
partnership unit | $ 1.90 | $ 5.25 | $ 1.90 | $ 87.98 |
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 5
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited | ||||
Partnership | General | Limited | ||
Units | Partner | Partners | Total | |
Original capital contributions | 82,513 | $ 1 | $41,257 | $41,258 |
Partners' deficit at | ||||
December 31, 2006 | 82,508 | $(1,160) | $(2,702) | $ (3,862) |
Distribution to partners | (3) | (157) | (160) | |
Net loss for the nine months | ||||
ended September 30, 2007 | -- | (3) | (109) | (112) |
Partners' deficit at | ||||
September 30, 2007 | 82,508 | $(1,166) | $(2,968) | $ (4,134) |
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 5
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended | ||
September 30, | ||
2007 | 2006 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (112) | $ 13,671 |
Adjustments to reconcile net (loss) income to net | ||
cash provided by (used in) operating activities: | ||
Gain from sale of discontinued operations | -- | (15,320) |
Loss on early extinguishment of debt | -- | 1,504 |
Bad debt expense | 29 | 19 |
Depreciation | 210 | 260 |
Amortization of loan costs | 13 | 24 |
Change in accounts: | ||
Receivables and deposits | (61) | 129 |
Other assets | (49) | 49 |
Accounts payable | 11 | 34 |
Tenant security deposit liabilities | 15 | (30) |
Accrued property taxes | 92 | 72 |
Other liabilities | (19) | (109) |
Due to affiliates | (13) | (745) |
Net cash provided by (used in) operating activities | 116 | (442) |
Cash flows from investing activities: | ||
Property improvements and replacements | (182) | (663) |
Net withdrawals from restricted escrows | -- | 93 |
Net proceeds from sale of discontinued operations | -- | 17,293 |
Net cash (used in) provided by investing activities | (182) | 16,723 |
Cash flows from financing activities: | ||
Repayment of mortgage notes payable | -- | (8,330) |
Payments on mortgage notes payable | (47) | (55) |
Proceeds from mortgage note payable | 800 | -- |
Loan costs paid | (48) | (59) |
Advance from affiliate | 61 | -- |
Payments on advances from affiliate | (99) | (805) |
Distributions to partners | (160) | (7,407) |
Net cash provided by (used in) financing activities | 507 | (16,656) |
Net increase (decrease) in cash and cash equivalents | 441 | (375) |
Cash and cash equivalents at beginning of period | 25 | 481 |
Cash and cash equivalents at end of period | $ 466 | $ 106 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | $ 341 | $ 563 |
Supplemental disclosure of non-cash activity: | ||
Property improvements and replacements included in | ||
accounts payable | $ 17 | $ 22 |
Included in property improvements and replacements for the nine months ended September 30, 2007 and 2006 are approximately $6,000 and $108,000 of improvements, respectively, which were included in accounts payable at December 31, 2006 and 2005, respectively.
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 5
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A – Basis of Presentation
The accompanying unaudited financial statements of National Property Investors 5 (the "Partnership" or "Registrant") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of NPI Equity Investments, Inc. ("NPI Equity" or the "Managing General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2007 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2007. For further information, refer to the financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006. The Managing General Partner is a subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust.
In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the accompanying statement of operations for the nine months ended September 30, 2006 reflects the operations of Oakwood Village at Lake Nan Apartments as loss from discontinued operations due to its sale in March 2006 (see “Note C”).
Certain reclassifications have been made to the 2006 balances to conform to the 2007 presentation.
Recent Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value and does not expand the use of fair value in any new circumstances. SFAS No. 157 establishes a hierarchy that prioritizes the information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entity’s own data. SFAS No. 157 requires fair value measurements to be disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Partnershipdoes not anticipate that the adoption of SFAS No. 157 will have a material effect on the Partnership’s financial statements.
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Partnership has not yet determined whether it will elect the fair value option for any of its financ ial instruments.
In June 2007, the American Institute of Certified Public Accountants (the “AICPA”) issued Statement of Position No. 07-1, “Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” ("SOP 07-1"). SOP 07-1 provides guidance for determining whether the accounting principles of the AICPA Audit and Accounting Guide “Investment Companies” are required to be applied to an entity by clarifying the definition of an investment company and, whether investment company accounting should be retained by a parent company upon consolidation of an investment company subsidiary, or by an investor in the application of the equity method of accounting to an investment company investee. SOP 07-1 applies to reporting periods beginning on or after December 15, 2007; however, the FASB has decided to issue an exposure draft that would indefinitely delay the effective date of SOP 07-1 until the FASB can reassess the provisions of SOP 07-1. The Partnership is currently evaluating the impact, if any, that adoption of SOP 07-1 may have on its financial statements in the period of adoption.
Note B - Transactions with Affiliated Parties
The Partnership has no employees and depends on the Managing General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for payments to affiliates for property management services based on a percentage of revenue and for reimbursement of certain expenses incurred by affiliates on behalf of the Partnership.
Affiliates of the Managing General Partner receive 5% of gross receipts from both of the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $65,000 and $92,000 for the nine months ended September 30, 2007 and 2006, respectively, which are included in operating expenses and loss from discontinued operations.
Affiliates of the Managing General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $68,000 and $146,000 for the nine months ended September 30, 2007 and 2006, respectively, which is included in general and administrative expenses, investment property and gain from sale of discontinued operations. The portion of these reimbursements included in investment property and gain from sale of discontinued operations for the nine months ended September 30, 2007 and 2006 are construction management services provided by an affiliate of the Managing General Partner of approximately $13,000 and $82,000, respectively.
For services relating to the administration of the Partnership and operation of the Partnership’s properties, the Managing General Partner is entitled to receive payment for non-accountable expenses up to a maximum of $100,000 per year, based upon the original number of Partnership units sold, subject to certain limitations. No such reimbursements were earned during the nine months ended September 30, 2007 or 2006.
In connection with the additional financing obtained on Willow Park on Lake Adelaide Apartments (as discussed in “Note D”), the Managing General Partner earned and was paid a finance fee of 1% of the new mortgage amount, or approximately $8,000 for its assistance in arranging the new financing. This fee was capitalized as loan costs and is included in other assets.
Upon the sale of the Partnership's property, NPI Equity will be entitled to an Incentive Compensation Fee equal to a declining percentage of the difference between the total amount distributed to limited partners and the appraised value of their investment at February 1, 1992. The percentage amount to be realized by NPI Equity, if any, will be dependent upon the year in which the property is sold. Payment of the Incentive Compensation Fee is subordinated to the receipt by the limited partners, of: (a) distributions from capital transaction proceeds of an amount equal to their appraised investment in the Partnership at February 1, 1992, and (b) distributions from all sources (capital transactions as well as cash flow) of an amount equal to six percent (6%) per annum cumulative, non-compounded, on their appraised investment in the Partnership at February 1, 1992. An Incentive Compensation Fee of approximately $290,000 was accrued related to the sale of The Village in 1998 and approximately $395,000 was accrued related to the sale of Oakwood Village at Lake Nan Apartments in 2006. The Managing General Partner was not entitled to receive an Incentive Compensation Fee from the sale of Palisades Apartments in 2003. During the nine months ended September 30, 2006, both Incentive Compensation Fees were paid to the Managing General Partner with proceeds from the sale of Oakwood Village at Lake Nan Apartments.
NPI Equity, on behalf of the Partnership and certain affiliated partnerships, has established a revolving credit facility (the "Partnership Revolver") to be used to fund deferred maintenance and working capital needs of the Partnership and certain other affiliated partnerships in the National Property Investors Partnership Series. The maximum draw available to the Partnership under the Partnership Revolver is $300,000. Loans under the Partnership Revolver will have a term of 365 days, be unsecured and bear interest at the prime rate plus 2% per annum. The maturity date of any such borrowing accelerates in the event of (i) the removal of NPI Equity as the managing general partner (whether or not for cause); (ii) the sale or refinancing of a property by the Partnership (whether or not a borrowing under the Partnership Revolver was made with respect to such property); or (iii) the liquidation of the Partnership. During the latter part of 200 1, the Managing General Partner agreed to advance funds in excess of the Partnership Revolver. During the nine months ended September 30, 2007, the Managing General Partner advanced approximately $61,000 to the Partnership to fund operating expenses. There were no advances received during the nine months ended September 30, 2006. During the nine months ended September 30, 2007 and 2006, interest on the advances, at the rate of prime plus 2%, was approximately $4,000 and $20,000, respectively. During the nine months ended September 30, 2007 and 2006, the Partnership repaid approximately $104,000 and $833,000, respectively, of advances and associated accrued interest from proceeds from the additional financing obtained on Willow Park on Lake Adelaide Apartments and the sale of Oakwood Village at Lake Nan Apartments, respectively. At September 30, 2007, there were no amounts due to affiliates of the Managing General Partner under the Partnership Revolver.
The Partnership insures its property up to certain limits through coverage provided by AIMCO which is generally self-insured for a portion of losses and liabilities related to workers’ compensation, property casualty, general liability and vehicle liability. The Partnership insures its property above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the Managing General Partner. During the nine months ended September 30, 2007, the Partnership was charged by AIMCO and its affiliates approximately $66,000 for insurance coverage and fees associated with policy claims administration. The Partnership was charged by AIMCO and its affiliates approximately $78,000 for insurance coverage and fees associated with the policy claims administration during the year ended December 31, 2006.
Note C – Disposition of Investment Property
On March 31, 2006, the Partnership sold Oakwood Village at Lake Nan Apartments to a third party for a gross sale price of $19,235,000. The net proceeds realized by the Partnership were approximately $17,293,000 after payment of closing costs of approximately $665,000 and a prepayment penalty of approximately $1,277,000 owed by the Partnership on the mortgages. The Partnership accrued the incentive compensation fee of approximately $395,000 upon the sale, in accordance with the Partnership Agreement. The Partnership used approximately $8,330,000 of the net proceeds to repay the mortgages encumbering the property. The Partnership realized a gain from sale of discontinued operations of approximately $15,320,000 for the nine months ended September 30, 2006, as a result of the sale. In addition, the Partnership recorded a loss on early extinguishment of debt of approximately $1,504,000 for the nine months ended September 30, 2006 due to the write-off of unamortized loan costs and a prepayment penalty, which is included in loss from discontinued operations. The property’s operations, a loss of approximately $62,000 for the nine months ended September 30, 2006, are included in loss from discontinued operations. Also included in loss from discontinued operations are revenues of approximately $630,000 for the nine months ended September 30, 2006.
Note D - Mortgage Financing
On August 31, 2007, the Partnership obtained an additional mortgage loan in the principal amount of $800,000 on Willow Park on Lake Adelaide Apartments. The new mortgage bears interest at a fixed rate of 5.84% per annum and requires monthly payments of principal and interest of approximately $5,000 beginning on October 1, 2007 through the December 1, 2015 maturity date, with a balloon payment of approximately $697,000 due at maturity. If no event of default (as defined in the loan agreement) exists at maturity, the maturity date will automatically be extended for one additional year, to December 1, 2016. As a condition of the loan, the lender required AIMCO Properties, L.P., an affiliate of the Managing General Partner, to guarantee the obligations and liabilities of the Partnership with respect to the new mortgage financing. Total capitalized loan costs in connection with the new mortgage were approximately $48,000 and are included in other assets .
Note E – Contingencies
In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitledRosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain Managing General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire lim ited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Property Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captionedHeller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint. Plaintiffs took an appeal from this order.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the “Appeal”) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004, the Objector filed a second appeal challenging the court’s use of a referee and its order requiring Objector to pay those fees.
On March 21, 2005, the Court of Appeals issued opinions in both pending appeals. With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial court’s order and remanded to the trial court for further findings on the basis that the “state of the record is insufficient to permit meaningful appellate review”. The matter was transferred back to the trial court on June 21, 2005. With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial court’s order striking the first amended complaint.
On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court. On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement. On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion. On February 3, 2006, the Court held a hearing on the various matters pending before it and ordered additional briefing from the parties and Objector. On June 30, 2006, the trial court entered an order confirming its approval of the class act ion settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings. The substantive terms of the settlement agreement remain unchanged. The trial court also entered supplemental orders on July 1, 2006, denying Objector’s Motion to File a Complaint in Intervention, Objector’s Motion for Leave of Discovery and Objector’s Motion to Dissolve the Anti-Suit Injunction. Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the Court’s June 30, 2006 and July 1, 2006 orders. On December 14, 2006, Objector filed his Appellant’s Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents’ Briefs on May 17, 2007. Objector filed his response on August 3, 2007. No hearing date has yet been scheduled.
The Managing General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnership’s overall operations.
The Partnership is unaware of any other pending or outstanding litigation matters involving it or its investment property that are not of a routine nature arising in the ordinary course of business.
Environmental
Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of its property, the Partnership could potentially be liable for environmental liabilities or costs associated with its property.
Mold
The Partnership is aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements. The Partnership has only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure. Affiliates of the Managing General Partner have implemented policies, procedures, third-party audits and training and the Managing General Partner believes that these measures will prevent or eliminate mold exposure and will minimize the effects that mold may have on residents. To date, the Partnership has not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions. Because the law regarding mold is unsettled and subject to change the Managing General Partner can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on the Partnership’s financial condition or results of operations.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this report contain certain forward-looking statements, including, without limitation, statements regarding future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation: national and local economic conditions; the terms of governmental regulations that affect the Registrant and interpretations of those regulations; the competitive environment in which the Registrant operates; financing risks, including the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including variations of real estate values and the general economic climate in local markets and competition for tenants in such markets; litigation, including costs associated with prosecuting and defending cla ims and any adverse outcomes, and possible environmental liabilities. Readers should carefully review the Registrant's financial statements and the notes thereto, as well as the risk factors described in the documents the Registrant files from time to time with the Securities and Exchange Commission.
The Partnership's investment property consists of one apartment complex. The following table sets forth the average occupancy of the property for the nine months ended September 30, 2007 and 2006:
Average Occupancy | ||
Property | 2007 | 2006 |
Willow Park on Lake Adelaide Apartments | 92% | 97% |
Altamonte Springs, Florida | ||
The Managing General Partner attributes the decrease in occupancy at Willow Park on Lake Adelaide Apartments to the soft rental market and increased competition in the Altamonte Springs area.
The Partnership’s financial results depend upon a number of factors including the ability to attract and maintain tenants at the investment property, interest rates on mortgage loans, costs incurred to operate the investment property, general economic conditions and weather. As part of the ongoing business plan of the Partnership, the Managing General Partnermonitors the rental market environment of its investment property to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the Managing General Partnerattempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, the Managing General Partner may use rental concessions and rental rate reductions to offset softening market c onditions; accordingly, there is no guarantee that the Managing General Partner will be able to sustain such a plan. Further, a number of factors that are outside the control of the Partnership such as the local economic climate and weather can adversely or positively affect the Partnership’s financial results.
Results of Operations
The Partnership’s net loss for the three and nine months ended September 30, 2007 was approximately $37,000 and $112,000, respectively, compared to a net loss of approximately $42,000 for the three months ended September 30, 2006 and net income of approximately $13,671,000 for the nine months ended September 30, 2006. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the statement of operations for the nine months ended September 30, 2006 reflects the operations of Oakwood Village at Lake Nan Apartments as loss from discontinued operations due to its sale on March 31, 2006.
On March 31, 2006, the Partnership sold Oakwood Village at Lake Nan Apartments to a third party for a gross sale price of $19,235,000. The net proceeds realized by the Partnership were approximately $17,293,000 after payment of closing costs of approximately $665,000 and a prepayment penalty of approximately $1,277,000 owed by the Partnership on the mortgages. The Partnership accrued the incentive compensation fee of approximately $395,000 upon the sale, in accordance with the Partnership Agreement. The Partnership used approximately $8,330,000 of the net proceeds to repay the mortgages encumbering the property. The Partnership realized a gain from sale of discontinued operations of approximately $15,320,000 for the nine months ended September 30, 2006, as a result of the sale. In addition, the Partnership recorded a loss on early extinguishment of debt of approximately $1,504,000 for the nine months ended September 30, 2006 due to the write-off of unamortized loan costs and a prepayment penalty, which is included in loss from discontinued operations. The property’s operations, a loss of approximately $62,000 for the nine months ended September 30, 2006, are included in loss from discontinued operations. Also included in loss from discontinued operations are revenues of approximately $630,000 for the nine months ended September 30, 2006.
The Partnership’s loss from continuing operations for the three and nine months ended September 30, 2007 was approximately $37,000 and $112,000, respectively, compared to loss from continuing operations of approximately $42,000 and $83,000, respectively, for the three and nine months ended September 30, 2006. The decrease in loss from continuing operations for the three months ended September 30, 2007 is due to a decrease in total expenses, partially offset by a decrease in total revenues. The increase in loss from continuing operations for the nine months ended September 30, 2007 is due to an increase in total expenses, partially offset by an increase in total revenues.
The decrease in total expenses for the three months ended September 30, 2007 is primarily due to a decrease in operating expenses partially offset by an increase in interest expense. General and administrative, depreciation and property tax expenses remained relatively constant for the three months ended September 30, 2007. The decrease in operating expenses for the three months ended September 30, 2007 is primarily due to decreases in contract maintenance expense and interior repairs, partially offset by increases in advertising and insurance expense as a result of increased premiums at the Partnership’s investment property. The increase in interest expense for the three months ended September 30, 2007 is primarily due to a higher average debt balance as a result of the third mortgage obtained on the Partnership’s investment property in August 2007, as discussed in “Liquidity and Capital Resources”.
Total revenues decreased for the three months ended September 30, 2007 due to a decrease in rental income, partially offset by an increase in other income. Rental income decreased for the three months ended September 30, 2007 primarily due to an increase in bad debt expense at the Partnership’s investment property. Other income increased for the three months ended September 30, 2007 due to an increase in tenant utility reimbursements, partially offset by a decrease in interest income as a result of lower average cash balances.
The increase in total expenses for the nine months ended September 30, 2007 is due to increases in operating, depreciation and property tax expenses, partially offset by decreases in general and administrative and interest expenses. The increase in operating expenses for the nine months ended September 30, 2007 is primarily due to increases in insurance expense as a result of increased premiums, employee housing, payroll related and advertising expenses at the property. Depreciation expense increased for the nine months ended September 30, 2007 due to property improvements and replacements placed into service at the property during the past twelve months. Property tax expense increased for the nine months ended September 30, 2007 primarily due to an increase in the assessed value of Willow Park on Lake Adelaide Apartments. Interest expense decreased for the nine months ended September 30, 2007 due to a decrease in interest on advances from an affil iate of the Managing General Partner as a result of a lower average advance balance.
Total revenues increased for the nine months ended September 30, 2007 primarily due to an increase in rental income. Other income remained relatively constant for the nine months ended September 30, 2007. Rental income increased for the nine months ended September 30, 2007 primarily due to an increase in the average rental rate, partially offset by a decrease in occupancy and an increase in bad debt expense at Willow Park on Lake Adelaide Apartments.
The decrease in general and administrative expenses for the nine months ended September 30, 2007 is primarily due to decreases in reimbursements to the Managing General Partner as allowed under the Partnership Agreement and costs associated with the annual audit required by the Partnership Agreement. Also included in general and administrative expenses for the three and nine months ended September 30, 2007 and 2006 are costs associated with the quarterly and annual communications with investors and regulatory agencies.
Liquidity and Capital Resources
At September 30, 2007, the Partnership had cash and cash equivalents of approximately $466,000, compared to approximately $106,000 at September 30, 2006. Cash and cash equivalents increased approximately $441,000, from December 31, 2006, due to approximately $507,000 and $116,000 of cash provided by financing and operating activities, respectively, partially offset by approximately $182,000 of cash used in investing activities. Cash provided by financing activities consisted of proceeds from the third mortgage obtained on Willow Park on Lake Adelaide Apartments, and an advance from an affiliate of the Managing General Partner, partially offset by distributions paid to partners, repayment of advances received from an affiliate of the Managing General Partner, loan costs paid and principal payments made on the mortgages encumbering the Partnership’s investment property. Cash used in investing activities consisted of property improvements a nd replacements. The Partnership invests its working capital reserves in interest bearing accounts.
NPI Equity, on behalf of the Partnership and certain affiliated partnerships, has established a revolving credit facility (the "Partnership Revolver") to be used to fund deferred maintenance and working capital needs of the Partnership and certain other affiliated partnerships in the National Property Investors Partnership Series. The maximum draw available to the Partnership under the Partnership Revolver is $300,000. Loans under the Partnership Revolver will have a term of 365 days, be unsecured and bear interest at the prime rate plus 2% per annum. The maturity date of any such borrowing accelerates in the event of (i) the removal of NPI Equity as the managing general partner (whether or not for cause); (ii) the sale or refinancing of a property by the Partnership (whether or not a borrowing under the Partnership Revolver was made with respect to such property); or (iii) the liquidation of the Partnership. During the latter part of 200 1, the Managing General Partner agreed to advance funds in excess of the Partnership Revolver. During the nine months ended September 30, 2007, the Managing General Partner advanced approximately $61,000 to the Partnership to fund operating expenses. There were no advances received during the nine months ended September 30, 2006. During the nine months ended September 30, 2007 and 2006, interest on the advances, at the rate of prime plus 2%, was approximately $4,000 and $20,000, respectively. During the nine months ended September 30, 2007 and 2006, the Partnership repaid approximately $104,000 and $833,000, respectively, of advances and associated accrued interest from proceeds from the additional financing obtained on Willow Park on Lake Adelaide Apartments and the sale of Oakwood Village at Lake Nan Apartments, respectively. At September 30, 2007, there were no amounts due to affiliates of the Managing General Partner under the Partnership Revolver.
The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the property to adequately maintain the physical assets and other operating needs of the Partnership and to comply with Federal, state and local legal and regulatory requirements. The Managing General Partner monitors developments in the area of legal and regulatory compliance. For example, the Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas. In light of these changes, the Partnership expects that it will incur higher expenses related to compliance. Capital improvements planned for the Partnership’s property are detailed below.
During the nine months ended September 30, 2007, the Partnership completed approximately $193,000 of capital improvements at Willow Park on Lake Adelaide Apartments, consisting primarily of exterior lighting, structural improvements, air conditioning upgrades, and floor covering replacement. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.
Capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that capital improvements are completed, the Partnership’s distributable cash flow, if any, may be adversely affected at least in the short term.
The Partnership's assets are thought to be generally sufficient for any near-term needs (exclusive of capital improvements) of the Partnership. On August 31, 2007, the Partnership obtained an additional mortgage loan in the principal amount of $800,000 on Willow Park on Lake Adelaide Apartments. The new mortgage bears interest at a fixed rate of 5.84% per annum and requires monthly payments of principal and interest of approximately $5,000 beginning on October 1, 2007 through the December 1, 2015 maturity date, with a balloon payment of approximately $697,000 due at maturity. If no event of default (as defined in the loan agreement) exists at maturity, the maturity date will automatically be extended for one additional year, to December 1, 2016. As a condition of the loan, the lender required AIMCO Properties, L.P., an affiliate of the Managing General Partner, to guarantee the obligations and liabilities of the Partnership with respect to the new mortgage financing. Total capitalized loan costs in connection with the new mortgage were approximately $48,000 and are included in other assets.
The first mortgage indebtedness of approximately $3,345,000 requires monthly payments of principal and interest until the loan matures on December 1, 2015, at which time a balloon payment of approximately $3,045,000 is due. The second mortgage indebtedness of approximately $2,836,000 requires monthly payments of principal and interest until the loan matures on December 1, 2015, at which time a balloon payment of approximately $2,430,000 is due.
The Partnership distributed the following amounts during the nine months ended September 30, 2007 and 2006 (in thousands, except per unit data):
Nine Months | Per Limited | Nine Months | Per Limited | |
Ended | Partnership | Ended | Partnership | |
September 30, 2007 | Unit | September 30, 2006 | Unit | |
Sale (1) | $ 160 | $ 1.90 | $7,407 | $87.98 |
(1)
Proceeds from the March 2006 sale of Oakwood Village at Lake Nan Apartments.
Future cash distributions will depend on the levels of net cash generated from operations, the timing of the debt maturities, property sale and/or refinancings. The Partnership's cash available for distribution is reviewed on a monthly basis. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after capital expenditures to permit additional distributions to its partners during 2007 or subsequent periods.
Other
In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 53,900 limited partnership units (the "Units") in the Partnership representing 65.33% of the outstanding Units at September 30, 2007. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 65.33% of the outstanding Uni ts, AIMCO and its affiliates are in a position to influence all voting decisions with respect to the Partnership. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the Managing General Partner because of its affiliation with the Managing General Partner. However, with respect to 37,149 Units, AIMCO is required to vote such Units: (i) against any increase in compensation payable to the Managing General Partner or to affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the votes cast by non-tendering Unit holders. Except for the foregoing, no other limitations are imposed on AIMCO's ability to influence voting decisions with respect to the Partnership. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnership and its limited partners may come into conflict with the duties of the Managing General Partner to AIMCO as its sole stockholder.
Critical Accounting Policies and Estimates
The financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Partnership to make estimates and assumptions. The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity.
Impairment of Long-Lived Asset
Investment property is recorded at cost, less accumulated depreciation, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of the property may not be recoverable, the Partnership will make an assessment of its recoverability by comparing the carrying amount to the Partnership’s estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate undiscounted future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.
Real property investment is subject to varying degrees of risk. Several factors may adversely affect the economic performance and value of the Partnership’s investment property. These factors include, but are not limited to, general economic climate; competition from other apartment communities and other housing options; local conditions, such as loss of jobs or an increase in the supply of apartments that might adversely affect apartment occupancy or rental rates; changes in governmental regulations and the related cost of compliance; increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; and changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multi-family housing. Any adverse changes in these factors could cause impairment of the Partnership’s asset.
Revenue Recognition
The Partnership generally leases apartment units for twelve-month terms or less. The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area. Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease. The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants.
ITEM 3.
CONTROLS AND PROCEDURES
(a)
Disclosure Controls and Procedures. The Partnership’s management, with the participation of the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership’s disclosure contr ols and procedures are effective.
(b)
Internal Control Over Financial Reporting. There have not been any changes in the Partnership’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitledRosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain Managing General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire lim ited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Property Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captionedHeller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint. Plaintiffs took an appeal from this order.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the “Appeal”) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004, the Objector filed a second appeal challenging the court’s use of a referee and its order requiring Objector to pay those fees.
On March 21, 2005, the Court of Appeals issued opinions in both pending appeals. With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial court’s order and remanded to the trial court for further findings on the basis that the “state of the record is insufficient to permit meaningful appellate review”. The matter was transferred back to the trial court on June 21, 2005. With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial court’s order striking the first amended complaint.
On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court. On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement. On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion. On February 3, 2006, the Court held a hearing on the various matters pending before it and ordered additional briefing from the parties and Objector. On June 30, 2006, the trial court entered an order confirming its approval of the class act ion settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings. The substantive terms of the settlement agreement remain unchanged. The trial court also entered supplemental orders on July 1, 2006, denying Objector’s Motion to File a Complaint in Intervention, Objector’s Motion for Leave of Discovery and Objector’s Motion to Dissolve the Anti-Suit Injunction. Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the Court’s June 30, 2006 and July 1, 2006 orders. On December 14, 2006, Objector filed his Appellant’s Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents’ Briefs on May 17, 2007. Objector filed his response on August 3, 2007. No hearing date has yet been scheduled.
The Managing General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnership’s overall operations.
ITEM 5.
OTHER INFORMATION
None.
ITEM 6.
EXHIBITS
See Exhibit Index.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NATIONAL PROPERTY INVESTORS 5 | |
By: NPI EQUITY INVESTMENTS, INC. | |
Managing General Partner | |
Date: November 8, 2007 | By: /s/Martha L. Long |
Martha L. Long | |
Senior Vice President | |
Date: November 8, 2007 | By: /s/Stephen B. Waters |
Stephen B. Waters | |
Vice President | |
NATIONAL PROPERTY INVESTORS 5
EXHIBIT INDEX
Exhibit
Description of Exhibit
2.1
NPI, Inc. Stock Purchase Agreement dated as of August 17, 1995, incorporated by reference to Exhibit 2 to the Partnership's Current Report on Form 8-K dated August 17, 1995.
2.2
Partnership Units Purchase Agreement dated as of August 17, 1995, incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed by Insignia Financial Group, Inc. ("Insignia") with the Securities and Exchange Commission on September 1, 1995.
2.3
Management Purchase Agreement dated as of August 17, 1995, incorporated by reference to Exhibit 2.2 to Current Report on Form 8-K filed by Insignia Financial Group, Inc. with the Securities and Exchange Commission on September 1, 1995.
2.5
Master Indemnity Agreement dated as of August 17, 1995, incorporated by reference to Exhibit 2.5 to Current Report on Form 8-K filed by Insignia Financial Group, Inc. with the Securities and Exchange Commission on September 1, 1995.
2.6
Agreement and Plan of Merger, dated as of October 1, 1999, by and between AIMCO and IPT incorporated by reference to Exhibit 2.1 in the Registrant's Current Report on Form 8-K dated as of October 16, 1999.
3.4 (a)
Agreement of Limited Partnership incorporated by reference to Exhibit A to the Prospectus of the Partnership dated January 4, 1982, included in the Partnership's Registration Statement on Form S-11 (Reg. No. 2-74143).
(b)
Amendments to Agreement of Limited Partnership incorporated by reference to the Definitive Proxy Statement of the Partnership dated April 3, 1991.
(c)
Amendments to the Partnership Agreement, incorporated by reference to the Statement Furnished in Connection with the Solicitation of the Registrant dated August 28, 1992.
(d)
Amendment to the Partnership Agreement, incorporated by reference to Current Report on Form 8-K dated October 25, 2004.
10.21
Purchase and Sale Contract between National Property Investors 5, a California limited partnership, and the affiliated Selling Partnerships and The Bethany Group, LLC, a California limited liability company, dated November 2, 2005. Related to sale of Oakwood Village at Lake Nan Apartments. Incorporated by reference to the Partnership’s Current Report on Form 8-K dated November 2, 2005.
10.22
Multifamily Mortgage, Assignment of Rents and Security Agreement dated December 1, 2005 between National Property Investors 5, a California limited partnership, and GMAC Commercial Mortgage Bank. Incorporated by reference to Current Report on Form 8-K dated December 1, 2005.
10.23
Multifamily Note, dated December 1, 2005 between National Property Investors 5, a California limited partnership, and GMAC Commercial Mortgage Bank. Incorporated by reference to Current Report on Form 8-K dated December 1, 2005.
10.24
Guaranty, dated December 1, 2005 between AIMCO Properties, L.P. and GMAC Commercial Mortgage Bank. Incorporated by reference to Current Report on Form 8-K dated December 1, 2005.
10.25
Amended and Restated Multifamily Mortgage, Assignment of Rents, and Security Agreement dated December 1, 2005 between National Property Investors 5, a California limited partnership, and Federal Home Loan Mortgage Corporation. Incorporated by reference to Current Report on Form 8-K dated December 1, 2005.
10.26
Amended and Restated Multifamily Note dated December 1, 2005 between National Property Investors 5, a California limited partnership, and Federal Home Loan Mortgage Corporation. Incorporated by reference to Current Report on Form 8-K dated December 1, 2005.
10.27
Amended and Restated Guaranty dated December 1, 2005 between National Property Investors 5, a California limited partnership, and Federal Home Loan Mortgage Corporation. Incorporated by reference to Current Report on Form 8-K dated December 1, 2005.
10.28
Second Amendment to Purchase and Sale Contract between National Property Investors 5, a California limited partnership, and the affiliated Selling Partnerships and The Bethany Group, LLC, a California limited liability company, dated February 9, 2006. Incorporated by reference to the Partnership’s Current Report on Form 8-K dated February 9, 2006.
10.31
Multifamily Note, dated August 31, 2007 between National Property Investors 5, a California limited partnership, and Capmark Bank, a Utah industrial bank. (Incorporated by reference to the Partnership’s Current Report on Form 8-K dated August 31, 2007)
31.1
Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of equivalent of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
