FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended....................................March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from..............................to..................
Commission file number 0-16792
BASS REAL ESTATE FUND-84
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(Exact name of partnership as specified in its charter)
North Carolina 56-1419569
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4000 Park Road Charlotte, North Carolina 28209
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(Address of principal executive office) (Zip Code)
Partnership's telephone number, including area code: (704) 523-9407
Indicate by check mark whether the partnership (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
partnership 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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BASS REAL ESTATE FUND-84
INDEX
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PAGE
NUMBER
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Balance Sheet
as of March 31, 1996
(Unaudited) 3
Condensed Statement of Income
Three months ended
March 31, 1996 and 1995
(Unaudited) 4
Statement of Partners' Deficit 5
(Unaudited)
Condensed Statement of Cash Flows
Three months ended March 31, 1996 and 1995
(Unaudited) 6
Notes to Condensed Financial
Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II. OTHER INFORMATION 10
SIGNATURES 11
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BASS REAL ESTATE FUND-84
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CONDENSED BALANCE SHEET
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March 31, December 31,
1996 1995
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ASSETS (Unaudited)
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RENTAL PROPERTIES, at cost:
Land $550,298 $550,298
Buildings 6,392,399 6,389,824
Furnishings and fixtures 794,152 788,552
Accumulated depreciation (3,015,062) (2,957,333)
------------------ -----------------
4,721,787 4,771,341
CASH AND CASH INVESTMENTS 208,354 147,417
RESTRICTED ESCROW DEPOSITS & FUNDED RESERVES 438,725 439,291
DEFERRED COSTS AND OTHER ASSETS, net 118,489 154,398
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Total assets $5,487,355 $5,512,447
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LIABILITIES AND PARTNERS' DEFICIT
-------------------------------------
MORTGAGE LOANS PAYABLE $5,697,323 $5,709,097
SECURITY DEPOSITS 58,404 57,046
ACCRUED LIABILITIES 60,436 94,719
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Total liabilities 5,816,163 5,860,862
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PARTNERS' DEFICIT:
Limited partners' interest 0 0
General partners' interest (328,808) (348,415)
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Total partners' deficit (328,808) (348,415)
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Total liabilities and partners' deficit $5,487,355 $5,512,447
================== =================
The accompanying notes are an integral
part of the financial statements.
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BASS REAL ESTATE FUND-84
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CONDENSED STATEMENT OF INCOME
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(Unaudited)
Three months Three months
ended ended
March 31, March 31,
1996 1995
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REVENUE:
Rental income $338,228 $329,723
Interest income 1,235 479
Other operating income 7,664 11,475
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347,127 341,677
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OPERATING EXPENSES:
Fees and expenses to affiliates 57,184 59,009
Property taxes and insurance 24,609 24,842
Utilities 18,529 19,010
Repairs and maintenance 22,286 23,484
Advertising 12,811 8,955
Depreciation and amortization 59,689 72,510
Other 5,984 4,370
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201,092 212,180
INTEREST EXPENSE 107,742 99,885
NONOPERATING EXPENSE 18,686 20,289
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Total expenses 327,520 332,354
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NET INCOME $19,607 $9,323
================ ===============
NET INCOME ALLOCATED TO GENERAL PARTNERS $19,607 $9,323
================ ===============
NET INCOME ALLOCATED TO LIMITED PARTNERS $0 $0
================ ===============
NET INCOME PER LIMITED PARTNERSHIP UNIT, based
on number of units outstanding (8,530) $0.00 $0.00
================ ===============
The accompanying notes are an integral
part of the financial statements.
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BASS REAL ESTATE FUND-84
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STATEMENT OF PARTNERS' DEFICIT
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(Unaudited)
Limited General
Partners Partners Total
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Balance, January 1, 1996 $0 ($348,415) ($348,415)
Net income 0 19,607 19,607
================ ================ ==============
Balance, March 31, 1996 $0 ($328,808) ($328,808)
================ ================ ==============
Limited General
Partners Partners Total
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Balance, January 1, 1995 $0 ($614,072) ($614,072)
Distribution to partners (74,250) (750) (75,000)
Reallocation of partners' deficit due to distribution 74,250 (74,250) 0
Net income 0 9,323 9,323
---------------- ---------------- --------------
Balance, March 31, 1995 $0 ($679,749) ($679,749)
================ ================ ==============
The accompanying notes are an integral
part of the financial statements.
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BASS REAL ESTATE FUND-84
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CONDENSED STATEMENT OF CASH FLOWS
- ---------------------------------------------------------------
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $19,607 $9,323
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities-
Depreciation and amortization 59,689 72,510
Change in assets and liabilities:
Increase (decrease) in accrued liabilities (32,925) 26,355
(Increase) decrease in escrows and other assets, net 34,515 (30,650)
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Net cash provided by operating activities 80,886 77,538
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to rental properties (8,175) (34,812)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to partners 0 (75,000)
Payments on mortgage loans payable to bank (11,774) (7,687)
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Net cash used in financing activities (11,774) (82,687)
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NET INCREASE (DECREASE) IN CASH AND
CASH INVESTMENTS 60,937 (39,961)
CASH AND CASH INVESTMENTS, beginning of year 147,417 115,809
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CASH AND CASH INVESTMENTS, March 31 $208,354 $75,848
=================== =================
The accompanying notes are an integral
part of the financial statements.
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BASS REAL ESTATE FUND-84
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION
Bass Real Estate Fund-84 (the Partnership) was organized on June 1, 1984,
to engage in the acquisition, development, operation, holding and disposition of
income-producing residential and commercial properties. Limited partnership
interests were sold at $500 per unit (8,530 units) for a total of $4,265,000.
Under the terms of the partnership agreement, net income (loss) and cash
distributions from operations are to be allocated 99% to the limited partners
and 1% to the general partners. In the event of a sale or liquidation of the
partnership properties, the partnership agreement provides for special
allocations of resultant gains or losses. Due to recurring financial statement
losses, the limited partners' interest is zero at March 31, 1995, and future
losses will be allocated 100% to the general partners. In addition, limited
partners' deficits resulting from the allocation of cash distributions have been
reallocated to the general partners in order to return the limited partners'
interest to zero.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Partnership records are maintained on the accrual basis of accounting
in accordance with generally accepted accounting principles.
In the opinion of management, the accompanying unaudited financial
statements reflect all adjustments (which include only normal recurring
adjustments) necessary to present fairly the Partnership's financial position as
of March 31, 1996, results of operations for the three months ended March 31,
1996 and 1995, and cash flow for the three months ended March 31, 1996 and 1995.
3. RENTAL PROPERTIES
The rental properties consist of two residential apartment complexes: The
Chase on Commonwealth (The Chase) and Willow Glen Apartments (formerly Sunset
Apartments). Both complexes are managed by Marion Bass Properties, Inc.
The Chase, constructed by Marion Bass Construction Company for the
Partnership, contains 54 one-bedroom and 78 two-bedroom units. The land upon
which the complex is constructed was purchased for the Partnership by Marion F.
Bass and was sold to the Partnership at his acquisition cost.
Willow Glen Apartments (an existing 120-unit residential apartment complex)
was purchased by the Partnership in April 1986.
4. MORTGAGE LOANS PAYABLE
Mortgage loans payable consists of a $2,473,592 mortgage loan outstanding
secured by Willow Glen (maturing in June 2021) and a $3,223,731 mortgage loan
outstanding secured by The Chase (maturing in December 2030). The mortgage
secured by The Chase was obtained in November 1995 in connection with the
prepayment of the Partnership's mortgage loan payable to an affiliate. The loans
bear interest at 7.5% and 7.6%, respectively, and require total monthly payments
of principal and interest of $40,247. In addition, the mortgage agreements
require the Partnership to fund certain reserves for capital improvement,
insurance and property tax expenditures.
Each of the Partnership's mortgage loans is insured under the National
Housing Act, as amended. As such, the Partnership's operations are regulated by
the Federal Housing Administration (FHA) of the U.S.
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BASS REAL ESTATE FUND-84
Department of Housing and Urban Development. Under the FHA Regulatory Agreement
entered into under each of the mortgages, the Partnership is required to comply
with certain reporting and operating requirements, the most significant of which
restricts Partnership distributions to the amount of "surplus cash" as defined.
As of December 31, 1995, "surplus cash" available for distribution amounted to
$112,578.
5. GENERAL PARTNERS AND RELATED PARTY TRANSACTIONS
The general partners are Marion F. Bass (The Individual General Partner)
and Marion Bass Real Estate Group, Inc., (The Managing General Partner). The
rental properties are managed by Marion Bass Properties, Inc., which is wholly
owned by Marion F. Bass.
Under the terms of the partnership agreement, the General Partners or their
affiliates charged certain fees and expenses during the three-month period
ending March 31, 1996 as follows:
Management fee of 5% of gross revenues $17,731
Reimbursed maintenance salaries and benefits 12,339
Reimbursed property manager salaries and benefits 27,114
$57,184
The general partners and certain of their affiliates also perform, without
cost to the Partnership, day-to-day investment, management and administrative
functions of the Partnership.
The general partners are entitled to receive 1% of all items of partnership
income, gain, loss, deduction, credit and net cash flow from operations.
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BASS REAL ESTATE FUND-84
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At March 31, 1996, partners' equity had a deficit of $328,808 and cash and
cash reserves amounted to $208,354. The Partnership had accrued liabilities of
$60,436 that consisted of interest payable to bank of $15,460, 1996 property
taxes of $21,195, fees due to an affiliate of $6,161, trade accounts payable of
$5,350 and tenant prepaid rent of $12,270.
Net cash provided by operations totaled $80,886 for the three months ended
March 31, 1996. This is compared to net cash provided by operating activities of
$77,538 for the corresponding period in 1995. The Partnership had a 7.5%
amortizing mortgage note in the amount of $2,473,592 and a 7.6% amortizing
mortgage note in the amount of $3,223,731 at March 31, 1996. The Partnership
made principal payments of $11,774 during the three month period ended March 31,
1996.
The 1996 operating plan and budget projects a net cash flow from
partnership activities (exclusive of changes in assets and liabilities and
distribution to partners) of $101,000 at The Chase and $85,000 at Willow Glen.
The budget assumes that the Partnership will achieve occupancy rates equivalent
to 96% at The Chase and Willow Glen. For the three months ended March 31, 1996,
actual combined averaged economic occupancy was 95% and actual combined net cash
flow from partnership activities (exclusive of changes in assets and liabilities
and distribution to partners) was $59,347. Rents are being increased 5% over
rates charged in 1995 to offset normal increases in operating expenses. Capital
expenditures of $22,000 and $44,000 are budgeted for The Chase and Willow Glen,
respectively, and include selected replacement of carpeting and appliances at
both properties. As of March 31, 1996, actual capital expenditures and
replacements have totaled $16,482. Projected cash flows from the two properties
and available cash reserves, restricted and unrestricted, have been used to fund
the replacements. On the basis of these estimates, the Partnership believes that
the cash flow from operations will be sufficient to meet cash requirements and
rebuild cash reserves, which at March 31, 1996, totaled $208,354. Under the HUD
Regulatory Agreement with respect to the properties, distributions are limited
to "surplus cash" as defined and calculated at the end of a semi-annual fiscal
period. During 1995 The Chase and Willow Glen generated "surplus cash" of
$112,578 and was held in reserve accounts for future use.
Results of Operations
The following discussion relates to the Partnership's operation of The
Chase and Willow Glen Apartments for the three months ended March 31, 1996 and
1995.
Results of operations for the three months ended March 31, 1996 reflect a
combined average economic occupancy of 95% compared to 96% for the corresponding
period in 1995. A first quarter comparison of 1996 and 1995 reflects higher
rental income of $8,505 during 1996 due to rents being increased 5% over rates
charged in 1995. Other operating income that consists of lease-breaking fees,
late fees, laundry income, vending income and pet fees was $3,811 lower in 1996.
Overall, total income for the first quarter ended March 31, 1996 was $5,450
higher than the corresponding period in 1995.
Operating expenses were $201,092 for the three months ended March 31, 1996,
compared to $212,180 for the corresponding period in 1995 which reflects a
variance of $11,088. Fees and expenses to affiliates that consist of a
management fee of 5% of gross revenues and the reimbursement of complex employee
salaries and benefits were lower by $1,825. Utilities were lower by $481.
Repairs and maintenance was $1,198 lower due to reduced turnkey costs (expenses
associated with preparing rental units for occupation). Depreciation and
amortization was lower by $12,821.
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BASS REAL ESTATE FUND-84
After combined interest expense of $107,742 and nonoperating expenses
(partnership expenses and nonrecurring replacement costs) of $18,686,
partnership operations recognized a net income of $19,607 for the three months
ended March 31, 1996. This is compared to a net income of $9,323 for the
corresponding period in 1995.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Response: None
Item 2. Changes in Securities
Response: None
Item 3. Defaults upon Senior Securities
Response: None
Item 4. Submission of Matters to a Vote of Security Holders
Response: None
Item 5. Other Information
Response: None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4(a) Copy of Limited Partnership Agreement dated as of June 1,
1984, filed as Exhibit 4(a) to Partnership's Registration
Statement of Form S-18 (No. 2-92295A), filed with the
Securities and Exchange Commission on July 19, 1984, which is
incorporated by reference to such Form S-18.
4(b) Copy of Certificate of Limited Partnership dated as of June 1,
1984, filed as Exhibit 4(b) to Partnership's Registration
Statement on Form S-18 (No. 2-92295A), filed with the
Securities and Exchange Commission on July 19, 1984, which is
incorporated by reference to such Form S-18.
4(c) Copy of Amendment to Agreement of Limited Partnership dated as
of March 14, 1986, filed as Exhibit 4(c) to the Partnership's
Form 10-K Annual report for the fiscal year ended December 31,
1985, filed with the Securities and Exchange Commission, which
is incorporated herein by reference to such Form 10-K.
(b) Reports on Form 8-K. No reports of Form 8-K were filed during the
quarter covered by this report.
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BASS REAL ESTATE FUND-84
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Partnership has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
BASS REAL ESTATE FUND-84
By: Marion Bass Real Estate Group, Inc. as Managing General Partner
By: Marion F. Bass, President
Date: May 10, 1996
By: Robert J. Brietz, Executive Vice President
Date: May 10, 1996
11