UNITED STATES
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 March 31, 1995
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 0-13402
Brauvin Real Estate Fund L.P. 4
(Exact name of registrant as specified in its charter)
Delaware 36-3304339
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 South Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
(312) 443-0922
(Registrant's telephone number, including area code)
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
BRAUVIN REAL ESTATE FUND L.P. 4
INDEX
Page
PART I Financial Information
Item 1. Financial Statements. . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets at March 31, 1995 and
December 31, 1994 . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations for the three
months ended March 31, 1995 and 1994. . . . . . . . . . . 5
Consolidated Statement of Partners' Capital for the period
January 1, 1995 to March 31, 1995 . . . . . . . . . . . . 6
Consolidated Statements of Cash Flows for the three
months ended March 31, 1995 and 1994. . . . . . . . . . . 7
Notes to Consolidated Financial Statements. . . . . . . . 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . 10
PART II Other Information
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . 12
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . 12
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . 12
Item 4. Submissions of Matters to a Vote of Security Holders . 12
Item 5. Other Information. . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Except for the December 31, 1994 Consolidated Balance Sheet, the
following Consolidated Balance Sheet as of March 31, 1995, Consolidated
Statements of Operations for the three months ended March 31, 1995 and
1994, Consolidated Statement of Partners' Capital for the period January 1,
1995 to March 31, 1995 and Consolidated Statements of Cash Flows for the
three months ended March 31, 1995 and 1994 for Brauvin Real Estate Fund
L.P. 4 (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 financial statements should be read in conjunction with the
financial statements and notes thereto included in the Partnership's 1994
Annual Report on Form 10-K.
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
1995 1994
ASSETS
Cash and cash equivalents $ 437,996 $ 404,347
Tenant receivables (net of allowance of
$19,476 and $19,204, respectively) 96,927 45,979
Escrow and other deposits 210,443 147,988
Other assets 50,022 56,922
Investment in affiliated joint venture 1,015,584 1,019,775
1,810,972 1,675,011
Investment in real estate, at cost:
Land 4,035,301 4,035,301
Buildings 16,201,324 16,195,230
20,236,625 20,230,531
Less: accumulated depreciation (4,645,710) (4,536,911)
Total investment in real estate, net 15,590,915 15,693,620
Total Assets $17,401,887 $17,368,631
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 185,809 $ 124,588
Security deposits 40,827 40,013
Mortgages payable 12,120,853 12,155,027
Total Liabilities 12,347,489 12,319,628
Minority interest in affiliated
joint venture 689,925 712,179
Partners' Capital
General Partners (16,559) (16,835)
Limited Partners (9,550 limited
partnership units issued
and outstanding) 4,381,032 4,353,659
Total Partners' Capital 4,364,473 4,336,824
Total Liabilities and
Partners' Capital $17,401,887 $17,368,631
See notes to consolidated financial statements (unaudited).
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1995 and 1994
(UNAUDITED)
1995 1994
INCOME
Rental $453,142 $449,223
Interest 5,437 653
Other, primarily expense reimbursements 68,349 62,739
Total income 526,928 512,615
EXPENSES
Mortgage and other interest 273,570 263,530
Depreciation 108,799 115,514
Real estate taxes 67,200 69,600
Repairs and maintenance 15,962 14,441
Other property operating 53,568 58,317
General and administrative 54,643 57,740
Total expenses 573,742 579,142
Loss before participation in affiliated
joint ventures (46,814) (66,527)
Equity in net income from affiliated
joint venture 52,209 43,506
Minority interest's share of affiliated
joint venture net loss 22,254 23,755
Net Income $ 27,649 $ 734
NET INCOME PER LIMITED PARTNERSHIP
INTEREST (9,550 UNITS): $ 2.87 $ .08
See notes to consolidated financial statements (unaudited).
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
For the Period January 1, 1995 to March 31, 1995
(UNAUDITED)
General Limited
Partners Partners Total
BALANCE at January 1, 1995 $(16,835) $4,353,659 $4,336,824
Net income 276 27,373 27,649
BALANCE at March 31, 1995 $(16,559) $4,381,032 $4,364,473
See notes to consolidated financial statements (unaudited).
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1995 and 1994
(UNAUDITED)
1995 1994
Cash Flows From Operating Activities:
Net income $ 27,649 $ 734
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in net income from affiliated
joint venture (52,209) (43,506)
Minority interest's share of affiliated
joint venture net loss (22,254) (23,755)
Provision for doubtful accounts 300 7,050
Depreciation 108,799 115,514
Amortization 4,729 4,729
Normalized rental revenue 780 3,233
Changes in operating assets and liabilities:
(Increase) decrease in tenant receivables (52,028) 71,458
Increase in escrow and other deposits (62,455) (38,521)
Decrease in other assets 2,171 12,779
Increase (decrease) in accounts payable
and accrued expenses 61,221 (41,628)
Increase (decrease) in security deposits 814 (889)
Net cash provided by operating activities 17,517 67,198
Cash Flows From Investing Activities:
Capital expenditures (6,094) (35,683)
Cash distribution from affiliated joint venture 56,400 44,650
Net cash provided by investing activities 50,306 8,967
Cash Flows From Financing Activities:
Repayment of mortgages (34,174) (59,717)
Contribution from minority partner of
affiliated joint venture -- 16,799
Net cash used in financing activities (34,174) (42,918)
Net increase in cash and cash equivalents 33,649 33,247
Cash and cash equivalents at beginning of period 404,347 276,652
Cash and cash equivalents at end of period $ 437,996 $ 309,899
See notes to consolidated financial statements (unaudited).
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three month period ended March 31, 1995 are not necessarily
indicative of the results that may be expected for the year ended December
31, 1995. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Annual Report on Form 10-K
for the year ended December 31, 1994.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reclassifications
Certain amounts in the 1994 financial statements have been reclassified
to conform to the 1995 presentation. This has not affected the previously
reported results of operations.
(3) TRANSACTIONS WITH AFFILIATES
Fees and other expenses paid to the General Partners or its affiliates
for the three months ended March 31, 1995 and 1994, were as follows:
1995 1994
Management fees $30,532 $35,122
Reimbursable office expenses 25,050 32,154
The Partnership believes the amounts paid to affiliates are
representative of amounts which would have been paid to independent parties
for similar services. The Partnership had made all payments to affiliates,
except for $8,103 for legal services, as of March 31, 1995.
(4) INVESTMENT IN AFFILIATED JOINT VENTURE
The Partnership owns a 47% interest in Sabal Palm and accounts for its
investment under the equity method.
The following are condensed income statements for Sabal Palm:
INCOME STATEMENTS:
Three Months Ended March 31,
1995 1994
Rental income $281,813 $261,205
Interest income 402 425
282,215 261,630
Mortgage and other interest 75,694 76,409
Depreciation 33,959 33,827
Operating and administrative expenses 61,478 58,832
171,131 169,068
Net income $111,084 $92,562
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
The Partnership intends to satisfy its short-term liquidity needs
through cash flow from the properties. Long-term liquidity needs are
expected to be satisfied through modification of the mortgages.
In November 1991, the Partnership reached an agreement with the lender
to modify the terms of the Fortune mortgage loan in a manner which has
allowed the property to operate at a break-even or positive cash flow level
(the "Second Loan Modification"). Pursuant to the Second Loan
Modification, the annual interest rate was reduced from 11.875% to 3%
effective as of July 1, 1991. The Partnership makes monthly principal and
interest payments based upon a 15-year amortization schedule plus 50% of
available cash flow for the period from July 1, 1993 through July 1, 1997.
Fortune is currently operating at a positive cash flow level and the
Partnership is current on its mortgage payments for the Fortune loan.
The lender had the option to accelerate the loan maturity beginning on
July 1, 1994, and each anniversary thereafter, if the property is not: (i)
in good condition and repair; (ii) occupied at a rate that is equal to the
prevailing occupancy rate for similar properties in the same locale; and
(iii) leased at rental rates which are at least 90% of the prevailing rate
for similar properties in the same locale. The Partnership believes that
the property currently meets these standards and will continue to meet
these standards.
In November 1992, the Partnership negotiated a modification of the
terms of the mortgage on Raleigh Springs Marketplace with the lender (the
"Modified Loan"). In October 1992, the interest rate was reduced from
12.75% to 10.00%. Since November 1992 and through September 1999,
principal and interest payments are based on a 25-year amortization
schedule. The Modified Loan capitalized the August, September and October
1992 mortgage payments with the final payment due on October 1, 1999. The
Partnership is current on its mortgage payments for the Raleigh Springs
loan.
The occupancy level at Fortune at March 31, 1995 was 93% as compared to
79% at December 31, 1994. The Partnership is continuing to work to sustain
the occupancy level of Fortune. Fortune operated at a positive cash flow
for the three months ended March 31, 1995.
Raleigh continued to generate positive cash flow for the three months
ended March 31, 1995. The occupancy level at Raleigh at March 31, 1995 was
98% compared to 92% at December 31, 1994.
Strawberry Fields continued to generate negative cash flow for the three
months ended March 31, 1995. The occupancy level at Strawberry Fields at
March 31, 1995 was 85% compared to 78% at December 31, 1994.
At Sabal Palm, the Partnership and its joint venture partner are
continuing to work to sustain the occupancy level, which stood at 99% at
March 31, 1995 and December 31, 1994. Although the Sabal Palm retail
market appears to be overbuilt, the property has continued to generate
positive cash flow since its acquisition in 1986.
The General Partners of the Partnership expect to distribute proceeds
from operations, 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 refinancings or sale proceeds. These cash needs include, among other
things, maintenance of working capital reserves in compliance with the
partnership agreement as well as payments for major repairs, tenant
improvements and leasing commissions in support of real estate operations.
Results of Operations - Three Months Ended March 31, 1995 and 1994
(Amounts rounded to 000's)
The Partnership generated a net income of $28,000 in the first quarter
of 1995 as compared to a net income of $1,000 in 1994. The $27,000
increase in net income resulted primarily from a $14,000 increase in total
income and a $5,000 decrease in total expenses.
First quarter total income was $527,000 in 1995 as compared to $513,000
in 1994, an increase of $14,000. The $14,000 increase in rental income
resulted primarily from a $9,000 increase in rental income at Fortune, due
to an increase in occupancy.
First quarter expenses were $574,000 in 1995 as compared to $579,000 in
1994, a decrease of $5,000.
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.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BY: Brauvin Ventures, Inc.
Corporate General Partner of
Brauvin Real Estate Fund L.P. 4
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of
Directors and President
DATE: May 12, 1995
BY: /s/ Thomas J. Coorsh
Thomas J. Coorsh
Chief Financial Officer and Treasurer
DATE: May 12, 1995