SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/_x_/ Quarterly report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the quarterly period ended September 30, 2005
/___/ Transition report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
for the transition period from ______________ to ________________.
Commission File Number 2-90168
DSI REALTY INCOME FUND VIII, A California Limited Partnership
(Exact name of registrant as specified in its charter)
California_______________________________________95-0050204
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
6700 E. Pacific Coast Hwy., Long Beach, California 90803
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code-(562)493-8881
_________________________________________________________________
Former name, former address and former fiscal year, if changed
since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such 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.
DSI REALTY INCOME FUND VIII
(A California Real Estate Limited Partnership)
BALANCE SHEETS(UNAUDITED)
SEPTEMBER 30, 2005 AND DECEMBER 31, 2004
September 30, December 31,
2005 2004
ASSETS
CASH AND CASH EQUIVALENTS $ 890,487 $ 620,452
PROPERTY, Net 2,394,492 2,410,252
INVESTMENT IN REAL ESTATE
JOINT VENTURE 182,058 179,700
OTHER ASSETS 71,550 71,550
---------- ----------
TOTAL $3,538,587 $3,281,954
========== ==========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Distribution to Partners $ 272,727 $ 272,727
Capital lease obligation 77,319 97,569
Other liabilities 441,746 380,559
---------- ----------
Total liabilities 791,792 750,855
---------- ----------
PARTNERS' EQUITY (DEFICIT):
General Partners (80,313) (82,471)
Limited Partners 2,827,108 2,613,570
---------- ----------
Total partners' equity 2,746,795 2,531,099
---------- ----------
TOTAL $3,538,587 $3,281,954
========== ==========
See accompanying notes to financial statements.
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
September 30, September 30,
2005 2004
REVENUES:
Rental $ 628,189 $ 596,859
---------- ----------
EXPENSES:
Operating 232,384 218,486
General and administrative 52,856 46,711
---------- ----------
Total expenses 285,240 265,197
---------- ----------
OPERATING INCOME 342,949 331,662
OTHER INCOME
Interest 188 187
---------- ----------
INCOME BEFORE EQUITY IN INCOME
OF REAL ESTATE JOINT VENTURE 343,137 331,849
EQUITY IN INCOME OF REAL ESTATE
JOINT VENTURE 30,634 28,698
---------- ----------
NET INCOME $ 373,771 $ 360,547
========== ==========
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners $ 370,033 $ 356,942
General Partners 3,738 3,605
---------- ----------
TOTAL $ 373,771 $ 360,547
========== ==========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 15.42 $ 14.87
========== ==========
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 24,000 24,000
====== ======
See accompanying notes to financial statements.
STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
September 30, September 30,
2005 2004
REVENUES:
Rental $1,856,832 $1,779,018
---------- ----------
EXPENSES:
Operating 710,656 653,042
General and Administrative 195,614 181,204
---------- ----------
Total Expenses 906,270 834,246
---------- ----------
OPERATING INCOME 950,562 944,772
OTHER INCOME 557 555
---------- ----------
INCOME BEFORE EQUITY IN INCOME OF
REAL ESTATE JOINT VENTURE 951,119 945,327
EQUITY IN INCOME OF REAL
ESTATE JOINT VENTURE 82,758 87,923
---------- ----------
NET INCOME $1,033,877 $1,033,250
========== ==========
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners $1,023,538 $1,022,918
General Partners 10,339 10,332
---------- ----------
TOTAL $1,033,877 $1,033,250
========== ==========
NET INCOME PER LIMITED PARTNERSHIP UNIT $42.65 $42.62
====== ======
LIMITED PARTNERSHIP UNITS USED
IN PER UNIT CALCULATION 24,000 24,000
====== ======
See accompanying notes to financial statements.
STATEMENT OF CHANGES IN PARTNERS' EQUITY (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2005 ($82,471) $2,613,570 $2,531,099
NET INCOME 10,339 1,023,538 1,033,877
DISTRIBUTIONS (8,181) (810,000) (818,181)
-------- ---------- ----------
BALANCE AT SEPTEMBER 30, 2005 ($80,313) $2,827,108 $2,746,795
======== ========== ==========
See accompanying notes to consolidated financial statements.
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
September 30, September 30,
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,033,877 $1,033,250
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 15,760
Equity in earnings of
real estate joint venture (82,758) (87,923)
Distributions from real
estate joint venture 80,400 87,300
Changes in assets and
liabilities:
Increase in other assets (29)
Increase in liabilities 40,937 46,274
--------- ---------
Net cash provided by
operating activities 1,088,216 1,078,872
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (818,181) (818,181)
--------- ---------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 270,035 260,691
CASH AND CASH EQUIVALENTS:
At beginning of period 620,452 713,429
--------- ---------
At end of period $ 890,487 $ 974,120
========= =========
See accompanying notes to financial statements(unaudited).
DSI REALTY INCOME FUND VIII
(A California Real Estate Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
DSI Realty Income Fund VIII (the "Partnership"), a limited partnership, has
two general partners (DSI Properties, Inc., and Diversified Investors Agency)
and limited partners owning 24,000 limited partnership units. The
Partnership was formed under the California Uniform Limited Partnership
Act for the primary purpose of acquiring and operating real estate.
The Partnership has acquired five mini-storage facilities located in
Stockton, Pittsburgh, El Centro, Huntington Beach, and Lompoc, California.
The Partnership has also entered into a joint venture with DSI Realty Income
Fund IX, a related party, through which the Partnership has a 30% interest
in a mini-storage facility in Aurora, Colorado (see Note 3). All facilities
were acquired from Dahn Corporation ("Dahn"). Dahn is not affiliated with
the Partnership. Dahn is affiliated with other partnerships in which DSI
Properties, Inc. is a general partner. The mini-storage facilities are
operated for the Partnership by Dahn under various agreements that are
subject to renewal annually. Under the terms of the agreements, the
Partnership is required to pay Dahn a property management fee equal to
5% of gross revenue from operations, defined as the entire amount of all
receipts from the renting or leasing of storage compartments and sale of
locks. The Partnership and DSI Realty Income Fund IX both have DSI
Properties, Inc. as one of the general partners and both of their facilities
are managed by Dahn.
The accompanying financial information as of September 30, 2005, and for
the periods ended September 30, 2005, and 2004 is unaudited. Such financial
information includes all adjustments considered necessary by the
Partnership's management for a fair presentation of the results for the
periods indicated.
2. PROPERTY
The Partnership owns five mini-storage facilities located in Stockton,
Pittsburg, El Centro, Lompoc and Huntington Beach, California. The total
cost of property and accumulated depreciation is as follows:
September 30, 2005 December 31, 2004
Land $ 2,287,427 $ 2,287,427
Buildings and improvements 7,127,000 7,127,000
Equipment 148,837 148,837
------------ ------------
Total 9,563,264 9,563,264
Less: Accumulated Depreciation ( 7,168,772) ( 7,153,012)
------------ ------------
Property - Net $ 2,394,492 $ 2,410,252
============ ============
3. INVESTMENT IN REAL ESTATE JOINT VENTURE
The Partnership is involved in a joint venture with DSI Realty Income
Fund IX through which the Partnership has a 30% interest in a mini-storage
facility in Aurora, Colorado. Under the terms of the joint venture
agreement, the Partnership is entitled to 30% of the profits and losses of
the venture and owns 30% of the mini-storage facility with DSI Realty Income
Fund IX, owning the remaining 70% interest in the venture. Summarized
income statement information for the joint venture the nine months ended
September 30, 2005, and 2004 is as follows:
2005 2004
Revenue $461,730 $456,390
Operating Expenses 185,871 163,313
-------- --------
Net Income $275,859 $293,077
======== ========
The Partnership accounts for its investment in the real estate joint
venture under the equity method of accounting.
4. NET INCOME PER LIMITED PARTNERSHIP UNIT
Net income per limited partnership unit is calculated by dividing the net
income allocated to the limited partners by the number of limited
partnership units outstanding during the period.
5. ALLOCATION OF PROFITS AND LOSSES AND GENERAL PARTNERS' INCENTIVE
MANAGEMENT FEE
Under the Agreement of limited Partnership, the general partners are to
be allocated 1% of the net profits or losses from operations, and the
limited partners are to be allocated the balance of the net profits or
losses from operations in proportion to their limited partnership
interests.
The General Partners are also entitled to receive a percentage, based on
a predetermined formula, of any cash distribution from the sale, other
disposition or refinancing of the project.
In addition, the General Partners are entitled to receive an incentive
management fee for supervising the operations of the Partnership. The
fee is to be paid in an amount equal to 9% per annum of the cash available
for distribution on a cumulative basis, calculated as cash generated from
operations less capital expenditures.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
DSI REALTY INCOME FUND VIII
(A California Real Estate Limited Partnership)
We are pleased to enclose the Partnership's unaudited financial
statements for the period ended September 30, 2005. The following is
Management's discussion and analysis of the Partnership's financial
condition and results of its operations.
For the three-month period ended September 30, 2005 and 2004, total revenues
increased 5.3% from $596,859 to $628,189 and total expenses increased 7.6%
from $265,197 to $285,240 and other income increased from $187 to $188.
Equity in income of the real estate joint venture increased 6.7% from $28,698
to $30,634. As a result, net income increased 3.7% from $360,547 to $373,771
for the three-month period ended September 30, 2005, as compared to the same
period in 2004. Rental revenue increased as a result of higher unit rental
rates. Occupancy levels for the Partnership's five mini-storage facilities
averaged 85.7% for the three-month period ended September 30, 2005 as compared
to 86.2% for the same period in 2004. The Partnership is continuing its
marketing efforts to attract and keep new tenants in its various mini-storage
facilities. Operating expenses increased approximately $13,900 (6.4%) primarily
as a result of increases in purchase of locks and packing materials, salaries
and wages, depreciation and truck insurance and maintenance expenses, partially
offset by a decrease in repairs and maintenance and workers compensation in-
surance expenses. General and administrative expenses increased approximately
$6,100 (13.1%) primarily as a result of an increase in equipment and computer
lease expense. Equity in income from the real estate joint venture increased
as a result of higher rental revenue at that facility.
For the nine-month period ended September 30, 2005, and 2004, total revenues
increased 4.4% from $1,779,018 to $1,856,832 and total expenses increased 8.6%
from $834,246 to $906,270 and other income increased from $555 to $557. Equity
in income of the real estate joint venture decreased 5.9% from $87,923 to
$82,758. As a result, net income increased 0.1% from $1,033,250 to $1,033,877
for the nine-month period ended Setpember 30, 2005, as compared to the same
period in 2004. Rental revenue increased as a result of higher unit rental
rates. Operating expenses increased approximately $57,600 (8.8%) primarily as
a result of increases in advertising, purchase of locks and packing materials,
property management fees, real estate tax, salaries and wages, truck insurance
and maintenance and depreciation expenses, partially offset by a decrease in
repairs and maintenance workers compensation insurance expenses. General and
administrative expenses increased approximately $14,400 (7.9%) primarily as a
result of an increase in legal and professional and equipment and computer
lease expenses. Equity in income from the real estate joint venture decreased
as a result of higher operating expenses at that facility.
The General Partners will continue their policy of funding improvements
and maintenance of Partnership properties with cash generated from
operations. The Partnership's financial resources appear to be adequate to
meet in needs. The General Partners anticipate distributions to the Limited
Partners to remain at the current level for the foreseeable future.
Item 3. Quantative and Qualitative Disclosures About Market Risk
NONE
Item 4. CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, the Partnership evaluated
the effectiveness of its disclosure controls and procedures. This evaluation
was performed by the Partnership's Controller with the assistance of the
President and Chief Executive Officer. These disclosure controls and pro-
cedures are designed to ensure that the information required to be disclosed
by the Partnership in its periodic reports filed with the Securities and Ex-
change Commission (the Commission) is recorded, processed, summarized and
reported, within the time periods specified by the Commissions rules and forms
and that the information is communicated to the certifying officers on a timely
basis. Based on this evaluation, the Partnership concluded that its disclosure
controls and procedures were effective. There have been no significant changes
in the Partnership's internal controls or in other factors that could signifi-
cantly affect the internal controls subsequent to the date of their
evaluation.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Registrant is not a party to any material pending legal proceedings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8K.
(a) Attached hereto as Exhibit "20" is Registrant's Quarterly
Report to Limited Partners for the period ended September 30, 2005.
(b) Registrant did not file any reports on Form 8-K for the
period reported upon.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: October 31, 2005 DSI REALTY INCOME FUND VIII
A California Limited Partnership
(Registrant)
By____\s\ Robert J. Conway_____
DSI Properties, Inc., as General
Partner by ROBERT J. CONWAY,
President and Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: October 31, 2005 DSI REALTY INCOME FUND VIII
A California Limited Partnership
(Registrant)
By__\s\ Robert J. Conway________
DSI Properties, Inc., as General
Partner by ROBERT J. CONWAY,
President and Chief Financial Officer
CERTIFICATIONS
I, Robert J. Conway, certify that:
1. I have reviewed this quarterly report on Form 10-Q of DSI Realty Income
Fund VIII;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period cover-
ed by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to affect the registrant's ability to record, pro-
cess, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls over financial reporting.
Date: October 31, 2005
Robert J. Conway
Chief Executive Officer
CERTIFICATIONS
I, Richard P. Conway, certify that:
1. I have reviewed this quarterly report on Form 10-Q of DSI Realty Income
Fund VIII;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period cover-
ed by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to affect the registrant's ability to record, pro-
cess, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls over financial reporting.
Date: October 31, 2005
Richard P. Conway
Vice President
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of DSI Realty Income Fund VIII (the
"Partnership") on Form 10-Q for the period ending September 30, 2005 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Robert J. Conway, Chief Executive Officer of the Partnership, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
Robert J. Conway
Chief Executive Officer
October 31, 2005
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of DSI Realty Income Fund VIII (the
"Partnership") on Form 10-Q for the period ending September 30, 2005 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Richard P. Conway, Vice President of the Corporate General Partner, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
Richard P. Conway
Vice President
October 31, 2005