UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[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
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ___________to______________
Commission File Number ___________0-14481_________________
Brauvin Real Estate Fund L.P. 5
(Name of small business issuer as specified in its charter)
Delaware 36-3432071
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 North LaSalle Street, Chicago, Illinois 60602
(Address of principal executive offices) (Zip Code)
(312)759-7660
(Issuer's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
(Title of class)
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
filling requirements for the past 90 days. Yes X No .
BRAUVIN REAL ESTATE FUND L.P. 5
(a Delaware limited partnership)
INDEX
PART I
Page
Item 1. Consolidated Financial Statements 3
Consolidated Statement of Net Assets in Liquidation
as of September 30, 2005 (Liquidation Basis) 4
Consolidated Statement of Changes in Net Assets
in Liquidation for the period January 1, 2005 to
September 30, 2005 (Liquidation Basis) 5
Consolidated Statement of Changes in Net Assets
in Liquidation for the period January 1, 2004 to
September 30, 2004 (Liquidation Basis) 6
Consolidated Statements of Operations for the
nine months ended September 30, 2005 and
September 30, 2004(Liquidation Basis) 7
Consolidated Statements of Operations for the
three months ended September 30, 2005 and
September 30, 2004(Liquidation Basis) 8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis or Plan
of Operation 21
Item 3. Controls and Procedures . . . . . . . . . . . . 30
PART II
Item 1. Legal Proceedings 31
Item 2. Changes in Securities 31
Item 3. Defaults Upon Senior Securities 31
Item 4. Submission of Matters to a Vote of Security
Holders 31
Item 5. Other Information 31
Item 6. Exhibits, and Reports on Form 8-K 31
Signatures . . . . . . . . . . . . . . . . .. .. .. .. . . 32
BRAUVIN REAL ESTATE FUND L.P. 5
(a Delaware limited partnership)
PART I - FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
The following Consolidated Statement of Net Assets in
Liquidation as of September 30, 2005 (Liquidation Basis),
Consolidated Statement of Changes in Net Assets in Liquidation
for the period January 1, 2005 to September 30, 2005 (Liquidation
Basis), Consolidated Statement of Changes in Net Assets in
Liquidation for the period January 1, 2004 to September 30, 2004
(Liquidation Basis), Consolidated Statements of Operations for
the nine months ended September 30, 2005 and September 30, 2004
(Liquidation Basis) and Consolidated Statements of Operations for
the three months ended September 30, 2005 and September 30, 2004
(Liquidation Basis) for Brauvin Real Estate Fund L.P. 5 (the
"Partnership") are unaudited but reflect, in the opinion of the
management, all adjustments necessary to present fairly the
information required. All such adjustments are of a normal
recurring nature.
These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes
thereto included in the Partnership's 2004 Annual Report on Form
10-KSB.
BRAUVIN REAL ESTATE FUND L.P. 5
(a Delaware limited partnership)
CONSOLIDATED STATEMENT OF NET ASSETS IN LIQUIDATION AS OF
SEPTEMBER 30, 2005 (LIQUIDATION BASIS)
(Unaudited)
ASSETS
Real estate held for sale $3,028,375
Cash and cash equivalents 2,545,881
Tenant receivable (net of an
allowance of $54,522) 17,247
Utility deposits 3,429
Other assets 20,733
----------
Total Assets 5,615,665
----------
LIABILITIES
Mortgage notes payable (Note 4) 2,600,000
Accounts payable and accrued expenses 116,846
Reserve for estimated costs during
the period of liquidation 160,365
Tenant security deposits 36,769
Due to affiliates (Note 5) 2,990
----------
Total Liabilities 2,916,970
MINORITY INTEREST IN SABAL PALM
JOINT VENTURE 292,841
----------
Net Assets in Liquidation $2,405,854
==========
See accompanying notes to consolidated financial statements
BRAUVIN REAL ESTATE FUND L.P. 5
(a Delaware limited partnership)
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN
LIQUIDATION FOR THE PERIOD JANUARY 1, 2005 TO SEPTEMBER 30, 2005
(LIQUIDATION BASIS)
(Unaudited)
Net assets in liquidation at January 1, 2005 $2,424,275
Loss from operations (18,421)
----------
Net assets in liquidation at September 30, 2005 $2,405,854
==========
See accompanying notes to consolidated financial statements
BRAUVIN REAL ESTATE FUND L.P. 5
(a Delaware limited partnership)
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN
LIQUIDATION FOR THE PERIOD JANUARY 1, 2004 TO SEPTEMBER 30, 2004
(LIQUIDATION BASIS)
(Unaudited)
Net assets in liquidation at January 1, 2004 $2,562,051
Loss from operations (162,936)
----------
Net assets in liquidation at September 30, 2004 $2,399,115
==========
See accompanying notes to consolidated financial statements
BRAUVIN REAL ESTATE FUND L.P. 5
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(LIQUIDATION BASIS)
(Unaudited)
2005 2004
--------- ---------
INCOME
Rental $ 367,765 $ 310,359
Interest 45,968 17,899
Other, primarily tenant
expense reimbursements 83,317 80,214
--------- ---------
Total income 497,050 408,472
--------- ---------
EXPENSES
Interest 123,887 97,438
Real estate taxes 72,291 70,650
Repairs and maintenance 145,879 96,588
Management fees (Note 5) 29,605 21,967
Other property operating 33,967 36,562
Bad debt expense 28,568 26,613
General and administrative 95,655 294,036
--------- ---------
Total expenses 529,852 643,854
--------- ---------
Loss before minority
interest (32,802) (235,382)
Minority interest's
share of Sabal Palm's
net loss 14,381 72,446
--------- ---------
Net loss $ (18,421) $(162,936)
========= =========
Net loss allocated
to the General Partners $ (184) $ (1,629)
======== =========
Net loss allocated
to the Limited Partners $(18,237) $(161,307)
======== =========
Net loss per
Limited Partnership
Interest (9,914.5 units
Outstanding) $ (1.84) $ (16.27)
======== =========
See accompanying notes to consolidated financial statements.
BRAUVIN REAL ESTATE FUND L.P. 5
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(LIQUIDATION BASIS)
(Unaudited)
2005 2004
--------- ---------
INCOME
Rental $ 129,162 $ 114,654
Interest 17,921 8,121
Other, primarily tenant
expense reimbursements 12,362 24,885
--------- ---------
Total income 159,445 147,660
--------- ---------
EXPENSES
Interest 42,378 33,645
Real estate taxes 24,097 23,550
Repairs and maintenance (6,700) 8,235
Management fees (Note 5) 10,418 8,435
Other property operating 10,158 9,887
Bad debt (recovery) expense (9,485) 9,050
General and administrative 37,438 213,814
--------- ---------
Total expenses 108,304 306,616
--------- ---------
Income (loss) before minority
interest 51,141 (158,956)
Minority interest's
share of Sabal Palm's
net (income) loss (21,305) 41,510
--------- ---------
Net income (loss) $ 29,836 $(117,446)
========= =========
Net income (loss) allocated
to the General Partners $ 298 $ (1,174)
========= =========
Net income (loss) allocated
to the Limited Partners $ 29,538 $(116,272)
========= =========
Net income (loss) per
Limited Partnership
Interest (9,914.5 units
Outstanding) $ 2.98 $ (11.73)
========= =========
See accompanying notes to consolidated financial statements.
BRAUVIN REAL ESTATE FUND L.P. 5
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The financial statements consolidate the accounts of Brauvin
Real Estate Fund L.P. 5 (the "Partnership") and joint ventures in
which the Partnership has a 50% interest or greater.
Additionally, the Partnership had a 42% interest in another joint
venture which, prior to its sale in 2001, was accounted for using
the equity method of accounting.
Brauvin Real Estate Fund L.P. 5 (the "Partnership")
was organized on June 28, 1985. The General Partners of the
Partnership are Brauvin Ventures, Inc. and Jerome J. Brault. On
August 8, 1997, Mr. Cezar M. Froelich resigned as an Individual
General Partner effective 90 days from August 14, 1997. Brauvin
Ventures Inc. is owned by A.G.E. Realty Corporation Inc. (50%)
and by Messrs. Brault (beneficially) (25%) and Froelich (25%).
A. G. Edwards & Sons, Inc. and Brauvin Securities, Inc.,
affiliates of the General Partners, were the selling agents of
the Partnership. The Partnership is managed by an affiliate of
the General Partners.
The Partnership filed a Registration Statement on Form S-11
with the Securities and Exchange Commission, which became
effective on March 1, 1985. The sale of the minimum of
$1,200,000 of limited partnership interests of the Partnership
(the "Units") necessary for the Partnership to commence
operations was achieved on June 28, 1985. The Partnership's
offering closed on February 28, 1986. A total of $9,914,500 of
Units were subscribed for and issued between March 1, 1985 and
February 28, 1986 pursuant to the Partnership's public offering.
Properties owned either directly or indirectly with affiliates
of the Partnership from January 1,2001 and subsequent
transactions are (a) Crown Point (which was sold in July 2002),
(b) Strawberry Fields (which was sold in July 2001) and (c) Sabal
Palm Shopping Center.
Management's Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Basis of Presentation
As a result of the July 12, 1999 authorization by a majority
of the Limited Partners to sell the Partnership's properties the
Partnership has begun the liquidation process and, in accordance
with generally accepted accounting principles, the Partnership's
financial statements for periods subsequent to July 12, 1999 have
been prepared on the liquidation basis of accounting.
Accordingly, the carrying values of the assets are presented at
their estimated net realizable values and liabilities are
presented at estimated settlement amounts, including estimated
costs associated with carrying out the liquidation. Preparation
of financial statements on the liquidation basis of accounting
requires significant assumptions by management, including the
estimate of liquidation costs and the resolution of any
contingent liabilities. There may be differences between the
assumptions and the actual results because events and
circumstances frequently do not occur as expected. Those
differences, if any, could result in a change in the net assets
recorded in the statement of net assets as of September 30, 2005.
Accounting Method
The accompanying consolidated financial statements have been
prepared using the accrual method of accounting.
Federal Income Taxes
Under the provisions of the Internal Revenue Code, the
Partnership's income and losses are reportable by the partners on
their respective income tax returns. Accordingly, no provision
is made for Federal income taxes in the financial statements.
Consolidation of Joint Venture Partnership
The Partnership owns a 53% interest in the Sabal Palm Joint
Venture, which owns Sabal Palm Shopping Center. The accompanying
financial statements include 100% of the assets, liabilities,
operations and partners' capital of Sabal Palm Joint Venture.
The minority interest of the consolidated joint venture is
adjusted for the respective joint venture partner's share of
income or loss and any cash contributions from or distributions
to the joint venture partner Brauvin Real Estate Fund L.P. 4
("BREF 4"). All significant intercompany balances and
transactions have been eliminated.
Investment in Real Estate
Prior to the preparation of the financial statements on the
liquidation basis of accounting, the operating properties
acquired by the Partnership were stated at cost, including
acquisition costs, leasing commissions, and tenant improvements,
and net of impairment losses. Depreciation and amortization
expense were computed on a straight-line basis over approximately
31.5 years and the term of the applicable leases, respectively.
All of the Partnership's properties were subject to liens under
first mortgages (see Note 4).
Subsequent to the adoption of the liquidation basis of
accounting (see Note 2), the Partnership adjusted its investment
in real estate to estimated net realizable value, which is
recorded as real estate held for sale. Additionally, the
Partnership suspended recording any further depreciation expense.
The Partnership has adopted Statement of Financial Accounting
Standards No. 141, "Business Combinations" ("SFAS 141"). SFAS
141 requires the purchase method of accounting for business
combinations initiated after June 30, 2001 and eliminates the
pooling-of-interests method. In July 2001, the FASB issued
Statement of Financial Accounting Standards No. 142, "Goodwill
and Other Intangible Assets" ("SFAS 142"), which is effective
January 1, 2002. SFAS 142 requires, among other things, the
discontinuance of goodwill amortization. In addition, the
standard includes provisions for the reclassification of certain
existing intangibles, reassessment of the useful lives of
existing intangibles, reclassification of certain intangibles out
of previously reported goodwill and the identification of
reporting units for purposes of assessing potential future
impairments of goodwill.
Application of the statements to future acquisitions, if any,
could result in the recognition, upon acquisition of additional
intangible assets (acquired in-place lease origination costs and
acquired above market leases) and liabilities (acquired below
market leases), which would be amortized over the remaining terms
of the acquired leases.
The Partnership has adopted Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS 144"). SFAS 144 retains the
recognition and measurement requirements of its predecessor, but
resolves significant implementation issues. In addition, it
applies to a segment of a business accounted for as a
discontinued operation.
SFAS 144 has not had a significant impact on the Partnership's
financial statements.
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid debt
instruments with an original maturity within three months from
date
of purchase.
The Partnership maintains its cash in bank deposit accounts,
which, at times, may exceed federally insured limits. The
Partnership has not experienced any losses in such accounts.
Management believes the Partnership is not exposed to any
significant credit risk related to cash or cash equivalents.
Tenant Receivables
Tenant receivables are comprised of (a) billed but uncollected
amounts due for monthly rents and other charges and (b) estimated
unbilled amounts due for tenant reimbursement of common area
maintenance charges and property taxes. Receivables are recorded
at management's estimate of the amounts that will ultimately be
collected. An allowance for doubtful accounts of $54,522 at
September 30, 2005 is based on specific identification of
uncollectible accounts and the Partnership's historical
collection experience.
Estimated Fair Value of Financial Instruments
Disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of
Statement of Financial Accounting Standards No. 107, "Disclosures
About Fair Value of Financial Instruments". The estimated fair
value amounts have been determined by using available market
information and appropriate valuation methodologies. However,
considerable judgement is necessarily required in interpreting
market data to develop estimates of fair value.
The fair value estimates are based on information available to
management as of September 30, 2005, but may not necessarily be
indicative of the amounts that the Partnership could realize in a
current market exchange. The use of different assumptions and/or
estimation methodologies may have a material effect on the
estimated fair value amounts.
In connection with the adoption of the liquidation basis of
accounting, assets were adjusted to their net realizable values
and liabilities were adjusted to estimated settlement amounts,
which approximate their fair value at September 30, 2005.
Derivatives and Hedging Instruments
In June 1998, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"), which requires that all derivatives be
recognized as assets and liabilities in the balance sheet and be
measured at fair value. SFAS 133 also requires changes in fair
value of derivatives to be recorded each period in current
earnings or comprehensive income depending on the intended use of
the derivatives. In June, 2000, the FASB issued SFAS 138, which
amends the accounting and reporting standards of SFAS 133 for
certain derivatives and certain hedging activities. SFAS 133 and
SFAS 138 were adopted by the Partnership effective January 1,
2001. The Partnership had no derivatives in 2005 and 2004.
Recent Accounting Pronouncements
In January 2003, FASB issued interpretation No. 46,
"Consolidation of Variable Interest Entities" (FIN 46). FIN 46
addresses consolidation by business enterprises of certain
variable interest entities in which the equity investors do not
have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance
its activities without additional subordinated financial support
from other parties.
This interpretation was revised in December 2003 and for
calendar year end entities, is effective as of December 31,
2003. The Partnership does not own any "special purpose
entities."
In May 2003, FASB issued Statement of Financial Accounting
Standards No. 150, "Accounting for Certain Financial Instruments
with the Characteristics of both Liabilities and Equity" ("SFAS
150"), which is effective for all financial instruments entered
into or modified after May 31, 2003, and is otherwise effective
beginning July 1, 2003. SFAS 150 establishes standards for how
an issuer classifies and measures certain financial instruments
with characteristics of both liabilities and equity.
The adoption of SFAS 150 and FIN 46 has not had a significant
impact on the Partnership's financial statements.
(2) ADJUSTMENT TO LIQUIDATION BASIS
On July 12, 1999, in accordance with the liquidation basis of
accounting, assets were adjusted to their estimated net
realizable values and liabilities were adjusted to their
estimated settlement amounts, including estimated costs
associated with carrying out the liquidation.
(3) PARTNERSHIP AGREEMENT
The Partnership Agreement (the "Agreement") provides that 99%
of the net profits and losses from operations of the Partnership
for each fiscal year shall be allocated to the Limited Partners
and 1% of net profits and losses from operations shall be
allocated to the General Partners. The net profit of the
Partnership from the sale or other disposition of a Partnership
property shall be allocated as follows: first, there shall be
allocated to the General Partners the greater of: (i) 1% of such
net profits; or (ii) the amount distributable to the General
Partners as Net Sale Proceeds from such sale or other
disposition, as defined in the Partnership Agreement; and second,
all remaining profits shall be allocated to the Limited Partners.
The net loss of the Partnership from any sale or other
disposition of a Partnership property shall be allocated as
follows: 99% of such net loss shall be allocated to the Limited
Partners and 1% of such net loss shall be allocated to the
General Partners.
The Agreement provides that distributions of Operating Cash
Flow, as defined in the Agreement, shall be distributed 99% to
the Limited Partners and 1% to the General Partners. The receipt
by the General Partners of such 1% of Operating Cash Flow shall
be subordinated to the receipt by the Limited Partners of
Operating Cash Flow equal to a 10% per annum, cumulative,
non-compounded return on Adjusted Investment, as such term is
defined in the Agreement (the "Preferential Distribution"). In
the event the full Preferential Distribution is not made in any
year (herein referred to as a "Preferential Distribution
Deficiency") and Operating Cash Flow is available in following
years in excess of the Preferential Distribution for said years,
then the Limited Partners shall be paid such excess Operating
Cash Flow until they have been paid any unpaid Preferential
Distribution Deficiency from prior years. Net Sale Proceeds, as
defined in the Agreement, received by the Partnership shall be
distributed as follows: (a) first, to the Limited Partners until
such time as the Limited Partners have been paid an amount equal
to the amount of their Adjusted Investment; (b) second, to the
Limited Partners until such time as the Limited Partners have
been paid an amount equal to any unpaid Preferential Distribution
Deficiency; and (c) third, 85% of any remaining Net Sale Proceeds
to the Limited Partners, and the remaining 15% of the Net Sale
Proceeds to the General Partners. The Preferential Distribution
Deficiency at September 30, 2005 equaled $17,770,272.
(4) MORTGAGE NOTES PAYABLE
Mortgage notes payable at September 30, 2005 consist of the
following:
Interest Date
Balance Rate Due
Sabal Palm Square
Shopping Center $2,600,000 LIBOR +2.85% 2/3/06
Sabal Palm Square Shopping Center
Sabal Palm Square Shopping Center serves as collateral under
its respective limited recourse debt obligation.
The original First Mortgage Loan bore interest at the rate of
8.93% per annum, was to be amortized over a 25-year period,
required monthly payments of principal and interest of
approximately $26,700 and matured on March 26, 2002. A portion
of the proceeds of the First Mortgage Loan, approximately
$3,077,000, was used to retire Sabal Palm's existing mortgage
from Lincoln National Pension Insurance Company. Subsequent to
the end of the first quarter of 2003, this loan was repaid and
replaced with a new facility described below.
On August 7, 2000, Sabal Palm was given notice that Walgreens
would vacate the space prior to its lease termination of April
30, 2005. Walgreens moved out, however, it remains liable for
rental payments under its lease with Sabal Palm. The joint
venture and Walgreens reached an agreement with a subtenant for
the occupancy of this space through the initial term ending in
April 2005. Subsequently, the joint venture entered into a new
direct lease with the replacement tenant for this space through
June 30, 2007.
In the second quarter of 1998, Winn-Dixie vacated its space at
the center. Winn-Dixie failed to timely pay its rental
obligation for November and December 2001 and January through
March 2002.
As a result of Winn-Dixie's lease default, in the third
quarter of 2001, Sabal Palm recorded an adjustment to liquidation
basis of $114,367 related to an other than temporary decline in
the value of real estate for Sabal Palm.
In the fourth quarter of 2001, Sabal Palm recorded a further
adjustment to liquidation basis of $7,508 related to an other
than temporary decline in the value of real estate at Sabal Palm.
Due to non-payment of Winn-Dixie's rental obligations, the
joint venture did not make its mortgage payments for Sabal Palm
in November and December 2001 and January through March 2002 thus
resulting in a default on its loan. In April 2002, the joint
venture and the lender agreed to a twelve month extension of the
existing mortgage loan. The loan extension was subject to the
lease termination of Winn-Dixie and Winn-Dixie's payment of a
$300,000 termination fee and payment of all past due amounts thus
curing the default. As a requirement of the extension, the joint
venture and the lender agreed to use the proceeds from the
termination to redemize the former Winn-Dixie space into three
spaces as well as certain other improvements to the center. The
joint venture signed a lease with Sav A Lot, a national grocery
chain, for 14,350 square feet (one of the demized spaces). Sav A
Lot took occupancy of its space in October, 2002. In addition,
in the first quarter of 2004 the joint venture executed a lease
with Family Dollar (a national discount retailer) to lease
approximately 10,675 square feet (another one of the demized
spaces). Family Dollar has taken occupancy in the center.
Separately, the Partnership has made a number of cosmetic
improvements to the center in preparation for its sale. However,
the property was recently damaged by two of the hurricanes that
struck the Palm Bay area in the third quarter of 2004 and will
likely delay the sale of the property. The property's damage was
primarily cosmetic and we do not believe the structural integrity
or economic viability of the building has diminished. Temporary
repair work has been completed. However due to the extensive
damage elsewhere in the area, permanent repairs were not able to
commence until the first quarter of 2005.
On March 17, 2003, the joint venture obtained a loan
commitment from AmSouth Bank in the amount of $3,250,000. The
loan proposal provides for payment of interest only for a 24-
month term subject to various tests to be met at a six-month
period from close and a nine-month period from close. If these
tests are not met the joint venture can be required to reduce the
principal outstanding by a cumulative amount ranging from
$250,000 to $500,000 depending on the test.
On April 29, 2003, the Sabal Palm joint venture closed on a
$3,250,000 mortgage with AmSouth Bank (subject to a reduction not
to exceed $500,000 if certain conditions of the loan are not
met). The joint venture repaid the prior outstanding first
mortgage loan on the property in the amount of $2,957,941,
accrued interest of $22,100 and paid loan costs and fees of
approximately $46,100 at closing. The joint venture expects to
use the remaining proceeds primarily to finance certain tenant
improvements and leasing costs.
The AmSouth loan bears interest at LIBOR plus 2.85% and is
payable interest only monthly until maturity (May 3, 2006) at
which time all unpaid interest and principal is due. The loan is
secured by a first mortgage lien on the property and collateral
assignment of rents and leases as well as the management
agreement. The partners of the joint venture have each
guaranteed the repayment of 50% of the joint venture obligations
under the loan documents and the manager has agreed to
subordinate payment of the management fee to the payment of the
loan obligations.
Additionally, the lender required that $1,000,000 in aggregate
unencumbered liquid assets be maintained (but not pledged) during
the term of the loan as well as requiring the Partnership and
BREF 4 to maintain a minimum combined tangible net worth of not
less than $1,000,000.
Due to the fact that damage caused by the hurricanes in 2004
was being repaired in the first and second quarter of 2005, the
joint venture did not believe it would be able to repay the loan
in May 2005. Therefore, the joint venture requested an extension
of the mortgage loan. On April 13, 2005, the joint venture and
the lender agreed to terms for a nine month extension of the
current mortgage note. The lender required that the joint
venture make a principal reduction in the amount of $400,000,
which the lender has agreed will be paid from the cash deposit
held by the lender. Additionally, the joint venture was required
to pay an extension fee in the amount of $5,000. Further, as
part of the extension, the lender agreed to release the
unencumbered liquid asset requirement of the mortgage loan. All
other terms and conditions remain the same.
In September 2005, the Sabal Palm joint venture entered into a
contract to sell the Sabal Palm shopping center to an
unaffiliated third party. The contract calls for a due diligence
investigation period of 45 days with closing to follow 45 days
thereafter. The due diligence period has expired and the
property has been approved by the purchaser. The joint venture
expects to complete the sale in the fourth quarter of 2005.
However, there can be no assurance that this purchaser will
complete the transaction.
The carrying value of Sabal Palm approximated $3,028,000 at
September 30, 2005.
(5) TRANSACTIONS WITH AFFILIATES
Fees and other expenses paid or payable to the General
Partners or its affiliates for the nine months ended September
30, 2005 and 2004 were as follows:
2005 2004
------- -------
Management fees $29,605 $21,967
Reimbursable office
expenses 59,400 62,114
As of September 30, 2005, the Partnership had made all
payments to affiliates, except for management fees of $2,990.
BRAUVIN REAL ESTATE FUND L.P. 5
(a Delaware limited partnership)
Item 2.Management's Discussion and Analysis or Plan of Operation.
General
Certain statements in this Quarterly Report that are not
historical fact constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Discussions containing forward-looking statements may be
found in this section and in the section entitled "Description of
Business." Without limiting the foregoing, words such as
"anticipates", "expects", "intends", "plans" and similar
expressions are intended to identify forward-looking statements.
These statements are subject to a number of risks and
uncertainties. Actual results could differ materially from those
projected in the forward-looking statements. The Partnership
undertakes no obligation to update these forward-looking
statements to reflect future events or circumstances.
Liquidity and Capital Resources
The Partnership intends to satisfy its short-term liquidity
needs through cash flow from its remaining joint venture
investment in Sabal Palm. The Partnership's mortgage note
payable is expected to be satisfied through the sale of Sabal
Palm.
The General Partners determined to pursue the disposition of
the Partnership's assets. In 1999, the Partnership solicited and
received the votes of the Limited Partners to approve a sale of
all of the Partnership's properties, either on an individual or
group basis, and to subsequently liquidate the Partnership. The
solicitation, which was approved by the Limited Partners in the
third quarter of 1999, stated that the Partnership's properties
may be sold individually or in any combination provided that the
total sales price for the properties included in the transaction
equals or exceeds 70% of the aggregate appraised value for such
properties, which valuation was conducted by an independent third
party appraisal firm.
The Partnership intends to sell the remaining investment under
a closed bid process which will include identification of target
buyers with proven financing ability and performance of certain
evaluations of the properties, such as environmental testing.
Potential buyers will be requested to sign confidentiality
agreements to safeguard the Partnership's confidential
proprietary information. The General Partners have determined
that each bid must be all cash, completely unconditional and
accompanied by a substantial deposit.
Property Status
Sabal Palm
Sabal Palm was required to make a balloon mortgage payment in
February 1997. Prior to the scheduled maturity of the First
Mortgage Loan, the lender granted Sabal Palm an extension until
April 1, 1997. On March 31, 1997, Sabal Palm obtained a first
mortgage loan in the amount of $3,200,000 (the "First Mortgage
Loan"), secured by its real estate, from NationsBanc Mortgage
Capital Corporation. Prior to April 29, 2003 the First Mortgage
Loan bore interest at the rate of 8.93% per annum, was amortized
over a 25-year period, required monthly payments of principal and
interest of approximately $26,700 and was scheduled to mature on
March 26, 2002 (later extended to April 2003). A portion of the
proceeds of the First Mortgage Loan, approximately $3,077,000,
was used to retire Sabal Palm's existing mortgage from Lincoln
National Pension Insurance Company.
On August 7, 2000, Sabal Palm was given notice that Walgreens
will vacate the space prior to its lease termination of April 30,
2005. Walgreens moved out, however, it remains liable for rental
payments under its lease with Sabal Palm. The joint venture and
Walgreens reached an agreement with a subtenant for the occupancy
of this space through the initial term ending in April 2005.
Subsequently, the joint venture entered into a new direct lease
with the replacement tenant for this space through June 30, 2007.
In the second quarter of 1998, Winn-Dixie vacated its space at
the center (which was approximately 42,000 square feet). Winn-
Dixie failed to timely pay its rental obligation for November and
December 2001 and January through March 2002.
As a result of Winn-Dixie's lease default, in the third
quarter of 2001, Sabal Palm recorded an adjustment to liquidation
basis of $114,367 related to an other than temporary decline in
the value of real estate for Sabal Palm.
In the fourth quarter of 2001, Sabal Palm recorded a further
adjustment to liquidation basis of $7,508 related to an other
than temporary decline in the value of real estate at Sabal Palm.
Due to non-payment of Winn-Dixie's rental obligations, the
joint venture did not make its mortgage payments for Sabal Palm
in November and December 2001 and January through March 2002 thus
resulting in a default on its loan. In April 2002, the joint
venture and the lender agreed to a twelve month extension of the
existing mortgage loan. The loan extension was subject to the
lease termination of Winn-Dixie and Winn-Dixie's payment of a
$300,000 termination fee and payment of all past due amounts thus
curing the default. As a requirement of the extension, the joint
venture and the lender agreed to use the proceeds from the
termination to redemize the former Winn-Dixie space into three
spaces as well as certain other improvements to the center. The
joint venture signed a lease with Sav A Lot, a national grocery
chain, for 14,350 square feet (one of the demized spaces). Sav A
Lot took occupancy of its space in October, 2002. In addition,
in the first quarter of 2004 the joint venture executed a lease
with Family Dollar (a national discount retailer) to lease
approximately 10,675 square feet (another one of the demized
spaces). Family Dollar has taken occupancy in the center.
Separately, the joint venture has made a number of cosmetic
improvements to the center in preparation for its sale. However,
the property was recently damaged by two of the hurricanes that
struck the Palm Bay area in the third quarter of 2004 and will
likely delay the sale of the property. The property's damage was
primarily cosmetic and we do not believe the structural integrity
or economic viability of the building has diminished. Temporary
repair work has been completed. However due to the extensive
damage elsewhere in the area, permanent repairs were not able to
commence until the first quarter of 2005.
On March 17, 2003, the joint venture obtained a loan
commitment from AmSouth Bank in the amount of $3,250,000. The
loan proposal provides for payment of interest only for a 24-
month term subject to various tests to be met at a six-month
period from close and a nine-month period from close. If these
tests are not met the joint venture can be required to reduce the
principal outstanding by a cumulative amount ranging from
$250,000 to $500,000 depending on the test.
On April 29, 2003, the Sabal Palm joint venture closed on a
$3,250,000 mortgage with AmSouth Bank (subject to a reduction not
to exceed $500,000 if certain conditions of the loan are not
met). The joint venture repaid the prior outstanding first
mortgage loan on the property in the amount of $2,957,941,
accrued interest of $22,100 and paid loan costs and fees of
approximately $46,100 at closing. The joint venture expects to
use the remaining proceeds primarily to finance certain tenant
improvements and leasing costs.
The AmSouth loan bears interest at LIBOR plus 2.85% and is
payable interest only monthly until maturity (February 3, 2006)
at which time all unpaid interest and principal is due. The loan
is secured by a first mortgage lien on the property and
collateral assignment of rents and leases as well as the
management agreement. The partners of the joint venture have each
guaranteed the repayment of 50% of the joint venture obligations
under the loan documents and the manager has agreed to
subordinate payment of the management fee to the payment of the
loan obligations.
Additionally, the lender required that $1,000,000 in aggregate
unencumbered liquid assets be maintained (but not pledged) during
the term of the loan as well as requiring the Partnership and
BREF 4 to maintain a minimum combined tangible net worth of not
less than $1,000,000.
In January 2004, Sabal Palm was not in compliance with the net
operating income requirement established in the loan and as a
result the lender had a right to require a repayment of principal
from the joint venture in an amount not to exceed $500,000. In
the second quarter of 2004, pursuant to the existing loan
agreement, the lender requested repayment of principal in the
amount of $250,000. The lender agreed to allow for this payment
to be made from the $1,000,000 on deposit with the lender and
further agreed to reduce the liquidity requirement to $500,000.
Additionally, the lender agreed to fund from the deposit with the
lender certain improvements (up to $245,000) that the joint
venture is contemplating making in order to facilitate the sale
of the property.
Due to the fact that damage caused by the hurricanes in 2004
was being repaired in the first and second quarter of 2005, the
joint venture did not believe it would be able to repay the loan
in May 2005. Therefore, the joint venture requested an extension
of the mortgage loan. On April 13, 2005, the joint venture and
the lender agreed to terms for a nine month extension of the
current mortgage note. The lender required that the joint
venture make a principal reduction in the amount of $400,000,
which the lender has agreed will be paid from the cash deposit
held by the lender. Additionally, the joint venture was required
to pay an extension fee in the amount of $5,000. Further, as
part of the extension, the lender agreed to release the
unencumbered liquid asset requirement of the mortgage loan. All
other terms and conditions remain the same.
A requirement of the Family Dollar lease was that the joint
venture reimburse the tenant approximately $127,000 for the
substantial improvements made by the tenant to the existing
space. The joint venture reimbursed Family Dollar in September
2004. In addition, the joint venture will be making a number of
other repairs and improvements to the center to improve its
marketability for sale. These improvements will include roof
repair (and repainting) and parking lot repairs including
restriping.
In September 2005, the Sabal Palm joint venture entered into a
contract to sell the Sabal Palm shopping center to an
unaffiliated third party. The contract calls for a due diligence
investigation period of 45 days with closing to follow 45 days
thereafter. The due diligence period has expired and the
property has been approved by the purchaser. The joint venture
expects to complete the sale in the fourth quarter of 2005.
However, there can be no assurance that this purchaser will
complete the transaction.
As a result of the July 1999 authorization by a majority of
the Limited Partners to sell the Partnership's properties, the
Partnership has begun the liquidation process and, in accordance
with generally accepted accounting principles, the Partnership's
financial statements for periods subsequent to July 12, 1999 have
been prepared on the liquidation basis of accounting.
Accordingly, the carrying values of the assets are presented at
net realizable values and liabilities are presented at estimated
settlement amounts, including estimated costs associated with
carrying out the liquidation. Preparation of the financial
statements on the liquidation basis of accounting requires
significant assumptions by management, including the estimate of
liquidation costs and the resolution of any contingent
liabilities. There may be differences between the assumptions
and the actual results because events and circumstances
frequently do not occur as expected. Those differences, if any,
could result in a change in the net assets recorded in the
consolidated statement of net assets as of September 30, 2005.
The General Partners expect to distribute proceeds from
operating cash flow, if any, and from the sale of real estate to
Limited Partners in a manner that is consistent with the
investment objectives of the Partnership. Management of the
Partnership believes that cash needs may arise from time to time
which will have the effect of reducing distributions to Limited
Partners to amounts less than would be available from refinancing
or sale proceeds. These cash needs include, among other things,
maintenance of working capital reserves in compliance with the
Agreement as well as payments for major repairs, tenant
improvements and leasing commissions in support of real estate
operations. In particular, the retenanting of Sabal Palm, if
successful, will require an additional capital investment by the
Partnership.
Results of Operations
The Partnership's revenue and expenses are affected primarily
by the operations of the properties. Property operations, and in
particular the components of income, demand for space and rental
rates are, to a large extent, determined by local and national
market conditions.
These conditions have generally adversely impacted the
Partnership's property economics. Rental and occupancy rates
have generally been less than they were when the properties were
acquired.
The General Partners conduct an in-depth assessment of each
property's physical condition as well as a demographic analysis
to assess opportunities for increasing occupancy and rental rates
and decreasing operating costs. In all instances, decisions
concerning restructuring of loan terms, reversions and subsequent
operation of the property are made with the intent of maximizing
the potential proceeds to the Partnership and, therefore, return
of investment and income to Limited Partners.
In certain instances and under limited circumstances,
management of the Partnership entered into negotiations with
lenders for the purpose of restructuring the terms of loans to
provide for debt service levels that could be supported by
operations of the properties. When negotiations are
unsuccessful, management of the Partnership considers the
possibility of reverting the properties to the first mortgage
lender. Foreclosure proceedings may require 6 to 24 months to
conclude.
An affiliate of the Partnership and the General Partners is
assigned responsibility for day-to-day management of the
properties. The affiliate receives a combined management and
leasing fee, which cannot exceed 6% of gross revenues generated
by the properties. Management fee rates are determined by the
extent of services provided by the affiliate versus services that
may be provided by third parties, i.e., independent leasing
agents. In all instances, fees paid by the Partnership to the
property management affiliate are, in the General Partners'
opinion, comparable to fees that would be paid to independent
third parties.
Results of Operations - Nine months ended September 30, 2005 and
2004 (Liquidation Basis)
As a result of the Partnership's adoption of the liquidation
basis of accounting, and in accordance with generally accepted
accounting principles, the Partnership's financial statements for
periods subsequent to July 12, 1999 have been prepared on a
liquidation basis.
The Partnership generated net loss of $18,000 for the nine
months ended September 30, 2005 as compared to a net loss of
$163,000 for the same period in 2004.
Total income for the nine months ended September 30, 2005 was
$497,000 as compared to $408,000 for the same period in 2004.
The $89,000 increase in total income was primarily a result of a
$57,000 increase in rental income, a $28,000 increase in interest
income and a $3,000 increase in other income. Rental and other
tenant income increased as a result of an increase in occupancy
at Sabal during the nine months ended September 30, 2005 compared
to the nine months ended September 30, 2004.
Total expenses for the nine months ended September 30, 2005
were $530,000 as compared to $644,000 for the same period in
2004. The $114,000 decrease in expense is the result of a
$198,000 decrease in general and administrative expense,
partially offset by a $49,000 increase in repairs and
maintenance, a $26,000 increase in interest expense and an $8,000
increase in management fees. General and administrative expenses
decreased between the two periods primarily as a result of the
$127,000 payment in September 2004 to reimburse a tenant at Sabal
Palm for part of their buildout. In addition, general and
administrative expenses decreased as a result of paying more
leasing commissions during the period ended in 2004 than in 2005.
Repairs and maintenance increased primarily as a result of roof
repairs at the Sabal Palm property.
Results of Operations - Three months ended September 30, 2005 and
2004
(Liquidation Basis)
The Partnership generated net income of $30,000 for the three
months ended September 30, 2005 as compared to a net loss of
$117,000 for the same period in 2004.
Total income for the three months ended September 30, 2005 was
$159,000 as compared to $148,000 for the same period in 2004.
The $11,000 increase in total income was primarily a result of a
$15,000 increase in rental income, a $10,000 increase in interest
income, partially offset by a $13,000 decrease in other income.
Rental income increased as a result of an increase in occupancy
at Sabal during the three months ended September 30, 2005
compared to the three months ended September 30, 2004.
Total expenses for the three months ended September 30, 2005
were $108,000 as compared to $306,000 for the same period in
2004. The $198,000 decrease in expense is the result of a
decrease in general and administrative expense of $177,000, a
decrease of $18,000 in bad debt expense and a $14,000 decrease in
repairs and maintenance. The decrease in expenses was partially
offset by an increase of $8,000 in interest expense. General and
administrative expenses decreased between the two periods
primarily as a result of the $127,000 payment in September 2004
to reimburse a tenant at Sabal Palm for part of their buildout.
In addition, general and administrative expenses decreased in
2005 when compared to 2004 as a result of the 2004 recording of
increases to the reserve for estimated future costs during the
liquidation period. Bad debt expense decreased in 2005 as a
result of collecting receivables previously accounted for as bad
debt. Repairs and maintenance expense decreased as a result of
receiving insurance proceeds in 2005 related to the hurricane
repairs.
Item 3. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Chief Executive Officer and Chief Financial Officer, of
the corporate general partner, have reviewed and evaluated the
effectiveness of the Partnership's disclosure controls and
procedures (as defined in Exchange Act Rules 240.13a-14(c) and
15d-14(c)) as of a date within 90 days before the filing date of
this quarterly report. Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer have concluded that
the Partnership's current disclosure controls and procedures are
effective and timely, providing all material information relating
to the Partnership required to be disclosed in reports filed or
submitted under the Exchange Act.
Changes in Internal Controls
There have not been any significant changes in the
Partnership's internal controls or in other factors that could
significantly affect these controls subsequent to the date of
their evaluation. The Chief Executive Officer and Chief
Financial Officer are not aware of any significant deficiencies
or material weaknesses, therefore no corrective actions were
taken.
BRAUVIN REAL ESTATE FUND L.P. 5
(a Delaware limited partnership)
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
None.
ITEM 2. Changes in Securities.
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 8-K.
Exhibit 99. Certification of Officers
BRAUVIN REAL ESTATE FUND L.P. 5
(a Delaware limited partnership)
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.
BY: Brauvin Ventures, Inc.
Corporate General Partner of
Brauvin Real Estate Fund L.P. 5
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of
Directors and President
DATE: November 15, 2005
BY: /s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer
And Treasurer
DATE: November 15, 2005
CERTIFICATION FOR SARBANES-OXLEY SECTION 302(A)
CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER
OF
BRAUVIN VENTURES, INC.
CORPORATE GENERAL PARTNER
OF
BRAUVIN REAL ESTATE FUND L.P. 5
I, Jerome J. Brault, Chief Executive Officer of the Company,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
Brauvin Real Estate Fund L.P. 5;
2. Based on my knowledge, this report does not contain any untrue
statement of 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 consolidated financial condition,
results of operations and statement of changes in net assets
in liquidation of the small business issuer as of, and for,
the periods presented in this report;
4. The small business issuer's other certifying officer 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)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)for the small business issue 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 quarterly report is being
prepared;
b) Designed such internal control over financial reporting,
or caused such internal control over financial reporting
to be designed under our supervision, to provide
reasonable assurance regarding the reliability of
financial reporting and the preparation of financial
statements for external purposes in accordance with
generally accepted accounting principles
c) 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
d) 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
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 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 small
business issuer's board of directors (or persons performing
the equivalent function):
a) All significant deficiencies and material weaknesses in
the design or operation of internal control over
financial reporting which are reasonably likely to
aversely 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 controls over
financial reporting.
BY: Brauvin Ventures, Inc.
Corporate General Partner of
Brauvin Real Estate Fund L.P. 5
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of
Directors, President and Chief
Executive Officer
DATE: November 15, 2005
CERTIFICATION FOR SARBANES-OXLEY SECTION 302(A)
CERTIFICATE OF THE CHIEF FINANCIAL OFFICER
OF
BRAUVIN VENTURES, INC.
CORPORATE GENERAL PARTNER
OF
BRAUVIN REAL ESTATE FUND L.P. 5
I, Thomas E. Murphy, Chief Financial Officer of the Company,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
Brauvin Real Estate Fund L.P 5.;
2. Based on my knowledge, this report does not contain any
untrue statement of 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 consolidated financial
condition, results of operations and statement of changes in
net assets in liquidation of the small business issuer as
of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer 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)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)for the small business issue 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 quarterly report is
being prepared;
b) Designed such internal control over financial
reporting, or caused such internal control over
financial reporting to be designed under our
supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the
preparation of financial statements for external
purposes in accordance with generally accepted
accounting principles
c) 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
d) 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 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 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 small
business issuer's board of directors (or persons performing
the equivalent function):
a) All significant deficiencies and material weaknesses in
the design or operation of internal control over
financial reporting which are reasonably likely to
aversely 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 controls
over financial reporting.
BY: Brauvin Ventures, Inc.
Corporate General Partner of
Brauvin Real Estate Fund L.P. 5
BY: /s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer and
Treasurer
DATE: November 15, 2005
Exhibit 99
SECTION 906 CERTIFICATION
The following statement is provided by the undersigned to
accompany the Quarterly Report on Form 10-QSB for the quarter
ended September 30, 2005, pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 and shall not be deemed filed pursuant to any
provisions of the Securities Exchange Act of 1934 or any other
securities law:
Each of the undersigned certifies that the foregoing Report on
Form 10-QSB fully complies with the requirements of Section 13(a)
of the Securities Exchange Act of 1934 (15 U.S.C. 78m) and that
the information contained in the Form 10-QSB fairly presents, in
all material respects, the financial condition and results of
operations of Brauvin Real Estate Fund L.P. 5.
BY: Brauvin Ventures, Inc.
Corporate General Partner of
Brauvin Real Estate Fund L.P. 5
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of
Directors and President
DATE: November 15, 2005
BY: /s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer
And Treasurer
DATE: November 15, 2005