SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarterly period ended September 30, 1995 or
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from to
Commission file number 0-7660
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
(Exact name of registrant as specified in its charter)
Michigan 38-6285884
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6100 Glades Road, Suite 205
Boca Raton, Florida 33434
(Address of principal executive offices) (Zip Code)
(407) 487-6700
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
MULTIVEST REAL ESTATE FUND, LTD. SERIES VII
COMMISSION FILE NUMBER 0-7660
FORM 10-Q
September 30, 1995
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition, as of September 30, 1995
and December 31, 1994 (Unaudited)...............................3
Statements of Operations, for the three months and the nine months
ended September 30, 1995 and 1994 (Unaudited)...................4
Statements of Cash Flows, for the nine months ended
September 30, 1995 and 1994 (Unaudited).........................5
Notes to Financial Statements (Unaudited)............................6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............................7
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K.....................................8
ITEM 1. FINANCIAL STATEMENTS
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
(a Michigan limited partnership)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
September 30, December 31,
1995 1994
ASSETS (Unaudited)
Investments in real estate
Land $ 1,900,000 $ -
Building and improvements 2,549,788 -
4,449,788 -
Less: Accumulated depreciation 29,393 -
Net investment in real estate 4,420,395 -
Wrap-around mortgage notes receivable 6,026,842 13,655,214
Less unamortized discount - (17,215)
Allowance for loss on wrap-around mortgage
note receivable (275,000) (125,000)
Deferred gain on sales of real estate (2,402,387) (7,845,314)
3,349,455 5,667,685
Other assets
Cash 2,537 21,060
Investments, at cost which approximates
market 1,366,128 1,647,000
Accounts receivable 13,637 43,643
Prepaid insurance 7,962 -
Escrow deposits and other assets 20,010 -
Deferred interest receivable - 1,886,866
Total other assets 1,410,274 3,598,569
Total assets $ 9,180,124 $ 9,266,254
LIABILITIES AND PARTNERS' CAPITAL
Mortgage notes payable $ 1,767,079 $ 1,862,729
Accounts payable 2,852 5,401
Accrued liabilities 128,818 918
Accrued liabilities to affiliates 66,912 10,574
Security deposits 50,610 -
Unfunded distribution payable - 552,470
Total liabilities 2,016,271 2,432,092
Partners' capital
Limited Partners, 22,261 units 7,085,362 6,759,014
General Partner, 228 units 78,491 75,148
Total Partners' capital 7,163,853 6,834,162
Total liabilities and
Partners' capital $ 9,180,124 $ 9,266,254
3
MULTIVEST REAL ESTATE FUND, LTD. SERIES VII
(a Michigan limited partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Revenues
Rents and other tenant
charges $ 388,787 $ - $ 884,854 $ -
Interest on wrap-around
mortgage notes receivable 139,608 294,634 423,802 884,515
Other income 30,451 38,868 73,067 66,636
558,846 333,502 1,381,723 951,151
Expenses
Maintenance, custodial salaries
and related expenses 33,314 - 70,000 -
Real estate management fees 22,414 - 55,304 -
Investment management/real
estate commission 59,110 564,300 73,630 1,626,646
Mortgage servicing fee 2,785 6,975 12,838 19,434
Property taxes 36,714 - 85,666 -
Depreciation and amortization 18,151 - 29,393 -
Insurance 13,980 - 32,620 -
Utilities 55,111 - 148,140 -
Repairs and maintenance 83,728 - 158,330 -
Legal and accounting 373 1,847 22,593 18,662
Interest 34,080 43,751 113,258 137,482
Administrative and other 40,787 19,666 100,260 74,293
400,547 636,539 902,032 1,876,517
Income (loss) from
existing assets 158,299 (303,037) 479,691 (925,366)
Provision for loss on
wrap-around mortgage note
receivable (150,000) - (150,000) -
Operations of disposed
properties - (422,554) - (150,358)
Income (loss) from operations 8,299 (725,591) 329,691 (1,075,724)
Gain on sale of real estate - - - 567,598
Net income (loss) $ 8,299 $ (725,591) $ 329,691 $ 508,126)
Allocated to
Limited partners,
22,261 units $ 8,215 $ (718,235) $ 326,348 $ (502,974)
General partner, 228 units 84 (7,356) 3,343 (5,152)
$ 8,299 $ (725,591) $ 329,691 $ (508,126)
Net income (loss) per
partnership unit based on
22,489 Partnership units
outstanding $ .37 $ (32.26) $ 14.66 $ (22.59)
4
MULTIVEST REAL ESTATE FUND, LTD. SERIES VII
(a Michigan limited partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months
Ended September 30
1995 1994
Operating Activities
Net income (loss) $ 329,691 $ (508,126)
Adjustments to reconcile net income to
net cash provided by operating activities:
Decrease in deferred interest income - 629,000
Depreciation 29,393 -
Gain on sale of property - (567,598)
Amortization of discount on mortgage
note receivable (17,215) (19,367)
Provision for loss on wrap-around mortgage
note receivable 150,000 -
Decrease in accounts receivable 4,672 12,394
Increase in prepaid insurance (7,962) -
Increase in escrow deposits and other assets (20,010) -
Decrease in accounts payable (2,549) (10,633)
Increase in accrued liabilities 127,900 361,178
Increase in accrued liabilities to affiliates 56,338 -
Decrease in unfunded distributions payable (552,470) -
Increase in security deposits 50,610 -
Net cash provided by (used in)
operating activities 148,398 (103,152)
Investing Activities
Capital improvement to real estate (380,515) -
Net cash used in investing activities (380,515) -
Financing Activities
Payoff received on Woodside Apartments mortgage
note receivable - 7,400,000
Principal payoff on Woodside Apartments mortgage
note payable - (2,179,565)
Proceeds from sale of property - 600,000
Payments received on wrap-around mortgage
notes receivable 28,372 25,810
Principal payments on mortgage notes payable (95,650) (393,209)
Net cash (used in) provided by
financing activities (67,278) 5,453,036
(Decrease) increase in cash and
cash equivalents (299,395) 5,349,884
Cash and cash equivalents - January 1 1,668,060 1,309,688
Cash and cash equivalents - September 30 $ 1,368,665 $ 6,659,572
Non-Cash Activities
Foreclosure on Las Cortes Apartments:
Decrease in wrap-around mortgage
note receivables $(7,600,000) $ -
Decrease in deferred gain on sale 5,442,927 -
Decrease in deferred interest receivable (1,886,866) -
Decrease in interest receivable (25,333) -
Foreclosed property 4,069,272 -
5
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
(a Michigan limited partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
The financial statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of the interim periods
presented. It is suggested that these financial statements be read in
conjunction with the financial statements and the notes included in the
Partnership's latest annual report on Form 10-K. The results of operations
for interim periods should not be considered as indicative of the results to be
expected for a full year.
Reclassifications
Certain reclassifications have been made in the 1994 financial statements to
conform to the presentation of 1995 results of operations.
Subsequent Event
On October 6, 1995, the Partnership received $654,454 in repayment of the Quail
Creek Apartments mortgage note receivable. The amount represents the difference
between (a) the remaining principal plus all accrued and deferred interest on
the wrap-around mortgage note receivable and a prepayment fee of $12,001
($1,271,603); and (b) the principal, accrued interest, and a prepayment penalty
on the underlying mortgage note payable with respect to this property
($617,149). The Partnership has recorded a provision for loss of $150,000 on
this transaction.
6
MULTIVEST REAL ESTATE FUND, LTD. SERIES VII
(a Michigan limited partnership)
September 30, 1995
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Operations of the Partnership are centered on one apartment complex owned by
the Partnership (Las Cortes Apartments), collections on mortgage notes received
upon sale of certain of the Partnership's properties and protection of the
Partnership's mortgage interest in such properties.
The Partnership's total revenues increased $225,344 or 68% for the three months
ended September 30, 1995, and $430,572 or 45% for the nine month period, as
compared to the same periods of the prior year. Interest on wrap-around
mortgage notes receivable decreased $155,026 or 53% for the three months, and
$460,713 or 52% for the nine months ended September 30, 1995, due to the
foreclosure on the wrap-around mortgage note receivable on Las Cortes
Apartments. Rents and other tenant charges during 1995 represent the rental
activity for Las Cortes Apartments since foreclosure (see below).
Expenses of the Partnership decreased $235,992 or 37% for the quarter ending
September 30, 1995 as compared to the same period of the prior year. There was
a $974,485 or 52% decrease in total expenses for the nine months ended
September 30, 1995. The decrease for both periods in the investment
management/real estate commission results from the fees due to the General
Partner as of December 31, 1994 having been paid. Additional fees will continue
to be due the General Partner as the Partnership continues to receive sale
proceeds. Increases in operating expenses are a result of the resumption of
rental operations at Las Cortes Apartments.
On January 15, 1995, the owners of Las Cortes Apartments (also known as Lincoln
Terrace Apartments) were required to make a mortgage balloon payment to the
Partnership in the amount of $10,153,932 plus $24,170 in accrued legal expenses
and out-of-pocket costs from previous defaults and a tax escrow payment of
$8,292. No payment was received by the Partnership and a Notice of Default was
sent to the owners of the property on January 24, 1995. On March 7, 1995 the
Partnership foreclosed on the mortgage and took title to the property.
The liquidity of the Partnership is dependent upon the timely receipt of income.
There are no other credit facilities currently in place and limited partners
have no obligation to provide additional funds in excess of their initial cash
contributions. In order to protect the Partnership in the event of a reduction
in cash flow, management closely monitors the Partnership's cash position, and,
when necessary, will reserve adequate funds to continue to operate the
Partnership in the foreseeable future. Funds so reserved are generally invested
in short-term investments. The Partnership endeavors to maintain adequate
liquidity on a short-term basis as a result of its cash flow and reserve
policies; however, there can be no assurance as to the continued performance
of the Partnership's rental property or the collections on the existing
mortgage notes. Unanticipated collection problems on the existing
notes or a decline in the performance of the Partnership's rental property
could have a negative effect upon the long-term liquidity of the
Partnership. Funds generated from operations and the collections on the
wrap-around mortgage notes have primarily been utilized to meet debt service
obligations and, when possible, distribute funds to the Partners. There was
no distribution of funds during the nine months ending September 30, 1995.
7
MULTIVEST REAL ESTATE FUND, LTD. SERIES VII
(a Michigan limited partnership)
September 30, 1995
PART II - OTHER INFORMATION
Item 6. Exhibits and Report on Form 8-K
(a) Exhibits:
(i) Exhibit 27 - Financial Data Schedule
(b) No report on Form 8-K has been filed during the quarter ended
September 30, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MULTIVEST REAL ESTATE FUND, LTD.
Series VII, a Michigan Limited
Partnership
(Registrant)
By: MULTIVEST REAL ESTATE, INC.,
a Delaware corporation
Its: Corporate General Partner
RICHARD L. DAVIS
Date: November 13, 1995
Richard L. Davis
President -
Chief Executive Officer
JOHN J. KAMMERER
Date: November 13, 1995
John J. Kammerer
Principal Accounting Officer
8