SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 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 0-7239
MULTIVEST REAL ESTATE FUND, LTD. SERIES V
(Exact name of registrant as specified in its charter)
Michigan 38-6258639
(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 V
FORM 10-K
INDEX
PART I Page
Item 1 Business. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2 Properties. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 3 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 7
Item 4 Submission of Matters To a Vote of Security Holders . . . . . 7
PART II
Item 5 Market for Registrant's Partnership Units
and Related Security Holder Matters . . . . . . . . . . . . 7
Item 6 Selected Financial Data . . . . . . . . . . . . . . . . . . . 8
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 9
Item 8 Financial Statements and Supplementary Data . . . . . . . . . 11
(a) Independent Auditors' Report. . . . . . . . . . . . . . 12
(b) Statements of Financial Condition, as of
December 31, 1995 and 1994. . . . . . . . . . . . . . . 13
(c) Statements of Operations, for each of the years
in the three year period ended December 31, 1995 . . . 14
(d) Statements of Changes in Partners' Capital, for each
of the years in the three year period ended
December 31, 1995 . . . . . . . . . . . . . . . . . . . 15
(e) Statements of Cash Flows, for each of the years
in the three year period ended December 31, 1995. . . . 16
(f) Notes to Financial Statements . . . . . . . . . . . . . 17
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure . . . . . . . . . . . . . . . . . 30
PART III
Item 10 Directors and Executive Officers of the Registrant. . . . . . 30
Item 11 Executive Compensation. . . . . . . . . . . . . . . . . . . . 30
Item 12 Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . . . . . . 31
Item 13 Certain Relationships and Related Transactions. . . . . . . . 32
PART IV
Item 14 Exhibits, Financial Statement Schedules, and Reports
on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . 34
Financial information of properties securing mortgage loans
is not included because the registrant has no contractual
right to the information and cannot otherwise practicably
obtain the information.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
FORM 10-K
PART I
ITEM 1 BUSINESS
Formation of the Partnership
The registrant, MultiVest Real Estate Fund, Ltd., Series V ("Partnership"), is a
Michigan limited partnership which was formed in 1973 primarily for the purpose
of investing in, operating and disposing of improved real estate. The
Partnership is operated by its (corporate) general partner, MultiVest Real
Estate, Inc., a Delaware corporation ("General Partner").
The Partnership invested its funds in apartment complexes, which the General
Partner considered to have a potential for profit either through income or gain
on resale. The Partnership also attempted to provide tax shelter benefits for
participants when feasible within the primary investment objective.
Dissolution of the Partnership
In 1981, the Limited Partners of the Partnership voted for the orderly
termination and dissolution of the Partnership. The General Partner is
proceeding with such dissolution pursuant to the Partnership's Agreement of
Limited Partnership ("Partnership Agreement"). The three properties (Manitoba
Apartments, Greenhaven Village Apartments and Rock Island Apartments) owned and
operated by the Partnership are presently on the market for sale.
Summary of Business Operations for the Year Ended December 31, 1995
The operations of the Partnership consist of the ownership and management of
three apartment complexes. The Partnership owns Greenhaven Village Apartments
(Addison, Texas), Manitoba Apartments (Fort Worth, Texas) and Rock Island
Apartments (Irving, Texas).
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
Summary of Business Operations for the Year Ended December 31, 1995, continued
The wrap-around mortgage held by the Partnership on Royal Oak Apartments was
repaid on August 31, 1995 in the net amount of $1,571,039. As the result of the
mortgage repayment, the Partnership made a cash distribution to the Partners
totaling $2,037,813.00 or $64.50 per Partnership unit for the quarter ended
September 30, 1995. That cash distribution also included a significant portion
of the cash reserves held by the Partnership. For further information
concerning the 1995 repayment of the mortgage note on Royal Oak Apartments,
see Note 4 of Notes to Financial Statements.
The sources of operating income for the Partnership consist of interest earned
on funds held in reserve pursuant to the Partnership Agreement and income from
the operations and/or sales of the Partnership's apartment complexes. At
December 31, 1995, the Partnership had 24 employees.
For further information regarding the 1995 operations of the Partnership, see
Item 7 - "Management's Discussion and Analysis of Financial Condition and
Results of Operations".
Future Business Operations of the Partnership
The General Partner anticipates continuation of the dissolution and winding up
of the Partnership and that the cash flow (if any) for any future distributions
to the Partners will be produced from (1) the operations of the Partnership's
remaining apartment complexes; and/or (2) proceeds received from the sale of the
Partnership's remaining properties.
Conflicts of Interest
The Partnership is subject to various conflicts of interest arising out of its
relationship with the General Partner and its affiliates. These conflicts
involve:
1. Competition by the Partnership with Other Partnerships for Management
Services: The General Partner serves as a general partner in three other
limited partnerships, all of which were formed to engage in similar
businesses as the Partnership two of which are presently being wound up and
liquidated. The General Partner may have conflicts of interest in
allocating management time, services and functions among the various
Partnerships and any future Partnerships and other entities which may be
organized. However, the General Partner believes that it has sufficient
staff to be fully capable of discharging its responsibilities to each
partnership and other entity.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
Conflicts of Interest, continued
2. Liability of General Partner to Other Partnerships: The General Partner is
generally liable for the Partnership's recourse obligations, to the extent
not paid by the Partnership. Because the General Partner is a general
partner in other limited partnerships, creditors of any of the partnerships
could seek to realize on the assets of the General Partner if that
partnership's assets were insufficient to satisfy its debts. Should the
General Partner at any time have insufficient assets to meet such
obligations, the General Partner could face conflicts of interest with
regard to the manner in which its assets are distributed to meet the
obligations.
3. Real Estate Commissions and Other Commissions Earned by Affiliates: To the
extent the Partnership sells any properties, modifies or refinances any
indebtedness or requires a construction manager, the Partnership may pay
real estate and loan brokerage commissions thereon to brokers or
construction management fees to the construction manager, including an
affiliate of the General Partner, subject to such restrictions and upon such
terms as are provided under the Partnership Agreement.
4. Provision for Property Management and Mortgage Servicing Services for the
Partnership by an Affiliate: An affiliate of the General Partner performs
property management and mortgage servicing services for the Partnership. In
the opinion of the General Partner, such affiliate is engaged in accordance
with the Partnership Agreement on terms which are fair and reasonable and no
less favorable than could reasonably be obtained by the Partnership from
unaffiliated persons.
5. Provision for Legal Services: The firm of Honigman Miller Schwartz and Cohn
is counsel to the Partnership. It also is counsel to the General Partner
and its corporate affiliates. As such, it provides legal services to the
Partnership in connection with its operations, real property investments and
related matters at its usual rate for such services.
6. General Partner Notes: The general partners of the Partnership delivered
non- recourse notes to the Partnership in connection with their original
purchase of partnership units from the Partnership (see Item 13, "Certain
Relationships and Related Transactions"). Because the notes are
non-recourse, payment demand will only be made when cash distributions
are made to the general partner.
Competition
The three rental properties currently owned by the Partnership are subject to
competition from similar properties in their respective vicinities.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
ITEM 2 PROPERTIES
The following is a brief description of location and character of the properties
owned by the Partnership at December 31, 1995:
Year Percentage of
Number of Construction Occupancy at
Apt. Units Completed December 29, 1995
Manitoba Apartments 265 Units 1971 77.7%
Fort Worth, TX Apartment Complex
Rock Island
Apartments 154 Units 1973 96.1%
Addison, TX Apartment Complex
Greenhaven Village
Apartments 382 Units 1973 98.7%
Addison, TX Apartment Complex
Manitoba Apartments competes with properties which are of similar age and
construction, as well as with properties with more modern construction and
amenities.
On May 5, 1995, Manitoba Apartments sustained significant damage as a result of
a hailstorm which hit the Fort Worth, Texas area. Due to the damage, occupancy
at the property declined approximately 20%. Repairs to the property are
anticipated to be completed by the end of March, 1996, and Management is
currently in the process of re-marketing and leasing the vacant units. The
Partnership is presently in negotiations with the insurance carrier to reach
a settlement with regard to the property damages and rental loss.
Rock Island Apartments is located midway between Dallas and Fort Worth. Rock
Island competes against properties in the immediate area that are of similar
construction and age. Occupancy is relatively stable and, although minimal,
rent concessions are a commonly utilized marketing tool.
Greenhaven Apartments is located in a suburb of Dallas. Occupancy in this
market is relatively stable. Rental concessions, although minimal, are often
necessary to maintain acceptable occupancy.
For additional information with respect to the encumbrances relating to the
properties of the Partnership, cash investment of the Partnership, gross amount
at which properties are carried and accumulated depreciation, see Note 2 of
Notes to Financial Statements. The above described property is encumbered by a
mortgage loan. For information with respect to that mortgage loan, see Note 5
of Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
ITEM 3 LEGAL PROCEEDINGS
The Partnership is a defendant, from time to time, in various actions brought by
tenants, contractors, materialmen and others in connection with the
Partnership's property, many of which are covered by the liability insurance
maintained by the Partnership. The Partnership believes that the effect, if
any, of these suits on the financial condition of the Partnership will not be
material.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5 MARKET FOR REGISTRANT'S PARTNERSHIP UNITS AND RELATED SECURITY HOLDER
MATTERS.
To the best knowledge of the General Partner, there is no public trading market
for the Partnership Units. Since such a market does not exist for the resale of
the Units, market prices cannot be ascertained. There are approximately 1,748
holders of the Units as of December 31, 1995.
Cash Distributions to Partners
The following cash distributions were declared by the Partnership during the
past two years:
Distributions Per Unit
For the Quarter Ended Declared Amount
March 31, 1994 $ 2,022,016.00 $ 64.00
June 30, 1994 1,295,354.00 41.00
September 31, 1994 5,213,010.00 165.00
December 31, 1994 189,564.00 6.00
September 30, 1995 2,037,813.00 64.50
December 31, 1995 379,128.00 12.00
$11,136,885.00 $ 352.50
Distributions are generally paid to the Partners in the quarter subsequent to
their declaration.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
ITEM 6 SELECTED FINANCIAL DATA
OPERATIONAL SUMMARY
1995 1994 1993 1992 1991
Total revenues $ 4,798,888 $ 5,091,207 $ 4,240,089 $ 3,998,645 $ 4,071,062
Total expenses 4,316,229 4,600,286 4,656,015 4,456,122 4,299,521
Income (loss) from
existing assets 482,659 490,921 (415,926) (457,477) (228,459)
Operations of
disposed properties 193,626 501,199 1,004,716 1,162,081 1,200,967
Gain on sale of
properties and
note payoffs 884,737 4,182,969 - - -
Gain on
replacements
from storm damage 455,823 - - - -
Real estate
transactions - - (355,000) - (65,000)
Net income $ 2,016,845 $ 5,175,089 $ 233,790 $ 704,604 $ 907,508
Allocated to:
Limited Partners $ 2,014,562 $ 5,169,231 $ 233,525 $ 703,806 $ 906,481
General Partners 2,283 5,858 265 798 1,027
$ 2,016,845 $ 5,175,089 $ 233,790 $ 704,604 $ 907,508
Net income per
Partnership unit
based on 30,034
average Partnership
units outstanding $ 67.15 $ 172.31 $ 7.78 $ 23.46 $ 30.22
Cash distributions
to Partners $ 2,227,377 $ 8,530,380 $ - $ - $ 576,591
Cash distributions
per Partnership Unit
based on 31,594
average units
outstanding $ 70.50 $ 270.00 $ - $ - $ 18.25
FINANCIAL CONDITION SUMMARY
Net investment
in real estate $ 6,301,935 $ 6,215,152 $10,908,546 $10,445,574 $ 7,297,646
Wrap-around
mortgage notes
receivable, net - 899,767 3,736,749 4,844,828 7,500,579
Other assets 2,582,115 3,570,985 3,108,744 3,210,271 4,150,953
Total assets $ 8,884,050 $10,685,904 $17,754,039 $18,500,673 $18,949,178
Mortgage notes
payable $ 3,774,776 $ 4,743,039 $ 8,949,785 $10,043,250 $11,065,964
Other liabilities 409,784 1,032,843 538,941 425,900 556,295
Other liabilities 4,184,560 5,775,882 9,488,726 10,469,150 11,622,259
Partners' capital 4,699,490 4,910,022 8,265,313 8,031,523 7,326,919
Total liabilities
and Partners'
capital $ 8,884,050 $10,685,904 $17,754,039 $18,500,673 $18,949,178
Note: The above information and Item 7 - "Management's Discussion and Analysis
of Financial Condition and Results of Operations" should be read in
conjunction with the financial information contained in Item 8 and
elsewhere herein.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The current operations of the Partnership are centered around the Partnership's
three residential apartment complexes.
The Partnership's total revenues decreased $292,319 or 6% in 1995 as compared to
1994, as a result of a $331,181 or 33% decrease in other income. This was due
primarily to the recognition, during 1994, of interest income on General Partner
notes.
Total revenues increased $851,118 or 20% in 1994 as compared to 1993. There was
a $250,222 or 7% increase in rents and other tenant charges due primarily to
increased rental revenue at Greenhaven Village Apartments and also to increased
occupancy at the Partnership's Manitoba Apartments. Other income increased
$600,896 or 148% due primarily to the recognition of interest income on General
Partner notes.
Total expenses decreased $284,057 or 6% in 1995 as compared to 1994.
Depreciation expense decreased $165,776 or 21% due primarily to the tangible
personal property at Greenhaven Village Apartments having become fully
depreciated in 1994. Interest expense decreased $88,004 or 19% in 1995 as
compared to 1994, as a result of continued principal amortization on the
Partnership's mortgage notes payable.
Total expenses decreased $55,729 or 1% in 1994 from 1993. Maintenance,
custodial salaries and related expenses decreased $39,838 or 9% in 1994 from
1993, due primarily to a decrease in maintenance staff at the Partnership's
Greenhaven Village Apartments along with an overall decrease in workers
compensation costs at all three of the Partnership's residential apartment
complexes. Interest expense decreased $127,217 or 21% in 1994 from 1993 as a
result of continued principal amortization of the Partnership's mortgage
notes payable.
On May 5, 1995, Manitoba Apartments sustained significant damage as a result of
a hailstorm which affected the Fort Worth, Texas area. Due to the damage,
occupancy at the property declined approximately 20%. As a result of the damage
sustained, adjustments have been made to reduce the carrying value of the
damaged apartments at Manitoba Apartments. These adjustments resulted in the
Partnership recognizing a net gain from insurance proceeds related to storm
damage of $455,823 (See Note 2 of Notes to Financial Statements). Repairs to
the property are anticipated to be completed by the end of March, 1996, and
management is currently in the process of re-marketing and leasing the vacant
units. The Partnership is presently in negotiations with the insurance carrier
to reach a settlement with regard to the property damage and rental loss.
On August 31, 1995, the Partnership received $1,571,039 in repayment of the
Royal Oak Apartments mortgage note receivable. The amount represents the
difference between (a) the remaining principal due on the wrap-around mortgage
note receivable ($1,784,883); and (b) the remaining principal and accrued
interest on the underlying mortgage note payable with respect to this property
($213,844). The Partnership recognized a gain of $884,737 on the payoff of
this note.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, continued
The liquidity of the Partnership is dependent upon the timely receipt of cash.
There are no other credit facilities currently in place and limited partners
have no obligation to provide additional funds in excess of their initial
contributions. In order to protect the Partnership in the event of a reduction
of cash flow, management closely monitors the Partnership's cash position, and
,when necessary, reservesadequate funds to continue to operate the Partnership
in the foreseeable future. Funds reserved are generally invested in short-term
investments. The General Partner believes that the Partnership maintains
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 the Partnership's rental properties, which 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 Partners. Funds in excess
of Partnership reserves resulted in distributions totaling $2,227,377.00 or
$70.50 per partnership unit being paid during the year ended December 31, 1995.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
PART II, continued
ITEM 8
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
For each of the years in
the three year period ended
December 31, 1995
Schedules omitted are not required, or the required information
is included in the financial statements or the notes thereto.
Independent Auditors' Report
The Partners
MultiVest Real Estate Fund, Ltd. (Series V):
We have audited the accompanying statements of financial condition of MultiVest
Real Estate Fund, Ltd. (Series V) (a Michigan Limited Partnership) as of
December 31, 1995 and 1994, and the related statements of operations, changes
in partners' capital, and cash flows for each of the years in the three-year
period ended December 31, 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MultiVest Real Estate Fund,
Ltd. (Series V) (a Michigan limited partnership) at December 31, 1995 and
1994, and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 1995, in conformity with
generally accepted accounting principles.
March 21, 1996 KPMG Peat Marwick LLP
Fort Lauderdale, Florida
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
(a Michigan limited partnership)
STATEMENTS OF FINANCIAL CONDITION
December 31, 1995 and 1994
ASSETS 1995 1994
Investment in real estate
Land $ 2,426,149 $ 2,426,149
Land improvements 315,017 315,017
Buildings and improvements 10,732,387 11,408,970
Construction-in-progress 640,459 -
14,114,012 14,150,136
Less accumulated depreciation 7,812,077 7,934,984
Net investment in real estate
(Notes 2 and 10) 6,301,935 6,215,152
Wrap-around mortgage notes
receivable (Note 4) - 1,969,157
Less unamortized discount (Note 4) - (414,072)
Allowance for loss on wrap-around
mortgage notes receivable (Note 4) - (655,318)
- 899,767
Other assets
Cash 16,345 79,047
Investments, at cost which
approximates market (Note 3) 2,219,310 3,122,975
Interest and other receivables 10,948 20,675
Prepaid insurance and
property taxes 131,104 129,957
Replacement and repair
reserves (Note 13) 34,197 45,086
Escrow, deposits and other assets 92,796 89,829
Deferred charges net of accumulated
amortization of $20,824 and $13,573,
respectively 77,415 83,416
Total other assets 2,582,115 3,570,985
Total assets $ 8,884,050 $10,685,904
LIABILITIES AND PARTNERS' CAPITAL
Mortgage notes payable (Note 5) $ 3,774,776 $ 4,743,039
Accounts payable 80,252 72,734
Accrued liabilities (Note 6) 165,244 153,346
Accrued liabilities to
affiliates (Note 7) 18,831 18,469
Unfunded distributions payable - 655,610
Tenants' security deposits
and other liabilities 145,457 132,684
Total liabilities 4,184,560 5,775,882
Contingencies (Note 11)
Partners' capital, (Notes 8 and 9)
Limited Partners, 30,000 units 4,691,695 4,902,113
General Partners, 1,594 units 721,495 721,609
Less subscriptions receivable (713,700) (713,700)
Total Partners' capital 4,699,490 4,910,022
Total liabilities and
Partners' capital $ 8,884,050 $10,685,904
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
(a Michigan limited partnership)
STATEMENTS OF OPERATIONS
For each of the years in the
three year period ended December 31, 1995
1995 1994 1993
Revenues
Rents and other tenant charges $ 4,122,014 $ 4,083,152 $ 3,832,930
Other income 676,874 1,008,055 407,159
4,798,888 5,091,207 4,240,089
Expenses
Maintenance, custodial salaries
and related expenses 378,599 388,198 428,036
Real estate management fee-
affiliate (Note 7) 223,470 221,552 208,197
Property taxes 289,165 284,896 281,769
Depreciation (Note 2) 620,500 786,276 764,440
Amortization 7,251 67,631 22,936
Insurance 141,267 149,058 179,100
Utilities 1,203,489 1,176,348 1,107,942
Repairs and maintenance 684,365 655,471 686,131
Legal and accounting 25,115 25,630 17,294
Interest 381,692 469,696 596,913
Administrative and other 361,316 375,530 363,257
4,316,229 4,600,286 4,656,015
Income (loss) from
existing assets 482,659 490,921 (415,926)
Operations of disposed
properties (Note 12) 193,626 501,199 1,004,716
Gain on sale of properties
and note payoff 884,737 4,182,969 -
Net gain from insurance proceeds
related to storm damage 455,823 - -
Provision for loss on real estate - - (355,000)
Net income $ 2,016,845 $ 5,175,089 $ 233,790
Allocated to
Limited partner, 30,000 units $ 2,014,562 $ 5,169,231 $ 233,525
General partners,
1,594 units (Note 8) 2,283 5,858 265
$ 2,016,845 $ 5,175,089 $ 233,790
Net income per partnership unit
based on 30,034 average units
outstanding (Note 8) $ 67.15 $ 172.31 $ 7.78
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
(a Michigan limited partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For each of the years in the
three year period ended December 31, 1995
General Limited
Partners* Partners Total
Partners' capital, January 1, 1993 $ 10,966 $ 8,020,557 $ 8,031,523
Net income for 1993 265 233,525 233,790
Balance, December 31, 1993 11,231 8,254,082 8,265,313
Net income for 1994 5,858 5,169,231 5,175,089
Distributions to Partners 1994 (430,380) (8,100,000) (8,530,380)
Distribution of General
Partners allocated to
Limited Partners (Note 8) 421,200 (421,200) -
Balance, December 31, 1994 7,909 4,902,113 4,910,022
Net income for 1995 2,283 2,014,562 2,016,845
Distributions to Partners 1995 (112,377) (2,115,000) (2,227,377)
Distributions of General
Partners allocated to
Limited Partners (Note 8) 109,980 (109,980) -
Partners' capital,
December 31, 1995 $ 7,795 $ 4,691,695 $ 4,699,490
Partnership units outstanding
at December 31, 1995, 1994
and 1993 1,594 30,000 31,594
* General Partner units are net of subscriptions receivable for all periods
presented.
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
(a Michigan limited partnership)
STATEMENTS OF CASH FLOWS
For each of the years in the
three year period ended December 31, 1995
Increase (decrease) in Cash and Cash Equivalents
Operating Activities 1995 1994 1993
Net income $ 2,016,845 $ 5,175,089 $ 233,790
Adjustments to reconcile net
income to net cash provided by
operating activities:
Amortization of discount on
mortgage notes receivable (213,952) (320,928) (320,928)
Provision for loss on real estate - - 355,000
Gain on sales of properties
and note payoff (884,737) (4,182,969) -
Net gain from insurance proceeds
related to storm damage (455,823) - -
Amortization 7,251 67,631 22,936
Depreciation 620,500 809,640 923,048
Changes in assets and liabilities:
Decrease (increase) in deferred
interest income - 1,096,200 (64,801)
Decrease (increase) in interest
and other receivables 9,727 44,940 (30,288)
(Increase) decrease in
prepaid expenses (1,147) 26,367 22,886
Increase in deferred charges (1,628) (95,062) (2,368)
(Increase) decrease in escrow,
deposits and other assets (2,967) 44,896 (98,895)
Increase (decrease) in accounts payable 7,518 (27,176) 67,418
Increase (decrease) in
accrued liabilities 11,898 (75,440) (30,146)
Increase (decrease) in accrued
liabilities to affiliates 362 (6,119 7,549
Increase (decrease) in
security deposits 12,773 (52,973) 68,220
Decrease (increase) in replacement
and repair reserve 10,889 (45,086) -
(Decrease) increase in unfunded
distributions payable (655,610) 655,610 -
Net cash provided by
operating activities 481,899 3,114,620 1,153,421
Investing Activities
Construction-in-progress, storm damage (640,459) - -
Payment received on Great Oaks
wrap-around mortgage note receivable - 6,725,992 -
Payment received on Royal Oak
wrap-around mortgage note receivable 1,784,883 - -
Capital improvements to real estate (241,571) (280,829) (424,975)
Payments received on wrap-around
mortgage notes receivable 213,952 320,928 320,928
Proceeds from sale of properties - 4,458,542 -
Net cash provided by (used in)
investing activities 1,116,805 11,224,633 (104,047)
Financing Activities
Insurance proceeds from storm damage 630,569 - -
Proceeds received on Rock Island
refinancing - 2,100,000 -
Payoff of Rock Island mortgage
note payable - (2,091,861) -
Principal payoff on Royal Oak
mortgage note payable (212,245) - -
Mortgage note payoffs on
sold properties - (3,371,622) -
Principal payments on mortgage
notes payable (756,018) (843,263) (1,093,465)
Distributions to partners (2,227,377) (8,530,380) -
Net cash used in
financing activities (2,565,071) (12,737,126) (1,093,465)
(Decrease) increase in cash
and cash equivalents (966,367) 1,602,127 (44,091)
Cash and cash equivalents -
beginning of year 3,202,022 1,599,895 1,643,986
Cash and cash equivalents -
end of year $ 2,235,655 $ 3,202,022 $ 1,599,895
Non-Cash Activities
Repossession of Cambury West Apartments:
Decrease in wrap-around mortgage
note receivable - - (1,550,000)
Decrease in allowance for loss on
wrap-around mortgage note receivable - - 525,000
Decrease in interest receivable - - (6,458)
Decrease in deferred interest receivable - - (198,917)
Decrease in escrow deposits - - (1,820)
Repossession of property - - 1,232,195
Repossession of Kindercare Learning Center:
Decrease in wrap-around mortgage
note receivable - - (185,000)
Decrease in interest receivable - - (771)
Decrease in deferred gain on sale - - 101,921
Repossession of property - - 83,850
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1995, 1994 and 1993
1. Summary of Significant Accounting Policies
Assets
The Partnership's assets are carried at the lower of cost or estimated fair
value. All subsequent expenditures for improvements are capitalized. The
costs of repairs and maintenance are charged to expense as incurred. Upon
sale or retirement, the cost and related accumulated depreciation are
removed from the accounts and any gain or loss is reflected in income in
accordance with Statement of Financial Accounting Standards No. 66.
The Partnership adopted Statement of Financial Accounting Standards No.
121 - Accounting for the Impairment of Long Lived Assets and for Long
Lived Assets to Be Disposed Of - as if January 1, 1995, and accordingly
evaluates its real estate investments periodically to assess
whether any impairment indications are present, including recurring
operating losses and significant adverse changes in legal factors or
business climate that affect the recovery of the recorded value. If any
real estate investment is considered impaired, a loss is provided to reduce
the carrying value of the property to its estimated fair value. The
implementation of this standard had no financial impact on the financial
statements.
Depreciation
The Partnership depreciates land improvements, buildings and building
improvements using the straight-line method over the estimated useful lives
of the assets. Depreciation is computed using the following useful lives:
Years
Land Improvements 3 to 10
Buildings 16 to 28
Building Improvements 3 to 10
Deferred Charges
The Partnership capitalizes certain refinancing costs which are being amortized
on a straight line basis over the period of the new mortgages (from 3 to
25 years).
Accounting for Real Estate Sales
Sales of real estate are accounted for in accordance with Statement of
Financial Accounting Standards No. 66 - Accounting for Sales of Real Estate.
For sales of real estate where both cost recovery is reasonably certain and the
collectibility of the contract price is reasonably assured, but the
transactions do not meet the remaining requirements to be recorded on the
accrual basis, profit is recognized under the installment method which
recognizes profit as collections of principal are received. If developments
subsequent to the adoption of the installment method occur causing the
transaction to meet the requirements of the full accrual method, the remaining
deferred profit is recognized at that time.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts in the financial statements and
accompanying notes. Actual results could differ from those estimates.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
For the years ended December 31, 1995, 1994 and 1993
1. Summary of Significant Accounting Policies, continued
Fair Value of Financial Instruments
The fair values of the Partnership's financial instruments, including mortgage
notes and accounts receivable, mortgage notes and accounts payable, accrued
expenses, security deposits, and other financial instruments, generally
determined using the present value of estimated future cash flows using a
discount rate commensurate with the risks involved, approximate their carrying
or contract values.
Cash Equivalents
For purposes of the Statements of Cash Flows, all highly liquid investments
purchased with a maturity of three months or less are considered to be cash
equivalents. These investments consist principally of repurchase agreements
and Treasury Bills.
Reclassifications
Certain reclassifications have been made in the 1993 and 1994 financial
statements to conform to the presentation of 1995 results of operations.
Storm Damage
Property damage resulting fro a hail storm has been written off in the fourth
quarter based upon estimates obtained from general contractors involved in the
repair of the property. Repairs for property damage are capitalized and
included in construction in progress until completed. The difference between
the loss sustained and the insurance proceeds received is recorded as a gain
or loss related to storm damage. Management anticipates additional proceeds
to be received in 1996.
Notes Receivable
Notes receivable are recorded at cost less the related allowance for impaired
notes receivable. The Partnership adopted the provisions of Statements of
Financial Accounting Standard No. 114, Accounting by Creditors for Impairment
of a Loan, as amended by SFAS No. 118, Accounting by Creditors for Impairment
of a Loan-income Recognition and Disclosure, on January 1, 1995. Management,
considering current information and events regarding the borrowers ability to
repay their obligations, considers a note to be impaired when it is probable
that the Partnership will be unable to collect all amounts due according to the
contractual terms of the note agreement. When a loan is considered to be
impaired, the amount of the impairment is measured based on the present value
of expected future cash flows discounted at the note's effective interest
rate. Impairment losses are included in the allowance for doubtful accounts
through a charge to bad debt expense. Interest is recognized on a cash basis
for impaired loans. The implementation of these standards had no financial
impact on the financial statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
2. Real Estate and Accumulated Depreciation
Real estate and accumulated depreciation at December 31, 1995 consisted of
the following:
Cost
Partnership Capitalized Gross Amount at Which Life on Which
Cost to Subsequent to Carried at Close of Depreciation in
Re-acquire Re-Acquisition Period Latest Statements
Buildings & Building and Accumulated Date of Date of Operations
Description Encumbrances Land Improvements Improvements Land Improvements Total Depreciation Construct'n Acquired is Computed
Greenhaven
Village
Apartments
Addison, TX 1,090,039 1,999,125 2,024,132 1,955,719 1,999,125 3,979,851 5,978,976 2,277,840 1973 07/05/89 3 - 28 years
Manitoba
Apartments
Fort
Worth, TX 642,050 177,024 3,658,322 1,173,657 177,024 4,831,979 5,009,003 3,445,201 1971 12/31/73 3 - 28 years
Rock Island
Apartments
Irving, TX 2,042,687 250,000 1,833,333 1,042,700 250,000 2,876,033 3,126,033 2,089,036 1973 05/15/74 3 - 28 years
Total,
December 31,
1995 3,774,776 2,426,149 7,515,787 4,172,076 2,426,149 11,687,863 14,114,012 7,812,077
The cost basis of the properties for federal income tax purposes is
substantially the same as the cost basis for financial statement purposes.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
2. Real Estate and Accumulated Depreciation, continued
SUMMARY OF CHANGES IN GROSS AMOUNT OF REAL ESTATE
AND ACCUMULATED DEPRECIATION
1995 1994 1993
Gross Amount of Real Estate
Balance at beginning of period $ 14,150,136 $ 18,570,861 $ 16,829,841
Construction-in-progress 640,459 - -
Asset write-offs, storm damage (918,154) - -
Additions through deed acceptances - - 1,336,196
Sales of properties - (4,701,554) -
Improvements 241,571 280,829 404,824
Balance at close of period $14,114,012 $14,150,136 $18,570,861
Accumulated Depreciation
Balance at beginning of period $ 7,934,984 $ 7,307,315 $ 6,384,267
Less: Accumulated depreciation
write off on sold properties - (181,971) -
Accumulated depreciation
write-offs, storm damage (743,407) - -
Depreciation expense 620,500 809,640 923,048
Balance at close of period $ 7,812,077 $ 7,934,984 $ 7,307,315
3. Investments 1995 1994
Treasury Bills $ 1,585,860 $ 1,883,375
Repurchase Agreements 633,450 1,239,600
$ 2,219,310 $ 3,122,975
Investments are recorded at cost, which approximates market value, and have
maturities of three months or less. Yield on investments at December 31,
1995 was approximately 5.02%.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
4. Wrap-Around Mortgage Notes Receivable
Mortgage notes receivable at December 31, 1995 consisted of the following:
Final Periodic Wrap-Around Interest Income
Interest Prior Maturity Payment Mortgage Notes Earned Applicable
Rates Liens Date Terms Receivable to Period
1995 1994
Royal Oak Apartments
Dallas, Texas N/A N/A 08/31/95 (A) - 1,969,157 213,952*
*Interest income earned prior to note payoff is included in operations of
disposed properties.
1995 1994 1993
Balance at beginning of period, net of unamortized
discount and allowance for losses 899,767 8,099,767 9,309,767
Less: Collections of principal - (320,928) (320,928)
Decrease in wrap-around mortgage notes receivable,
repayment of Royal Oak Apartments (1,969,157) - -
Decrease in wrap-around mortgage note receivable,
repayment of Great Oaks Apartments - (7,200,000) -
Decrease in wrap-around mortgage notes receivable,
Kindercare Learning Center conveyance of deed in
satisfaction of any and all claims against Mortgagor - - (185,000)
Decrease in wrap-around montage notes receivable, Cambury
West Apartments deed accepted in lieu of foreclosure - - (1,550,000)
Add: Recognition and amortization of discount on
Royal Oak mortgage note receivable 414,072 320,928 320,928
Decrease in allowance for loss on wrap-around
Mortgage Note receivable - Repayment of Royal
Oak Apartments 655,318 - -
Decrease in allowance for loss on wrap-around mortgage
note receivable on Cambury West Apartments - - 525,000
Balance at end of period - 899,767 8,099,767
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
4. Wrap-Around Mortgage Notes Receivable, continued
(A) On August 31, 1995, the Partnership received $1,571,039 in repayment of
the Royal Oak Apartments mortgage note receivable. The amount
represents the difference between (a) the remaining principal due on
the wrap-around mortgage note receivable ($1,784,883) and; (b) the
remaining principal and accrued interest on the underlying mortgage
note payable with respect to this property ($213,844). The Partnership
recognized a gain of $884,737 on payoff of this note.
5. Mortgage Notes Payable
Mortgage notes payable at December 31, 1995 and 1994 consisted of
the following:
Interest Final Monthly Carrying Amount of
Description Rates Maturity Date Payment Mortgage Notes Payable
1995 1994
Royal Oak Apartments
Dallas, Texas (b) N/A 1995 $ - $ - $ 327,784
Greenhaven Village
Apartments
Addison, Texas (a) 10.50% 1996 42,704 1,090,039 1,466,336
Manitoba Apartments
Fort Worth, Texas 8.75% 1998 24,665 642,049 870,861
Rock Island Apartments
Irving, Texas (c) 8.65% 2001 17,812 2,042,688 2,078,058
$ 85,181 $3,774,776 $4,743,039
(a) On August 24, 1994, the Partnership obtained an extension for the
Greenhaven Village Apartment mortgage note payable. The unpaid principal
balance was $1,611,444, the interest rate remained at 10.5% and the monthly
principal and interest payment is $42,704. A balloon payment including
principal and interest is to be made on this note in the amount of $955,170
on May 15, 1996.
(b) On August 31, 1995, the Partnership received $1,571,039 in repayment of the
Royal Oak Apartments mortgage note receivable. The amount represents the
difference between (a) the remaining principal due on the wrap-around
mortgage note receivable ($1,784,883); and (b) the remaining principal and
accrued interest on the underlying mortgage note payable with respect to
this property ($213,844). (See Note 4).
(c) On April 12, 1994, the Partnership obtained refinancing for the Rock Island
Apartments mortgage note payable, and the underlying mortgage note was paid
off in the amount of $2,091,861. The new note monthly principal and
interest payment is $17,812, with a balloon payment in the amount of
$1,792,739 due on May 1, 2001. (See note 13)
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
5. Mortgage Notes Payable, continued
Principal balance, January 1, 1995 $ 4,743,039
Payoff of Royal Oak mortgage note payable (212,245)
Payments of principal (756,018)
Principal balance, December 31, 1995 $ 3,774,776
The aggregate annual maturities on mortgage indebtedness are summarized as
follows:
1996 $ 1,378,247
1997 314,422
1998 165,672
1999 49,930
2000 54,394
Thereafter 1,812,111
$ 3,774,776
The mortgage notes payable are collateralized by real estate. The
Partnership has no liability beyond this collateral, with the exception of
$519,515 related to the Rock Island Apartments mortgage note payable.
Cash paid during 1995, 1994 and 1993 for interest was $397,519, $627,031,
and $975,029, respectively. Interest expense incurred before note payoff
and property sales is included in operations of disposed properties.
6. Accrued Liabilities
Accrued liabilities at December 31, 1995 and 1994 consisted of:
1995 1994
Miscellaneous $ 44,633 $ 43,964
Property taxes 106,421 95,240
Payroll 14,190 14,142
$ 165,244 $ 153,346
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
7. Related-Party Transactions
The following list of expenses incurred and the related liabilities are a
result of transactions with affiliates:
M.V. National Property Analysis
Properties, Inc. and Development Corp.
1995 1994 1993 1995 1994 1993
Real estate management
fee 223,470 230,844* 261,267* - - -
Mortgage servicing fee 4,433* 11,662* 21,674* - - -
Real Estate commissions - - - - 232,550 -
Totals 227,903 242,506 282,941 - 232,550 -
Accrued liabilities,
December 31 18,831 18,469 24,588 - - -
*Real estate management fees and mortgage servicing fees incurred before note
payoff and property sales are included in operations of disposed properties.
Management is of the opinion that these transactions were executed for a
consideration approximating that which would have been paid to unaffiliated
firms.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
7. Related-Party Transactions, continued
MultiVest Real Estate, Inc. is the Corporate General Partner of the
Partnership. The Partnership Agreement permits the Corporate General Partner
to provide certain services to the Partnership and to employ certain
affiliates of the Corporate General Partner to provide services to the
Partnership and obtain reimbursement. The services provided encompass:
(1) Real estate management services - M.V. National Properties, Inc.
(2) Investment management services - MultiVest Real Estate, Inc.
(3) Mortgage servicing - M.V. National Properties, Inc.
(4) Mortgage inspection services - M.V. National Properties, Inc.
(5) Construction management, acquisition, disposition and financing
services - Property Analysis and Development Corp.
The Partnership Agreement provides that the General Partner shall be
entitled to an annual Investment Management fee of:
(i) 9% of cash flow distributions to partners exclusive of the cash flow
from proceeds of sale or refinancing, or 1/4 of 1% of gross assets
calculated without respect to depreciation, whichever is less. Such
fee is conditioned upon the total of cash distributed and mortgage
amortization being at least 12% per annum (of which at least 7% must be
cash distributions) of the Partners' current capital account on a
cumulative basis commencing two years from the formation of the
Partnership and on a non-cumulative basis during the first two
Partnership years, and
(ii) 9% of the distributions to partners of proceeds from sale or
refinancing of properties. Such fee is conditioned upon the partners
receiving 100% of their initial capital account, less the sum of all
prior distributions, plus an amount equal to 12% per annum of the
current capital account, as defined in the Partnership Agreement. At
December 31, 1995, assuming all mortgages were ultimately collected,
the partners would not have received the above described returns and
no Investment Management Fee would have been earned by the General
Partner.
The Partnership Agreement also allows the Corporate General Partner to bill,
at its cost, for the direct (other than salaries paid by the Corporate
General Partner to its officers and directors) expenses which are incurred
in performing services for the Partnership, including but not limited to,
costs of accounting, statistical or bookkeeping services and computing or
accounting equipment and travel, telephone, communications to all partners
and other costs and expenses relating to the acquisition, financing and
operation of acquired properties.
For the year ended December 31, 1995, no affiliate of the General Partner
received reimbursement for services performed by its employees or for
overhead expenses attributed to the Partnership.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
7. Related Party Transactions, continued
In addition, the Partnership Agreement provides that an affiliate of
the Corporate General Partner may serve as a real estate broker. The
Partnership Agreement limits real estate commissions, paid (regardless
of to whom paid and including any commission payable to an affiliate
of the Partnership) in connection with its purchases or sales of
properties to not more than 6% of the total price of the property.
The Partnership Agreement also prohibits affiliates of the Partnership
from receiving a real estate commission in connection with the sale
of any property by the Partnership unless the Partnership will recover
from the proceeds of the sale at least 110% of the amount of the
Partnership's cash investment in the property. No real estate
commissions were earned by the affiliate in 1995.
The Partnership Agreement provides that affiliates of the General Partner
may be engaged to perform (a) normal property management services for fees
not to exceed 5% of gross rental income; and/or (b) accounting, record
keeping, data processing and other services, but only on terms that are fair
and reasonable and no less favorable than could reasonably be obtained by
the Partnership with unaffiliated persons. For the year ended December 31,
1995, an affiliate earned $223,470 as its Real Estate Management Fee. In
addition, an affiliate of the General Partner was engaged to service all of
the mortgages owned by the Partnership (i.e. on sold properties) in
accordance with the terms and conditions of a Mortgage Servicing Agreement
between the affiliate and the Partnership. For the year ended December 31,
1995, the affiliate earned $4,433 for such services.
The Partnership Agreement allows the General Partner to employ, and dismiss
from employment, persons in the operation and management of the
Partnership's business, including but not limited to supervisory managing
agents, building management agents, real estate brokers and loan brokers, on
such terms and for such compensation as the Corporate General Partner shall
determine. The Corporate General Partner is empowered to employ in such
capacities the Individual General Partners or an affiliate or subsidiary of
the Corporate General Partner on terms comparable to those offered by
unaffiliated firms.
8. General Partner Participation in Income and Loss
The Corporate General Partner presently owns 954 General Partnership units
and 30 Limited Partnership units. Two of the four Individual General
Partners each own 316 General Partnership units and two Individual General
Partners each own 4 General Partnership units.
Originally, five Individual Partners purchased an aggregate of 1,560 General
Partnership units and gave the Partnership nonrecourse promissory notes, due
in 1983, in payment of the purchase price of $713,700. These promissory
notes are classified as subscriptions receivable. The notes bear interest
at 12% per annum. The accrued interest as of December 31, 1995 was
$373,450. Due to the fact that the General Partners have no liability for
payment of principal and interest on the notes beyond the General
Partnership Units, interest has been recorded only to the extent of cash
distributions received from the Partnership, $109,980 in 1995. As of March
29, 1983, the General Partner agreed to extend the expiration of the notes
as well as to defer interest and principal payments to July 28, 1984.
On July 26, 1984, the Corporate General Partner further deferred the
payments on the notes to ten (10) days after the date of written demand for
payment as such demand is determined by the Corporate General Partner.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
8. General Partner Participation in Income and Loss, continued
Pursuant to the Partnership Agreement, all profits, gains and losses of the
Partnership are to be divided among and charged against the accounts of the
Partners proportionately at the end of each fiscal year of the Partnership
in the ratio which the number of Units owned by each Partner bears to the
number of Units owned by all Partners as of that date.
The Corporate General Partner and the Individual General Partners also
purchased in cash an aggregate of 34 General Partner Units. These Units
participate in all cash distributions as well as profit and losses of the
partnership. The following schedule identifies the number of general
partner units outstanding and initial partnership capital:
Cash Non-Cash
Units Amounts Units Amounts
MultiVest Real Estate, Inc. 18 $ 8,235 1,248 $ 570,960
Wales Martindale 4 1,830 312 142,740
Oscar Ziemba 4 1,830 - -
Gerson Geltner 4 1,830 - -
Irv Gold 4 1,830 - -
34 $15,555 1,560 $ 713,700
9. Income Tax
MultiVest Real Estate Fund, Ltd., Series V is a partnership and has no
liability for federal income taxes. The Limited Partners include in their
individual income tax returns their proportionate share of any income or
loss of the Partnership.
Net income, total assets and Partners' capital as reported in the
accompanying financial statements exceed, (or are less than) net income,
total assets and Partners' capital as reported in the Partnership's tax
return by approximately $842,273, $(1,664,586) and $(1,664,685),
respectively. The following are differences related to net income as
of and for the years ended December 31:
1995 1994 1993
Income per books $ 2,016,845 $ 5,175,089 $ 233,790
Imputed interest - (320,928) (320,928)
Depreciation 262,296 413,468 267,626
Original issue discount - 154,805 166,618
Net gain from insurance proceeds
related to storm damage (455,823) - -
Rent loss income 88,000 - -
Book/tax basis difference (736,746) (803,358) 396,285
Provision for loss on real estate - - 355,000
Other - 12,856 10,000
Tax income $ 1,174,572 $ 4,631,932 $ 1,108,391
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
10. Description of Partnership Operations and Leasing Arrangements
The Partnership operates exclusively in the real estate industry investing
its funds in rental properties consisting of apartment complexes.
The following is an analysis of the Partnership's investment in property
held for rent for residential purposes as of December 31, 1995:
Residential rental apartments $14,114,012
Less: Accumulated depreciation 7,812,077
$ 6,301,935
Residential leases are for periods not exceeding one year.
11. Contingencies
The Partnership is a defendant, from time to time, in various actions
brought by tenants, contractors, materialmen and others in connection with
the Partnership's property, many of which are covered by the liability
insurance maintained by the Partnership. The Partnership believes that the
effect, if any, of these suits on the financial condition of the
Partnership will not be material.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
12. Operations of Disposed Properties
Kindercare Cambury Old Town
Learning Great Oaks West Villa Royal Oak
Center Apartments Apts. Apartments Apts. Total
1995:
Total revenues $ - $ - $ - $ - $ 213,952 $ 213,952
Total expenses - - - - (20,326) 193,626
Net income $ - $ - $ - $ - $ 193,626 $ 193,626
1994:
Total revenues $ 88 $ 409,495 $ 155,737 $ 4,013 $ 320,928 $ 890,261
Total expenses (15,092) (112,955) (168,941) (48,057) (44,017) (389,062)
Net income
(loss) $ (15,004) $ 296,540 $ (13,204) $ (44,044) $ 276,911 $ 501,199
1993:
Total revenues $ 667 $ 784,800 $ 195,868 $ 945,600 $ 320,928 $2,247,863
Total expenses (16,304) (233,767) (100,353) (832,917) (59,806) (1,243,147)
Net income
(loss) $ (15,637) $ 551,033 $ 95,515 $ 112,683 $ 261,122 $1,004,716
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
NOTES TO FINANCIAL STATEMENTS, continued
13. Replacement and Repair Reserves
On April 12, 1994 the Partnership obtained refinancing for the Rock Island
Apartments mortgage note payable. As required by the lender, a repair
reserve account was established in order to assure that certain repairs be
made. In addition, a replacement reserve account was established for the
funding of capital replacements throughout the term of the loan.
The Partnership makes requests for reimbursement for capital replacements
quarterly and is reimbursed for various capital replacements from this
account.
14. Subsequent Events
A distribution was declared for the quarter ended December 31, 1995, and
paid to the Partnership in March 1996 in the amount of $379,128 or $12.00
per Partnership unit.
PART II, continued
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership has no directors or officers. The business policy making
functions of the Partnership are carried on through the directors and executive
officers of the General Partner, who are listed below:
RICHARD L. DAVIS, age 46, is President, Chief Executive Officer and Director of
the General Partner and has been associated with the General Partner since
August 1981.
JAMES F. COLGAN, age 61, is a Director of the General Partner and has served in
that capacity since December 1987. Since March 1990, Mr. Colgan has been
President and Director of MultiVest, Inc. From November 1987 to March 1990 he
served as Chief Financial Officer of that company.
PAUL D. TOOMEY, age 45, is Vice President, Treasurer and Secretary of the
General Partner and has been associated with MultiVest Real Estate, Inc. and
MultiVest, Inc., in various capacities since 1972.
There is no family relationship among any of the above named executive officers
and directors of the General Partner.
ITEM 11 EXECUTIVE COMPENSATION
The Partnership has no directors or officers. The General Partner, MultiVest
Real Estate, Inc. operates the Partnership.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
According to the Partnership's records, at January 1, 1996, a group consisting
of the following entities (through their affiliates) is the only individual,
entity or group which is the beneficial owner or has the rights to acquire
beneficial ownership of more than 5% of the Limited Partnership units:
Name of Amount & Nature of Percentage
Title of Class Beneficial Owner Beneficial Ownership of Class
$500 Limited LF 53 LP 40 .133
Partnership Units
$500 Limited LF 54 LP 219 .730
Partnership Units
$500 Limited LF 75 LP 60 .200
Partnership Units
$500 Limited Liquidity Fund IX 60 .200
Partnership Units
$500 Limited Liquidity Fund X 1,671 5.570
Partnership Units
$500 Limited Liquidity Fund XI 595 1.983
Partnership Units
$500 Limited Liquidity Fund XIII 1,323 4.410
Partnership Units
$500 Limited Liquidity Fund XIV 158 .527
Partnership Units
$500 Limited Liquidity Income XVI 222 .740
$500 Limited Liquidity Fund Special 5 .017
Partnership Units Opportunity Associates
$500 Limited Liquidity Fund Income 976 3.252
Partnership Units Growth Fund 87
$500 Limited Liquidity Income 190 .633
Partnership Units Growth Fund 88
$500 Limited Liquidity Fund Income 98 .327
Partnership Units Growth Fund 89
$500 Limited Liquidity Fund 52 713 2.377
Partnership Units
$500 Limited Liquidity Fund 53 1,155 3.849
Partnership Units
$500 Limited Liquidity Fund High Yield 210 .700
Partnership Units Institutional Investors
$500 Limited LFG Liquidity Interest, L.P. 33 .110
Partnership Units
$500 Limited Liquidity Financial Group LP 56 .187
Partnership Units
$500 Limited Liquidity Fund General 6 .020
Partnership Units Partners II
FBO Sean Subas
$500 Limited Liquidity Fund General 1 .003
Partnership Units Partners II
TOTAL 7,791 25.968
The address for the above beneficial owners is P.O. Box 882044, San Francisco,
California 94188.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT,
continued
There are no parents of the Partnership. MultiVest Real Estate, Inc., a
Delaware corporation, serves as Corporate General Partner of the Partnership
and, as such, controls its activities. The Corporate General Partner is a
wholly-owned subsidiary of MultiVest, Inc., a Delaware corporation. The
Corporate General Partner owns 1,266 General Partnership Units and 30 Limited
Partnership Units. One of the four individual general partners owns 316 General
Partnership Units and three of the individual general partners each own 4
General Partnership Units. (See Note 8 of Notes to Financial Statements).
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership Agreement provides that the General Partner shall be entitled to
an Annual Investment Management Fee equal to:
(i) 9% of the cash flow distributions to partners exclusive of the cash flow
from proceeds of sale or refinancing, or 1/4 of 1% of gross assets
calculated without respect to depreciation, whichever is less. Such fee
is conditioned upon the total of cash distributed and mortgage amortization
being at least 12% per annum (or which at least 7% must be cash
distributions) of the partners' current capital account on a cumulative
basis commencing two years from the formation of the Partnership and on a
non-cumulative basis during the first two Partnership years; plus
(ii) 9% of the distributions to partners of proceeds from sale or refinancing of
properties. Such fee is conditioned upon the Partners receiving 100% of
their initial capital account, less the sum of all prior distributions,
plus an amount equal to 12% per annum of the current capital account, as
defined in the Partnership Agreement.
At December 31, 1995, assuming all mortgages were ultimately collected, the
Partners would not have received the above described returns and no Investment
Management Fee would have been earned by the General Partner.
The Partnership Agreement also permits the Corporate General Partner to bill, at
its cost, for the direct (other than salaries paid by the Corporate General
Partner to its officers and directors) expenses which are incurred in performing
services for the Partnership, including costs of accounting, statistical or
bookkeeping services and computing or accounting, equipment and travel,
telephone, communications to all Partners and other costs and expenses relating
to the acquisition, financing and operation of acquired properties. For the
year ended December 31, 1995, no affiliate of the General Partner received
reimbursement for services performed by its employees and for overhead expenses
attributed to the Partnership.
The Partnership Agreement also provides that an affiliate of the Corporate
General Partner may serve as a real estate broker for the Partnership, but that
real estate commissions paid (regardless of by whom paid and including any
commission payable to an affiliate of the Partnership) in connection with its
purchases or sales of properties are limited to not more than 6% of the total
price of the property. In no event, however, will an affiliate of the
Partnership receive a real estate commission in connection with the sale of
any property by the Partnership unless the Partnership will recover from the
proceeds of the sale at least 110% of the amount of the Partnership's cash
investment in the property. No real estate commissions were earned by the
affiliate in 1995.
Affiliates of the General Partner may be engaged to perform (a) normal property
management services for fees not to exceed 5% of gross rental income; (b)
accounting,
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, continued
record keeping, data processing and other services, but only on terms that are
fair and reasonable and no less favorable than could reasonably be obtained by
the Partnership with unaffiliated persons; and/or (c) legal services at the
affiliate's usual rates for such services. For the year ended December 31,
1995, an affiliate earned $223,470 as its Property Management Fee. In addition,
an affiliate of the General Partner was engaged to service certain of the
mortgages owned by the Partnership in accordance with the terms and conditions
of a Mortgage Servicing Agreement between the affiliate and the Partnership.
For the year ended December 31, 1995, the affiliate earned $4,433 for
such services.
The Partnership Agreement allows the General Partner to employ, and dismiss from
employment, persons in the operation and management of the Partnership's
business, including but not limited to supervisory managing agents, building
management agents, real estate brokers and loan brokers, on such terms and for
such compensation as the Corporate General Partner shall determine. The
Corporate General Partner is empowered to employ in such capacities the
Individual General Partners or an affiliate or subsidiary of the Corporate
General Partner on terms comparable to those offered by unaffiliated firms.
At the time of the formation of the Partnership, the Individual General Partners
of the Partnership executed promissory notes in favor of the Partnership as
payment for their General Partnership Units. Each note required each of the
Individual General Partners to make an interest payment to the Partnership of 4%
per annum with an additional annual 8% interest payment out of cash
distributions, if any, made to the Individual General Partner. The Individual
General Partners have no personal liability with respect to their notes. On
December 29, 1976, the General Partner, in order to enhance the viability of
the Partnership and to retain the Individual General Partners (which retention
was deemed desirable with regard to the tax status of the Partnership) and in
order to induce the Individual General Partners to remain as such, agreed to
defer, without any personal liability to the Individual General Partners, all
current interest payments and future interest payment obligations until March
31, 1983. As of March 29, 1983, the General Partner agreed to extend the
expiration of the notes as well as the deferment of interest and principal
payments to July 28, 1984. On July 26, 1984, the Corporate General Partner
further deferred the payments on the notes to ten (10) days after the date of
written demand for payment as such demand is determined by the Corporate
General Partner.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
a) 1. Financial Statements.
See Index on Page 2 of this Form 10-K.
2. Financial Statement Schedules.
None.
3. Exhibits.
(i) Certificate of Limited Partnership - incorporated by
reference from annual report on Form 10-K for the fiscal
year ending December 31, 1982, Page 50.
(ii) Agreement of Limited Partnership - incorporated by
reference from annual report on Form 10-K for the fiscal
year ending December 31, 1982, Page 33.
b) Reports on Form 8-K
None.
MULTIVEST REAL ESTATE FUND, LTD., SERIES V
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
MULTIVEST REAL ESTATE FUND, LTD.,
SERIES V, a Michigan Limited
Partnership,
By: MULTIVEST REAL ESTATE, INC.
a Delaware corporation
Its: Corporate General Partner
RICHARD L. DAVIS
Richard L. Davis
President, Chief Executive Officer
and Director
(Principal Executive Officer)
Date: MARCH 28, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
RICHARD L. DAVIS
Richard L. Davis
President, Chief Executive Officer
and Director
Date: MARCH 28, 1996
JAMES F. COLGAN
James F. Colgan
Director
Date: MARCH 28, 1996
JOHN J. KAMMERER
John J. Kammerer
(Principal Accounting Officer)
Date: MARCH 28, 1996