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) March 28, 2005
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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 March 28, 2005, the Registrant sold Cypress Key Apartments in
Orlando, Florida to Residences at Millenia, LLC, an unrelated Florida
limited liability company, for $27,000,000 in an all cash transaction.
The proceeds from the sale were used, in part, to retire the mortgage
note of approximately $15,860,000 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
Cypress Key Apartments by the Registrant. The balance sheet as of the
last filing, December 31, 2004, has been adjusted to reflect the
removal of the assets and liabilities of this 360-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, 2004
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. 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. 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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DECEMBER 31, PRO FORMA PRO FORMA
2004 ADJUSTMENTS BALANCE
AS REPORTED (SEE NOTE 2) SHEET
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Assets:
Investments -
Real Estate, at cost
Land $ 3,520,842 $ 0 $ 3,520,842
Buildings, furnishings and improvements 35,313,196 0 35,313,196
Less - accumulated depreciation (6,719,624) 0 (6,719,624)
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32,114,414 0 32,114,414
Real estate held for sale 20,221,129 (20,221,129) 0
Investment in joint venture 2,813,589 2,813,589
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55,149,132 (20,221,129) 34,928,003
Other assets-
Cash and cash equivalents 126,361 8,993,845 9,120,206
Cash held by lenders in escrow 299,199 0 299,199
Other 264,435 0 264,435
Other assets in discontinued operations 471,098 (471,098) 0
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Total assets $56,310,225 $(11,698,382) $44,611,843
=========== ============ ===========
Liabilities:
Mortgage notes and other loans payable $17,124,089 $ 0 $17,124,089
Accounts payable and accrued expenses 765,973 0 765,973
Tenant security deposits 172,807 0 172,807
Deferred revenue 23,000 0 23,000
Other liabilities in discontinued operations,
including $15,904,543 of mortgage note
payable 15,957,511 (15,957,511) 0
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Total liabilities 34,043,380 (15,957,511) 18,085,869
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Partners' Capital:
Units of partnership interest without par value;
Limited partners - 7,753 units 22,282,408 4,258,580 26,540,988
General partner - 1 unit (15,563) 549 (15,014)
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Total partners' capital 22,266,845 4,259,129 26,525,974
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Total liabilities and partners' capital $56,310,225 $(11,698,382) $44,611,843
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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, 2004
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PRO FORMA PRO FORMA
AS ADJUSTMENT INCOME
REPORTED (SEE NOTE 2) STATEMENT
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Revenues:
Rental income $5,061,601 $ 0 $ 5,061,601
Other rental income 558,740 0 558,740
Interest on short-term investments 3,774 0 3,774
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Total revenues 5,624,115 0 5,624,115
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Expenses:
Real estate operating expenses 2,668,779 0 2,668,779
Interest on mortgage notes and other loans payable 1,130,777 0 1,130,777
Depreciation and amortization 993,567 0 993,567
Management fees 712,845 (161,443) 551,402
Real estate taxes 519,196 0 519,196
Other 156,677 0 156,677
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Total expenses 6,181,841 (161,443) 6,020,398
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Income(loss) from continuing operations (557,726) 161,443 (396,283)
Equity in net loss of joint venture (317,007) 0 (317,007)
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Income(loss) from continuing operations (874,733) 161,443 (713,290)
Income(loss) from discontinued operations (455,503) 455,503 0
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Net income (loss) (1,330,236) 616,946 (713,290)
Income(loss) allocated to general partner (171) 80 (92)
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Income(loss) allocated to limited partners $(1,330,065) $ 616,866 $ (713,198)
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Net income(loss) per unit of limited
partnership interest $ (171) $ 80 $ (92)
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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 Cypress Key Apartments by the Registrant. The balance sheet as of
the last filing date, December 31, 2004, has been adjusted to reflect
the removal of the assets and liabilities related to Cypress Key
Apartments as if the sale had been consummated on the balance sheet
date. The statement of operations for the year ended December 31, 2004
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.
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 December 31, 2004, 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, 2004, 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. 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 Cypress Key Apartments as of
December 31, 2004 have been removed from the historical balance sheet
to reflect the sale of the property. Assets removed included real
estate assets held for sale, $20,221,129 and other assets in
discontinued operations totaling $471,098. Liabilities removed include
other liabilities in discontinued operations totaling $15,957,511. The
balance of cash has been increased to reflect the proceeds from the
sale of Cypress Key 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, December 31, 2004.
Statement of Operations
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All items of income and expense of Cypress Key Apartments have
been removed from the statement of operations for the year ended
December 31, 2004. 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 Cypress Key Apartments resulted in a net gain for
financial reporting purposes of approximately $6,350,000. 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 PARTNERS
Principal Financial & Accounting Officer
Date April 20, 2005 /s/ George N. Tietjen III
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By: George N. Tietjen III
Chief Financial Officer & Treasurer