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 June 30, 1996 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)
(561) 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
June 30, 1996
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Financial Condition, as of June 30, 1996
(Unaudited) and December 31, 1995 . . . . . . . . . . . . . 3
Statements of Operations, for the three and six month
periods ended June 30, 1996 and 1995 (Unaudited). . . . . . 4
Statements of Cash Flows, for the three months ended
June 30, 1996 and 1995 (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
June 30, December 31,
1996 1995
ASSETS (Unaudited)
Investments in real estate
Land $ 1,900,000 $ 1,900,000
Building and improvements 3,696,669 2,986,895
5,596,669 4,886,895
Less: Accumulated depreciation 227,405 125,992
Net investment in real estate 5,369,264 4,760,903
Wrap-around mortgage notes receivable - 4,489,845
Deferred gain on sales of real estate - (2,402,387)
- 2,087,458
Other assets
Cash 4,072 5,270
Investments, at cost which
approximates market 3,379,515 1,850,930
Accounts receivable - 6,447
Prepaid insurance 14,645 44,867
Escrow and deposits and other assets 20,010 20,010
Total other assets 3,418,242 1,927,524
Total assets $ 8,787,506 $ 8,775,885
LIABILITIES AND PARTNERS' CAPITAL
Mortgage notes payable $ - $ 1,143,793
Accounts payable 4,381 176,106
Accrued liabilities 103,178 188,591
Accrued liabilities to affiliates 292,259 36,176
Security deposits 56,815 51,785
Total liabilities 456,633 1,596,451
Partners' capital
Limited Partners, 22,261 units 8,240,551 7,100,786
General Partners, 228 units 90,322 78,648
Total Partners' capital 8,330,873 7,179,434
Total liabilities and
Partners' capital $ 8,787,506 $ 8,775,885
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
(a Michigan limited partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Revenues
Rents and other tenant charges $ 407,034 $ 381,424 $ 788,330 $ 496,067
Interest on wrap-around
mortgage notes receivable 106,592 135,530 213,427 271,282
Other income 70,357 71,076 159,249 98,326
583,983 588,030 1,161,006 865,675
Expenses
Maintenance, custodial salaries
and related expenses 36,393 31,026 80,604 36,686
Real estate management fees 23,662 27,123 46,168 32,891
Investment management/real
estate commission 277,778 7,260 284,688 14,520
Mortgage servicing fee 1,402 3,088 3,707 10,054
Property taxes 37,500 36,714 75,000 48,952
Depreciation and amortization 66,752 11,242 101,413 11,242
Insurance 12,750 13,980 25,500 18,640
Utilities 95,268 112,695 215,767 135,828
Repairs and maintenance 64,904 66,042 123,446 74,602
Legal and accounting 6,593 15,583 12,250 22,220
Interest 19,152 39,237 43,291 79,178
Administrative and other 36,916 33,513 67,599 59,471
679,070 397,503 1,079,433 544,284
Income (loss) from existing
assets (95,087) 190,527 81,573 321,391
Discount on settlement of note (680,340) - (680,340) -
Income (loss) from operations (775,427) 190,527 (598,767) 321,391
Gain on sale of real estate 2,402,387 - 2,402,387 -
Net income $ 1,626,960 $ 190,527 $ 1,803,620 $ 321,391
Allocated to
Limited partners,
22,261 units $ 1,610,465 $ 188,595 $ 1,785,334 $ 318,133
General partner, 228 units 16,495 1,932 18,286 3,258
$ 1,626,960 $ 190,527 $ 1,803,620 $ 321,391
Net income per partnership
unit based on 22,489
Partnership units
outstanding $ 72.34 $ 8.47 $ 80.20 $ 14.29
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
(a Michigan limited partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
June 30,
1996 1995
Operating Activities
Net income $ 1,803,620 $ 321,391
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 101,413 11,242
Gain on sale of property (2,402,387) -
Discount on settlement of note 680,340 -
Amortization of discount on mortgage
note receivable - (12,911)
Decrease in accounts receivable 6,447 7,355
Decrease (increase) in prepaid insurance 30,222 (13,975)
Increase in escrow deposits and other assets - (20,010)
(Decrease) increase in accounts payable (171,725) 9,928
(Decrease) increase in accrued liabilities (85,413) 90,860
Increase in accrued liabilities to affiliates 256,083 11,031
Decrease in unfunded distributions payable - (552,470)
Increase in security deposits 5,030 51,935
Net cash provided by (used in)
operating activities 223,630 (95,624)
Investing Activities
Capital improvement to real estate (709,774) (18,778)
Net cash used in investing activities (709,774) (18,778)
Financing Activities
Proceeds from payoff of Ross Ridge wrap-
around mortgage note receivable 3,788,960 -
Payments received on wrap-around mortgage
notes receivable 20,545 18,690
Principal payoff on Ross Ridge
mortgage note payable (1,103,937) -
Principal payments on mortgage notes payable (39,856) (65,532)
Distributions to Partners (652,181) -
Net cash provided by (used in)
financing activities 2,013,531 (46,842)
Increase (decrease) in cash and
cash equivalents 1,527,387 (161,244)
Cash and cash equivalents - January 1 1,856,200 1,668,060
Cash and cash equivalents - June 30 $ 3,383,587 $ 1,506,816
Non-Cash Activities
Foreclosure on Las Cortes Apartments:
Decrease in wrap-around mortgage
note receivable $ - $(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
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 1995 financial statements to
conform to the presentation of 1996 results of operations.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
(a Michigan limited partnership)
June 30, 1996
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Operations of the Partnership are centered on one apartment complex (Las Cortes
Apartments, located in Dallas, Texas) owned by the Partnership.
On January 15, 1995, the owners of Las Cortes Apartments (also know 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 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.
On June 28, 1996, the Partnership received $2,681,681 in repayment of the Ross
Ridge Apartments mortgage note receivable. The amount represents the difference
between (a) the remaining principal on the note less a discount of $680,340
($3,788,960) and (b) the principal and accrued interest on the underlying
mortgage note payable with respect to this property ($1,107,279). The
Partnership previously recorded the sale under the installment method of
accounting and, as a result of the payoff, recognized a gain of $2,402,387.
The Partnership's total revenues remained relatively constant for the three
months ended June 30, 1996 as compared to the same period of the prior year.
Total revenues increased $295,331 or 34% for the six months ended June 30,
1996 as compared to the same period of the prior year. Rents and other tenant
charges increased $292,263 or 59% due primarily to rental activity for 1996
being for a period of six months, and 1995 being for four months.
Expenses of the Partnership increased $281,567 or 71% for the quarter ending
June 30, 1996 as compared to the same period of the prior year. There was a
$535,149 or 98% increase in total expenses for the six months ended June 30,
1996. The increase for both periods in the investment management/real estate
commission results from the fee due to the General Partner following the payoff
of the Ross Ridge Apartments mortgage note receivable. Increases in all other
expense categories for the six month period are a result of the rental activity
for a six month period in 1996 and a four month period in 1995 at Las Cortes
Apartments.
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 of the continued performance of
Las Cortes Apartments. An unanticipated decline in the performance of Las
Cortes Apartments could have a negative effect upon the long-term liquidity of
the Partnership. Funds generated from operations have primarily been utilized
to meet debt service obligations and, when possible, distribute funds to the
Partners. Funds in excess of Partnership reserves resulted in distributions
totaling $652,181 or $29.00 per unit being paid during the six months ended
June 30, 1996.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
(a Michigan limited partnership)
June 30, 1996
PART II - OTHER INFORMATION
Item 6. Exhibits and Report on Form 8-K
(b) No report on Form 8-K has been filed during the quarter ended
June 30, 1996.
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
Date: August 13, 1996 RICHARD L. DAVIS
Richard L. Davis
President -
Chief Executive Officer
Date: August 13, 1996 JOHN J. KAMMERER
John J. Kammerer
Principal Accounting Officer