UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________to _________
Commission file number 0-11574
SHELTER PROPERTIES V
(Exact Name of Small Business Issuer as Specified in Its Charter)
South Carolina 57-0721855
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
Issuer's telephone number
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 ___
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SHELTER PROPERTIES V
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2004
Assets
Cash and cash equivalents $ 271
Receivables and deposits 371
Restricted escrows 278
Other assets 1,662
Investment properties:
Land $ 4,054
Buildings and related personal property 86,587
90,641
Less accumulated depreciation (58,655) 31,986
$ 34,568
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 1,271
Tenant security deposit liabilities 272
Accrued property taxes 535
Other liabilities 643
Mortgage notes payable 44,408
Partners' Deficit
General partners $ (378)
Limited partners (52,538 units
issued and outstanding) (12,183) (12,561)
$ 34,568
See Accompanying Notes to Consolidated Financial Statements
SHELTER PROPERTIES V
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Revenues:
Rental income $ 3,075 $ 3,201 $ 9,136 $ 9,366
Other income 343 302 1,092 1,036
Casualty gains (Note D) 20 54 58 498
Total revenues 3,438 3,557 10,286 10,900
Expenses:
Operating 1,707 1,536 4,758 4,403
General and administrative 111 114 303 346
Depreciation 812 823 2,525 2,499
Interest 850 860 2,581 2,620
Property taxes 263 225 781 720
Total expenses 3,743 3,558 10,948 10,588
Net (loss) income $ (305) $ (1) $ (662) $ 312
Net (loss) income allocated to
general partners (1%) $ (3) $ -- $ (7) $ 3
Net (loss) income allocated to
limited partners (99%) (302) (1) (655) 309
$ (305) $ (1) $ (662) $ 312
Net (loss) income per limited
partnership unit $ (5.75) $ (0.02) $(12.47) $ 5.88
Distributions per limited
partnership unit $ -- $ 2.76 $ -- $ 9.61
See Accompanying Notes to Consolidated Financial Statements
SHELTER PROPERTIES V
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partners Partners Total
Original capital contributions 52,538 $ 2 $ 52,538 $ 52,540
Partners' deficit at
December 31, 2003 52,538 $ (371) $(11,528) $(11,899)
Net loss for the nine months
ended September 30, 2004 -- (7) (655) (662)
Partners' deficit at
September 30, 2004 52,538 $ (378) $(12,183) $(12,561)
See Accompanying Notes to Consolidated Financial Statements
SHELTER PROPERTIES V
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
2004 2003
Cash flows from operating activities:
Net (loss) income $ (662) $ 312
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Casualty gains (58) (498)
Depreciation 2,525 2,499
Amortization of loan costs 59 63
Bad debt expense 217 163
Change in accounts:
Receivables and deposits (246) 39
Other assets (292) (187)
Accounts payable 1 81
Tenant security deposit liabilities (27) 15
Accrued property taxes 298 289
Other liabilities (7) (42)
Net cash provided by operating activities 1,808 2,734
Cash flows from investing activities:
Property improvements and replacements (1,084) (1,899)
Net (deposits to) withdrawals from restricted escrows (1) 124
Insurance proceeds received 71 460
Net cash used in investing activities (1,014) (1,315)
Cash flows from financing activities:
Payments on mortgage notes payable (981) (949)
Advances from affiliate 150 219
Payments on advances from affiliate (150) (239)
Distributions to partners -- (505)
Net cash used in financing activities (981) (1,474)
Net decrease in cash and cash equivalents (187) (55)
Cash and cash equivalents at beginning of period 458 787
Cash and cash equivalents at end of period $ 271 $ 732
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,424 $ 2,622
Supplemental disclosure of non-cash activity:
Property improvements and replacements included in
accounts payable $ 1,125 $ --
At December 31, 2002, approximately $291,000 of property improvements and
replacements were included in accounts payable.
See Accompanying Notes to Consolidated Financial Statements
SHELTER PROPERTIES V
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Shelter
Properties V (the "Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The general partner responsible for management of the
Partnership's business is Shelter Realty V Corporation (the "Corporate General
Partner"). In the opinion of the Corporate General Partner, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and nine month
periods ended September 30, 2004 are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 2004. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Partnership's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2003. The Corporate General Partner is a
subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly
traded real estate investment trust. The other general partner of the
Partnership, AIMCO Properties, L.P., is also an affiliate of AIMCO.
Certain reclassifications have been made to the 2003 balances to conform to the
2004 presentation.
Note B - Reconciliation of Cash Flows
As required by the Partnership Agreement, the following is a reconciliation of
"Net cash provided by operating activities" in the accompanying consolidated
statements of cash flows to "Net cash from operations", as defined in the
Partnership Agreement. However, "Net cash from operations" should not be
considered an alternative to net (loss) income as an indicator of the
Partnership's operating performance or to cash flows as a measure of liquidity.
Nine Months Ended
September 30,
(in thousands)
2004 2003
Net cash provided by operating activities $ 1,808 $ 2,734
Payments on mortgage notes payable (981) (949)
Property improvements and replacements (1,084) (1,899)
Change in restricted escrows, net (1) 124
Changes in reserves for net operating
liabilities 273 (195)
Additional reserves (15) --
Net cash from operations $ -- $ (185)
For the nine months ended September 30, 2004, the Corporate General Partner
reserved approximately $15,000 to fund capital improvements and repairs at the
Partnership's properties. Distributions made from reserves no longer considered
necessary by the Corporate General Partner are considered to be additional net
cash from operations for allocation purposes.
Note C - Transactions with Affiliated Parties
The Partnership has no employees and depends on the Corporate General Partner
and its affiliates for the management and administration of all Partnership
activities. The Partnership Agreement provides for certain payments to
affiliates for services and reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
Affiliates of the Corporate General Partner are entitled to receive 5% of gross
receipts from all of the Partnership's investment properties as compensation for
providing property management services. The Partnership paid to such affiliates
approximately $514,000 and $511,000 for the nine months ended September 30, 2004
and 2003, respectively, which are included in operating expenses.
In accordance with the Partnership Agreement, the Corporate General Partner
loaned approximately $150,000 and $219,000 to the Partnership to cover real
estate tax payments at Woodland Village Apartments during the nine months ended
September 30, 2004 and 2003, respectively. Interest was accrued at the prime
rate plus 2%. Interest expense was approximately $1,000 for each of the nine
months ended September 30, 2004 and 2003. During the nine months ended September
30, 2004 and 2003, the Partnership repaid advances of approximately $150,000 and
$239,000, respectively, and related interest of approximately $1,000 for each of
the nine months ended September 30, 2004 and 2003 to the Corporate General
Partner with cash from operations. At September 30, 2004, there were no
outstanding loans or accrued interest due to the Corporate General Partner.
Subsequent to September 30, 2004, the Corporate General Partner loaned
approximately $798,000 to the Partnership to fund the redevelopment project at
Lake Johnson Mews Apartments and has committed to fund additional redevelopment
costs of approximately $3,113,000.
Affiliates of the Corporate General Partner received reimbursement of
accountable administrative expenses amounting to approximately $264,000 and
$360,000 for the nine months ended September 30, 2004 and 2003, respectively,
which are included in general and administrative expenses and investment
properties. Included in these amounts are fees related to construction
management services provided by an affiliate of the Corporate General Partner of
approximately $43,000 and $106,000 for the nine months ended September 30, 2004
and 2003, respectively. The construction management service fees are calculated
based on a percentage of current additions to investment properties.
The Partnership insures its properties up to certain limits through coverage
provided by AIMCO which is generally self-insured for a portion of losses and
liabilities related to workers' compensation, property casualty and vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the
Corporate General Partner. During the nine months ended September 30, 2004 and
2003, the Partnership was charged by AIMCO and its affiliates approximately
$199,000 and $192,000, respectively, for insurance coverage and fees associated
with policy claims administration.
Note D - Casualty Events
On September 4, 2004, Millhopper Village Apartments experienced damage from
Hurricane Frances. As of September 30, 2004, the Partnership estimates damages
to be approximately $85,000. The Corporate General Partner anticipates that
insurance proceeds to be received will be sufficient to cover estimated repairs
and no loss will result from this event.
On September 4, 2004, The Lexington Green Apartments experienced damage from
Hurricane Frances. As of September 30, 2004, the Partnership estimates damages
to be approximately $45,000. The Corporate General Partner anticipates a loss of
approximately $10,000 to result from this event.
On May 19, 2004, Old Salem Apartments suffered fire damage to one unit. The
property incurred damages of approximately $41,000. During the three and nine
months ended September 30, 2004, the Partnership recognized a casualty gain of
approximately $20,000 as a result of the receipt of insurance proceeds of
approximately $26,000 offset by the write-off of the undepreciated damaged
assets of approximately $6,000.
On September 18, 2003, Old Salem Apartments suffered hurricane damage, causing
minor damage to 29 units. The property incurred damages of approximately
$46,000. During the nine months ended September 30, 2004, the Partnership
recognized a casualty gain of approximately $38,000 as a result of the receipt
of insurance proceeds of approximately $45,000, offset by the write-off of the
undepreciated damaged assets of approximately $7,000.
On January 18, 2003, there was a fire at Tar River Estates Apartments causing
damage to eight units. The property incurred damages of approximately $504,000
and lost rents of approximately $41,000. During the nine months ended September
30, 2003, the Partnership recognized a gain of approximately $369,000 as a
result of the receipt of insurance proceeds of approximately $452,000,
approximately $208,000 of which were held on deposit with the mortgage lender at
September 30, 2003, offset by the write-off of the undepreciated damaged assets
of approximately $83,000.
In June 2002, Foxfire Apartments experienced a fire, causing damage to twelve
units. The property incurred damages of approximately $677,000 as a result of
the fire and lost rents of approximately $61,000. During the year ended December
31, 2002, insurance proceeds of approximately $494,000 were received to cover
the damage to the property, including approximately $59,000 which was held on
deposit with the mortgage lender at December 31, 2002 and released to the
Partnership during the nine months ended September 30, 2003. The Partnership
recognized a casualty gain of approximately $394,000 after writing off the
undepreciated cost of the damaged units during the year ended December 31, 2002.
During the nine months ended September 30, 2003, the Partnership received
additional proceeds of approximately $157,000 to cover the damages and
approximately $61,000 to cover the lost rents, which are included in rental
income. The Partnership recognized an additional gain of approximately $129,000
for the nine months ended September 30, 2003, after writing off additional
undepreciated damaged assets of approximately $28,000.
Note E - Contingencies
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its Corporate General Partner and
several of their affiliated partnerships and corporate entities. The action
purported to assert claims on behalf of a class of limited partners and
derivatively on behalf of a number of limited partnerships (including the
Partnership) that are named as nominal defendants, challenging, among other
things, the acquisition of interests in certain Corporate General Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities that were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; management of the partnerships
by the Insignia affiliates; and the series of transactions which closed on
October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties
Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint captioned Heller v.
Insignia Financial Group (the "Heller action") was filed against the same
defendants that are named in the Nuanes action. On or about August 6, 2001,
plaintiffs filed a first amended complaint. The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary duty, unfair competition, conversion, unjust enrichment, and
judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a court appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval, if it is granted, and to
provide partners with the independent appraisals at the time of these tenders.
The proposed settlement also provided for the limitation of the allowable costs
which the Corporate General Partner or its affiliates will charge the
Partnerships in connection with this litigation and imposes limits on the class
counsel fees and costs in this litigation. On April 11, 2003, notice was
distributed to limited partners providing the details of the proposed
settlement.
On June 13, 2003, the court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the
order approving the settlement and entering judgment thereto. On November 24,
2003, the Objector filed an application requesting the court order AIMCO to
withdraw settlement tender offers it had commenced, refrain from making further
offers pending the appeal and auction any units tendered to third parties,
contending that the offers did not conform with the terms of the settlement.
Counsel for the Objector (on behalf of another investor) had alternatively
requested the court take certain action purportedly to enforce the terms of the
settlement agreement. On December 18, 2003, the court heard oral argument on the
motions and denied them both in their entirety. The Objector filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.
On January 28, 2004, the Objector filed his opening brief in the Appeal. On
April 23, 2004, the Corporate General Partner and its affiliates filed a
response brief in support of the settlement and the judgment thereto. The
plaintiffs have also filed a brief in support of the settlement. On June 4,
2004, Objector filed a reply to the briefs submitted by the Corporate General
Partner and Plaintiffs. In addition both the Objector and plaintiffs filed
briefs in connection with the second appeal. The Court of Appeals heard oral
argument on both appeals on September 22, 2004 and took the matters under
submission.
The Corporate General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the Corporate General
Partner, was served with a complaint in the United States District Court,
District of Columbia alleging that AIMCO Properties L.P. willfully violated the
Fair Labor Standards Act ("FLSA") by failing to pay maintenance workers overtime
for all hours worked in excess of forty per week. On March 5, 2004 the
plaintiffs filed an amended complaint also naming NHP Management Company, which
is also an affiliate of the Corporate General Partner. The complaint is styled
as a Collective Action under the FLSA and seeks to certify state subclasses in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate maintenance workers for
time that they were required to be "on-call". Additionally, the complaint
alleges AIMCO Properties L.P. failed to comply with the FLSA in compensating
maintenance workers for time that they worked in responding to a call while
"on-call". The defendants have filed an answer to the amended complaint denying
the substantive allegations. Some discovery has taken place and settlement
negotiations continue. Although the outcome of any litigation is uncertain,
AIMCO Properties, L.P. does not believe that the ultimate outcome will have a
material adverse effect on its financial condition or results of operations.
Similarly, the Corporate General Partner does not believe that the ultimate
outcome will have a material adverse effect on the Partnership's consolidated
financial condition or results of operations.
The Partnership is unaware of any other pending or outstanding litigation
matters involving it or its investment properties that are not of a routine
nature arising in the ordinary course of business.
As previously disclosed, the Central Regional Office of the United States
Securities and Exchange Commission (the "SEC") is conducting a formal
investigation relating to certain matters. Although the staff of the SEC is not
limited in the areas that it may investigate, AIMCO believes the areas of
investigation include AIMCO's miscalculated monthly net rental income figures in
third quarter 2003, forecasted guidance, accounts payable, rent concessions,
vendor rebates, capitalization of payroll and certain other costs, and tax
credit transactions. AIMCO is cooperating fully. AIMCO is not able to predict
when the matter will be resolved. AIMCO does not believe that the ultimate
outcome will have a material adverse effect on its consolidated financial
condition or results of operations. Similarly, the Corporate General Partner
does not believe that the ultimate outcome will have a material adverse effect
on the Partnership's consolidated financial condition or results of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government regulations. Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including, without limitation: national and local
economic conditions; the terms of governmental regulations that affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates; financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest; real estate risks, including variations of real estate values and
the general economic climate in local markets and competition for tenants in
such markets; litigation, including costs associated with prosecuting and
defending claims and any adverse outcomes, and possible environmental
liabilities. Readers should carefully review the Registrant's financial
statements and the notes thereto, as well as the risk factors described in the
documents the Registrant files from time to time with the Securities and
Exchange Commission.
The Partnership's investment properties consist of seven apartment complexes.
The following table sets forth the average occupancy of the properties for the
nine months ended September 30, 2004 and 2003:
September 30,
Property 2004 2003
Foxfire Apartments
Atlanta, Georgia (1) 91% 78%
Old Salem Apartments
Charlottesville, Virginia 92% 91%
Woodland Village Apartments
Columbia, South Carolina (2) 87% 91%
Lake Johnson Mews Apartments
Raleigh, North Carolina (3) 88% 92%
The Lexington Green Apartments
Sarasota, Florida (4) 90% 94%
Millhopper Village Apartments
Gainesville, Florida (5) 92% 95%
Tar River Estates Apartments
Greenville, North Carolina 90% 89%
(1) The Corporate General Partner attributes the increase in occupancy at
Foxfire Apartments to increased marketing and competitive pricing efforts.
(2) The Corporate General Partner attributes the decrease in occupancy at
Woodland Village Apartments to increased competition in the Columbia area.
(3) The Corporate General Partner attributes the decrease in occupancy at Lake
Johnson Mews Apartments to increased competition in the Raleigh area.
(4) The Corporate General Partner attributes the decrease in occupancy at The
Lexington Green Apartments to unfavorable economic conditions in the
Sarasota area.
(5) The Corporate General Partner attributes the decrease in occupancy at
Millhopper Village Apartments to increased home purchases and competition
in the Gainesville area.
The Partnership's financial results depend upon a number of factors including
the ability to attract and maintain tenants at the investment properties,
interest rates on mortgage loans, costs incurred to operate the investment
properties, general economic conditions and weather. As part of the ongoing
business plan of the Partnership, the Corporate General Partner monitors the
rental market environment of its investment properties to assess the feasibility
of increasing rents, maintaining or increasing occupancy levels and protecting
the Partnership from increases in expenses. As part of this plan, the Corporate
General Partner attempts to protect the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level. However, the Corporate General Partner may use
rental concessions and rental rate reductions to offset softening market
conditions; accordingly, there is no guarantee that the Corporate General
Partner will be able to sustain such a plan. Further, a number of factors that
are outside the control of the Partnership such as the local economic climate
and weather can adversely or positively affect the Partnership's financial
results.
Results of Operations
The Partnership's net loss for the three and nine months ended September 30,
2004 was approximately $305,000 and $662,000, respectively, as compared to a net
loss of approximately $1,000 for the three months ended September 30, 2003 and
net income of approximately $312,000 for the nine months ended September 30,
2003. The increase in net loss for both the three and nine months ended
September 30, 2004 is due to a decrease in total revenues and an increase in
total expenses. The decrease in total revenues for both the three and nine
months ended September 30, 2004 is due to decreases in rental income and the
recognition of casualty gains, partially offset by an increase in other income.
The decrease in rental income for both periods is due to decreases in occupancy
at four of the Partnership's investment properties and the average rental rate
at six of the Partnership's investment properties, partially offset by increases
in occupancy at Foxfire Apartments, Old Salem Apartments, and Tar River Estates
Apartments and the average rental rate at Tar River Estates Apartments. The
increase in other income for both periods is primarily due to increases in lease
cancellation fees at five of the Partnership's investment properties and utility
reimbursements at The Lexington Green Apartments.
On September 4, 2004, Millhopper Village Apartments experienced damage from
Hurricane Frances. As of September 30, 2004, the Partnership estimates damages
to be approximately $85,000. The Corporate General Partner anticipates that
insurance proceeds to be received will be sufficient to cover estimated repairs
and no loss will result from this event.
On September 4, 2004, The Lexington Green Apartments experienced damage from
Hurricane Frances. As of September 30, 2004, the Partnership estimates damages
to be approximately $45,000. The Corporate General Partner anticipates a loss of
approximately $10,000 to result from this event.
On May 19, 2004, Old Salem Apartments suffered fire damage to one unit. The
property incurred damages of approximately $41,000. During the three and nine
months ended September 30, 2004, the Partnership recognized a casualty gain of
approximately $20,000 as a result of the receipt of insurance proceeds of
approximately $26,000 offset by the write-off of the undepreciated damaged
assets of approximately $6,000.
On September 18, 2003, Old Salem Apartments suffered hurricane damage, causing
minor damage to 29 units. The property incurred damages of approximately
$46,000. During the nine months ended September 30, 2004, the Partnership
recognized a casualty gain of approximately $38,000 as a result of the receipt
of insurance proceeds of approximately $45,000, offset by the write-off of the
undepreciated damaged assets of approximately $7,000.
On January 18, 2003, there was a fire at Tar River Estates Apartments causing
damage to eight units. The property incurred damages of approximately $504,000
and lost rents of approximately $41,000. During the nine months ended September
30, 2003, the Partnership recognized a gain of approximately $369,000 as a
result of the receipt of insurance proceeds of approximately $452,000,
approximately $208,000 of which were held on deposit with the mortgage lender at
September 30, 2003, offset by the write-off of the undepreciated damaged assets
of approximately $83,000.
In June 2002, Foxfire Apartments experienced a fire, causing damage to twelve
units. The property incurred damages of approximately $677,000 as a result of
the fire and lost rents of approximately $61,000. During the year ended December
31, 2002, insurance proceeds of approximately $494,000 were received to cover
the damage to the property, including approximately $59,000 which was held on
deposit with the mortgage lender at December 31, 2002 and released to the
Partnership during the nine months ended September 30, 2003. The Partnership
recognized a casualty gain of approximately $394,000 after writing off the
undepreciated cost of the damaged units during the year ended December 31, 2002.
During the nine months ended September 30, 2003, the Partnership received
additional proceeds of approximately $157,000 to cover the damages and
approximately $61,000 to cover the lost rents, which are included in rental
income. The Partnership recognized an additional gain of approximately $129,000
for the nine months ended September 30, 2003, after writing off additional
undepreciated damaged assets of approximately $28,000.
The increase in total expenses for the three months ended September 30, 2004 is
due to increases in both operating and property tax expense, partially offset by
decreases in both depreciation and interest expense. General and administrative
expenses remained relatively constant for the three months ended September 30,
2004. The increase in total expenses for the nine months ended September 30,
2004 is due to increases in operating, depreciation, and property tax expenses,
partially offset by decreases in both interest and general and administrative
expenses. The increase in operating expenses for both periods is due to
increases in payroll related expenses at Lake Johnson Mews Apartments and The
Lexington Green Apartments, utility expenses at Lake Johnson Mews Apartments and
Foxfire Apartments, training expenses at four of the Partnership's investment
properties, and maintenance expense at Foxfire Apartments. The increase in
property tax expense for both periods is primarily due to increases in the
assessed value of four properties and in the tax rate for Woodland Village
Apartments. Interest expense decreased for both periods primarily as a result of
scheduled principal payments made on the mortgages encumbering the Partnership's
investment properties, which reduced the carrying balance of the loans.
Depreciation expense increased for the nine months ended September 30, 2004 as a
result of property improvements and replacements placed into service at the
properties during the past twelve months, partially offset by property
improvements and replacements placed into service in prior years becoming fully
depreciated during the third quarter of 2004. The decrease in general and
administrative expenses for the nine months ended September 30, 2004 is
primarily due to decreases in management reimbursements to the Corporate General
Partner as allowed under the Partnership Agreement and professional expenses
associated with the administration of the Partnership. In addition, costs
associated with the quarterly and annual communications with investors and
regulatory agencies and the annual audit required by the Partnership Agreement
are also included in general and administrative expenses for the three and nine
months ended September 30, 2004 and 2003.
During the three and nine months ended September 30, 2004, the Corporate General
Partner began a major redevelopment project at Lake Johnson Mews Apartments. The
property has had difficulty staying competitive and needs to be updated.
Therefore, in an effort to increase occupancy and remain competitive in the
local market, a significant redevelopment project has been started and is
expected to be completed in November 2005 at a total cost of approximately
$3,911,000. The project is being funded from advances from an affiliate of the
Corporate General Partner. The Corporate General Partner anticipates that all
units will remain available to lease during the redevelopment period.
Liquidity and Capital Resources
At September 30, 2004, the Partnership had cash and cash equivalents of
approximately $271,000, compared to approximately $732,000 at September 30,
2003. The decrease in cash and cash equivalents of approximately $187,000, from
the Partnership's year ended December 31, 2003, is due to approximately
$1,014,000 of cash used in investing activities and approximately $981,000 of
cash used in financing activities, partially offset by approximately $1,808,000
of cash provided by operating activities. Cash used in investing activities
consisted of property improvements and replacements and net deposits to escrow
accounts maintained by the mortgage lenders, partially offset by insurance
proceeds received related to the casualties at Old Salem Apartments. Cash used
in financing activities consisted of payments of principal made on the mortgages
encumbering the Partnership's investment properties and payment on an advance
from an affiliate of the Corporate General Partner, partially offset by the
receipt of an advance from an affiliate of the Corporate General Partner. The
Partnership invests its working capital reserves in interest bearing accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the investment properties to adequately maintain the
physical assets and other operating needs of the Partnership and to comply with
Federal, state, and local legal and regulatory requirements. The Corporate
General Partner monitors developments in the area of legal and regulatory
compliance. For example, the Sarbanes-Oxley Act of 2002 mandates or suggests
additional compliance measures with regard to governance, disclosure, audit and
other areas. In light of these changes, the Partnership expects that it will
incur higher expenses related to compliance. Capital improvements planned for
each of the Partnership's properties are detailed below.
Millhopper Village Apartments: During the nine months ended September 30, 2004,
the Partnership completed approximately $30,000 of capital improvements at
Millhopper Village Apartments, consisting primarily of floor covering
replacement. These improvements were funded from operations. The Partnership
evaluates the capital improvement needs of the property during the year and
currently expects to complete an additional $52,000 in capital improvements
during the remainder of 2004. Additional capital improvements may be considered
and will depend on the physical condition of the property as well as the
anticipated cash flow generated by the property.
Foxfire Apartments: During the nine months ended September 30, 2004, the
Partnership completed approximately $138,000 of capital improvements at Foxfire
Apartments, consisting primarily of exterior painting, plumbing upgrades and
floor covering and appliance replacements. These improvements were funded from
operations. The Partnership evaluates the capital improvement needs of the
property during the year and currently expects to complete an additional $14,000
in capital improvements during the remainder of 2004. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property.
Lake Johnson Mews Apartments: During the nine months ended September 30, 2004,
the Partnership completed approximately $1,014,000 of capital improvements
arising from the redevelopment of the property. Additional capital improvements
of approximately $135,000 during the nine months ended September 30, 2004
consisted primarily of structural improvements and floor covering replacement.
These improvements were funded from operations and an advance from an affiliate
of the Corporate General Partner which was received subsequent to September 30,
2004. The property is currently undergoing a redevelopment project in order to
remain competitive with other properties in the area in the effort to increase
occupancy at the property. Based on current redevelopment plans, the Corporate
General Partner anticipates the redevelopment to be complete in November 2005 at
a total cost of approximately $3,911,000. The project is being funded from
advances from an affiliate of the Corporate General Partner. Subsequent to
September 30, 2004, approximately $798,000 was advanced to the Partnership to
pay for redevelopment project costs. The Partnership is currently evaluating the
capital improvement needs of the property for 2004 and currently expects to
complete an additional $20,000 for expenditures not related to property
redevelopment and approximately $382,000 for property redevelopment during the
remainder of 2004. Additional improvements may be considered and will depend on
the physical condition of the property as well as anticipated cash flow
generated by the property.
Woodland Village Apartments: During the nine months ended September 30, 2004,
the Partnership completed approximately $198,000 of capital improvements at
Woodland Village Apartments, consisting primarily of swimming pool upgrades,
furniture upgrades, and floor covering replacement. These improvements were
funded from operations. The Partnership evaluates the capital improvement needs
of the property during the year and currently expects to complete an additional
$75,000 in capital improvements during the remainder of 2004. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property.
The Lexington Green Apartments: During the nine months ended September 30, 2004,
the Partnership completed approximately $432,000 of capital improvements at The
Lexington Green Apartments, consisting primarily of structural improvements,
exterior building improvements, parking area upgrades, sewer upgrades, plumbing
upgrades and floor covering and appliance replacements. These improvements were
funded from operations. The Partnership evaluates the capital improvement needs
of the property during the year and currently expects to complete an additional
$4,000 in capital improvements during the remainder of 2004. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property and
replacement reserves.
Tar River Estates Apartments: During the nine months ended September 30, 2004,
the Partnership completed approximately $87,000 of capital improvements at Tar
River Estates Apartments, consisting primarily of structural improvements and
floor covering replacement. These improvements were funded from operations. The
Partnership evaluates the capital improvement needs of the property during the
year and currently expects to complete an additional $37,000 in capital
improvements during the remainder of 2004. Additional capital improvements may
be considered and will depend on the physical condition of the property as well
as the anticipated cash flow generated by the property.
Old Salem Apartments: During the nine months ended September 30, 2004, the
Partnership completed approximately $175,000 of capital improvements at Old
Salem Apartments, consisting primarily of sewer upgrades, fitness equipment,
floor covering replacement, and construction related to the hurricane and fire
damage, as discussed in "Results of Operations". These improvements were funded
from operations and insurance proceeds. The Partnership evaluates the capital
improvement needs of the property during the year and currently expects to
complete an additional $29,000 in capital improvements during the remainder of
2004. Additional capital improvements may be considered and will depend on the
physical condition of the property as well as the anticipated cash flow
generated by the property.
The additional capital expenditures will be incurred only if cash is available
from operations and from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.
The Partnership's assets are thought to be sufficient for any near-term needs
(exclusive of capital improvements) of the Partnership. The mortgage
indebtedness encumbering all of the Partnership's investment properties of
approximately $44,408,000 is amortized over varying periods with maturity dates
ranging from November 1, 2019 to January 1, 2022, at which time the loans are
scheduled to be fully amortized.
The Partnership distributed the following amounts during the nine months ended
September 30, 2004 and 2003 (in thousands, except per unit data):
Nine Months Nine Months
Ended Per Limited Ended Per Limited
September 30, Partnership September 30, Partnership
2004 Unit 2003 Unit
Financing Proceeds (1) $ -- $ -- $ 505 $ 9.61
(1) From proceeds from the new financing obtained on Tar River Estates
Apartments in December 2001.
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves, property refinancings and/or
property sales. The Partnership's cash available for distribution is reviewed on
a monthly basis. There can be no assurance, however, that the Partnership will
generate sufficient funds from operations, after required capital expenditures,
to permit any distributions to its partners in 2004 or subsequent periods.
Other
In addition to its indirect ownership of the general partner interests in the
Partnership, AIMCO and its affiliates owned 38,193 limited partnership units
(the "Units") in the Partnership representing 72.70% of the outstanding Units at
September 30, 2004. A number of these Units were acquired pursuant to tender
offers made by AIMCO or its affiliates. It is possible that AIMCO or its
affiliates will acquire additional Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private purchases or tender offers. In this regard, on November
8, 2004 AIMCO Properties, L.P., commenced a tender offer to acquire 14,345 Units
for a purchase price of $256.63 per Unit. Such offer expires on December 8,
2004. Pursuant to the Partnership Agreement, unitholders holding a majority of
the Units are entitled to take action with respect to a variety of matters that
include, but are not limited to, voting on certain amendments to the Partnership
Agreement and voting to remove the Corporate General Partner. As a result of its
ownership of 72.70% of the outstanding Units, AIMCO and its affiliates are in a
position to control all voting decisions with respect to the Partnership.
Although the Corporate General Partner owes fiduciary duties to the limited
partners of the Partnership, the Corporate General Partner also owes fiduciary
duties to AIMCO as its sole stockholder. As a result, the duties of the
Corporate General Partner, as corporate general partner, to the Partnership and
its limited partners may come into conflict with the duties of the Corporate
General Partner to AIMCO as its sole stockholder.
Critical Accounting Policies and Estimates
The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which require the
Partnership to make estimates and assumptions. The Partnership believes that of
its significant accounting policies, the following may involve a higher degree
of judgment and complexity.
Impairment of Long-Lived Assets
The Partnership's investment properties are recorded at cost, less accumulated
depreciation, unless considered impaired. If events or circumstances indicate
that the carrying amount of a property may be impaired, the Partnership will
make an assessment of its recoverability by estimating the undiscounted future
cash flows, excluding interest charges, of the property. If the carrying amount
exceeds the aggregate future cash flows, the Partnership would recognize an
impairment loss to the extent the carrying amount exceeds the fair value of the
property.
Real property investments are subject to varying degrees of risk. Several
factors may adversely affect the economic performance and value of the
Partnership's investment properties. These factors include, but are not limited
to, changes in the national, regional and local economic climate; local
conditions, such as an oversupply of multifamily properties; competition from
other available multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.
Revenue Recognition
The Partnership generally leases apartment units for twelve-month terms or less.
Rental income attributable to leases is recognized monthly as it is earned. The
Partnership evaluates all accounts receivable from residents and establishes an
allowance, after the application of security deposits, for accounts greater than
30 days past due on current tenants and all receivables due from former tenants.
The Partnership will offer rental concessions during particularly slow months or
in response to heavy competition from other similar complexes in the area. Any
concessions given at the inception of the lease are amortized over the life of
the lease.
ITEM 3. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures. The Partnership's management, with the
participation of the principal executive officer and principal financial officer
of the Corporate General Partner, who are the equivalent of the Partnership's
principal executive officer and principal financial officer, respectively, has
evaluated the effectiveness of the Partnership's disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report. Based on such evaluation, the principal
executive officer and principal financial officer of the Corporate General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal financial officer, respectively, have concluded that, as of the
end of such period, the Partnership's disclosure controls and procedures are
effective.
(b) Internal Control Over Financial Reporting. There have not been any changes
in the Partnership's internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Partnership's internal control
over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its Corporate General Partner and
several of their affiliated partnerships and corporate entities. The action
purported to assert claims on behalf of a class of limited partners and
derivatively on behalf of a number of limited partnerships (including the
Partnership) that are named as nominal defendants, challenging, among other
things, the acquisition of interests in certain Corporate General Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities that were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; management of the partnerships
by the Insignia affiliates; and the series of transactions which closed on
October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties
Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint captioned Heller v.
Insignia Financial Group (the "Heller action") was filed against the same
defendants that are named in the Nuanes action. On or about August 6, 2001,
plaintiffs filed a first amended complaint. The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary duty, unfair competition, conversion, unjust enrichment, and
judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a court appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval, if it is granted, and to
provide partners with the independent appraisals at the time of these tenders.
The proposed settlement also provided for the limitation of the allowable costs
which the Corporate General Partner or its affiliates will charge the
Partnerships in connection with this litigation and imposes limits on the class
counsel fees and costs in this litigation. On April 11, 2003, notice was
distributed to limited partners providing the details of the proposed
settlement.
On June 13, 2003, the court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the
order approving the settlement and entering judgment thereto. On November 24,
2003, the Objector filed an application requesting the court order AIMCO to
withdraw settlement tender offers it had commenced, refrain from making further
offers pending the appeal and auction any units tendered to third parties,
contending that the offers did not conform with the terms of the settlement.
Counsel for the Objector (on behalf of another investor) had alternatively
requested the court take certain action purportedly to enforce the terms of the
settlement agreement. On December 18, 2003, the court heard oral argument on the
motions and denied them both in their entirety. The Objector filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.
On January 28, 2004, the Objector filed his opening brief in the Appeal. On
April 23, 2004, the Corporate General Partner and its affiliates filed a
response brief in support of the settlement and the judgment thereto. The
plaintiffs have also filed a brief in support of the settlement. On June 4,
2004, Objector filed a reply to the briefs submitted by the Corporate General
Partner and Plaintiffs. In addition both the Objector and plaintiffs filed
briefs in connection with the second appeal. The Court of Appeals heard oral
argument on both appeals on September 22, 2004 and took the matters under
submission.
The Corporate General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the Corporate General
Partner, was served with a complaint in the United States District Court,
District of Columbia alleging that AIMCO Properties L.P. willfully violated the
Fair Labor Standards Act ("FLSA") by failing to pay maintenance workers overtime
for all hours worked in excess of forty per week. On March 5, 2004 the
plaintiffs filed an amended complaint also naming NHP Management Company, which
is also an affiliate of the Corporate General Partner. The complaint is styled
as a Collective Action under the FLSA and seeks to certify state subclasses in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate maintenance workers for
time that they were required to be "on-call". Additionally, the complaint
alleges AIMCO Properties L.P. failed to comply with the FLSA in compensating
maintenance workers for time that they worked in responding to a call while
"on-call". The defendants have filed an answer to the amended complaint denying
the substantive allegations. Some discovery has taken place and settlement
negotiations continue. Although the outcome of any litigation is uncertain,
AIMCO Properties, L.P. does not believe that the ultimate outcome will have a
material adverse effect on its financial condition or results of operations.
Similarly, the Corporate General Partner does not believe that the ultimate
outcome will have a material adverse effect on the Partnership's consolidated
financial condition or results of operations.
ITEM 6. EXHIBITS
See Exhibit Index.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SHELTER PROPERTIES V
By: Shelter Realty V Corporation
Corporate General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
By: /s/Stephen B. Waters
Stephen B. Waters
Vice President
Date: November 12, 2004
EXHIBIT INDEX
Exhibit
3 See Exhibit 4(a)
3.1 Second Amended and Restated Bylaws of IPT, dated October 2,
1998 (incorporated by reference to Current Report on Form 8-K,
dated October 1, 1998).
4 (a) Amended and Restated Certificate and Agreement of Limited
Partnership (included as Exhibit A to the Prospectus of
Registrant dated May 27, 1983 contained in Amendment No. 1
to Registration Statement No. 2-81308, of Registrant filed
June 8, 1982 (the "Prospectus") and incorporated herein by
reference.)
(b) Subscription Agreement and Signature Page (included as
Exhibits 4(A) and 4 (B) to the Registration Statement,
incorporated herein by reference).
10(i) Contracts related to acquisition of properties.
(a) Purchase Agreement dated May 23, 1983 between CFC 1978
Partnership C and U.S. Shelter Corporation to acquire Foxfire
Apartments.*
(b) Purchase Agreement dated May 14, 1983 between Old Salem and
U.S. Shelter Corporation to acquire Old Salem Apartments.*
(c) Purchase Agreement dated April 21, 1983 between Europco
Management Company of America and U.S. Shelter Corporation to
acquire Woodland Village Apartments.*
(d) Purchase Agreement dated May 6, 1983 between Europco
Management Company of America and U.S. Shelter Corporation
to acquire Lake Johnson Mews.*
*Filed as Exhibits 12(a) through 12(d), respectively, to
Amendment No. 1 of Registration Statement No. 2-81308 of
Registrant filed May 24, 1983 and incorporated herein by
reference.
(e) Purchase Agreement dated June 17, 1983 between The Lexington
Green Apartments and U.S. Shelter Corporation to acquire The
Lexington Green Apartments. (Filed as Exhibit 12(E) to
Post-Effective Amendment No. 1 of Registration Statement No.
2-81308 of Registrant filed June 27, 1983 and incorporated
herein by reference).
(f) Purchase Agreement dated August 26, 1983 between James S.
Quincey and U.S. Shelter Corporation to acquire Millhopper
Village Apartments. (Filed as Exhibit 12(F) to Post-Effective
Amendment No. 1 of Registration Statement No. 2-81308 of
Registrant filed October 13, 1983 and incorporated herein by
reference).
(h) Purchase Agreement dated December 14, 1983 between Virginia
Real Estate Investors and U.S. Shelter Corporation to acquire
Tar River Estates. (Filed as Exhibit 10(B) to Form 8-K of
Registrant dated December 8, 1983 and incorporated herein by
reference).
(iii) Contracts related to refinancing of debt:
(l) Multifamily Note secured by a Mortgage or Deed of Trust dated
October 25, 1999, between Foxfire Apartments V Limited
Partnership and GMAC Commercial Mortgage Corporation relating
to Foxfire Apartments. (Filed as Exhibit 10(1) to Form 10-KSB
of Registrant for period ended November 30, 1999 and
incorporated herein by reference).
(m) Multifamily Note secured by a Mortgage or Deed of Trust dated
November 10, 1999, between Shelter Properties V Limited
Partnership and GMAC Commercial Mortgage Corporation relating
to Old Salem Apartments. (Filed as Exhibit 10(m) to Form
10-KSB of Registrant for period ended November 30, 1999 and
incorporated herein by reference).
(n) Multifamily Note secured by a Mortgage or Deed of Trust dated
December 15, 2000 between New Shelter Properties V Limited
Partnership and Reilly Mortgage Group, Inc. relating to The
Lexington Green Apartments. (Filed as Exhibit 10(iii)n to Form
10-KSB of Registrant filed on April 2, 2001 and incorporated
herein by reference).
(o) Multifamily Note dated June 28, 2001, by and between Shelter
Properties V Limited Partnership, a South Carolina limited
partnership, and GMAC Commercial Mortgage Corporation,
relating to Lake Johnson Mews Apartments. (Filed as Exhibit
10(iii)o to Form 10-QSB of Registrant filed on August 13, 2001
and incorporated herein by reference).
(p) Multifamily Note dated June 28, 2001, by and between Shelter
Properties V Limited Partnership, a South Carolina limited
partnership, and GMAC Commercial Mortgage Corporation,
relating to Millhopper Village Apartments. (Filed as Exhibit
10(iii)p to Form 10-QSB of Registrant filed on August 13, 2001
and incorporated herein by reference).
(q) Multifamily Note dated August 30, 2001, by and between Shelter
Properties V Limited Partnership, a South Carolina limited
partnership, and GMAC Commercial Mortgage Corporation,
relating to Woodland Village Apartments. (Filed as Exhibit
10(iii)q to Form 10-QSB of Registrant filed on November 13,
2001 and incorporated herein by reference).
(r) Multifamily Note dated December 28, 2001, by and between New
Shelter V Limited Partnership, a South Carolina limited
partnership, and Lend Lease Mortgage Capital, LP, a Texas
limited partnership. (Filed as Exhibit 10(iii)r to Form 8-K of
Registrant filed on January 14, 2002 and incorporated herein
by reference).
(iv) Contracts related to sale of property:
(a) Purchase and Sale Contract for the parcel of land at Tar River
Estates Apartments between Registrant and the City of
Greenville, North Carolina. (Filed as Exhibit 10(iv)a on Form
8-K of Registrant filed on November 1, 2001 and incorporated
herein by reference).
31.1 Certification of equivalent of Chief Executive Officer
pursuant to Securities Exchange Act Rules
13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
31.2 Certification of equivalent of Chief Financial Officer
pursuant to Securities Exchange Act Rules
13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
Exhibit 31.1
CERTIFICATION
I, Martha L. Long, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Shelter Properties
V;
2. Based on my knowledge, this 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 covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the small business issuer as of, and for, the periods presented in this
report;
4. The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
small business issuer, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Evaluated the effectiveness of the small business issuer'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 small business issuer's
internal control over financial reporting that occurred during the
small business issuer's most recent fiscal quarter (the small
business issuer's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over
financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuer's
ability to record, process, 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 small business
issuer's internal control over financial reporting.
Date: November 12, 2004
/s/Martha L. Long
Martha L. Long
Senior Vice President of
Shelter Realty V Corporation,
equivalent of the chief
executive officer of the
Partnership
Exhibit 31.2
CERTIFICATION
I, Stephen B. Waters, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Shelter Properties
V;
2. Based on my knowledge, this 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 covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the small business issuer as of, and for, the periods presented in this
report;
4. The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
small business issuer, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Evaluated the effectiveness of the small business issuer'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 small business issuer's
internal control over financial reporting that occurred during the
small business issuer's most recent fiscal quarter (the small
business issuer's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over
financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuer's
ability to record, process, 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 small business
issuer's internal control over financial reporting.
Date: November 12, 2004
/s/Stephen B. Waters
Stephen B. Waters
Vice President of
Shelter Realty V
Corporation,
equivalent of the
chief financial
officer of the
Partnership
Exhibit 32.1
Certification of CEO and CFO
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 Quarterly Report on Form 10-QSB of Shelter Properties V
(the "Partnership"), for the quarterly period ended September 30, 2004 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
Martha L. Long, as the equivalent of the chief executive officer of the
Partnership, and Stephen B. Waters, as the equivalent of the chief financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that, to the best of his knowledge:
(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 results of operations
of the Partnership.
/s/Martha L. Long
Name: Martha L. Long
Date: November 12, 2004
/s/Stephen B. Waters
Name: Stephen B. Waters
Date: November 12, 2004
This certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.