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 March 31, 1996
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
(Exact 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.)
150 South Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
(312) 443-0922
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if
changed since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act
during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements
for the past 90 days. Yes X No .
INDEX
Page
PART I Financial Information
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . . .3
Consolidated Balance Sheet at March 31, 1996 . . . . . . . . .4
Consolidated Statements of Operations for the
three months ended March 31, 1996 and 1995 . . . . . . . . . .5
Consolidated Statements of Cash Flows for the
three months ended March 31, 1996 and 1995 . . . . . . . . . .6
Notes to Consolidated Financial Statements . . . . . . . . . .7
Item 2. Management's Discussion and Analysis or Plan
of Operations. . . . . . . . . . . . . . . . . . . . . . . . .9
PART II Other Information
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . 11
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . . 11
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . . 11
Item 4. Submissions of Matters to a Vote of Security
Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 11
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
The following Consolidated Balance Sheet as of March 31, 1996,
Consolidated Statements of Operations for the three months ended
March 31, 1996 and 1995 and Consolidated Statements of Cash Flows
for the three months ended March 31, 1996 and 1995 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 financial statements should be read in conjunction with the
financial statements and notes thereto included in the
Partnership's 1995 Annual Report on Form 10-K.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
March 31,
1996
ASSETS
Cash and cash equivalents $ 227,466
Tenant receivables (net of
allowance of $30,846) 105,714
Escrow deposits 121,656
Other assets 102,912
Due from affiliates 5,880
Investment in affiliated joint venture 598,622
1,162,250
Investment in real estate, at cost:
Land 2,411,849
Buildings 10,035,511
12,447,360
Less: accumulated depreciation (2,847,518)
Total investment in real estate, net 9,599,842
Total Assets $10,762,092
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 93,493
Due to affiliates 8,895
Security deposits 40,985
Mortgages payable 6,369,430
Total Liabilities 6,512,803
Minority interest in affiliated joint venture 993,289
Partners' Capital
General Partners (33,284)
Limited Partners (9,914.5 limited
partnership units issued and outstanding) 3,289,284
Total Partners' Capital 3,256,000
Total Liabilities and Partners' Capital $10,762,092
See notes to consolidated financial statements (unaudited).
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1996 and 1995
(UNAUDITED)
1996 1995
INCOME
Rental $404,057 $ 524,082
Interest 924 2,108
Other, primarily tenant expense
reimbursements 69,846 114,506
Total income 474,827 640,696
EXPENSES
Interest 140,281 165,927
Depreciation 67,137 101,427
Real estate taxes 35,855 154,700
Repairs and maintenance 5,055 2,925
Operating 46,235 72,690
General and administrative 49,320 52,414
Total expenses 343,883 550,083
Equity in net loss from
affiliated joint venture (11,868) (22,254)
Income before minority interest's
share in affiliated joint ventures 119,076 68,359
Minority interest's share of
Sabal Palm's net income (59,829) (52,209)
Minority interest's share of
Annex's net loss -- 2,638
Net Income $ 59,247 $ 18,788
Net Income Per Limited Partnership
Interest (9,914.5 Units) $ 5.92 $ 1.88
See notes to consolidated financial statements (unaudited).
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1996 and 1995
(UNAUDITED)
1996 1995
Cash Flows From Operating Activities:
Net income $ 59,247 $ 18,788
Adjustments to reconcile net income to net
cash provided by operating activities:
Equity in affiliated joint venture's
net loss 11,868 22,254
Minority interest's share of Sabal Palm's
net income 59,829 52,209
Minority interest's share of the Annex's
net loss -- (2,638)
Provision for doubtful accounts 12,160 3,300
Depreciation 67,137 101,427
Normalized rental revenue 2,952 (3,297)
Changes in operating assets and liabilities:
Decrease in tenant receivables, net 16,446 51,503
(Increase) decrease in escrow deposits (26,107) 55,795
Decrease in other assets 6,354 75
Increase in due from affiliates (5,880) (110)
Increase in cash held by receiver -- (64,072)
Increase (decrease) in accounts payable
and accrued expenses 14,112 (39,426)
Decrease in due to affiliates (43,838) --
Increase in security deposits -- 4,138
Net cash provided by operating activities 174,280 199,946
Cash Flows From Investing Activities:
Capital expenditures -- (11,500)
Cash distribution to Minority Partner-
Sabal Palm (70,500) (56,400)
Cash used in investing activities (70,500) (67,900)
Cash Flows From Financing Activities:
Repayment of mortgages (18,634) (20,468)
Cash used in financing activities (18,634) (20,468)
Net increase in cash and cash equivalents 85,146 111,578
Cash and cash equivalents at beginning
of period 142,320 106,289
Cash and cash equivalents at end of period $227,466 $217,867
See notes to consolidated financial statements (unaudited).
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-QSB 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, 1996 are not
necessarily indicative of the results that may be expected for the
year ended December 31, 1996. 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, 1995.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reclassifications
Certain amounts in the 1995 financial statements have been
reclassified to conform to the 1996 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 their
affiliates for the three months ended March 31, 1996 and 1995, were
as follows:
1996 1995
Management fees $28,556 $34,675
Reimbursable office expenses 19,033 25,621
Legal fees 4,480 --
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 $2,728 and $19,197 for legal
services, as of March 31, 1996 and 1995, respectively.
(4) INVESTMENT IN AFFILIATED JOINT VENTURE
The Partnership owns a 42% interest in Strawberry Fields and
accounts for its investment under the equity method. The following
are condensed income statements for Strawberry Fields:
INCOME STATEMENTS:
Three Months Ended March 31,
1996 1995
Rental income $207,031 $196,529
Interest income 65 --
207,096 196,529
Interest 114,901 137,070
Depreciation 50,010 49,841
Operating and
administrative expenses 70,441 62,603
235,352 249,514
Net loss $(28,256) $(52,985)
ITEM 2. Management's Discussion and Analysis or Plan 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 at more favorable interest rates.
The occupancy level at Crown Point at March 31, 1996 and
December 31, 1995 was 98% as compared to 95% at March 31, 1995. The
Partnership is continuing to work to sustain the occupancy level of
Crown Point. Crown Point operated at a positive cash flow for the
three months ended March 31, 1996.
At Sabal Palm the occupancy level at March 31, 1996 continues
to be at 99% as it was at March 31, 1995 and December 31, 1995.
Although the Sabal Palm retail market appears to be overbuilt, the
property has operated at a positive cash flow since its acquisition
in 1986.
Strawberry Fields operated at a positive cash flow for the
three months ended March 31, 1996. The occupancy level at
Strawberry Fields at March 31, 1996 and December 31, 1995 was 83%
as compared to 85% at March 31, 1995.
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, 1996 and 1995
(Amounts rounded to 000's)
The Partnership generated net income of $59,000 for the three
months ended March 31, 1996 as compared to net income of $19,000
for the same three month period in 1995. The $40,000 increase in
net income resulted primarily from the net of a $166,000 decrease
in total income and a $206,000 decrease in total expenses.
Total income for the three months ended March 31, 1996 was
$475,000 as compared to $641,000 for the same three month period in
1995, a decrease of $166,000. The $166,000 decrease resulted
primarily from the foreclosure of the Annex on May 15, 1995. Total
income for the Annex for the three months ended March 31, 1995 was
$194,000. This decrease in the Annex income was partially offset
by an increase in income at Sabal Palm of $14,000 and an increase
at Crown Point of $14,000. The increase at Crown Point was
primarily due to the occupancy rate increasing from 95% at March
31, 1995 to 98% at March 31, 1996.
For the three months ended March 31, 1996, total expenses were
$344,000 as compared to $550,000 for the same three month period in
1995, a decrease of $206,000. The $206,000 decrease in total
expenses resulted primarily from the foreclosure of the Annex.
Total expenses for the Annex for the three months ended March 31,
1995 was $200,000. The total expenses at the remaining properties
for the three months ended March 31, 1996 held constant with the
total expenses for the same three month period in 1995.
Interest expense at Crown Point and Strawberry Fields
decreased a total of $34,000 due to the refinancing of the Crown
Point loan on December 28, 1995 and the restructuring of the
Strawberry loan on November 1, 1995. These decreases in interest
expense at Crown Point and Strawberry Fields were offset by slight
increases in real estate taxes, operating expenses and general and
administrative expenses.
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 27. Financial Data Schedule
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. 5
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of
Directors and President
DATE: May 14, 1996
BY: /s/ Thomas J. Coorsh
Thomas J. Coorsh
Chief Financial Officer
and Treasurer
DATE: May 14, 1996