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FORM 10-K--ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 34-31905, eff 10/26/93.)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [No Fee Required]
For the fiscal year ended December 31, 1996
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period.........to.........
Commission file number 0-11002
CONSOLIDATED CAPITAL PROPERTIES IV
(Exact name of registrant as specified in its charter)
California 94-2768742
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Act:
None
Securities registered under Section 12(g) of the Act:
Limited Partnership Units
(Title of class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (SEC. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X] (Amended by Exch Act Rel No.
28869, eff. 5/1/91.)
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests, as of a specified date within 60 days prior to the date of filing:
Market value information for the Registrant's partnership interests is not
available. Should a trading market develop for these interests, it is
management's belief that such trading would not exceed $25,000,000.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Consolidated Capital Properties IV (the "Partnership" or "Registrant") was
organized on September 22, 1981, as a limited partnership under the California
Uniform Limited Partnership Act. On December 18, 1981, the Partnership
registered with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933 (File No. 2-74353) and commenced a public offering for
sale of $100 million of Units with the general partners' right to increase the
offering to $200 million. The Units represent equity interests in the
Partnership and entitle the holders thereof to participate in certain
allocations and distributions of the Partnership. The Partnership subsequently
filed a Form 8-A Registration Statement with the SEC and registered under the
Securities Exchange Act of 1934 (File No. 0-11002) on March 28, 1983. The sale
of Units closed on December 14, 1983, with 343,106 Units sold at $500 each, or
gross proceeds of $171.5 million to the Partnership. At the request of certain
Limited Partners and in accordance with its Partnership Agreement, the
Partnership has retired a total of 323 Units as of December 31, 1996. The
Partnership gave no consideration for these Units.
By the end of fiscal year 1985, approximately 73% of the proceeds raised had
been invested in 48 properties. Of the remaining 27%, 11% was required for
organizational and offering expenses, sales commissions and acquisition fees,
and 16% was retained in Partnership reserves for project improvements and
working capital as required by the Partnership Agreement.
The General Partner of the Partnership is ConCap Equities, Inc., a Delaware
corporation (the "General Partner" or "CEI"). The principal place of business
for the Partnership and for the General Partner is One Insignia Financial Plaza,
Greenville, South Carolina 29602.
The Partnership's primary business and only industry segment is real estate
related operations. The Partnership was formed to acquire, own, operate and
ultimately dispose of income-producing real properties for the benefit of its
Limited Partners (herein so called; and together with the General Partner shall
be called the "Partners"). As of the close of fiscal year 1985, the Partnership
had completed its property acquisition stage and had acquired 48 properties. At
December 31, 1996, the Partnership owned 17 income-producing properties (or
interests therein) and held one note receivable with respect to a sold property.
Prior to 1996, the Partnership had disposed of 30 properties originally owned by
the Partnership. In February of 1996, the Partnership lost an additional
property through foreclosure, as discussed below.
The real estate business is highly competitive. The Registrant's real property
investments are subject to competition from similar types of properties in the
localities in which they are located and the Partnership is not a significant
factor in its industry. In addition, various limited partnerships have been
formed by related parties to engage in businesses which may be competitive with
the Registrant.
The Registrant has no employees. Management and administrative services are
performed by affiliates of Insignia Financial Group, Inc. ("Insignia"). The
property manager is responsible for the day-to-day operations of each property.
The Managing General Partner has also selected an affiliate of Insignia to
provide real estate advisory and asset management services to the Partnership.
As advisor, such affiliates provide all partnership accounting and
administrative services, investment management, and supervisory services over
property management and leasing. For a further discussion of property and
partnership management, see "Item 12," which descriptions are herein
incorporated by reference.
The Partnership is required by the Partnership Agreement to maintain working
capital reserves for contingencies. On September 25, 1995, the partners were
proxied and approved a reduction of the capital reserve requirements to $500 per
apartment unit and $1.00 per square foot of gross leasable commercial space
owned by the Partnership, or approximately $2.2 million. During 1996, the Metro
Centre Office Building was foreclosed on by the lender. Accordingly, the
replacement reserve requirement at the remaining residential properties was
reduced to approximately $2.1 million. In the event expenditures are made from
these reserves, operating revenue shall be allocated to such reserves to the
extent necessary to maintain the foregoing level. Reserves, including
unrestricted cash and cash equivalents, tenant security deposits and
investments, totaling approximately $10.4 million at December 31, 1996, exceeded
the Partnership's reserve requirement of approximately $2.1 million.
The Partnership currently owns and operates 17 apartment complexes, which range
in age from 20 to 26 years old, principally located in the midwest, southeastern
and southwestern United States. The Partnership also holds one note receivable
on a sold property which is performing according to the note terms as of
December 31, 1996.
The Partnership has made significant capital investments in its real estate
portfolio during the previous three years. These investments consisted of
selected property improvement and rehabilitation programs and expenditures to
cure deferred maintenance which existed at certain of the properties. Capital
expenditures of approximately $3.4 million are budgeted for the Partnership's
properties in 1997.
Approximately $2.5 million of non-recourse mortgage debt secured by the Metro
Centre Office Building, located in Southern California, matured July 1, 1995.
The property historically had difficulty making its scheduled debt service
payments and, since 1985, the property made quarterly cash flow payments
pursuant to a modified and restructured loan agreement, however, no payments
were made in 1995. Given existing economic conditions in Southern California,
property operations were not expected to improve sufficiently to enable the
Partnership to refinance the existing indebtedness under prevailing market
conditions. In September 1995, a Notice of Default and Election to Sell Under
Deed of Trust was filed by the lender. The Partnership did not contest this
foreclosure action and the property was foreclosed upon on February 7, 1996.
Prior to March 1995, the Nob Hill Villa Apartments ("Nob Hill") secured two non-
recourse mortgage notes totalling approximately $5.8 million. One of the notes,
a $3.8 million first-lien mortgage, was scheduled to mature in November 1995.
In March 1995, the General Partner refinanced these mortgage notes by obtaining
a new mortgage note of approximately $7.5 million secured by Nob Hill. Under
the terms of the refinancing agreement, the new mortgage note bears interest at
9.2% and matures in April 2005.
Approximately $14.3 million of non-recourse mortgage debt secured by the
Foothill Place Apartments and the Chimney Hill Apartments originally matured in
1994. The Partnership exercised its option to extend the maturities until
September 1995, by paying a 1%, or $143,000, loan extension fee to the current
lender, as provided for in the loan agreement. In December 1995, these
properties, along with five of the Partnership's other properties, were
refinanced for 10 years with interest only payments due each month (See "Note C"
in the Notes to Consolidated Financial Statements in "Item 8").
Prior to November 1996, Lake Forest Apartments ("Lake Forest") secured a
mortgage note guaranteed by the U.S. Department of Housing and Urban Development
("HUD") totalling approximately $4.1 million. In November 1996, the Partnership
refinanced this mortgage note by obtaining a new mortgage note of approximately
$4.7 million secured by Lake Forest. Under the terms of the refinancing
agreement, the new mortgage note bears interest at 7.33% and matures in November
2003.
The Post Ridge Apartments ("Post Ridge") formerly secured a mortgage note
totalling approximately $4.2 million, which was guaranteed by HUD. Operating
cash flow from Post Ridge did not support its scheduled debt service payments.
As a result, in January 1991, the Partnership suspended scheduled debt service
for Post Ridge. From 1991 through March of 1995, the Partnership remitted
excess cash flow from the properties' operations as debt service. On March 28,
1995, this debt was sold to an unaffiliated third party. Accordingly, since the
closing of the sale on May 8, 1995, this debt is no longer regulated by HUD. In
September of 1996, the Partnership entered into an interim financing arrangement
and refinanced the non-recourse mortgage note of approximately $4.2 million
secured by Post Ridge. Under the terms of the interim financing arrangement,
the new $4.1 million mortgage note bore interest at 8% through October 31, 1996,
and from November 1, 1996, through the maturity date of November 15, 1996, the
note bore interest at a rate equal to 2.5% plus the average one month LIBOR
(totaling 7.875%). As a result of this refinancing, the Partnership realized a
$16,000 gain on the forgiveness of accrued interest, a $61,000 gain on the
forgiveness of advances from prior years, and a $158,000 loss on the write-off
of loan costs which resulted in a net extraordinary loss on refinancing of
$81,000. In November 1996, the General Partner obtained permanent financing by
securing a new mortgage note of approximately $4.1 million collateralized by
Post Ridge. Under the terms of the agreement this mortgage note bears
interest at 7.33% and matures in November 2003.
To facilitate the refinancing of the mortgage note secured by Post Ridge,
effective August 7, 1996, the Post Ridge Associates, Ltd.'s Limited Partnership
Agreement was amended to convert the general partnership interest held by
Consolidated Capital Properties IV ("CCP IV") to a limited partnership interest,
such that CCP IV shall be the sole Limited Partner owning a 99.0% limited
partnership interest in Post Ridge Associates, Ltd. Concap Equities, Inc. was
admitted as the new General Partner owning a 1.0% general partner interest and
PRA, Inc. withdrew as the Limited Partner of Post Ridge Associates, Ltd.
Upon the Partnership's formation in 1981, Consolidated Capital Equities
Corporation ("CCEC"), a Colorado corporation, was the corporate general partner
and Consolidated Capital Management Company ("CCMC"), a California general
partnership, was the non-corporate general partner. In 1988, through a series
of transactions, Southmark Corporation ("Southmark") acquired a controlling
interest in CCEC. In December 1988, CCEC filed for reorganization under Chapter
11 of the United States Bankruptcy Code. In 1990, as part of its reorganization
plan, CEI acquired CCEC's general partner interests in the Partnership and in 15
other affiliated public limited partnerships (the "Affiliated Partnerships") and
CEI replaced CCEC as managing general partner in all 16 partnerships. The
selection of CEI as the sole managing general partner was approved by a
majority of the Limited Partners in the Partnership and in each of the
Affiliated Partnerships pursuant to a solicitation of the Limited Partners dated
August 10, 1990. As part of this solicitation, the Limited Partners also
approved an amendment to the Partnership Agreement to limit changes of control
of the Partnership, and the conversion of CCMC from a general partner to a
limited partner, thereby leaving CEI as the sole general partner of the
Partnership.
All of CEI's outstanding stock is owned by GII Realty, Inc. In December 1994,
the parent of GII Realty, Inc., entered into a transaction (the "Insignia
Transaction") in which an affiliate of Insignia acquired an option (exercisable
in whole or in part from time to time) to purchase all of the stock of GII
Realty, Inc. and, pursuant to a partial exercise of such option, acquired 50.5%
of that stock. As a part of the Insignia Transaction, the Insignia affiliate
also acquired all of the outstanding stock of Partnership Services, Inc., an
asset management entity, and a subsidiary of Insignia acquired all of the
outstanding stock of Coventry Properties, Inc., a property management entity.
In addition, confidentiality, non-competition, and standstill arrangements were
entered into between certain of the parties. Those arrangements, among other
things, prohibit GII Realty's former sole shareholder from purchasing
Partnership Units for a period of three years. On October 24, 1995, the
Insignia affiliate exercised the remaining portion of its option to purchase all
of the remaining outstanding capital stock of GII Realty, Inc.
ITEM 2. DESCRIPTION OF PROPERTY
The Partnership originally acquired 48 properties of which eleven (11) were
sold, ten (10) were conveyed to lenders in lieu of foreclosure, and nine (9)
were foreclosed upon by the lenders in fiscal years prior to 1996. In February
of 1996, the Partnership lost an additional property through
foreclosure. As of December 31, 1996, the Partnership owned seventeen (17)
apartment complexes and held one (1) note receivable on sold property as noted
below. Additional information about the properties is found in "Item 8 -
Financial Statements and Supplementary Data."
Date of
Property Purchase Type of Ownership Use
The Apartment 04/84 Fee ownership subject Residential Apartments
Omaha, Nebraska to first mortgage 204 units
Arbour East 09/83 Fee ownership subject Residential Apartments
Nashville, Tennessee to first mortgage 350 units
Briar Bay Racquet Club 09/82 Fee ownership subject Residential Apartments
Miami, Florida to first mortgage 194 units
Chimney Hill 08/82 Fee ownership subject Residential Apartments
Marietta, Georgia to first mortgage 326 units
Citadel 05/83 Fee ownership subject Residential Apartments
El Paso, Texas to first mortgage 260 units
Citadel Village 12/82 Fee ownership subject Residential Apartments
Colorado Springs, Colorado to first mortgage 122 units
Foothill Place 08/85 Fee ownership subject Residential Apartments
Salt Lake City, Utah to first mortgage 450 units
Knollwood 07/82 Fee ownership subject Residential Apartments
Nashville, Tennessee to first mortgage 326 units
Lake Forest 04/84 Fee ownership subject Residential Apartments
Omaha, Nebraska to first mortgage 312 units
Nob Hill Villa 04/83 Fee ownership subject Residential Apartments
Nashville, Tennessee to first mortgage 472 units
Overlook 11/85 Fee ownership subject Residential Apartments
Memphis, Tennessee to first mortgage 252 units
Point West 11/85 Fee ownership subject Residential Apartments
Charleston, South Carolina to first mortgage 120 units
Post Ridge 07/82 Fee ownership subject Residential Apartments
Nashville, Tennessee to first mortgage 150 units
Rivers Edge 04/83 Fee ownership subject Residential Apartments
Auburn, Washington to first mortgage 120 units
South Port 11/83 Fee ownership subject Residential Apartments
Tulsa, Oklahoma to first mortgage 240 units
Stratford Place 08/85 Fee ownership subject Residential Apartments
Austin, Texas to first mortgage 223 units
Village East 12/82 Fee ownership subject Residential Apartments
Cimarron Hills, Colorado to first mortgage 137 units
SCHEDULE OF PROPERTIES:
(dollar amounts in thousands)
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
The Apartments $ 8,338 $5,424 5-18 yr S/L $ 2,767
Arbour East 11,877 9,126 5-18 yr S/L 2,997
Briar Bay Racquet Club 7,635 5,855 5-18 yr S/L 2,261
Chimney Hills 10,408 8,822 5-18 yr S/L 2,520
Citadel 7,393 5,806 5-18 yr S/L 1,488
Citadel Village 3,761 3,258 5-18 yr S/L 1,123
Foothill Place 14,829 7,616 5-18 yr S/L 8,505
Knollwood 10,203 8,555 5-18 yr S/L 2,025
Lake Forest 8,682 5,133 5-18 yr S/L 2,851
Nob Hill Villa 12,109 9,775 5-18 yr S/L 2,395
Overlook 4,370 2,959 5-15 yr S/L 1,876
Point West 2,883 2,021 5-40 yr S/L 1,503
Post Ridge 4,096 3,430 5-18 yr S/L 779
Rivers Edge 3,178 2,344 5-18 yr S/L 997
South Port 7,812 5,524 5-18 yr S/L 2,246
Stratford Place 7,285 3,568 5-20 yr S/L 2,902
Village East 3,269 2,718 5-18 yr S/L 545
Totals $128,128 $91,934 $39,780
See "Note A" in the Notes to Consolidated Financial Statements in "Item 8" for a
description of the Partnership's depreciation policy.
SCHEDULE OF MORTGAGES:
Principal Principal
Balance At Stated Balance
December 31, Interest Period Maturity Due At
Property 1996 Rate Amortized Date Maturity
(dollar amounts in thousands)
The Apartments $ 3,488 8.34% 7 years 9/00 $ 3,244
Arbour East Apartments 5,650 6.95% 10 years 12/05 5,650
Briar Bay Racquet Club 3,500 6.95% 10 years 12/05 3,500
Chimney Hills Apartments 5,400 6.95% 10 years 12/05 5,400
Citadel Apartments 4,830 8.38% 7 years 10/00 4,488
Citadel Village Apartments 2,450 6.95% 10 years 12/05 2,450
Foothill Place Apartments 10,100 6.95% 10 years 12/05 10,100
Knollwood Apartments 6,780 6.95% 10 years 12/05 6,780
Lake Forest Apartments 4,700 7.33% 7 years 11/03 4,700
Nob Hill Villa Apartments 7,361 9.20% 10 years 4/05 6,250
Overlook Apartments 1,878 10.50% 25 years 12/98 1,817
Post Ridge Apartments 4,050 7.33% 7 years 11/03 4,050
Rivers Edge Apartments 2,036 8.40% 7 years 9/00 1,895
South Port Apartments 3,464 10.85% 15 years 7/01 3,167
Stratford Place Apartments 2,657 8.65% 25 years 9/00 2,478
Village East Apartments 2,150 6.95% 10 years 12/05 2,150
$70,494 $68,119
The notes payable represent borrowings on the properties purchased by the
Partnership. The notes are non-recourse, and are collateralized by deeds of
trust on the investment properties. The notes mature between 1998 and 2005 bear
interest at rates ranging from 6.95% to 10.85%.
Note Receivable on Sold Property:
As of December 31, 1996
Underlying
Note Mortgage
Collateral Property Receivable Debt
(in thousands)
Denbigh Village
Apartment complex - 138 units
Newport News, Virginia $ 1,116 $ 1,268
When Denbigh Village Apartments was sold in August 1994, the Partnership
accepted a 9% interest bearing promissory note which matured in March 1996. In
March 1996, an extension, under the existing terms, was negotiated to extend the
note until April 1997. See "Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Item 8 - Financial
Statements and Supplementary Data," for further discussion of the Denbigh
Village Apartments sale and the note receivable by the Partnership.
Denbigh Village Apartments secures two underlying mortgage notes. The balance
of the first mortgage is approximately $542,000 at December 31, 1996, has a
stated interest rate of 9.5% and matures in December 2002. The balance of the
second mortgage is approximately $726,000, has a stated interest rate of 9.5%
and matures in December of 1998.
SCHEDULE OF RENTAL RATES AND OCCUPANCY:
Average Annual Average Annual
Rental Rates Occupancy
Per Unit
1996 1995 1996 1995
The Apartments $5,821 $5,639 92% 95%
Arbour East 6,784 6,220 95% 97%
Briar Bay Racquet Club 8,207 8,055 97% 93%
Chimney Hill 7,540 6,901 92% 96%
Citadel 6,753 6,676 91% 92%
Citadel Village 7,672 7,050 97% 98%
Foothill Place 7,300 6,919 97% 98%
Knollwood 7,194 6,649 97% 98%
Lake Forest 6,073 5,662 94% 97%
Nob Hill Villa 5,612 5,183 97% 98%
Overlook 3,945 3,767 83% 88%
Point West 5,121 5,046 90% 90%
Post Ridge 8,689 8,143 96% 97%
Rivers Edge 6,342 6,242 97% 93%
South Port 5,333 5,282 96% 84%
Stratford Place 6,494 6,321 92% 93%
Village East 6,142 5,435 99% 99%
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties of the Partnership are subject to
competition from other residential apartment complexes and office buildings in
the areas in which they operate. The General Partner believes that all of the
properties are adequately insured.
The average rental rate increases at Post Ridge Apartments, Knollwood, and
Arbour East were due to rate increases able to be implemented due to the
strength of the Nashville market throughout the year as leases were renewed.
Rental rate increases also are responsible for the average rental rate
increases at Village East Apartments, Citadel Village, and Chimney Hill.
The Briar Bay Racquet Club Apartments occupancy increase is attributable to
increased resident retention efforts at the property. The decrease in occupancy
for Chimney Hill is due to increased competition in the Atlanta market.
Occupancy at Rivers Edge Apartments has increased due to the continued strength
of the Seattle market. The increase in occupancy at South Port is attributable
to an increased effort by property management to retain and attract tenants by
slightly decreasing rents and a tightening of the apartment supply in the Tulsa
market. Occupancy for the Overlook Apartments decreased due to increased
competition in the Memphis market resulting from the renovation of surrounding
properties in the area.
SCHEDULE OF REAL ESTATE TAXES AND RATES:
(dollar amounts in thousands)
Real estate taxes and rates in 1996 for each property were:
1996 1996
Billing Rate
The Apartments *$147 2.9%
Arbour East 105 3.5%
Briar Bay Racquet Club 149 2.3%
Chimney Hill 128 3.3%
Citadel 164 2.8%
Citadel Village 16 6.9%
Foothill Place 163 1.5%
Knollwood 114 3.5%
Lake Forest *202 2.9%
Nob Hill Villa 127 4.5%
Overlook 63 3.2%
Point West 33 34.4%
Post Ridge 54 3.5%
Rivers Edge 56 1.5%
South Port 52 13.2%
Stratford Place 125 2.4%
Village East 14 7.0%
* Represents an estimate for the 1996 taxes and rates. Actual billings have
not been received as of the date of this filing.
ITEM 3. LEGAL PROCEEDINGS
The Registrant is unaware of any pending or outstanding litigation that is not
of a routine nature. The Managing General Partner of the Registrant believes
that all such pending or outstanding litigation will be resolved without a
material adverse effect upon the business, financial condition, or operations of
the Partnership.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Unit holders of the Partnership did not vote on any matter during the fourth
quarter of the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S UNITS OF LIMITED PARTNERSHIP AND RELATED
SECURITY HOLDER MATTERS
(A) No established trading market for the Partnership's Units exists, nor is
one expected to develop.
(B) Title of Class Number of Unitholders of Record
Limited Partnership Units 14,317 as of December 31, 1996
(C) During 1996, the Partnership paid distributions attributable to cash flow
from operations of approximately $4,538,000 and approximately $71,000
representing a return of capital. In conjunction with the transfer of
funds from certain majority-owned sub-tier limited partnerships to the
Partnership, approximately $36,000 was distributed to the general
partners of the majority-owned sub-tier limited partnerships. Cumulative
distributions to the Limited Partners since the inception of the
Partnership totaled approximately $28 million at December 31, 1996.
During 1995, the Partnership paid distributions attributable to cash flow
from operations of approximately $921,000 to the Partners. No cash
distributions were made to the Limited Partners during the year ended
December 31, 1994. Also, see "Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations". Subsequent
to December 31, 1996, the Partnership declared distributions to the
Partners of approximately $550,000 attributable to cash flow from
operations and approximately $903,000 representing a return of capital.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth a summary of certain financial data for the
Partnership. This summary should be read in conjunction with the Partnership's
consolidated financial statements and notes thereto appearing in "Item 8 -
Financial Statements and Supplementary Data."
Years Ended December 31,
Consolidated Statements 1996 1995 1994 1993 1992
of Operations
(in thousands,
except per unit data)
Revenues $ 28,137 $ 27,468 $ 27,905 $ 27,263 $ 26,272
Expenses (29,010) (28,708) (32,325) (33,972) (33,931)
Loss from operations (873) (1,240) (4,420) (6,709) (7,659)
Gain on dispositions
of real estate -- -- 9,523 -- 329
Reorganization expense -- -- -- (368) (261)
Gain on sale of investments -- -- -- 75 --
Income (loss) before
extraordinary items (873) (1,240) 5,103 (7,002) (7,591)
Extraordinary items 2,909 43 6,614 (272) 5,677
Net income (loss) $ 2,036 $ (1,197) $ 11,717 $ (7,274) $ (1,914)
Net income (loss) per weighted
Limited Partnership Unit:
Loss from operations $ (2.45) $ (3.47) $ (12.38) $ (18.78) $ (21.43)
Gain on dispositions
of real estate -- -- 26.67 -- .92
Reorganization expense -- -- -- (1.03) (.73)
Gain on sale of securities
available for sale -- -- -- .21 --
Income (loss) before
extraordinary items (2.45) (3.47) 14.29 (19.60) (21.24)
Extraordinary items 8.15 .12 18.52 (.76) 15.89
Net income (loss) $ 5.70 $ (3.35) $ 32.81 $ (20.36) $ (5.35)
Distributions per Limited
Unit $ 12.91 $ 2.58 $ -- $ -- $ --
Limited Partnership Units
outstanding 342,783 342,783 342,819 342,951 343,097
Consolidated Balance Sheets
Total assets $ 53,844 $ 61,146 $ 56,812 $ 67,683 $ 75,387
Notes and interest payable$ 72,233 $ 76,336 $ 70,825 $ 92,525 $ 93,557
ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION
The operations of the Partnership primarily include owning, operating and
ultimately disposing of income-producing real properties for the benefit of its
Partners. Therefore, the following discussion of operations, liquidity and
capital resources will focus on these activities and should be read in
conjunction with "Item 8 - Financial Statements and Supplementary Data" and the
notes related thereto included elsewhere in this report.
RESULTS OF OPERATIONS
The Partnership's loss from operations totaled approximately $873,000 for the
year ended December 31, 1996, compared to losses from operations of
approximately $1,240,000 and $4,420,000 for 1995 and 1994, respectively. The
decreased loss from operations is due primarily to an increase in rental rates
at all of the Partnership's properties and the foreclosure of the Metro Centre
Office Building in 1996. The decreased loss from operations is also due to the
foreclosure of the Greenbriar and Westwood Apartments and the sale of the
Denbigh Woods Apartments during the third quarter of 1994. Unless future sales
and/or foreclosures of properties occur, it is expected that the Partnership
will continue to generate losses from operations, primarily because certain
noncash items are included in expenses. Depreciation of the Partnership's real
estate investments and amortization of loan costs, mortgage discounts, and lease
commissions, the primary noncash expenses, totaled approximately $7.3 million
for the year ended December 31, 1996, and approximately $7 million and $7.9
million for each of the years ended December 31, 1995 and 1994, respectively.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
1996 Compared to 1995
Revenues:
Rental income increased for the year ended December 31, 1996, compared to the
corresponding period ended December 31, 1995, due primarily to an increase in
rental rates at all of the Partnership's properties, partially offset by a
decrease in occupancy at several of the Partnership's properties. Interest and
other income decreased for 1996 compared to 1995, due primarily to the receipt
in 1995 of a tax refund for Chimney Hill for the years of 1992, 1993 and 1994,
and due to the receipt of a non-recurring dividend on the Southmark Preferred
Stock.
Expenses:
Property operations expenses increased for 1996 compared to 1995, due primarily
to increased maintenance expenses incurred in efforts to increase the curb
appeal of several of the Partnership's properties and increased concession
expense in efforts to increase occupancy. Depreciation and amortization expense
increased for the year ended December 31, 1996, compared to the year ended
December 31, 1995, due primarily to the addition of approximately $5 million in
property improvements and replacements during 1996. Interest expense in 1996
decreased compared to 1995, due to the refinancing of seven of the Partnership's
properties in December of 1995 and two properties in November of 1996 at lower
interest rates, and due to the Point West Apartments' first-lien note being paid
off as discussed below. Administrative expenses decreased for the year ended
December 31, 1996, compared to the year ended December 31, 1995, due to
decreased legal, printing and postage costs associated with the Partnership's
required responses to various tender offers as well as increased expense
reimbursements related to the combined efforts of the Dallas and Greenville
partnership administration staffs during the transition period in the first and
second quarters of 1995. The increased costs related to the transition efforts
were incurred to minimize any disruption in the year-end reporting function
including the financial reporting and K-1 preparation and distribution.
Included in maintenance expense for the year ended December 31, 1996 is
approximately $798,000 of major repairs and maintenance comprised primarily of
major landscaping, exterior building improvements and parking lot repairs.
In February of 1996, the $484,000 balance of the first-lien note secured by the
Point West Apartments, with an original maturity of May 2001, was paid off to
retire debt with interest rates higher than the current market rate. As a
result of the note payoff, the Partnership paid approximately $5,000 in
prepayment penalties which resulted in an extraordinary loss on refinancing.
Prior to November 1996, Lake Forest Apartments ("Lake Forest") secured a
mortgage note guaranteed by the U.S. Department of Housing and Urban Development
("HUD") totalling approximately $4.1 million. In November 1996, the Partnership
refinanced this mortgage note by obtaining a new mortgage note of approximately
$4.7 million secured by Lake Forest. Under the terms of the refinancing
agreement, the new mortgage note bears interest at 7.33% and matures in November
2003. As a result of the refinancing, the Partnership paid approximately $4,000
in prepayment penalties which resulted in an extraordinary loss on refinancing.
The Post Ridge Apartments ("Post Ridge") formerly secured a mortgage note
totalling approximately $4.2 million, which was guaranteed by HUD. Operating
cash flow from Post Ridge did not support its scheduled debt service payments.
As a result, in January 1991, the Partnership suspended scheduled debt service
for Post Ridge. From 1991 through March of 1995, the Partnership remitted
excess cash flow from the properties' operations as debt service. On March 28,
1995, this debt was sold to an unaffiliated third party. Accordingly, since the
closing of the sale on May 8, 1995, this debt is no longer regulated by HUD. In
September of 1996, the Partnership entered into an interim financing arrangement
and refinanced the non-recourse mortgage note of approximately $4.2 million
which was secured by Post Ridge Apartments. Under the terms of the interim
financing arrangement, the new $4.1 million mortgage note bore interest at 8%
through October 31, 1996, and from November 1, 1996, through the maturity date
of November 15, 1996, the note bore interest at a rate equal to 2.5% plus the
average one month LIBOR (7.875%). As a result of this refinancing, the
Partnership realized a $16,000 gain on the forgiveness of accrued interest, a
$61,000 gain on the forgiveness of advances from prior years, and a $158,000
loss on the write off of loan costs which resulted in a net extraordinary loss
on refinancing of $81,000. In November 1996, the General Partner obtained
permanent financing by securing a new mortgage note of approximately $4.1
million collateralized by Post Ridge. Under the terms of the agreement this
mortgage note bears interest at 7.33% and matures in November 2003.
Approximately $2.5 million of non-recourse mortgage debt secured by the Metro
Centre Office Building, located in Southern California, matured July 1, 1995.
The property historically had difficulty making its scheduled debt service
payments and since 1985, the property made quarterly cash flow payments pursuant
to a modified and restructured loan agreement, however, no payments were made in
1995. Given existing economic conditions in Southern California, property
operations were not expected to improve sufficiently to enable the Partnership
to refinance the existing indebtedness under prevailing market conditions. In
September 1995, a Notice of Default and Election to Sell Under Deed of Trust was
filed by the lender. The Partnership did not contest this foreclosure action
and the property was foreclosed upon on February 7, 1996, resulting in an
extraordinary gain on foreclosure of approximately $2,999,000 to the
Partnership.
1995 Compared to 1994
Revenues:
Rental income decreased for the year ended December 31, 1995, compared to the
corresponding period ended December 31, 1994, due primarily to the sale and
foreclosures noted in the Results of Operations section above. The rental
income decreases were partially offset by increased occupancy at the Briar Bay
Racquet Club Apartments and rental increases at several of the Partnership's
apartment properties for the year ended December 31, 1995. Interest and other
income increased for the year ended December 31, 1995, compared to the year
ended December 31, 1994, due to higher cash balances being available for
investment in 1995 and the $185,000 casualty gain discussed below. Also,
dividends of $61,000 were received on the Partnership's investment in Southmark
preferred stock during the year ended December 31, 1995, compared to $36,000
during the year ended December 31, 1994, and interest income of $97,000 was
recognized in 1995 on the Denbigh Woods note receivable compared to $36,000 in
1994.
In December of 1995, a fire occurred at the Overlook Apartments resulting in
four units being destroyed and eight units incurring smoke and water damage.
The total insurance proceeds received were approximately $260,000. These
proceeds exceeded the total costs of replacing the units destroyed, resulting in
a casualty gain of $106,000. In 1995, the Partnership also received insurance
proceeds of $60,000 and $15,000 resulting from hail damage sustained in 1994 at
the Citadel Village and Village East Apartments, respectively. In addition, the
Partnership received an additional $4,000 insurance settlement from a fire at
the Point West Apartments which occurred in 1991. These four events resulted in
a total casualty gain of $185,000 in 1995.
Expenses:
Property operations, depreciation and amortization and interest expense
decreased for the year ended December 31, 1995, compared to the year ended
December 31, 1994, due primarily to the disposition of Greenbriar, Westwood and
Denbigh Woods Apartments in the third quarter of 1994. Administrative expenses
increased for the year ended December 31, 1995, compared to the year ended
December 31, 1994, due to increased legal, printing and postage costs associated
with the Partnership's required responses to various tender offers as well as
increased expense reimbursements related to the combined efforts of the Dallas
and Greenville partnership administration staffs during the transition period in
the first and second quarters of 1995. The reimbursements for the Dallas and
Greenville offices amount to $306,000 and $282,000, respectively, during the
year ended December 31, 1995.
The increased costs related to the transition efforts were incurred to minimize
any disruption in the year-end reporting function including the financial
reporting and K-1 preparation and distribution. The General Partner expects
recurring administrative expenses to be reduced now that the management
transition is complete.
The extraordinary net gain from refinancing of $43,000 is the net of the
following two items:
A $250,000 gain on refinancing was realized during 1995, due to the refinancing
of Nob Hill Villa Apartments. Through this refinancing, a new $7.5 million
mortgage note which bears interest at 9.2% and matures in April 2005, was
obtained. As a result of the refinancing, the Partnership realized a $250,000
discount on the second mortgage resulting in an extraordinary gain on
refinancing (See "Note C" in the Notes to Consolidated Financial Statements in
"Item 8").
A $207,000 extraordinary loss on refinancing was realized during 1995, due to
the write-off of unamortized loan costs and prepayment penalties paid on seven
refinanced properties (See "Note C" in the Notes to Consolidated Financial
Statements in "Item 8").
In 1995, the Partnership recognized a $200,000 loss on the write-down of the
carrying value of Metro Centre to its estimated net realizable value, due to the
decline in the Southern California Market.
LIQUIDITY AND CAPITAL RESOURCES
A detailed discussion of the General Partner's current operating plan is
described in "Item 1 - Description of Business".
1996 Compared to 1995
At December 31, 1996, the Partnership held unrestricted cash and cash
equivalents of approximately $9.2 million compared to approximately $10.9
million at December 31, 1995. Net cash provided by operating activities
increased primarily due to increased rental revenues, the receipt of an
insurance refund of approximately $124,000, an escrow receipt in 1996 from the
refinancing of the Knollwood Apartments debt in December of 1995, and the
collection of insurance proceeds resulting from the fire at the Overlook
Apartments in 1995, as discussed above. These items were partially offset by a
decrease in accounts payable due to the timing of accounts payable payments.
Net cash used in investing activities increased as the result of increased
property improvements and replacements, partially offset by increased receipts
from restricted escrows. Net cash used in financing activities increased due to
significantly increased distributions to partners in 1996, as well as decreased
proceeds from long-term borrowings.
1995 Compared to 1994
As of December 31, 1995, the Partnership held unrestricted cash and cash
equivalents of approximately $10.9 million compared to approximately $4.3
million at December 31, 1994. Net cash provided by operating activities
increased primarily due to the absence of negative cash flows from the
properties disposed of in 1994, and an increase in accounts payable and accrued
expenses at the remaining properties. Net cash used in investing activities
increased primarily due to increased restricted escrow deposits and increased
property improvements and replacements. Net cash provided by financing
activities increased as a result of the refinancing of eight of the
Partnership's properties (See "Note C" in the Notes to Consolidated Financial
Statements in "Item 8"), partially offset by $921,000 of distributions to
partners in 1995.
Capital Resources
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and meet other operating needs of the Partnership. Such assets are
currently thought to be sufficient for any near-term needs of the Partnership.
The mortgage indebtedness of approximately $72 million matures at various times
with balloon payments due at maturity, at which time the properties will either
be refinanced or sold. Future cash distributions will depend on the levels of
net cash generated from operations, capital expenditure requirements, property
sales and the availability of cash reserves. Cash distributions of
approximately $4,645,000 and $921,000 were declared and paid during the years
ended December 31, 1996 and 1995, respectively.
On January 20, 1995, an affiliate of the General Partner, Insignia CCP IV
Acquisition, L.L.C., closed an offer to purchase Units (the "Tender Offer") for
a cash price of $60 per Unit for Limited Partners of record as of December 15,
1994. Approximately 3,370 Limited Partners holding 64,175 Units (18.72% of total
Units) accepted the Tender Offer and sold their Units to Insignia CCP IV
Acquisition, L.L.C. effective January 20, 1995, for an aggregate sales price of
approximately $3.9 million.
The Partnership is required by the Partnership Agreement to maintain working
capital reserves for contingencies. On September 25, 1995, the partners were
proxied and approved a reduction of the capital reserve requirements to $500 per
apartment unit and $1.00 per square foot of gross leasable commercial space
owned by the Partnership, or approximately $2.2 million. During 1996, the Metro
Centre Office Building was foreclosed on by the lender. Accordingly, the
replacement reserve requirement at the remaining residential properties is
approximately $2.1 million. In the event expenditures are made from these
reserves, operating revenue shall be allocated to such reserves to the extent
necessary to maintain the foregoing level. Reserves, including unrestricted cash
and cash equivalents, tenant security deposits and investments, totaling
approximately $10.4 million at December 31, 1996, exceeded the Partnership's
reserve requirements of approximately $2.1 million.
Debt Maturities in 1995
Approximately $14.3 million of non-recourse mortgage debt secured by the
Foothill Place Apartments and the Chimney Hill Apartments matured in 1994. The
Partnership exercised its option to extend the debt maturities until September
1995, by paying a 1% loan extension fee of $143,000 to the current lender as
provided for in the loan agreement. In September 1995, the Partnership signed
an extension agreement extending the maturity date of the notes to June 1997.
These properties and five of the Partnership's other properties were refinanced
in December of 1995 (See "Note C" in the Notes to Consolidated Financial
Statements in "Item 8").
Prior to March 1995, the Nob Hill Villa Apartments secured two non-recourse
mortgage notes totaling approximately $5.8 million. One of the notes, a $3.8
million first lien mortgage, was scheduled to mature in November 1995. In March
1995, the General Partner refinanced these mortgage notes by obtaining a new
mortgage note of approximately $7.5 million secured by Nob Hill Villa. Under
the terms of the refinancing agreement, the new mortgage note bears interest at
9.2% and matures in April 2005.
Sale and Disposition of Real Estate
In August 1994, the Partnership sold the Denbigh Woods Apartments. In
connection with the sale, the Partnership accepted a $1.2 million wrap note
receivable and received net sales proceeds of approximately $900,000. The wrap
note receivable bears interest at an annual rate of 9%, requires monthly
payments of principal and interest totaling $11,814 and matures in March 1996.
The Partnership has negotiated with the purchaser to extend the wrap note until
April 1997. The Partnership remains obligated under two underlying first-liens
totaling approximately $1.3 million which are secured by the Denbigh Woods
Apartments. Pursuant to the sale contract the Partnership received from the
purchaser, a capital improvement escrow totaling $150,000. Upon completion of
certain repairs and capital improvements at the property, the Partnership will
reimburse the purchaser from the escrow account. At December 31, 1996, the
Partnership held a reserve balance of approximately $44,000. The Partnership
recognized a gain of $884,000 on this sale during 1994.
In January 1991, the Partnership suspended scheduled debt service on the HUD
financed loan secured by the Westwood Apartments because cash flow from the
property's operations did not support the scheduled payments, and because the
property was leveraged in excess of its economic value. The Partnership
submitted two workout proposals to HUD; however, HUD rejected both proposals.
In 1993, HUD notified the Partnership that it intended to foreclose on the
Westwood Apartments, and the General Partner informed HUD that it would
cooperate with HUD's planned sale of the property. In September 1994, the
property was foreclosed upon by HUD. The Partnership recognized a gain of
approximately $5.4 million on the disposition of the real estate and an
extraordinary gain of $426,000 on extinguishment of the related debt.
Greenbriar Associates Chapter 11 Proceeding
In December 1990, the Partnership ceased debt service on the note and interest
payable of $12.5 million secured by Greenbriar Apartments because the property's
operations did not support scheduled debt service payments. As a result of the
Partnership's nonperformance under the terms of the mortgage note, the lien-
holder moved to foreclose on the property in October 1991. In December 1991,
Greenbriar Associates, a wholly-owned limited partnership that holds title to
the Greenbriar Apartments, filed for Chapter 11 protection. In March 1994, the
General Partner, on behalf of Greenbriar Associates, executed a deed-in-lieu of
foreclosure after Greenbriar Associates was unable to obtain the debt
concessions proposed in its reorganization plan. In July 1994, the property was
transferred to the lienholder resulting in a net gain of approximately $9.5
million on the property disposition and extinguishment of debt.
Other Income
The Partnership (and simultaneously 15 affiliated partnerships) entered claims
in Southmark Corporation's Chapter 11 bankruptcy proceeding in 1991. These
claims related to Southmark Corporation's activities while it exercised control
(directly, or indirectly through its affiliates) over the Partnership. The
Bankruptcy Court set the Partnership's and the affiliated partnerships' allowed
claim at an aggregate $11 million. In March 1994, the Partnership received
3,143 shares of Southmark Corporation Redeemable Series A Preferred Stock and
22,985 shares of Southmark Corporation New Common Stock, with an aggregate
market value on the date of receipt of $23,000, and $172,000 in cash,
representing the Partnership's share of the recovery, based on its pro rata
share of the claims filed.
In July 1994, the Partnership was able to recover $199,000, representing the
refund of a repair escrow relating to a property that was previously sold. The
recovery has been recorded as other income in the accompanying statement of
operations.
Subsequent Event
Subsequent to December 31, 1996, the Partnership declared distributions to the
partners of approximately $550,000 attributable to cash flow from operations and
approximately $903,000 representing a return of capital.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CONSOLIDATED CAPITAL PROPERTIES IV
LIST OF FINANCIAL STATEMENTS
Reports of Independent Auditors
Consolidated Balance Sheets - December 31, 1996 and 1995
Consolidated Statements of Operations - Years ended December 31, 1996,
1995 and 1994
Consolidated Statements of Changes in Partners' Deficit - Years ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows - Years ended December 31, 1996,
1995 and 1994
Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Consolidated Capital Properties IV
We have audited the accompanying consolidated balance sheets of Consolidated
Capital Properties IV as of December 31, 1996 and 1995, and the related
consolidated statements of operations, partners' deficit and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Partnership's management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Consolidated Capital Properties IV as of December 31, 1996 and 1995, and the
consolidated results of its operations and its cash flows for the years then
ended, in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Greenville, South Carolina
February 3, 1997
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Consolidated Capital Properties IV:
We have audited the accompanying consolidated statements of operations, partners
deficit, and cash flows of Consolidated Capital Properties IV (a California
limited partnership) for the year ended December 31, 1994. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations, changes in partners' deficit,
and cash flows of Consolidated Capital Properties IV for the year ended December
31, 1994, in conformity with generally accepted accounting principles.
/s/ Arthur Andersen, LLP
Dallas, Texas
March 23, 1995
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
Years Ended December 31,
1996 1995
Assets
Cash and cash equivalents:
Unrestricted $ 9,239 $ 10,865
Restricted-tenant security deposits 648 665
Investments 515 2,637
Prepaid expenses and other assets 6,124 6,900
Note and interest receivable 1,124 1,155
Investment properties:
Land 12,491 12,868
Buildings and related personal property 115,637 112,350
128,128 125,218
Less accumulated depreciation (91,934) (86,294)
36,194 38,924
$ 53,844 $ 61,146
Liabilities and Partners' Deficit
Liabilities
Accounts payable and accrued expenses $ 2,853 $ 3,443
Notes and interest payable 72,233 76,336
75,086 79,779
Partners' Deficit
General partners (6,089) (5,951)
Limited partners (342,783 units outstanding in
(1996 and 1995, respectively) (15,153) (12,682)
(21,242) (18,633)
$ 53,844 $ 61,146
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1996 1995 1994
Revenues:
Rental income $27,413 $26,354 $27,087
Interest and other income 724 1,114 818
Total revenues 28,137 27,468 27,905
Expenses:
Property operations 14,593 13,805 16,092
Depreciation and amortization 7,048 6,673 7,328
Interest 6,052 6,544 8,025
Administrative 1,317 1,486 880
Write down of investment property -- 200 --
Total expenses 29,010 28,708 32,325
Loss from operations (873) (1,240) (4,420)
Gain on disposition of real estate -- -- 9,523
Income (loss) before extraordinary
items (873) (1,240) 5,103
Extraordinary (losses) gains, net from
refinancing of debt (90) 43 --
Extraordinary gains from extinguishment
of debt -- -- 6,614
Extraordinary gain on foreclosure 2,999 -- --
Net income (loss) $ 2,036 $(1,197) $11,717
Net income (loss) per weighted average
limited partnership unit:
Income (loss) before extraordinary
items $ (2.45) $ (3.47) $ 14.29
Extraordinary items 8.15 .12 18.52
Net income(loss) per weighted average
limited partnership unit $ 5.70 $ (3.35) $ 32.81
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIT
(in thousands, except unit data)
Limited Total
Partnership General Limited Partners'
Units Partner Partners (Deficit)
Original capital contributions 343,106 $ 1 $171,553 $171,554
Partners' deficit
at December 31, 1993 342,839 $(6,335) $(21,897) $(28,232)
Abandonment of limited
partnership units (56) -- -- --
Net income for the year ended
December 31, 1994 -- 469 11,248 11,717
Partners' deficit
at December 31, 1994 342,783 (5,866) (10,649) (16,515)
Net loss for the year ended
December 31, 1995 -- (48) (1,149) (1,197)
Distributions paid -- (37) (884) (921)
Partners' deficit at December
31, 1995 342,783 (5,951) (12,682) (18,633)
Net income for the year ended
December 31, 1996 -- 81 1,955 2,036
Distributions paid -- (219) (4,426) (4,645)
Partners' deficit at December
31, 1996 342,783 $(6,089) $(15,153) $(21,242)
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
1996 1995 1994
Cash flows from operating activities:
Net income (loss) $ 2,036 $ (1,197) $11,717
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization of loan
costs, mortgage discounts and lease commissions 7,327 6,952 7,920
Loss (gain) on disposition of investment property 101 -- (9,523)
Write down of investment property -- 200 --
Casualty gains -- (185) --
Extraordinary losses (gains) on refinancing 90 (43) --
Extraordinary gains from extinguishment of debt -- -- (6,614)
Extraordinary gains on foreclosure (2,999) -- --
Southmark stock receipt -- -- (23)
Change in accounts:
Restricted cash 5 (327) 147
Interest on note receivable (8) -- --
Prepaid expenses and other assets 757 (561) (196)
Interest payable 6 85 --
Accounts payable and accrued expenses (505) 941 (93)
Net cash provided by operating activities 6,810 5,865 3,335
Cash flows from investing activities:
Property improvements and replacements (4,945) (3,325) (1,708)
Purchase of investments -- (7,176) (1,705)
Proceeds from sale of investments 2,122 8,882 250
Proceeds from sale of real estate -- -- 881
Receipt of capital improvement escrow on sold real
estate -- -- 150
Collections on notes receivable 39 33 11
Deposits to restricted escrows (2,403) (2,323) --
Receipts from restricted escrows 2,259 1,138 --
Net insurance proceeds from casualty gain -- 185 --
Net cash used in investing activities (2,928) (2,586) (2,121)
Cash flows from financing activities:
Payments on notes payable (497) (749) (783)
Repayment of notes payable (12,878) (37,106) --
Proceeds from long-term borrowings 12,800 43,530 --
Prepayment penalties (9) (179) --
Loan costs paid (279) (1,325) --
Distributions to Partners (4,645) (921) --
Net cash (used in) provided by
financing activities (5,508) 3,250 (783)
Net (decrease) increase in cash and cash equivalents (1,626) 6,529 431
Cash and cash equivalents at beginning of year 10,865 4,336 3,905
Cash and cash equivalents at end of year $ 9,239 $10,865 $ 4,336
Supplemental Disclosures of Cash Flow Information and Non-Cash Activities:
Cash paid for interest was approximately $5,750,000, $6,154,000 and $6,651,000
for the years ended December 31, 1996, 1995, and 1994, respectively.
Foreclosure
In February of 1996, Metro Centre Office Building was foreclosed upon by the
lender. In connection with this foreclosure, the following accounts were
adjusted by the amounts noted below (in thousands).
1996
Tenant security deposits remitted to the lender $ (12)
Prepaid expenses and other assets (5)
Buildings and personal property (1,605)
Accumulated depreciation 1,079
Accounts payable and accrued expenses 24
Interest payable 1,021
Notes payable 2,497
Extraordinary gain on foreclosure of investment property (2,999)
The net book amount of the property approximated its fair value at the date of
foreclosure.
See Accompanying Notes to Consolidated Financial Statements
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Consolidated Capital Properties IV (the "Partnership" or "Registrant"), a
California limited partnership, was formed on September 22, 1981, to acquire and
operate commercial and residential properties. Partnership operations commenced
February 16, 1982, the date on which impound requirements were met. As of
December 31, 1996, the Partnership operates 17 residential properties located in
or near major urban areas in the United States.
Upon the Partnership's formation in 1981, Consolidated Capital Equities
Corporation ("CCEC"), a Colorado corporation, was the corporate general partner
and Consolidated Capital Management Company ("CCMC"), a California general
partnership, was the non-corporate general partner. In 1988, through a series
of transactions, Southmark Corporation ("Southmark") acquired controlling
interest in CCEC. In December 1988, CCEC filed for reorganization under Chapter
11 of the United States Bankruptcy Code. In 1990, as part of CCEC's
reorganization plan, CEI acquired CCEC's general partner interests in the
Partnership and in 15 other affiliated public limited partnerships (the
"Affiliated Partnerships") and CEI replaced CCEC as managing general partner in
all 16 partnerships. The selection of CEI as the sole managing general partner
was approved by a majority of the limited partners in the Partnership and in
each of the Affiliated Partnerships pursuant to a solicitation of the Limited
Partners dated August 10, 1990. As part of this solicitation, the Limited
Partners also approved an amendment to the Partnership Agreement to limit
changes of control of the Partnership, and the conversion of CCMC from a general
partner to a limited partner, thereby leaving CEI as the sole general partner of
the Partnership.
All of CEI's outstanding stock is owned by GII Realty, Inc. In December 1994,
the parent of GII Realty, Inc., entered into a transaction (the "Insignia
Transaction") in which an affiliate of Insignia acquired an option (exercisable
in whole or in part from time to time) to purchase all of the stock of GII
Realty, Inc. and, pursuant to a partial exercise of such option, acquired 50.5%
of that stock. As a part of the Insignia Transaction, the Insignia affiliate
also acquired all of the outstanding stock of Partnership Services, Inc., an
asset management entity, and a subsidiary of Insignia acquired all of the
outstanding stock of Coventry Properties, Inc., a property management entity.
In addition, confidentiality, non-competition, and standstill arrangements were
entered into between certain of the parties. Those arrangements, among other
things, prohibit GII Realty's former sole shareholder from purchasing
Partnership Units for a period of three years. On October 24, 1995, the
Insignia affiliate exercised the remaining portion of its option to purchase all
of the remaining outstanding capital stock of GII Realty, Inc. At December 31,
1996, Insignia and Affiliates own a total of 65,651 Units of the Partnership.
The principal place of business for the Partnership and for the General Partner
is One Insignia Financial Plaza, Greenville, South Carolina 29602.
Consolidation
The consolidated financial statements include the Partnership's equity interest
in a joint-venture partnership which owns South Port Apartments. No minority
interest has been reflected for the joint venture partnership because minority
interests are limited to the extent of their equity capital, and losses in
excess of the minority interest equity capital are charged against the
Partnership's interest.
The Partnership's consolidated financial statements include the accounts of
certain majority-owned limited partnerships and the Partnership's majority
interest in a joint venture partnership. All intercompany transactions have been
eliminated.
Cash and Cash Equivalents:
Unrestricted Cash
Unrestricted cash and cash equivalents include cash on hand and in banks, demand
deposits, money market funds, and certificates of deposits with original
maturities of less than ninety days.
See "Notes C and I" for supplemental information with respect to noncash
investing and financing activity.
Restricted cash - tenant security deposits
The Partnership requires security deposits from new lessees for the duration of
the lease and such deposits are considered restricted cash. Deposits
are refunded when the tenant vacates the apartment, provided the tenant has not
damaged its space and is current on its rental payments.
Restricted assets
The Partnership maintained cash related to its U.S. Housing and Urban
Development ("HUD") property in unrestricted cash of approximately $801,000 at
December 31, 1995. Due to refinancing activities in 1996, as discussed in "Note
C", there are no remaining properties secured by HUD loans at December 31, 1996.
The Partnership maintained the following restricted cash balances in Prepaid
expenses and other assets (amounts in thousands):
As of December 31,
1996 1995
Tax and Insurance Escrows $1,017 $1,235
Repair and Maintenance Escrows 2,910 2,766
Investments in Real Estate
Prior to 1996, investment properties were generally stated at the lower of cost
or estimated fair value, which was determined using the net operating income of
the investment property capitalized at a rate deemed reasonable for the type of
property, adjusted for market conditions, physical condition of the property and
other factors to assess whether any permanent impairment in value has occurred.
During 1996, the Partnership adopted "FASB Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. The impairment loss is measured by comparing the fair value of
the asset to its carrying amount. The effect of the adoption was not material.
Depreciation
Buildings, improvements and furniture and fixtures are depreciated using the
straight-line method over the estimated useful lives of the assets, ranging from
4 to 40 years.
Investments
In 1994, the Partnership adopted "Statements of Financial Accounting Standards
No. 115, Accounting for Certain Investments in Debt and Equity Securities."
Investments consisting primarily of U.S. Treasury Notes with original maturities
of more than ninety days, are considered to be held-to-maturity securities. As
the Investments' fair values approximate their cost, any unrealized gains or
losses are immaterial and therefore, have not been recorded in the accompanying
financial statements. The cost of Investments sold is determined using the
specific identification method.
The Investments mature as follows (dollar amounts in thousands):
Description Cost Maturity
U.S. Treasury Notes 492 January 1997
Equity Securities 23 N/A
$ 515
Investments at December 31, 1995, consisted of approximately $2,614,000 in U.S.
Treasury Notes and approximately $23,000 in Equity Securities.
Rental Income
The Partnership leases its residential properties under short-term operating
leases. Lease terms are generally one year or less in duration. The Partnership
owned one commercial office building (Metro Centre Office Building) which was
foreclosed upon in 1996 (See "Note C").
Deferred Loan Fees
Deferred loan fees are amortized using the straight-line method over the lives
of the related mortgage notes. Unamortized deferred fees are included in
prepaid expenses and other assets.
Lease Commissions
Lease commissions are capitalized and amortized using the straight-line method
over the life of the applicable lease. Unamortized lease commissions are
included in prepaid expenses and other assets.
Income Taxes
The Partnership is classified as a partnership for Federal income tax purposes.
Accordingly, no provision for income taxes is made in the financial statements
of the Partnership. Taxable income or loss of the Partnership is reported in
the income tax returns of its partners.
The tax basis of the Partnership's assets and liabilities is approximately $27.6
million greater than the assets and liabilities as reported in the financial
statements at December 31, 1996.
Fair Value
In 1995, the Partnership implemented "Statements of Financial Accounting
Standards No. 107, Disclosure about Fair Value of Financial Instruments," which
requires disclosure of fair value information about financial instruments for
which it is practicable to estimate that value. The carrying amount of the
Partnership's cash and cash equivalents approximates fair value due to their
short-term maturities. The Partnership estimates the fair value of its fixed
rate mortgages by discounted cash flow analysis based on estimated borrowing
rates currently available to the Partnership.
Allocation of Net Income and Net Loss
The Partnership Agreement provides for net losses and distributions of
distributable cash from operations to be allocated, generally 96% to the Limited
Partners and 4% to the general partner (inclusive of the special limited
partners).
Net Income (Loss) Per Weighted Average Limited Partnership Unit
Net income (loss) per weighted average Limited Partnership Unit is computed by
dividing net income (loss) allocated to the Limited Partners by the weighted
average number of Units outstanding. Per Unit information has been computed
based on weighted average Units outstanding of 342,783 for the years ended
December 31, 1996 and 1995, respectively, and 342,819 for the year ended
December 31, 1994.
Reclassifications
Certain reclassifications have been made to the 1995 and 1994 information to
conform to the 1996 presentation.
Advertising Costs
Advertising costs of approximately $375,000, $321,000, and $375,000 in 1996,
1995 and 1994, respectively, are charged to expenses as incurred and are
included in operating expenses.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
NOTE B - RELATED PARTY TRANSACTIONS
The Partnership has no employees and is dependent on the General Partner and
affiliates of Insignia for the management and administration of all of the
partnership activities, as provided in the Partnership Agreement.
The Partnership has paid the property management fees noted below based on
collected gross rental revenues ("Rental Revenues") for property management
services in each of the years ended December 31, 1996, 1995 and 1994,
respectively. For the year ended December 31, 1994, a portion of such property
management fees equal to 4% of Rental Revenues was paid to the property
management companies performing day-to-day property management services and a
portion equal to 1% of Rental Revenues was paid to Partnership Services, Inc.
("PSI") or its predecessor for advisory services related to day-to-day property
operations. During 1994, Coventry Properties, Inc. ("Coventry"), an affiliate
of the General Partner, provided day-to-day property management responsibilities
for six of the Partnership's properties. In late December 1994, an affiliate of
Insignia assumed day-to-day property management responsibilities for fifteen of
the Partnership's eighteen properties. On February 15, 1995, an affiliate of
Insignia assumed day-to-day property management responsibilities for Lake Forest
and Post Ridge Apartments. On February 7, 1996, the Metro Centre Office
Building was foreclosed upon by the lender and affiliates of Insignia ceased to
manage the property. South Port Apartments is currently managed by an
unaffiliated management company.
Property management fees of approximately $1,316,000 and $1,223,000 were paid to
affiliates of the General Partner for the years ended December 31, 1996, and
1995, respectively. Fees paid to PSI and Coventry for the year ended December
31, 1994, were approximately $570,000. These fees are included in operating
expenses.
The Limited Partnership Agreement ("Partnership Agreement") provides for a
special management fee equal to 9% of the total distributions made to the
limited partners from cash flow provided by operations to be paid to the General
Partner for executive and administrative management services. The Partnership
paid approximately $392,000 and $80,000 under this provision of the Partnership
Agreement to affiliates of the General Partner for the years ended December 31,
1996 and 1995, respectively. No such fees were paid or accrued in 1994. These
fees are included in administration expenses.
The Partnership Agreement also provides for reimbursement to the General Partner
and its affiliates for costs incurred in connection with the administration of
Partnership activities. Reimbursements for services of affiliates of
approximately $605,000 and $645,000 were paid to the General Partner and
affiliates for the years ended December 31, 1996, and 1995, respectively. These
reimbursements are primarily included in administrative expenses. The General
Partner and its affiliates, which includes Coventry for the year ended December
31, 1994, received approximately $505,000 of expense reimbursements.
Included in reimbursements for services of affiliates is approximately $32,000
and $11,000 for 1996 and 1995, respectively, related to construction oversight
costs incurred in conjunction with capital improvements at several of the
Partnership's properties.
During the year ended December 31, 1995, the Partnership incurred approximately
$42,000 of expense reimbursements to an affiliate of the General Partner related
to evaluating the feasibility of refinancing the debt on several of the
Partnership's investment properties. The Partnership has also paid this
affiliate approximately $22,000 and $123,000 in 1996 and 1995, respectively, for
loan costs which were capitalized and included in "Prepaid expenses and other
assets" on the Consolidated Balance Sheet. These loan costs related to the
refinancing of two of the Partnership's properties in 1996 and eight properties
in 1995 (See "Note C").
In July 1995, the Partnership began insuring its properties under a master
policy through an agency and insurer unaffiliated with the General Partner. An
affiliate of the General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the current year's master policy. The current agent
assumed the financial obligations to the affiliate of the General Partner, who
receives payment on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of
the General Partner by virtue of the agent's obligations is not significant.
On January 20, 1995, an affiliate of the General Partner, Insignia CCP IV
Acquisition, L.L.C., closed an offer to purchase Units (the "Tender Offer") for
a cash price of $60.00 per Unit to Limited Partners of record as of December 15,
1994. Approximately 3,370 Limited Partners holding 64,343 Units (18.77% of total
Units) accepted the Tender Offer and sold their Units to Insignia CCP IV
Acquisition, L.L.C. effective January 20, 1995, for an aggregate sales price of
approximately $3.9 million.
NOTE C - NOTES AND INTEREST PAYABLE AND RECEIVABLE
Notes Payable
Principal Principal
Balance At Stated Balance
December 31, Interest Period Maturity Due At
Property 1996 Rate Amortized Date Maturity
(dollar amounts in thousands)
The Apartments $ 3,488 8.34% 7 years 9/00 $ 3,244
Arbour East Apartments 5,650 6.95% 10 years 12/05 5,650
Briar Bay Racquet Club 3,500 6.95% 10 years 12/05 3,500
Chimney Hills Apartments 5,400 6.95% 10 years 12/05 5,400
Citadel Apartments 4,830 8.38% 7 years 10/00 4,488
Citadel Village Apartments 2,450 6.95% 10 years 12/05 2,450
Foothill Place Apartments 10,100 6.95% 10 years 12/05 10,100
Knollwood Apartments 6,780 6.95% 10 years 12/05 6,780
Lake Forest Apartments 4,700 7.33% 7 years 11/03 4,700
Nob Hill Villa Apartments 7,361 9.20% 10 years 4/05 6,250
Overlook Apartments 1,878 10.50% 25 years 12/98 1,817
Post Ridge Apartments 4,050 7.33% 7 years 11/03 4,050
Rivers Edge Apartments 2,036 8.40% 7 years 9/00 1,895
South Port Apartments 3,464 10.85% 15 years 7/01 3,167
Stratford Place Apartments 2,657 8.65% 25 years 9/00 2,478
Village East Apartments 2,150 6.95% 10 years 12/05 2,150
$70,494 $68,119
The notes payable represent borrowings on the properties purchased by the
Partnership. The notes are non-recourse, and are collateralized by deeds of
trust on the investment properties. The notes mature between 1998 and 2005 and
bear interest at rates ranging from 6.95% to 10.85%.
The estimated fair value of the Partnership's aggregate debt is approximately
$72.5 million. This estimate represents a general approximation of possible
value and is not necessarily indicative of the amounts the Partnership might pay
in actual market transactions.
Summary of Maturities Subsequent to December 31, 1996
Future annual principal payments required under the terms of mortgage notes
payable are as follows (amounts in thousands):
Years Ended December 31,
1997 $ 415
1998 2,974
1999 449
2000 12,509
2001 3,356
Thereafter 52,060
Total $71,763(a)
(a) This table includes the underlying mortgage debt related to the Denbigh
Village Apartments as discussed below.
Approximately $2.5 million of non-recourse mortgage debt secured by the Metro
Centre Office Building, located in Southern California, matured July 1, 1995.
The property historically had difficulty making its scheduled debt service
payments and, since 1985, the property had made quarterly cash flow payments
pursuant to a modified and restructured loan agreement, however, no payments
were made in 1995. Given existing economic conditions in Southern California,
property operations were not expected to improve sufficiently to enable the
Partnership to refinance the existing indebtedness under prevailing market
conditions. In September 1995, a Notice of Default and Election to Sell Under
Deed of Trust was filed by the lender. The Partnership did not contest this
foreclosure action and the property was foreclosed upon on February 7, 1996,
resulting in an extraordinary gain on foreclosure of approximately $2,999,000 to
the Partnership.
In March of 1995, the Partnership refinanced two non-recourse mortgage notes
totalling approximately $5.8 million which were secured by the Nob Hill Villa
Apartments. Under the terms of the refinancing agreement, the new $7.5 million
mortgage note bears interest at 9.2% and matures in April 2005. As a result of
the refinancing, the Partnership realized a $250,000 discount on the second
mortgage which resulted in an extraordinary gain on refinancing.
Total capitalized loan costs incurred in 1995 for the refinancing totaled
approximately $304,000 and are being amortized over the life of the loan.
Restricted Escrows required under the Nob Hill Villa refinancing are as follows:
CAPITAL IMPROVEMENT RESERVES - At the time of the refinancing of the mortgage
note payable, $219,000 of the proceeds were designated for "Capital Improvement
Escrows" for certain capital improvements. At December 31, 1996, the escrow
balance is approximately $29,000.
In December of 1995, the Partnership refinanced approximately $31.5 million of
mortgage indebtedness which encumbers the Arbour East, Briar Bay, Chimney Hills,
Citadel Village, Foothill Place, Knollwood and Village East Apartments. As a
result of the refinancings, the Partnership paid approximately $179,000 in
prepayment penalties and wrote-off approximately $28,000 in unamortized loan
costs. As a result, the Partnership recorded an extraordinary loss from the
refinancing of approximately $207,000. The new mortgage indebtedness of
$36,030,000 carries a stated interest rate of 6.95%, with interest-only payments
and a balloon payment due December 1, 2005.
Total capitalized loan costs incurred in December 1995, for the seven
refinancings totaled approximately $1,002,000 and are being amortized over the
life of the respective loans.
Restricted Escrows required under the December 1995, refinancings are as
follows:
CAPITAL IMPROVEMENT RESERVES - At the time of the refinancings of the
mortgage notes payable, $1,047,000 of the proceeds were designated for "Capital
Improvement Escrows" for certain capital improvements. At December 31,
1996, the balance of these reserves is approximately $479,000. In 1996, an
additional $97,500 was designated for "Capital Improvement Escrows" for
Knollwood.
REPLACEMENT RESERVE ACCOUNT - In addition to the Capital Improvement
Reserves, Replacement Reserve Accounts of $507,000, which ranged from $191 to
$325 per unit, were established with the refinancing proceeds for the refinanced
properties. These funds were established to cover necessary repairs and
replacements of existing improvements. At December 31, 1996, the balance of
these reserves is approximately $855,000.
In February of 1996, the $484,000 balance of the first-lien note secured by the
Point West Apartments, with an original maturity of May 2001, was paid off to
retire debt with interest rates higher than the current market rate. As a
result of the note payoff, the Partnership paid approximately $5,000 in
prepayment penalties which resulted in an extraordinary loss on refinancing.
Prior to November 1996, Lake Forest Apartments ("Lake Forest") secured a
mortgage note guaranteed by the U.S. Department of Housing and Urban Development
("HUD") totalling approximately $4.1 million. In November 1996, the Partnership
refinanced this mortgage note by obtaining a new mortgage note of approximately
$4.7 million secured by Lake Forest. Under the terms of the refinancing
agreement, the new mortgage note bears interest at 7.33% and matures in November
2003. As a result of the refinancing, the Partnership paid approximately $4,000
in prepayment penalties which resulted in an extraordinary loss on refinancing.
Total capitalized loan costs incurred in 1996 for Lake Forest totaled
approximately $133,000 and are being amortized over the life of the loan.
Restricted escrows established at the Lake Forest refinancing are as follows:
CAPITAL IMPROVEMENT RESERVES - At the time of the refinancing of the mortgage
note payable, $555,000 of the proceeds were designated for "Capital Improvement
Escrows" for certain capital improvements.
The Post Ridge Apartments ("Post Ridge") formerly secured a mortgage note
totalling approximately $4.2 million, which was guaranteed by HUD. Operating
cash flow from Post Ridge did not support its scheduled debt service payments.
As a result, in January 1991, the Partnership suspended scheduled debt service
for Post Ridge. From 1991 through March of 1995, the Partnership remitted
excess cash flow from the properties' operations as debt service. On March 28,
1995, this debt was sold to an unaffiliated third party. Accordingly, since the
closing of the sale on May 8, 1995, this debt is no longer regulated by HUD. In
September of 1996, the Partnership entered into an interim financing arrangement
and refinanced the non-recourse mortgage note of approximately $4.2 million
which was secured by Post Ridge Apartments. Under the terms of the interim
financing arrangement, the new $4.1 million mortgage note bore interest at 8%
through October 31, 1996, and from November 1, 1996, through the maturity
date of November 15, 1996, the note bore interest at a rate equal to 2.5% plus
the average one month LIBOR (7.875%). As a result of this refinancing, the
Partnership realized a $16,000 gain on the forgiveness of accrued interest, a
$61,000 gain on the forgiveness of advances from prior years, and a $158,000
loss on the write-off of loan costs which resulted in a net extraordinary loss
on refinancing of $81,000. In November 1996, the General Partner obtained
permanent financing by securing a new mortgage note of approximately $4.1
million collateralized by Post Ridge. Under the terms of the agreement this
mortgage note bears interest at 7.33% and matures in November 2003. Total
capitalized loan costs incurred in 1996 for Post Ridge totaled approximately
$122,000 and are being amortized over the life of the loan.
Restricted escrows established at the Post Ridge refinancing are as follows:
CAPITAL IMPROVEMENT RESERVES - At the time of the refinancing, approximately
$384,000 of the proceeds were designated for "Capital Improvement Escrows" for
certain capital improvements.
Note Receivable on Sold Property:
As of December 31, 1996
Underlying
Note Mortgage
Collateral Property Receivable Debt
(in thousands)
Denbigh Village
Apartment complex - 138 units
Newport News, Virginia $ 1,116 $ 1,268
When Denbigh Village Apartments was sold in August 1994, the Partnership
accepted a promissory note which matured in March 1996. In March 1996, an
extension, under the existing terms, was negotiated to extend the note until
April 1997. The estimated value of the note receivable approximates its
carrying value.
Denbigh Village Apartments secures two underlying mortgage notes. The balance
of the first mortgage is approximately $542,000 at December 31, 1996, has a
stated interest rate of 9.5% and matures in December 2002. The balance of the
second mortgage is approximately $726,000, has a stated interest rate of 9.5%
and matures in December of 1998.
The estimated fair value of the Partnership's underlying mortgage debt secured
by the Denbigh Village Apartments is approximately $1.4 million. This estimate
represents a general approximation of possible value and is not necessarily
indicative of the amounts the Partnership might pay in actual market
transactions.
NOTE D - CHAPTER 11 PROCEEDING
Greenbriar Associates
In December 1990, the Partnership ceased debt service on the note and interest
payable secured by Greenbriar Apartments because the property's operations did
not support scheduled debt service payments. As a result of the Partnership's
non-performance under the terms of the mortgage note, the lien-holder moved to
foreclose on the property in October 1991. In December 1991, Greenbriar
Associates, a wholly-owned limited partnership that holds title to the
Greenbriar Apartments, filed for Chapter 11 protection. Property management
services for the property were transferred to a management company employed by
the lender in December 1991. In March 1994, the General Partner, on behalf of
Greenbriar Associates, executed a deed-in-lieu of foreclosure after Greenbriar
Associates was unable to obtain the debt concessions proposed in its
reorganization plan. In July 1994, the property was transferred to the
lienholder resulting in a net gain of approximately $9.5 million on the property
disposition and extinguishment of debt.
The 1994 results of operations for Greenbriar Associates are summarized in the
following table (in thousands):
For the Period
From January 1 to
July 15, 1994
Rental revenues $ 1,322
Costs and expenses:
Property operations 1,278
Depreciation 364
Interest 538
Total costs and expenses 2,180
Net loss $ (858)
NOTE E - COMMITMENTS
The Partnership is required by the Partnership Agreement to maintain working
capital reserves for contingencies. On September 25, 1995, the partners were
proxied and approved a reduction of the capital reserve requirements to $500 per
apartment unit and $1.00 per square foot of gross leasable commercial space
owned by the Partnership, or approximately $2.2 million. During 1996, the Metro
Centre Office Building was foreclosed on by the lender. Accordingly, the
replacement reserve requirement at the remaining residential properties was
reduced to approximately $2.1 million. In the event expenditures are made from
these reserves, operating revenue shall be allocated to such reserves to the
extent necessary to maintain the foregoing level. Reserves, including
unrestricted cash and cash equivalents, tenant security deposits and
investments, totaling approximately $10.4 million at December 31, 1996, exceeded
the Partnership's reserve requirements of approximately $2.1 million.
NOTE F - OTHER INCOME
In 1991, the Partnership (and simultaneously other affiliated partnerships)
entered claims in the Southmark Corporation's Chapter 11 bankruptcy proceeding.
These claims related to the Southmark Corporation's activities while it
exercised control (directly, or indirectly through its affiliates) over the
Partnership. The Bankruptcy Court set the Partnership's and the other
affiliated partnerships' allowed claim at an aggregate $11 million. In March
1994, the Partnership received 3,143 shares of Southmark Corporation Redeemable
Series A Preferred Stock and 22,985 shares of Southmark Corporation New Common
Stock with an aggregate market value on the date of receipt of approximately
$23,000 and $172,000 in cash, representing the Partnership's share of the
recovery, based on its pro rata share of the claims filed.
In July 1994, the Partnership was able to recover approximately $199,000,
representing the refund of a repair escrow relating to a property that was
previously sold. The recovery has been recorded as other income in the
accompanying statement of operations.
NOTE G - ABANDONED LIMITED PARTNERSHIP UNITS
For the year ended December 31, 1994, the number of Limited Partnership Units
decreased by 56 units, due to limited partners abandoning their units. In
abandoning Limited Partnership Units, a limited partner relinquishes all right,
title and interest in the Partnership as of the date of abandonment. The net
loss per weighted average Limited Partnership Unit in the accompanying
Statements of Operations is calculated based on weighted average Units
outstanding during the period.
NOTE H - SALE OF REAL ESTATE
In August 1994, the Partnership sold the Denbigh Woods Apartments. In
connection with the sale, the Partnership accepted a $1.2 million wrap-note
receivable and received net sales proceeds of $881,000. The wrap-note
receivable accrued interest at an annual rate of 9%, required monthly payments
of principal and interest totalling $11,814, and matured in March 1996. The
Partnership negotiated with the purchaser to extend the note, at the same
interest rate, until April 1997. Since the wrap-around promissory note is
subordinate and inferior to the first-lien mortgages, the Partnership remains
obligated under two underlying first-lien mortgages totalling approximately $1.3
million which are secured by the Denbigh Woods Apartments. Pursuant to the sale
contract, the Partnership received, from the purchaser, a capital improvement
escrow totalling $150,000. Upon completion of certain repairs and capital
improvements at the property, the Partnership will reimburse the
purchaser from the escrow account. At December 31, 1996, the remaining capital
improvement escrow held by the partnership was approximately $44,000. The
Partnership recognized a gain of $884,000 on the sale during the third quarter
of 1994. The sales transaction is summarized in the following table (in
thousands):
1994
Sales Value:
Cash proceeds received $ 881
Wrap-note receivable 1,200
Total sales value 2,081
Cost of sales:
Net real estate (a) (1,188)
Other liabilities, net of other assets (9)
Total costs of sales (1,197)
Gain on sale of real estate $ 884
(a)Real estate at cost, net of accumulated depreciation of approximately $1.7
million.
The holder of the underlying first-lien mortgages did not pre-approve the sale
and, as a result, since the sale in 1994 the Partnership has been in technical
default on the two first-lien mortgages. Although the holder of the mortgages
has the right to accelerate the notes at any time, no such intentions have been
indicated by the holder of the mortgages.
NOTE I - DISPOSITION OF REAL ESTATE
In February 1996, Metro Centre Office Building was foreclosed upon by the
lender. The 1996, 1995 and 1994 results of operations for Metro Centre Office
Building are summarized in the following table (in thousands):
For the Period
From January 1 to
February 7, 1996 1995 1994
(in thousands)
Revenues $ 22 $ 294 $ 308
(Loss) from continuing operations (9) (160) (372)
Net income (loss) 2,991 (160) (372)
Income (loss) per limited
Partnership Unit $ 8.38 $(0.46) $(1.04)
In January 1991, the Partnership suspended the scheduled debt service on the
HUD-financed loan secured by the Westwood Apartments because cash flow from the
property's operations did not support the scheduled payments and because the
property was leveraged in excess of its economic value. The Partnership
submitted two workout proposals to HUD, however, HUD rejected both proposals.
In 1993, HUD notified the Partnership that it intended to foreclose on the
Westwood Apartments and in September 1994, the property was foreclosed upon,
with the Partnership recognizing a gain of approximately $5.4 million on the
disposition of the real estate and an extraordinary gain of $426,000 on
extinguishment of the related debt.
As more fully described in "Note D," the General Partner, on behalf of
Greenbriar Associates, executed a deed-in-lieu of foreclosure on Greenbriar
Apartments and in July 1994, the property was transferred to the lienholder.
The Partnership recognized a gain of approximately $3.3 million on the
disposition of the real estate and an extraordinary gain of approximately $6.2
million on extinguishment of the related debt.
The transactions are summarized as follows (in thousands):
1994
Net real estate (a) $(5,866)
Other assets, net of other liabilities 455
(5,411)
Debt discharged (b) 20,664
Net gain on foreclosure 15,253
Gain on disposition of real estate (c) $ 8,639
Extraordinary gain on extinguishment of
debt (d) 6,614
Net gain on foreclosure $15,253
(a)Real estate, at cost, net of accumulated depreciation of approximately $14.9
million.
(b)Amount includes accrued interest.
(c)The gain on disposition of real estate represents the difference between the
carrying value of the real estate and the estimated fair value of the
property at disposition. The gain is included in "Gain on disposition of
real estate" in the accompanying consolidated statements of operations.
(d)The gain on extinguishment of debt represents the difference between the
estimated fair value of the property at foreclosure and the amount of debt,
including accrued interest, extinguished. The gain is reflected as an
extraordinary item in the accompanying consolidated statements of
operations.
NOTE J - DISTRIBUTIONS
In March 1996, the General Partner declared and paid distributions attributable
to cash flow from operations totalling approximately $3,617,000 and
approximately $71,000 representing a return of capital. In conjunction with the
transfer of funds from certain majority-owned sub-tier limited partnerships to
the Partnership, approximately $36,000 was distributed to the general partners
of the majority-owned sub-tier limited partnerships. In September 1996, the
General Partner declared and paid distributions attributable to cash flow from
operations totalling approximately $921,000.
NOTE K - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION
(amounts in thousands)
Initial Cost
To Partnership
Cost
Buildings Capitalized
and Related (Written-Down)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
Knollwood $ 6,780 $ 345 $ 7,065 $ 2,793
Chimney Hills 5,400 659 7,188 2,561
Briar Bay Racquet Club 3,500 1,084 5,271 1,280
Citadel Village 2,450 337 3,334 90
Village East 2,150 184 2,236 849
Rivers Edge 2,036 512 2,160 506
Nob Hill Villa 7,361 490 8,922 2,697
Citadel 4,830 695 5,619 1,079
Post Ridge 4,050 143 2,498 1,455
Arbour East 5,650 547 8,574 2,756
South Port 3,464 1,175 6,496 141
The Apartments 3,488 438 6,218 1,682
Lake Forest 4,700 692 5,811 2,179
Foothill Place 10,100 3,492 9,435 1,902
Stratford Place 2,657 1,186 4,628 1,471
Overlook 1,878 397 3,573 400
Point West -- 285 2,919 (321)
Totals $70,494 $12,661 $91,947 $23,520
Gross Amount At Which Carried
At December 31, 1996
Buildings
And
Related
Personal Accumulated Date of Date Depreciable
Description Land Property Total Depreciation Construction Acquired Life-Years
Knollwood $ 345 $ 9,858 $10,203 $8,555 1972 7/82 5-18
Chimney Hills 659 9,749 10,408 8,822 1973 8/82 5-18
Briar Bay Racquet Club 1,084 6,551 7,635 5,855 1975 9/82 5-18
Citadel Village 337 3,424 3,761 3,258 1974 12/82 5-18
Village East 184 3,085 3,269 2,718 1973 12/82 5-18
Rivers Edge 512 2,666 3,178 2,344 1976 4/83 5-18
Nob Hill Villa 490 11,619 12,109 9,775 1971 4/83 5-18
Citadel 695 6,698 7,393 5,806 1973 5/83 5-18
Post Ridge 143 3,953 4,096 3,430 1972 7/82 5-18
Arbour East 547 11,330 11,877 9,126 1973 9/83 5-18
South Port 1,175 6,637 7,812 5,524 -- 11/83 5-18
The Apartments 438 7,900 8,338 5,424 1973 4/84 5-18
Lake Forest 692 7,990 8,682 5,133 1971 4/84 5-18
Foothill Place 3,402 11,427 14,829 7,616 1973 8/85 5-18
Stratford Place 1,186 6,099 7,285 3,568 1975 8/85 5-20
Overlook 397 3,973 4,370 2,959 1970 11/85 5-15
Point West 205 2,678 2,883 2,021 1973 11/85 5-40
Totals $12,491 $115,637 $128,128 $91,934
Reconciliation of "Investment Properties and Accumulated Depreciation
(in thousands):
For the Years Ended December 31,
1996 1995 1994
Investment Properties
Balance at beginning of year $125,218 $122,218 $144,854
Additions 4,945 3,325 1,708
Dispositions through sale -- -- (3,533)
Dispositions through foreclosures (1,605) -- (20,811)
Property disposals (430) (325) --
Balance at End of Year $128,128 $125,218 $122,218
Accumulated Depreciation
Balance at beginning of year $ 86,294 $ 79,720 $ 89,681
Depreciation of real estate 7,048 6,667 7,328
Accumulated depreciation on real
estate sold -- -- (2,345)
Accumulated depreciation on real
estate foreclosed (1,079) -- (14,944)
Accumulated depreciation on
property disposals (329) (93) --
Balance at end of year $ 91,934 $ 86,294 $ 79,720
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1996 and 1995, is approximately $146,091,000 and $145,189,000. The
accumulated depreciation taken for Federal income tax purposes at December 31,
1996 and 1995, is approximately $106,311,000 and $101,945,000, respectively.
NOTE L - SUBSEQUENT EVENTS
Subsequent to December 31, 1996, the Partnership declared distributions to the
partners of approximately $550,000 attributable to cash flow from operations and
approximately $903,000 representing a return of capital.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER OF THE
REGISTRANT
The Registrant has no officers or directors. The General Partner manages and
controls the Registrant and has general responsibility and authority in all
matters affecting its business.
The names of the directors and executive officers of ConCap Equities, Inc.
("CEI"), the Partnership's General Partner, as of December 31, 1996, their ages
and the nature of all positions with CEI presently held by them are set forth
below.
Name Age Position
William H. Jarrard, Jr. 50 President
Ronald Uretta 41 Vice President/Treasurer
Martha L. Long 37 Controller
John K. Lines, Esq. 37 Vice President/Secretary
Kelley M. Buechler 39 Assistant Secretary
William H. Jarrard, Jr. has been President of CEI since December 1996 and
Managing Director - Partnership Administration of Insignia since January 1991.
Mr. Jarrard served as Managing Director - Partnership Administration and Asset
Management from July 1994 until January 1996.
Ronald Uretta has been Vice President/Treasurer of CEI since December 1996 and
Insignia's Treasurer since January 1992. Since August 1996, he has also
served as Insignia's Chief Operating Officer. He has also served as
Insignia's Secretary from January 1992 to June 1996 and as Insignia's Chief
Financial Officer from January 1992 to August 1994. Since September 1990, Mr.
Uretta has also served as the Chief Financial Officer and Controller of
Metropolitan Asset Group.
Martha L. Long has been Controller of CEI since December 1996 and Senior Vice
President - Finance and Controller of Insignia since January 1997. In June
1994, Ms. Long joined Insignia as its Controller, and was promoted to Senior
Vice President - Finance in January 1997. Prior to that time, she was Senior
Vice President and Controller of The First Savings Bank, FSB in Greenville,
SC.
John K. Lines, Esq. has been Secretary of CEI since December 1994 and General
Counsel and Secretary of Insignia since July 1994. From May 1993 until June
1994, Mr. Lines was the Assistant General Counsel and Vice President of Ocwen
Financial Corporation in West Palm Beach, Florida. From October 1991 until
April 1993, Mr. Lines was a Senior Attorney with Banc One Corporation in
Columbus, Ohio. From May 1984 until October 1991, Mr. Lines was employed as
an associate with Squire Sanders & Dempsey in Columbus, Ohio.
Kelley M. Buechler has been Assistant Secretary of CEI since December 1994 and
Assistant Secretary of Insignia since 1991. During the five years prior to
joining Insignia in 1991, she served in a similar capacity for U.S. Shelter.
CEI is the general partner of the Partnership and 15 other Affiliated Partner-
ships as of December 31, 1996.
No family relationship exists between any of the directors and officers of CEI.
Market Ventures, L.L.C. ("Ventures"), Liquidity Assistance, L.L.C.
("Liquidity") and Insignia CCP IV Acquisition L.L.C. ("Acquisition")
delinquently reported 31 transactions (17, 5 and 9 transactions, respectively)
as of December 31, 1996 on a Form 5 filed in January 1997, with respect to the
entities' purchases of Units of Limited Partner Interest of the Partnership.
Each of Insignia Financial Group, Inc., Insignia Commercial Group, Inc. and
Andrew L. Farkas also delinquently reported the same transactions on a Form 5
by virtue of their status as affiliates of Ventures, Liquidity and Acquisition,
through which they may be deemed to be beneficial owners of the securities
owned by such entities.
ITEM 11. EXECUTIVE COMPENSATION
No direct compensation was paid or payable by the Partnership to directors or
officers for the years ended December 31, 1996 or 1995, nor was any direct
compensation paid or payable by the Partnership to directors or officers of
the General Partner for the years ended December 31, 1996 or 1995. The
Partnership has no plans to pay any such remuneration to any directors or
officers of the General Partner in the future.
See "Item 8" - Financial Statements and Supplementary Data, "Note B" - Related
Party Transactions, for amounts of compensation and reimbursement of salaries
paid by the Partnership to the General Partner and its affiliates and the
former general partner and former affiliates.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
Except as provided below, as of March 1997, no person or group was known
to CEI to own of record or beneficially own more than five percent of the
Units of the Partnership:
Number of Percent
Group and Address Units Of Total
Insignia affiliates 65,816.50 19.20%
One Insignia Financial Plaza
Greenville, SC 29602
The units above are held by Insignia Properties, L.P. who holds 65,755.50
units (19.18% of outstanding units) and other affiliated entities who
hold nominal amounts of units.
As of March 1997, no other person was known to CEI to own of record or
beneficially own more than 5 percent (5%) of the Units of the
Partnership.
(b) Beneficial Owners of Management
Except as provided below, neither CEI nor any of the directors or
officers or associates of CEI own any Units of the Partnership of record
or beneficially.
(c) Changes in Control
Beneficial Owners of CEI
As of March 1997, the following persons were known to CEI to be the
beneficial owners of more than 5 percent (5%) of its common stock:
Number of Percent
Name and Address CEI Shares Of Total
GII Realty, Inc. 100,000 100%
One Insignia Financial Plaza
Greenville, SC 29602
GII Realty, Inc. is owned by an affiliate of Insignia. (See "Item 1")
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Current Management and Others
Except for the transactions described below, neither CEI nor any of its
directors, officers or associates, or any associates of any of them, has had any
interest in any other transaction to which the Partnership is a party. Please
refer to "Item 8 - Financial Statements and Supplementary Data," "Note B -
Related Party Transactions," for the amounts and items of permissible
compensation and fees paid to the General Partner and its affiliates and other
related parties for the last three years.
The Partnership has paid property management fees equal to 5% of collected gross
rental revenues ("Rental Revenues") for property management services for each of
the three years in the period ended December 31, 1996. For the year ended
December 31, 1994, a portion of such property management fees equal to 4% of
Rental Revenues has been paid to the management companies performing day-to-day
property management services and the portion equal to 1% of Rental Revenues has
been paid to Partnership Services, Inc. ("PSI") for advisory services related to
day-to-day property operations. During 1994, Coventry Properties, Inc.
("Coventry"), an affiliate of the General Partner, provided day-to-day property
management responsibilities for six of the Partnership's properties. In late
December 1994, an affiliate of Insignia assumed day-to-day property management
responsibilities for fifteen of the Partnerships' eighteen properties. On
February 15, 1995, an affiliate of Insignia assumed day to day property
management responsibilities for Lake Forest and Post Ridge Apartments. On
February 7, 1996, the Metro Centre Office Building was foreclosed upon by the
lender and affiliates of Insignia ceased to manage the property. South Port
Apartments is currently managed by an unaffiliated management company.
All of the above-referenced agreements with affiliates of CEI and related
parties of the Partnership are subject to the conditions and limitations imposed
by the Partnership Agreement.
Litigation with Former Related Parties
Please refer to "Item 8 - Financial Statements and Supplementary Data," "Note B
- - Related Party Transactions," for the amounts and items of compensation and
fees paid to former affiliates.
In 1991, the Partnership (and simultaneously each of the Affiliated
Partnerships) entered claims in Southmark's Chapter 11 bankruptcy proceeding.
These claims related to Southmark's activities while it exercised control
(directly, or indirectly through its affiliates) over the Partnership. The
Bankruptcy Court set the Partnership's and the Affiliated Partnership's allowed
claim at $11 million, in aggregate. In March 1994, the Partnership received
3,143 shares of Southmark Corporation Redeemable Series A Preferred Stock and
22,985 shares of Southmark Corporation New Common Stock with an aggregate market
value on the date of receipt of $23,000 and $172,000 in cash, representing the
Partnership's share of the recovery, based on its pro rata share of the claims
filed.
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements
Consolidated Balance Sheets - December 31, 1996 and 1995
Consolidated Statements of Operations - Years Ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Partners' Deficit - Years Ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows - Years Ended
December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
2. Schedules
All schedules are omitted because either they are not required, are not
applicable or the financial information is included in the financial
statements or notes thereto.
3. Exhibits
S-K REFERENCE
NUMBER DOCUMENT DESCRIPTION
3 Certificate of Limited Partnership, as amended
to date.
10.1 Property Management Agreement No. 105
dated October 23, 1990, by and between the
Partnership and CCEC (Incorporated by refer-
ence to the Quarterly Report on Form 10-Q
for the quarter ended September 30, 1990).
10.2 Property Management Agreement No. 106
dated October 23, 1990, by and between
the LeTourneau Associates, Ltd. and CCEC
(Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1990).
10.3 Property Management Agreement No. 107
dated October 23, 1990, by and between
Overlook Associates, Ltd. and CCEC (Incor-
porated by reference to the Quarterly Report
on Form 10-Q for the quarter ended
September 30, 1990).
10.4 Property Management Agreement No. 108
dated October 23, 1990, by and between
Park 77 Associates, Ltd. and CCEC
(Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1990).
10.5 Property Management Agreement No. 205
dated October 23, 1990, by and between the
Partnership and CCEC (Incorporated by refer-
ence to the Quarterly Report on Form 10-Q for
the quarter ended September 30, 1990).
10.6 Property Management Agreement No. 306
dated October 23, 1990, by and between the
Partnership and CCEC (Incorporated by refer-
ence to the Quarterly Report on Form 10-Q for
the quarter ended September 30, 1990).
10.7 Property Management Agreement No. 307
dated October 23, 1990, by and between Point
West Associates, Ltd. and CCEC (Incorporated
by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1990).
10.8 Property Management Agreement No. 403 dated
October 23, 1990, by and between the Partnership
and CCEC (Incorporated by reference to the Quar-
terly Report on Form 10-Q for the quarter ended
September 30, 1990).
10.9 Property Management Agreement No. 404 dated
October 23, 1990, by and between Denbigh Village
Associates, Ltd. and CCEC (Incorporated by refer-
ence to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990).
10.10 Property Management Agreement No. 405 dated
October 23, 1990, by and between Stratford Place
Associates, Ltd. and CCEC (Incorporated by refer-
ence to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990).
10.11 Bill of Sale and Assignment dated October 23,
1990, by and between CCEC and ConCap Services
Company (Incorporated by reference to the Quar-
terly Report on Form 10-Q for the quarter ended
September 30, 1990).
10.12 Assignment and Assumption Agreement dated
October 23, 1990, by and between CCEC and
ConCap Management Limited Partnership
("CCMLP") (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1990).
10.13 Assignment and Assumption Agreement as to
Certain Property Management Services dated
October 23, 1990, by and between CCMLP and
ConCap Capital Company (Incorporated by
reference to the Quarterly Report on Form 10-Q
for the quarter ended September 30, 1990).
10.14 Assignment and Assumption Agreement dated
October 23, 1990, by and between CCMLP
and The Hayman Company (100 Series of
Property Management Contracts) (Incorporated
by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1990).
10.15 Assignment and Assumption Agreement dated
October 23, 1990, by and between CCMLP and
Horn-Barlow Companies (200 Series of Property
Management Contracts) (Incorporated by reference
to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990).
10.16 Assignment and Assumption Agreement dated
October 23, 1990, by and between CCMLP and
Metro ConCap, Inc. (300 Series of Property
Management Contracts) (Incorporated by reference
to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990).
10.17 Assignment and Assumption Agreement dated
October 23, 1990, by and between CCMLP and
R&B Realty Group (400 Series of Property Manage-
ment Contracts) (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1990).
10.18 Assignment and Assumption Agreement dated
February 21, 1991, by and between the Partnership
and Greenbriar Apartments Associates Limited
Partnership (Property Management Agreement No.
403). (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December
31, 1991).
10.19 Assignment and Assumption Agreement dated
April 1, 1991, by and between the Partnership and
ConCap Village East Apartments Associates, L.P.
(Property Management Agreement No. 205).
(Incorporated by reference to the Annual Report
on Form 10-K for the year ended December 31,
1991).
10.20 Assignment and Assumption Agreement
dated April 1, 1991, by and between the
Partnership and Nob Hill Villa Apartments
Associates, L.P. (Property Management
Agreement No. 306). (Incorporated by
reference to the Annual Report on Form
10-K for the year ended December 31, 1991).
10.21 Assignment and Assumption Agreement
dated April 1, 1991, by and between the
Partnership and Barnett Regency Tower
Associates Limited Partnership (Property
Management Agreement No. 105).
(Incorporated by reference to the Annual
Report on Form 10-K for the year ended
December 31, 1991).
10.22 Assignment and Assumption of Property
Management Agreement dated August 1,
1991, by and between R & B Realty Group
and R & B Apartment Management Company,
Inc. (Property Management Agreement with
Denbigh Village Associates, Ltd.) (Incorporated
by reference to the Annual Report on Form
10-K for the year ended December 31, 1991).
10.23 Assignment and Assumption of Property
Management Agreement dated August 1, 1991,
by and between R & B Realty Group and R & B
Apartment Management Company, Inc. (Property
Management Agreement with Greenbriar Apart-
ments Associates Limited Partnership). (Incor-
porated by reference to the Annual Report on
Form 10-K for the year ended December 31,
1991).
10.24 Assignment and Assumption of Property Manage-
ment Agreement dated August 1, 1991, by and
between R & B Realty Group and R & B Apart-
ment Management Company, Inc. (Property
Management Agreement with the Partnership
concerning Briar Bay Racquet Club). (Incorpora-
ted by reference to the Annual Report on Form
10-K for the year ended December 31, 1991).
10.25 Assignment and Assumption of Property Manage-
ment Agreement dated August 1, 1991, by and
between R & B Realty Group and R & B Apartment
Management Company, Inc. (Property Management
Agreement with Stratford Place Associates, Ltd.).
(Incorporated by reference to the Annual Report on
Form 10-K for the year ended December 31, 1991).
10.26 Assignment and Assumption Agreement
dated September 1, 1991, by and between
the Partnership and CCP IV Associates, Ltd.
(Property Management Agreement No. 306).
(Incorporated by reference to the Annual
Report on Form 10-K for the year ended
December 31, 1991).
10.27 Assignment and Assumption Agreement
dated September 1, 1991, by and between
the Partnership and CCP IV Associates, Ltd.
(Property Management Agreement No. 205).
(Incorporated by reference to the Annual
Report on Form 10-K for the year ended
December 31, 1991).
10.28 Assignment and Assumption Agreement
dated September 1, 1991, by and between
ConCap Village East Apartments Associates,
L.P. and CCP IV Associates, Ltd. (Property
Management Agreement No. 205). (Incor-
porated by reference to the Annual Report
on Form 10-K for the year ended December
31, 1991).
10.29 Assignment and Assumption Agreement
dated September 15, 1991, by and between
the Partnership and Foothill Chimney Associates
Limited Partnership (Property Management
Agreement No. 105). (Incorporated by reference
to the Annual Report on Form 10-K for the year
ended December 31, 1991).
10.30 Assignment and Assumption Agreement dated
September 15, 1991, by and between the Partner-
ship and Foothill Chimney Associates Limited
Partnership (Property Management Agreement
No. 205). (Incorporated by reference to the
Annual Report on Form 10-K for the year ended
December 31, 1991).
10.31 Construction Management Cost Reimbursement
Agreement dated January 1, 1991, by and between
the Partnership and Horn-Barlow Companies (the
"Horn-Barlow Construction Management Agree-
ment"). (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December
31, 1991).
10.33 Assignment and Assumption Agreement
dated September 15, 1991, by and between
the Partnership and Foothill Chimney Associates
Limited Partnership (Horn-Barlow Construction
Management Agreement Concerning Chimney
Hill Apartments). (Incorporated by reference
to the Annual Report on Form 10-K for the year
ended December 31, 1991).
10.34 Assignment and Assumption Agreement dated
September 1, 1991, by and between ConCap
Village East Apartments Associates, L.P. and
CCP IV Associates, Ltd. (Village East Construc-
tion Agreement). (Incorporated by reference to
the Annual Report on Form 10-K for the year
ended December 31, 1991).
10.35 Construction Management Cost Reimbursement
Agreement dated January 1, 1991, by and
between the Partnership and Metro ConCap,
Inc. (the "Metro Construction Management
Agreement"). (Incorporated by reference
to the Annual Report on Form 10-K for the
year ended December 31, 1991).
10.36 Assignment and Assumption Agreement dated
September 1, 1991, by and between the
Partnership and CCP IV Associates, Ltd.
(Metro Construction Management Agreement
concerning Arbour East and Knollwood
apartments). (Incorporated by reference
to the Annual Report on Form 10-K for the
year ended December 31, 1991).
10.37 Construction Management Cost Reimburse-
ment Agreement dated January 1, 1991, by and
between the Partnership and The Hayman
Company (the "Hayman Construction Manage-
ment Agreement"). (Incorporated by reference
to the Annual Report on Form 10-K for the
year ended December 31, 1991).
10.38 Assignment and Assumption Agreement dated
September 15, 1991, by and between the
Partnership and Foothill Chimney Associates
Limited Partnership (Hayman Construction
Management Agreement concerning Chimney
Hill Apartments). (Incorporated by reference
to the Annual Report on Form 10-K for the
year ended December 31, 1991).
10.39 Construction Management Cost Reimbursement
Agreement dated January 1, 1991, by and between
the Partnership and R & B Apartment Management
Company, Inc. (Incorporated by reference to the
Annual Report on Form 10-K for the year ended
December 31, 1991).
10.40 Construction Management Cost Reimbursement
Agreement dated January 1, 1991, by and between
ConCap Metro Centre Associates, L.P. and R & B
Commercial Management Company, Inc. (Incor-
porated by reference to the Annual Report on Form
10-K for the year ended December 31, 1991).
10.41 Investor Services Agreement dated October 23,
1990, by and between the Partnership and CCEC
(Incorporated by reference to the Quarterly Report
on Form 10-Q for the quarter ended September 30,
1990). (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December
31, 1991).
10.42 Assignment and Assumption Agreement (Investor
Services Agreement) dated October 23, 1990, by and
between CCEC and ConCap Services Company
(Incorporated by reference to the Annual Report on
Form 10-K for the year ended December 31, 1990).
10.43 Letter of Notice dated December 20, 1991, from
Partnership Services, Inc. ("PSI") to the Partnership
regarding the change in ownership and dissolution
of ConCap Services Company whereby PSI assumed
the Investor Services Agreement. (Incorporated by
reference to the Annual Report on Form 10-K for the
year ended December 31, 1991).
10.44 Financial Services Agreement dated October 23,
1990, by and between the Partnership and CCEC
(Incorporated by reference to the Quarterly Report
on Form 10-Q for the quarter ended September 30,
1990).
10.45 Assignment and Assumption Agreement
(Financial Service Agreement) dated October
23, 1990, by and between CCEC and ConCap
Capital Company (Incorporated by reference
to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990).
10.46 Letter of Notice dated December 20, 1991, from
PSI to the Partnership regarding the change in
ownership and dissolution of ConCap Capital
Company whereby PSI (Incorporated by reference
to the Annual Report on Form 10-K for the year
ended December 31, 1991).
10.47 Property Management Agreement No. 419 dated
May 13, 1993, by and between the Partnership
and Coventry Properties, Inc. (Incorporated
by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1993).
10.48 Assignment and Assumption Agreement
(Property Management Agreement No. 419)
dated May 13, 1993, by and between Coventry
Properties, Inc., R&B Apartment Management
Company, Inc. and Partnership Services, Inc.
(Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1993).
10.49 Assignment and Agreement as to Certain
Property Management Services dated May 13,
1993, by and between Coventry Properties, Inc.
and Partnership Services, Inc. (Incorporated by
reference to the Quarterly Report on Form 10-Q
for the quarter ended September 30, 1993).
10.50 Property Management Agreement No. 419A
dated October 11, 1993, by and between ConCap
Stratford Associates, Ltd. and Coventry Properties,
Inc. (Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1993).
10.51 Assignment and Assumption Agreement
(Property Management Agreement No. 491A)
dated October 11, 1993, by and between
Coventry Properties, Inc., R&B Apartment
Management Company, Inc. and Partnership
Services, Inc. (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1993).
10.52 Assignment and Agreement as to Certain
Property Management Services dated October 11,
1993, by and between Coventry Properties, Inc.
and Partnership Services, Inc. (Incorporated by
reference to the Quarterly Report on Form 10-Q
for the quarter ended September 30, 1993).
10.53 Property Management Agreement No. 427A
dated October 11, 1993, by and between ConCap
River's Edge Associates, Ltd. and Coventry
Properties, Inc. (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1993).
10.54 Assignment and Assumption Agreement
(Property Management Agreement No. 427A)
dated October 11, 1993, by and between
Coventry Properties, Inc., R&B Apartment
Management Company, Inc. and Partnership
Services, Inc. (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1993).
10.55 Assignment and Agreement as to Certain
Property Management Services dated October
11, 1993, by and between Coventry Properties,
Inc. and Partnership Services, Inc. (Incorporated
by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1993).
10.56 Property Management Agreement No. 513A
dated August 18, 1993, by and between ConCap
Citadel Associates, Ltd. and Coventry Properties,
Inc.
10.57 Assignment and Agreement as to Certain Property
Management Services dated November 17, 1993,
by and between Coventry Properties, Inc. and
Partnership Services, Inc.
10.58 Property Management Agreement No. 514 dated
June 1, 1993, by and between the Partnership and
Coventry Properties, Inc.
10.59 Assignment and Agreement as to Certain Property
Management Services dated November 17, 1993,
by and between Coventry Properties, Inc. and
Partnership Services, Inc.
10.60 Stock and Asset Purchase Agreement, dated
December 8, 1994 (the "Gordon Agreement"), among
MAE-ICC, Inc. ("MAE-ICC"), Gordon Realty Inc.
("Gordon"), GII Realty, Inc. ("GII Realty"), and
certain other parties. (Incorporated by
reference to form 8-K dated December 8, 1994)
10.61 Exercise of the Option (as defined in the Gordon
Agreement), dated December 8, 1994, between MAE-
ICC and Gordon. (Incorporated by reference to
Form 8-K dated December 8, 1994)
10.62 Contracts related to refinancing of debt
(a) Deed of Trust and Security Agreement dated
March 27, 1995 between Nob Hill Villa
Apartment
Associates, L.P., a Tennessee limited
partnership, and First Union National Bank of
North Carolina, a North Carolina Corporation.
(b) Promissory Note dated March 27, 1995 between
Nob Hill Villa Apartments Associates, L.P., a
Tennessee limited partnership, and First
Union National Bank of North Carolina, a
North Carolina corporation.
(c) Assignment of leases and Rents dated March
27, 1995 between Nob Hill Villa Apartments
Associates, L.P., a Tennessee limited
partnership, and First Union National Bank of
North Carolina, a North Carolina Corporation.
10.63 Multifamily Note dated November 30, 1995 between
Briar Bay Apartments Associates, LTD., a Texas
limited partnership, and Lehman Brothers Holdings
Inc. d/b/a Lehman Capital, A Division of Lehman
Brothers Holdings Inc..
10.64 Multifamily Note dated November 30, 1995 between
CCP IV Associates, LTD., a Texas limited
partnership, and Lehman Brothers Holdings Inc.
d/b/a Lehman Capital, A Division of Lehman
Brothers Holdings Inc..
10.65 Multifamily Note dated November 30, 1995 between
CCP IV Associates, LTD., a Texas limited
partnership, and Lehman Brothers Holdings Inc.
d/b/a Lehman Capital, A Division of Lehman
Brothers Holdings Inc..
10.66 Multifamily Note dated November 30, 1995 between
CCP IV Associates, LTD., a Texas limited
partnership, and Lehman Brothers Holdings Inc.
d/b/a Lehman Capital, A Division of Lehman
Brothers Holdings Inc..
10.67 Multifamily Note dated November 30, 1995 between
CCP IV Associates, LTD., a Texas limited
partnership, and Lehman Brothers Holdings Inc.
d/b/a Lehman Capital, A Division of Lehman
Brothers Holdings Inc..
10.68 Multifamily Note dated November 30, 1995 between
Foothill Chimney Associates Limited Partnership,
a Georgia limited partnership, and Lehman
Brothers Holdings Inc. d/b/a Lehman Capital, A
Division of Lehman Brothers Holdings Inc..
10.69 Multifamily Note dated November 30, 1995 between
Foothill Chimney Associates Limited Partnership,
a Georgia limited partnership, and Lehman
Brothers Holdings Inc. d/b/a Lehman Capital, A
Division of Lehman Brothers Holdings Inc..
10.70 Multifamily note dated September 30, 1996, between
Post Ridge Associates, Ltd., Limited Partnership, a
Tennessee Limited Partnership and Lehman Brothers
Holdings, Inc. d/b/a Lehman Capitol, a division of
Lehman Brothers Holdings, Inc.
10.71 Exercise of the remaining portion of the option (as
defined in the Gordon Agreement), dated December 8,
1994 between MAE-ICC and Gordon. (Incorporated by
reference to Form 8-K dated October 24, 1995).
10.72 Multifamily note dated November 1, 1996, between Post
Ridge Associates, Ltd., Limited Partnership, a
Tennessee Limited Partnership and Lehman Brothers
Holdings, Inc. d/b/a Lehman Capitol, a division of
Lehman Brothers Holdings, Inc.
10.73 Amended and Restated Multifamily note dated November
1, 1996, between Post Ridge Associates, Ltd., Limited
Partnership , a Tennessee Limited Partnership and
Lehman Brothers Holding, Inc. d/b/a Lehman Capitol, a
division of Lehman Brothers Holdings, Inc.
10.74 Multifamily note dated November 1, 1996, between
Consolidated Capital Properties IV, a California
Limited Partnership and Lehman Brothers Holdings,
Inc. d/b/a Lehman Capitol, a division of Lehman
Brothers Holdings, Inc.
11 Statement regarding computation of Net Income
per Limited Partnership Unit (Incorporated by
reference to Note 1 of Item 8 - Financial Statements
of this Form 10-K).
16.1 Letter, dated August 12, 1992, from Ernst & Young
to the Securities and Exchange Commission regard-
ing change in certifying accountant. (Incorporated
by reference to Form 8-K dated August 6, 1992).
16.2 Letter dated May 9, 1995 from the Registrant's former
independent accountant regarding its concurrence with
the statements made by the Registrant regarding a
change in the certifying accountant. (Incorporated
by reference to Form 8-K dated May 3, 1995)
19.1 Chapter 11 Plan of CCP/IV Associates, Ltd.
(Restated to incorporate first amended Chapter
11 Plan filed October 27, 1992 and second amend-
ments to Chapter 11 Plan of CCP/IV Associates,
Ltd. filed December 14, 1992) dated December 14,
1992, and filed December 14, 1992, in the United
States Bankruptcy Court for the Middle District of
Tennessee. (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December
31, 1992).
19.2 First amended disclosure statement to
accompany Chapter 11 Plan, dated February
21, 1992, and amended October 27, 1992
filed by CCP/IV Associates, Ltd. filed
October 27, 1992, in the United States
Bankruptcy Court for the Middle District
of Tennessee. (Incorporated by reference
to the Annual Report on Form 10-K for the
year ended December 31, 1992).
27 Financial Data Schedule
(b) Reports on Form 8-K filed during the fourth quarter of 1996:
None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONSOLIDATED CAPITAL PROPERTIES IV
By: CONCAP EQUITIES, INC.
General Partner
By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President
By: /s/Ronald Uretta
Ronald Uretta
Vice President/Treasurer
Date: March 27, 1997
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
date indicated.
/s/William H. Jarrard, Jr. President
William H. Jarrard, Jr.
/s/Ronald Uretta Vice President/Treasurer
Ronald Uretta