UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 18, 2005
--------------------------------
SB Partners
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 0-08952 13-6294787
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1251 Avenue of the Americas, New York, NY 10020
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 408-5000
------------------------------
- -------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
Item 7. Financial Statements
The following unaudited and pro forma financial information is included
as an amendment to the Form 8-K dated September 29, 2005, filed on
October 18, 2005 and incorporated herein by reference.
In assessing the acquisition of 435 Park Court, the Registrant
considered historical and estimates of future cash flows, physical
condition, location, the competitive nature of the market, and the
existing tenant. Furthermore, anticipated maintenance and repair costs
and capital improvement requirements were evaluated. After reasonable
inquiry, the Registrant is not aware of any material factors that would
cause the reported financial information in the accompanying Statement
of Revenue and Certain Expenses not to be indicative of future
operating results, although no assurance can be given that the
historical financial information will be representative of future
results. The development of 435 Park Court was completed in the middle
of 2004 with only minimal rental activity for the rest of the year,
therefore we are not presenting a Statement of Revenue and Certain
Expenses for 2004 as it would not be indicative of future results.
2
The following pro forma consolidated financial statements reflect
the acquisition of 435 Park Court by the Registrant. As the Registrant
used the proceeds of a mortgage note of $10,000,000 secured by the
property to make this purchase and drew $2,000,000 from it's existing
credit facility for operational purposes, the consolidated balance
sheet as of the last filing, September 30, 2005, has been adjusted to
reflect the inclusion of the assets and liabilities of the newly
acquired commercial property, as well as the new mortgage note and the
withdrawal from the credit facility, as if the acquisition and
financing had occurred at the end of the period. The consolidated
statement of operations for the nine months ended September 30, 2005
has been restated to reflect the results of operations of the
Registrant as if the acquisition and financing had been consummated at
the beginning of the periods presented.
In addition, the consolidated statement of operations for the nine
months ended September 30, 2005 has been restated to reflect the
results of operations of the Registrant as if the real estate sale of
Cypress Key Apartments on March 28, 2005 had taken place at the
beginning of the year. The Registrant is reflecting this transaction in
accordance with the rules and regulations regarding the filing of Form
8-K, as the transaction was consummated during the fiscal period
presented. Please refer to the Form 8-K filed April 21, 2005 filed in
connection with this transaction.
3
SB PARTNERS
-----------
FORM 8-K/A
----------
INDEX TO FINANCIAL STATEMENTS
-----------------------------
Statement of Revenue and Certain Expenses
for the nine months ended September 30, 2005 (Unaudited)................4
Notes to Statement of Revenue and Certain Expenses (Unaudited)...............5
Pro Forma Consolidated Balance Sheet
as of September 30, 2005 (Unaudited)....................................6
Pro Forma Consolidated Statement of Operations
for the nine months ended September 30, 2005 (Unaudited)................7
Notes to Pro Forma Consolidated Financial Statements (Unaudited).............8-9
4
435 PARK COURT
--------------
STATEMENT OF REVENUE AND CERTAIN EXPENSES
-----------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
--------------------------------------------
UNAUDITED
---------
REVENUE:
Rental income $813,794
Other income 32,298
--------
Total revenue 846,092
--------
CERTAIN EXPENSES:
Real estate taxes 38,919
General and administrative 18,256
--------
Total certain expenses 57,175
--------
REVENUE IN EXCESS OF CERTAIN EXPENSES $788,917
========
The accompanying notes are an integral part of this financial statement.
5
435 PARK COURT
--------------
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
--------------------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
--------------------------------------------
UNAUDITED
---------
1. BASIS OF PRESENTATION
The accompanying Statement of Revenue and Certain Expenses relates to the
operations of 435 Park Court, a 265,516 square foot commercial property
located in Lino Lakes, Minnesota.
The accompanying financial statement has been prepared for the purpose of
complying with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission and thus excludes certain expenses, such as depreciation and
amortization, not related to the future operations of the property.
Management is not aware of any material factors relating to the property,
which would cause the reported financial information not to be indicative
of future operating results.
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying Statement of Revenue and Certain Expenses was prepared
using the accrual basis of accounting in accordance with generally accepted
accounting principles. Rental income is recognized on a straight-line basis
over the term of the lease. The preparation of financial statements in
conformity with generally accepted accounting principles requires the use
of certain estimates in determining the reported amounts of revenues and
expenses. Actual results could differ from those estimates.
3. CONCENTRATION OF RISK
435 Park court is occupied by a single tenant whose lease runs through
September 30, 2017.
6
SB PARTNERS
-----------
(a New York limited partnership)
------------------------------
PRO FORMA CONSOLIDATED BALANCE SHEET
------------------------------------
(UNAUDITED)
---------
SEPTEMBER 30, PRO FORMA PRO FORMA
2005 ADJUSTMENTS BALANCE
AS REPORTED (SEE NOTE 2) SHEET
----------- ----------- -----------
Assets:
Investments -
Real estate, at cost
Land $ 3,062,500 $ 1,515,000 $ 4,577,500
Buildings, furnishings and improvements 30,385,194 13,797,160 44,182,354
Less - accumulated depreciation (4,653,211) 0 (4,653,211)
----------- ----------- -----------
28,794,483 15,312,160 44,106,643
Real estate held for sale 3,156,460 0 3,156,460
Investment in joint venture 2,751,259 0 2,751,259
----------- ----------- -----------
34,702,202 15,312,160 50,014,362
Other assets
Cash and cash equivalents 4,300,634 (2,764,899) 1,535,735
Cash held by lenders in escrow 245,356 0 245,356
Other assets 341,436 (201,362) 140,074
Other assets in discontinued operations 290,108 0 290,108
----------- ----------- -----------
Total assets $39,879,736 $12,345,899 $52,225,635
=========== =========== ===========
Liabilities:
Mortgage notes payable $ 9,656,677 $12,000,000 $21,656,677
Accounts payable and accrued expenses 328,265 320,899 649,164
Tenant security deposits 102,048 25,000 127,048
Other liabilities in discontinued operations,
Including $3,421,263 of mortgage notes payable 3,640,035 0 3,640,035
----------- ----------- -----------
Total liabilities 13,727,025 12,345,899 26,072,924
----------- ----------- -----------
Partners' Capital:
Units of partnership interest without par value;
Limited partners - 7,753 units 26,167,773 0 26,167,773
General partner - 1 unit (15,062) 0 (15,062)
----------- ----------- -----------
Total partners' capital 26,152,711 0 26,152,711
----------- ----------- -----------
Total liabilities & partners' capital $39,879,736 $12,345,899 $52,225,635
=========== =========== ===========
See accompanying notes to pro forma consolidated financial statements.
7
SB PARTNERS
-----------
(a New York limited partnership)
------------------------------
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
----------------------------------------------
(UNAUDITED)
---------
For the Nine Months Ended September 30, 2005
--------------------------------------------
PRO FORMA ADJUSTMENTS
(SEE NOTE 2)
-------------------------
PURCHASE OF SALE OF PRO FORMA
AS 435 PARK CYPRESS KEY INCOME
REPORTED COURT APARTMENTS STATEMENT
---------- -------- ----------- ----------
<c>
Revenue:
Rental income $2,885,369 $813,794 $ 0 $3,699,163
Interest on short-term investments 313,052 0 0 313,052
Other 67,325 32,298 0 99,623
---------- -------- ----------- ----------
Total revenue 3,265,746 846,092 0 4,111,838
---------- -------- ----------- ----------
Expenses:
Real estate operating expenses 1,446,618 18,256 0 1,464,874
Interest on mortgage notes payable 627,784 513,750 0 1,141,534
Depreciation and amortization 609,817 288,876 0 898,693
Real estate taxes 370,542 38,919 0 409,461
Management fees 515,302 45,691 (56,404) 504,589
Other 36,922 0 0 36,922
---------- -------- ----------- ----------
Total expenses 3,606,985 905,492 (56,404) 4,456,073
---------- -------- ----------- ----------
Loss from operations (341,239) (59,400) 56,404 (344,235)
Equity in net loss of joint venture (362,330) 0 0 (362,330)
---------- -------- ----------- ----------
Loss from continuing operations (703,569) (59,400) 56,404 (706,565)
Profit (loss) from discontinued operations (1,451,196) 0 1,609,152 157,956
Net gain on sales of investment in real
estate property 6,350,771 0 (6,350,771) 0
---------- -------- ----------- ----------
Net income (loss) 4,196,006 (59,400) (4,685,215) (548,609)
Income (loss) allocated to general partner 541 (8) (604) (71)
---------- -------- ----------- ----------
Income (loss) allocated to limited partners $4,195,465 $(59,392) $(4,684,611) $ (548,538)
========== ======== =========== ==========
Earnings per Unit of Limited Partnership Interest
(Basic and Diluted)
Continuing Operations $ (90.75) $ (7.66) $ 7.28 $ (91.13)
========== ======== =========== ==========
Discontinued Operations
(including gain on sale) $ 631.96 $ 0 $ (611.59) $ 20.37
========== ======== =========== ==========
Net Income (loss) $ 541.21 $ (7.66) $ (604.31) $ (70.76)
========== ======== =========== ==========
Weighted average number of Units of limited
partnership interest outstanding 7,753 7,753 7,753 7,753
========== ======== =========== ==========
See accompanying notes to pro forma consolidated financial statements.
8
SB PARTNERS
-----------
(a New York limited partnership)
--------------------------------
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(UNAUDITED)
-----------
(1) Accounting and Financial Reporting
----------------------------------
The consolidated financial statements included herein are
unaudited; however, the information reflects all adjustments
(consisting solely of normal recurring adjustments) that are, in the
opinion of management, necessary to a fair presentation of the
financial position and results of operations for the periods presented.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations, although the Registrant believes that the
disclosures are adequate to make the information presented not
misleading. It is suggested that these financial statements be read in
conjunction with the financial statements and the notes thereto
included in the Registrant's latest annual report on Form 10-K,
quarterly report on Form 10-Q, and Form 8-K filed April 13, 2005,
November 14, 2005 and April 21, 2005, respectively.
(2) Pro Forma Adjustments
---------------------
The consolidated balance sheet as of the last filing date,
September 30, 2005, has been restated to reflect the addition of the
assets and liabilities related to 435 Park Court, and the related
mortgage note payable, as if the transactions had occurred on such
date. The total costs to acquire 435 Park Court, $15,312,160, have been
added to the Registrant's portfolio of investments in real estate
properties. Liabilities assumed at the time of the purchase, accrued
expenses of $320,899 and tenant security deposits of $25,000, were
added to the Registrant's total liabilities. The mortgage note of
$10,000,000 secured by the property and $2,000,000 drawn on the
Registrant's existing credit facility has been added to the total of
the Registrant's mortgage notes payable. The decrease in other assets
of $201,362, has been subtracted from the assets held by the
Registrant. Cash held by the Registrant has been decreased by
$2,764,899, the net of $4,764,899 required for the acquisition of 435
Park Court less $2,000,000 drawn on the Registrant's existing credit
facility.
9
The accompanying pro forma consolidated statement of
operations for the nine months ended September 30, 2005 have been
adjusted to reflect the results of operations of the Registrant as if
the acquisition and financing had been consummated at the beginning of
the year. In addition, the consolidated statement of operations for the
nine months ended September 30, 2005 has been restated to reflect the
results of operations of the Registrant as if the real estate sale of
Cypress Key Apartments on March 28, 2005 had taken place at the
beginning of the year. The Registrant is reflecting this transaction in
accordance with the rules and regulations regarding the filing of Form
8-K, as the transactions were consummated during the fiscal period
presented. Please refer to the Form 8-K filed April 21, 2005 filed in
connection with this transaction.
The items of income of 435 Park court that have been added to the
consolidated statement of operations for the period presented include
rental and other income received from the tenant. All expenses relating
to the property including real estate operating expenses, interest on
mortgage notes payable, taxes, depreciation, and other expenses have
also been included. Management fees have been adjusted to reflect the
investment in the property, net of the proceeds of the mortgage note.
The loss from discontinuing operations of Cypress Key Apartments has
been removed from the consolidated statement of operations for the nine
months ended September 30, 2005. In addition, management fees have been
reduced to reflect the sale of the property. In accordance with the
rules and regulations regarding the filing of Form 8-K, no gain from
the sale of the investment in real estate property are reflected in the
pro forma statement of operations.
(3) CONCENTRATION OF RISK
---------------------
435 Park court is occupied by a single tenant whose lease runs
through September 30, 2017.
10
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
----------------------------------------
(Registrant)
By: SB PARTNERS REAL ESTATE CORPORATION
GENERAL PARTNER
Date December 19, 2005 /s/ George N. Tietjen III
------------------- ----------------------------------------
George N. Tietjen III
Principal Accounting & Financial Officer
Chief Financial Officer & Treasurer