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 0-6701
MULTIVEST REAL ESTATE FUND, LTD. SERIES IV
(Exact name of registrant as specified in its charter)
Michigan 38-6239993
(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 IV
FORM 10-K
INDEX
PART I
Page
Item 1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 3 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 6
Item 4 Submission of Matters To a Vote of Security Holders. . . . . . 6
PART II
Item 5 Market for Registrant's Partnership Units
and Related Security Holder Matters . . . . . . . . . . . . 6
Item 6 Selected Financial Data. . . . . . . . . . . . . . . . . . . . 7
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 8
Item 8 Financial Statements and Supplementary Data. . . . . . . . . . 10
(a) Independent Auditors' Report. . . . . . . . . . . . . . . 11
(b) Statements of Financial Condition, as of
December 31, 1995 and 1994 . . . . . . . . . . . . . . 12
(c) Statements of Operations, for each of the years in the
three year period ended December 31, 1995. . . . . . . 13
(d) Statements of Changes in Partners' Capital, for each
of the years in the three year period ended
December 31, 1995. . . . . . . . . . . . . . . . . . . 14
(e) Statements of Cash Flows, for each of the years in the
three year period ended December 31, 1995. . . . . . . 15
(f) Notes to Financial Statements . . . . . . . . . . . . . . 16
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 IV
FORM 10-K
PART I
ITEM 1 BUSINESS
Formation of the Partnership
The registrant, MultiVest Real Estate Fund, Ltd., Series IV ("Partnership"), is
a Michigan limited partnership which was formed in 1972 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, shopping centers and
mobile home parks which the General Partner considered had 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.
Properties Sold by the Partnership
The General Partner of the Partnership has sold properties pursuant to
wrap-around mortgage notes or purchase money mortgage notes which are secured
by the sold property. Following is a summary of such sales for which mortgage
notes receivable are still outstanding:
Mortgage Mortgage
Sale Sale Note Balance Note
Date Price at 12/31/95 Maturity
Eastern Gateway
Shopping Center 11/13/84 $ 4,100,000 $ 1,450,000 1994
On March 22, 1994 and again on April 6, 1994, the Partnership sent a default
notice to the owner of Eastern Gateway Shopping Center for, among other things,
failing to pay, when due, the real estate taxes on the property as required
under the mortgage documents. When the owner failed to cure the defaults within
the time period required by the mortgage documents, the debt was automatically
accelerated without further notice. The Partnership then exercised its remedies
under the mortgage documents by commencing foreclosure proceedings. In
connection with that process, the Partnership petitioned the Wayne County
Superior Court in Richmond, Indiana for a hearing to appoint a receiver for
the property. The hearing was scheduled for August 3, 1994. On that date,
shortly before the hearing, the owner of the property filed a Voluntary Petition
in Bankruptcy in the United States Bankruptcy Court for the Southern District of
Indiana. The Partnership's petition for an appointment of a receiver and the
related foreclosure proceedings were stayed by the bankruptcy filing.
Eastern Gateway Shopping Center remained under the jurisdiction of the
Bankruptcy Court until November 2, 1995, at which time the case was dismissed.
While in bankruptcy, the owner of the property tried unsuccessfully on more than
one occasion to sell the property. In addition, the owner was unable to present
a Plan of Reorganization acceptable to the Court or the owner's creditors.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
Properties Sold by the Partnership, continued
Following dismissal of the bankruptcy case, the Partnership re-opened its case
in the Wayne County Superior Court in Richmond, Indiana to foreclose on the
property. The foreclosure is anticipated to occur in April, 1996.
For further information on the sale of Partnership property, see Notes 4 and 11
of Notes to Financial Statements.
Summary of Business Operations for the Year Ended December 31, 1995
With regard to those properties sold pursuant to mortgage notes receivable, the
Partnership's operations differ in several respects from its earlier property
investment and management functions. The General Partner is also concerned with
servicing the mortgage which relates to the mortgage note receivable. This
entails inspecting the properties, monitoring payments on (and the purchaser's
ability to pay) the notes and, when appropriate, taking action to protect the
Partnership if a purchaser defaults under its note (this includes beginning,
monitoring and settling legal action and, if appropriate, taking possession of,
operating and reselling the property).
In addition to the operations discussed above, the Partnership owns and operates
Hidden Village Apartments in Irving, Texas. Hidden Village Apartments is
presently on the market for sale. At December 31, 1995, the Partnership had 9
employees, all employed at Hidden Village Apartments.
On October 6, 1995, the owner of French Quarter Apartments repaid the mortgage
note due the Partnership in the net amount of $1,579,063. For further
information concerning the repayment, see Note 4 of Notes to Financial
Statements.
For additional information on 1995 operations, see Item 7 - "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
Future Business Operations of the Partnership
Based on the anticipated foreclosure on Eastern Gateway Shopping Center, the
future cash distributions to the Limited Partners will be based on any potential
cash flow from the operations and/or sale of Eastern Gateway as well as the
Hidden Village Apartments.
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 the following:
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 this Partnership and all of which are presently being wound up
and liquidated.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
Conflicts of Interest, continued
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.
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 managers, 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 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 is also 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 investment and
related matters at its usual rate for such services.
Competition
Hidden Village Apartments is subject to competition from similar properties in
its general location (see Item 2, "Properties", below).
ITEM 2 PROPERTIES
The following is a brief description of the property currently held by the
Partnership:
Year Percentage of
Number of Construction Occupancy at
Location Apt. Units Completed December 29, 1995
Hidden Village Apartments
Irving, Texas 176 Units 1973 96.2%
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
Location, continued
Hidden Village Apartments is located midway between Dallas and Fort Worth.
Hidden Village competes against properties in the immediate area that are of
similar construction and age. Occupancy is relatively stable and rent
concessions, although minimal, are a commonly utilized marketing tool.
For additional information with respect to the encumbrance relating to the
property of the Partnership, gross amount at which the property is carried and
accumulated depreciation, see Notes 2 and 5 of Notes to Financial Statements.
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 2,791
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
September 30, 1994 $ 3,040,304.00 $ 76.00
December 31, 1995 1,580,158.00 39.50
$ 4,620,462.00 $ 115.50
Distributions are generally paid to the Partners in the quarter subsequent to
their declaration.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
ITEM 6 SELECTED FINANCIAL DATA
OPERATIONAL SUMMARY
1995 1994 1993 1992 1991
Total revenues $ 1,287,259 $ 1,219,478 $ 1,103,954 $ 1,032,643 $ 946,397
Total expenses 1,236,561 1,646,923 1,106,964 1,079,045 1,119,979
Operations of
disposed property 95,958 341,599 504,302 490,891 472,641
Discount on
settlement of note (996,818) (223,135) - - -
Gain on note payoff 2,465,068 - - - -
Income (loss)
before real estate
transactions 1,614,906 (308,981) 501,292 444,489 299,059
Real estate
transactions - - - - (525,000)
Net income
(loss) $ 1,614,906 $ (308,981) $ 501,292 $ 444,489 $ (225,941)
Allocated to:
Limited Partners $ 1,614,906 $ (308,981) $ 501,292 $ 444,489 $ (225,941)
General Partner - - - - -
$ 1,614,906 $ (308,981) $ 501,292 $ 444,489 $ (225,941)
Net income (loss)
per Partnership
Unit based on 40,004
average Limited
Partnership units
outstanding $ 40.37 $ (7.72) $ 12.53 $ 11.11 $ (5.65)
Cash distributions
to Partners $ - $ 3,040,304 $ - $ 160,016 $ -
Cash distributions
per Limited
Partnership Unit
based on 40,004
average units
outstanding $ - $ 76.00 $ - $ 4.00 $ -
FINANCIAL CONDITION SUMMARY
Net investment in
real estate $ 1,400,912 $ 1,618,967 $ 1,772,800 $ 1,740,865 $ 1,957,439
Mortgage notes
receivable, net 406,200 2,924,186 6,733,143 6,642,099 6,551,056
Other assets 5,105,665 4,261,458 2,666,239 2,571,912 2,451,932
Total assets $ 6,912,777 $ 8,804,611 $11,172,182 $10,954,876 $10,960,427
Mortgage notes
payable $ 1,472,561 $ 3,974,353 $ 3,907,945 $ 4,205,082 $ 4,476,102
Other liabilities 217,253 1,222,201 306,895 293,744 312,748
Total liabilities 1,689,814 5,196,554 4,214,840 4,498,826 4,788,850
Partners' capital 5,222,963 3,608,057 6,957,342 6,456,050 6,171,577
Total liabilities
and Partners'
capital $ 6,912,777 $ 8,804,611 $11,172,182 $10,954,876 $10,960,427
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 IV
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The current operations of the Partnership are centered on one apartment complex
owned by the Partnership, collections on a mortgage note received upon sale of a
Partnership property and protection of the Partnership's mortgage interest in
the property.
There was a $67,781 or 6% increase in total revenues in 1995 from 1994. Other
interest increased $28,890 or 10% due primarily to increased interest on
investments following repayment of the French Quarter Apartments mortgage note
receivable.
The Partnership's total revenues increased by $115,524 or 10% in 1994 over 1993
due primarily to a $115,013 or 68% increase in other interest. The increase was
primarily due to increased interest on investments following repayment of the
Dover Country Club mortgage note receivable.
Total expenses for the Partnership decreased $410,362 or 25% in 1995 as compared
to 1994. There was a $344,834 or 96% decrease in investment management fee
expense due to the fee relative to the French Quarter note payoff in 1995 being
substantially less than the 1994 fee on the Dover Country Club note receivable
payoff. Legal and accounting costs decreased $137,374 or 89% in 1995 from 1994,
due primarily to legal costs incurred by the Partnership during 1994 in
connection with the Eastern Gateway Shopping Center bankruptcy.
Total expenses increased $539,959 or 49% in 1994 as compared to 1993, due
primarily to the investment management fee paid to the General Partner as a
result of the repayment of the Dover Country Club mortgage note receivable.
Interest expense increased $31,319 or 40% in 1994, due primarily to the
increased principal balance following the Hidden Village refinancing.
On March 22, 1994 and again on April 6, 1994, the Partnership sent a default
notice to the owner of Eastern Gateway Shopping Center for, among other things,
failing to pay, when due, the real estate taxes on the property as required
under the mortgage documents. When the owner failed to cure the defaults within
the time period required by the mortgage documents, the debt was automatically
accelerated without further notice. The Partnership then exercised its remedies
under the mortgage documents by commencing foreclosure proceedings. In
connection with that process, the Partnership petitioned the Wayne County
Superior Court in Richmond, Indiana for a hearing to appoint a receiver for
the property. The hearing was scheduled for August 3, 1994. On that date,
shortly before the hearing, the owner of the property filed a Voluntary
Petition in Bankruptcy in the United States Bankruptcy Court for the Southern
District of Indiana. The Partnership's petition for an appointment of a
receiver and the related foreclosure proceedings were stayed by the bankruptcy
filing.
Eastern Gateway Shopping Center remained under the jurisdiction of the
Bankruptcy Court until November 2, 1995, at which time the case was dismissed.
While in bankruptcy, the owner of the property tried unsuccessfully on more than
one occasion to sell the property. In addition, the owner was unable to present
a Plan of Reorganization acceptable to the Court or the owner's creditors.
Following dismissal of the bankruptcy case, the Partnership re-opened its case
in the Wayne County Superior Court in Richmond, Indiana to foreclose on the
property. The foreclosure is anticipated to occur in April, 1996.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, continued
On October 6, 1995, the Partnership received $1,579,063 in repayment of the
French Quarter Apartments mortgage note receivable. The amount represents the
difference between (a) the remaining principal plus all accrued and deferred
interest on the note, less a discount of $996,818 ($4,068,048) and; (b) the
principal and accrued interest on the underlying mortgage note payable with
respect to this property ($2,488,985). The Partnership recognized a deferred
gain of $2,465,068 on the payoff of this note.
The liquidity of the Partnership is dependent upon the timely receipt of cash.
There are no credit facilities currently in place and limited partners have no
obligation to provide additional funds in excess of their initial cash
contributions. In order to protect the Partnership in the event of a reduction
in cash flow, management closely monitors the Partnership's cash position and,
when necessary, will reserve adequate funds to continue to operate the
Partnership. 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 continued collections on the existing
mortgage note or the continued performance of the Partnership's rental property,
which could have a negative effect upon the long-term liquidity of the
Partnership. Funds generated from operations and the purchase money mortgage
note receivable on the sold property have primarily been utilized to meet debt
service obligations and, when possible, distribute funds to the Partners. There
was no distribution of funds during the year ended December 31, 1995.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
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 IV):
We have audited the accompanying statements of financial condition of MultiVest
Real Estate Fund, Ltd. (Series IV) (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
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 IV) (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 IV
(a Michigan limited partnership)
STATEMENTS OF FINANCIAL CONDITION
December 31, 1995 and 1994
1995 1994
ASSETS
Investment in real estate
Land $ 144,581 $ 144,581
Land improvements 51,425 51,425
Buildings and improvements 3,469,704 3,391,354
3,665,710 3,587,360
Less accumulated depreciation 2,264,798 1,968,393
Net investment in real estate
(Notes 2 and 10) 1,400,912 1,618,967
Wrap-around mortgage notes
receivable (Note 4) - 5,043,750
Purchase money mortgage note
receivable (Note 4) 1,450,000 1,450,000
Less unamortized discount (Note 4) - (60,696)
Allowance for loss on note
receivable (Note 4) (525,000) (525,000)
Deferred gain on sales of
real estate (Note 11) (518,800) (2,983,868)
406,200 2,924,186
Other assets
Cash 24,175 27,031
Investments, at cost which
approximates market (Note 3) 4,359,300 3,619,725
Interest and other receivables 16,369 37,976
Deferred interest receivable (Note 4) 174,488 174,488
Prepaid insurance 26,720 30,051
Replacement and repair
reserves (Note 16) 112,450 105,114
Escrow, deposits and other assets 107,140 115,770
Deferred charges net of accumulated
amortization of $21,970 and $89,806,
respectively 285,023 151,303
Total other assets 5,105,665 4,261,458
Total assets $ 6,912,777 $ 8,804,611
LIABILITIES AND PARTNERS' CAPITAL
Mortgage notes payable (Note 5) $ 1,472,561 $ 3,974,353
Accounts payable 10,510 31,249
Accrued liabilities (Note 6) 158,276 152,401
Accrued liabilities to
affiliates (Note 9) 16,691 471,421
Unfunded distributions payable - 540,304
Tenants' security deposits and other
liabilities 31,776 26,826
Total liabilities 1,689,814 5,196,554
Contingencies (Note 14)
Partners' capital (Notes 7 and 8)
Limited Partners, 40,004 units 5,207,568 3,592,662
General Partner, 34 units 15,395 15,395
Total Partners' capital 5,222,963 3,608,057
Total liabilities and
Partners' capital $ 6,912,777 $ 8,804,611
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
(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
Interest on mortgage notes
receivable (Note 4) $ 126,670 $ 114,002 $ 152,002
Rents and other tenant charges 847,872 821,649 783,138
Other interest 312,717 283,827 168,814
1,287,259 1,219,478 1,103,954
Expenses
Maintenance, custodial salaries
and related expenses 74,004 76,178 83,798
Mortgage servicing fee -
affiliate (Note 9) 5,412 4,512 5,412
Real estate management fee -
affiliate (Note 9) 48,371 47,119 44,946
Investment management fee -
affiliate (Note 9) 12,624 357,458 -
Depreciation (Note 2) 296,405 282,147 230,908
Amortization 11,983 9,985 -
Property taxes 81,156 77,192 69,104
Insurance 31,530 37,748 47,230
Utilities 224,945 216,498 222,960
Repairs and maintenance 150,758 139,127 177,572
Legal and accounting 16,900 154,274 16,068
Interest (Note 12) 136,354 109,452 78,133
Administrative and other 146,119 135,233 130,833
1,236,561 1,646,923 1,106,964
Income (loss) from
existing assets 50,698 (427,445) (3,010)
Operations of disposed
property (Note 15) 95,958 341,599 504,302
Discount on settlement
of note receivable (Note 4) (996,818) (223,135) -
Deferred gain recognized on sale
of real estate (Note 11) 2,465,068 - -
Net income (loss) $ 1,614,906 $ (308,981) $ 501,292
Allocated to
Limited partners, 40,004 unit $ 1,614,906 $ (308,981) $ 501,292
General partner,
34 units (Note 7) - - -
$ 1,614,906 $ (308,981) $ 501,292
Net income (loss) per
limited partnership
unit based on 40,004
average units outstanding $ 40.37 $ (7.72) $ 12.53
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
(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
Partner Partners Total
Partners' capital January 1, 1993 $ 15,395 $ 6,440,655 $ 6,456,050
Net income for 1993 - 501,292 501,292
Balance, December 31, 1993 15,395 6,941,947 6,957,342
Net loss for 1994 - (308,981) (308,981)
Distribution to Partners - (3,040,304) (3,040,304)
Balance, December 31, 1994 15,395 3,592,662 3,608,057
Net income for 1995 - 1,614,906 1,614,906
Partners' capital, December 31, 1995 $ 15,395 $ 5,207,568 $ 5,222,963
Partnership units outstanding
at December 31, 1995, 1994
and 1993 34 40,004 40,038
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
(a Michigan limited partnership)
STATEMENTS OF CASH FLOWS
For each of the years in the
three year period ended December 31, 1995
Increase in Cash and Cash Equivalents
Operating Activities 1995 1994 1993
Net income (loss) $ 1,614,906 $ (308,981) $ 501,292
Adjustments to reconcile
net income (loss) to net
cash provided by (used in)
operating activities:
Decrease (increase) in deferred
interest income - 593,775 (35,100)
Amortization of discount on
mortgage notes receivable (60,696) (91,043) (91,044)
Amortization - 20,176 10,191
Depreciation 296,405 282,147 230,908
Discount on settlement of
note receivable 996,818 223,135 -
Deferred gain recognized on
sale of real estate (2,465,068) - -
Changes in assets and liabilities:
Decrease in interest and other
receivables 21,607 530 357
Decrease (increase) in prepaid
expenses 3,331 (1,195) 13,296
Decrease (increase) in escrow
deposits 8,630 (43,664) (8,589)
Increase in replacement and
repair reserve (7,336) (105,114) -
(Increase) in deferred charges (133,720) (79,659) (59,551)
(Decrease) increase in accounts
payable (20,739) 11,890 5,692
Increase (decrease) in accrued
liabilities 5,875 12,670 (434)
(Decrease) increase in accrued
liabilities to affiliates (454,730) 357,372 116
Increase (decrease) in security
deposits 4,950 (6,930) 7,777
(Decrease) increase in unfunded
distributions payable (540,304) 540,304 -
Net cash (used in) provided
by operating activities (730,071) 1,405,413 574,911
Investing Activities
Repayment of French Quarter Apartments
mortgage note receivable 4,046,932 - -
Repayment of Dover Country Club mortgage
note receivable - 3,676,865 -
Capital improvements to real estate (78,350) (128,314) (262,843)
Net cash provided by (used in)
investing activities 3,968,582 3,548,551 (262,843)
Financing Activities
Proceeds received on Hidden Village
refinancing - 1,494,000 -
Repayment of Hidden Village mortgage
note payable - (835,008) -
Distributions to partners - (3,040,304) -
Principal payments on mortgage
notes payable (40,357) (137,689) (297,137)
Principal payoff on Dover Country
Club Apartments mortgage note payable - (454,895) -
Principal payoff on French Quarter
Apartments mortgage note payable (2,461,435) - -
Net cash used in financing activities (2,501,792) (2,973,896) (297,137)
Increase in cash and cash
equivalents 736,719 1,980,068 14,931
Cash and cash equivalents -
beginning of year 3,646,756 1,666,688 1,651,757
Cash and cash equivalents -
end of year $ 4,383,475 $ 3,646,756 $ 1,666,688
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
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 of 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 10 to 15
Buildings 16
Building Improvements 3 to 15
Deferred Charges
The Partnership capitalizes certain costs to refinance mortgages. Refinancing
costs are amortized 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 IV
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. The net carrying value of the purchase money mortgage note
receivable approximates the fair value of the collateral.
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.
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 IV
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 Gross Amount
Partnership Capitalized at Which Life on Which
Cost to Subsequent to Carried at Close Depreciation in
Re-acquire Re-Acquisition of Period Latest Statements
Buildings & Building and Accumulated Date of Date of Operations
Description Encumbrances Land Improvements Improvements Land Improvements Total Depreciation Construct'n Acquired isComputed
Hidden Village
Apartments,
Irving,
Texas (a) 1,472,561 144,581 1,124,366 2,396,763 144,581 3,521,129 3,665,710 2,264,798 1973 1985 3 - 16 years
(a) Formerly El Dorado Apartments.
The cost basis of the property for federal tax purposes is $3,812,822. The
primary difference between such basis and the amount reflected in the financial
statements is a gain recognized for tax purposes on repossession of the
property.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
NOTES TO FINANCIAL STATEMENTS, continued
2. Real Estate and Accumulated Depreciation, continued
SUMMARY OF CHANGES IN GROSS AMOUNT OF REAL ESTATE
AND ACCUMULATED DEPRECIATION
Gross Amount of Real Estate 1995 1994 1993
Balance at beginning of period $ 3,587,360 $ 3,459,046 $ 3,196,203
Improvements 78,350 128,314 262,843
Balance at close of period $ 3,665,710 $ 3,587,360 $ 3,459,046
Accumulated Depreciation 1995 1994 1993
Balance at beginning of period $ 1,968,393 $ 1,686,246 $ 1,455,338
Depreciation expense 296,405 282,147 230,908
Balance at close of period $ 2,264,798 $ 1,968,393 $ 1,686,246
3. Investments
Title of Each Class Cost of Each Issue
1995 1994
Treasury Bills $ 3,964,650 $ 2,874,625
Repurchase Agreements 394,650 745,100
$ 4,359,300 $ 3,619,725
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 IV
NOTES TO FINANCIAL STATEMENTS, continued
4. Mortgage Notes Receivable
Mortgage notes receivable at December 31, 1995 consisted of the following:
Interest Income
Final Periodic Accrued and Interest Income
Interest Prior Maturity Payment Mortgage Notes Deferred at End Earned Applicable
Rates Liens Date Terms Receivable of Period to Period
1995 1994
Eastern
Gateway
Shopping
Center 8.11% (D,E) (A) 10/15/94 (A) 1,450,000 (D) 1,450,000 179,926 126,670
French
Quarter
Apartments N/A N/A 10/06/95 (B) - 5,043,750 - 338,247*
1,450,000 6,493,750 179,926 (C) 464,917
*Interest income earned on the note prior to the payoff is included in
operations of disposed property.
1995 1994 1993
Balance at beginning of period, net of
unamortized discount and allowance
for loss 5,908,054 9,717,011 9,625,967
Amortization of discount 60,696 91,043 91,044
Principal payoff on Dover Country
Club mortgage note receivable - (3,900,000) -
Principal payoff on French
Quarter Apartments mortgage
note receivable (5,043,750) - -
Balance at end of period 925,000 5,908,054 9,717,011
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
NOTES TO FINANCIAL STATEMENTS, continued
4. Mortgage Notes Receivable, continued
(A) On March 22, 1994 and again on April 6, 1994, the Partnership sent a
default notice to the owner of Eastern Gateway Shopping Center for, among
other things, failing to pay, when due, the real estate taxes on the
property as required under the mortgage documents. When the owner failed to
cure the defaults within the time period required by the mortgage documents,
the debt was automatically accelerated without further notice. The
Partnership then proceeded to exercise its remedies under the mortgage
documents by commencing foreclosure proceedings. In connection with that
process, the Partnership petitioned the Wayne County Superior Court in
Richmond, Indiana for a hearing to appoint a receiver for the property. The
hearing was scheduled for August 3, 1994. On that date, shortly
before the hearing, the owner of the property filed a Voluntary Petition in
Bankruptcy in the United States Bankruptcy Court for the Southern District
of Indiana. The Partnership's petition for an appointment of a receiver and
the related foreclosure proceedings were stayed by the bankruptcy filing.
As of the date of this report, the Partnership is opposing the bankruptcy
filing in an effort to foreclose on the owner and regain title to the
property. This loan is in non-accrual status.
(B) On October 6, 1995, the Partnership received $1,579,063 in repayment of the
French Quarter Apartments mortgage note receivable. The amount represents
the difference between (a) the remaining principal plus all accrued and
deferred interest on the note, less a discount of $996,818 ($4,068,048) and;
(b) the principal and accrued interest on the underlying mortgage note
payable with respect to this property ($2,488,985).
(C) The total interest income accrued and deferred includes cumulative deferred
interest receivable.
Breakdown of interest income accrued and deferred:
Accrued Interest Deferred Interest
1995 1994 1995 1994
Eastern Gateway Shopping Center $ 5,438 $ 5,438 $ 174,488 $ 174,488
French Quarter Apartments - 15,083 - -
Totals $ 5,438 $ 20,521 $ 174,488 $ 174,488
(D) On October 2, 1991, Eastern Gateway Limited Partnership entered a Plan of
Reorganization with the United States Bankruptcy Court modifying the
mortgage note by resetting the total indebtedness to $1,875,000, and the
effective interest rate to 8.11%. Such indebtedness includes accrued and
deferred interest and penalties associated with the note during the
bankruptcy period. This note was reduced by an allowance for loss of
$525,000 in December 1991, as a result of an analysis of net realizable
value.
(E) The Eastern Gateway mortgage note receivable was the Partnership's only
impaired loan. The recorded investment in the note receivable for which
an impairment has been recognized and the related allowance for loss on
the note receivable at December 31, 1995, were $1,450,000 and $525,000,
respectively. The average recorded investment in the impaired note
receivable during 1995 was $1,450,000. Interest income recognized on
the impaired note receivable during 1995 was $126,670.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
NOTES TO FINANCIAL STATEMENTS, continued
5. Mortgage Notes Payable
Mortgage notes payable at December 31, 1995 and 1994 consisted of
the following:
Interest Final Monthly Carrying Amount
Description Rates Maturity Date Payment of Mortgage Notes Payable
1995 1994
French Quarter
Apartments,
Wichita Falls,
Texas (C)
Phase III N/A 1995(A) $ - $ - $ 409,315
Phases I & II N/A 1995(A) - - 2,081,953
Hidden Village
Apartments
Irving, Texas 9.475% 2004(B) 12,503 1,472,561 1,483,085
$ 12,503 $1,472,561 $3,974,353
(A) On October 6, 1995, the Partnership received $1,579,063 in repayment of the
French Quarter Apartments mortgage note receivable. The amount represents
the difference between (a) the remaining principal plus all accrued and
deferred interest on the note, less a discount of $996,818 ($4,068,048);
and (b) the principal and accrued interest on the underlying mortgage note
payable with respect to this property ($2,488,985).
(B) The mortgage note payable requires a monthly principal and interest payment
of $12,503 based on an adjustable interest rate (currently 9.475%). A
balloon payment is due at the maturity date of March 1, 2004.
(C) This property was sold during 1985; (See Notes 4 and 11).
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
NOTES TO FINANCIAL STATEMENTS, continued
5. Mortgage Notes Payable, continued
Principal balance, January 1, 1995 $ 3,974,353
Payoff of French Quarter Apartments
mortgage note payable (2,461,435)
Payments of principal (40,357)
Principal balance, December 31, 1995 $ 1,472,561
The mortgage notes payable are collateralized by real estate, and the
Partnership has no liability beyond this collateral.
The aggregate annual maturities on mortgage indebtedness are summarized
as follows:
1996 10,982
1997 12,068
1998 13,263
1999 14,576
2000 16,018
Thereafter 1,405,654
$ 1,472,561
6. Accrued Liabilities
Accrued liabilities at December 31, 1995 and 1994 consisted of:
1995 1994
Property taxes $ 140,383 $ 134,954
Payroll 3,528 3,209
Utilities and other 14,365 14,238
$ 158,276 $ 152,401
7. General Partner's Participation in Income (Loss) and Distributions
Pursuant to the Partnership Agreement of the Partnership, all of the
profits, gains and losses, and distributions of the Partnership are to be
divided among and charged against the accounts of the Limited Partners
proportionately at the end of each fiscal year of the Partnership in the
ratio which the number of Units owned by each Limited Partner bears to the
number of Units owned by all Limited Partners as of that date.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
NOTES TO FINANCIAL STATEMENTS, continued
8. Income Taxes
MultiVest Real Estate Fund, Ltd., Series IV 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 (loss), 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 1995 tax return
by approximately $209,054, $(984,181) and $(1,015,011), respectively. The
following are differences related to net income (loss) as of and for the years
ended December 31:
1995 1994 1993
Income (loss) per books $ 1,614,906 $ (308,981) $ 501,292
Depreciation 132,523 118,568 72,790
Imputed interest 136,361 (57,778) (60,297)
Book/tax difference on
gain recognition (477,938) - -
Recognition of deferred
gain on sale of property - 1,955,740 -
Other - (10,000) 10,000
Tax income $ 1,405,852 $1,697,549 $ 523,785
9. Related-Party Transactions
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 inspections - M.V. National Properties, Inc.
5. Construction management, acquisition, disposition and financing
services - Property Analysis and Development Corp.
Pursuant to the Partnership Agreement, the General Partner receives an
Investment Management Fee of 12-1/2% of the cash available for distribution.
Cash available for distribution is defined as cash flow (including net cash
profits realized on disposition of investments subject to certain
limitations), less any reserves established by the General Partner which it
deems reasonably necessary for the proper operation of the Partnership
business.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
NOTES TO FINANCIAL STATEMENTS, continued
9. Related-Party Transactions, continued
The General Partner has agreed to waive its Investment Management Fee in the
event annual minimum distributions at the rate of 7% per annum of net
capital contribution ($457.50 per Unit) on a non-cumulative basis are not
made to the Limited Partners. In computing the 7% distribution, return of
Partnership capital other than return of capital which resulted from
depreciation, is excluded. Accordingly, quarterly distributions of the
Investment Management Fee shall not be made to the General Partner, unless
they are preceded by or made simultaneously with a minimum non-cumulative
1-3/4% quarterly cash distribution (7% annual basis) to the Limited Partners
for the period. In the event a quarterly Investment Management Fee is paid
to the General Partner, but the 7% annual return is not achieved for the
Partnership year, then such quarterly fees shall be returned by the General
Partner to the Partnership.
Any cash profits realized on disposition of Partnership investments will
also be included in the cash available for distribution. The General
Partner will share in the cash profits realized on disposition of a
Partnership investment only to the extent the proceeds of the disposition
exceed, on an investment-by-investment basis, an amount equal to the
portion of the Partnership's initial capital used in making the particular
investment, multiplied by the percentage which results from dividing 500
times the Units of Limited Partnership outstanding by the beginning net
capital of the Partnership. The General Partner will not share in the
proceeds resulting from disposition of any Partnership investment unless the
Limited Partners will receive such a return on disposition of any
Partnership Investment. For the year ended December 31, 1995 and 1994, the
affiliate earned $12,624 and $357,458, respectively, as an Investment
Management Fee. For the year ended December 31, 1993, the General Partner
earned no Investment Management Fee.
The Partnership Agreement provides for reimbursement to the General Partner
for all out-of-pocket expenses. At December 31, 1995, no reimbursements
were due to the General Partner for overhead expenses attributed to the
Partnership.
In addition, the Partnership Agreement allows an affiliate of the General
Partner to serve as a real estate broker but 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.
Affiliates of the Partnership are entitled to receive a real estate
commission in connection with the sale of any property by the Partnership
only if the Partnership recovers from the proceeds of the sale at least the
amount of the Partnership's capital that was invested in the property. For
the year ended December 31, 1995, an affiliate of the General Partner did
not earn a brokerage commission.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
NOTES TO FINANCIAL STATEMENTS, continued
9. Related-Party Transactions, continued
Affiliates of the General Partner may be engaged to perform (a) insurance
services, (b) normal property management services for fees not to exceed 5%
of gross rental income and/or (c) accounting, legal, 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. In addition, the Partnership
Agreement provides that the General Partner has the right and power to
employ persons in the operation and management of the Partnership business,
including but not limited to, supervisory managing agents, building
management agents, insurance brokers, real estate brokers and loan brokers,
on such terms and for such compensation as the General Partner determines.
The General Partner is empowered to employ in such capacities an
affiliate or subsidiary of the General Partner on terms comparable to those
offered by unaffiliated firms. For the year ended December 31, 1995, a
corporate affiliate of the General Partner received $48,371 for rendering
real estate management services to the Partnership. In addition, an
affiliate of the General Partner has been engaged to service the wrap-around
mortgages held by the Partnership in accordance with a Mortgage Servicing
Agreement between the affiliate and the Partnership. It is anticipated that
in order to protect the Partnership's interest in its assets, such affiliate
will continue to service each wrap-around mortgage or other instrument now
or hereafter held by the Partnership until full payment of the corresponding
wrap-around note or other obligation is received. For the year ended
December 31, 1995, the affiliate earned $11,941 for such services.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
NOTES TO FINANCIAL STATEMENTS, continued
9. Related-Party Transactions, continued
The following list of expenses incurred and the related liabilities are from
transactions with affiliates:
M.V. National Property Analysis
Properties, Inc. MultiVest Real Estate, Inc. and Development Corp.
1995 1994 1993 1995 1994 1993 1995 1994 1993
Real estate
management
fee 48,371 47,119 44,946 - - - - - -
Mortgage
servicing fee 11,941* 15,955* 20,192* - - - - - -
Real estate
commission - - - - - - - - -
Investment
management
fee - - - 12,624 357,458 - - - -
60,312 63,074 65,138 12,624 357,458 - - - -
Accrued
liabilities,
December 31 4,067 3,763 3,849 12,624 357,458 - - 110,200 110,200
*Mortgage Servicing fees incurred prior to the payoff is included in operations
of disposed property.
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 IV
NOTES TO FINANCIAL STATEMENTS, continued
10. Description of Partnership Operations and Leasing Arrangements
The Partnership operates exclusively in the real estate industry. It
currently owns one rental apartment complex in Irving, Texas.
Residential leases are for periods not exceeding one year.
The following schedule provides an analysis of the Partnership's investment
in property held for rent for residential purposes as of December 31, 1995:
Residential rental apartments $ 3,665,710
Less: Accumulated depreciation 2,264,798
$ 1,400,912
11. Real Estate Sales
On August 22, 1985 the Partnership sold French Quarter Apartments in Wichita
Falls, Texas for $5,700,000, consisting of $500,000 cash and a wrap-around
mortgage note in the amount of $5,200,000. The sale was recorded on the
installment method where gain is recognized on the basis of principal
collections. The calculation of gain recognition is as follows:
Sales Price $5,700,000
Less: Discount on payoff (996,818)
Cost, less accumulated
depreciation of $2,288,669 $2,488,383
Closing costs 344,090 2,832,473
Total gain on sale $1,870,709
Gain recognized in prior years 402,459
Gain recognized in 1995 2,465,068
Less: Discount on payoff (996,818)
Total gain recognized $1,870,709
Property Analysis and Development Corporation, an affiliate of the Corporate
General Partner, earned a real estate commission in the amount of $330,600 in
connection with the sale of French Quarter Apartments. Of this amount,
$220,400 was paid prior to 1995, and the balance of $110,200 was paid
following the payoff on October 6, 1995.
The property (Eastern Gateway Shopping Center) sold for which no gain has
been recognized in the past three years and not described above, resulted in
continued deferred gain of $518,800 at December 31, 1995.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
NOTES TO FINANCIAL STATEMENTS, continued
12. Interest Expense
The Partnership incurs interest expense on the property presently owned and
operated by the Partnership as well as on the underlying mortgages
associated with the properties sold pursuant to wrap-around mortgage notes
receivable.
1995 1994 1993
Existing properties $ 136,354 $ 109,452 $ 78,133
Sold properties subject to
wrap-around mortgages 212,678 301,226 342,557
$ 349,032* $ 410,678* $ 420,690*
Cash paid during 1995, 1994, and 1993 for interest was $349,032, $410,678,
and $420,690, respectively.
*Interest expense incurred relative to French Quarter Apartments ($212,678,
$281,756, and $286,188 for 1995, 1994, and 1993, respectively); and Dover
Country Club Apartments ($19,470 for 1994 and $56,369 for 1993) is included
in operations of disposed property.
13. Mortgage Note Modification
On September 15, 1990, Eastern Gateway Limited Partnership, the owner of
Eastern Gateway Shopping Center, failed to make its required monthly
mortgage payment to the Partnership which holds a mortgage note on the
property. On November 29, 1990, Eastern Gateway Limited Partnership filed
for relief under Chapter 11 of the United States Bankruptcy Laws. On
October 2, 1991, Eastern Gateway Limited Partnership entered a Plan of
Reorganization with the United States Bankruptcy Court modifying the
mortgage note by resetting the total indebtedness to $1,875,000. However,
the note was not increased based on management's net realizable value
analysis. The note is currently in non performing status.
14. 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.
15. Operations of Disposed Properties - Dover Country Club and French Quarter
Apartments
1995 1994 1993
Total revenues $ 338,247 $ 671,148 $ 878,144
Total expenses (242,289) (329,549) (373,842)
Net income $ 95,958 $ 341,599 $ 504,302
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
NOTES TO FINANCIAL STATEMENTS, continued
16. Replacement and Repair Reserves
On February 16, 1994, the Partnership obtained refinancing for the Hidden
Village Apartments mortgage note payable. As required by the lender, a
repair reserve 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.
17. Subsequent Events
A distribution was declared for the quarter ended December 31, 1995, and
paid to the Partners in March 1996 in the amount of $1,580,158 or $39.50 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 IV
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
According to the Partnership's records, at January 1, 1996, two groups
consisting of the following entities (through their affiliates) are the only
entities or groups which are the beneficial owners or have the rights to acquire
beneficial ownership of more than 5% of the Limited Partnership units:
GROUP 1
Name of Amount & Nature of Percentage
Title of Clas s Beneficial Owner Beneficial Ownership of Class
$500 Limited LF 54, LP 166 .415
Partnership Units
$500 Limited Liquidity Fund IX 59 .147
Partnership Units
$500 Limited Liquidity Fund X 394 .985
Partnership Units
$500 Limited Liquidity Fund XI 233 .582
Partnership Units
$500 Limited Liquidity Fund XIII 1,853 4.632
Partnership Units
$500 Limited Liquidity Fund XIV 215 .538
Partnership Units
$500 Limited Liquidity Fund XV 37 .093
Partnership Units
$500 Limited Liquidity Income Growth 389 .973
Partnership Units Fund 85
$500 Limited Liquidity Fund Income 2,744 6.859
Partnership Units Growth 87
$500 Limited Liquidity Fund High 187 .467
Partnership Units Yield Institutional
Investors
$500 Limited Liquidity Fund 52 1,435 3.587
Partnership Units
$500 Limited Liquidity Fund 53 45 .112
Partnership Units
$500 Limited Liquidity Income 876 2.190
Partnership Units Growth Fund 88
$500 Limited Liquidity Fund Income 1,420 3.549
Partnership Units Growth Fund 89
TOTAL 10,053 25.129%
The address for the above beneficial owners is P.O. Box 882044, San Francisco,
California, 94188.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT,
continued
GROUP 2
Name of Amount & Nature of Percentage
Title of Class Beneficial Owner Beneficial Ownership of Class
$500 Limited J-B Investment Partners 1,911 4.777
Partnership Units 409 W. Hallandale Beach
Blvd. #415
Hallandale, FL 33009
$500 Limited Benjamin S. Schwartz CUST 388 .970
Partnership Units FBO Pamela S. Schwartz
5480 SW 94th Terrace
Miami, FL 33156
TOTAL 2,299 5.747
There are no parents of the Partnership. MultiVest Real Estate, Inc., a
Delaware Corporation, serves as General Partner of the Partnership and, as such,
controls its activities. The General Partner owns 218 Limited Partnership Units
and 34 General Partnership Units.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to the Partnership Agreement, the General Partner receives an
Investment Management Fee of 12-1/2% of the cash available for distribution.
Cash available for distribution is defined as cash flow (including net cash
profits realized on disposition of investments subject to certain limitations),
less any reserves established by the General Partner which it deems reasonably
necessary for the proper operation of the Partnership business.
The General Partner has agreed to waive its Investment Management Fee in the
event annual minimum distributions at the rate of 7% per annum of net capital
contribution ($457.50 per Unit) on a non-cumulative basis are not made to the
Limited Partners. In computing the 7% distribution, return of Partnership
capital other than return of capital which resulted from depreciation, is to be
excluded. Accordingly, quarterly distributions of the Investment Management
Fee shall not be made to the General Partner, unless they are preceded by or
made simultaneously with a minimum non-cumulative 1-3/4% quarterly cash
distribution (7% annual basis) to the Limited Partners for the period. If a
quarterly Investment Management Fee is paid to the General Partner, but the 7%
annual return is not achieved for the Partnership year, such quarterly fees
shall be returned by the General Partner to the Partnership.
Any cash profits realized on disposition of Partnership investments will also be
included in the cash available for distribution. The General Partner will share
in the cash profits realized on disposition of a Partnership investment only to
the extent the proceeds of the disposition exceed,on an investment-by-investment
basis, an amount equal to the portion of the Partnership's initial capital used
in making the particular investment, multiplied by the percentage which results
from dividing 500 times the Units of Limited Partnership outstanding by the
beginning net capital of the Partnership. The General Partner will not share in
the proceeds resulting from disposition of any Partnership investment unless
the Limited Partners will receive such a return on disposition of any
Partnership investment. For the year ended December 31, 1995, the General
Partner earned an Investment Management Fee of $12,624.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, continued
The Partnership Agreement also obligates the Partnership to reimburse the
General Partner for all overhead expenses attributable to the Partnership. For
the year ended December 31, 1993, no reimbursements were due the General Partner
for overhead expenses.
In addition, the Partnership Agreement provides that an affiliate of the General
Partner may serve as a real estate broker. The Partnership will limit 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. 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 the amount
of the Partnership's capital that was invested in the property. For the year
ended December 31, 1995, no brokerage commissions were earned by the General
Partners affiliates.
Affiliates of the General Partner may be engaged to perform (a) insurance
services, (b) normal property management services for fees not to exceed 5% of
gross rental income, and/or (c) accounting, legal, 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. In addition, the Partnership Agreement provides that the
General Partner has the right and power to employ persons in the operation and
management of the Partnership business, including but not limited to,
supervisory managing agents, building management agents, insurance brokers, real
estate brokers and loan brokers, on such terms and for such compensation as the
General Partner determines. The General Partner is empowered to employ in such
capacities an affiliate or subsidiary of the General Partner on terms comparable
to those offered by unaffiliated firms. For the year ended December 31, 1995, a
corporate affiliate of the General Partner received $48,371 for rendering
property management services to the Partnership. In addition, an affiliate
of the General Partner has been engaged to service the wrap-around mortgages
held by the Partnership in accordance with the terms and conditions of a
Mortgage Servicing Agreement between the affiliate and the Partnership. It is
anticipated that in order to protect the Partnership's interest in its assets,
such affiliate will continue to service each wrap-around mortgage or other
instrument now or hereafter held by the Partnership until full payment of the
corresponding wrap-around note or other obligation is received. For the year
ended December 31, 1995, an affiliate earned $11,941 for such services.
MULTIVEST REAL ESTATE FUND, LTD., SERIES IV
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 IV
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 IV, 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