FORM 10-Q
UNITED STATES
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 quarterly period ended March 31, 2001
Commission File Number: 0-14386
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
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(Exact name of registrant as specified in its charter)
Delaware 16-1245153
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(State of organization) (IRS Employer Identification No.)
2350 North Forest Road, Suite 12A,Getzville, New York 14068
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(Address of principal executive offices)
(716) 636-0280
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(Registrant's telephone number)
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 [ ]
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
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March 31, December 31,
2001 2000
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Assets
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Cost of property and equipment held for sale $5,121,009 5,121,009
Less accumulated depreciation 2,497,483 2,497,483
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2,623,526 2,623,526
Cash and equivalents 70,080 88,453
Other assets 88,129 65,733
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Total assets $2,781,735 2,777,712
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Liabilities and Partners' Deficit
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Mortgage loan payable 3,934,163 3,941,815
Accounts payable and accrued expenses 288,035 250,855
Payable to affiliates 1,532,701 1,466,355
Other liabilities 68,022 69,993
Partners' deficit (3,041,186) (2,951,306)
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Total liabilities and partners' deficit $2,781,735 2,777,712
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Condensed Consolidated Statements of Operations
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Three months ended March 31,
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2001 2000
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Rental income $233,858 255,354
Other income 4,690 34,049
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Total income 238,548 289,403
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Property operating costs 160,351 157,392
Administrative expense - affiliates 23,109 28,483
Other administrative expense 26,531 33,060
Interest - affiliates 36,535 49,869
Mortgage loan interest 81,902 110,003
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Total expenses 328,428 378,807
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Net loss ($89,880) (89,404)
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Net loss per limited partnership unit ($3.73) (3.71)
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Weighted average limited partnership units outstanding 23,366 23,366
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Condensed Consolidated Statements of Cash Flows
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Three months ended March 31,
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2001 2000
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Operating activities:
Net loss ($89,880) (89,404)
Adjustments:
Increase (decrease) in payable to affiliates 66,346 (1,413,786)
Other, principally changes in other assets and liabilities 12,813 8,567
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Net cash used by operating activities (10,721) (1,494,623)
Net cash used by investing activities -
additions to property and equipment -- (2,656)
Net cash used by financing activities -
principal payments on mortgage loans (7,652) --
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Net decrease in cash and equivalents (18,373) (1,497,279)
Cash and equivalents at beginning of period 88,453 1,686,913
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Cash and equivalents at end of period $70,080 189,634
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Notes to Financial Statements
Three months ended March 31, 2001 and 2000
Organization
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Realmark Property Investors Limited Partnership - IV (the Partnership), a
Delaware limited partnership, was formed on February 12, 1985, to invest in a
diversified portfolio of income producing real estate investments. The general
partners are Realmark Properties, Inc. (the corporate general partner) and
Joseph M. Jayson (the individual general partner). Joseph M. Jayson is the sole
stockholder of J.M. Jayson & Company Inc. Realmark Properties, Inc. is a
wholly-owned subsidiary 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.
Basis of Presentation
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The accompanying interim financial statements have been prepared in accordance
with generally accepted accounting principles and, in the opinion of management,
contain all necessary adjustments for a fair presentation, on a going concern
basis. The Partnership has sustained recurring losses from operations and has
experienced operating cash flow difficulties. While efforts to improve operating
results continue, the plan to sell the Partnership's remaining property also
continues. The financial statements do not include any adjustments that might
result from the outcome of the sale and the subsequent dissolution of the
Partnership.
The Partnership's significant accounting policies are set forth in its December
31, 2000 Form 10-K. The interim financial statements should be read in
conjunction with the financial statements included therein. The interim results
should not be considered indicative of the annual results. Certain
reclassifications of prior period numbers may have been made to conform to the
current period presentation.
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Property and Equipment
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Since 1998, the Partnership's only property, the Andover Park apartment complex,
has been actively marketed for sale. At March 31, 2001, the property is the
subject of a contingent $5,200,000 sales agreement that, if closed, will result
in a gain in the range of $2.2 to $2.4 million and net proceeds of approximately
$1 million, which will not be sufficient to satisfy all of the Partnership's
liabilities. Depreciation expense not recorded in each of the three month
periods ended March 31, 2001 and 2000 was approximately $44,000.
Contingency
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The Partnership, as a nominal defendant, the General Partners of the Partnership
and the officers and directors of the Corporate General Partner, as defendants,
were served with a Summons and Complaint on April 7, 2000 in a class and
derivative lawsuit instituted by Ira Gaines and on August 8, 2000 in a class and
derivative lawsuit instituted by Sean O'Reilly and Louise Homburger, each in
Supreme Court, County of Erie, State of New York. In September 2000, the Court
signed an order consolidating these lawsuits. The consolidated lawsuit alleges
claims of mismanagement and improper use of partnership funds relating to the
Realmark Partnerships. The consolidated lawsuit seeks declaratory relief,
unspecified damages, a receiver, an order liquidating the partnership, punitive
damages, attorneys' fees and related relief. The defendants deny any liability
and intend to vigorously defend this lawsuit. Because of the early stage of this
lawsuit and because there has been no discovery to date, legal counsel cannot
render an opinion as to the likely outcome of this case. The possible effect of
this contingency is not presently determinable and, therefore, the consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Current Accounting Pronouncements
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Statements of Financial Accounting Standards Nos. 138 and 133, which concern
accounting for derivative instruments and hedging activities, became effective
for the Partnership on January 1, 2001 and did not have any effect on the
Partnership's financial statements.
PART I - Item 2. Management's Discussion and Analysis of Financial Condition
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and Results of Operations
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Liquidity and Capital Resources
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The Partnership continues to incur losses and operating cash flow deficits and
relies on its corporate general partner and its affiliates to cover cash
shortages. It is unlikely that the net proceeds from the eventual sale of the
Andover Park property will be sufficient to repay the entire amount of advances
from affiliates and, therefore, no distributions to partners are anticipated.
During 1999, the Partnership sold Woodbridge Manor Apartments for $6,400,000.
The sale resulted in a $1,131,370 gain for financial statement purposes. In the
first quarter of 2000, a portion of the sale proceeds was used to reduce the
Partnership's liability to affiliated parties.
Results of Operations
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During most of the first quarter of 2001, occupancy at Andover Park continued at
a relatively low rate of approximately 80%, the occupancy rate at December 31,
2000. Therefore, rental income decreased compared to rental income in the first
quarter of 2000 when occupancy was higher at approximately 88%. Other income
also decreased in the 2001 quarter because of lower fees on lower occupancy.
Also, in the 2000 quarter, interest income was earned on the temporary
investment of the net proceeds from the Woodbridge Manor sale; no such funds
were available for investment in 2001.
Operating expenses were very comparable for the two quarters. Administrative
expenses decreased in the 2001 quarter due to lower professional fees. The
decrease in mortgage loan interest reflects the refinancing of the debt in 2000
and the absence of $15,000 of origination cost amortization in 2001.
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PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk
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The Partnership's cash equivalents are short-term, interest-bearing bank
accounts and its mortgage loan is fixed-rate. It has not entered into any
derivative contracts. Therefore, it has no market risk exposure.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP IV
May 15, 2001 /s/ Joseph M. Jayson
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Date Joseph M. Jayson,
Individual General Partner and
Principal Financial Officer
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