SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 10-Q/A
AMENDMENT TO GENERAL FORM FOR REGISTRATION OF
SECURITIES
Filed pursuant to Section 12(g)
THE SECURITIES EXCHANGE ACT OF 1934
ASSOCIATED PLANNERS REALTY GROWTH FUND
(Exact name of registrant as specified in its charter)
AMENDMENT NO. 1
File No. 33-13983
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its General Form for
Registration of Securities on Form 10-Q as set forth in the pages
attached hereto:
10-Q for the Quarter ending June 30, 1995
Item 1 and 2
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Amendment to be signed on its
behalf by the undersigned thereunto duly authorized.
ASSOCIATED PLANNERS REALTY GROWTH FUND
(Registrant)
Date:
By: West Coast Realty Advisors, Inc. (General Partner)
By:
Michael G. Clark, Vice President/Treasurer
ASSOCIATED PLANNERS REALTY GROWTH FUND
(A California Limited Partnership)
ITEM 1. FINANCIAL STATEMENTS
In the opinion of the General Partner of Associated Planners Realty
Growth 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 (Notes 2 & 3) $3,221,853 $3,255,051
CASH AND CASH EQUIVALENTS 2,601 5,657
OTHER ASSETS 18,117 35,726
$3,242,571 $3,296,434
LIABILITIES AND PARTNERS' EQUITY
PAYABLE TO AFFILIATES $ 164,821 $ 187,807
OTHER ACCRUED LIABILITIES 61,639 16,725
NOTE PAYABLE - RELATED PARTY (Note 4) 150,000 150,000
SECURITY DEPOSITS AND PREPAID RENT 25,977 25,181
NOTE PAYABLE (Note 3) 1,607,108 1,614,884
TOTAL LIABILITIES 2,009,545 1,994,597
COMMITMENTS AND CONTINGENCIES
PARTNERS' EQUITY:
Limited Partner:
$1,000 stated value per unit;
authorized 10,000 units;
issued - 2,061 1,228,662 1,296,785
General Partner: 4,364 5,052
TOTAL PARTNERS EQUITY 1,233,026 1,301,837
$3,242,571 $3,296,434
[FN]
See accompanying notes to financial statements.
ASSOCIATED PLANNERS REALTY GROWTH 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 $1,301,837 2,061 $1,296,785 $5,052
Net loss (68,811) --- (68,123) (688)
BALANCE, June 30, 1995 $1,233,026 2,061 $1,228,662 $4,364
Six Months Ended June 30, 1994
(Unaudited)
Limited Partners General
Total Units Amount Partner
BALANCE, December 31, 1993 $1,416,980 2,061 $1,410,777 $6,203
Net loss (38,448) --- (38,063) (385)
BALANCE, June 30, 1994 $1,378,532 2,061 $1,372,714 $5,818
[FN]
See accompanying notes to financial statements.
ASSOCIATED PLANNERS REALTY GROWTH FUND
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
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 $65,438 $75,877 $121,315 $153,587
Interest 41 140 91 287
65,479 76,017 121,406 153,874
COSTS AND EXPENSES:
Operating 19,248 18,507 38,662 36,226
Property taxes 4,495 4,496 8,990 8,992
Property management fees 2,678 3,414 4,977 6,924
Interest 42,360 42,674 83,975 85,483
General and administrative 10,199 9,924 20,415 21,480
Depreciation and amortization 16,599 16,606 33,198 33,217
95,579 95,621 190,217 192,322
NET LOSS $(30,100) $(19,604) $(68,811) $(38,448)
NET LOSS PER
LIMITED PARTNERSHIP UNIT $(14.46) $(9.41) $(33.05) $(18.46)
[FN]
See accompanying notes to financial statements.
ASSOCIATED PLANNERS REALTY GROWTH 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 flow from operating activities:
Net Loss $(68,811) $(38,448)
Adjustments to reconcile net (loss) to
net cash (used in) provided by operating activities:
Depreciation and amortization 33,198 33,217
Increase (decrease) from changes in:
Other assets 17,609 (2,660)
Accounts payable 21,928 (4,594)
Security deposits and prepaid rent 796 415
Net cash (used in) provided by operating activites 4,720 (12,070)
Cash flows from financing actvities:
Repayments on note payable (7,776) (7,057)
Net cash (used in) financing activities (7,776) (7,057)
Net (decrease) in cash & cash equivalents (3,056) (19,127)
Cash and cash equivalents at beginning of period 5,657 29,564
Cash and cash equivalents at end of period $2,601 $10,437
[FN]
See accompanying notes to financial statements.
ASSOCIATED PLANNERS REALTY GROWTH FUND
(A California Limited Partnership)
Summary of Accounting Policies
Business
Associated Planners Realty Growth Fund (the "Partnership"), a
California limited partnership, was formed on March 9, 1987
under the Revised Limited Partnership Act of the State of
California for the purpose of developing or acquiring, managing
and operating leveraged income producing real estate. The
Partnership met its minimum funding of $1,200,000 on August 29,
1988 and terminated its offering on September 5, 1989.
Basis of Presentation
The 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.
Rental Real Estate and Depreciation
Assets are stated at cost. Depreciation is computed using the
straight-line method over estimated useful lives ranging from
31.5 to 40 years for financial reporting and income tax reporting
purposes.
Organizational Costs and Loan Origination Fees
Organizational costs and loan origination fees are capitalized
and amortized over five and ten years, respectively.
Lease Commissions
Lease commissions which are paid to real estate brokers for
locating tenants are capitalized and amortized over the life of
the lease.
Rental Revenue
Rental revenue is recognized on a straight-line basis to the
extent that rental revenue is deemed collectible.
Statements of Cash Flows
For purposes 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.
ASSOCIATED PLANNERS REALTY GROWTH FUND
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 1995 and 1994 (Unaudited)
and December 31, 1994
Note 1 - Nature of Partnership Business
Associated Planners Realty Growth Fund, a California limited
partnership (the "Fund"), was formed on December 23, 1986 under the Revised
Limited Partnership Act of the State of California for the purpose of
acquiring, managing, and operating leveraged income-producing real estate.
Under the terms of the partnership agreement, the General Partner
(West Coast Realty Advisors, Inc. and W. Thomas Maudlin Jr.) 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 (Note 4).
Note 2 - Rental Real Estate
As of June 30, 1995 and December 31, 1994, the Fund's net real
estate investments in the Parkcenter Office Building and PROCARE Industrial
Building are as follows:
June 30, December 31,
1995 1994
Land $1,349,900 $1,349,900
Buildings and Improvements 2,241,600 2,241,600
3,591,500 3,591,500
Less Accumulated Depreciation 369,647 336,449
Net Real Estate Investment $3,221,853 $3,255,051
ASSOCIATED PLANNERS REALTY GROWTH 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 - Note Payable
The Partnership has a 9.75% promissory note secured by a Deed
of Trust totaling $1,607,108 at June 30, 1995 and $1,614,884 at December 31,
1994, with a life insurance company. This note is due January 1, 2000, and
provides significant prepayment penalties. Payments are made in monthly
installments of $14,390 including principal and interest.
Note 4 - Related Party Transactions
(a) Property management fees incurred in accordance with the
partnership agreement with West Coast Realty Management, Inc., an affiliate
of the corporate General Partner, totaled $2,299 for the six months ended
June 30, 1995, $6,924 for the six months ended June 30, 1994, $2,678 for the
three months ended June 30, 1995, and $3,414 for the three months ended
June 30, 1994.
(b) During the year ended December 31, 1990, the Partnership,
in a joint venture with Associated Planners Realty Income Fund (an
affiliate), purchased a one-story office building located in San Marcos,
California (Note 2). The acquisition was paid for entirely in cash totaling
$3,119,000 of which $311,900 was provided by the Partnership and $2,807,100
by Associated Planners Realty Income Fund. The Partnership owns a 10%
interest in this joint venture.
(c) The Partnership has a note payable to a General Partner of
$150,000 at June 30, 1995 and December 31, 1994. The note outstanding bears
interest of 7.5% and is payable in equal installments of principal and
interest amortized over a 10 year period, with all remaining unpaid interest
and principal due on May 1, 1997.
Note 5 - Net Loss and Cash Distributions Per Limited Partnership Unit
The Net Loss per Limited Partnership Unit was computed in
accordance with the Partnership Agreement on the basis of the number of
outstanding Limited Partnership Units. No distributions were made during the
three or six months ended June 30, 1995 and June 30, 1994.
ASSOCIATED PLANNERS REALTY GROWTH FUND
(A California Limited Partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
Associated Planners Realty Growth Fund (the "Partnership") was
organized in December 1986, under the California Revised Limited Partnership
Act. The Partnership began offering units for sale on October 20, 1987. As
of December 31, 1989, the Partnership had raised $2,061,000 in gross capital
contributions. The Partnership netted approximately $1,820,000 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 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 GROWTH 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 West Coast Realty Advisors, Inc.
("WCRA") (the corporate General Partner) and Mr. W. Thomas Maudlin Jr.
(an individual General Partner), collectively 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, the corporate 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 the three and
six months ended June 30, 1994 by approximately $16,374 and $38,207. Part of
this decrease was a result of a vacancy at the San Marcos building from
January 8, 1995 to February 13, 1995. The effect of this vacancy was a
decrease in rent of approximately $3,000 for the quarter and six months. In
addition, the new tenant (No Fear Inc.) entered into a lease at a rate that
was 30% less than the rate on the lease of the prior tenant (Professional
Care Products). This has resulted in approximately $4,000 less rent for the
first six months of 1995 in comparison to the first six months of 1994. The
remaining $31,000 decrease in rental revenue is the result of lower occupancy
and lower rent rates at the Santa Ana office building. Total costs and
expenses related to the properties' operation were similar for the quarter
ended June 30, 1995 and the quarter ended June 30, 1994. These same costs
were $4,783 lower for the six months ended June 30, 1995 vs. the six months
ended June 30, 1994, as a result of lower interest expense (greater principal
repayments on mortgage loan) and property management fees expenditures.
General and administrative expenses were approximately equal for both the
three and six months ended June 30, 1995 and June 30, 1994, as was
depreciation and amortization expense. Property management fees tracked the
level of rental revenue. Proeprty operating costs were slightly higher for
the three and six months ended June 30, 1995 in comparison to the prior year
($741 for the quarter and $2,436 for six months), due to slightly higher
office maintenance costs.
At June 30, 1995, the Parkcenter Building was 98% occupied by nine
tenants. The San Marcos property, which is 10% owned the Partnership, was
100% occupied by one tenant.
In an effort to secure a debt reduction and/or restructure from the
holder of the first deed of trust on the Parkcenter Office Building property
("Parkcenter Property"), the Partnership elected to pay real estate taxes due
April 10, 1995 on the Parkcenter Property on June 30, 1995. Despite the 70%
to 80% occupancy level at the property, it has been unable to generate a
positive cash flow. As a result the Partnership's General Partner has been
paying certain administrative costs of the Partnership, i.e., property
management fees, legal and accounting costs, general and administrative fees,
as well as certain leasehold improvement costs. As of June 30, 1995, the
amount of cash advanced to the Partnership by the General Partner was
$150,000. In addition, the General Partner and its affiliates have
deferred collection of fees and expenses totaling $177,971. The General
Partner is also pursing alternative solutions to improve the cash flow of the
Parkcenter Property and the Partnership.
Liquidity and Capital Resources
During the quarter ended June 30, 1995, the Partnership's cash
reserves decreased by $7,836 primarily due to the payment of property taxes
and the 30% lower rate on the new tenant lease at the San Marcos property.
Cash reserves are defined as cash balances in checking and money market
accounts.
For the six months ended June 30, 1995, the change in cash and cash
equivalents decreased by $3,056. This can be accounted for as follows:
1) $4,720 in cash was provided by operating activities. This was
largely the result of cash being provided by an increase in accounts payable
of $21,928 as payments of amounts due to third-party vendors and
(particularly) affiliates was postponed until later periods. In addition,
Other Assets decreased $17,609, effectively resulting in an increase in cash.
This decrease was primarily the result of a decrease in prepaid expense
balances, resulting from the write-off of amounts (primarily insurance) paid
in the last quarter of 1994. These increases to cash were greatly offset
by $35,613 use of cash resulting from the cash basis net loss for the first
six months of the year ($68,811 net loss with $33,198 in depreciation added
back). Management realizes that this increase in cash was unusual, and it
expects that operating activities for the rest of the year will result in a
net use of cash.
2) $7,776 in cash was used by financing activities. This was entirely
the result of the payback of principal on the outstanding mortgage note
payable.
ASSOCIATED PLANNERS REALTY GROWTH FUND
(A California Limited Partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
The Partnership had a net loss of $30,100, or $14.46 per limited
partnership unit, after depreciation expense of $16,599 for the quarter
ended June 30, 1995.
The Partnership's small cash reserve is invested primarily in a bank
money market account. This reserve is invested to provide stability and
safety of principal, competitive interest rates, and quick availability of
funds, in that order of importance.
Due to the large amount of vacancies and an increase in maintenance
and repair expenses at the Santa Ana Property, the 3% reserve remained
depleted during the first six months of 1995. In addition, the General
Partner has made loans to the Partnership and deferred collection of
miscellaneous amounts owed to it by the Partnership. For this reason,
there were no distributions made to the limited partners during the first
six months. It is the Partnership's intention to eliminate partner
distributions until such time as the reserves are built back up to acceptable
levels and various deferred liabilities due to the Advisor and its
affiliates are paid. The Partnership's properties are currently operating
at a loss on a cash basis, though the level of vacancy at the properties has
stabilized. It is uncertain at this point how long it will take the
Partnership to rebuild cash reserves and operate profitably on a cash basis.
The Partnership's ability to meet cash requirements in the short-run is
dependent upon the willingness of the General Partner and its affiliates to
defer collection of amounts due for property management fees and overhead
allocations, and the stabilization of the tenant base and rental rates at the
Santa Ana property. In the long run, the Partnership's cash requirements
will be further affected by the need to pay off the Deed of Trust that
secures the Santa Ana property. This note is due on January 1, 2000, and is
projected to have a balance of approximately $1,500,000 at that time. A
sale or refinance of the property will of course be necessary prior to that
date. The San Marcos property has no debt financing. In the short-term,
the fact that this property has a quality tenant and operates under a triple
net lease, allows the Partnership to collect a nominal amount of cash from
the operations of this Property. In the long-run, the Partnership expects
to benefit from the sale of this property when it is sold. The General
Partner anticipates that the San Marcos property will be sold prior to the
year 2000.
The condition of the properties is relatively good, therefore there
are no projected capital improvements or unusually large repair costs that
would severely deplete the cash reserves. The General Partner believes in
the long-term the property can generate positive cash flows. The General
Partner is committed to maintaining the economic viability of the Partnership
and is exploring alternatives to maintaining sufficient operating capital.
This includes advancing small loans to the Partnership as needed ($5,000 to
$10,000), soliciting additional Limited Partner contributions to paydown the
mortgage balance, or other forms of debt relief. The General Partner is a
wholly owned subsidiary of Associated Financial Group (the "Parent"), which
consolidated, as of December 31, 1994, had $6.3 million in assets, $2.0
million in cash and cash equivalents, and $3.0 million in equity, and had
net income of $.3 million for the year ended December 31, 1994. The ability
of the General Partner to obtain these advances is dependent upon the
liquidity of the Parent company of the General Partner.
The General Partner is aware that the economic conditions in the
area in which the Santa Ana property is located are not good. There have
been several foreclosures of office buildings in the same general area.
Buildings have had to compete for a dwindling supply of viable tenants by
lowering the rental rates they are offering, to rates that will allow owners
to compete in a difficult marketplace, that is considered to have an
oversupply of available office space. The General Partner is of the opinion
that the surplus of office space in the area has deterred new building in
the general area, and that eventually, given a turnaround in the local
economy, the demand for office space will improve, driving up market rents,
and improving the value of the Santa Ana property. It is the intention of
the General Partner to sell the Santa Ana property when it is reasonably
feasible, given the facts that:
1) The price it could be sold for now would be less than the balance
on the outstanding mortgage debt on the property, thus giving Partnership
incentive to substantially lease-up and maintain the property prior to sale,
2) The debt service on the property is so high that given the
long-term realities of low inflation in the U.S. economy and long-term
economic sluggishness in the Southern California economy (due to Orange and
Los Angeles county fiscal problems, aerospace and defense layoffs, lower
personal income figures, higher than U.S. average unemployment, etc.), rents
could never increase enough in the foreseeable future for this property to
generate significant enough positive cash flow to maintain the viability of
the Partnership, and pay certain accrued and accruing expenses due to the
General Partner and Affiliates.
As previously discussed, the Partnership has a 10% interest in a
building in San Marcos, California. Subsequent to yearend, the building was
leased to a tenant at a rate 70% of the previous rental rate. Because the
Partnership has such a small percentage interest in this property, the
decrease in rent results in only a $750 per month decrease in cash flow.
This decrease is not expected to have a material impact on operations.
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.
During the 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 clauses in its leases
with some of its properties' tenants that will help alleviate some of the
negative impact of inflation. However, as previously alluded to, the lack
of inflation is hurting the Partnership due to the stagnation of office
rental rates.
The Partnership completed its acquisition program in 1990.
There are currently no plans for any material renovation,
improvement or further development of the properties.
ASSOCIATED PLANNERS REALTY GROWTH 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 GROWTH FUND
A California Limited Partnership
(Registrant)
Date: ____________________ By: WEST COAST REALTY
ADVISORS, INC.
A California Corporation,
A General Partner
William T. Haas
Director and Executive Vice
President / Secretary
Date: ____________________
Michael G. Clark
Vice President / Treasurer