DSI REALTY INCOME FUND XI
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 and
Exchange Act of 1934 [Fee Required] for the fiscal year ended December 31, 2004.
or / /Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period from
____________ to _____________.
Commission File No. 33-26038.
DSI REALTY INCOME FUND XI, a California Limited Partnership
(Exact name of Registrant as specified in governing instruments)
__________California_________________________33-0324161_______
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification
number)
6700 E. Pacific Coast Hwy., Long Beach, California 90803
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code-(562)493-8881
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units.
Indicate by check mark, whether the Registrant (l) 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 shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes_X___. No_____.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. /x/
The Registrant is a limited partnership and there is no voting stock. All units
of limited partnership are owned by non-affiliates of the Registrant. All units
sold to date were sold at $500.00 per unit.
DOCUMENTS INCORPORATED BY REFERENCE
Item 8. Registrant's Financial Statements for its fiscal year ended December
31, 2004, incorporated by reference to Form 10-K, Part II.
Item 11. Registrant's Financial Statements for its fiscal year ended December
31, 2004, incorporated by reference to Form 10-K, Part III.
Item 12. Registration Statement on Form S-11, as amended, previously filed with
the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended, incorporated by reference to Form 10-K, Part III.
Item 13. Registrant's financial statements for its fiscal year ended December
31, 2004, together with report of independent public accountants,
incorporated by reference to Form 10-K, Part III.
PART I
Item l. BUSINESS
Registrant (the "Partnership") is a publicly held limited partnership
organized under the California Uniform Limited Partnership Act pursuant to
Agreement of Limited Partnership (the "Agreement") dated December 7, 1988. The
General Partners are DSI Properties, Inc., a California corporation, ROBERT J.
CONWAY and JOSEPH W. CONWAY. The General Partners are affiliates of the Selling
Agent, Diversified Securities, Inc., a wholly-owned subsidiary of DSI Financial,
Inc. The General Partners provide similar services to other partnerships.
The Partnerships's public offering was completed on February 12, 1991, with
20,000 Units ($10,000,000) of limited partnership interests having been
subscribed for. The General Partners have retained a l% interest in all profits,
losses and distributions (subject to certain conditions) without making any
capital contributions to the Partnership. The General Partners are not required
to make any contributions to capital in the future. The General Partners and the
Partnership have obtained a ruling from the Internal Revenue Service, that under
present provisions of the Internal Revenue Code, current Treasury Regulations
thereunder and the interpretations thereof by the Service and the courts, the
Partnership should be treated for federal income tax purposes as a partnership
and not as an association, which is taxable as a corporation. Such ruling was
based upon certain representations contained in the ruling request.
The Partnership is engaged in the business of investing in and operating
mini-storage facilities with the primary objectives of generating, for its
partners, cash flow, capital appreciation of its properties and obtaining
federal income tax deductions in order to shelter a portion of cash distributed
from taxation. The Partnership has interests in joint ventures which purchased
four mini-storage facilities. See discussion under Item 2 - Properties for
further information.
The Partnership does not intend to sell additional limited partnership
interests in the future. The term of the Partnership is fifty years, however, it
is anticipated that all properties will be sold and/or refinanced prior thereto.
The Partnership is intended to be self-liquidating and it is not anticipated
that proceeds from the sale or refinancing of its operating properties will be
reinvested. The Registrant has no full time employees other than on-site
managers at each mini-storage facility. However, the Partnership shares the
expenses of one or more employees with its various affiliated Limited
Partnerships. The general management and supervision of the business and affairs
of the Registrant is vested exclusively in the General Partners. Limited
Partners have no right to participate in the management or conduct of the
Registrant's business and affairs. An independent management company has been
retained to provide day-to-day management services with respect to all of the
Partnership's investment properties.
The average occupancy levels for each of the Partnership's four properties
for the years ended December 31, 2004 and December 31, 2003 were as follows:
Location of Property Average Occupancy Average Occupancy
for the Level for the
Year Ended Year Ended
Dec. 31, 2004 Dec. 31, 2003
Whittier, CA(1) 88% 92%
Bloomingdale, IL(2) 82% 80%
Edgewater, NJ(3) 85% 87%
Sterling Heights, MI(4) 77% 82%
(1) The Partnership owns a 90% interest in this property.
(2) The Partnership owns a 90% interest in this property.
(3) The Partnership owns an 85% interest in this property.
(4) The Partnership owns a 75% interest in this property.
The business in which the Partnership is engaged is highly competitive.
Each of its mini-storage facilities is located in or near a major urban area,
and accordingly, will compete with a significant number of individuals and
organizations with respect to both the purchase and sale of its properties and
for rentals.
Item 2. PROPERTIES
Location Size of Net Rentable No. of Completion
Parcel Area Rental Date
Whittier, CA(1) 3.92 acres 60,249 513 3/90
Bloomingdale,
IL(2) 3.542 acres 60,624 571 1/31/91
Edgewater,NJ(2) 4.118 acres 52,940 447 8/21/90
Sterling
Heights, MI(4) 3.76 acres 58,198 515 7/17/91
(1) The Partnership owns a 90% interest in this property.
(2) The Partnership owns a 90% interest in this property.
(3) The Partnership owns an 85% interest in this property.
(4) The Partnership owns a 75% interest in this property.
Item 3. LEGAL PROCEEDINGS
Registrant is not a party to any material pending proceedings.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
Registrant, a publicly-held limited partnership, had approximately 525
Limited Partners at December 31, 2004. The Registrant completed its public
offering of limited partnership Units. There is no public market for the resale
of these Units.
Average cash distributions of $14.37 per Limited Partnership Unit were
declared and paid each quarter for the year ended December 31, 2004 and $13.85
per Limited Partnership Unit were declared and paid each quarter for the year
ended December 31, 2003 and $11.25 per Limited Partnership Unit were declared
and paid each quarter for the year ended December 31, 2002. It is Registrant's
expectations that distributions will continue to be paid in the future.
Item 6. SELECTED FINANCIAL DATA
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
- ----------------------------------------------
SELECTED FINANCIAL DATA
FIVE YEARS ENDED DECEMBER 31, 2004
- -----------------------------------------------------------------
2004 2003 2002 2001 2000
---- ---- ---- ---- ----
TOTAL REVENUES
AND OTHER
INCOME $2,269,596 $2,335,866 $2,334,725 $2,336,174 $2,181,934
TOTAL
EXPENSES 1,438,441 1,444,226 1,453,731 1,303,980 1,262,117
MINORITY INTEREST
IN INCOME OF
REAL ESTATE JOINT
VENTURE (188,904) (204,804) (190,054) (204,104) (194,204)
--------- --------- --------- --------- ---------
NET INCOME $ 642,251 $ 686,836 $ 690,940 $ 828,090 $ 725,613
========= ========= ========= ========= =========
TOTAL ASSETS $4,292,224 $4,676,176 $5,091,587 $5,293,797 $5,485,221
========== ========== ========== ========== ==========
CASH FLOWS FROM (USED IN):
OPERATING $1,174,400 $1,254,113 $1,262,126 $1,335,572 $1,287,282
INVESTING (16,112) - (17,459) (32,468) (18,864)
FINANCING (1,350,518) (1,323,888) (1,099,145) (1,214,205) (1,305,315)
NET INCOME
PER LIMITED
PARTNERSHIP
UNIT $ 31.79 $ 34.00 $ 34.20 $ 40.99 $ 35.92
======== ========= ======== ======== ========
CASH
DISTRIBUTIONS
PER LIMITED
PARTNERSHIP
UNIT $ 57.50 $ 55.39 $ 45.00 $ 50.00 $ 55.00
======== ======== ======== ======== ========
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Critical Accounting Policies
Revenue recognition - Rental revenue is recognized using the accrual method
based on contractual amounts provided for in the lease agreements, which
approximates recognition on a straight-line basis. The term of the lease
agreements is usually less than one year.
The Partnership holds a 90% interest in a joint venture that owns an operating
mini-storage facility in Whittier, California, an 85% interest in an operating
mini-storage facility in Edgewater Park, New Jersey, a 90% interest in an oper-
ating mini-storage facility in Bloomingdale, Illinois and a 75% interest in an
operating facility in Sterling Heights, Michigan. Occupancy levels for the
Partnership's four mini-storage facilities at December 31, 2004, were: Whittier
86%, Edgewater Park 86%, Bloomingdale 79% and Sterling Heights 76%.
RESULTS OF OPERATIONS
2004 COMPARED TO 2003
Total revenues decreased from $2,335,465 in 2003 to $2,269,266 in 2004, total
expenses decreased from $1,444,226 to $1,438,441, other income decreased from
$401 to $330 and minority interest in real estate joint ventures decreased
from $204,804 to $188,904. As a result, net income decreased from $686,836 to
$642,251. The approximate $66,200 (2.8%) decrease in rental revenues can be
attributed primarily to lower occupancy rates. Occupancy levels for the Part-
nership's four mini-storage facilities averaged 83.0% for the year ended
December 31, 2004, compared to 85.8% for the year ended December 31, 2003.
Operating expenses increased approximately $12,500 (2.0%) primarily as a result
of relatively insignificant fluctuations in various expense accounts. General
and administrative expenses decreased approximately $20,500 (9.6%) primarily
as a result of decreases in legal and professional, New Jersey Partner annual
processing fee expenses and equipment and computer lease expenses, partially
offset by an increase in office supplies and printing expense. The decrease
in legal and professional expense is related to unsuccessful legal challenges
bu two dissident Limited Partners to a proposed amendment to the Partnership
Agreement in the prior year (see paragraph below). Incentive management fees,
which are based on distributions paid to limited partners, increased as a
result of the increase in distributions to limited partners. Property manage-
ment fees, which are computed as a percentage of rental revenues, decreased
as a result of the decrease in rental revenue.
2003 COMPARED TO 2002
Total revenues increased from $2,333,960 in 2002 to $2,335,465 in 2003, total
expenses decreased from $1,453,731 to $1,444,226, other income decreased from
$765 to $401 and minority interest in real estate joint ventures increased
from $190,054 to $204,804. As a result, net income decreased from $690,940 to
$686,836. Rental revenues remained constant. Occupancy levels for the Part-
nership's four mini-storage facilities averaged 85.8% for the year ended
December 31, 2003, compared to 85.5% for the year ended December 31, 2002.
Operating expenses decreased approximately $57,200 (8.2%) primarily as a result
of decreases in yellow pages advertising, repairs and maintenance, real estate
tax, salaries and wages and workers compensation insurance expenses. General
and administrative expenses increased approximately $30,500 (16.6%) primarily
as a result of increases in legal and professional and New Jersey Partner
annual processing fee expenses, partially offset by a decrease in office
supplies and equipment and computer lease expenses. Legal expense increased
as a result of legal challenges by dissident Limited Partners to a proposed
amendment to the Partnership Agreement (see paragraph below). Incentive
management fees, which are based on distributions paid to limited partners,
increased as a result of the increase in distributions to limited partners.
Property management fees, which are computed as a percentage of rental revenues,
remained relatively constant.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities increased approximately $60,400
(4.8%) in 2004 compared to 2003 primarily as a result of the increase in net
income. Net cash provided by operating activities decreased approximately
$8,000 (0.6%) in 2003 compared to 2002 primarily as a result of the decrease
in net income.
Cash used in financing activities consisted of cash distributions to partners
in 2004, 2003, and 2002. Additionally, cash distributions were paid to
the minority interests in the real estate joint ventures in 2004, 2003, and
2002. In December 2004, 2003 and 2002, the General Partners declared and paid
a special distribution equal to 3.5%, 3%, and 1%, respectively of capital
contributed by the limited partners.
Cash used in investing activities, as set forth in the statement of cash flows,
consists of acquisitions of equipment for the Partnership's mini storage
facilities in 2004 and 2002. The Partnership has no material commitments
for capital expenditures.
In 2003, the Limited Partners approved an amendment to the Partnership Agreement
granting the General Partners ten days to review certain types of transfers
during which the General Partners may match, exceed or approve the proposed
transfers. The Court has rejected all preliminary attempts to halt the imple-
mentation of the amendment. Subsequently, the two dissident Limited Partners
who initiated the legal proceedings decided not to pursue the matter any
further.
The General Partners plan to continue their policy of funding the continuing
improvement and maintenance of the Partnership properties with cash generated
from operations. The Partnership anticipates that cash flows generated from
operations of the Partnership's rental real estate operations will be
sufficient to cover operating expenses and distributions for the next twelve
months and beyond.
The General Partners are not aware of any environmental problems which could
have a material adverse effect upon the financial position of the Partnership.
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Summarized quarterly financial data for the years ended December 31, 2004 and
2003 was as follows:
2004 QUARTER ENDED
------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
Total revenues $596,896 $542,430 $572,026 $557,914
Income before minority
interest in
joint venture 257,051 163,660 223,171 187,273
Net income 257,051 163,660 78,817 142,723
Net income per
limited partnership
unit $ 12.72 $ 8.10 $ 3.90 $ 7.07
Weighted average
number of limited
partnership units
outstanding 20,000 20,000 20,000 20,000
2003 QUARTER ENDED
------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
Total revenues $598,595 $566,320 $587,206 $583,344
Income before minority
interest in
joint venture 265,613 210,842 226,436 188,749
Net income 265,613 210,842 71,582 138,799
Net income per
limited partnership
unit $ 13.15 $ 10.44 $ 3.54 $ 6.87
Weighted average
number of limited
partnership units
outstanding 20,000 20,000 20,000 20,000
Item 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Attached hereto as Exhibit l is the information required to be set forth as
item 8, Part II hereof. See the financial statements.
Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
Item 9a. CONTROLS AND PROCEDURES
The Partnership evaluated the effectiveness of its disclosure controls
and procedures. This evaluation was performed by the Partnership's
Controller with the assistance of the Partnership's President and the
Chief Executive Officer. These disclosure controls and procedures are
designed to ensure that the information required to be disclosed by the
Parnership in its periodic reports filed with the Securities and Exchange
Commission (the "Commission") is recorded, processed summarized and
reported, within the time periods specified by the Commission's rules
and forms, and that the information is communicated to the certifying
officers on a timely basis. Based on this evaluation, the Partnership
concluded that its disclosure controls and procedures were effective.
There have been no significant changes in the Partnership's internal
controls or in other factors that could significantly affect the internal
controls subsequent to the date of their evaluation.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT'S
GENERAL PARTNER
The General Partners of Registrant are the same as when the Partnership was
formed, i.e., DSI Properties, Inc., a California corporation, Robert J. Conway
and Joseph W. Conway, brothers. As of December 31, 2004, Messrs. Robert J.
Conway and Joseph W. Conway, each of whom own approximately 48.4% of the issued
and outstanding capital stock of DSI Financial, Inc., a California corporation,
together with Mr. Joseph W. Stok, currently comprise the entire Board of
Directors of DSI Properties, Inc.
Mr. Robert J. Conway is 71 years of age and is a licensed California real
estate broker, and since 1965 has been President and a member of the Board of
Directors of Diversified Securities, Inc., and since 1973 President, Chief
Financial Officer and a member of the Board of Directors of DSI Properties, Inc.
Mr. Conway received a Bachelor of Science Degree from Marquette University with
majors in Corporate Finance and Real Estate.
Mr. Joseph W. Conway is age 76 and has been Executive Vice President,
Treasurer and a member of the Board of Directors of Diversified Securities, Inc.
since 1965 and since 1973 the Vice President, Treasurer and member of the Board
of Directors of DSI Properties, Inc. Mr. Conway received a Bachelor of Arts
Degree from Loras College with a major in Accounting.
Mr. Joseph W. Stok is age 82 and has been a member of the Board of
Directors of DSI Properties, Inc. since 1994, a Vice President of Diversified
Securities, Inc. since 1973, and an Account Executive with Diversified
Securities, Inc. since 1967.
Item 11. MANAGEMENT REMUNERATION AND TRANSITIONS
The information required to be furnished in Item 11 of Part III is
contained in Registrant's Financial Statements for its fiscal year ended
December 31, 2004, which together with the report of its independent auditors,
Deloitte & Touche LLP, is attached hereto as Exhibit 1 and incorporated herein
by this reference. In addition to such information:
(a) No annuity, pension or retirement benefits are proposed to be paid by
the Registrant to any of the General Partners or to any officer or
director of the corporate General Partner;
(b) No standard or other agreement exists by which directors of the
Registrant are compensated;
(c) The Registrant has no plan, nor does the Registrant presently propose
a plan, which will result in any remuneration being paid to any
officer or director upon termination of employment.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
As of the December 31, 2004, no person of record owns more than 5% of the
limited partnership units of the Registrant, nor was any person known by the
Registrant to own of record and beneficially, or beneficially only, more than 5%
thereof. The balance of the information required to be furnished in Item 12 of
Part III is contained in the Registrant's Registration Statement on Form S-11,
previously filed pursuant to the Securities Act of 1933, as amended, and which
is incorporated herein by this reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required to be furnished in Item 13 of Part III is
contained in the Registrant's Financial Statements and Financial Statement
Schedule for it fiscal year ended December 31, 2004, attached hereto as Exhibit
l and incorporated herein by this reference.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The aggregate fees for professional services rendered by Deloitte & Touche
LLP for the audit of the Partnership's annual financial statements and for re-
view of the financial statements included in the Partnership's Quarterly Reports
on Form 10-Q for 2004 were $26,920 and for 2003 were $25,600.
Tax Fees
The aggregate fees for professional services rendered by Deloitee & Touche
LLP for tax compliance, tax advice and tax planning for 2004 were $14,000 and
for 2003 were $13,100. Most of the fees related to preparation of the Partner-
ship's tax returns.
PART IV
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a)(l) Attached hereto and incorporated herein by this reference as Exhibit
l are Registrant's Financial Statements for its fiscal year ended
December 31, 2004, together with the reports of its independent
auditors, Deloitte, & Touche LLP.
(a)(2) Attached hereto and incorporated herein by this reference as Exhibit
2 is Registrant's Letter to Limited Partners regarding the Annual
Report for its fiscal year ended December 31, 2004.
(b) There have been no 8K's filed during the last quarter of the period
covered by this Report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
DSI REALTY INCOME FUND XI
by: DSI Properties, Inc., a
California corporation, as
General Partner
By_______________________________ Dated: March 31, 2005
ROBERT J. CONWAY (President,
Chief Executive Officer, Chief
Financial Officer and Director)
By_______________________________ Dated: March 31, 2005
JOSEPH W. CONWAY (Executive
Vice President and Director)
Pursuant to the requirements of the Securities and Exchange
Act of 1934, this report has been signed by the following persons on behalf of
the Registrant and in the capacities and on the date indicated.
DSI REALTY INCOME FUND XI
by: DSI Properties, Inc., a
California corporation, as
General Partner
By_______________________________ Dated: March 31, 2005
ROBERT J. CONWAY (President,
Chief Executive Officer, Chief
Financial Officer and Director)
By______________________________ Dated: March 31, 2005
JOSEPH W. CONWAY (Executive
Vice President and Director)
DSI REALTY INCOME FUND XI
CROSS REFERENCE SHEET
FORM 1O-K ITEMS TO ANNUAL REPORT
PART I, Item 3. There are no legal proceedings pending or threatened.
PART I, Item 4. Not applicable.
PART II, Item 5. Not applicable.
PART II, Item 6. The information required is contained in Registrant's Financial
Statements for its fiscal year ended December 31, 2004, attached as Exhibit l to
Form 10-K.
PART II, Item 8. See Exhibit l to Form 10-K filed herewith.
PART II, Item 9. Not applicable.
EXHIBIT l
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
SELECTED FINANCIAL DATA
FIVE YEARS ENDED DECEMBER 31, 2004
- -----------------------------------------------------------------------------
2004 2003 2002 2001 2000
---- ---- ---- ---- ----
TOTAL REVENUES
AND OTHER
INCOME $2,269,596 $2,335,866 $2,334,725 $2,336,174 $2,181,934
TOTAL
EXPENSES 1,438,441 1,444,226 1,453,731 1,303,980 1,262,117
MINORITY INTEREST
IN INCOME OF
REAL ESTATE JOINT
VENTURE (188,904) (204,804) (190,054) (204,104) (194,204)
--------- --------- --------- --------- ---------
NET INCOME $ 642,251 $ 686,836 $ 690,940 $ 828,090 $ 725,613
========= ========= ========= ========= =========
TOTAL ASSETS $4,292,224 $4,676,176 $5,091,587 $5,293,797 $5,485,221
========== ========== ========== ========== ==========
CASH FLOWS FROM (USED IN):
OPERATING $1,174,400 $1,254,113 $1,262,126 $1,335,572 $1,287,282
INVESTING (16,112) - (17,459) (32,468) (18,864)
FINANCING (1,350,518) (1,323,888) (1,099,145) (1,214,205) (1,305,315)
NET INCOME
PER LIMITED
PARTNERSHIP
UNIT $ 31.79 $ 34.00 $ 34.20 $ 40.99 $ 35.92
======== ========= ======== ======== ========
CASH
DISTRIBUTIONS
PER LIMITED
PARTNERSHIP
UNIT $ 57.50 $ 55.39 $ 45.00 $ 50.00 $ 55.00
======== ======== ======== ======== ========
The following are reconciliations between the operating results and partners'
equity per the financial statements and the Partnership's income tax return for
the year ended December 31, 2004:
Net Partners'
Income Equity
Per financial statements $ 642,251 $ 3,788,494
Excess book depreciation 135,814 1,718,434
Excess book distributions 202,020
Real estate taxes (6,980)
Deferred rental revenues 68,995
Fixed asset adjustment (10,000) (10,000)
Tax expense adjustment (647)
Accrued expenses 13,800 13,800
Accrued incentive management fee 443,214
Acquisition costs capitalized
for tax purposes 1,033,227
----------- -----------
Per Partnership income tax return $ 781,218 $ 7,251,204
=========== ===========
Net taxable income per
limited partnership unit $ 38.67
===========
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Page
FINANCIAL STATEMENTS:
Report of Independent Registered Public Accounting Firm F-1
Consolidated Balance Sheets as of December 31, 2004 and 2003 F-2
Consolidated Statements of Income for each of the Three
Years Ended December 31, 2004 F-3
Consolidated Statements of Changes in Partners' Equity(Deficit)
for each of the Three Years Ended December 31, 2004 F-4
Consolidated Statements of Cash Flows for each of the Three Years
Ended December 31, 2004 F-5
Notes to Consolidated Financial Statements F-6
SUPPLEMENTAL SCHEDULE:
Schedule III - Real Estate and Accumulated Depreciation F-9
SCHEDULES OMITTED:
Financial statements and schedules not listed above are omitted because of the
absence of conditions under which they are required or because the
information is included in the financial statements named above, or in the
notes thereto.
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Partners
DSI Realty Income Fund XI:
We have audited the accompanying balance sheets of DSI Realty Income Fund XI, a
California Real Estate Limited Partnership (the "Partnership") as of December
31, 2004 and 2003, and the related consolidated statements of income, changes
in partners' equity (deficit), and cash flows for each of the three years ended
December 31, 2004. Our audits also included the financial statement schedule
listed in the Index at Item 15. These financial statements and the financial
statement schedule are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements
and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Partnership
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.
An audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such consoldiated financial statements present fairly,
in all material respects, the financial position of DSI Realty Income Fund
XI at December 31, 2004 and 2003, and the results of its operations and its
cash flows for each of the three years ended December 31, 2004 in conformity
with accounting principles generally accepted in the United States of America.
Also, in our opinion, such financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly
in all material respects, the information set forth therein.
Deloitte & Touche
March 14, 2005
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2004 AND 2003
- -------------------------------------------------------------------------------
ASSETS 2004 2003
CASH AND CASH EQUIVALENTS $ 335,279 $ 527,509
PROPERTY, net (Note 3) 3,901,485 4,100,678
OTHER ASSETS 55,460 47,989
----------- -----------
TOTAL $ 4,292,224 $ 4,676,176
=========== ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
LIABILITIES:
Distribution due partners (Note 4) $ 202,020 $ 202,020
Property management
fees payable 10,915 11,357
Customer Deposits & other liabilities 160,703 154,942
Capital lease obligations (Note 3) 130,092
----------- ----------
Total liabilities 503,730 368,319
----------- ----------
PARTNERS' EQUITY (DEFICIT)(Note 4):
General partners (51,782) (46,589)
Limited partners (20,000 limited
partnership units outstanding
at December 31, 2004 and 2003) 3,840,276 4,354,446
------------ -----------
Total partners' equity 3,788,494 4,307,857
------------ -----------
TOTAL $ 4,292,224 $ 4,676,176
============ ===========
See accompanying notes to consolidated financial statements.
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
CONSOLIDATED STATEMENTS OF INCOME
THREE YEARS ENDED DECEMBER 31, 2004
- --------------------------------------------------------------------------------
2004 2003 2002
REVENUES:
Rental $2,269,266 $2,335,465 $2,333,960
---------- ---------- ----------
EXPENSES:
Depreciation 355,397 353,788 353,787
Operating 649,620 637,126 694,329
General and administrative 193,171 213,639 183,184
General partners' incentive
management fee (Note 4) 104,546 100,001 81,819
Property management fees 135,707 139,672 140,612
---------- ---------- ----------
Total expenses 1,438,441 1,444,226 1,453,731
---------- ---------- ----------
OPERATING INCOME 830,825 891,239 880,229
OTHER INCOME -
Interest income 330 401 765
INCOME BEFORE MINORITY INTERESTS
IN INCOME OF REAL ESTATE
JOINT VENTURES 831,155 891,640 880,994
MINORITY INTERESTS IN INCOME OF
REAL ESTATE JOINT VENTURES (188,904) (204,804) (190,054)
---------- ---------- ----------
NET INCOME $ 642,251 $ 686,836 $ 690,940
========== ========== ==========
AGGREGATE NET INCOME ALLOCATED
TO (Note 4):
General partners 6,423 6,868 6,909
Limited partners $ 635,828 $ 679,968 $ 684,031
---------- ---------- ----------
TOTAL $ 642,251 $ 686,836 $ 690,940
========== ========== ==========
NET INCOME PER LIMITED PARTNERSHIP
UNIT (Note 4) $ 31.79 $ 34.00 $ 34.20
========== ========== ==========
See accompanying notes to financial statements.
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
THREE YEARS ENDED DECEMBER 31, 2004
- --------------------------------------------------------------------------------
General Limited
Partners Partners Total
BALANCE, JANUARY 1, 2002 $(40,084) $ 4,998,340 $ 4,958,256
Net income 6,909 684,031 690,940
Distributions (9,091) (900,000) (909,091)
-------- ----------- -----------
BALANCE, DECEMBER 31, 2002 $(42,266) $ 4,782,371 $ 4,740,105
Net income 6,868 679,968 686,836
Distributions (11,191) (1,107,893) (1,119,084)
-------- ---------- -----------
BALANCE,DECEMBER 31, 2003 $(46,589) $4,354,446 $ 4,307,857
Net income 6,423 635,828 642,251
Distributions (11,616) (1,149,998) (1,161,614)
-------- ---------- -----------
BALANCE, DECEMBER 31, 2004 $(51,782) $3,840,276 $ 3,788,494
======== =========== ===========
See accompanying notes to consolidated financial statements.
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 2004
- --------------------------------------------------------------------------------
2004 2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 642,251 $ 686,836 $ 690,940
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 355,397 353,788 353,787
Minority interests in income
of real estate joint ventures 188,904 204,804 190,054
Changes in assets and liabilities:
Other assets (7,471) (8,152) 11,404
Property management fees payable (442) 787 (1,009)
Customer deposits
and other liabilities 5,761 16,050 16,950
Captial lease obligations (10,000)
---------- ----------- ----------
Net cash provided by operating
activities 1,174,400 1,254,113 1,262,126
CASH FLOWS USED IN INVESTING ACTIVITIES -
Additions to property (16,112) (17,459)
----------- ----------- -----------
CASH FLOWS USED IN FINANCING ACTIVITIES
Distributions to partners (1,161,614) (1,119,084) (909,091)
Distributions paid to minority inter-
ests in real estate joint ventures (188,904) (204,804) (190,054)
----------- ----------- ----------
Net cash used in
financing activities (1,350,518) (1,323,888) (1,099,145)
----------- ----------- ----------
NET (DECREASE)INCREASE IN CASH AND
CASH EQUIVALENTS (192,230) (69,775) 145,522
CASH AND CASH EQUIVALENTS,
AT BEGINNING OF YEAR 527,509 597,284 451,762
----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
AT END OF YEAR $ 335,279 $ 527,509 $ 597,284
=========== =========== ===========
NON CASH INVESTING ACTIVITIES
Acquisition of trucks utilizing capital leases $140,092
See accompanying notes to financial statements.
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 2004
1. GENERAL
DSI Realty Income Fund XI, a California Limited Partnership (the
"Partnership"), has three general partners (DSI Properties, Inc.,
Robert J. Conway and Joseph W. Conway) and limited partners owning 20,000
limited partnership units, which were purchased for $500 a unit. The
general partners have made no capital contribution to the Partnership
and are not required to make any capital contribution in the future.
The Partnership has a maximum life of 50 years and was formed on
December 7, 1986 under the California Uniform Limited Partnership Act
for the primary purpose of acquiring and operating real estate.
The Partnership has entered into four joint venture arrangements with
affiliates of Dahn Corporation ("Dahn"). The Partnership and its joint
venture partners have acquired four mini-storage properties located in
Whittier, California; Edgewater, New Jersey; Bloomingdale, Illinois; and
Sterling Heights, Michigan. The properties were acquired from Dahn.
Under the terms of the property purchase agreements, the Partnership and
its joint venture partners (Whittier Mini, Bloomingdale Mini, Edgewater
Mini, and Sterling Heights Mini, each a California Limited Partnership and
an affiliate of Dahn, and hereinafter referred to as the "Joint Venture
Partners") own an undivided interest in the mini-storage facilities as
follows:
Joint Venture
Mini-Storage Property Partnership Partner
Whittier, CA 90% 10%
Bloomingdale, IL 90% 10%
Edgewater, NJ 85% 15%
Sterling Heights, MI 75% 25%
The Joint Venture Partners have made no cash contributions to any of the
joint ventures. Rather, each Joint Venture Partner's interest in each
respective mini-storage property was obtained in consideration of a
reduction in the purchase price of the property by Dahn. The Partnership
has control over the business and operations of the mini-storage
facilities.
Pursuant to the terms of each joint venture agreement, annual profits
(before depreciation) of each joint venture will be allocated to the
Joint Venture Partners on the basis of actual distributions received,
while annual losses (before depreciation) are to be allocated in pro-
portion to the ownership percentages as specified above. Cash distri-
butions are to be made to each Joint Venture Partner based upon each
Joint Venture Partner's ownership percentage. However, the Joint Venture
Partners have subordinated their rights to any distributions to the
Partnership's receipt of an annual, noncumulative, 8% return (7.75%
for the Whittier Mini) from the operation of the joint ventures.
Requirements under the subordination agreement were met during 2004,
2003 and 2002. A minority interest in real estate joint venture is
recorded to the extent of any distributions due to the Joint Venture
Partners. The Joint Venture Partners are also entitled to receive
a percentage, based upon a pre-determined formula, of the net proceeds
from the sale of the properties.
The Partnership is required by the agreements to pay Dahn a management
fee equal to 6% of gross revenue from operations, defined as the
entire amount of all receipts from the renting or leasing of storage
compartments and sale of locks.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principals of Consolidation - The accompanying consolidated finacial
statements include the accounts of the Partnership and its joint venture
investments. All significant intercompany balances and transactions have
been eliminated.
Cash and Cash Equivalents - The Partnership classifies its short-term
investments purchased with an original maturity of three months or less as
cash equivalents.
Property and Depreciation - Property is recorded at cost and consists
primarily of mini-storage facilities. Depreciation is provided for using
the straight-line method over an estimated useful life of 20 years.
Building improvements are depreciated over a five-year period. Property
under capital leases is amortized over the lives of the respective leases
or the estimated useful lives of the assets.
Income Taxes - No provision has been made for income taxes in the
accompanying consolidated financial statements. The taxable income
or loss of the Partnership is allocated to each partner in accordance
with the terms of the Agreement of Limited Partnership. Each partner's
tax status, in turn, determines the appropriate income tax for its
allocated share of the Partnership taxable income or loss. The net
difference between the basis of the Partnership's asset and liabilities
for federal income tax purposes and as reported for financial statement
purposes is $138,967.
On February 27, 2003, New Jersey adopted new regulations effective retro-
actively to January 1, 2002 that impose a filing fee of $150 per each New
Jersey resident partner and a filing fee of $150 multiplied by the corpor-
ate allocation factor of the Partnership for each non-resident partner.
As a result, the Partnership recorded $46,466 and $21,244 in partnership
filing fees during the years ended December 31, 2003 and 2002, respectively
which are included in general and administrative expenses.
Revenues - Rental revenue is recognized using the accrual method based
on contractual amounts provided for in the lease agreements, which
approximates recognition on a straight-line basis. The term of the lease
agreements is usually less than one year.
Net Income per Limited Partnership Unit - Net income per limited
partnership unit is computed by dividing net income allocated to the
limited partners by the weighted average number of limited partnership
units outstanding during each period.
Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the Partnership's management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Impairment of Long-Lived Assets - The Partnership regularly reviews long-
lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. If
the sum of the expected undiscounted future cash flow is less than the
carrying amount of the asset, the Partnership would recognize an impair-
ment loss to the extent that the carrying value exceeded the fair value of
the property. No impairment losses were required in 2004, 2003 or 2002.
Fair Value of Financial Instruments - The Partnership's financial
instruments consist primarily of cash, receivables, accounts payable and
accrued liabilities. The carrying values of all financial instruments are
representative of their fair values due to their short-term maturities.
Concentrations of Credit Risk - Financial instruments that potentially
subject the Partnership to concentrations of credit risk consist
primarily of cash equivalents and rent receivables. The Partnership
places its cash and cash equivalents with high credit quality institutions.
3. PROPERTY
The total cost of property and accumulated depreciation is as follows
as of December 31:
2004 2003
Land $ 1,894,250 $ 1,894,250
Buildings and improvements 6,566,838 6,550,726
----------- -----------
Total 8,461,088 8,444,976
Less accumulated depreciation 4,699,695 4,344,298
----------- ----------
Total 3,761,393 4,100,678
Rental trucks under capital leases 140,092 0
----------- -----------
Property - net $ 3,901,485 $ 4,100,678
=========== ===========
The rental trucks under capital leases were not placed into services
until January 2005 and therefore no depreciation expense was recorded
during 2004.
The Partnership leases certain vehicles under agreements that meet the
criteria for classification as capital leases which expire in 2008.
Future minimum lease payments under these capital leases at December 31,
2004 are summarized as follows:
2005 $36,000
2006 36,000
2007 36,000
2008 36,000
-------
Total future minimum payment obligations 144,000
Less interest portion 13,908
-------
Present value of net minimum lease payments $130,092
========
4. ALLOCATION OF PROFITS AND LOSSES AND GENERAL PARTNERS' INCENTIVE
MANAGEMENT FEE
Under the Agreement of Limited Partnership, the general partners are to be
allocated 1% of the net profits or losses from operations and the
limited partners are to be allocated the balance of the net profits
or losses from operations in proportion to their limited partnership
interests. The general partners are also entitled to receive a percent-
age, based on a predetermined formula, of any cash distribution from
the sale, other disposition, or refinancing of a real estate project.
In addition, the general partners are entitled to receive an incentive
management fee for supervising the operations of the Partnership. The
fee is equal to 9% per annum of the Partnership distributions made
from cash available for distribution calculated as cash generated
from operations less capital expenditures.
5. BUSINESS SEGMENT INFORMATION
The following disclosure about segment reporting of the Partnership is
made in accordance with the requirements of SFAS No. 131, Disclosures
about Segments of an Enterprise and Related Information. The Partnership
operates under a single segment; storage facility operations, under which
the Partnership rents its storage facilities to its customers on a need
basis and charges rent on a predetermined rate.
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
REAL ESTATE AND ACCUMULATED DEPRECIATION
- --------------------------------------------------------------------------------
Costs Capitalized
Initial Cost to Subsequent to Gross Amount at Which Carried
Partnership Acquisition at Close of Period
------------------- ----------------- -----------------------------
Buildings Buildings Date
and Improve- Carrying and Accum. of Date
Description Encumbrances Land Improvements ments Costs Land Improvements Total Deprec. Const. Acq. Life
MINI-U-STORAGE
Whittier, CA None $845,000 $1,969,083 $12,990 $845,000 $1,982,073 $2,827,073 $1464,558 04/90 03/90 20 Yrs
Edgewater, NJ None 191,250 2,358,780 47,530 191,250 2,406,310 2,597,560 1728,497 06/89 09/90 20 Yrs
Bloomingdale, IL None 442,000 1,579,879 75,717 442,000 1,655,596 2,097,596 1150,655 07/88 01/91 20 Yrs
Sterling Heights, MI None 416,000 467,979 54,880 416,000 522,859 938,859 355,985 06/77 07/91 20 Yrs
-------- ---------- ------- -------- ---------- ---------- ----------
$1,894,250 $6,375,721 $191,117 $1,894,250 $6,566,838 $ 8,461,088*$4,699,695
========== ========== ======== ========== ========== =========== ==========
Real Estate Accumulated
at Cost Depreciation
Balance at January 1, 2002 $ 8,427,517 $3,636,723
Additions 17,459 353,787
----------- ----------
Balance at December 31, 2002 $ 8,444,976 $3,990,510
Additions 353,788
----------- ----------
Balance at December 31, 2003 $ 8,444,976 $4,344,298
Additions 16,112 355,397
----------- ----------
Balance at December 31, 2004 $ 8,461,088 $4,699,695
=========== ==========
EXHIBIT 2
March 14, 2005
ANNUAL REPORT TO LIMITED PARTNERS OF
DSI REALTY INCOME FUND XI
Dear Limited Partner:
This report contains the Partnership's balance sheets as of December 31,
2004 and 2003, and the related statements of income, changes in partners' equity
and cash flows for each of the three years ended December 31, 2004 accompanied
by an independent auditors' report. The Partnership owns an interest in
four mini-storage. Partnership's properties were each purchased for all cash
and funded solely from subscriptions for limited partnership interests
without the use of mortgage financing.
Your attention is directed to the section entitled Management's Discussion
and Analysis of Financial Condition and Results of Operations for the General
Partners' discussion and analysis of the financial statements and operations of
the Partnership.
Average occupancy levels for each of the Partnership's four properties for
the years ended December 31, 2004 and December 31, 2003 were as follows:
Location of Property Average Occupancy Average Occupancy
Levels for the Levels for the
Year Ended Year Ended
Dec. 31, 2004 Dec. 31, 2003
Whittier, CA(1) 88% 92%
Bloomingdale, IL(2) 82% 80%
Edgewater, NJ(3) 85% 87%
Sterling Heights, MI(4) 77% 82%
(1) The Partnership owns a 90% interest in this property.
(2) The Partnership owns a 90% interest in this property.
(3) The Partnership owns an 85% interest in this property.
(4) The Partnership owns a 75% interest in this property.
We will keep you informed of the activities of DSI Realty Income Fund XI as
they develop. If you have any questions, please contact us at your convenience
at (562) 493-3022.
If you would like a copy of the Partnership's Annual Report on Form 10-K
for the year ended December 31, 2004, which was filed with the Securities
and Exchange Commission (which report includes the enclosed Financial
Statements), we will forward a copy of the report to you upon written request.
Very truly yours,
DSI REALTY INCOME FUND XI
By: DSI Properties, Inc.
By_______________________________
ROBERT J. CONWAY, President
CERTIFICATIONS
I, Robert J. Conway, certify that:
1. I have reviewed this annual report on Form 10-K of DSI Realty Income
Fund XI;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period cover-
ed by this annual report.
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to affect the registrant's ability to record, pro-
cess, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls over financial reporting.
Date: March 14, 2005
Robert J. Conway
Chief Executive Officer
CERTIFICATIONS
I, Richard P. Conway, certify that:
1. I have reviewed this annual report on Form 10-K of DSI Realty Income
Fund XI;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period cover-
ed by this annual report.
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to affect the registrant's ability to record, pro-
cess, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls over financial reporting.
Date: March 14, 2005
Richard P. Conway
Vice President
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of DSI Realty Income Fund XI (the
"Partnership") on Form 10-K for the period ending December 31, 2004 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Robert J. Conway, Chief Executive Officer of the Partnership, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
Robert J. Conway
Chief Executive Officer
March 14, 2005
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of DSI Realty Income Fund XI (the
"Partnership") on Form 10-K for the period ending December 31, 2004 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Richard P. Conway, Chief Executive Officer of the Partnership, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
Richard P. Conway
Vice President
March 14, 2005