UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 9, 2002
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SB Partners
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(Exact name of registrant as specified in its charter)
New York 000-08952 13-6294787
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1251 Avenue of the Americas, New York, NY 10020
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 408-5000
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(Former name or former address, if changed since last report.)
Item 2. Disposition of Assets
On May 9, 2002, the Registrant sold Meadowwood Apartments in Reno,
Nevada to Meadow Wood Apartments Reno, LLC, an unrelated Nevada limited
liability company, for $31,350,000 in an all cash transaction. The
proceeds from the sale were used, in part, to retire the mortgage note
of approximately $19,600,000 that had been secured by the property.
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Item 7. Financial Statements
The following pro forma financial statements reflect the sale of
Meadowwood Apartments by the Registrant. The balance sheet as of the
last filing, March 31, 2002, has been adjusted to reflect the removal
of the assets and liabilities of this 704-unit apartment community as
if the sale had been consummated on the balance sheet date. The
statement of operations for the year ended December 31, 2001 has been
adjusted to reflect the results of operations of the Registrant as if
the sale had been consummated at the beginning of that year. As the
statement of operations for the three months ended March 31, 2002
reflected the results of operations from Meadowwood Apartments as
discontinued operations, the statement of operations for that period is
not included here. For additional information, please refer to the
financial statements included in the Registrant's latest quarterly
report on Form 10-Q. This pro forma information should be read in
conjunction with the financial statements and notes thereto and the
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" included in the Registrant's latest annual
report on Form 10-K, and the latest quarterly report on Form 10-Q. In
management's opinion, all adjustments necessary to reflect the sale
have been made.
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SB PARTNERS
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(a New York limited partnership)
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PRO FORMA BALANCE SHEET
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MARCH 31, PRO FORMA PRO FORMA
2002 ADJUSTMENTS BALANCE
AS REPORTED (SEE NOTE 2) SHEET
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Assets:
Investments -
Real Estate, at cost
Land $ 5,310,842 $ 0 $ 5,310,842
Buildings, furnishings and improvements 50,863,371 0 50,863,371
Less - accumulated depreciation (6,000,812) 0 (6,000,812)
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50,173,401 0 50,173,401
Real estate asset held for sale 13,823,271 (13,823,271) 0
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63,996,672 (13,823,271) 50,173,401
Other assets-
Cash and cash equivalents 60,206 10,940,660 11,000,866
Cash held by lenders in escrow 826,003 0 826,003
Other 567,634 0 567,634
Other assets in discontinued operations 1,032,619 (1,032,619) 0
----------- ------------ -----------
Total assets $66,483,134 $ (3,915,230) $62,567,904
=========== ============ ===========
Liabilities:
Mortgage notes and other loans payable $31,282,287 $ 0 $31,282,287
Accounts payable and accrued expenses 675,508 0 675,508
Tenant security deposits 168,192 0 168,192
Liabilities of discontinued operations
including mortgage note payable
of $19,663,325 19,922,211 (19,922,211) 0
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Total liabilities 52,048,198 (19,922,211) 32,125,987
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Partners' Capital:
Units of partnership interest without par value;
Limited partners - 7,753 units 14,451,510 16,004,917 30,456,427
General partner - 1 unit (16,574) 2,064 (14,510)
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Total partners' capital 14,434,936 16,006,981 30,441,917
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Total liabilities and partners' capital $66,483,134 $ (3,915,230) $62,567,904
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See accompanying notes to pro forma financial statements.
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SB PARTNERS
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(a New York limited partnership)
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PRO FORMA STATEMENT OF OPERATIONS
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For the Year Ended December 31, 2001
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PRO FORMA PRO FORMA
AS ADJUSTMENT INCOME
REPORTED (SEE NOTE 2) STATEMENT
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Revenues:
Rental income $12,267,295 $(4,833,431) $ 7,433,864
Interest on short-term investments 35,866 0 35,866
Other 585,077 (168,729) 416,348
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Total revenues 12,888,238 (5,002,160) 7,886,078
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Expenses:
Real estate operating expenses 5,109,704 (1,784,520) 3,325,184
Interest on mortgage notes and other loans payable 3,705,511 (1,506,835) 2,198,676
Depreciation and amortization 2,150,121 (664,046) 1,486,075
Management fees 826,453 (168,702) 657,751
Real estate taxes 1,127,689 (280,973) 846,716
Other 277,642 (39,477) 238,165
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Total expenses 13,197,120 (4,444,553) 8,752,567
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Net loss from continuing operations (308,882) (557,607) (866,489)
Net loss from continuing operations
allocated to general partner (40) (72) (112)
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Net loss from continuing operations
allocated to limited partners $ (308,842) $ (557,535) $ (866,377)
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Net loss from continuing operations
per unit of limited partnership interest $ (40) $ (72) $ (112)
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Weighted Average Number of Units of Limited
Partnership Interest Outstanding 7,753 7,753 7,753
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See accompanying notes to pro forma financial statements.
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SB PARTNERS
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(a New York limited partnership)
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NOTES TO PRO FORMA FINANCIAL STATEMENTS
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(1) Pro Forma Presentation
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The accompanying pro forma financial statements reflect the sale
of Meadowwood Apartments by the Registrant. The balance sheet as of the
last filing date, March 31, 2002, has been adjusted to reflect the
removal of the assets and liabilities related to Meadowwood Apartments
as if the sale had been consummated on the balance sheet date. The
statement of operations for the year ended December 31, 2001 has been
adjusted to reflect the results of operations of the Registrant as if
the sale had been consummated at the beginning of that year. As the
statement of operations for the three months ended March 31, 2002
reflected the results of operations from Meadowwood Apartments as
discontinued operations, the statement of operations for that period is
not included here.
The unaudited pro forma balance sheet is not necessarily indicative of
what the actual financial position would have been assuming the sale
had been consummated as of March 31, 2002, and the unaudited pro forma
statement of operations is not necessarily indicative of what the
actual results of operations would have been assuming the sale had been
consummated as of January 1, 2001, nor do these pro forma financial
statements purport to present the future financial position or results
of operations of the Registrant. Pro forma information should be read
in conjunction with the financial statements and notes thereto and the
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" included in the Registrant's latest annual
report on Form 10-K, and the latest quarterly report on Form 10-Q. In
management's opinion, all adjustments necessary to reflect the sale
have been made.
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(2) Pro Forma Adjustments:
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Balance Sheet
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The assets and related liabilities of Meadowwood Apartments as of
March 31, 2002 have been removed from the historical balance sheet to
reflect the sale of the property. Assets removed included real estate
assets held for sale, $13,823,271, cash held by lenders in escrow,
$923,461, unamortized deferred financing costs of $78,495 and
miscellaneous other assets totaling $30,663. Liabilities removed
include the mortgage note payable and accrued interest of $19,663,351
and $124,383, respectively, tenant security deposits of $56,511,
accrued property operating expenses totaling $75,652, and prepaid rents
of $2,314. The balance of cash has been increased to reflect the
proceeds from the sale of Meadowwood Apartments. The partners' capital
accounts are adjusted to reflect the increase in net assets which
resulted from the sale. All adjustments are shown as of the date of the
last balance sheet filed, March 31, 2002.
Statement of Operations
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All items of income of Meadowwood Apartments have been removed
from the statement of operations for the year ended December 31, 2001,
including rental and other income received from tenants. All expenses
relating to the property, including interest on the related mortgage,
real estate operating expenses, taxes, and other expenses have also
been removed. In addition, management fees have been reduced to reflect
the sale of the property. The aforementioned income and expense
adjustments have been prepared as if the sale had taken place at the
beginning of the year. In accordance with the rules and regulations
regarding the filing of Form 8-K, no gain or loss from the sale of the
real estate is reflected in the pro forma statements of operations.
(See also Note 3.)
(3) Gain on Sale of Investment in Real Estate
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The sale of Meadowwood Apartments resulted in a net gain for
financial reporting purposes of approximately $17,000,000. The gain for
tax purposes will be computed using the tax basis of the asset sold,
and will differ from the gain reported on the financial statements. In
accordance with the rules and regulations regarding the filing of Form
8-K, no gain or loss from the sale of the real estate is reflected in
the pro forma statements of operations.
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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 hereunto duly authorized.
SB Partners
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(Registrant)
By: SB PARTNERS REAL ESTATE CORPORATION
GENERAL PARTNER
Date May 24, 2002 /s/ George N. Tietjen III
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George N. Tietjen III
Vice-President
(Principal Accounting Officer)