SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 10, 1995
Brauvin Real Estate Fund L. P. 5
(Exact name of registrant as specified in its charter)
Delaware 0-14481 36-3432071
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
organization) Number)
150 South Wacker Drive, Suite 3200, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 443-0922
Not Applicable
(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets
As reported on the Current Report on Form 8-K filed with the
Securities and Exchange Commission dated August 23, 1994,
Brauvin/The Annex of Schaumburg Associates, a joint venture (the
"Joint Venture") filed a voluntary petition for bankruptcy (Chapter 11) in
the United States Bankruptcy Court in the Northern District of Illinois.
The Joint Venture has two partners, Brauvin Real Estate Fund L.P. 5 ( the
"Partnership") and Brauvin Income Properties L.P. 6 ("BIP 6"), both Delaware
limited partnerships. The Partnership is a 54% partner of the Joint Venture
and BIP 6 is a 46% partner of the Joint Venture. On February 10, 1995, the
Bankruptcy Court ordered the dismissal of the voluntary petition
for bankruptcy effectively eliminating the protection of the property
from its creditors.
As reported on the Current Report on Form 8-K filed with the
Securities and Exchange Commission dated February 15, 1995, AUSA
Life Insurance Company ("AUSA") filed a motion for appointment of a
receiver against the Joint Venture. On February 17, 1995, the motion was
granted and an order was issued. The receiver had full power and authority
to operate, manage and conserve the mortgage real estate, commonly
know as the Annex of Schaumburg (the "Annex"), pursuant to the order. On
February 15, 1995, the Joint Venture received an amended notice of mortgage
foreclosure from AUSA. The Joint Venture had until March 17, 1995 to file an
answer to the amended notice. Since the Joint Venture did not answer on or
before March 17, 1995, default was entered against the Joint Venture and
ajudgement in accordance with the request for relief.
On April 3, 1995, a judgment of foreclosure and sale
was entered into against the Joint Venture. On May 10, 1995, the Annex was
sold to AUSA in a foreclosure sale, conducted by the Sheriff of Cook County,
pursuant to the judgement of foreclosure, however, the Joint Venture did not
receive notice of sale until May 22, 1995.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Statements.
The pro forma information included herein is presented for the year
ended December 31, 1994 and the three months ended March 31, 1995,
corresponding to the periods of the Partnership's annual and
quarterly financial statements most recently filed with the Securities and
Exchange Commission. The pro forma income statements and balance sheets
reflect the Partnership's operations, assets and liabilities as originally
reported and then as revised to exclude the Annex.
BRAUVIN REAL ESTATE FUND L.P. 5
PRO FORMA BALANCE SHEET
(Disposition of Brauvin/The Annex of Schaumburg)
March 31, 1995
(Unaudited)
Historical Pro Forma Pro Forma
Results Adjustments Results
ASSETS
Cash and cash equivalents $ 217,867 $ 7,079 $210,788
Cash held by receiver 64,072 64,072 --
Tenant receivables 41,916 30,142 11,774
Escrow and other deposits 27,404 679 26,725
Other assets 9,859 -- 9,859
Investment in affiliated joint
venture 689,925 -- 689,925
Deposit with title company 2,918,479 2,918,479 --
3,969,522 3,020,451 949,071
Investment in real estate, at cost:
Land 3,716,151 1,304,302 2,411,849
Buildings 15,353,131 5,320,037 10,033,094
19,069,282 6,624,339 12,444,943
Less: accumulated
depreciation (4,205,154) (1,607,614) (2,597,540)
Total investment in real
estate, net 14,864,128 5,016,725 9,847,403
Total Assets $18,833,650 $8,037,176 $10,796,474
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued
expenses $ 563,181 $ 507,850$ 55,331
Due to affiliates 22,686 -- 22,686
Security deposits 60,910 22,598 38,312
Note payable 2,918,479 2,918,479 --
Mortgages payable 11,407,275 5,040,583 6,366,692
Total Liabilities 14,972,531 8,489,510 6,483,021
Minority Interest in
Sabal Palm 1,015,584 -- 1,015,584
Minority Interest (deficit)
in the Annex of Schaumburg (233,753) (233,753) --
Partners' Capital
General Partners (35,051) (2,186) (32,865)
Limited Partners (9,914.5
limited partnership units
issued and outstanding) 3,114,339 (216,395) 3,330,734
Total Partners' Capital 3,079,288 (218,581) 3,297,869
Total Liabilities and
Partners' Capital $18,833,650 $8,037,176 $10,796,474
See Notes to Pro Forma Financial Statements
BRAUVIN REAL ESTATE FUND L.P. 5.
PRO FORMA STATEMENT OF INCOME
(Disposition of Brauvin/The Annex of Schaumburg)
For the Three Months Ended March 31, 1995
(Unaudited)
Historical Pro Forma Pro Forma
Results Adjustments Results
INCOME
Rental $524,082 $130,887 $393,195
Interest 2,108 1,203 905
Other, primarily expense
reimbursements 114,506 61,936 52,570
Total income 640,696 194,026 446,670
EXPENSES
Mortgage and other interest 165,927 12,677 153,250
Depreciation 101,427 35,358 66,069
Real estate taxes 154,700 119,100 35,600
Repairs and maintenance 2,925 -- 2,925
Other property operating 72,690 20,902 51,788
General and administrative 52,414 11,724 40,690
Total expenses 550,083 199,761 350,322
Income before affiliated joint
venture participation and
minority interests 90,613 (5,735) 96,348
Equity interest in affiliated
joint venture's net loss (22,254) -- (22,254)
Minority interest's share of
Sabal Palm's net income (52,209) -- (52,209)
Minority interest's share of
the Annex's net loss 2,638 2,638 --
Net Income $ 18,788 $ (3,097) $21,885
Net Income Per Limited Partnership
Interest (9,914.5 Units): $1.88 $(0.31) $2.19
See Notes to Pro Forma Financial Statements.
BRAUVIN REAL ESTATE FUND L.P. 5
PRO FORMA BALANCE SHEET
(Disposition of Brauvin/The Annex of Schaumburg)
December 31, 1994
(Unaudited)
Historical Pro Forma Pro Forma
Results Adjustments Results
ASSETS
Cash and cash equivalents $ 106,289$ 30,743$ 75,546
Due from affiliates 587 -- 587
Tenant receivables 93,422 22,326 71,096
Escrow and other deposits 83,199 83,636 (437)
Other assets 12,539 586 11,953
Investment in affiliated joint
venture 712,179 -- 712,179
Deposit with title company 2,929,581 2,929,581 --
3,937,796 3,066,872 870,924
Investment in real estate, at cost:
Land 3,716,151 1,304,302 2,411,849
Buildings 15,341,631 5,308,537 10,033,094
19,057,782 6,612,839 12,444,943
Less: accumulated
depreciation (4,103,727) (1,572,256) (2,531,471)
Total investment in real
estate, net 14,954,055 5,040,583 9,913,472
Total Assets $18,891,851 $ 8,107,455 $10,784,396
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued
expenses $ 602,607 $ 563,292 $ 39,315
Due to affiliates 25,988 -- 25,988
Security deposits 56,772 20,598 36,174
Note payable 2,929,581 2,929,581 --
Mortgages payable 11,427,743 5,040,583 6,387,160
Total Liabilities 15,042,691 8,554,054 6,488,637
Minority Interest in
Sabal Palm 1,019,775 -- 1,019,775
Minority Interest (deficit)
in the Annex of Schaumburg (231,115) (231,115) --
Partners' capital
General Partners (35,239) (2,155) (33,084)
Limited Partners (9,914.5
limited partnership units
issued and outstanding) 3,095,739 (213,329) 3,309,068
Total Partners' Capital 3,060,500 (215,484) 3,275,984
Total Liabilities and
Partners' Capital $18,891,851 $ 8,107,455 $10,784,396
See Notes to Pro Forma Financial Statements.
BRAUVIN REAL ESTATE FUND L.P. 5.
PRO FORMA STATEMENT OF INCOME
(Disposition of Brauvin/The Annex of Schaumburg)
For the Year Ended December 31, 1994
(Unaudited)
Historical Pro Forma Pro Forma
Results Adjustments Results
INCOME
Rental $1,708,963 $549,029 $1,159,934
Interest 8,186 4,220 3,966
Other, primarily tenant
expense reimbursements 543,922 388,813 155,109
Total income 2,261,071 942,062 1,319,009
EXPENSES
Mortgage and other interest 842,751 224,604 618,147
Depreciation 423,829 161,553 262,276
Real estate taxes 570,682 445,220 125,462
Repair and maintenance 144,835 64,139 80,696
Other property operating 255,183 117,978 137,205
General and administrative 307,140 98,155 208,985
Provision for investment
property impairment 882,709 882,709 --
Total expenses 3,427,129 1,994,358 1,432,771
Loss before affiliated joint
venture participation and
minority interests (1,166,058) (1,052,296) (113,762)
Equity interest in affiliated
joint venture's net loss (98,150) -- (98,150)
Minority interest's share of
Sabal Palm's net
(income) loss (22,991) -- (22,991)
Minority interest's share
of the Annex of
Schaumburg's net loss 484,056 484,056 --
Net loss $ (803,143) $ (568,240) $(234,903)
Net Loss Per Limited
Partnership Interest
(9,914.5 Units): $(80.20) $(56.74) $(23.46)
See Notes to Pro Forma Financial Statements.
BRAUVIN REAL ESTATE FUND L.P. 5
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The unaudited pro forma condensed financial statements are based upon
the Brauvin Real Estate Fund L.P. 5's (the "Partnership") audited
financial statements for the year ended December 31, 1994 with pro forma
adjustments based on the Partnership's disposition of the Brauvin/The Annex of
Schaumburg (the "Annex").
The pro forma adjustments reflect the financial effect of the
disposition as if it had been consummated on January 1, 1994 and
are described in detail by the following footnotes.
2. Joint Venture Partnerships
The Partnership owns 42%, 53% and 54% interests in joint ventures
which acquired three shopping centers, Strawberry Fields, Sabal
Palm and the Annex, respectively. The accompanying financial statements
have consolidated 100% of the assets and liabilities of Sabal Palm and
the Annex and are reported as investments in real estate. The investment in
Strawberry Fields has been recorded using the equity method and is
reported as an investment in an affiliated joint venture. The minority
interest of the consolidated joint ventures are recorded as minority interests
and 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.
3. Property
The Annex is stated at cost including adjustments for acquisition
costs, leasing commissions and tenant improvements. Depreciation
and amortization are recorded on a straight-line basis over the
estimated economic lives of the properties, which approximate 38 years, and
applicable lease terms, respectively.
The Partnership makes periodic assessments concerning possible
permanent impairment to the value of its properties. In the event
that the Partnership determines that a permanent impairment in value has
occurred, the carrying basis of that property is reduced to its estimated
fair value.
4. Cash Equivalents
The Partnership considers all highly liquid investments with a
maturity of 90 days or less when purchased to be a cash equivalent.
5. Mortgage Payable
On August 23, 1994, the Brauvin/The Annex of Schaumburg (the "Joint
Venture") filed a voluntary petition for bankruptcy (Chapter 11) in
the United States Bankruptcy Court in the Northern District of
Illinois. The Joint Venture has two partners, the Partnership and Brauvin
Income Properties L.P. 6 ("BIP 6"), both Delaware limited partnerships.
The Partnership is a 54% partner of the Joint Venture and BIP 6 is a
46% partner of the Joint Venture. On February 10, 1995, the Bankruptcy
Court ordered the dismissal of the voluntary petition for bankruptcy
effectively eliminating the protection of the property from its creditors.
Also on February 10, 1995, AUSA Life Insurance Company ("AUSA") filed a
motion for appointment of a receiver against the Joint Venture. On February
17, 1995, the motion was granted and an order was issued. The receiver will
have full power and authority to operate, manage and conserve the Annex
pursuant to the order. On February 15, 1995, the Joint Venture received an
amended notice of mortgage foreclosure from AUSA. The Joint Venture had
until March 17, 1995 to file an answer to the amended notice. Since the
Joint Venture did not answer on or before March 17, 1995, default was
entered against the Joint Venture and a judgement in accordance with the
request for relief. On April 3, 1995, a judgment of foreclosure and sale
was entered into against the Joint Venture. On May 10, 1995, the Annex
was sold to AUSA in a foreclosure sale, conducted by the Sheriff of
Cook County, pursuant to the judgement of foreclosure.
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.
BRAUVIN REAL ESTATE FUND L.P. 5
By: Brauvin Ventures, Inc.
Corporate General Partner
By: /s/ Jerome J. Brault
President and Chief
Executive Officer
Dated: May 24, 1995