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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended June 30, 1995
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Commission file number 0-8902
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REAL ESTATE FUND INVESTMENT TRUST
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(Exact name of registrant as specified in its charter)
SOUTH CAROLINA 57-0402813
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
304 South Main Street
P.O. Box 396, Fountain Inn, S.C. 29644
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (803) 862-3765
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Former name, former address and former fiscal year, if changed since last
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report: N/A
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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
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The number of shares outstanding of the Registrant's Shares of
Beneficial Interest, as of August 14, 1994: 2,090,108
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Real Estate Fund Investment Trust
Index
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed balance sheet--June 30, 1995
Condensed statements of income--Three months ended June 30,
1995 and 1994; Six months ended June 30, 1995 and 1994.
Condensed statements of cash flows--Six months ended June 30,
1995 and 1994.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
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Part I. Financial Information
Real Estate Fund Investment Trust
Condensed Balance Sheet
JUNE 30,
1995
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(Unaudited)
ASSETS
Real estate investments:
Equity investments in real estate, less allowances for
depreciation:
Earning $ 1,505,266
Non-earning 453,333
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1,958,599
Net investment in direct financing leases 281,699
Mortgage note receivable 160,527
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442,226
Other assets:
Cash and cash equivalents 751,113
Rents and tenant charges receivable, net of allowance for
uncollectible accounts of $45,000 54,005
Prepaid expenses and other 27,735
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832,853
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$ 3,233,678
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accrued property taxes $ 73,720
Other accrued expenses 72,403
Deferred income taxes 2,000
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148,123
Shareholders' equity:
Shares of Beneficial Interest, par value $1.00 per
share--unlimited authorization, issued and
outstanding 2,090,108 shares 2,090,108
Additional paid-in capital 759,110
Undistributed net income 236,337
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$ 3,085,555
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$ 3,233,678
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Real Estate Fund Investment Trust
Condensed Statements of Income (Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1995 1994 1995 1994
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Revenues:
Rental income $ 218,110 $ 209,204 $ 436,838 $ 410,409
Earned income from direct financing leases 11,153 13,067 22,805 26,758
Interest on mortgage notes and money
market accounts 8,407 7,476 15,325 14,633
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237,670 229,747 474,968 451,800
Expenses:
Provision for depreciation 43,008 40,779 85,840 81,304
Property and miscellaneous taxes 41,393 42,705 82,921 85,409
Maintenance and repairs, including payments of
$20,349 (1995), $21,606 (1994), $29,349 (1995),
and $28,802 (1994) to a company in which
the Trust's manager is a principal owner 39,842 34,793 64,775 52,415
Administrative and other expenses 52,996 58,433 120,928 125,997
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177,239 176,710 354,464 345,125
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Income from operations before income taxes 60,431 53,037 120,504 106,675
Provision for Federal and state income taxes 800 200 1,900 1,200
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Income from operations 59,631 52,837 118,604 105,475
Gain on sales of equity investments in real estate,
net of taxes 64,696 - 203,897 -
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Net income $ 124,327 $ 52,837 $ 322,501 $ 105,475
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Net income per Share of Beneficial Interest:
Income from operations $ .03 $ .03 $ .05 $ .05
Gain on sale of real estate .03 - .10 -
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$ .06 $ .03 $ .15 $ .05
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Number of shares used in computation 2,090,108 2,090,108 2,090,108 2,090,108
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Cash distributions paid per Share of
Beneficial Interest $ .05 $ .04 $ .10 $ .08
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Real Estate Fund Investment Trust
Condensed Statement of Cash Flows (Unaudited)
SIX MONTHS ENDED
JUNE 30
1995 1994
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OPERATING ACTIVITIES
Net income $ 322,501 $ 105,475
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation of equity investments in real estate 85,556 81,060
Gain on sale of equity investment in real estate (203,997) -
Recovery of investment in direct financing leases 21,745 20,124
Decrease in rents and tenant charges receivable,
prepaid expenses, escrow deposits and other assets 82,539 49,373
(Decrease) increase in accrued property taxes, other accrued
expenses and Federal and state income taxes payable (88,675) (90,549)
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Net cash provided by operating activities 219,669 165,483
INVESTING ACTIVITIES
Proceeds from sale of equity investment in real estate,
net of selling expenses of $7,542 (1995) 224,958 -
Additional costs of equity investments in real estate,
including $16,391 (1995) and $21,055 (1994) paid to a
company in which the Trust's manager is a principal owner (38,631) (75,124)
Collections of mortgage notes receivable 12,047 11,179
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Net cash provided (used) in investing activities 198,374 (63,945)
DIVIDENDS PAID (209,011) (167,209)
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Increase (decrease) in cash and cash equivalents 209,032 (65,671)
Cash and cash equivalents at beginning of period 542,081 688,124
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Cash and cash equivalents at end of period $ 751,113 $ 622,453
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MANAGEMENT'S DISCUSSION AND ANALYSIS
There has been no significant change in the Trust's liquidity or financial
condition since December 31, 1994. At present there are no large capital
expenditures planned that would present a liquidity problem. In the Trust's
Form 10-KSB for the year ended December 31, 1994, disclosure was made of the
shareholders' vote to direct the Board of Trustees to develop a plan of
liquidation of the Trust's assets. Although negotiations are continuing, no
formal sales agreements to sell the Trust's assets have been executed at this
time. The plan of liquidation must also be approved by the shareholders. The
Trust intends to continue to distribute as dividends at least 95% of its
taxable income until such time as the plan of liquidation is approved.
Rental income increased by approximately 4% during the three-month period ended
June 30, 1995, as compared to the three-month period ended June 30, 1994. This
increase is primarily due to recent leases of properties, which were vacant as
of June 30, 1994. As of June 30, 1995, the Trust had approximately 109,000
square feet of vacant space as compared to approximately 164,000 square feet of
vacant space at June 30, 1994. Total expenses for the three and six-month
period ending June 30, 1995 are consistent with the total expenses reported for
the three and six-month period ending June 30, 1994.
For 1995 and 1994, the Trust has provided for Federal and state income taxes,
assuming a consistent flow of revenue and expenses for the year. The taxes are
based on estimated taxable income after the 95% dividend distribution required
by IRS code provisions pertaining to real estate investments trusts.
In April of 1995, the Trust sold the Quick Way property located in Anderson,
South Carolina for $85,000. Due to this sale, a gain of approximately $65,000
has been reported in the second quarter of 1995 for financial statement
purposes and for tax purposes. In addition, the Trust has one outstanding
offer for the sale of real estate as of the date of this report. However, no
contract for sale has been entered into at this time. Based on preliminary
discussions, the Trust anticipates recognizing a profit for financial statement
purposes and for tax purposes if the property is ultimately sold, pursuant to
this outstanding offer.
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Part II. Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule (For SEC Use Only)
The Trust did not file any reports on Form 8-K during
the three months ended June 30, 1995.
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.
Real Estate Fund Investment Trust
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(Registrant)
Date August 14, 1994 /s/ Werner B. McDannald
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Werner B. McDannald, Manager
Date August 14, 1994 /s/ Stewart H. Garrett
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Stewart H. Garrett, Sec./Treas.