FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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 0-168056
ASSOCIATED PLANNERS REALTY FUND
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4036980
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5933 W. CENTURY BLVD., SUITE 900
LOS ANGELES, CALIFORNIA 90045
(Address of principal executive offices)
(Zip Code)
(310) 670-0800
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
ITEM 1. FINANCIAL STATEMENTS
In the opinion of the General Partner of Associated Planners Realty Fund
(the"Partnership"), all adjustments necessary for a fair presentation of the
Partnership's results for the three and six months ended June 30, 1995
and 1994, have been made in the following financial statements. However, such
financial statements are unaudited and are subject to any year-end adjustments
that may be necessary.
BALANCE SHEETS
June 30, 1995 (Unaudited) and December 31, 1994
June 30, December 31,
1995 1994
(Unaudited)
ASSETS
RENTAL REAL ESTATE, net of accumulated
depreciation (Note 2) $4,526,324 $5,982,471
CASH AND CASH EQUIVALENT 1,596,325 36,227
CONSTRUCTION IN PROGRESS 819,901 68,411
INVESTMENT-GOVERNMENT SECURITIES ACCOUNT --- 55,554
OTHER ASSETS 50,504 112,713
$6,993,054 $6,255,376
LIABILITIES AND PARTNERS' EQUITY
CONSTRUCTION LOAN PAYABLE 672,675 ---
ACCOUNTS PAYABLE 8,880 24,757
SECURITY DEPOSITS AND PREPAID RENT 30,839 20,103
TOTAL LIABILITIES 712,394 44,860
MINORITY INTEREST 221,087 224,618
COMMITMENTS AND CONTINGENCIES (Note 5)
PARTNERS' EQUITY:
Limited Partner:
$1,000 stated value per unit;
authorized 7,500 units;
issued - 7,499 5,699,262 5,653,977
General Partner: 360,311 331,921
TOTAL PARTNERS EQUITY 6,059,573 5,985,898
$6,993,054 $6,255,376
[FN]
See accompanying notes to financial statements.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
Six Months Ended June 30, 1995
(Unaudited)
Limited Partners General
Total Units Amount Partner
BALANCE, December 31, 1994 $5,985,898 7,499 $5,653,977 $331,921
Net income 223,755 --- 195,365 28,390
Distributions to limited partners (150,080) --- (150,080) --
BALANCE, June 30, 1995 $6,059,573 7,499 $5,699,262 $360,311
Six Months Ended June 30, 1994
(Unaudited)
Limited Partners General
Total Units Amount Partner
BALANCE, December 31, 1993 $6,116,709 7,499 $5,819,311 $297,398
Net income 106,652 --- 89,019 17,633
Distributions to limited partners (183,725) --- (183,725) ---
BALANCE, June 30, 1994 $6,039,636 7,499 $5,724,605 $315,031
[FN]
See accompanying notes to financial statements.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
STATEMENTS OF INCOME
Three and Six Months Ended June 30, 1995 and 1994
(Unaudited)
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES:
Rental $152,753 $190,699 $341,771 $374,891
Gain on sale of property 116,749 --- 116,749 ---
Interest 9,845 1,617 10,625 3,094
279,347 192,316 469,145 377,985
COSTS AND EXPENSES:
Operating 30,371 30,993 87,168 84,002
Property taxes 10,927 15,281 24,924 29,930
Property management fees 6,836 9,552 16,793 18,761
Unrealized (gain) loss in
government securities --- 2,195 (98) 4,666
General and administrative 26,834 37,181 53,311 57,405
Depreciation 30,591 35,373 66,823 70,746
105,559 130,575 248,921 265,510
LESS MINORITY INTEREST
IN NET INCOME (LOSS) OF
JOINT VENTURE 1,502 (3,162) 3,531 (5,823)
NET INCOME $175,290 $58,579 $223,755 $106,652
NET INCOME PER
LIMITED PARTNERSHIP UNIT $20.67 $6.61 $26.05 $11.87
[FN]
See accompanying notes to financial statements.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 1995 and 1994
(Unaudited)
Six Months Six Months
Ended Ended
June 30, June 30,
1995 1994
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net income $223,755 $106,652
Adjustment to reconcile net income to
net cash provided by operating activities:
Depreciation 66,823 70,746
Net proceeds from sale of investment
in government securities account 55,652 8,596
Unrealized loss (gain) -
investment in government securities (98) 4,666
Minority interest in net income (loss) (3,531) (5,823)
Gain on sale of property (116,749) ---
Increase (decrease) from changes in:
Other assets 62,209 (12,646)
Accounts payable (15,877) (47,288)
Security deposits 10,736 723
Net cash provided by operating activities 282,920 125,626
Cash flows used in investing activities:
Furniture & fixture additions (11,746) ---
Construction in progress (751,490) ---
Proceeds from sale of property 1,517,819 ---
Net cash provided by investing activities 754,583 ---
Cash flows used in financing activities:
Construction loan proceeds 672,675 ---
Distributions to limited partners (150,080) (183,725)
Distributions to minority interest --- (1,236)
Net cash used in financing activities 522,595 (184,961)
Net increase (decrease) in cash and cash equivalent 1,560,098 (59,335)
Cash and cash equivalents at beginning of period 36,227 139,748
Cash and cash equivalents at end of period $1,596,325 $80,413
[FN]
See accompanying notes to financial statements.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
Summary of Accounting Policies
Business
Associated Planners Realty Fund (the "Partnership"), a California limited
partnership, was formed on November 19, 1985 under the Revised Limited
Partnership Act of the State of California for the purpose of acquiring and
operating real estate.
Basis of Presentation
The consolidated financial statements do not give effect to any assets
that the partners may have outside of their interest in the partnership, nor
to any personal obligations, including income taxes, of the partners.
The consolidated financial statements include the accounts of
Associated Planners Realty Fund and all joint ventures in which it has
a majority interest.
Rental Real Estate
Assets are stated at cost. Depreciation is computed using the straight-
line method over estimated useful lives ranging from five to 35 years for
financial reporting purposes and five to 40 years for income tax purposes.
Rental Income
Rental income is recognized when the amount is due and payable under the
terms of a lease agreement.
Investment in Government Securities
Investment in Government Securities, which represent trading securities,
are accounted for in accordance with SFAS No. 115. The difference between
historical cost and market value are reported as unrealized gains Securities
or losses in the statement of income.
Statements of Cash Flows
For the purpose of the statements of cash flows, the Partnership considers
cash in the bank and all highly liquid investments purchased with original
maturities of three months or less, to be cash and cash equivalents.
Reclassification
Certain amounts in the 1995 financial statements have been reclassified
for comparative purposes.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 1995 and 1994 (Unaudited)
and Year Ended December 31, 1994
Note 1 - Nature of Partnership Business
Associated Planners Realty Fund, a California limited partnership (the
"Fund"), was formed on November 19, 1985 under the Revised Limited
Partnership Act of the State of California for the purpose of acquiring and
operating real estate. The Fund did not begin operations until 1986.
Under the terms of the partnership agreement, the General Partner is
entitled to cash distributions and net income allocations varying from 1% for
depreciation allocations to 15% of cash and income after the limited partners
have received cash distributions equal to their initial cash investment plus
a cumulative 8% return. The General Partner is also entitled to cash
distributions and net income allocations of 10% from ongoing partnership
operations. Further, the General Partner receives acquisition fees for
locating and negotiating the purchase of rental real estate and management
fees for operating the Partnership.
The Partnership currently has interests in four rental real estate
properties. Two are wholly-owned and two are jointly owned by the
Partnership (81.2%) and an affiliate (18.8%) (Note 2). The affiliate's
interests have been reflected as minority interests.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 1995 and 1994 (Unaudited)
and Year Ended December 31, 1994
(Continued)
Note 2 - Rental Real Estate
As of June 30, 1995 and December 31, 1994, the Fund's net real estate
investment is as follows:
June 30, December 31,
1995 1994
Land $2,001,428 $2,644,667
Buildings and Improvements 3,439,174 4,418,832
5,440,602 7,063,499
Less Accumulated Depreciation 914,278 1,081,028
Net Real Estate Investment $4,526,324 $5,982,471
On May 15, 1995, the Shurgard Mini-Warehouse Facility located at 11315
Meridian South, Puyallup, Washington was sold to Shurgard Storage Centers,
Inc. ("the Buyer"). The gross sales price was $1,550,000, although the
Partnership received $1,510,976 in net proceeds as a result of the
transaction. This net proceeds amount is calculated as the gross sale price
of $1,550,000 less $23,486 in excise taxes paid to the State of Washington,
less $4,332 in miscellaneous escrow closing costs, less $11,206 in prepaid
user rents, net of rent receivable and property taxes, attributable to the
Partnership. Net sales proceeds for tax reporting purposes are $1,522,182.
The amount of consideration received from the sale of the building was
arrived at through an arms-length negotiation process with the Buyer. The
sale was consummated for all cash without the use of seller provided
financing, or other installment sale techniques.
The Buyer of the property is an affiliate of the original seller of the
property that the Partnership acquired the property from in 1987.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 1995 and 1994 (Unaudited)
and Year Ended December 31, 1994
(Continued)
Note 3 - Related Party Transactions
(a) For Partnership management services rendered to the Partnership, the
General Partner is entitled to receive 10% of all distributions of cash from
operations. These amounts totaled $8,332 for the quarter ended June 30, 1995
and $9,999 for the quarter ended June 30, 1994, and $16,664 for the six
months ended June 30, 1995 and $20,414 for the six months ended June 30, 1994.
(b) For administrative services provided to the Partnership, the General
Partner is entitled to reimbursement for the cost of certain personnel and
relevant expenses. These amounts totaled $6,000 for the six months ended
June 30, 1995 and June 30, 1994 and $3,000 for the three months ended June
30, 1995 and June 30 1994.
(c) Property management fees incurred, in accordance with the
Partnership Agreement, to West Coast Realty Management, Inc., an affiliate of
the corporate General Partner, totaled $6,836 for the quarter ended June 30,
1995 and $9,552 for the quarter ended June 30, 1994, $16,793 for the
six months ended June 30, 1995 and $18,761 for the six months ended June 30,
1994.
Note 4 - Net Income and Cash Distributions Per Limited Partnership Unit
The Net Income per Limited Partnership Unit was computed in accordance
with the Partnership Agreement on the basis of weighted quarterly average
number of outstanding Limited Partnership Units. Cash distributions of
$10.00 per unit, paid on February 3, 1995 are reflected for the 7,499 units
outstanding at December 31, 1994 and $12.50 per unit, paid on February 9,
1994 are reflected for 7,499 units outstanding at December 31, 1993.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 1995 and 1994 (Unaudited)
and Year Ended December 31,1994
(Continued)
Note 5 - Construction in Progress and Construction Loan Payable
In January 1995, the Partnership closed escrow on a parcel of land
adjacent to the Shaw Villa Shopping Center. The purchase price of the land
was $206,749, including a $13,102 acquisition fee paid to the Advisor. The
purchase was financed using $23,602 in cash, and the remainder by a one
year construction loan from Valliwide Bank of Fresno. The loan bears
interest at 2% over the bank's prime rate and the total construction loan
commitment is for $1,365,000. The construction loan is interest only with
payments via additional draws against this loan. Total construction costs
incurred as of June 30, 1995 were $819,901, while borrowings on the
construction loan were $672,675. Included in construction costs is $22,278 in
construction loan interest that was capitalized.
Note 6 - Subsequent Events
The Partnership distributed $1,506,960 (ranging from $182.69 to $207.39
per unit) on July 7, 1995 to Limited Partners of record as of June 30, 1995.
On August 2, 1995, Wherehouse Entertainment, Inc. ("Wherehouse") filed
for relieve through Chapter 11 Bankruptcy protection. The Wherehouse is a
major tenant of the Shaw Villa Shopping Center in Clovis, California. In the
interim, the Partnership expects that Merrill Lynch, which controls over 90%
of the Wherehouse, will work diligently to resolve its debt restructuring
problems. Nevertheless, the Partnership has elected to take a cautious
approach until more reliable information is obtained.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
Associated Planners Realty Fund (the "Partnership") was organized in
November 1985, under the California Revised Limited Partnership Act. The
Partnership began offering units for sale on March 28, 1986. As of December
27, 1987, the Partnership had raised $7,499,000 in gross capital
contributions. The Partnership netted approximately $6,720,000 after sales
commissions and syndication costs.
The Partnership was organized for the purpose of investing in, holding,
and managing improved, leveraged income-producing property, such as
residential property, office buildings, commercial buildings, industrial
properties, and shopping centers. The Partnership intends to own and operate
such properties for investment over an anticipated holding period of
approximately five to ten years.
The Partnership's principal investment objectives are to invest in
rental real estate properties which will:
(1) Preserve and protect the Partnership's invested capital;
(2) Provide for cash distributions from operations;
(3) Provide gains through potential appreciation; and
(4) Generate Federal income tax deductions so that during the early
years of property operations, a portion of cash distributions may be treated
as a return of capital for tax purposes and, therefore, may not represent
taxable income to the limited partners.
The ownership and operation of any income-producing real estate is
subject to those risks inherent in all real estate investments, including
national and local economic conditions, the supply and demand for similar
types of properties, competitive marketing conditions, zoning changes,
possible casualty losses, and increases in real estate taxes, assessments,
and operating expenses, as well as others.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
The Partnership is operated by the General Partner subject to the terms
of the Amended and Restated Agreement of Limited Partnership. The
Partnership has no employees, and all administrative services are provided by
West Coast Realty Advisors, Inc., the General Partner.
Results of Operations
Operations for the quarter ended June 30, 1995, reflect an entire period
of operations for the Partnership's properties. Rental revenue for the three
and six months ended June 30, 1995 decreased from that for the three and six
months ended June 30, 1994 by $37,946 and $33,120, respectively, due to the
continued vacancy of the single tenant Santa Fe Business Park Building.
Costs and expenses related to the properties operation decreased for the
three and six months ended June 30, 1995 vs. the three and six months ended
June 30, 1994 by $25,016 and $16,589, respectively, primarily due to
decreased property taxes, property management fees and depreciation expense
attributable to the single tenant Sante Fe Business Park building vacancy and
the sale of the Puyallup, Washington mini-warehouse building to Shurgard
Storage Centers Inc. in May 1995.
The Partnership is currently attemting to rent space or sell the single
tenant Sante Fe Business Park Building, (179 Calle Magdalena), which has been
unoccupied since December 1993. The Partnership is experiencing a net
negative $4,000 cash flow per quarter as a result of the vacancy.
On May 15, 1995, the Shurgard Mini-Warehouse Facility located at 11315
Meridian South, Puyallup, Washington was sold to Shurgard Storage Centers,
Inc. ("the Buyer"). The gross sales price was $1,550,000, although the
Partnership received $1,510,976 in net proceeds as a result of the
transaction. This net proceeds amount is calculated as the gross sale price
of $1,550,000 less $23,486 in excise taxes paid to the State of Washington,
less $4,332 in miscellaneous escrow closing costs, less $11,206 in prepaid
user rents, net of rent receivable and property taxes, attributable to the
Partnership. Net sales proceeds for tax reporting purposes are $1,522,182.
The amount of consideration received from the sale of the building was
arrived at through an arms-length negotiation process with the Buyer. The
sale was consummated for all cash without the use of seller provided
financing, or other installment sale techniques.
The Buyer of the property is an affiliate of the original seller of the
property that the Partnership acquired the property from in 1987.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Liquidity and Capital Resources
During the three months ended June 30, 1995, cash increased by
approximately $1,490,900. This increase was due primarily to proceeds
received from the sale of the Puyallup, Washington mini-warehouse building to
Shurgard Storage Centers Inc. in May 1995. During the quarter ended June
30, 1995, the Partnership had a net income of $175,290, or $20.67 per limited
partnership unit, after depreciation expense of $30,591.
In January 1995, the Partnership closed escrow on a parcel of land
adjacent to the Shaw Villa Shopping Center. The purchase price of the land
was $206,749, including a $13,102 acquisition fee paid to the Advisor. The
purchase was financed using $23,602 in cash, and the reminder by a one
year construction loan from Valliwide Bank of Fresno. The loan bears
interest at 2% over the bank's prime rate and the total construction loan
commitment is for $1,365,000. The construction loan is interest only with
payments via additional draws against this loan. Total construction costs
incurred as of June 30, 1995 were $819,901, while borrowings on the
construction loan were $672,675. Included in total construction costs is
$22,278 capitalized interest.
Construction at the shopping center is expected to be completed in two
phases. First, 4,000 square feet of additional space will be erected on the
new parcel, contiguous to an existing building at Shaw Villa. Construction
is expected to be completed June 1, 1995. The Wherehouse will then be moved
into this space. The current space occupied by the Wherehouse will then be
remodeled and expanded by approximately 3,800 more square feet, for a total
of 8,200 square feet. This construction is expected to be completed by
September 1, 1995. The Wherehouse will then be relocated to the remodeled
space, and the Partnership will attempt to lease the new 4,000 square foot
space.
This additional work is expected to enhance the value of the parcel and
operating cash flows in the long run. The construction loan is expected to
be replaced by permanent financing in December 1995. The Partnership has
already received a commitment from a major insurance company to replace the
construction loan with a twenty year loan.
The Partnership's cash reserve is invested primarily in a liquid money
market mutual fund, earning interest at market rates, and a managed
Government Securities account. The money market fund is invested to provide
stability and safety of principal, competitive interest rates, and quick
availability of funds, in that order of importance.
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
PART II
O T H E R I N F O R M A T I O N
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. EXHIBIT AND REPORTS ON FORM 8-K
(a) Information required under this section has been included in
the financial statements.
(b) Reports on Form 8-K
Report dated May 15, 1995: pertains to Item 2. Disposition of
Assets
ASSOCIATED PLANNERS REALTY FUND
(A California Limited Partnership)
S I G N A T U R E S
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.
ASSOCIATED PLANNERS REALTY FUND
A California Limited Partnership
(Registrant)
By: WEST COAST REALTY ADVISORS, INC.
A California Corporation,
General Partner
August 11, 1995
Date William T. Haas
William T. Haas
Director and Executive Vice President / Secretary
August 11, 1995
Date Michael G. Clark
Michael G. Clark
Vice President / Treasurer