SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1996
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-15649
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BALCOR REALTY INVESTORS 86-SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3327914
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Rd.
Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
---------------
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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BALCOR REALTY INVESTORS - 86 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
BALANCE SHEETS
June 30, 1996 and December 31, 1995
(UNAUDITED)
ASSETS
1996 1995
-------------- --------------
Cash and cash equivalents $ 1,267,460 $ 1,093,098
Escrow deposits 2,542,354 2,246,696
Accounts and accrued interest receivable 11,648 5,857
Prepaid expenses 264,654 229,129
Deferred expenses, net of accumulated
amortization of $89,634 in 1996 and
$378,475 in 1995 581,869 619,028
-------------- --------------
4,667,985 4,193,808
-------------- --------------
Investment in real estate:
Land 7,849,735 11,137,023
Buildings and improvements 49,471,098 83,187,367
-------------- --------------
57,320,833 94,324,390
Less accumulated depreciation 19,938,661 34,286,807
-------------- --------------
Investment in real estate, net of
accumulated depreciation 37,382,172 60,037,583
-------------- --------------
$ 42,050,157 $ 64,231,391
============== ==============
LIABILITIES AND PARTNERS' DEFICIT
Accounts payable $ 67,509 $ 119,006
Due to affiliates 49,804 28,823
Accrued liabilities, principally
real estate taxes and interest 143,500 330,070
Security deposits 348,431 420,724
Mortgage notes payable 47,052,605 74,196,579
-------------- --------------
Total liabilities 47,661,849 75,095,202
Affiliates' participation in
joint ventures (1,406,215) (1,283,650)
Limited Partners' deficit
(59,791 Interests issued and
outstanding) (3,687,792) (8,962,989)
General Partner's deficit (517,685) (617,172)
-------------- --------------
Total partners' deficit (4,205,477) (9,580,161)
-------------- --------------
$ 42,050,157 $ 64,231,391
============== ==============
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS - 86 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1996 and 1995
(UNAUDITED)
1996 1995
-------------- --------------
Income:
Rental and service $ 6,419,565 $ 8,115,111
Interest on short-term
investments 49,286 36,306
-------------- --------------
Total income 6,468,851 8,151,417
-------------- --------------
Expenses:
Interest on mortgage
notes payable 2,927,175 3,354,380
Depreciation 969,307 1,395,828
Amortization of deferred
expenses 37,159 75,103
Property operating 2,239,337 2,369,384
Real estate taxes 465,298 676,256
Property management fees 339,005 404,873
Administrative 313,744 321,847
-------------- --------------
Total expenses 7,291,025 8,597,671
-------------- --------------
Loss before gain on sales of
properties, affiliates'
participation in joint ventures
and extraordinary items (822,174) (446,254)
Gain on sales of properties 10,800,286
Affiliates' participation in
(income) loss from joint
ventures (29,416) 13,025
-------------- --------------
Income (loss) before
extraordinary items 9,948,696 (433,229)
Extraordinary items:
Debt extinguishment expense (145,393)
Affiliate's participation in debt
extinguishment expense 58,521
--------------
Total extraordinary items (86,872)
-------------- --------------
Net income (loss) $ 9,948,696 $ (520,101)
============== ==============
Income (loss) before extraordinary items
allocated to General Partner $ 99,487 $ (4,332)
============== ==============
Income (loss) before extraordinary items
allocated to Limited Partners $ 9,849,209 $ (428,897)
============== ==============
Income (loss) before extraordinary items
per Limited Partnership Interest
(59,791 issued and outstanding) $ 164.73 $ (7.17)
============== ==============
Extraordinary items allocated
to General Partner None $ (869)
============== ==============
Extraordinary items allocated
to Limited Partners None $ (86,003)
============== ==============
Extraordinary items per Limited
Partnership Interest (59,791
issued and outstanding) None $ (1.44)
============== ==============
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS - 86 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1996 and 1995
(UNAUDITED)
(CONTINUED)
1996 1995
-------------- --------------
Net income (loss) allocated to
General Partner $ 99,487 $ (5,201)
============== ==============
Net income (loss) allocated to
Limited Partners $ 9,849,209 $ (514,900)
============== ==============
Net income (loss) per Limited
Partnership Interest (59,791
issued and outstanding) $ 164.73 $ (8.61)
============== ==============
Distributions to Limited Partners $ 4,574,012 None
============== ==============
Distributions per Limited Partnership
Interest $ 76.50 None
============== ==============
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS - 86 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended June 30, 1996 and 1995
(UNAUDITED)
1996 1995
-------------- --------------
Income:
Rental and service $ 2,569,469 $ 4,058,299
Interest on short-term
investments 21,404 12,450
-------------- --------------
Total income 2,590,873 4,070,749
-------------- --------------
Expenses:
Interest on mortgage
notes payable 983,278 1,685,659
Depreciation 378,022 697,914
Amortization of deferred
expenses 13,146 37,552
Property operating 829,979 1,163,082
Real estate taxes 171,735 334,936
Property management fees 142,225 203,285
Administrative 176,896 226,186
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Total expenses 2,695,281 4,348,614
-------------- --------------
Loss before affiliates'
participation in joint
ventures and extraordinary items (104,408) (277,865)
Affiliates' participation in
(income) loss from joint
ventures (22,221) 3,696
-------------- --------------
Loss before extraordinary items (126,629) (274,169)
Extraordinary items:
Debt extinguishment expense (145,393)
Affiliate's participation in debt
extinguishment expense 58,521
--------------
Total extraordinary items (86,872)
-------------- --------------
Net loss $ (126,629) $ (361,041)
============== ==============
Loss before extraordinary items
allocated to General Partner $ (1,266) $ (2,741)
============== ==============
Loss before extraordinary items
allocated to Limited Partners $ (125,363) $ (271,428)
============== ==============
Loss before extraordinary items
per Limited Partnership Interest
(59,791 issued and outstanding) $ (2.09) $ (4.54)
============== ==============
Extraordinary items allocated
to General Partner None $ (869)
============== ==============
Extraordinary items allocated
to Limited Partners None $ (86,003)
============== ==============
Extraordinary items per Limited
Partnership Interest (59,791
issued and outstanding) None $ (1.44)
============== ==============
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS - 86 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended June 30, 1996 and 1995
(UNAUDITED)
(CONTINUED)
1996 1995
-------------- --------------
Net loss allocated to General
Partner $ (1,266) $ (3,610)
============== ==============
Net loss allocated to Limited
Partners $ (125,363) $ (357,431)
============== ==============
Net loss per Limited Partnership
Interest (59,791 issued and
outstanding) $ (2.09) $ (5.98)
============== ==============
Distribution to Limited Partners $ 4,424,534 None
============== ==============
Distribution per Limited Partnership
Interest $ 74.00 None
============== ==============
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS - 86 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1996 and 1995
(UNAUDITED)
1996 1995
-------------- --------------
Operating activities:
Net income (loss) $ 9,948,696 $ (520,101)
Adjustments to reconcile net income
(loss) to net cash (used in) or
provided by operating activities:
Gain on sales of properties (10,800,286)
Debt extinguishment expense 145,393
Affiliates' participation in debt
extinguishment expense (58,521)
Affiliates' participation
in income (loss) from
joint ventures 29,416 (13,025)
Depreciation of properties 969,307 1,395,828
Amortization of deferred expenses 37,159 75,103
Net change in:
Escrow deposits 39,342 (179,886)
Accounts and accrued interest
receivable (5,791) 62,277
Prepaid expenses (35,525) (488,229)
Accounts payable (51,497) 3,726
Due to affiliates 20,981 (65,611)
Accrued liabilities (186,570) 74,762
Security deposits (72,293) (21,284)
-------------- --------------
Net cash (used in) or provided by
operating activities (107,061) 410,432
-------------- --------------
Investing activities:
Proceeds from sales of properties 33,074,000
Payment of selling costs (587,610)
Funding of escrow in connection
with sale of property (335,000)
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Net cash provided by investing
activities 32,151,390
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Financing activities:
Capital contribution by joint venture
partner - affiliate 342,760
Distributions to joint venture
partner - affiliate (151,981) (328,376)
Distributions to Limited
Partners (4,574,012)
Principal payments on mortgage notes
payable (508,935) (779,164)
Issuance of mortgage note payable 20,932,600
Repayment of mortgage notes payable (26,635,039) (18,728,280)
Payment of deferred expenses (499,868)
Funding of improvement escrow (1,604,551)
-------------- --------------
Net cash used in financing
activities (31,869,967) (664,879)
-------------- --------------
Net change in cash and cash equivalents 174,362 (254,447)
Cash and cash equivalents at beginning
of period 1,093,098 1,058,935
-------------- --------------
Cash and cash equivalents at end of
period $ 1,267,460 $ 804,488
============== ==============
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS 86-SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the six months and quarter
ended June 30, 1996, and all such adjustments are of a normal and recurring
nature.
2. Interest Expense:
During the six months ended June 30, 1996 and 1995, the Partnership incurred
interest expense on mortgage notes payable of $2,927,175 and $3,354,380 and
paid interest expense of $2,891,761 and $3,354,380, respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
six months and quarter ended June 30, 1996 are:
Paid
-----------------------
Six Months Quarter Payable
------------ --------- ----------
Reimbursement of expenses to
the General Partner, at cost $67,836 $40,132 $49,804
4. Property Sales:
(a) In March 1996, the Partnership sold the Pines of Cloverlane Apartments in
an all cash sale for $18,974,000. From the proceeds of the sale, the
Partnership paid $14,208,240 to the third party mortgage holder in full
satisfaction of the first mortgage loan, and paid $288,460 in selling costs.
The Partnership also funded an escrow of $335,000 required in connection with
the sale. The basis of the property was $12,369,952, which is net of
accumulated depreciation of $10,441,365. For financial statement purposes, the
Partnership recognized a gain of $6,315,588 from the sale of this property.
(b) In March 1996, the Partnership sold the Lakeside Apartments in an all cash
sale for $14,100,000. From the proceeds of the sale, the Partnership paid
$12,894,356 to the third party mortgage holder in full satisfaction of the
first mortgage loan, and paid $299,150 in selling costs. The amount paid to the
mortgage holder includes the outstanding principal balance of the loan and
additional interest expense of $467,557, as required by the loan documents,
which is equal to 50% of the net sale proceeds in excess of $12,654,000. The
basis of the property was $9,316,152, which is net of accumulated depreciation
of $4,876,088. For financial statement purposes, the Partnership recognized a
gain of $4,484,698 from the sale of this property.
5. Subsequent Event:
In July 1996, the Partnership made a special distribution of $149,478 ($2.50
per Interest) to the holders of Limited Partnership Interests representing a
distribution of sales proceeds from Net Cash Proceeds reserves.
BALCOR REALTY INVESTORS 86-SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Realty Investors 86-Series I A Real Estate Limited Partnership (the
"Partnership") is a limited partnership formed in 1984 to invest in and operate
income-producing real property. The Partnership raised $59,791,000 through the
sale of Limited Partnership Interests and utilized these proceeds to acquire
eight real property investments and a minority joint venture interest in one
additional real property. Prior to 1996, title to two of these properties and
the property in which the Partnership held a minority joint venture interest
were relinquished through foreclosure. During 1996, the Partnership sold two
additional properties. The Partnership continues to operate its four remaining
properties.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1995 for a more complete understanding of
the Partnership's financial position.
Operations
- ----------
Summary of Operations
- ---------------------
The Partnership sold two properties in March 1996. As a result of the gains
recognized on these sales, the Partnership generated net income during the six
months ended June 30, 1996 as compared to a net loss for the same period in
1995. As a result of extraordinary debt extinguishment expense recognized in
June 1995, the Partnership's net loss decreased during the quarter ended June
30, 1996 as compared to the same period in 1995. Further discussion of the
Partnership's operations is summarized below.
1996 Compared to 1995
- ---------------------
Unless otherwise noted, discussions of fluctuations between 1996 and 1995 refer
to both the six months and quarters ended June 30, 1996 and 1995.
In March 1996, the Partnership sold the Pines of Cloverlane and Lakeside
apartment complexes. As a result, the Partnership recognized gains totaling
$10,800,286 during 1996. These sales also resulted in decreases in rental and
service income, depreciation, property operating, real estate taxes and
property management fees during 1996 as compared to 1995.
Higher average cash balances due to the investment of the proceeds from the
property sales prior to distribution to Limited Partners, resulted in an
increase in interest income on short-term investments during 1996 as compared
to 1995.
Interest expense on mortgage notes payable decreased during 1996 as compared to
1995 due to the property sales during March 1996 and lower interest expense at
the Lakeville Apartments due to the 1995 loan refinancing at a lower interest
rate. This decrease was partially offset by a $467,557 payment made to the
lender in connection with the sale of the Lakeside Apartments, as required by
the loan documents.
The amortization of deferred loan fees on the current Lakeville Resort
Apartments mortgage note is lower than the amortization related to the former
mortgage note, resulting in a decrease in amortization expense for 1996 as
compared to 1995.
Higher legal fees in 1995 were partially offset by increased consulting fees
related to property sales and increased printing and postage costs in response
to a tender offer during 1996, resulting in a decrease in administrative
expenses during 1996 when compared to 1995.
Lower interest expense and amortization expense at the Lakeville Resort
Apartments due to the June 1995 refinancing, resulted in affiliates'
participation in income from joint ventures during 1996 as compared to
affiliates' participation in loss from joint venture during 1995.
The Lakeville Resort Apartments is owned by a joint venture consisting of the
Partnership and an affiliate. In June 1995, the mortgage note was refinanced
with a new lender. In connection with the transaction, the Partnership
recognized an extraordinary debt extinguishment expense of $145,393 in 1995
relating to the full amortization of deferred loan fees on the former mortgage
note, of which $58,521 represents the affiliate's share.
Liquidity and Capital Resources
- -------------------------------
The Partnership's cash position increased by approximately $174,000 as of June
30, 1996 when compared to December 31, 1995. The Partnership used cash of
approximately $107,000 in its operating activities which consisted primarily of
operating cash flow from the properties which was offset by the payment of
additional interest expense relating to the sale of the Lakeside Apartments as
well as administrative expenses. Cash provided by investing activities of
approximately $32,151,000 consisted of proceeds received from the sales of
properties, net of closing costs and the funding of an escrow required in
connection with the sale of Pines of Cloverlane Apartments. Cash used in
financing activities of approximately $31,870,000 consisted of the repayment of
mortgage notes payable in the amount of $26,635,039, principal payments on
mortgage notes payable, distributions to Limited Partners in the amount of
$4,574,012, and distributions to joint venture partner - affiliate.
The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit or a significant deficit, each after
consideration of debt service payments unless otherwise indicated. A deficit is
considered significant if it exceeds $250,000 annually or 20% of the property's
rental and service income. The Partnership defines cash flow generated from its
properties as an amount equal to the property's revenue receipts less property
related expenditures, which include debt service payments. During the six
months ended June 30, 1996 and 1995, the Partnership's four remaining
properties generated positive cash flow. The Lakeside Apartments was sold in
March 1996 and generated a significant cash flow deficit prior to its sale in
1996 as compared to a marginal cash flow deficit in 1995, due to expenses
incurred to enhance the property's sale value. The Pines of Cloverlane
Apartments was sold in March 1996 and generated a significant cash flow deficit
prior to its sale in 1996 as compared to positive cash flow in 1995 also due to
expenses incurred to enhance the property's sale value. As of June 30, 1996,
the occupancy rates of the Partnership's remaining properties ranged from 94%
to 98%.
While the cash flow of certain of the Partnership's properties has improved,
the General Partner continues to pursue a number of actions aimed at improving
the cash flow of the Partnership's properties, including improving operating
performance and seeking rent increases where market conditions allow.
Each of the Partnership's properties is owned through the use of third-party
mortgage loan financing and, therefore, the Partnership is subject to the
financial obligations required by such loans. Third party financing of
approximately $6,900,000 on the Brighton Townhomes Apartments matures in 1996;
the Partnership has entered into a contract to sell this property. The
Partnership does not own any other properties with third party financing which
matures prior to 1998.
The General Partner believes that the market for multifamily housing properties
is favorable to sellers of these properties. During March 1996, the Partnership
sold the Lakeside and Pines of Cloverlane apartment complexes. Currently, the
Partnership has entered into contracts to sell the Lakeville Resort Apartments
and the Brighton Townhomes for sales prices of $27,200,00 and $11,150,000,
respectively. Additionally, the Partnership is actively marketing the two
remaining properties in its portfolio. If current market conditions remain
favorable and the General Partner can obtain appropriate sales prices, the
Partnership's liquidation strategy will be accelerated.
In March 1996, the Partnership sold the Pines of Cloverlane Apartments in all
cash sale for $18,974,000. From the proceeds of the sale, the Partnership paid
$14,208,240 to the third party mortgage holder in full satisfaction of the
first mortgage loan, paid $288,460 in selling costs and also funded an escrow
of $335,000 required in connection with the sale. The majority of the proceeds
were distributed as a special distribution to the Limited Partners in April
1996. See Note 4 of Notes to Financial Statements for additional information.
In March 1996, the Partnership sold the Lakeside Apartments in an all cash sale
for $14,100,000. From the proceeds of the sale, the Partnership paid
$12,894,356 to the third party mortgage holder in full satisfaction of the
first mortgage loan and paid $299,150 in selling costs. The amount paid to the
mortgage holder includes the outstanding principal balance of the loan and
additional interest expense of $467,557, as required by the loan documents. The
majority of the proceeds were distributed as a special distribution to the
Limited Partners in April 1996. See Note 4 of Notes to Financial Statements for
additional information.
During July 1996, the Partnership made a special distribution of Net Cash
Proceeds of $149,478 ($2.50 Per Interest) to the holders of Limited Partnership
Interests. The special distribution was made with Net Cash Proceeds from prior
property sales which were held in the Partnership's cash reserves. To date,
including the July 1996 distribution, investors have received cumulative
distributions of Net Cash Receipts of $7.50 per $1,000 Interest and Net Cash
Proceeds of $74.00 per $1,000 Interest, totaling $81.50 per $1,000 Interest, as
well as certain tax benefits. Future quarterly distributions from cash flow and
cash reserves are expected to continue until the properties are sold. As the
properties are sold, the Partnership will distribute the proceeds to investors.
In light of results to date and current market conditions, the General Partner
does not anticipate that investors will recover a substantial portion of their
original investment.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
will increase operating costs and replacement costs and may lead to increased
rental revenues and real estate values.
BALCOR REALTY INVESTORS 86-SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 5. Other Information
- ---------------------------
Lakeville Resort Apartments
- ---------------------------
As previously reported, on April 23, 1996, a joint venture consisting of the
Partnership and an affiliate which owns Lakeville Resort Apartments, Petaluma,
California, contracted to sell the property to an unaffiliated party, ERP
Operating Limited Partnership, an Illinois limited partnership, for a sale
price of $27,200,000. The closing of the sale has been extended to September 3,
1996.
Brighton Townhomes
- ------------------
As previously reported, on May 6, 1996, the Partnership contracted to sell
Brighton Townhomes, Washington County, Oregon, to Security Capital Pacific
Trust, a Maryland real estate investment trust, for a sale price of
$11,500,000. Upon the agreement of the Partnership and the purchaser, the sale
price has been reduced from $11,500,000 to $11,150,000. The closing date has
been extended to August 16, 1996. The purchaser has deposited into the escrow
account an additional $50,000 as earnest money for a total of $350,000.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Form of Subscription Agreement set forth as Exhibit 4.1 to Amendment No. 1
of the Registrant's Registration Statement on Form S-11 dated December 16, 1985
(Registration No. 33-361), and Form of Confirmation regarding Interests in the
Partnership set forth as Exhibit 4.2 to the Registrant's Report on Form 10-Q
for the quarter ended June 30, 1992 (Commission File No. 0-15649) are
incorporated herein by reference.
(10) Material Contracts:
(a)(i) The Agreement of Sale and attachment thereto relating to the sale of
Pines of Cloverlane Apartments previously filed as Exhibit 2 to the
Registrant's Current Report on Form 8-K dated January 25, 1996 is incorporated
herein by reference.
(ii) First, Second and Third Amendments to Agreement of Sale relating to the
sale of Pines of Cloverlane Apartments previously filed as Exhibits (10)(ii),
(10)(iii) and (10)(iv), respectively, to the Registrant's Report on Form 10-K
for the year ended December 31, 1995 is incorporated herein by reference.
(b)(i) The Agreement of Sale and attachment thereto relating to the sale of the
Lakeside Apartments previously filed as Exhibit 2 to the Registrant's Current
Report on Form 8-K dated February 21, 1996 is incorporated herein by reference.
(c)(i) The Agreement of Sale and attachment thereto relating to the sale of
Lakeville Resort Apartments previously filed as Exhibit 2 to the Registrant's
Current Report on Form 8-K dated April 23, 1996 is incorporated herein by
reference.
(ii) Master Amendment and Agreement dated May 22, 1996 relating to the sale of
Lakeville Resort Apartments, Petaluma, California, is attached hereto.
(iii) Master Amendment and Agreement #2 dated May 22, 1996 relating to the sale
of Lakeville Resort Apartments, Petaluma, California, is attached hereto.
(iv) Letter Agreements dated May 22, 1996 and July 8, 1996 relating to the sale
of Lakeville Resort Apartments, Petaluma, California, are attached hereto.
(d)(i) The Agreement of Sale relating to the sale of Brighton Townhomes
Apartments previously filed as Exhibit (10)(v) to the Registrant's Report on
Form 10-Q for the quarter ending March 31, 1996 is incorporated herein by
reference.
(ii) First Amendment to Agreement of Sale and Escrow Agreement dated May 31,
1996 relating to the sale of Brighton Townehomes, Washington County, Oregon, is
attached hereto.
(iii) Letter of Termination dated June 12, 1996 relating to the sale of
Brighton Townhomes, Washington County, Oregon, is attached hereto.
(iv) Reinstatement and Second Amendment to Agreement of Sale and Escrow
Agreement dated June 13, 1996 relating to the sale of Brighton Townhomes,
Washington County, Oregon, is attached hereto.
(v) Letter of Extension dated July 8, 1996 relating to the sale of Brighton
Townhomes, Washington County, Oregon, is attached hereto.
(27) Financial Data Schedule of the Registrant for the six months ending June
30, 1996 is attached hereto.
(b) Reports on Form 8-K: A Current Report on Form 8-K dated April 23, 1996 was
filed reporting the contract to sell the Lakeville Resort Apartments in
Petaluma, California.
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.
BALCOR REALTY INVESTORS 86-SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
By: /s/ Thomas E. Meador
--------------------------------
Thomas E. Meador
President and Chief Executive Officer (Principal
Executive Officer) of Balcor Partners-XIX, the
General Partner
By: /s/ Brian D. Parker
---------------------------------
Brian D. Parker
Senior Vice President, and Chief
Financial Officer (Principal Accounting and
Financial Officer) of Balcor Partners-XIX,
the General Partner
Date: August 20, 1996
------------------------