Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 31, 2015 | |
Entity Registrant Name | SB Partners | |
Entity Central Index Key | 87,047 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 0 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets (Cu
Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Assets: | ||
Land | $ 470,000 | $ 470,000 |
Buildings, furnishings and improvements | 4,973,553 | 4,866,973 |
Less - accumulated depreciation | (1,694,420) | (1,631,056) |
3,749,133 | 3,705,917 | |
Real estate held for sale | 12,026,246 | 12,026,246 |
Investment in Sentinel Omaha, LLC, net of reserve for fair value of $9,032,963 and $6,749,554 at June 30, 2015 and December 31, 2014, respectively | 0 | 0 |
15,775,379 | 15,732,163 | |
Other Assets - | ||
Cash and cash equivalents | 905,988 | 933,373 |
Cash in escrow | 500,218 | 500,194 |
Other | 63,928 | 83,508 |
Other assets in discontinued operations | 3,400 | 22,549 |
Total assets | 17,248,913 | 17,271,787 |
Liabilities: | ||
Unsecured loan payable | 9,828,751 | 9,953,036 |
Mortgage note in discontinued operations | 10,000,000 | 10,000,000 |
Accounts payable | 282,657 | 292,993 |
Tenant security deposits | 94,419 | 93,021 |
Accrued expenses | 3,062,499 | 2,683,030 |
Other liabilities in discontinued operations | 25,000 | 25,000 |
Total liabilities | 23,293,326 | 23,047,080 |
Partners' Deficit: | ||
Limited partner - 7,753 units | (6,025,197) | (5,756,112) |
General partner - 1 unit | (19,216) | (19,181) |
Total partners' deficit | (6,044,413) | (5,775,293) |
Total liabilities and partners' deficit | $ 17,248,913 | $ 17,271,787 |
Consolidated Balance Sheets (C3
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Investment in Sentinel Omaha, LLC, reserve for fair value | $ 9,032,963 | $ 6,749,554 |
Limited partner - units (in shares) | 7,753 | 7,753 |
General partner - units (in shares) | 1 | 1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues: | ||||
Base rental income | $ 160,216 | $ 155,539 | $ 320,432 | $ 311,078 |
Other rental income | 87,936 | 136,982 | 175,872 | 209,626 |
Interest on short-term investments and other | 337 | 188 | 670 | 313 |
Total revenues | 248,489 | 292,709 | 496,974 | 521,017 |
Expenses: | ||||
Real estate operating expenses | 66,179 | 82,192 | 156,895 | 196,617 |
Interest on unsecured loan payable | 126,540 | 126,472 | 250,404 | 251,060 |
Depreciation and amortization | 37,141 | 45,126 | 74,282 | 90,252 |
Real estate taxes | 31,362 | 32,665 | 62,724 | 57,636 |
Management fees | 221,700 | 218,028 | 441,761 | 434,077 |
Other | 36,520 | 37,185 | 73,923 | 74,694 |
Total expenses | 519,442 | 541,668 | 1,059,989 | 1,104,336 |
Loss from operations | (270,953) | (248,959) | (563,015) | (583,319) |
Equity in net income of investment | 1,130,278 | 854,900 | 2,283,409 | 1,459,783 |
Reserve for value of investment | (1,130,278) | (854,900) | (2,283,409) | (1,459,783) |
Loss from continuing operations | (270,953) | (248,959) | (563,015) | (583,319) |
Income from discontinued operations | 142,554 | 43,227 | 293,895 | 93,304 |
Net loss | (128,399) | (205,732) | (269,120) | (490,015) |
Loss allocated to general partner | (17) | (27) | (35) | (63) |
Loss allocated to limited partners | $ (128,382) | $ (205,705) | $ (269,085) | $ (489,952) |
Loss per unit of limited partnership interest | ||||
Loss from continuing operations (in dollars per share) | $ (34.95) | $ (32.11) | $ (72.62) | $ (75.24) |
Income from discontinued operations (in dollars per share) | 18.39 | 5.58 | 37.91 | 12.03 |
Net loss (in dollars per share) | $ (16.56) | $ (26.54) | $ (34.71) | $ (63.20) |
Weighted Average Number of Units of Limited Partnership Interest Outstanding (in shares) | 7,753 | 7,753 | 7,753 | 7,753 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Partners' (Deficit) - 6 months ended Jun. 30, 2015 - USD ($) | Limited Partner [Member]Units of Partnership [Member] | Limited Partner [Member]Cumulative Cash Distributions [Member] | Limited Partner [Member]Retained Earnings [Member] | Limited Partner [Member] | General Partner [Member]Units of Partnership [Member] | General Partner [Member]Cumulative Cash Distributions [Member] | General Partner [Member]Retained Earnings [Member] | General Partner [Member] | Total |
Balance (in shares) at Dec. 31, 2014 | 7,753 | 1 | |||||||
Balance at Dec. 31, 2014 | $ 119,968,973 | $ (111,721,586) | $ (14,003,499) | $ (5,756,112) | $ 10,000 | $ (26,364) | $ (2,817) | $ (19,181) | $ (5,775,293) |
Net loss | (269,085) | (269,085) | (35) | (35) | (269,120) | ||||
Balance (in shares) at Jun. 30, 2015 | 7,753 | 1 | |||||||
Balance at Jun. 30, 2015 | $ 119,968,973 | $ (111,721,586) | $ (14,272,584) | $ (6,025,197) | $ 10,000 | $ (26,364) | $ (2,852) | $ (19,216) | $ (6,044,413) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (269,120) | $ (490,015) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Equity in net (income) of investment | (2,283,409) | (1,459,783) |
Reserve for fair value of investment | 2,283,409 | 1,459,783 |
Depreciation and amortization | 75,594 | 268,040 |
Net decrease in operating assets | 26,499 | 24,629 |
Net increase (decrease) in accounts payable | (10,336) | (97,421) |
Net increase in tenant security deposits | 1,398 | 1,399 |
Net increase in accrued expenses | 379,469 | 370,957 |
Net cash provided by operating activites | 203,504 | 77,589 |
Cash Flows From Investing Activities: | ||
Interest earned on capital reserve escrow acount | (24) | $ (24) |
Capital additions to real estate owned | (106,580) | |
Net cash (used in) investing activites | (106,604) | $ (24) |
Cash Flows From Financing Activities: | ||
Repayment of unsecured loan payable | (124,285) | (13,973) |
Net cash (used in) financing activities | (124,285) | (13,973) |
Net change in cash and cash equivalents | (27,385) | 63,592 |
Cash and cash equivalents at beginning of period | 933,373 | 624,191 |
Cash and cash equivalents at end of period | 905,988 | 687,783 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | $ 388,171 | $ 391,060 |
Note 1 - Organization and Signi
Note 1 - Organization and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | (1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES SB Partners, a New York limited partnership, and its subsidiaries (collectively, the "Partnership" or the “Registrant”), have been engaged since April 1971 in acquiring, operating, and holding for investment a varying portfolio of real estate interests. SB Partners Real Estate Corporation (the "General Partner") serves as the general partner of the Partnership. The consolidated financial statements included herein are unaudited; however, the information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary to a fair presentation of the financial position, results of operations and cash flows for the interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Partnership’s latest annual report on Form 10-K. The results of operations for the three and six month periods ended June 30, 2015 are not necessarily indicative of the results to be expected for a full year. For a discussion of the significant accounting and financial reporting policies of the Partnership, refer to the Annual Report on Form 10–K for the year ended December 31, 2014. |
Note 2 - Investments in Real Es
Note 2 - Investments in Real Estate | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Real Estate Disclosure [Text Block] | (2) INVESTMENTS IN REAL ESTATE As of June 30, 2015, the Partnership owns an industrial flex property in Maple Grove, Minnesota and a warehouse distribution center in Lino Lakes, Minnesota. The following is the cost basis and accumulated depreciation of the real estate investments owned by the Partnership at June 30, 2015 and December 31, 2014. See footnote 3 regarding the Partnership’s marketing the Lino Lakes property for sale. No. of Year of Real Estate at Cost Type Prop. Acquisition Description 6/30/2015 12/31/2014 Industrial flex property 1 2002 60,345 sf $ 5,443,553 $ 5,336,973 Less: Accumulated depreciation (1,694,420 ) (1,631,056 ) Investment in real estate $ 3,749,133 $ 3,705,917 Real estate held for sale: Warehouse distribution property 1 2005 226,000 sf $ 12,026,246 $ 12,026,246 |
Note 3 - Real Estate Held for S
Note 3 - Real Estate Held for Sale | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Real Estate Held for Sale [Text Block] | (3) REAL ESTATE HELD FOR SALE During February 2015 the Partnership initiated a sales effort for Lino Lakes, its warehouse distribution property located in Lino Lakes, MN. On July 20, 2015, the Partnership executed a contract to sell Lino Lakes for a sale price of $16,050,000 to an unrelated buyer. The assets and liabilities for this property at June 30, 2015 and December 31, 2014 are reflected as assets and liabilities from discontinued operations in the accompanying consolidated balance sheets and the results of operations for the three and six months ended June 30, 2015 and 2014 are reflected as income from discontinued operations in the accompanying consolidated statements of operations. |
Note 4 - Investment in Sentinel
Note 4 - Investment in Sentinel Omaha, LLC | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | (4) INVESTMENT IN SENTINEL OMAHA, LLC In 2007, the Partnership made an investment in the amount of $37,200,000 in Sentinel Omaha, LLC (“Omaha”). Omaha is a real estate investment company which as of June 30, 2015 owns 14 multifamily properties in 10 markets. Omaha is an affiliate of the Registrant’s general partner. The investment represents a 30% ownership interest in Omaha. The following are the condensed financial statements (000’s omitted) of Omaha as of and for the periods ended June 30, 2015 and December 31, 2014. (Unaudited) (Audited) Balance Sheet June 30, 2015 December 31, 2014 Investment in real estate, net $ 288,300 $ 283,300 Other assets 10,933 11,707 Debt (265,380 ) (267,495 ) Other liabilities (3,743 ) (5,013 ) Member's equity (deficit) $ 30,110 $ 22,499 (Unaudited) Statement of Operations June 30, 2015 Rent and other income $ 20,351 Real estate operating expenses (10,110 ) Other expenses (5,763 ) Net unrealized income 3,133 Net income $ 7,611 |
Note 5 - Mortgage Note and Unse
Note 5 - Mortgage Note and Unsecured Loan Payable | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | (5) MORTGAGE NOTE AND UNSECURED LOAN PAYABLE Mortgage notes and unsecured loan payable consist of the following non-recourse first liens: Annual Net Carrying Amount Interest Installment Amount Due June 30, December 31, Property Rate Maturity Date Payments at Maturity 2015 2014 Unsecured loan payable: Bank Loan (b): Note A $ 3,828,751 $ 3,953,036 Note B 6,000,000 6,000,000 $ 9,828,751 $ 9,953,036 Mortgage note in discontinued operations: Lino Lakes 5.800 % October, 2015 $ 580,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 (a) Annual installment payments include interest only. (b) On September 17, 2007, the Partnership entered into a bank loan (the “Loan”) with a bank (“Holder”) in the amount of $22,000,000, which matured on October 1, 2008. On April 29, 2011, the Partnership and Holder executed the new loan agreement (“Loan Agreement”) on the following terms: 1) In connection with the execution of the Loan Agreement, the Partnership was required to make an immediate payment to Holder of $11,930,430, reducing the balance due under the unsecured credit facility to $10,069,570. The payment was made from proceeds resulting from the sale of 175 Ambassador Drive. Additional proceeds from the sale were used to pay Holder’s legal and appraisal costs and to fund a reserve account for future tenant improvement and leasing costs, as needed. The remaining outstanding obligation in the amount of $10,069,570 was divided into two notes (“Note A” and “Note B;” together, the “Notes”). 2) Note A in the amount of $3,828,751 as of June 30, 2015 has a maturity of July 31, 2016. Note A requires monthly payments of accrued interest at an annual fixed rate of 5% until paid in full. The Partnership made an additional principal payment of $9,570 in March 2015 and is required to pay fixed principal payments of $30,000 monthly thereafter until paid in full. On May 4, 2015, the Partnership sent notification to Holder to exercise its second option to extend the maturity date of Note A to July 31, 2016. Holder responded that there were no issues regarding the extension to July 31, 2016. 3) Note B in the amount of $6,000,000 has a maturity date of April 29, 2018. The Partnership has three 1-year options to extend the maturity date if certain conditions are satisfied. Note B accrues interest at an annual fixed rate of 5% but only until all interest and principal have been paid in full on Note A. Thereafter Note B does not accrue any interest. Payments of interest and principal are deferred until Registrant’s investment in Sentinel Omaha LLC (“Omaha”) pays distributions to the Partnership or the Partnership sells Eagle Lake Business Center IV or its investment in Omaha. Distributions from Omaha or net proceeds from the sale of Eagle IV or Omaha would be used first to pay accrued interest on the Note B obligation, then principal on the Note B obligation. If there are no distributions from Omaha prior to the Note B maturity, all interest and principal is due at maturity, subject to the above mentioned extensions. As of June 30, 2015 and December 31, 2014, $1,264,167 and $1,113,339, respectively of Note B interest has been accrued and is included in accrued expenses on the balance sheet. 4) The Notes may be voluntarily prepaid upon notice to the Holder, subject to certain requirements as to the application of payments. The Partnership’s obligations under the Notes may be accelerated upon default. 5) Until the Partnership’s obligations under the Notes are satisfied in full, the Partnership is required to pay a portion of its net operating income (after payment of certain permitted expenses), and the net proceeds from the sale, transfer or refinancing of its remaining properties and investments, toward the Notes while retaining the other portion to increase cash reserves. While the obligations under the Notes are outstanding the Partnership is precluded from making distributions to its partners. 6) The Partnership, its general partner and the Holder also entered into a Management Subordination Agreement accruing a portion of the investment management fee payable by the Partnership to its general partner so long as the Notes remain outstanding. As of June 30, 2015 and December 31, 2014, $1,798,332 and 1,569,691, respectively of investment management fees have been accrued and are included in accrued expenses on the balance sheet. As additional security for the Partnership’s payment of its obligations under the Loan Agreement, the Partnership, through its wholly-owned subsidiary Eagle IV Realty, LLC, has executed a Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement (“Eagle IV Security Agreement”) and a Pledge Agreement (“Eagle IV Pledge Agreement”) in favor of Holder. The Eagle IV Security Agreement provides Holder with a security interest on the Partnership’s property located in Maple Grove, Minnesota (“Eagle IV”) of up to $5,000,000. The Eagle IV Pledge Agreement pledges to Holder the Partnership’s membership interest in Eagle IV Realty, LLC, the direct owner of Eagle IV. The Partnership has no other debt obligation secured by Eagle IV. The Loan Agreement also provides for a negative pledge on the Partnership’s remaining properties and investments. |
Note 2 - Investments in Real 12
Note 2 - Investments in Real Estate (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes Tables | |
Schedule of Real Estate Properties [Table Text Block] | No. of Year of Real Estate at Cost Type Prop. Acquisition Description 6/30/2015 12/31/2014 Industrial flex property 1 2002 60,345 sf $ 5,443,553 $ 5,336,973 Less: Accumulated depreciation (1,694,420 ) (1,631,056 ) Investment in real estate $ 3,749,133 $ 3,705,917 Real estate held for sale: Warehouse distribution property 1 2005 226,000 sf $ 12,026,246 $ 12,026,246 |
Note 4 - Investment in Sentin13
Note 4 - Investment in Sentinel Omaha, LLC (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Statement of Operations [Member] | |
Notes Tables | |
Real Estate Investment Financial Statements, Disclosure [Table Text Block] | (Unaudited) Statement of Operations June 30, 2015 Rent and other income $ 20,351 Real estate operating expenses (10,110 ) Other expenses (5,763 ) Net unrealized income 3,133 Net income $ 7,611 |
Balance Sheet [Member] | |
Notes Tables | |
Real Estate Investment Financial Statements, Disclosure [Table Text Block] | (Unaudited) (Audited) Balance Sheet June 30, 2015 December 31, 2014 Investment in real estate, net $ 288,300 $ 283,300 Other assets 10,933 11,707 Debt (265,380 ) (267,495 ) Other liabilities (3,743 ) (5,013 ) Member's equity (deficit) $ 30,110 $ 22,499 |
Note 5 - Mortgage Note and Un14
Note 5 - Mortgage Note and Unsecured Loan Payable (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes Tables | |
Schedule of Long-term Debt Instruments [Table Text Block] | Annual Net Carrying Amount Interest Installment Amount Due June 30, December 31, Property Rate Maturity Date Payments at Maturity 2015 2014 Unsecured loan payable: Bank Loan (b): Note A $ 3,828,751 $ 3,953,036 Note B 6,000,000 6,000,000 $ 9,828,751 $ 9,953,036 Mortgage note in discontinued operations: Lino Lakes 5.800 % October, 2015 $ 580,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 |
Note 2 - Investments in Real 15
Note 2 - Investments in Real Estate - Summary of Investments in Real Estate (Details) | 6 Months Ended | |
Jun. 30, 2015USD ($)a | Dec. 31, 2014USD ($) | |
Industrial Flex Property [Member] | ||
Industrial flex property | 1 | |
Industrial flex property | 2,002 | |
Industrial flex property | a | 60,345 | |
Industrial flex property | $ 5,443,553 | $ 5,336,973 |
Warehouse Distribution Properties [Member] | ||
Industrial flex property | 1 | |
Industrial flex property | 2,005 | |
Industrial flex property | a | 226,000 | |
Industrial flex property | $ 12,026,246 | 12,026,246 |
Less: Accumulated depreciation | (1,694,420) | (1,631,056) |
Investment in real estate | $ 3,749,133 | $ 3,705,917 |
Note 3 - Real Estate Held for16
Note 3 - Real Estate Held for Sale (Details Textual) | Jul. 20, 2015USD ($) |
Subsequent Event [Member] | |
Property, Plant and Equipment, Disposals | $ 16,050,000 |
Note 4 - Investment in Sentin17
Note 4 - Investment in Sentinel Omaha, LLC (Details Textual) - Sentinel Omaha LLC [Member] | Jun. 30, 2015 | Dec. 31, 2007USD ($) |
Investment Owned, at Cost | $ 37,200,000 | |
Number of Multifamily Properties | 14 | |
Number of Markets | 10 | |
Equity Method Investment, Ownership Percentage | 30.00% |
Note 4 - Investment in Sentin18
Note 4 - Investment in Sentinel Omaha, LLC - Condensed Balance Sheet (Current Period Unaudited) (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Sentinel Omaha LLC [Member] | ||
Investment in real estate, net | $ 288,300 | $ 283,300 |
Other assets | 10,933 | 11,707 |
Debt | (265,380) | (267,495) |
Other liabilities | (3,743) | (5,013) |
Member's equity (deficit) | 30,110 | 22,499 |
Other assets | $ 63,928 | $ 83,508 |
Note 4 - Investment in Sentin19
Note 4 - Investment in Sentinel Omaha, LLC - Condensed Statement of Operations (Unaudited) (Details) - USD ($) | 6 Months Ended |
Jun. 30, 2015 | |
Sentinel Omaha LLC [Member] | |
Rent and other income | $ 20,351 |
Real estate operating expenses | (10,110) |
Other expenses | (5,763) |
Net unrealized income | 3,133 |
Net loss | 7,611 |
Rent and other income | 496,974 |
Real estate operating expenses | (156,895) |
Other expenses | (73,923) |
Net loss | $ (269,120) |
Note 5 - Mortgage Note and Un20
Note 5 - Mortgage Note and Unsecured Loan Payable (Details Textual) | Apr. 29, 2011USD ($) | Mar. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Sep. 17, 2007USD ($) | |||
Note A [Member] | Notes Payable to Banks [Member] | |||||||||
Original Maturity Date | Jul. 31, 2016 | ||||||||
Long-term Debt | [1] | $ 3,828,751 | $ 3,953,036 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||||||||
First Fixed Principal Payment Required if Maturity Date is Extended | $ 9,570 | ||||||||
Fixed Principal Payment After First Payment | $ 30,000 | ||||||||
Note B [Member] | Notes Payable to Banks [Member] | |||||||||
Original Maturity Date | Apr. 29, 2018 | ||||||||
Long-term Debt | [1] | $ 6,000,000 | 6,000,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||||||||
Number of Extension Options | 3 | ||||||||
Term of Extension Options | 1 year | ||||||||
Interest Payable | $ 1,264,167 | 1,113,339 | |||||||
Notes Payable to Banks [Member] | |||||||||
Debt Instrument, Face Amount | $ 22,000,000 | ||||||||
Repayments of Unsecured Debt | $ 11,930,430 | ||||||||
Long-term Debt | $ 10,069,570 | 9,828,751 | [1] | 9,953,036 | [1] | ||||
Management Fee Payable | 1,798,332 | $ 1,569,691 | |||||||
Security Interest on Partnership's Property Maximum | 5,000,000 | ||||||||
Repayments of Unsecured Debt | $ 124,285 | $ 13,973 | |||||||
[1] | On September 17, 2007, the Partnership entered into a bank loan (the “Loan”) with a bank (“Holder”) in the amount of $22,000,000, which matured on October 1, 2008. On April 29, 2011, the Partnership and Holder executed the new loan agreement (“Loan Agreement”) on the following terms: 1) In connection with the execution of the Loan Agreement, the Partnership was required to make an immediate payment to Holder of $11,930,430, reducing the balance due under the unsecured credit facility to $10,069,570. The payment was made from proceeds resulting from the sale of 175 Ambassador Drive. Additional proceeds from the sale were used to pay Holder’s legal and appraisal costs and to fund a reserve account for future tenant improvement and leasing costs, as needed. The remaining outstanding obligation in the amount of $10,069,570 was divided into two notes (“Note A” and “Note B;” together, the “Notes”). 2) Note A in the amount of $3,828,751 as of June 30, 2015 has a maturity of July 31, 2016. Note A requires monthly payments of accrued interest at an annual fixed rate of 5% until paid in full. The Partnership made an additional principal payment of $9,570 in March 2015 and is required to pay fixed principal payments of $30,000 monthly thereafter until paid in full. On May 4, 2015, the Partnership sent notification to Holder to exercise its second option to extend the maturity date of Note A to July 31, 2016. Holder responded that there were no issues regarding the extension to July 31, 2016. 3) Note B in the amount of $6,000,000 has a maturity date of April 29, 2018. The Partnership has three 1-year options to extend the maturity date if certain conditions are satisfied. Note B accrues interest at an annual fixed rate of 5% but only until all interest and principal have been paid in full on Note A. Thereafter Note B does not accrue any interest. Payments of interest and principal are deferred until Registrant’s investment in Sentinel Omaha LLC (“Omaha”) pays distributions to the Partnership or the Partnership sells Eagle IV or its investment in Omaha. Distributions from Omaha would be used first to pay accrued interest on the Note B obligation, then principal on the Note B obligation. If there are no distributions from Omaha prior to the Note B maturity, all interest and principal is due at maturity, subject to the above mentioned extensions. As of June 30, 2015 and December 31, 2014, $1,264,167 and $1,113,339, respectively of Note B interest has been accrued and is included in accrued expenses on the balance sheet. 4) The Notes may be voluntarily prepaid upon notice to the Holder, subject to certain requirements as to the application of payments. The Partnership’s obligations under the Notes may be accelerated upon default. 5) Until the Partnership’s obligations under the Notes are satisfied in full, the Partnership is required to pay a portion of its net operating income (after payment of certain permitted expenses), and the net proceeds from the sale, transfer or refinancing of its remaining properties and investments, toward the Notes while retaining the other portion to increase cash reserves. While the obligations under the Notes are outstanding the Partnership is precluded from making distributions to its partners. 6) The Partnership, its general partner and the Holder also entered into a Management Subordination Agreement accruing a portion of the investment management fee payable by the Partnership to its general partner so long as the Notes remain outstanding. As of June 30, 2015 and December 31, 2014, $1,798,332 and 1,569,691, respectively of investment management fees have been accrued and are included in accrued expenses on the balance sheet. |
Note 5 - Mortgage Note and Un21
Note 5 - Mortgage Note and Unsecured Loan Payable - Summary of Notes and Loans Payable (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2014 | ||
Note A [Member] | Notes Payable to Banks [Member] | |||
Long-term Debt | [1] | $ 3,828,751 | $ 3,953,036 |
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||
Note B [Member] | Notes Payable to Banks [Member] | |||
Long-term Debt | [1] | $ 6,000,000 | 6,000,000 |
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||
Lino Lakes [Member] | Mortgages [Member] | |||
Long-term Debt | $ 10,000,000 | 10,000,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 5.80% | ||
Lino Lakes | $ 580,000 | ||
Debt Instrument, Face Amount | 10,000,000 | ||
Notes Payable to Banks [Member] | |||
Long-term Debt | [1] | $ 9,828,751 | $ 9,953,036 |
[1] | On September 17, 2007, the Partnership entered into a bank loan (the “Loan”) with a bank (“Holder”) in the amount of $22,000,000, which matured on October 1, 2008. On April 29, 2011, the Partnership and Holder executed the new loan agreement (“Loan Agreement”) on the following terms: 1) In connection with the execution of the Loan Agreement, the Partnership was required to make an immediate payment to Holder of $11,930,430, reducing the balance due under the unsecured credit facility to $10,069,570. The payment was made from proceeds resulting from the sale of 175 Ambassador Drive. Additional proceeds from the sale were used to pay Holder’s legal and appraisal costs and to fund a reserve account for future tenant improvement and leasing costs, as needed. The remaining outstanding obligation in the amount of $10,069,570 was divided into two notes (“Note A” and “Note B;” together, the “Notes”). 2) Note A in the amount of $3,828,751 as of June 30, 2015 has a maturity of July 31, 2016. Note A requires monthly payments of accrued interest at an annual fixed rate of 5% until paid in full. The Partnership made an additional principal payment of $9,570 in March 2015 and is required to pay fixed principal payments of $30,000 monthly thereafter until paid in full. On May 4, 2015, the Partnership sent notification to Holder to exercise its second option to extend the maturity date of Note A to July 31, 2016. Holder responded that there were no issues regarding the extension to July 31, 2016. 3) Note B in the amount of $6,000,000 has a maturity date of April 29, 2018. The Partnership has three 1-year options to extend the maturity date if certain conditions are satisfied. Note B accrues interest at an annual fixed rate of 5% but only until all interest and principal have been paid in full on Note A. Thereafter Note B does not accrue any interest. Payments of interest and principal are deferred until Registrant’s investment in Sentinel Omaha LLC (“Omaha”) pays distributions to the Partnership or the Partnership sells Eagle IV or its investment in Omaha. Distributions from Omaha would be used first to pay accrued interest on the Note B obligation, then principal on the Note B obligation. If there are no distributions from Omaha prior to the Note B maturity, all interest and principal is due at maturity, subject to the above mentioned extensions. As of June 30, 2015 and December 31, 2014, $1,264,167 and $1,113,339, respectively of Note B interest has been accrued and is included in accrued expenses on the balance sheet. 4) The Notes may be voluntarily prepaid upon notice to the Holder, subject to certain requirements as to the application of payments. The Partnership’s obligations under the Notes may be accelerated upon default. 5) Until the Partnership’s obligations under the Notes are satisfied in full, the Partnership is required to pay a portion of its net operating income (after payment of certain permitted expenses), and the net proceeds from the sale, transfer or refinancing of its remaining properties and investments, toward the Notes while retaining the other portion to increase cash reserves. While the obligations under the Notes are outstanding the Partnership is precluded from making distributions to its partners. 6) The Partnership, its general partner and the Holder also entered into a Management Subordination Agreement accruing a portion of the investment management fee payable by the Partnership to its general partner so long as the Notes remain outstanding. As of June 30, 2015 and December 31, 2014, $1,798,332 and 1,569,691, respectively of investment management fees have been accrued and are included in accrued expenses on the balance sheet. |