UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 0-16805 ASSOCIATED PLANNERS REALTY FUND, (A CALIFORNIA LIMITED PARTNERSHIP) (Exact name of registrant as specified in its charter) CALIFORNIA 95-4036980 State or other jurisdiction of (IRS Employer incorporation or organization identification) 5933 WEST CENTURY BLVD., 9TH FLOOR, LOS ANGELES, CA 90045-5454 (Address of principal executive offices) Registrant's telephone number, including area code (310) 670-0800 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: UNITS OF LIMITED PARTNERSHIP INTEREST (Title of class) Indicate by check mark whether the registrant (1) has filed all reports 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 O No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [ ] PART I ITEM 1. BUSINESS Associated Planners Realty Fund (the "Partnership"), was organized in November 1985, under the California Revised Limited Partnership Act. The General Partner is West Coast Realty Advisors, Inc. ("WCRA"), a California corporation. The Partnership was organized for the purpose of investing in, holding, and managing improved, unleveraged income-producing property, such as residential properties, office buildings, commercial buildings, industrial properties, miniwarehouse facilities, and shopping centers ("Properties"), which are believed to have potential for cash flow and capital appreciation. The Partnership intends to own and operate such Properties for investment over an anticipated holding period of approximately five to ten years. At December 31, 1995, the Partnership had no employees. The Partnership's principal investment objectives are to invest the net proceeds in real 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 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 Partnership acquired an 81.2% interest in two office buildings on December 31, 1986 in a joint venture with a related party, a 100% interest in a shopping center on January 23, 1987, a 100% interest in a commercial office building on November 12, 1987, and a 100% interest in a miniwarehouse facility on May 9, 1988. The terms of the joint venture call for Associated Planners Realty Fund to receive 81.2% of the operating profits and depreciation expense on the property. Upon disposition of the property, the Partnership will be entitled to 81.2% of the proceeds received from the sale of the property. All properties are located in California except for the miniwarehouse which is located in Washington. The mini-warehouse was sold in May 1995 (See Item 7 - Management's Discussion And Analysis of Financial Condition And Results of Operations). The ownership and operation of any income-producing real estate is subject to those risks inherent in all real estate investments. These include national and local economic conditions, the supply of and demand for similar types of real property, competitive marketing conditions, zoning changes, possible casualty losses, and increases in real estate taxes, assessments, and operating expenses, as well as others. In addition, the real estate market at this date is in a general state of uncertainty, and there is no assurance as to how long it might continue or its possible effect on the Partnership. This uncertainty is evidenced by the following conditions: 1. Downtrends in the real estate market in various areas of the country as evidenced by high vacancy rates in the commercial sector, and a large unsold inventory of new homes, particularly in California. 2. Economic recession, as evidenced by higher unemployment, slow consumer spending, and low increases in gross national product figures. 3. The effect of current or proposed tax reform legislation which has slowed the level of sale and development of real estate and the formation of real estate partnerships in many areas of the country. 4. Availability and cost of financing to allow for the purchase and sale of properties and to maintain overall real estate values. Although these factors have not materially affected the current financial results of the Partnership, there is a potential for them to have material effects on the Partnership's operations over the long-term. The Partnership is subject to competitive conditions that exist in the local markets where it operates rental real estate. These conditions are discussed in Item 2-- "Properties". 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 WCRA. ITEM 2. PROPERTIES The properties acquired and disposed of by the Partnership are described below: SANTA FE BUSINESS PARK (TWO PROPERTIES) On December 31, 1986, the Partnership purchased two out of six office buildings ("Building 3" and "Building 5"), located in a complex known as Santa Fe Business Park (the "Park"). The Park is located in Encinitas, California, near the intersection of Encinitas Boulevard and Interstate 5. The existence of a major highway (Interstate 5) near the office park makes it a desirable and accessible location for tenants. As the Partnership owns two of six buildings that make up Santa Fe Business Park, it is subject to competition from the other four buildings in the complex. The buildings were acquired in a joint venture with Prado Land Company (Prado), a California General Partnership, which is an affiliate of the General Partner. The Partnership has an 81.2% interest in the buildings and related profits and losses, and Prado has an 18.8% interest. The Park was completed in 1982, and is situated on 163,765 square feet of land. The buildings are two-story, constructed with steel and wood frames, with exterior walls of concrete and wood. There is extensive use of windows in the modern design, and Building 5 is operated as an executive suite with on-site management and several desirable shared amenities, such as conference rooms, showers, secretarial services, and wet bars. Ample parking is available around both buildings. Building 3 contains one office suite of 6,944 square feet. As of December 31, 1995, the building was 66 % occupied and the average rent per occupied square foot was $1.06. Building 5 contains 6,944 rental square feet, and its offices range in size from 90 to 350 square feet. As of December 31, 1995, the occupancy rate was 82 %, and the average monthly rent per occupied square foot was approximately $1.56 . No one tenant occupied 10% or of the rental square footage for Building 5 as of December 31, 1995. Tenants occupying more than 10% of Building 3 are noted below: Infoplace: 13.8% of rentable square footage; Rent is $12,756 per year (17% of total rent for the building). Lease expires August 31, 1996. Renewal options: None. Cohan: 13.8% of rentable square footage; Rent is $12,672 per year (17% of total rent for the building). Lease expires October 31, 1996. Renewal options: None. Synteract: 17.9% of rentable square footage; Rent is $14,664 per year (20% of total rent for the building). Lease expires September 30, 1996. Renewal options: One year for $17,160. PLG: 20.5% of rentable square footage; Rent is $18,797 per year (26% of total rent for the building). Lease expires September 30, 1998. Renewal options: None. The building and improvements are depreciated over 5 to 19 years using a straight-line method for both financial and income tax reporting purposes. The financial and income tax basis for the property are the same. In the opinion of the General Partner, the property is adequately insured. The property is managed by West Coast Realty Management, Inc. ("WCRM"), an affiliate of the General Partner. SHAW VILLA SHOPPING CENTER On January 23, 1987, the Partnership purchased the Shaw Villa Shopping Center (the "Center"), a 12,678 net leasable square foot shopping center located in Clovis, California. The Center was completed in 1978, and is situated on 69,260 square feet of land. The Center consisted of two buildings of 8,250 and 4,428 square feet each. Stores range in size from 1,000 to 3,000 square feet in the larger building. There are seventy parking spaces available within the Center. Wherehouse Entertainment, Inc. (a nationally known audio/video store) occupied the entire smaller building under a lease that expired January 1994, and at which time it then began paying $3,540 per month in rent ($0.80 per square foot plus a percentage of rent based on taxable sales) on a month to month lease. On June 15, 1995, The Wherehouse moved into a larger space (4,000 square feet) and began paying rent at the rate of $4,000 per month on a month- to-month basis. On November 4, 1995, the Wherehouse moved into a larger, newly constructed space, and signed a lease which runs through October 31, 2010, and calls for minimum monthly rent of $10,588 per month. (No other tenant besides Wherehouse Entertainment, Inc., occupies 10% or more of the rental square footage of the Shaw Villa Shopping Center). 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 paid for using $23,602 in cash, and the remainder financed by a one year construction loan provided by Valliwide Bank of Fresno. The loan carries an interest rate of 2% over the bank's prime rate, with the total loan commitment equaling $1,365,000. The loan is interest only with payments being made via additional draws against the loan. The outstanding loan balance at December 31, 1995 was $1,225,950. Construction at the shopping center was completed in two phases. First, 4,000 square feet of additional space was erected on the new parcel, contiguous to an existing building at Shaw Villa. Construction of this phase was completed June 1, 1995. The Wherehouse then moved into this space on June 15, 1995. The space occupied by the Wherehouse was then remodeled and expanded by approximately 3,900 more square feet, for a total of 8,272 square feet. This construction was completed by November 1, 1995. The Wherehouse was then relocated to the remodeled space on November 4, 1995, and the Partnership was in a position to lease the new 4,000 square foot space. As of December 31, 1995, the Partnership has thus far been unsuccessful in obtaining a new tenant for the 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 on or before December 31, 1996. The Partnership has already received a commitment from a major insurance company to replace the construction loan with a twenty year loan. The material terms of this commitment include are: 1) Amount of the loan: $1,500,000, 2) Term: 10 years with 20 year amortization, 3) Interest Rate: 9.625%, or the rate equal to the weekly average of the five-year Treasury Note yield for the seventh week prior to loan closing, plus 250 basis points, and 4) Payments: $14,105 per month, (if the interest rate is 9.625%). In August 1995, Wherehouse Entertainment (the parent company of the Wherehouse), sought protection under Chapter 11 of the Bankruptcy Code. Despite this filing, the Wherehouse store in the Shaw Villa Center has continued to operate and the Partnership has continued to collect payments due. The Wherehouse has contacted the Partnership regarding a possible reduction in its rent obligation in connection with its new enlarged space. In addition, the Partnership has an agreement with The Wherehouse to reimburse the tenant for up to $165,000 in improvement costs that the tenant has incurred in connection with the construction and move-in to the new space. At this time, the Partnership and The Wherehouse are still negotiating the issue, but nothing has been resolved. Given the fact that The Wherehouse is operating under protection of the bankruptcy laws, and a plan of reorganization is not expected to be approved until April 1996, this issue is not expected to be resolved until sometime after that month. The Partnership has sufficient commitment from its permanent financing lender to finance the $165,000 in improvement costs. In addition, the Partnership has identified several retail tenants who would be interested in occupying the Wherehouse space if nullification of the Wherehouse lease were to take place. The building and improvements are depreciated over 31.5 to 40 years using a straight-line method for both financial and income tax reporting purposes. The financial and income tax basis for the property are the same. In the opinion of the General Partner, the property is adequately insured. The property is managed by WCRM. This Center is dependent upon the vitality of the consumer market in the general area. There are several other small shopping centers in the area, similar to the one owned by the Partnership. There is, however, a large enough customer base for the retail and service business in the general area. Although all areas of California have been affected by the economic slowdown, layoffs, plant closings and military cutbacks, these economic factors are not expected to significantly impact the occupancy of the shopping center. PACIFIC BELL BUILDING, SIMI FREEWAY COMMERCE CENTER On November 12, 1987, the Partnership purchased the Pacific Bell Building located in the Simi Freeway Commerce Center in Simi Valley, California. The building's construction was completed in 1986, though the sole tenant, Pacific Bell, did not occupy the building until August 1987. The building provides 26,154 rentable square feet and is centrally located on the property's 2.06 acres of land. The average monthly rent per occupied square foot was approximately $.72 ($18,831 per month) up until September 15, 1995. At that time, the rent was adjusted upwards to $.756 per square foot ($19,772 per month) based on certain provisions in the lease allowing for increases based on changes in the Consumer Price Index. The lease is a "triple net" lease, requiring Pacific Bell to pay insurance, taxes, maintenance, and all other operating costs. The building and improvements are depreciated over 31.5 to 40 years using a straight-line method for both financial and income tax reporting purposes. The financial and income tax bases for the property are the same. In the opinion of the General Partner, the property is adequately insured. The property is managed by WCRM. In August 1995, as part of a general Company-wide consolidation, Pacific Bell vacated the property. Subsequent to that date, in November 1995, a subsidiary of Pacific Bell moved into the building to occupy a small portion of the property (1,700 square feet). Pacific Bell continues to pay its lease obligation on a regular basis. SHURGARD MINIWAREHOUSE On May 9, 1988, the Partnership purchased the Shurgard Miniwarehouse located in Puyallup, Washington. The building's construction was completed in 1978. The property is located on 2.76 acres of land, and has 485 storage spaces providing 44,040 square feet of rentable area. The property contains four separate single story storage buildings and a small building in the front which serves as the office and living quarters for the on-site manager. A network of asphalt driveways connects the storage buildings. There is ample parking available, the open area in the front is landscaped with grass, trees, and shrubs, and a computerized gate provides security access to the storage buildings. The General Partner engaged Shurgard Capital Management Corporation to manage this property. On May 15, 1995, the Shurgard Mini-Warehouse 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 property 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. The sale of the Shurgard property resulted in a $116,749 gain on sale. The building and improvements were depreciated over 31.5 to 40 years using a straight-line method for both financial and income tax reporting purposes. The financial and income tax basis for the property were the same. SUMMARY As of December 31, 1995, the combined occupancy rate of all the Partnership's properties, was 87%. In the opinion of the General Partner, all properties are adequately covered by insurance. The schedule below indicates the average annual occupancy rate expressed as a percentage of rentable square feet for the last five years: Year Santa Fe Shaw Villa Pacific Bell Shurgard Business Park Shopping Building Miniwarehouse - 2 properties Center 1995 Bldg.#3 = 66% 81% 100% n/a Bldg.#5 = 82% 1994 Bldg.#3 = 0% 76% 100% 85% Bldg.#5 = 80% 1993 Bldg.#3 = 0% 92% 100% 80% Bldg.#5 = 62% 1992 Bldg.#3 = 100% 100% 100% 80% Bldg.#5 = 84% Bldg.#3 = 100% 76% 100% 75% 1991 Bldg.#5 = 73% The total original acquisition cost to the Partnership of each property and the dates of acquisition were as follows: DESCRIPTION ACQUISITION ACQUISITION COST DATES Santa Fe Business Park (Building 3) $ 699,973 12/31/86 Santa Fe Business Park (Building 5) 825,281 12/31/86 Shaw Villa Shopping Center 1,208,990 01/23/87 Pacific Bell Building 2,616,523 11/12/87 Shurgard Miniwarehouse (Sold May 15, 1,603,144 05/09/88 1995) TOTAL 6,954,378 ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS At December 31, 1995, there were 7,499 limited partnership units outstanding and 669 unit holders of record. The units sold are not freely transferable and no public market for the sold units presently exists or is likely to develop. There are no units available for sale at December 31, 1995. Distributions totaling $1,769,282, $348,703, and $356,202, were made in 1995, 1994, and 1993, respectively, and were made to unit holders of record at the end of the calendar quarters indicated below. These distributions constituted a return of capital of $1,492,408, $130,811, and $53,515, in 1995, 1994, and 1993, respectively. In addition, $53,543 in distributions were paid to unit holders subsequent to the year-end in February 1996. The distribution amounts for 1995 and 1994 are summarized below: Record Date Date Paid Per Unit Units Total Paid Outstanding 12/31/93 02/09/94 12.50 7,499 93,737 03/31/94 05/05/94 12.00 7,499 89,988 06/30/94 08/02/94 12.00 7,499 89,988 09/30/94 11/03/94 10.00 7,499 74,990 12/31/94 02/03/95 10.00 7,499 74,990 03/31/95 07/07/95 182.69-207.39* 7,499 1,506,817 06/30/95 11/06/95 7.50 7,499 56,243 09/30/95 11/06/95 7.50 7,499 56,242 * Pertains to distribution of proceeds from the sale of the Shurgard property. Distributions are made based on income from operations, before depreciation and amortization, available as a result of the previous quarter's operations. ITEM 6. SELECTED FINANCIAL DATA The selected financial data should be read in conjunction with the financial statements and related notes and Item 7--" Management Discussion and Analysis of Financial Condition and Results of Operations" appearing elsewhere in this report. This statement is not covered by the accountants' opinion included elsewhere in this report. 1995 1994 1993 1992 1991 Operations for the years ended December 31: Revenues $639,039 $754,950 $ 861,238 $ 848,087 $ 798,919 Net Income 276,874 217,892 302,687 263,087 248,498 Net Income per Limited Partner Unit * 33.23 24.45 34.60 29.81 27.94 Distributions per Limited Partner Unit * 235.94 46.50 47.50 40.00 49.00 Financial position at December 31: Total Assets 6,011,070 6,255,376 6,459,247 6,491,943 6,527,404 Construction Loan 1,225,950 -- -- -- -- Partners' Equity 4,478,268 5,985,898 6,116,709 6,170,224 6,207,098 [FN] *Net income and distributions per limited partner unit were based on the weighted average number of outstanding units. ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES The Partnership began offering for sale limited partnership units on March 28, 1986. On July 16, 1986, the Partnership reached its minimum offering level of $1,200,000, and funds were released from an escrow account to the Partnership. The Partnership sold units throughout the remainder of the year, and raised $3,397,000 in gross proceeds or $3,025,961 net of syndication costs and sales commissions as of December 31, 1986. During 1986, the Partnership purchased two properties for $1,525,254 cash (the Santa Fe Business Park (two buildings)). During 1987, the Partnership purchased two additional properties for $3,829,207 cash (the Shurgard Mini-Warehouse and the Shaw Villa Shopping Center). The Partnership filed Post-Effective Amendment No. 1 to the Form S-18 used to register the Partnership. This filing was done to extend the period that units could be offered for sale by registrant to March 28, 1988. On December 30, 1987, the sale of units ended with $7,499,000 raised or $6,725,211 net of syndication costs and sales commissions. During 1988, the Partnership acquired its last and final property for $1,603,144 cash (the Pacific Bell Building). As of December 31, 1988, the Partnership completed its property acquisition phase. ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) In May 1995, the Partnership began the first step of the disposition phase of the Partnership's life cycle through the sale of the mini-warehouse located in Puyallup, Washington to Shurgard Storage Centers, Inc. The Partnership received approximately $1,510,976 in cash in connection with the sale (there was no debt assumed in connection with the sale). The General Partner did not receive any compensation in connection with its services provided in selling the property. The sale of the Shurgard property resulted in a gain of $116,749. In January 1995, the Partnership commenced a redevelopment project in order to enhance the value of the Partnership's Ownership of the Shaw Villa Shopping Center. The purpose of the project was primarily to increase the rentable square feet available in the Center, and particularly construct a larger retail space for Wherehouse Records--the primary tenant--in order to maintain that business as a long term tenant. A parcel of land adjacent to the Shopping Center was purchased for $206,749, including a $13,102 acquisition fee paid to the General Partner. 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 was for $1,365,000. The construction loan is interest only with payments via additional draws against this loan. The construction project was completed on November 2, 1995 with costs totaling $1,389,009, including $87,838 in capitalized interest costs. The Wherehouse moved into an enlarged space on November 4, 1995, At December 31, 1995, there was 4,000 square feet of vacant space in the Center (19.5%) of total available space. The Pacific Bell Building was vacated by its tenant (Pacific Bell) in August 1995. However, the tenant continues to pay its rental obligation on the building. The Pacific Bell lease ends September 1997. The Partnership has an ongoing effort to locate a suitable tenant for the building prior to the termination of this lease. The Partnership is currently not actively marketing any of the Partnership's remaining properties for sale at this time. During the year ended December 31, 1995, the Partnership made distributions to the general and limited partners totaling $1,784,504 of which $1,507,630 constituted a return of capital. The $1,784,504 in distributions compared favorably to the $1,804,673 in cash generated from property operations (net income plus depreciation expense less gain on sale of property) and proceeds from the sale of the Shurgard property. On February 4, 1996, the Partnership made a distribution to limited partners totaling $53,543. Distributions are determined by management based on cash flow and the liquidity position of the Partnership. It is the intention of management to make quarterly distributions of cash, subject to the maintenance of reasonable reserves. ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Management uses cash as its primary measure of a partnership's liquidity. The amount of cash that represents adequate liquidity for a real estate limited partnership, in the short-term and long-term, depends on several factors. Among them are: 1. Relative risk of the partnership; 2. Condition of the partnership's properties; 3. Stage in the partnership's life cycle (e.g., money-raising, acquisition, operating or disposition phase); and 4. Distributions to partners. The Partnership believes it has the ability to generate sufficient cash to meet both short-term and long-term liquidity needs, based upon the above four points. The first point refers to the risk of Partnership investments. The Partnership's investments in properties were paid for in cash and precludes the risk of debt service. The second point relates to the condition of the Partnership's properties. All Partnership properties are in good condition. There is no foreseeable need to increase reserves to fund deferred or unusual maintenance and repair expenditures. The third point relates to life cycle. The Partnership completed its funding and acquisition of property in previous years. Thus, the Partnership is in the property operating stage. As part of these operating activities, the partnership was involved in purchasing and developing the aforementioned parcel in Clovis in 1994 and 1995. This activity is expected to enhance rental revenues and increase the value of the Shaw Villa Shopping Center. The Partnership believes that cash flows provided by operating activities will continue. Although the Partnership did sell the Shurgard Property in 1995, there are currently no plans to sell additional properties in 1996. However, the General Partner will review any unsolicited offers for the purchase of the Partnership's properties to determine if a negotiated sale would be in the Partnership's best interests. ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) The fourth point relates to partner distributions. The Partnership makes quarterly distributions from operations. Such distributions are subject to payment of Partnership expenses and reasonable reserves for expenses, maintenance, and replacements. Adding to the liquidity is that at least one quarter's cash profits are reflected on the Partnership's balance sheet at each quarter end, since the Partnership makes distributions to the partners one month after quarter end. In the absence of any unforeseeable catastrophic event, the General Partner believes that the Partnership will have the ability to meet its cash requirements in the short-term and long-term. During the year ended December 31, 1995, the General Partner earned partnership management fees of $35,953. Subsequent to year-end, the General Partner received a partnership management fee of $5,949. Partnership management fees were paid and calculated in accordance with the partnership agreement. The Tax Reform Acts of 1986 and 1987 and the Revenue Reconciliation Acts of 1990 and 1993 did not have a material impact on the Partnership's operations. The slowdown in the economy, inflation and changing prices have had a nominal effect on the Partnership's revenues and income from continuing operations. During the eight years of the Partnership's existence, inflationary pressures in the U.S. economy have been minimal, and this has been consistent with the experience of the Partnership in operating rental real estate in California. The Partnership has several lease clauses with its properties' tenants that will help alleviate much of the negative impact of inflation. Among these are: A. Several month-to-month leases at the Santa Fe Business Park that would allow the Partnership to raise rents on a monthly basis. B. Triple net leases at the Shaw Villa Shopping Center and Pacific Bell Building which give the Partnership an ability to pass on higher operating costs to its tenants. NEW ACCOUNTING PRONOUNCEMENTS Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of" (SFAS No. 121) issued by the Financial Accounting Standards Board (FASB) is effective for financial statements for fiscal years beginning after December 15, 1995. The new standard establishes new guidelines regarding when impairment losses on long-lived assets, which include plant and equipment, and certain identifiable intangible assets, should be recognized and how impairment losses should be measured. The Partnership has elected the early adoption of SFAS No. 121. This change had no effect on the statement of income for the year ended December 31, 1995. ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) RESULTS OF OPERATIONS - 1995 VS. 1994 Operations for the year ended December 31, 1995 reflect only four and one half months of operations for the Shurgard property, as this property was sold on May 15,1995 to an unaffiliated third party. As such, the overall results of the Partnership are not directly comparative to those of 1994, due to the ownership of less property, and the distribution of sales proceeds from the Shurgard property on July 7, 1995 (shortly after the sale). Rental revenue decreased $131,694 (18%) from 1994 to 1995, primarily due to the sale of the Shurgard property in May which resulted in approximately $165,000 less in rental revenue if the property had been held the entire year (based on current and prior year results). The loss of revenue on Shurgard was offset by an increase in revenue on the 179 Calle Magdalena property which was vacant during 1994, but had $26,410 in revenue during 1995, due to some leasing activity at the end of the year. Interest income increased $15,783 (308%) during 1995 as compared to 1994 due primarily to a large amount of funds held from approximately May 16 to July 7 as a result of the sale of the Shurgard property. In addition, the sale of the Shurgard property resulted in a $116,749 gain on sale, which increased net income for the year to $276,874, or 2.7% higher than 1994's level. The Partnership benefited from lower overall costs and expenses in 1995 as compared to 1994. These totaled $470,564--a $77,601 (14.1%) decrease from 1994's level of $548,165. This decrease was the result of decreases in three major expense categories. Property operating costs decreased $36,116 (12%) due to the sale of the Shurgard mini-warehouse. In addition, there was less repair and maintenance costs on all other properties in 1995 as compared to 1994. General and administrative costs decreased $19,699 (18%) due to lower general partnership insurance costs and lower partnership management fees (due to lower distributions of quarterly income to the limited partners resulting in lower partnership management fees being paid to the General Partner). Depreciation expense decreased $19,127 (14%) due to the sale of the Shurgard property. The net result of these more significant variances is that the net income for 1995 was $58,982 (27%) higher than for 1994. Even though the Shurgard property was sold in May, the gain reported in connection with the sale greatly offset the loss of revenues from that property. In addition, several categories of expenses dropped as well. The gain on the sale of the property is of course a one-time occurrence, but the drop in these categories of expenses is anticipated to be an ongoing occurrence. On an operating cashflow basis (net income plus depreciation expense, less the gain on sale of property) the Partnership realized $282,491 in 1995, compared to $359,385 in 1994. This $76,894 drop is primarily due to the loss in positive cash flow from the Shurgard property. ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Cash and cash equivalents increased $67,073 for the year ended December 31, 1995 as opposed to a $103,521 decrease for the year ended December 31, 1993. Net cash from operating activities was $116,863 (38%) higher due primarily to changes in various asset and liability account balances that resulted in an increase in cash. Investing activities resulted in a $201,584 increase in cash as opposed to a $60,762 decrease in 1994. 1994's decrease was due to cash used towards construction work at the Shaw Villa Shopping Center. 1995's increase was due to cash received from the sale of the Shurgard property ($1,522,182) exceeding cash applied towards construction of the improvements at Shaw Villa ($1,389,009). Cash used by financing activities was $558,554 in 1995 as opposed to $349,939 in 1994. This was due to the cash used for distributions to limited and general partners, less proceeds from the construction loan in 1995, exceeding the distributions to limited partners and the Santa Fe Business Park minority interest partner in 1994. In summary then, a significant amount of cash was generated in 1995 as the result of the sale of the Shurgard Mini-warehouse and continuing operating profits from the various properties. The Partnership elected to distribute most of these amounts to the partners. The large construction project undertaken at the Shaw Villa Shopping Center was funded primarily with the use of proceeds received from a construction loan. In comparison, 1994's results were reflective primarily of a full year of operations for all of the properties originally acquired by the Partnership, without any construction activities or property dispositions. In 1996 and beyond, the Partnership expects to incur interest expense costs in connection with the construction loan, and later, permanent financing that will be taken on in connection with the Shaw Villa Shopping Center. The Partnership anticipates at this time that the higher interest expense will be only be partially offset by higher rental income from that property, and that cash flow from that property in 1996 should be lower than it was in 1995. The operating cash flow is expected to drop further in 1996 as compared to 1995 due to the Shurgard property not being owned for an entire year, compared to the four and one half months that it was owned in 1995. Ongoing distributions of quarterly profits have already been impacted by these two occurrences in the latter half of 1995, but further decreases in the level of distributions per unit are not contemplated at this time. RESULTS OF OPERATIONS - 1994 VS. 1993 Operations for the years ended December 31, 1994 and 1993 reflect full years of rental activities for the Partnership's properties. Net Income decreased 28% ($84,795) as a result of a 12% ($105,798) decrease in rental revenues. This decrease in rental revenue was primarily the result of lower occupancy at the 187 Calle Magdalena Office Suite Building resulting in approximately $3,521 less rental revenue and zero occupancy at the 179 Calle Magdalena Building resulting in approximately $101,500 less rental revenue from the year ended December 31, 1993. The Partnership's net income was reduced as the result of a $2,757 unrealized net loss on a $58,311 (cost basis) investment in short-term government securities. ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) The Partnership generated $362,142 in income from operations before depreciation expense of $141,493 and unrealized loss on government securities of $2,757, compared to $454,331 in income from operation for 1993 before depreciation expense of $144,075. Distributions to limited partners were only slightly impacted--dropping from $356,202 in 1993 to $348,703 in 1994. Distributions did not decrease more due to the payout of prior years' undistributed income in 1994 that had been held in reserves. Operating expenses increased $5,013 (1.7%) and general and administrative expenses decreased $8,005 (6.9%) from 1993 to 1994, which are both considered immaterial for comparison purposes. The statement of cash flows reflects proceeds from the sales (purchases) of government securities for 1994 and 1993. These amounts pertain to gross sales and (purchases) of government securities and are not being reflected as net sales (purchases) for the periods being reported. The General Partner believes that the Partnership will continue to incur operating and general and administrative expenses consistent with the prior years since occupancy has not fluctuated significantly from 1993 to 1994. Additionally, the properties are in good condition and significant repairs and maintenance or other capital improvements are not necessary at this time. Net income per limited partner unit decreased from $34.60 in 1993 to $24.45 in 1994, due primarily to the $101,500 decrease in rental revenue in the 179 Calle Magdalena Building. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA PAGE Report of Independent Certified Public Accountants................... 19 Balance Sheets -- December 31, 1995 and 1994 ......................... 20 Statements of Income for the years ended December 31, 1995, 1994, and 1993 ............................... 21 Statements of Partners' Equity for the years ended December 31, 1995, 1994, and 1993 ............................... 22 Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993 ................................ 23-24 Summary of Accounting Policies ....................................... 25-26 Notes to Financial Statements ........................................ 27-33 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Associated Planners Realty Fund (a California limited partnership) Los Angeles, California We have audited the accompanying consolidated balance sheets of Associated Planners Realty Fund (a California limited partnership) and consolidated entities, as of December 31, 1995 and 1994 and the related consolidated statements of income, partners' equity, and cash flows for each of the three years in the period ended December 31, 1995. We have also audited the schedules listed in the accompanying index. These consolidated financial statements and schedules are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements and schedules are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements and schedules. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Associated Planners Realty Fund (a California limited partnership) and consolidated entities, at December 31, 1995 and 1994, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1995 in conformity with generally accepted accounting principles. Also, in our opinion, the schedules presents fairly, in all material respects, the information set forth therein As discussed in the summary of accounting policies, the Company changed its method in accounting for investments in 1994 to conform with SFAS No. 115. BDO SEIDMAN, LLP Los Angeles, California February 12, 1996 ASSOCIATED PLANNERS REALTY FUND BALANCE SHEETS December 31, 1995 1994 ASSETS Rental real estate, less accumulated depreciation (Note 2) $5,843,681 $6,050,882 Cash and cash equivalents 103,300 36,227 Investment in government securities, at market value - 55,554 Other assets 64,089 112,713 Total assets $6,011,070 $6,255,376 LIABILITIES AND PARTNERS' EQUITY LIABILITIES Accounts payable: Trade $ 2,368 $ 23,955 Related party (Note 6) 26,668 101 Construction loan (Note 4) 1,225,950 - Security deposits and prepaid rent 44,848 20,103 Other liabilities - 701 Total liabilities 1,299,834 44,860 COMMITMENTS MINORITY INTEREST 232,968 224,618 PARTNERS' EQUITY Limited partners: $1,000 stated value per unit - authorized 7,500 units; issued and outstanding 7,499 4,133,882 5,653,977 General partner 344,386 331,921 Total partners' equity 4,478,268 5,985,898 Total liabilities and partners' equity $6,011,070 $6,255,376 [FN] See accompanying summary of accounting policies and notes to consolidated financial statements. ASSOCIATED PLANNERS REALTY FUND STATEMENTS OF INCOME Years ended December 31, 1995 1994 1993 REVENUES Rental (Notes 2 and 3) $618,130 $749,824 $855,622 Interest 20,909 5,126 5,616 639,039 754,950 861,238 COSTS AND EXPENSES Operating 259,774 295,890 290,877 General and administrative 88,326 108,025 116,030 Depreciation and amortization 122,366 141,493 144,075 Loss on government securities 98 2,757 - 470,564 548,165 550,982 INCOME FROM OPERATIONS 168,475 206,785 310,256 GAIN ON SALE OF PROPERTY 116,749 - - MINORITY INTEREST IN NET LOSS (INCOME) OF JOINT VENTURES (8,350) 11,107 (7,569) NET INCOME $276,874 $217,892 $302,687 NET INCOME PER LIMITED PARTNERSHIP UNIT (Note 7) $ 33.23 $ 24.45 $ 34.60 [FN] See accompanying summary of accounting policies and notes to consolidated financial statements. ASSOCIATED PLANNERS REALTY FUND STATEMENTS OF PARTNERS EQUITY Limited Partners General Total Units Amount Partner BALANCE, January 1, 1993 $6,170,224 7,499 $5,916,060 $254,164 Net income for the year 302,687 - 259,453 43,234 Distribution to limited partners (356,202) - (356,202) - BALANCE, December 31, 1993 6,116,709 7,499 5,819,311 297,398 Net income for the year 217,892 - 183,369 34,523 Distribution to limited partners (348,703) - (348,703) - BALANCE, December 31, 1994 5,985,898 7,499 5,653,977 331,921 Net income for the year 276,874 - 249,187 27,687 Distribution to limited partner (1,769,282) - (1,769,282) - Distribution to general partner (15,222) - - (15,222) BALANCE, December 31, 1995 $4,478,268 7,499 $4,133,882 $344,386 [FN] See accompanying summary of accounting policies and notes to consolidated financial statements. ASSOCIATED PLANNERS REALTY FUND STATEMENTS OF CASH FLOWS INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Years ended December 31, 1995 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES Net income $276,874 $217,892 $302,687 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 122,366 141,493 144,075 Gain on sale of property (116,749) - - Minority interest in net (loss) income 8,350 (11,107) 7,569 Increase (decrease) from changes in: Government securities 55,554 74,649 (130,203) Other assets 48,624 (55,030) 25,719 Accounts payable - trade (21,587) (2,386) (1,538) Accounts payable - related party 26,567 (38,002) 37,523 Security deposits and prepaid rent 24,745 (19,528) (9,395) Other liabilities (701) (801) 842 Net cash provided by operating activities 424,043 307,180 377,279 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property 1,522,182 - - Additions to rental real estate (1,389,009) - - Additions (deletions) to construction in progress 68,411 (60,762) (7,649) Net cash provided by (used in) investing activities 201,584 (60,762) (7,649) ASSOCIATED PLANNERS REALTY FUND STATEMENTS OF CASH FLOWS (CONT.) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Years ended December 31, 1995 1994 1993 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from construction loan 1,225,950 - - Distributions to limited partners (1,769,282) (348,703) (356,202) Distributions to general partners (15,222) - - Distributions to minority interest - (1,236) (14,182) Net cash used in financing activities (558,554) (349,939) (370,384) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 67,073 (103,521) (754) CASH AND CASH EQUIVALENTS, beginning of year 36,227 139,748 140,502 CASH AND CASH EQUIVALENTS, end of year $ 103,300 $ 36,227 $ 139,748 [FN] See accompanying summary of accounting policies and notes to consolidated financial statements. ASSOCIATED PLANNERS REALTY FUND 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. The Partnership was formed to acquire income-producing real property throughout the United States with emphasis on properties located in California and southwestern states. The Partnership purchases such properties on an all cash basis and intends to own and operate such properties for investment over an anticipated holding period of approximately five to ten years. BASIS OF The consolidated financial statements do not give effect PRESENTATION to any assets that the partners may have outside of their interest in the partner ship, 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 Assets are stated at cost. Depreciation is computed ESTATE AND using the straight-line method over estimated useful DEPRECIATION lives ranging from five to 35 years. In the event that facts and circumstances indicate that the cost of an asset may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset would be compared to the carrying amount to determine if a write-down to market value is required. ASSOCIATED PLANNERS REALTY FUND SUMMARY OF ACCOUNTING POLICIES RENTAL INCOME Rental revenue is recognized on a straight-line basis to the extent that rental revenue is deemed collectible. INVESTMENTS During 1994, the Company changed its method of accounting for Invest ments. Investments, 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 or losses in the consolidated statements of income. The effect of this change in accounting policy is not material to the financial statements. For the purposes of the statements of cash flows, the STATEMENTS OF Partnership considers cash in the bank and all highly CASH FLOWS liquid investments purchased with original maturities of three months or less, to be cash and cash equivalents. 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. RECLASSIFICATIONS For comparative purposes, certain prior year amounts have been reclassified to conform to the current year presentation. ASSOCIATED PLANNERS REALTY FUND NOTES TO FINANCIAL STATEMENTS 1. NATURE OF The Partnership began accepting subscriptions in March PARTNERSHIP 1986 and completed its funding in December 1987. Under the terms of the partnership agreement, the General Partner, West Coast Realty Advisors, is entitled to cash distributions ranging from 10% to 15%. The General Partner is also entitled to net income (loss) allocations varying from 1% to 15% and 1% depreciation and amortization in accordance with the partnership agreement. 2. RENTAL REAL The Partnership currently has interests in the following ESTATE four rental real estate prop erties, two are wholly-owned and two are jointly owned by the Partnership (81.2%) and an affiliate (18.8%): Location Acquisition (Property Name) Date Purchased Cost Encinitas, California (179 Calle Magdelena) December 31, 1986 $555,743 Encinitas, California (187 Calle Magdelena) December 31, 1986 639,697 Clovis, California January 23, 1987 1,208,990 Simi Valley, California November 12, 1987 2,620,217 The major categories of property are: December 31, 1995 1994 Land $2,361,894 $2,644,667 Buildings and improvements 4,404,947 4,387,135 Furniture and fixtures 46,660 31,697 6,813,501 7,063,499 Less accumulated depreciation 969,820 1,081,028 5,843,681 5,982,471 Construction in progress (Note 3) - 68,411 Net rental real estate $5,843,681 $6,050,882 ASSOCIATED PLANNERS REALTY FUND NOTES TO FINANCIAL STATEMENTS 2. RENTAL REAL A significant portion of the Partnership's rental revenue ESTATE was earned from tenants whose individual rents represent (CONTINUED) more than 10% of total rental revenue. Specifically: One tenant accounted for 38% in 1995; One tenant accounted for 30% in 1994; Two tenants accounted for 26% and 12% in 1993. 3. FUTURE As of December 31, 1995, future minimum rental income MINIMUM under existing leases, excluding month to month rental RENTAL INCOME agreements, that have remaining noncancelable terms in excess of one year are as follows: Year Ending December 31, Amount 1996 $522,770 1997 432,929 1998 229,957 1999 213,816 2000 218,204 Total $1,617,676 Future minimum rental income does not include lease renewals or new leases that may result after a noncan- celable-lease expires. ASSOCIATED PLANNERS REALTY FUND NOTES TO FINANCIAL STATEMENTS 4. CONSTRUCTION In January 1995, the Partnership closed escrow on a IN parcel of land adjacent to the Shaw Villa Shopping PROGRESS AND Center. The purchase price of the land was $206,749, CONSTRUCTION including a $13,102 acquisition fee paid to the Advisor. LOAN PAYABLE 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 (11% at December 31, 1995). The total construction loan commitment is for $1,365,000 which matures on June 5, 1996. Borrowings on the construction loan totaled $1,225,950. The construction loan amortization is interest only with payments via additional draws against this loan. The construction was completed during 1995 and total construction costs of $1,372,900 was allocated to land, building and improvements. Included in construction costs is $87,838 in construction loan interest that was capitalized. The carrying amount is a reasonable estimate of fair value of the construction loan payable because the interest rates approximate the borrowing rates currently available for mortgage loans with similar terms and average maturities. ASSOCIATED PLANNERS REALTY FUND NOTES TO FINANCIAL STATEMENTS 5. COMMITMENTS The Partnership has an agreement to reimburse a tenant for up to $165,000 in improvement costs incurred in connection with construction and move-in costs. 6. RELATED PARTY (a) In accordance with the partnership agreement, TRANSACTIONS compensation earned by or services reimbursed to the General Partner consisted of the following: Year ended December 31, 1995 1994 1993 Partnership management fees $35,953 $38,745 $39,577 Administrative services: Data processing 4,609 4,774 4,572 Postage 2,782 1,910 2,855 Investor processing 1,844 2,452 1,829 Investor communications 1,383 1,432 1,372 Duplication 922 955 914 Miscellaneous 461 477 458 $ 47,954 $ 50,745 $51,577 ASSOCIATED PLANNERS REALTY FUND NOTES TO FINANCIAL STATEMENTS 6. RELATED PARTY (b) Property management fees to West Coast Realty TRANSACTIONS Management, Inc. ("WCRM"), an affiliate of the General (CONTINUED) Partner, were $22,930, $22,728 and $28,693 for 1995, 1994 and 1993. (c) Distributions of $-0-, $1,236 and $14,182 for 1995, 1994 and 1993 were made to an affiliate in connection with the minority interest. The minority interest in earnings (loss) was $(8,350), $(11,107) and $7,569 for 1995, 1994 and 1993. (d) Related party accounts payable are as follows: December 31, 1995 1994 Associated Financial Group, Inc. $ 13,351 $ - West Coast Realty Advisors 6,000 - WCRM 7,317 101 $ 26,668 $ 101 7. NET INCOME The Net Income per Limited Partnership Unit was computed AND CASH in accordance with the partnership agreement using the DISTRIBUTIONS weighted average number of outstanding limited PER LIMITED partnership units of 7,499 for 1995, 1994 and 1993. PARTNERSHIP LIST ASSOCIATED PLANNERS REALTY FUND NOTES TO FINANCIAL STATEMENTS 7. NET INCOME The Limited Partner cash distributions, computed in AND CASH accordance with the Partnership Agreement, were as DISTRIBUTIONS follows: PER LIMITED Record Outstanding Amount Total PARTNERSHIP Date Units Per Unit Distribution LIST (CONTINUED) September 30, 1995 7,499 $ 15.00 $ 112,485 March 31, 1995 7,499 10.00 74,990 December 31, 1994 7,499 10.00 74,990 Additional distribution upon sale of property $182.69 - $207.39 1,506,817 Total $1,769,282 September 30, 1994 7,499 $10.00 $ 74,990 June 30, 1994 7,499 12.00 89,988 March 31, 1994 7,499 12.00 89,988 December 31, 1993 7,499 12.50 93,737 Total $ 348,703 September 30, 1993 7,499 $12.50 $ 93,737 June 30, 1993 7,499 12.50 93,738 March 31, 1993 7,499 12.50 93,737 December 31, 1992 7,499 10.00 74,990 Total $ 356,202 Distributions were paid in the fiscal quarter following the record date. ASSOCIATED PLANNERS REALTY FUND NOTES TO FINANCIAL STATEMENTS 8. NEW Statement of Financial Accounting Standards No. 121, ACCOUNTING "Accounting for the Impairment of Long-Lived Assets and PRONOUNCE- for Long-Lived Assets to Be Disposed of" (SFAS No. 121) MENTS issued by the Financial Accounting Standards Board (FASB) is effective for financial statements for fiscal years beginning after December 15, 1995. The new standard establishes new guidelines regarding when impairment losses on long-lived assets, which include plant and equipment, and certain identifiable intangible assets, should be recognized and how impairment losses should be measured. The Partnership has elected the early adoption of SFAS No. 121. This change had no effect on the statement of income for the year ended December 31, 1995. SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION Information required by Rule 12-28 is as follows: --Initial Cost-- Cost Capitalized Gross Amount at which Life (Years) Building Subsequent to Carried at Close of Period Year on which Depreciation Improve- Improve- Improve- Total Accumulated Construction Date is computed Building Description Emcumbrances Land ments ments Land ments Cost Depreciation Completed Acquired & Improvements Santa Fe Business Park Encinitas, CA - 726,827 798,427 34,224 729,928 829,550 1,559,478 362,818 1982 12-86 5 - 19 Shaw Villa Shopping Center Clovis, CA 1,225,950 657,924 551,066 1,428,510 878,646 1,758,854 2,637,500 156,617 1978 1-87 31.5 - 40 Pacific Bell Office Building Simi Valley, CA - 753,320 1,863,203 - 753,320 1,863,203 2,616,523 450,385 1986 11-87 31.5 - 40 TOTAL 1,225,950 2,138,071 3,212,696 1,462,734 2,361,894 4,451,607 6,813,501 969,820 Reconciliation of accumulated A reconciliation of cost for depreciation for the years the years ending ending December 31, 1993, 1994, 1995 December 31, 1993, 1994, 1995 follows: follows: Balance at December 31, $795,460 Balance at December 31, $7,063,499 1992........................... 1992........................... .............. .............. 1993 Additions 144,075 1993 Additions 0 ............................... ............................... ............................... ............................... ... ... Balance at December 31, 939,535 Balance at December 31, 7,063,499 1993........................... 1993........................... .............. .............. 1994 Additions 141,493 1994 Additions 0 ............................... ............................... ............................... ............................... ... ... Balance at December 31, 1994 1,081,028 Balance at December 31, 1994 7,063,499 ............................... ............................... ......... ......... 1995 Additions 122,366 1995 Additions 1,427,466 ............................... ............................... ............................... ............................... ... ... 1995 (233,574) 1995 Deletions Deletions...................... ............................... (1,677,464) ............................... ............................... .............. .... Balance at December 31, 1995 $969,820 Balance at Decmber 31, 1995 $6,813,501 ............................... ........... SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE Information required by Rule 12-29 is as follows Final Periodic Delinquent Interest Maturity Payment Prior Face Carrying Principal/ Description Rate Date Terms Liens Amount Amount Interest Monthly Interest Shaw Villa Payments: Shopping 11.00% 6/5/96 Balloon None $1,365,000 1,225,950 None Center Payment Clovis, CA Due @ Maturity A reconciliation of mortgage loans for the year ended December 31, 1995 follows: Balance at December - 31, 1994 ...................... .................. 1995 Additions 1,225,950 1995 Paydowns - ...................... ...................... ..................... Balance at December $1,225,950 31, 1995 ...................... .................. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III The Partnership does not intend to file a proxy statement with the Commission within 120 days after the year end. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The Partnership is managed by the General Partners and the Limited Partners have no right to participate in the management of the Partnership or its business. The General Partner is West Coast Realty Advisors, Inc., a California corporation. Resumes of the General Partners' principal officers and directors and a description of the General Partners are set forth in the following paragraphs. See description below. WEST COAST REALTY ADVISORS, INC. West Coast Realty Advisors, Inc. is a California corporation formed on May 10, 1983 for the purpose of structuring real estate programs and to act as general partner of such programs. It is a subsidiary of Associated Financial Group, Inc. PHILIP N. GAINSBOROUGH (Born 1938) is Chairman and a Director of West Coast Realty Advisors, Inc. He is also currently the President of Associated Financial Group, Inc., Associated Securities Corp., Associated Planners Insurance Services, Inc., and Associated Planners Investment Advisory, Inc. In addition, from January 1981 to the present, he has served as President of Gainsborough Financial Consultants, Inc., a financial planning firm located in Los Angeles, California. From January 1981 to December 1982, Mr. Gainsborough served as a Registered Principal of Private Ledger Financial Services, Inc. From January 1977 to December 1980, he was employed by E.F.Hutton & Co. as a Registered Representative. W. THOMAS MAUDLIN JR. (Born 1936) is a Director and President of West Coast Realty Advisors, Inc. ("WCRA"). He is also co-General Partner (with WCRA) of the Partnership. Mr. Maudlin has been active in the real estate area for over 30 years, serving as co-developer of high-rise office buildings and condominiums. He has structured transactions for syndicators in apartment housing, including sale leaseback's, all-inclusive trust deeds, buying and restructuring transactions to suit a particular buyer, and as a buyer acting as a principal. Mr. Maudlin was co-developer of the Gateway Los Angeles office building, a 165, 000 square foot, fourteen-story office building located in West Los Angeles. Form 1980 to 1985, in partnership with the Muller Company, he developed eleven acres in San Bernardino which include a 42,000-square foot office building, a six-plex movie theater and two restaurants. From 1980 to 1985, Mr. Maudlin was involved in building in San Bernardino, California, a 134- unit condominium development, a shopping center, and a restaurant in Ventura. He is a graduate of the University of Southern California. WILLIAM T. HAAS (Born 1946 ) is a director and Executive Vice President/Secretary of West Coast Realty Advisors, Inc., Associated Planners Insurance Services, Associated Securities Corp., and Associated Planners Investment Advisory, Inc. He is also Executive Vice President/Secretary and Director of Associated Financial Group, Inc. He has been affiliated with various Associated companies since 1982. From December 1977 to December 1982, Mr. Haas was employed by the National Association of Securities Dealers, Inc. in various capacities, including that of Supervisor of Examiners. From 1968 to 1977, he was associated with Merrill Lynch as a branch office operations manager, and in the home office Operations Liaison department. MICHAEL G. CLARK (Born 1956) is Senior Vice President/Treasurer of West Coast Realty Advisors, Inc., Associated Financial Group, Inc., and Associated Securities Corp. Prior to joining AFG in 1986, he served as Controller for Quest Resources, a Los Angeles-based syndicator and operator of alternative energy projects, from October 1984 to March 1986, and Assistant Controller for Valley Cable T.V., from March 1982 through September 1984. In addition, Mr. Clark served as an auditor for Arthur Young & Co. in Los Angeles, from July 1978 to March 1982. He is a graduate of the University of California, Santa Barbara (BA) and California State University, Northridge (MS). ITEM 11. EXECUTIVE COMPENSATION During its last calendar year, the Registrant paid no direct or indirect compensation to directors or officers. The Registrant has no annuity, pension or retirement plans, or existing plan or arrangement pursuant to which compensatory payments are proposed to be made in the future to directors or officers. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The Registrant is a limited partnership and has no officers or directors. The Registrant has no outstanding securities possessing general voting rights. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Registrant was organized in November 1985 as a California Limited Partnership. Its General Partner is WCRA. The Registrant has no executive officers or directors. Philip N. Gainsborough, an officer of the General Partner, made an original limited partnership contribution to the Partnership in November 1985, which was subsequently paid back to him in March 1988 when the Partnership met its minimum funding requirement. The General Partner and its affiliates are entitled to compensation from the Partnership for the following services rendered: 1. For Partnership management services rendered to the Partnership, the General Partner is entitled to receive up to 10% of all distributions of cash operations. For the year ended December 31, 1995, the amount paid the General Partner was $35,953. In addition, the General Partner is entitled to reimbursement for certain public offering expenses, the cost of certain personnel employed in the organization of the Partnership, and certain administrative services performed by the General Partner. For the year ended December 31, 1995, the Partnership reimbursed $12,000 to the General Partner for these expenditures. 2. For property management services, the General Partner engaged WCRM an affiliate of the General Partner. For the year ended December 31, 1995, WCRM earned property management fees of $22,930 from the Partnership. On December 31, 1995, the Partnership was indebted to WCRM for $7,317, which was paid subsequent to year-end. 3. The General Partner received a 10% allocation of net income before depreciation and amortization and 1% of depreciation. For the year ended December 31, 1995 this resulted in a $28,911 allocation of net income before depreciation and a $1,224 allocation of depreciation or a net income allocation of $27,687. 4. In connection with the joint venture in the Santa Fe Business Park properties, the Partnership made no distributions to Prado Land Company, an affiliate of the of the General Partner's President, during the year ended December 31, 1995. For the year ended December 31, 1995, Prado Land Company was allocated $8,350 of net income for its minority interest in the joint venture's earnings. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) 1. FINANCIAL STATEMENTS The following financial statements of Associated Planners Realty Fund, a California Limited Partnership, are included in PART II, ITEM 8: PAGE Report of Independent Certified Public Accountants................................ 19 Balance Sheets -- December 31, 1995 and 1994 ...................................... 20 Statements of Income for the years ended December 31, 1995, 1994, and 1993 .......................................... 21 Statements of Partners' Equity for the years ended December 31, 1995, 1994, and 1993 .......................................... 22 Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993 .......................................... 23-24 Summary of Accounting Policies ........................................... 25-26 Notes to Financial Statements ........................................... 27-33 2. FINANCIAL STATEMENT SCHEDULES Schedule III --Real Estate and Accumulated Depreciation.. 34 Schedule IV --Mortgage Loan on Real Estate ........................................... 35 All other schedules have been omitted because they are either not required, not applicable or the information has been otherwise supplied. (b) REPORTS ON FORM 8-K NONE (c) EXHIBITS NONE SIGNATURES Pursuant to the requirements of the 13 or 15(d) 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) W. THOMAS MAUDLIN JR. (A General Partner) By: WEST COAST REALTY ADVISORS, INC. (A General Partner) WILLIAM T. HAAS (Director and Executive Vice President/Secretary) MICHAEL G. CLARK (Vice President/Treasurer) April 1, 1996