FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
June 30, 1996 0-14386
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
(Exact Name of Registrant as specified in its charter)
Delaware 16-1245153
- -------------------- ------------------------------------
(State of Formation) (IRS Employer Identification Number)
2350 North Forest Road
Suite 12 A
Getzville, New York 14068
(Address of Principal Executive Office)
Registrant's Telephone Number: (716) 636-0280
Indicate by a check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by a check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation 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-Q or any
amendment to this Form 10-Q. (X)
As of June 30, 1996 the issuer had 23,365.9 units of limited partnership
interest outstanding.
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
--------------------------------------------------
INDEX
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PAGE NO.
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PART I: FINANCIAL INFORMATION
- ------- ---------------------
Balance Sheets -
June 30, 1996 and December 31, 1995 3
Statements of Operations -
Three Months Ended June 30, 1996 and 1995 4
Statements of Operations -
Six Months Ended June 30, 1996 and 1995 5
Statements of Cash Flows -
Six Months Ended June 30, 1996 and 1995 6
Statements of Partners' (Deficit) -
Six Months Ended June 30, 1996 and 1995 7
Notes to Financial Statements 8 - 16
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
- -------- FINANCIAL CONDITION & RESULTS OF OPERATIONS 17 - 18
-------------------------------------------
-2-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
BALANCE SHEETS
June 30, 1996 and December 31, 1995
(Unaudited)
June 30 December 31,
1996 1995
---- ----
ASSETS
- ------
Property, at cost:
Land $ 1,773,922 $ 1,773,922
Buildings and improvements 27,641,015 27,641,015
Furniture, fixtures and equipment 2,711,794 2,711,794
------------ ------------
32,126,731 32,126,731
Less accumulated depreciation 13,536,974 13,104,388
------------ ------------
Property, net 18,589,757 19,022,343
Interest and other receivables 36,409 65,026
Note receivable 154,875 154,875
Mortgage costs, net of accumulated amortization
of $461,905 and $634,587 273,883 172,966
Other assets 1,253,423 567,583
------------ ------------
Total Assets $ 20,308,348 $ 19,982,793
============ ============
LIABILITIES AND PARTNERS' (DEFICIT)
- -----------------------------------
Liabilities:
Cash overdraft $ 206,058 $ 252,805
Mortgages and notes payable 19,919,450 19,414,288
Accounts payable and accrued expenses 1,051,841 991,181
Accounts payable - affiliates 2,622,221 2,220,847
Accrued interest 86,525 156,525
Security deposits and prepaid rents 363,285 414,471
------------ ------------
Total Liabilities 24,249,379 23,450,117
------------ ------------
Minority interest in joint venture 34,773 54,583
------------ ------------
Partners' (Deficit):
General partners (692,253) (678,636)
Limited partners (3,283,552) (2,843,271)
------------ ------------
Total Partners' (Deficit) (3,975,804) (3,521,907)
------------ ------------
Total Liabilities and Partners' (Deficit) $ 20,308,348 $ 19,982,793
============ ============
See notes to financial statements
-3-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
STATEMENTS OF OPERATIONS
Three Months Ended June 30, 1996 and 1995
(Unaudited)
Three Months Three Months
Ended Ended
June 30, June 30,
1996 1995
---- ----
Income:
Rental $ 1,200,395 $ 1,419,001
Interest and other income 79,839 78,093
----------- -----------
Total income 1,280,234 1,497,094
----------- -----------
Expenses:
Property operations 674,519 796,464
Interest:
Paid to affiliates 62,216 40,700
Other 379,923 392,218
Depreciation and amortization 275,558 302,240
Administrative:
Paid to affiliates 100,624 173,681
Other 118,006 105,039
----------- -----------
Total expenses 1,610,846 1,810,342
----------- -----------
Loss before allocated loss from joint venture (330,612) (313,248)
Loss allocated to minority interest -- 8,495
----------- -----------
Net loss $ (330,612) $ (304,753)
=========== ===========
Loss per limited partnership unit $ (13.72) $ (12.65)
=========== ===========
Distributions per limited partnership unit $ -- $ --
=========== ===========
Weighted average number of
limited partnership units
outstanding 23,366 23,366
=========== ===========
See notes to financial statements
-4-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1996 and 1995
(Unaudited)
Six Months Six Months
Ended Ended
June 30, June 30,
1996 1995
---- ----
Income:
Rental $ 2,584,882 $ 2,778,342
Interest and other income 188,391 157,750
----------- -----------
Total income 2,773,273 2,936,092
----------- -----------
Expenses:
Property operations 1,335,876 1,600,538
Interest:
Paid to affiliates 125,439 81,037
Other 798,056 843,977
Depreciation and amortization 514,291 604,478
Administrative:
Paid to affiliates 187,820 325,152
Other 285,500 251,264
----------- -----------
Total expenses 3,246,982 3,706,446
----------- -----------
Loss before allocated loss from joint venture (473,709) (770,354)
Loss allocated to minority interest 19,812 19,817
----------- -----------
Net loss $ (453,897) $ (750,537)
=========== ===========
Loss per limited partnership unit $ (18.84) $ (31.16)
=========== ===========
Distributions per limited partnership unit $ -- $ --
=========== ===========
Weighted average number of
limited partnership units
outstanding 23,366 23,366
=========== ===========
See notes to financial statements
-5-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 1996 and 1995
(Unaudited)
Six Months Six Months
Ended Ended
June 30, June 30,
1996 1995
---- ----
Cash flow from operating activities:
Net loss $(453,897) $(750,537)
Adjustments to reconcile net loss to net cash
(used in) operating activities:
Depreciation and amortization 514,291 604,478
Loss allocated to minority interest (19,812) (19,817)
Changes in operating assets and liabilities:
Interest and other receivables 28,617 30,069
Other assets (685,840) (456,337)
Accounts payable and accrued expenses 60,660 370,815
Accrued interest (70,000) 43,707
Security deposits and prepaid rent (51,186) 15,595
--------- ---------
Net cash (used in) operating activities (677,168) (162,027)
--------- ---------
Cash flow from investing activities:
Capital expenditures -- --
Increase in note(s) receivable -- --
--------- ---------
Net cash (used in) investing activities -- --
--------- ---------
Cash flows from financing activities:
Mortgage costs (182,620) --
Cash overdraft (46,747) --
Accounts payable - affiliates 401,374 300,764
Principal payments on mortgages and notes (276,175) (99,701)
Proceeds from mortgage 781,337 --
--------- ---------
Net cash provided by financing activities 677,168 201,063
--------- ---------
Increase (decrease) in cash -- 39,036
Cash - beginning of period -- --
--------- ---------
Cash - end of period $ -- $ 39,036
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 868,056 $ 800,270
========= =========
See notes to financial statements
-6-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
STATEMENTS OF PARTNERS' (DEFICIT)
Six Months Ended June 30, 1996 and 1995
(Unaudited)
General Limited Partners
Partners
Amount Units Amount
------ ----- ------
Balance, January 1, 1995 $ (635,751) 23,366 $(1,456,668)
Net loss (22,516) -- (728,021)
----------- ----------- -----------
Balance, June 30, 1996 $ (658,267) 23,366 $(2,184,689)
=========== =========== ===========
Balance, January 1, 1996 $ (678,636) 23,366 $(2,843,271)
Net loss (13,617) -- (440,281)
----------- ----------- -----------
Balance, June 30, 1996 $ (692,253) 23,366 $(3,283,552)
=========== =========== ===========
See notes to financial statements
-7-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
NOTES TO FINANCIAL STATEMENTS
Six Months Ended June 30, 1996 and 1995
(Unaudited)
1. GENERAL PARTNERS' DISCLOSURE
In the opinion of the General Partners of Realmark Property Investors
Limited Partnership IV, all adjustments necessary for a fair presentation
of the Partnership's financial position, results of operations and changes
in cash flows for the six month periods ended June 30, 1996 and 1995, have
been made in the financial statements. Such financial statements are
unaudited and subject to any year-end adjustments which may be necessary.
2. FORMATION AND OPERATION OF PARTNERSHIP
Realmark Property Investors Limited Partnership IV (the "Partnership"), a
Delaware Limited Partnership, was formed on February 12, 1985, to invest in
a diversified portfolio of income-producing real estate investments.
In April 1985, the Partnership commenced the public offering of units of
limited partnership interest. Other than matters relating to organization,
it had no business activities and, accordingly, had not incurred any
expenses or earned any income until the first interim closing (minimum
closing) of the offering, which occurred on September 20, 1985. On June 22,
1986 the offering was concluded, at which time 23,362.9 units of limited
partnership interest were outstanding, excluding 3 units held by an
affiliate of the General Partners. The General Partners are Realmark
Properties, Inc., a wholly-owned subsidiary of J.M. Jayson & Company, Inc.
and Joseph M. Jayson, the Individual General Partner. Joseph M. Jayson is
the sole shareholder of J.M. Jayson & Company, Inc.
Under the partnership agreement, the general partners and their affiliates
can receive compensation for services rendered and reimbursement for
expenses incurred on behalf of the Partnership.
Net income or loss and proceeds arising from a sale or refinancing shall be
distributed first to the limited partners in amounts equivalent to a 7%
return on the average of their adjusted capital contributions, then an
amount equal to their capital contributions, then an amount equal to an
additional 5% of the average of their adjusted capital contributions after
the general partners receive a disposition fee, then to all partners in an
amount equal to their respective positive capital balances and, finally, in
the ratio of 87% to the limited partners and 13% to the general partners.
-8-
FORMATION AND OPERATION OF PARTNERSHIP (CONTINUED)
The partnership agreement also provides that distribution of funds,
revenues, costs and expenses arising from partnership activities, exclusive
of any sale or refinancing activities, are to be allocated 97% to the
limited partners and 3% to the general partners.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash
----
For purposes of reporting cash flows, cash includes the following items:
cash on hand; cash in checking; and money market savings.
Property and Depreciation
-------------------------
Depreciation is provided using the straight-line method over the estimated
useful lives of the respective assets. Expenditures for maintenance and
repairs are expensed as incurred, and major renewals and betterments are
capitalized. The Accelerated Cost Recovery System and Modified Accelerated
Cost Recovery System are used to determine depreciation expense for tax
purposes.
Rental Income
-------------
Leases for residential properties have terms of one year or less.
Commercial leases have terms of from one to five years. Rental income is
recognized on the straight line method over the term of the lease.
Minority Interest in Consolidated Joint Venture
-----------------------------------------------
The minority interest in a consolidated joint venture is stated at the
amount of capital contributed by the minority investors adjusted for their
share of joint venture losses.
4. ACQUISITION AND DISPOSITION OF RENTAL PROPERTY
In November 1985, the Partnership acquired a 168 unit apartment complex
(Lakeview Village) located in Milwaukee, Wisconsin, for a purchase price of
$4,411,659, which included $320,779 in acquisition fees.
In December 1985, the Partnership acquired a 288 unit apartment complex
(Sutton Park, formerly Bristol Square) located in Lansing, Michigan for a
purchase price of $7,252,858, which included $588,716 in acquisition fees.
-9-
ACQUISITION AND DISPOSITION OF RENTAL PROPERTY (CONTINUED)
In August 1986, the Partnership acquired two office/warehouse buildings
consisting of 62,598 square feet (Airlane I) and 68,300 square feet
(Airlane III), consisting of approximately 25% office space and 75%
warehouse space located in Nashville, Tennessee, for a purchase price of
$6,180,920, which included $383,169 in acquisition fees.
In October 1986, the Partnership acquired an 86 unit apartment complex
(Gold Key Village II) located in Englewood, Ohio for a purchase price of
$2,354,615, which included $152,744 in acquisition fees.
In December 1986, the Partnership acquired two apartment complexes
consisting of 96 and 144 units (Creekside Apartments, formerly Bretton Park
I and II) located in Flat Rock, Michigan, for a purchase price of
$5,462,176, which included $445,964 in acquisition fees.
In December 1986, the Partnership acquired a 215 unit apartment complex
(Willow Creek) located in Greenville, South Carolina, for a purchase price
of $5,040,560, which included $477,987 in acquisition fees.
In December 1986, the Partnership acquired a 72 unit apartment complex
(Evergreen Terrace) located in Lansing, Michigan for a purchase price of
$1,1711,093, which included $314,379 in acquisition fees.
In May 1987, the Partnership acquired a 56 unit apartment complex (Cedar
Court) located in Monroeville, Pennsylvania, for a purchase price of
$1,439,832, which included $370,728 in acquisition fees.
In 1988, the Partnership acquired, upon its dissolution, the net assets and
liabilities of the Willow Lake Joint Venture, which amounted to $1,635,474.
Since the date of the acquisition, the Partnership had capitalized
additional construction costs of $5,059,296 which included capitalized
interest of $151,993. Construction on this project was substantially
complete in early 1991. During September 1992, Willow Lake's lender
foreclosed and took possession of the property because the Partnership had
difficulty in obtaining tenant leases and financing to complete tenant
build-out costs. The disposal generated a $1,328,352 loss for financial
statement purposes.
In October, 1989 the Partnership sold the Gold Key II apartment complex for
$2,881,136 which generated a gain of $911,177 for financial statement
purposes.
-10-
5. NOTE RECEIVABLE
In connection with the sale of the Gold Key II apartment complex, the
Partnership took back a second mortgage as security for two notes
receivable. The first note for $155,000 carried an interest rate of 10%
with interest payable monthly and the remaining balance payable at maturity
on October 11, 1995. The second note for $75,000 carried an interest rate
of 10% with principal payments payable in five annual installments of
$15,000 and any remaining interest payable at maturity on October 11, 1995.
Neither of the notes were paid in full by the maturity date. Applicable
interest and penalties have been accrued through June 30, 1996. During
1994, the Partnership assigned the rights to receive the proceeds of the
above notes as additional collateral for the mortgage on Evergreen Terrace
Apartments.
6. MORTGAGES AND NOTES PAYABLE
The Partnership has the following mortgages and notes payable:
Lakeview
--------
In January 1996, the Partnership refinanced the mortgage. The refinanced
mortgage, with a balance of $2,520,822 at June 30, 1996, provides for
annual principal and interest payments at 8.25% payable in equal monthly
installments of $232,924.
Sutton Park (formerly Bristol Square)
-------------------------------------
The property was refinanced January 11, 1996 with an 8% mortgage for
$3,400,000, and an unsecured $50,000 promissory note. The new mortgage
provides for annual principal and interest payments of $306,174 in equal
monthly installments. The balance outstanding at June 30, 1996 was
$3,388,494. The term of the mortgage is 10 years with the remaining balance
due and payable on February 1, 2006. The promissory note provides for
monthly principal payments of $2,083 plus interest accruing at the lenders
reference rate plus 2% (total of 10.25 % at June 30, 1996). At June 30,
1996 the outstanding balance was $41,668. The note is due and payable
February 1, 1998.
-11-
MORTGAGES AND NOTES PAYABLE (CONTINUED)
Airlanes I & III
----------------
A 7.625% mortgage with a balance of $3,575,294 at June 30, 1996, which
provides for annual principal and interest payments of $369,783 payable in
equal monthly installments, with the remaining balance due January 1, 1999.
Creekside
---------
An adjustable rate mortgage with an outstanding principal balance of
$3,706,512 and $3,773,646 at June 30, 1996 and 1995, respectively. The
interest rate is adjustable quarterly to a maximum rate of 13.5% and a
minimum rate of 7% ( 7.23% at June 30, 1996). The mortgage is payable
monthly in amounts which vary with the interest rate. Monthly payments at
June 30, 1996 based on 7.23% interest rate were $28,170.31. The balance of
the mortgage is due and payable March 31, 1998.
Willow Creek
------------
A 9.25% mortgage with an original balance of $4,080,000 which provides for
annual principal and interest payments of $393,023 payable in equal monthly
installments with the remaining balance of $3,929, 432 due on September 1,
1996. The balance as of June 30, 1996 and 1995 was $3,934,300 and
$3,961,995, respectively.
Evergreen Terrace
-----------------
An adjustable rate mortgage with a balance at June 30, 1996 and 1995 of
$1,028,717 and $1,045,544, respectively. The interest rate is adjustable
annually to a maximum rate of 15% during the first five years of the loan
term and 17% for the remaining life of the loan with a minimum rate of 9% (
9% at June 30, 1996). The mortgage is payable monthly in amounts which vary
with the interest rate. Monthly payments at June 30, 1996 based on a 9%
interest rate were $8,962. The balance of the mortgage is due and payable
May 24, 1998.
Chapelwood Estates (formerly Cedar Court)
-----------------------------------------
A 9.25% mortgage with a balance of $897,334 and $903,105 at June 30, 1996
and 1995, respectively, which provides for annual principal and interest
payments of $89,586 payable in equal monthly installments with remaining
balance of $895,117 due September 1, 1996.
-12-
MORTGAGES AND NOTES PAYABLE (CONTINUED)
The mortgages described above are secured by the Partnership properties to
which they relate.
The aggregate maturities of mortgages and notes payable for each of the
next five years and thereafter are as follows:
Year Amount
---- ------
1996 $ 5,088,225
1997 262,895
1998 4,778,938
1999 3,384,889
2000 82,696
Thereafter 5,584,544
-------------
TOTAL $ 19,182,187
=============
7. INVESTMENT IN JOINT VENTURE
On September 1, 1992, the Partnership entered into an agreement to form a
joint venture with Realmark Property Investors Limited Partnership VI-B
(RPILP VI-B). The joint venture was formed for the purpose of operating the
Lakeview Apartment complex owned by the Partnership. Under the terms of the
agreement, RPILP VI-B contributed $175,413, with the Partnership
contributing the property net of the first mortgage.
The joint venture agreement provides that any income, loss, gain, cash
flow, or sale proceeds be allocated 83.78% to the Partnership and 16.22% to
RPILP VI-B. The net loss from the date of inception has been allocated to
the minority interest in accordance with the agreement and has been
recorded as a reduction of the capital contribution.
A reconciliation of the minority interest share in the Lakeview Joint
Venture is as follows:
1996 1995
---- ----
Balance, January 1 $ 54,583 $ 97,207
Allocated Loss ( 3,159) (19,817)
---------- ---------
Balance, June 30 $ 51,424 $ 77,390
========== =========
-13-
8. RELATED PARTY TRANSACTIONS
Management fees for the management of certain of the Partnership's
properties are paid to an affiliate of the General Partners. The management
agreement provides for 5% of gross monthly receipts of the complexes to be
paid as fees for administering the operations of the properties. These fees
totaled $127,651 and $139,021 for the six months ended June 30, 1996 and
1995, respectively.
The Partnership entered into a management agreement with an unrelated third
party for the management of Airlane I and III on August 15, 1986. The
agreement provides for the payment of a management fee equal to 4% of
monthly gross rental income. An affiliate of the General Partners also
receives a management fee of 2% of monthly gross rental income.
According to the terms of the Partnership Agreement, the Corporate General
Partner is also entitled to receive a partnership management fee equal to
7% of net cash flow (as defined in the Partnership Agreement), 2% of which
is subordinated to the limited partners having received an annual cash
return equal to 7% of their average adjusted capital contributions. No such
fee was paid or accrued by the partnership for the six months ended June
30, 1996 and 1995.
Accounts payable to affiliates amounted to $2,485,013 and $1,817,037 at
June 30, 1996 and 1995, respectively. The payable represents fees due and
advances from the Corporate General Partner or an affiliate of the General
Partners. Interest charged on accounts payable to affiliates totaled
$125,979 and $81,037 for the six months ended June 30, 1996 and 1995.
The General Partners are also allowed to collect a property disposition fee
upon sale of acquired properties. This fee is not to exceed the lesser of
50% of amounts customarily charged in arm's-length transactions by others
rendering similar services for comparable properties, or 3% of the sales
price. The property disposition fee is subordinate to payments to the
limited partners of a cumulative annual return (not compounded) equal to 7%
of their average adjusted capital balances and to repayment to the limited
partners of an amount equal to their original capital contributions. Since
these conditions have not been met, no fees have been recorded or paid on
the sale of the Gold Key II apartment complex.
Computer service charges for the partnerships are paid or accrued to an
affiliate of the General Partner. The fee is based upon the number of
apartment units and totaled $6,600 and $6,600 for the six months ended June
30, 1996 and 1995, respectively.
-14-
RELATED PARTY TRANSACTIONS (CONTINUED)
Pursuant to the terms of the Partnership Agreement, the Corporate General
partner charged the Partnership for reimbursement of certain costs and
expenses incurred by the Corporate General Partner and its affiliates in
connection with the administration of the Partnership. These charges were
for the Partnership's allocated share of such costs and expenses which
include payroll, legal, rent, depreciation, printing, mailing, travel and
communication costs related to Partnership accounting, partner
communication and relations and property marketing. Accounting,
communication and marketing expenses are allocated based on total assets,
number of partners, and the market value of properties respectively.
9. INCOME TAXES
No provision has been made for income taxes since the income or loss of the
partnership is to be included in the tax returns of the Individual
Partners.
The tax returns of the Partnership are subject to examination by the
Federal and state taxing authorities. Under federal and state income tax
laws, regulations and rulings, certain types of transactions may be
accorded varying interpretations and, accordingly, reported partnership
amounts could be changed as a result of any such examination.
The reconciliation of net loss for the six months ended June 30, 1996 and
1995 as reported in the statements of operations, and as would be reported
for tax purposes, is as follows:
June 30, June 30,
1996 1995
---- ----
Net loss - statement of operations $ (453,897) $ (750,537)
Add to (deduct from):
Difference in depreciation ( 29,600) ( 66,725)
Gain on sale of property 2,202 -
Allowance for doubtful accounts 164,000 62,425
----------- -----------
Net loss - tax return purposes $ (317,295) $ (754,837)
=========== ===========
-15-
INCOME TAXES (CONTINUED)
The reconciliation of Partners' (Deficit) as of June 30, 1996 and December
31, 1995 as reported in the balance sheet, and as reported for tax
purposes, is as follows:
June 30, December 31,
1996 1995
---- ----
Partners' (Deficit) - balance sheet $ (3,975,804) $ (3,521,907)
Add to (deduct from):
Accumulated difference in
depreciation (5,257,175) (5,227,575)
Accumulated amortization 382,695 382,695
Syndication fees 2,734,297 2,734,297
Difference in book and tax
basis in partnership investments ( 635,737) ( 635,737)
Other 1,313,241 1,147,039
------------ -------------
Partners' (Deficit) - tax return purposes $ (5,438,483) $ (5,121,188)
============ =============
10. SUBSEQUENT EVENTS
On July 16, 1996 the Corporate General Partner entered into a contract on
behalf of the Partnership to sell Creekside Apartments, Evergreen Terrace
Apartments, Lakeview Apartments, Sutton Park Apartments (formerly Bristol
Square) and Willow Creek Apartments at sales prices of $5,900,000,
$1,200,000, $4,090,000, $5,800,000 and $5,425,000, respectively. The
contract is subject to a number of contingencies as were described in Form
8-K filed on July 31, 1996. No firm closing date on the sale has been
established to date.
-16-
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The General Partner continues to fund the Partnership's shortfalls in cash flow,
although under no obligation to do so. Such advances to the Partnership are
considered payable on demand to the General Partner, and at this point in time,
there is no assurance that these advances will continue. The Partnership did not
make any distributions during the second quarter of 1996, and is not likely to
make any in the future until all Partnership obligations are satisfied and the
General Partner is reimbursed for the advances it has made to the Partnership.
The notes receivable from the sale of Gold Key II matured in the fourth quarter
of 1995, but have not been paid at this date by the mortgagee. The Partnership
continues its legal action in pursuit of collection of the balance due on these
notes. Currently financial information has been requested from the mortgagee;
the General Partner will consider foreclosure if a reasonable offer is not made
soon by the mortgagee.
Management is optimistic that occupancy levels at the properties in this
Partnership will slowly increase as the "peak" rental season is being entered.
Incentive plans have been put in place to attract new tenants; plans for capital
improvements, such as exterior painting and repairs to woodwork, are also in
place.
Results of Operations:
- ----------------------
Net loss for the three month period ended June 30, 1996 amounted to $330,612 or
$13.72 per limited partnership unit versus a net loss for the three month period
ended June 30, 1995 of $304,753 or $12.65 per limited partnership unit. For the
six month period ended June 30, 1996, the net loss amounted to $453,897 versus a
net loss of $750,537 for the six month period ended June 30, 1995.
On a tax basis, the Partnership generated a loss of $317,295 or $13.17 per
limited partnership unit for the six month period ended June 30, 1996 versus a
tax loss of $754,837 or $31.34 per limited partnership unit for the six month
period ended June 30, 1995.
-17-
Results of Operations (continued):
- -----------------------------------
Partnership revenue for the quarter ended June 30, 1996 totaled $1,280,234, a
decrease of $216,860 from the same period in 1995. For the six month period
ended June 30, 1996 total income decreased by $162,819 from the corresponding
period in 1995. Rental income for the six month period ended June 30, 1996,
totaled $2,584,882, which was a decrease of $193,460 over the same time period
in 1995. The decrease is directly related to the decrease in occupancy at
several of the complexes. Other income increased by approximately $31,000
between the six month periods ended June 30, 1996 and June 30, 1995 primarily
due to increased laundry income at the residential properties.
For the three month period ended June 30, 1996, the Partnership expenses totaled
$1,610,846, a decrease of $199,496 from the quarter ended June 30, 1995. For the
six months ended June 30, 1996, the Partnership expenses totaled $3,246,982,
decreasing over $459,000 from quarter ended June 30, 1995. The majority of the
decrease in expenses is a direct result of a cost controlling factors in
property operations. Payroll and associated costs, repairs and maintenance and
contracted service expenses are being closely monitored at all complexes.
Additionally, administrative costs continue to decrease; the decrease is
primarily related to the decrease in investor service charges and portfolio
management charges.
Management is confident that the Partnership will be able to continue
controlling its costs, and it is now making every effort to increase occupancies
in those complexes that are struggling with lower levels, such as Sutton Park
(formerly Bristol Square), Evergreen Terrace and Chapelwood Estates (formerly
Cedar Court). Management feels that the third quarter of 1996 will show
additional improvements in the occupancies, as well as continual leveling out of
property expenditures.
For the six month period ended June 30, 1996, the Lakeview Joint Venture
generated net loss of $122,143, with $19,812 of the loss allocated to the
minority venturer. For the six months ended June 30, 1995, the joint venture had
a net loss of $122,177, with $19,817 of the loss allocated to the minority
venturer. Although total income decreased by over $60,000, property expenditures
also decreased by the same amount, thus maintaining a consistent bottom line for
this property.
-18-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
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PART II
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OTHER INFORMATION
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Item 1 - Legal Proceedings
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The Partnership is not party to, nor is it the subject of, any material pending
legal proceedings other than ordinary routine litigation incidental to the
Partnership's business.
Item 2, 3, 4 and 5
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Not applicable.
Item 6 - Exhibits and reports on Form 8-K
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Item 7 (c) - Financial Statements and Exhibits - Contract between the
Partnership and Partnership Equities, Inc. dated July 16, 1996 attached.
Form 8-K was filed July 31, 1996.
Exhibit 27 - Financial Data Schedule (Electronic filing only)
Form 8-K was filed July 31, 1996.
-19-
SIGNATURES
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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.
REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP IV
By: /s/Joseph M. Jayson January 2, 1997
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Joseph M. Jayson, Date
Individual General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By: REALMARK PROPERTIES, INC.
Corporate General Partner
/s/Joseph M. Jayson January 2, 1997
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Joseph M. Jayson, Date
President and Director
/s/Michael J. Colmerauer January 2, 1997
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Michael J. Colmerauer Date
Secretary