SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1994
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-11699
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BALCOR PENSION INVESTORS-IV
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(Exact name of registrant as specified in its charter)
Illinois 36-3202727
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Balcor Plaza
4849 Golf Road, Skokie, Illinois 60077-9894
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 677-2900
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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 reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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BALCOR PENSION INVESTORS-IV
(An Illinois Limited Partnership)
BALANCE SHEETS
September 30, 1994 and December 31, 1993
(Unaudited)
ASSETS
1994 1993
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Cash and cash equivalents $ 12,240,644 $ 14,917,086
Cash and cash equivalents - Early Investment
Incentive Fund 213,281 278,978
Escrow deposits 1,426,441 1,607,545
Escrow deposits - restricted 232,452
Accounts and accrued interest receivable 106,126 533,526
Deferred expenses, net of accumulated
amortization of $30,426 in 1994 and
$13,530 in 1993 152,267 169,163
Other assets 78,538
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14,138,759 17,817,288
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Investment in loans receivable:
Loans receivable - first mortgage 3,064,339 3,144,303
Less:
Allowance for potential loan losses 250,000 250,000
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Net investment in loans receivable 2,814,339 2,894,303
Real estate held for sale (net of allowance
of $1,277,805 in 1994 and 1993) 41,368,106 42,852,935
Investment in joint venture with affiliates 4,166,929 4,090,735
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48,349,374 49,837,973
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$ 62,488,133 $ 67,655,261
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LIABILITIES AND PARTNERS' CAPITAL
Accounts and accrued real estate taxes
payable $ 1,099,390 $ 727,417
Due to affiliates 183,041 86,745
Other liabilities (principally security
and escrow deposits) 270,296 545,134
Mortgage notes payable 11,383,672 14,410,060
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Total liabilities 12,936,399 15,769,356
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Partners' capital (429,606 Limited
Partnership Interests issued) 57,315,043 59,327,887
Less Interests held by Early Investment
Incentive Fund (28,121 in 1994 and
25,777 in 1993) (7,763,309) (7,441,982)
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49,551,734 51,885,905
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$ 62,488,133 $ 67,655,261
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The accompanying notes are an integral part of the financial statements.
BALCOR PENSION INVESTORS-IV
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the nine months ended September 30, 1994 and 1993
(Unaudited)
1994 1993
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Income:
Interest on loans receivable $ 606,700 $ 2,271,181
Less interest on loans payable -
underlying mortgages 521,615
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Net interest income on loans receivable 606,700 1,749,566
Income from operations of real estate
held for sale 1,599,821 362,786
Participation in income (loss) of joint
venture with affiliates 288,026 (78,122)
Interest on short-term investments 409,205 330,245
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Total income 2,903,752 2,364,475
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Expenses:
Mortgage servicing fees 11,444 39,891
Administrative 867,265 878,115
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Total expenses 878,709 918,006
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Income before net gain on sales
of real estate 2,025,043 1,446,469
Net gain on sales of real estate 1,170,546 24,267
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Net income $ 3,195,589 $ 1,470,736
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Net income allocated to General Partner $ 239,669 $ 110,305
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Net income allocated to Limited Partners $ 2,955,920 $ 1,360,431
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Net income per average number of
Limited Partnership interests outstanding
(403,172 in 1994 and 406,203 in 1993) $ 7.33 $ 3.35
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Distributions to General Partner $ 143,203 $ 62,651
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Distributions to Limited Partners $ 5,065,230 $ 4,776,812
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Distributions per Limited Partnership
Interest $ 12.55 $ 11.75
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The accompanying notes are an integral part of the financial statements.
BALCOR PENSION INVESTORS-IV
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended September 30, 1994 and 1993
(Unaudited)
1994 1993
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Income:
Interest on loans receivable $ 51,014 $ 794,620
Less interest on loans payable -
underlying mortgages 230,852
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Net interest income on loans receivable 51,014 563,768
Income from operations of real estate
held for sale 361,492 238,528
Participation in income (loss) of joint
venture with affiliates 89,222 (65,460)
Interest on short-term investments 144,261 137,353
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Total income 645,989 874,189
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Expenses:
Mortgage servicing fees 2,530 12,213
Administrative 194,155 239,916
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Total expenses 196,685 252,129
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Net income $ 449,304 $ 622,060
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Net income allocated to General Partner $ 33,698 $ 46,654
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Net income allocated to Limited Partners $ 415,606 $ 575,406
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Net income per average number of
Limited Partnership interests outstanding
(401,942 in 1994 and 405,553 in 1993) $ 1.04 $ 1.42
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Distribution to General Partner $ 53,701 None
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Distribution to Limited Partners $ 602,920 $ 2,031,306
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Distribution per Limited Partnership
Interest $ 1.50 $ 5.00
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The accompanying notes are an integral part of the financial statements.
BALCOR PENSION INVESTORS-IV
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the nine months ended September 30, 1994 and 1993
(Unaudited)
1994 1993
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Operating activities:
Net income $ 3,195,589 $ 1,470,736
Adjustments to reconcile net income to net
cash provided by operating activities:
Net gain on sales of real estate (1,170,546) (24,267)
Participation in income of joint
venture with affiliates (288,026) 78,122
Accrued interest income due at maturity (153,283)
Amortization of deferred expenses 16,896 7,659
Net change in:
Escrow deposits (102,877) (558,048)
Escrow deposits - restricted 232,452 (227,145)
Accounts and accrued interest
receivable 427,400 240,436
Other assets 78,538 (13,885)
Accounts and accrued interest payable 371,973 64,294
Due to affiliates 96,296 2,764
Other liabilities (274,929) 41,963
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Net cash provided by operating activities 2,582,766 929,346
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Investing activities:
Capital contribution to joint venture
with affiliates (19,473) (24,207)
Distributions from joint venture with
affiliates 231,305 24,271
Collection of principal payments on loan
receivable 79,964 84,889
Additions to real estate (40,599)
Proceeds from sales of real estate 3,250,000 5,770,000
Costs incurred in connection with sales
of real estate (244,360) (371,734)
Costs incurred in connection with real
estate acquired through foreclosure (350,174)
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Net cash provided by investing activities 2,947,262 5,442,620
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Financing activities:
Distributions to Limited Partners (5,065,230) (4,776,812)
Distributions to General Partner (143,203) (62,651)
Change in cash and cash equivalents -
Early Investment Incentive Fund 65,697 27,906
Repurchase of Limited Partnership Interests (321,327) (322,577)
Principal payments on underlying loan
and mortgage note payable (187,914) (456,970)
Proceeds from mortgage note refinancings 6,331,013
Repayment of mortgage notes payable (2,838,474) (6,802,907)
Funding of capital improvement escrows (1,283,170)
Release of capital improvement escrows 283,981
Payment of deferred expenses (182,693)
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Net cash used in financing activities (8,206,470) (7,528,861)
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Net change in cash and cash equivalents (2,676,442) (1,156,895)
Cash and cash equivalents at beginning of year 14,917,086 14,460,945
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Cash and cash equivalents at end of year $ 12,240,644 $ 13,304,050
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The accompanying notes are an integral part of the financial statements.
BALCOR PENSION INVESTORS-IV
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
Reclassifications have been made to the previously reported 1993 statements in
order to provide comparability with the 1994 statements. These
reclassifications have not changed the 1993 results. In the opinion of
management, all adjustments necessary for a fair presentation have been made to
the accompanying statements for the nine months and quarter ended September 30,
1994, and all such adjustments are of a normal and recurring nature.
2. Interest Expense:
During the nine months ended September 30, 1994 and 1993, the Partnership
incurred interest expense on mortgage notes payable of $787,906 and $1,298,448
and paid interest expense of $788,047 and $1,276,530, respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates for the
nine months and quarter ended September 30, 1994 are:
Paid
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Nine Months Quarter Payable
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Mortgage servicing fees $ 13,066 $ 1,687 $ 1,686
Property management fees 258,619 83,622 27,101
Reimbursement of expenses to
the General Partner, at cost:
Accounting 57,023 37,895 32,730
Data processing 14,889 14,889 67,725
Investor communications 15,239 10,127 7,807
Legal 13,132 8,727 9,164
Portfolio management 81,430 54,722 36,387
Other 10,552 7,012 10,834
4. Real Estate Held for Sale:
The Partnership acquired the North Kent Mall and the Glendale Fashion Center in
January and March 1994, respectively. These properties were classified as real
estate held for sale at December 31, 1993. The Partnership recorded the cost of
the properties at $15,849,638 which was equal to the outstanding loan balances
plus accrued interest receivable. In addition, the Partnership increased the
bases of the properties by $304,713 which represented other receivables,
liabilities, escrows and costs recognized or incurred in connection with the
foreclosures.
5. Property Sale:
In February 1994, the Partnership sold the Republic Park Office Building
located in Aurora, Colorado in an all cash sale for $3,250,000. The carrying
value of the property was $1,835,094 and the Partnership incurred selling
expenses of $244,360. The Partnership recognized a gain of $1,170,546 on the
sale during the first quarter of 1994.
6. Subsequent Event:
In October 1994, the Partnership made a distribution of $644,409 to the Limited
Partners which represents a regular quarterly distribution of available Cash
Flow of $1.50 per Interest for the third quarter of 1994.
BALCOR PENSION INVESTORS-IV
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Pension Investors-IV (the "Partnership") is a limited partnership formed
in 1982 to invest in wrap-around mortgage loans and, to a lesser extent, make
other junior mortgage loans and first mortgage loans. The Partnership raised
$214,803,000 through the sale of Limited Partnership Interests and utilized
these proceeds to fund thirty-eight loans. To date, the Partnership has
distributed $551.10 per $500 Interest. As of September 30, 1994, there are two
loans outstanding in the Partnership's portfolio. In addition, the Partnership
is operating seven properties held for sale and holds a minority joint venture
interest in one property.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1993 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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The Partnership recognized a gain on the sale of the Republic Park Office
Building during the first quarter of 1994. This, along with increased income
from the operation of the Partnership's properties held for sale, resulted in
an increase in net income during the nine months ended September 30, 1994 as
compared to the same period in 1993. A reduction in interest income earned by
the Partnership on its investment in loans receivable partially offset this
increase and resulted in a decrease in net income during the quarter ended
September 30, 1994 as compared to the same period in 1993. Further discussion
of the Partnership's operations is summarized below.
1994 Compared to 1993
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The foreclosures of the North Kent Mall and the Glendale Fashion Center in
January and March 1994, respectively, and the repayment of the Lantana Cascades
Mobile Home Park loan in October 1993 were the primary reasons for the decrease
in net interest income on loans receivable during the nine months and quarter
ended September 30, 1994 as compared to the same periods in 1993. Amounts
received from the discounted repayment of the residual note received by the
Partnership as part of the Independence Green loan prepayment were recognized
as interest income during the second quarter of 1994 and partially offset the
above decrease for the nine month period in 1993. See Liquidity and Capital
Resources for additional information on the discounted repayment.
The Partnership has one non-accrual loan at September 30, 1994 which is
collateralized by the Stonehaven South Apartments located in Kansas City,
Missouri. The funds advanced by the Partnership for this non-accrual loan are
approximately $2,800,000. For non-accrual loans, income is recorded only as
cash payments are received from the borrowers. During the nine months ended
September 30, 1994, the Partnership received cash payments of interest income
totaling approximately $87,000 on this loan. Under the terms of the original
loan agreement, the Partnership would have received approximately $281,000 of
interest income.
The allowance for potential losses provides for potential losses on loans and
is based upon loan loss experience for similar loans and prevailing economic
conditions in the market in which the collateral properties are located and the
General Partner's analysis of specific loans in the Partnership's portfolio.
The Partnership did not recognize a provision for potential losses during the
nine months ended September 30, 1994 and 1993. While actual losses may vary
from time to time because of changes in circumstances (such as occupancy rates,
rental rates, and other economic factors), the General Partner believes that
adequate recognition has been given to loss exposure in the portfolio at
September 30, 1994.
Operations of real estate held for sale represent the net operations of those
properties acquired by the Partnership through foreclosure. At September 30,
1994, the Partnership was operating seven properties which comprise
approximately 16% of the Partnership's portfolio based on original funds
advanced. Operations improved at the Palm View Apartments due to increased
occupancy resulting from the completion of exterior painting and other
improvements at the property during 1993. The Partnership completed a major
repair program at the Colony Apartments during 1993 which also resulted in
improved occupancy and overall operations for 1994. Rental income increased at
the Pelican Pointe Apartments due to increased rental rates. Interest expense
decreased at the Del Lago and Pelican Pointe apartment complexes due to the
repayment of the mortgage notes. In addition, the Partnership acquired the
North Kent Mall in January 1994 and the Glendale Fashion Center in March 1994,
which generated income. Finally, the Shadows Apartments and the Republic Park
Office Building, which were generating income, and the 240 E. Ontario Office
Building, which operated at a loss, were sold in April 1993, February 1994, and
June 1993, respectively. The combined effect of these events resulted in an
increase in income from the operations of the Partnership's properties during
the nine months and quarter ended September 30, 1994 as compared to the same
periods in 1993.
Participation in income (loss) of joint venture with affiliates represents the
Partnership's 15.37% share of the operations of the Perimeter 400 Center Office
Building. The Partnership incurred significant leasing costs at the property
during 1993 which resulted in higher occupancy levels and improved operations
at the property during 1994. As a result, the Partnership recognized a
participation in income of joint venture with affiliates during the nine months
and quarter ended September 30, 1994 as compared to a participation in loss
during the same periods in 1993.
As a result of higher average cash balances available for investment and higher
interest rates earned on short-term investments, interest income on short-term
investments increased during the nine months and quarter ended September 30,
1994 as compared to the same periods in 1993.
The reduced amount of loans being serviced during 1994 due to the
relinquishment of the Oakwood Village Apartments loan through foreclosure, the
Lantana Cascades loan repayment and the 1994 foreclosures has resulted in a
decrease in mortgage servicing fees during the nine months and quarter ended
September 30, 1994 as compared to the same periods in 1993.
Decreased legal fees incurred in connection with the loans on non-accrual
status caused administrative expenses to decrease during the quarter ended
September 30, 1994 as compared to the same period in 1993.
During the nine months ended September 30, 1994, the Partnership recognized a
gain of $1,170,546 on the sale of the Republic Park Office Building located in
Aurora, Colorado. See Note 5 of Notes to Financial Statements for additional
information. During the nine months ended September 30, 1993, the Partnership
recognized a net gain of $24,267 on the sales of the Shadows Apartments located
in Phoenix, Arizona and the 240 E. Ontario Office Building located in Chicago,
Illinois.
Liquidity and Capital Resources
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The cash or near cash position of the Partnership decreased as of September 30,
1994 when compared to December 31, 1993. The Partnership received cash flow
from its operating activities. The operating cash flow generated from interest
income earned on its investment in loans receivable and short-term interest
bearing instruments and cash flow generated by the Partnership's properties
held for sale offset the payment of administrative expenses. The Partnership
also received funds from investing activities relating primarily to the sale of
the Republic Park Office Building in February 1994. This receipt of cash was
partially offset by the payment of costs incurred in connection with the
foreclosure of the North Kent Mall. The Partnership also used cash to fund its
financing activities which consisted primarily of the payment of distributions
to the Limited Partners and General Partner, the repayment of the mortgage note
payable on the Pelican Pointe Apartments, and the payment of principal on the
mortgage notes payable. The Partnership's cash or near cash position fluctuates
during each quarter, initially decreasing with the payment of Partnership
distributions for the previous quarter, and then gradually increasing each
month in the quarter as mortgage payments and cash flow from property
operations are received.
During the nine months ended September 30, 1994, all seven properties held for
sale by the Partnership, including the North Kent Mall and Glendale Fashion
Center which were acquired through foreclosure in January and March 1994,
respectively, generated positive cash flow. The Partnership classifies the cash
flow performance of its properties as either positive, a marginal deficit or a
significant deficit, each after consideration of debt service payments unless
otherwise indicated. The Del Lago, Pelican Pointe and Regency Club apartment
complexes do not have underlying debt. A deficit is considered to be
significant if it exceeds $250,000 annually or 20% of the property's rental and
service income.
During the nine months ended September 30, 1993, the Pelican Pointe and Regency
Club apartment complexes generated positive cash flow and the Colony, Del Lago
and Palm View apartment complexes generated marginal cash flow deficits. The
Colony Apartments improved from a marginal deficit to positive cash flow during
1994 due to the completion during 1993 of a repair program required under the
terms of the refinancing agreement. The Del Lago Apartments also improved from
a marginal deficit to positive cash flow during 1994 due to the repayment of
its mortgage note payable in December 1993. Finally, the improvement in cash
flow during 1994 for the Palm View Apartments was due to the completion of
exterior painting and other improvements during 1993 and a resultant increase
in average occupancy levels and rental rates. The General Partner is continuing
its efforts to maintain high occupancy levels while increasing rents where
possible, and to monitor and control operating expenses and capital improvement
requirements at the properties. The General Partner will also examine the terms
of any mortgage loans collateralized by its properties, and may refinance or,
in certain instances, use Partnership reserves to repay such loans.
In January 1994, the Partnership used a portion of its cash reserves to repay
the $2,838,474 first mortgage loan collateralized by the Pelican Pointe
Apartments.
In November 1990, the borrower of the loan collateralized by the Independence
Green Apartments repaid the loan except for a portion of the accrued interest
in the amount of $1,600,000 which was payable pursuant to the terms of a note
executed by the borrower. In June 1994, the Partnership accepted $414,000 as a
discounted repayment of the note which has been recognized as interest income
during the second quarter of 1994. In accordance with its accounting policies,
the Partnership had not reflected this note in its financial statements.
The Partnership obtained title to the North Kent Mall pursuant to a deed in
lieu of foreclosure in January 1994. In addition, the Partnership obtained
title to the Glendale Fashion Center through foreclosure in March 1994. See
Note 4 of Notes to Financial Statements for additional information.
In February 1994, the Partnership sold the Republic Park Office Building
located in Aurora, Colorado in an all cash sale for $3,250,000 and incurred
related selling expenses of $244,360. See Note 5 of Notes to Financial
Statements for additional information.
Distributions to Limited Partners can be expected to fluctuate for various
reasons. Generally, distributions are made from Cash Flow generated by interest
and other payments made by borrowers under the Partnership's mortgage loans and
from property operations. Loan prepayments and repayments can initially cause
Cash Flow to increase as prepayment premiums and participations are paid;
however, thereafter prepayments and repayments will have the effect of reducing
Cash Flow. If such proceeds are distributed, Limited Partners will have
received a return of capital and the dollar amount of Cash Flow available for
distribution thereafter can be expected to decrease. Distribution levels can
also vary as loans are placed on non-accrual status, modified or restructured
and, if the Partnership has taken title to properties through foreclosure or
otherwise, as a result of property operations.
In October 1994, the Partnership made a distribution of $644,409 to the Limited
Partners which represents a regular quarterly distribution of available Cash
Flow of $1.50 per Interest for the third quarter of 1994. The quarterly
distribution level is consistent with the amount distributed for the second
quarter of 1994. The Partnership also paid $53,701 to the General Partner as
its distributive share of the Cash Flow distributed for the third quarter of
1994 and $17,900 as its contribution to the Early Investment Incentive Fund.
The Partnership expects to continue making regular quarterly cash
distributions; however, the level of such future distributions will be
dependent upon the cash flow generated by the receipt of mortgage payments and
improved operations of the Partnership's properties held for sale, less
mortgage servicing fees and administrative expenses. The General Partner, on
behalf of the Partnership, has retained what it believes to be an appropriate
amount of working capital to meet current cash or liquidity requirements which
may occur.
During the nine months ended September 30, 1994, the General Partner, on behalf
of the Partnership, used amounts placed in the Early Investment Incentive Fund
to repurchase 2,344 Interests from Limited Partners at a total cost of
$321,327.
On November 4, 1994, The Balcor Company completed the sale of the assets of
Allegiance Realty Group, Inc. to an unaffiliated company, Insignia Allegiance
Management, Inc. ("Insignia"), which is based in Greenville, South Carolina. As
a result of this transaction, Insignia has assumed the management of the
Partnership's properties. This transaction is not expected to result in any
material change to the property management fees paid by the Partnership.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
BALCOR PENSION INVESTORS-IV
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
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Williams proposed class action
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With respect to the proposed class action lawsuit filed in the U. S. District
Court, Northern District of Illinois (Paul Williams and Beverly Kennedy, et al.
vs. Balcor Pension Investors, et al., Case No. 90-C-0726), against the
Partnership and certain affiliated entities, in May 1993, the Court issued an
opinion and order denying the plaintiffs' motion for class certification based
in part on the inadequacy of the individual plaintiffs representing the
proposed class. Further, the Court granted the defendants' motion for certain
sanctions against plaintiffs' counsel and ordered the plaintiffs' counsel to
pay the defendants' attorneys' fees incurred with the class certification
motion. The defendants filed a petition for reimbursement of their fees and
costs from plaintiffs' counsel which remains pending. A motion previously filed
by the plaintiffs seeking to dismiss the defendants' counterclaim for fraud was
denied on August 18, 1994.
In July 1993, the Court gave plaintiffs leave to retain new counsel and to
propose new individual class representatives. The plaintiffs retained new
counsel and proposed three new individual class representatives. The
defendants conducted discovery regarding the proposed new class representatives
and, in February 1994, filed a response to the plaintiffs' latest motion for
class certification. On July 29, 1994, the Court indicated an intent to certify
a class relating to the plaintiffs' securities fraud claims, but gave leave for
the defendants to file a further motion opposing class certification. On
August 26, 1994, the defendants filed a motion which has been briefed. The
motion remains pending.
Item 6. Exhibits and Reports on Form 8-K
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(a) (3) Exhibits:
(4) Form of Confirmation regarding Interests in the Registrant set forth as
Exhibit 4 to the Registrant's Report on Form 10-Q for the quarter ended
June 30, 1992 (Commission File No. 0-11699) is incorporated herein by
reference.
(10) (a) Agreement of Sale relating to the sale of Republic Park One Office
Building, Aurora, Colorado, previously filed as Exhibit 2 to the Registrant's
Current Report on Form 8-K dated February 2, 1994 is incorporated herein by
reference.
(b) Agreement of Sale and Escrow Agreement relating to the sale of 240 E.
Ontario Street Office Building, Chicago, Illinois, previously filed as Exhibit
2 to the Registrant's Current Report on Form 8-K dated April 15, 1993, is
incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the nine month period ending
September 30, 1994 is attached hereto.
(b) Reports on Form 8-K: There were no reports filed on Form 8-K during the
quarter ended September 30, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR PENSION INVESTORS-IV
By: /s/Thomas E. Meador
-----------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Mortgage Advisors-III, the General Partner
By: /s/Allan Wood
------------------------------
Allan Wood
Executive Vice President, and Chief
Accounting and Financial Officer (Principal
Accounting and Financial Officer) of Balcor
Mortgage Advisors-III, the General Partner
Date: November 10, 1994
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