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
March 31, 1997 33-17579
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
(Exact Name of Registrant as specified in its charter)
Delaware 16-1309988
- -------------------- -----------------------------------
(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 March 31, 1997 the registrant had 78,625.10 units of limited partnership
interest outstanding.
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
----------------------------------------------------
INDEX
-----
PAGE NO.
--------
PART I: FINANCIAL INFORMATION
- ------- ---------------------
Balance Sheets -
March 31, 1997 and December 31, 1996 3
Statements of Operations -
Three Months Ended March 31, 1997 and 1996 4
Statements of Cash Flows -
Three Months Ended March 31, 1997 and 1996 5
Statements of Partners' (Deficit) Capital -
Three Months Ended March 31, 1997 and 1996 6
Notes to Financial Statements 7 - 21
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION & RESULTS OF
--------------------------------
OPERATIONS 22 - 23
----------
-2-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
March 31, December 31,
1997 1996
---- ----
ASSETS
Property, at cost:
Land $ 746,000 $ 746,000
Buildings and improvements 6,018,094 6,018,094
Furniture, fixtures and equipment 255,652 255,652
----------- -----------
7,019,746 7,019,746
Less accumulated depreciation 1,439,663 1,379,541
----------- -----------
Property, net 5,580,083 5,640,205
Investments in real estate joint ventures 397,069 389,598
Cash 1,329,718 1,508,588
Accounts receivable - affiliate 68,524 --
Mortgage costs, net of accumulated amortization
of $201,933 and $189,098, respectively 100,443 93,277
Other assets 126,113 118,069
----------- -----------
Total Assets $ 7,601,950 $ 7,749,737
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgages payable $ 4,214,687 $ 4,225,106
Accounts payable and accrued expenses 145,997 215,520
Security deposits and prepaid rents 105,696 111,962
----------- -----------
Total Liabilities 4,466,380 4,552,588
----------- -----------
Partners' (Deficit) Capital:
General partners (90,460) (88,613)
Limited partners 3,226,030 3,285,762
----------- -----------
Total Partners' Capital 3,135,570 3,197,149
----------- -----------
Total Liabilities and Partners' Capital $ 7,601,950 $ 7,749,737
=========== ===========
See notes to financial statements
-3-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
---- ----
Income:
Rental $ 396,861 $ 394,761
Interest and other income 22,721 30,319
--------- ---------
Total income 419,582 425,080
--------- ---------
Expenses:
Property operations 210,506 239,034
Interest 104,814 108,550
Depreciation and amortization 72,956 72,134
Administrative:
Paid to affiliates 43,329 19,247
Other 57,027 51,589
--------- ---------
Total expenses 488,632 490,554
--------- ---------
Loss before allocated loss from joint venture (69,050) (65,474)
Allocated income (loss) from joint ventures 7,471 (5,761)
--------- ---------
Net loss $ (61,579) $ (71,235)
========= =========
Loss per limited partnership unit $ (0.76) $ (0.88)
========= =========
Distributions per limited partnership unit $ -- $ --
========= =========
Weighted average number of
limited partnership units
outstanding 78,625.1 78,625.1
========= =========
See notes to financial statements
-4-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
---- ----
Cash flow from operating activities:
Net loss $ (61,579) $ (71,235)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization 72,956 72,134
Net income (loss) from joint ventures (7,471) 5,761
Changes in operating assets and liabilities:
Other assets (8,044) (15,504)
Accounts payable and accrued expenses (69,523) 55,971
Security deposits and prepaid rent (6,266) (2,144)
----------- -----------
Net cash (used in) provided by operating activities (79,927) 44,983
----------- -----------
Cash flow from investing activities:
Accounts receivable - affiliates (68,524) (37,542)
Capital expenditures -- --
Contributions to joint ventures, net of distributions -- --
----------- -----------
Net cash (used in) investing activities (68,524) (37,542)
----------- -----------
Cash flows from financing activities:
Distributions to partners -- --
Mortgage acquisition costs (20,000) --
Principal payments on mortgages (10,419) (6,651)
----------- -----------
Net cash (used in) financing activities (30,419) (6,651)
----------- -----------
(Decrease) increase in cash (178,870) 790
Cash - beginning of period 1,508,588 641,724
----------- -----------
Cash - end of period $ 1,329,718 $ 642,514
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 104,814 $ 108,550
=========== ===========
See notes to financial statements
-5-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
STATEMENTS OF PARTNERS' (DEFICIT) CAPITAL
Three Months Ended March 31, 1997 and 1996
(Unaudited)
General Limited Partners
Partners -----------------------
Amount Units Amount
------ ----- ------
Balance, January 1, 1996 $ (81,382) 78,625.1 $ 3,519,589
Distribution to partners -- -- --
Net loss (2,137) -- (69,098)
----------- -------- -----------
Balance, March 31, 1996 $ (83,519) 78,625.1 $ 3,450,491
=========== ======== ===========
Balance, January 1, 1997 $ (88,613) 78,625.1 $ 3,285,762
Distribution to partners -- -- --
Net loss (1,847) -- (59,732)
----------- -------- -----------
Balance, March 31, 1997 $ (90,460) 78,625.1 $ 3,226,030
=========== ======== ===========
See notes to financial statements
-6-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
NOTES TO FINANCIAL STATEMENTS
Three Months Ended March 31, 1997 and 1996
(Unaudited)
1. GENERAL PARTNERS' DISCLOSURE
----------------------------
In the opinion of the General Partners of Realmark Property Investors
Limited Partnership VI-B, all adjustments necessary for a fair
presentation of the Partnership's financial position, results of
operations and changes in cash flows for the three month periods ended
March 31, 1997 and 1996, 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 VI-B (the "Partnership"),
a Delaware Limited Partnership, was formed on September 21, 1987, to
invest in a diversified portfolio of income-producing real estate
investments.
In November 1988, 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 February 2, 1989. The
offering was concluded on February 28, 1990, at which time 78,625.1 units
of limited partnership interest were sold and outstanding. 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.
-7-
FORMATION AND OPERATION OF PARTNERSHIP (CONTINUED)
--------------------------------------------------
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 3% property disposition fee. Such fees
shall be reduced, but not below zero, by the amounts necessary to pay to
limited partners whose subscriptions were accepted by January 31, 1989, an
additional cumulative annual return (not compounded) equal to 2% based on
their average adjusted capital contributions, and to limited partners
whose subscriptions were accepted between February 1, 1989 and June 30,
1989, an additional cumulative annual return (not compounded) equal to 1%
based on their average adjusted capital contributions commencing with the
first fiscal quarter following the termination of the offering of units,
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.
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.
-8-
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
------------------------------------------------------
Acquisition Fees
----------------
Acquisition fees are paid to the general partner as properties are
specified, which generally occurs when a contract to purchase the property
is entered into. Acquisition fees are allocated to specific properties
when actual closing takes place. Acquisition fees paid for properties that
ultimately are not acquired will be applied toward other properties that
are acquired or reallocated to existing properties. There were no
capitalized acquisition fees at March 31, 1997.
Unconsolidated Joint Ventures
-----------------------------
The Partnership's investment in affiliated real estate joint ventures are
accounted for on the equity method.
Rental Income
-------------
Leases for residential properties have terms of one year or less. Rental
income is recognized on the straight line method over the term of the
lease.
Rents Receivable
----------------
Due to the nature of these accounts, residential rents receivable are
fully reserved as of March 31, 1997 and 1996.
Income (Loss) per Limited Partnership Unit
------------------------------------------
The income (loss) per limited partnership unit is based on the weighted
average number of limited partnership units outstanding during the period.
4. ACQUISITION AND DISPOSITION OF RENTAL PROPERTY
----------------------------------------------
In June 1991 the Partnership acquired a 192 unit apartment complex (the
Villa) located in Greenville, South Carolina for a purchase price of
$3,165,456, which included $373,493 in acquisition fees.
In June 1991 the Partnership acquired a 144 unit apartment complex
(Players Club) located in Lutz, Florida for a purchase price of
$3,070,800, which included $190,737 in acquisition fees.
-9-
5. MORTGAGES PAYABLE
-----------------
In connection with the acquisition of rental property, the Partnership
obtained mortgages as follows:
The Villa
---------
A mortgage with a balance of $1,945,879 and $1,968,515 at March 31, 1997
and 1996, respectively, providing for monthly principal and interest
payments of $17,998, bearing interest at 9.875%. The note matures August
1998.
Players Club
------------
A mortgage with a balance of $2,268,808 and $2,288,603 at March 31, 1997
and 1996, respectively, providing for monthly principal and interest
payments of $20,402, bearing interest at 10%. The note matures July 1998.
The mortgages described above are secured by the individual properties to
which they relate.
The aggregate maturities of mortgages payable for each of the next three
years are as follows:
Year Amount
---- ------
1997 $ 43,853
1998 4,181,253
-------------
TOTAL $ 4,225,106
=============
6. 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 $20,753 and $17,627 for the three months
ended March 31, 1997 and 1996, respectively.
-10-
RELATED PARTY TRANSACTIONS (CONTINUED)
-------------------------- -----------
According to the terms of the Partnership Agreement, the 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 adjusted capital contributions. There were no such
fees paid or accrued for the three months ended March 31, 1997 or 1996.
Pursuant to the terms of the Partnership agreement, the corporate general
partner charges 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 and acquisition of
properties. These charges are for the Partnership's allocated share of
such costs and expenses as payroll, travel, communication costs related to
partnership accounting, partner communication and relations, and
acquisition of properties. Partnership accounting, partner communication,
marketing and acquisition expenses are allocated based on total assets,
number of partners and number of units, respectively. These costs amounted
to $19,504 and $20,953 at March 31, 1997 and 1996.
Accounts receivable - affiliates amounted to $68,524 and $839,641 at March
31, 1997 and 1996, respectively. This balance is in the process of being
reimbursed.
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 $1,584 for the three months ended March 31,
1997 and 1996.
7. 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.
-11-
INCOME TAXES (CONTINUED)
------------------------
The reconciliation of net loss for the three months ended March 31, 1997
and 1996 as reported in the statements of operations, and as would be
reported for tax purposes, is as follows:
March 31, March 31,
1997 1996
---- ----
Net loss - statement of operations $ ( 61,579) $ ( 71,235)
Add to (deduct from):
Difference in depreciation 6,787 ( 70)
Tax basis adjustments -
Joint Ventures ( 3,684) ( 1,920)
Other non-deductible expenses 18,296 14,029
----------- ------------
Net loss - tax return purposes $ ( 40,180) $ ( 59,196)
=========== ============
The reconciliation of Partners' Capital as of March 31, 1997 and December
31, 1996 as reported in the balance sheet, and as reported for tax
purposes, is as follows:
March 31, December 31,
1997 1996
---- ----
Partners' Capital - balance sheet $ 3,135,570 $ 3,197,149
Add to (deduct from):
Accumulated difference in
depreciation ( 32,883) ( 39,670)
Tax basis adjustment -
Joint Ventures ( 63,660) ( 59,976)
Syndication fees 1,179,381 1,179,381
Other non-deductible expenses 268,692 250,396
----------- ----------
Partners' Capital - tax return purposes $ 4,487,100 $ 4,527,280
=========== ===========
-12-
8. INVESTMENT IN JOINT VENTURES
----------------------------
On September 27, 1991 the Partnership entered into an agreement to form a
joint venture with Realmark Property Investors Limited Partnership II
(RPILP II) and Realmark Property Investors Limited Partnership VI-B (RPILP
VI-B). The joint venture was formed for the purpose of operating the
Foxhunt Apartments located in Dayton, Ohio and owned by RPILP II. Under
the terms of the original agreement, the Partnership contributed $390,000
and RPILP VI-B contributed $1,041,568 to buy out the wraparound promissory
note on the property. RPILP II contributed the property net of the first
mortgage.
On April 1, 1992 RPILP II returned RPILP VI-A's entire capital
contribution and $580,000 of the capital originally invested by the
Partnership. The amended joint venture agreement now provides that any
income, loss, gain, cash flow or sale proceeds be allocated 88.5% to RPILP
II and 11.5% to the Partnership. Prior to the buyout the allocations were
63.14% to RPILP II, 26.82% to the Partnership and 10.04% to the RPILP
VI-A. The allocated net loss of the joint venture has been included in the
statements of operations of the Partnership.
In July of 1996, the Partnership entered into a plan to dispose of the
property, plant and equipment of Foxhunt Apartments with a carrying amount
of $2,886,577. Management has determined that a sale of the property is in
the best interest of the investors. As of March 31, 1997, the agreement,
with an anticipated sales price of $7.4 million, was canceled by the
buyer.
Financial Accounting Standards Statement No. 121, Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed
Of (the "Statement") requires that assets to be disposed of be recorded at
the lower of carrying value or fair value, less costs to sell. The
Statement also requires that such assets not be depreciated during the
disposal period, as the assets will be recovered through sale rather than
through operations. In accordance with this Statement, the long-lived
assets of the Partnership, classified as held for sale on the balance
sheet, are recorded at the carrying amount which is the lower of carrying
value or fair value less costs to sell, and have not been depreciated
during the disposal period. Depreciation expense, not recorded during the
disposal period, for the three months ended March 31, 1997 totaled
approximately $46,500.
-13-
INVESTMENT IN JOINT VENTURES (CONTINUED)
----------------------------------------
The following financial statements of the joint venture are presented on a
historical-cost basis. The equity ownership was determined based upon the
cash paid into the joint venture by the Partnership as a percentage of the
general partner's estimate of the fair market value of the apartment
complex and other net assets at the date of inception.
A summary of the assets, liabilities and partner's capital of the joint
venture as of March 31, 1997 and December 31, 1996 and the results of its
operations for the three months ended March 31, 1997 and 1996 is as
follows:
-14-
FOX HUNT JOINT VENTURE
BALANCE SHEETS
March 31, 1997 and December 31, 1996
March 31, December 31,
1997 1996
---- ----
ASSETS
Cash and cash equivalents $ 232,610 $ 162,914
Propery, net of accumulated depreciation 2,886,577 2,886,577
Accounts receivable - affiliates 241,639 249,929
Mortgage costs 251,838 253,937
Other assets 327,596 335,272
----------- -----------
Total Assets $ 3,940,260 $ 3,888,629
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage payable $ 4,521,048 $ 4,528,289
Accounts payable and accrued expenses 178,351 262,871
Other liabilities 125,654 68,038
----------- -----------
Total Liabilities 4,825,053 4,859,198
----------- -----------
Partners' Capital (884,793) (970,569)
----------- -----------
Total Liabilities and Partners' Capital $ 3,940,260 $ 3,888,629
=========== ===========
-15-
FOX HUNT JOINT VENTURE
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
---- ----
Income:
Rental $ 353,622 $ 319,805
Interest and other income 11,067 26,389
--------- ---------
Total income 364,689 346,194
--------- ---------
Expenses:
Property operations 113,312 203,133
Depreciation and amortization 2,099 53,900
Interest 101,778 102,453
Administrative 61,723 9,337
--------- ---------
Total expenses 278,912 368,824
--------- ---------
Net income (loss) $ 85,777 $ (22,630)
========= =========
Allocation of net income (loss):
The Partnership $ 9,864 $ (2,602)
Other Joint Venturer (RPILP II) 75,913 (20,028)
--------- ---------
$ 85,777 $ (22,630)
========= =========
-16-
INVESTMENT IN JOINT VENTURES (CONTINUED)
----------------------------------------
A reconciliation of the Partnership's investment in the joint venture is
as follows:
1997 1996
---------- ----------
Investment in joint venture, January 1 $ 371,119 $ 386,061
Allocation of net income (loss) 9,864 ( 2,602)
---------- ----------
Investment in joint venture, March 31 $ 380,983 $ 383,459
========== ==========
On August 30, 1992 the Partnership entered into a joint venture agreement
with Realmark Property Investors Limited Partnership IV (RPILP IV) for the
purpose of operating the Lakeview Apartment complex located in Milwaukee,
Wisconsin and owned by RPILP IV. Under the terms of the agreement, the
Partnership contributed $175,414 while RPILP IV contributed the property
net of the outstanding mortgage.
The joint venture agreement provides that any income, loss, cash flow or
sale proceeds be allocated 16.22% to the Partnership and 83.78% to RPILP
IV. The allocated net loss of the joint venture for the three month period
ended March 31, 1996 has been included in the statement of operations for
the Partnership.
The equity ownership percentage was determined based upon the cash paid
into the joint venture by the Partnership as a percentage of the general
partner's estimate of the fair market value of the apartment complex and
other net assets at the date of inception.
In July of 1996, the Partnership entered into a plan to dispose of the
property, plant and equipment of Lakeview Village Apartments with a
carrying amount of $2,507,241. Management has determined that a sale of
the property is in the best interest of the investors. As of March 31,
1997, the agreement had an anticipated sales price of $4,090,000.
-17-
INVESTMENT IN JOINT VENTURES (CONTINUED)
----------------------------------------
Financial Accounting Standards Statement No. 121, Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed
Of (the "Statement") requires that assets to be disposed of be recorded at
the lower of carrying value or fair value, less costs to sell. The
Statement also requires that such assets not be depreciated during the
disposal period, as the assets will be recovered through sale rather than
through operations. In accordance with this Statement, the long-lived
assets of the Partnership, classified as held for sale on the balance
sheet, are recorded at the carrying amount which is the lower of carrying
value or fair value less costs to sell, and have not been depreciated
during the disposal period. Depreciation expense, not recorded during the
disposal period, for the three months ended March 31, 1997 totaled
approximately $42,000.
A summary of the assets, liabilities and partners' capital of the joint
venture as of March 31, 1997 and December 31, 1996 and the results of its
operations for the three months ended March 31, 1997 and 1996 is as
follows:
-18-
LAKEVIEW JOINT VENTURE
BALANCE SHEETS
March 31, 1997 and December 31, 1996
March 31, December 31,
1997 1996
---- ----
ASSETS
Propery, net of accumulated depreciation $ 2,507,205 $ 2,507,241
Other assets 318,536 311,430
----------- -----------
Total Assets $ 2,825,741 $ 2,818,671
=========== ===========
LIABILITIES AND PARTNERS' (DEFICIENCY)
Liabilities:
Cash overdraft $ 28,178 $ 2,373
Mortgage payable 2,501,582 2,508,128
Accounts payable and accrued expenses 185,813 221,736
Accounts payable - affiliates 181,888 165,995
Other liabilities 77,332 54,736
----------- -----------
Total Liabilities 2,974,793 2,952,968
----------- -----------
Partners' (Deficiency) (149,052) (134,297)
----------- -----------
Total Liabilities and Partners' (Deficiency) $ 2,825,741 $ 2,818,671
=========== ===========
-19-
LAKEVIEW JOINT VENTURE
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
---- ----
Income:
Rental $ 187,098 $ 213,787
Interest and other income 12,259 11,502
--------- ---------
Total income 199,357 225,289
--------- ---------
Expenses:
Property operations 91,523 109,203
Depreciation and amortization 3,487 49,149
Interest 73,397 47,561
Administrative 45,705 38,850
--------- ---------
Total expenses 214,112 244,763
--------- ---------
Net loss $ (14,755) $ (19,474)
========= =========
Allocation of net loss:
The Partnership $ (2,393) $ (3,159)
Other Joint Venturer (12,362) (16,315)
--------- ---------
$ (14,755) $ (19,474)
========= =========
-20-
INVESTMENT IN JOINT VENTURES (CONTINUED)
A reconciliation of the Partnership's investment in the joint venture is
as follows:
1997 1996
--------- ---------
Investment in joint venture, January 1 $ 18,479 $ 54,585
Allocation of net loss ( 2,393) ( 3,159)
--------- ---------
Investment in joint venture, March 31 $ 16,086 $ 51,426
========= ==========
-21-
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS.
------------------------------------
Liquidity and Capital Resources
- -------------------------------
The Partnership continues to maintain sufficient cash to enable it to not only
fund current operations, but also to provide for future capital improvements.
The Partnership did have negative cash flow from operations during the first
quarter of 1997, primarily due to its paying down a significant amount of its
payables. No distributions to partners were made in either the first three
months of 1997 or 1996. The General Partner does anticipate making a
distribution during 1997, most likely during the next quarter.
Management expects to secure new financing on both The Villas and Players Club
during the second quarter of 1997. This new financing will result in a lower
interest rate, thus providing even more cash flow to the Partnership.
Foxhunt Apartments came under contract for sale during July 1996. The sale is
subject to a number of contingencies and is cancelable by the purchaser. The
sales price negotiated is $7,400,000. It appears as of the date of this writing
that the sale will not close. The General Partners feel that the sale of this
property is in the best interest of the joint venturers, so management continues
to look for potential buyers.
Also on July 16, 1996 a contract for the sale of Lakeview Village was
entered into on behalf of the joint venturers. The sales price negotiated is
$4,090,000. The contract is subject to a number of contingencies and is
cancelable by the purchaser. No firm closing date on the sale has been
established to date. The General Partners continue to aggressively seek other
buyers for this property since the sale is deemed to be in the best interests of
the joint venturers.
Result of Operations:
- ---------------------
For the three month period ended March 31, 1997, the Partnership generated a net
loss of $61,579 or $0.76 per limited partnership unit. The loss for the same
period in 1996 was $71,235 or $0.88 per limited partnership unit.
On a tax basis, the Partnership loss totaled $40,180 or $0.50 per limited
partnership unit for the three month period ended March 31, 1997 as compared to
the tax loss for the three month period ended March 31, 1996 which was $59,196
or $0.73 per limited partnership unit.
-22-
Result of Operations (Continued):
- -------------------- ------------
Total revenue for the three month period ended March 31, 1997 decreased $5,498
from the corresponding period in 1996. The decrease is the result of a $7,598
reduction in interest and other income. Approximately 40% of the decrease can be
attributed to a decline in laundry revenues collected; an 11% decrease in
interest income also contributed to the overall decrease. Rental income
increased slightly when comparing the quarter ended March 31, 1997 and 1996,
primarily due to a decrease in vacancies at Players Club. Management continues
to focus on efforts to decrease delinquencies by tightening credit and
collection procedures; from the quarter ended March 31, 1997 to that ended March
31, 1996, bad debts decreased in total over $9,780. The properties are both
located in what continues to be economically favorable areas for rental
properties, so rental income is expected to increase in the future.
Partnership expenses totaled $488,632 for the three month period ended March 31,
1997. This is a slight decrease of approximately $1,900 from the same period in
1996. Property operations expenses decreased over $28,000, the largest portion
of which can be attributed to a decrease in contracted service expenses. Slight
increases in payroll and related expenses and repairs and maintenance expenses
were also seen during the first quarter of 1997 as compared to the same period
during 1996. Interest expense and depreciation and amortization expense remained
fairly constant between the two quarters, whereas administrative expenses
increased due to increases in legal fees, management fees (resulting from
increased revenues), investor service and brokerage fees, and accounting and
portfolio expenses. Management continues to try to lower expenses by focusing on
tenant retention and attempting to do more of the repair and maintenance work
in-house as opposed to hiring outside contractors. Thus far, favorable financial
results can be seen by the decrease in operation costs.
For the three month period ended March 31, 1997, the Foxhunt Joint Venture
generated net income of $85,777 compared to a loss of $22,630 for the three
month period ended March 31, 1996. Of the total income, $9,864 was allocated to
the Partnership for the three month period ended March 31, 1997; $2,602 of the
loss was allocated to the Partnership for the same period in 1996.
The Lakeview Joint Venture had a net loss of $14,755 for the three month period
ended March 31, 1997 as compared to a loss of $19,474 for the three month period
ended March 31, 1996. The Partnership was allocated $2,393 of the loss for three
month period ended March 31, 1997 and $3,159 for the same period in 1996.
Management continues its efforts to decrease operating expenses related to this
property in hopes of seeing signs of an economic improvement in this region.
-23-
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B
PART II
OTHER INFORMATION
Item 1 - Legal Proceedings
- --------------------------
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
- ------------------
Not applicable.
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
None.
-24-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP VI-B
By: /s/Joseph M. Jayson May 17, 1997
------------------------------ ------------------------
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 May 17, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
President and Director
/s/Michael J. Colmerauer May 17, 1997
------------------------------ ------------------------
Michael J. Colmerauer Date
Secretary