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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 33-17579
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B (EXACT NAME OF
REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 16-1309988
- -------------------- --------------------------------
(STATE OF FORMATION) (IRS EMPLOYER IDENTIFICATION NO.)
2350 NORTH FOREST ROAD
SUITE 12-A
GETZVILLE, NEW YORK 14068
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
REGISTRANT'S TELEPHONE NUMBER: (716) 636-9090
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: UNITS OF LIMITED PARTNERSHIP INTEREST
INDICATE BY A CHECK MARK WHETHER THE REGISTRANT: (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ]
INDICATE BY A CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE
CONTAINED, TO THE BEST OF THE 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]
DOCUMENTS INCORPORATED BY REFERENCE
SEE ITEM 14 FOR A LIST OF ALL DOCUMENTS INCORPORATED BY REFERENCE
1
PART I
ITEM 1: BUSINESS
The registrant, Realmark Property Investors Limited Partnership-VI B ("the
Partnership"), is a Delaware limited partnership organized in 1987 pursuant to
an Amended and Restated Certificate and Agreement of Limited Partnership (the
"Partnership Agreement"), under the Delaware Revised Uniform Limited Partnership
Act. The Partnership's general partners are Realmark Properties, Inc. (the
"Corporate General Partner"), a Delaware corporation, and Joseph M. Jayson (the
"Individual General Partner").
The Registrant commenced the public offering of its limited partnership
units, registered with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, on November 11, 1988. The first interim
closing took place on February 2, 1989, and the initial $2,134,300 of
contributed capital was released to the Partnership at which time it began
operations. The offering was concluded February 28, 1990 at which time the
Partnership had raised $7,862,510, before deducting sales commissions and
syndication costs.
The Partnership's primary business and its only industry segment is to own
and operate income-producing real property for the benefit of its limited
partners. Through December 31, 1999, the Partnership owned two apartment
complexes, totaling 336 units. In addition, the Partnership is a partner in the
Foxhunt Apartments Joint Venture owning 11.5% of a 250 unit apartment complex in
Kettering, Ohio.
In June 1991, the Partnership purchased the 144 unit Players Club North
Apartments, located in Lutz, Florida, and Fairway Club Apartments (formerly the
Villas), a 192 unit apartment complex in Greenville, South Carolina. The average
occupancy level at Players Club North in 1999 was 93%; Fairway Club averaged
approximately 83%. For 1998, occupancy at Players Club North averaged 97%, while
Fairway Club was 71%. Occupancy during 1997 averaged 95% at Players Club North
and 83% at Fairway Club For the year ended December 31, 1999, Players Club
accounted for approximately 45% of total Partnership revenue, while Fairway Club
accounted for 55%. Fairway Club accounted for approximately 45% of total
Partnership revenue generated during 1998 and Players Club generated
approximately 55% of total Partnership revenue during the same year. For the
year ended December 31, 1997, Fairway Club generated 51% of total Partnership
revenue, and Players Club accounted for 49% of total Partnership revenue.
The business of the Partnership is not seasonal. The Partnership, as of
December 31, 1999, did not directly employ any persons in a full-time position.
All regular employees who rendered services on behalf of the Partnership through
December 31, 1999 were employees of the Corporate General Partner or its
affiliates.
This annual report contains certain forward-looking statements concerning
the Partnership's current expectations as to future results. Such
forward-looking statements are contained in Item 7: Management's Discussion and
Analysis of Financial Conditions and Results of Operations. Words such as
"believes", "forecasts", "intends", "possible", "expects", "estimates",
"anticipates" or "plans" and similar expressions are intended to identify
forward-looking statements.
2
BUSINESS (CONT'D)
Occupancy for each complex as of December 31, 1999, 1998 and 1997 was as
follows:
1999 1998 1997
Fairway Club 86% 72% 80%
Players Club 88% 98% 99%
For financial statement purposes, the operations of the Partnership's
properties are consolidated. The following chart lists the percentage of total
Partnership revenue generated by each complex for the year indicated:
1999 1998 1997
Fairway Club 55% 45% 51%
Players Club 45% 55% 49%
ITEM 2: PROPERTIES
The following is a list of Properties and Joint Ventures owned by the
Partnership as of December 31, 1999:
PROPERTY NAME
AND LOCATION GENERAL CHARACTER OF PROPERTY PURCHASE DATE
- -------------- ----------------------------- -------------
Players Club North A 144 unit apartment complex. The June 1991
Lutz, FL mortgage balance at 12/31/99 was
$2,665,129, maturing June 2027,
and providing for monthly
principal and interest payments of
$20,824 bearing interest at 8.48%.
Fairway Club A 192 unit apartment complex. The June 1991
Greenville, SC mortgage balance at 12/31/99 was
$2,604,171, maturing June 2027,
and providing for monthly
principal and interest payments of
$20,002 bearing interest at 8.30%.
JOINT VENTURE
NAME AND LOCATION
- -----------------
Foxhunt Apartments A 250 unit apartment complex. The September 1991
Joint Venture mortgage balance at 12/31/99 was
Kettering, OH $6,000,000, maturing December
2009, and providing for monthly
principal and interest payments of
$44,235 bearing interest at 8.05%.
3
ITEM 3: LEGAL PROCEEDINGS
The Partnership is not a party to, nor is any of the Partnership's
property the subject of, any material pending legal proceedings that would
impact the future financial position and operations of the Partnership.
ITEM 4: SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5: MARKET FOR REGISTRANT'S UNITS OF LIMITED
PARTNERSHIP INTEREST
There is currently no active trading market for the units of Limited
Partnership Interest of the Partnership and it is not anticipated that any will
develop in the future. As of December 31, 1999, there were 1,075 record holders
of units of Limited Partnership Interest.
4
ITEM 6: SELECTED FINANCIAL DATA
Realmark Properties Investors Limited Partnership VI B
---------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1997 Dec. 31, 1996 Dec. 31, 1995
------------- ------------- ------------- ------------- -------------
Total assets $6,534,717 $7,045,544 $8,034,759 $7,749,737 $8,048,753
========== ========== ========== ========== ==========
Notes payable and
long-term obligations $5,269,300 $5,309,087 5,345,640 $4,225,106 $4,263,769
========== ========== ========= ========== ==========
Revenue $1,885,431 $1,629,554 $1,652,233 $1,683,954 $1,715,088
Expenses 2,276,127 (2,372,575) 2,284,176 1,854,988 2,412,220
- -------- ---------- ----------- ---------- ---------- ----------
Loss before allocated
loss from joint
ventures (390,696) (743,021) (631,943) (171,034) (697,132)
Allocated loss from joint
ventures (54,127) (116,796) (42,373) (51,048) (73,723)
----------- ----------- ----------- ----------- ----------
Net loss $ (444,823) $ (859,817) $ (674,316) $ (222,082) $ (770,855)
=========== =========== =========== =========== ==========
Net cash (used in)
provided by operating
activities $ (184,259) $ (581,933) $ (146,083) $ 170,266 $ 95,718
Principal payments upon
refinancing - - (4,209,840) - -
Principal payments on
mortgages (39,787) (36,553) (29,626) (38,663) (34,945)
----------- ----------- ----------- ----------- ----------
Net cash (used in)
provided by operating
activities less
principal payments $ (224,046) $ (618,486) $ (4,385,549) $ 131,603 $ 60,773
=========== =========== ============ ============= ===========
Loss per limited
partnership unit $ (5.49) $ (10.61) $ (8.32) $ (2.74) $ (9.51)
----------- ----------- ------------ ------------ -----------
Distributions per limited
partnership unit $ - $ - $ 3.08 $ 0.23 $ 0.96
=========== =========== ============ ============ ===========
Weighted average number
of limited partnership
units outstanding 78,625.1 78,625.1 78,625.1 78,625.1 78,625.1
=========== =========== =========== =========== ===========
5
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES:
The Partnership utilized existing cash reserves to fund current operations
because there was a minor cash flow deficit. The remaining cash reserves are
available to provide for future capital improvements. The Partnership did not
make any distributions during 1999, but management hopes to once again make
distributions in the coming year. A new marketing strategy was implemented for
Fairway Club during the latter part of 1998 starting with the re-naming of the
complex. Management believed that the new name would create a different image
for the property. The complex underwent repairs in the form of door repairs,
roof repairs and pool repairs (funded from reserves). The market where this
property is located has become increasingly competitive due to new construction
of apartments; management believes that with the renovations completed, Fairway
Club will become even more competitive in the coming year.
Lakeview Joint Venture property (the Partnership owned 16.22% of the
Lakeview property), was sold on December 29, 1998 to an unrelated third party at
a sales price of $3.4 million. The sale resulted in a total gain of $851,317;
this Partnership was allocated $138,084, recognized in 1998, of the gain. The
proceeds from sale were used to pay closing costs, property taxes, etc. with the
balance paid to the lender to be applied against the existing mortgage. The
proceeds did not result in enough cash to pay the entire mortgage, however
management had negotiated a settlement with the lender which resulted in
forgiveness of debt totaling $253,159 of which $41,062 was allocated to this
Partnership as a joint venture partner.
Foxhunt Apartments (the Partnership owns 11.50% of the Foxhunt property)
saw a slight increase in occupancy during the year ended December 31, 1999 as
compared to that of the previous year; occupancy at December 31, 1999 was 94%
versus 86% at December 31, 1998. Management believes that the increase in
occupancy was due to the significant repairs done to the property (funded from
reserves).
Management successfully refinanced Foxhunt Apartments during 1999, the
building has a $6,000,000 mortgage which replaced its previous one year bridge
loan. The new mortgage bears interest at 8.05% and matures in December 2009.
Foxhunt had come under contract for sale in July of 1996. The sale was subject
to a number of contingencies and was cancelable at any time by the buyer. During
1997, the contract for sale was canceled by the buyer and management temporarily
discontinued, until July 1999, its plan to sell the property. In July 1999, the
Partnership resumed it's efforts to market Fox Hunt Apartments for sale as this
is deemed to be in the best interest of both joint venture partners. Marketing
efforts included advertising in national newspapers, such as The Wall Street
Journal, and mailing of sales packages and follow-up telephone calls to brokers.
At December 31, 1999, substantial doubt existed as the whether the other
joint venturer will continue as a going concern, due to the current nature of
Foxhunt's mortgage payable, recurring losses and a partner's deficiency. Should
the other joint venturer be unable to continue as a going concern, the
Partnership, as a general partner may be required to fund the losses of the
joint venturer's outstanding liabilities in excess of its ownership interest.
6
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CON'T)
LIQUIDITY AND CAPITAL RESOURCES (CON'T.):
The Partnership conducted a review of its computer systems to identify the
systems that could have been affected by the "year 2000 issue" and implemented a
plan to resolve such issues. The year 2000 issue is the result of computer
programs being written using two digits rather than four digits to define the
applicable year. Computer programs that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could have resulted in a system failure or miscalculations causing disruptions
of operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business activities.
Management contracted with outside independent computer consultants to resolve
this issue. The majority of the software in use is "2000 compliant" or was added
at no significant cost. Management also engaged a computer firm to re-write its
tax software making it Year 2000 compliant. Management did not experience any
significant problems with its computers as a result of the year 2000 issue and
does not anticipate any such problems in the future.
RESULTS OF OPERATIONS:
For the year ended December 31, 1999, the Partnership incurred a net loss
of $444,823 or $5.49 per limited partnership unit. This is a 48% decrease from
the year ended December 31, 1998 when the loss totaled $859,817 or $10.61 per
limited partnership unit. For the year ended December 31, 1997 losses incurred
totaled $674,316 or $8.32 per limited partnership unit.
Partnership revenues for the year ended December 31, 1999 totaled
$1,885,431, consisting of rental income of $1,695,604 and other income, which
includes interest, laundry income, and other miscellaneous sources of income of
$189,827. The increase in rental revenue from that of the previous years of 1998
and 1997 when it totaled $1,446,398 and $1,531,418, respectively, can be
attributed to an increase in occupancy at Fairway Club. Rental income from
Fairway Club increased from that of the previous year by $213,694 or 34%.
Occupancy at Fairway Club climbed steadily throughout the year; the average
occupancy for the year ended December 31, 1999 was 84%, a substantial increase
over the 71% of the prior year. Fairway Club had slightly lower concessions for
1999 as compared to 1998. The property also maintained a good collection year.
The staff continues to attract tenants through current leasing and marketing
strategies, as well as successfully retaining current tenants. Occupancy levels
at Players Club unfortunately decreased slightly during the year ended December
31, 1999 as compared to those of the previous two years. For 1999, occupancy at
this complex averaged 94%, while it was 97% for 1998 and 95% for 1997. There was
also approximately a 4% increase in other income during the year ended December
31, 1999 as compared to that earned in 1998. This increase is primarily
attributable to an increase in late charges at Fairway Club and increased
month-to-month rental surcharges at Players Club North (i.e., a "premium" rent
charged for tenants who are on month-to-month leases as opposed to yearly
leases).
7
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CON'T)
RESULTS OF OPERATIONS (CONT'D):
Partnership expenses for the year ended December 31, 1999 totaled
$2,276,127, a decrease of $96,448 from the expenses of the year ended December
31, 1998 of $2,372,575 and $8,049 from those for the year ended December 31,
1997 of $2,284,176. The decrease was evenly divided between interest expenses,
depreciation expenses and property operations expenses. Management continues to
do repairs at the Fairway Club Roof repairs, door repairs, sidewalk repairs,
handrail repairs and parking lot repairs were completed in 1999. Planned repairs
aT the Fairway Club for the year 2000 include resurfacing the tennis court, a
flood study and additional roof repairs, which will be funded by reserves and/or
cash flow from operations. It is anticipated that the completion of these will
increase occupancy for the year 2000.
Depreciation expense decreased $36,706 between the years ended December
31, 1999 and 1998. Interest expense for 1997 was unusually high due to the new
financing obtained during that year on both Fairway Club and Players Club North.
The new financing led to the write-off of the majority of the previously
capitalized mortgage acquisition costs. The write-off of such costs amounted to
approximately $208,665.
Administrative expenses totaled $344,713 and $349,535 for the years ended
December 31, 1999 and 1998, respectively. Administrative expenses paid to
affiliates increased by $14,647, which is a result of increased expenses for
accounting management and portfolio expenses. Other administrative expenses
decreased between 1999 and 1998 by $19,469 due to decreased legal and accounting
expenses incurred by the Partnership as well as decreased advertising and
promotional costs. Interest expense decreased by $23,688 when comparing 1999 to
1998.
The Foxhunt Joint Venture generated a net loss of $470,672 for the year
ended December 31, 1999 as compared to a loss of $943,631 for the year ended
December 31, 1998 and the income of $41,576 which was reported for 1997. The
primary reason for the decrease in the loss from 1998 to 1999 was the result of
increased rental income of $125,306 and a decrease in property operations,
interest and depreciation expenses of $393,176. In accordance with the joint
venture agreement, 11.5% of the income or loss is allocated to the Partnership
and 88.5% is allocated to the other joint venturer. Accordingly, $54,127 of the
1999 loss is allocated to the Partnership and $416,535 is allocated to the other
joint venture partner; $108,517 of the 1998 loss was allocable to the
Partnership and $835,114 was allocated to the other joint venturer, while for
the year 1997, $4,781 of the reported income was allocable to the Partnership
and $36,795 was allocable to the other joint venturer.
The Lakeview Village Joint Venture generated a net loss of $51,040 for the
year ended December 31, 1998; the loss from operations however totaled
$1,155,516 with the difference being the result of income from debt forgiveness
and the gain that resulted from the sale of the property. The property was sold
during December of 1998 for a sales price of $3.4 million. The proceeds were not
enough to pay the debt obligation and all associated costs of the sale, but
management negotiated a partial forgiveness of debt with the lender. The sale
resulted in a total gain of $851,317 and income from extinguishment of debt
totaling $253,159. The loss for the year ended December 31, 1997 was $290,713.
In accordance with the joint venture agreement, 16.22% of the loss is allocated
to the Partnership and 83.78% is allocated to the other joint venturer. For
1998, the loss allocated to the Partnership is $8,279 and $42,761 is allocated
to the other joint venture partner.
8
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CON'T)
RESULTS OF OPERATIONS (CONT'D):
For 1997, $47,154 of the loss was allocated to the Partnership and $243,559 was
allocated to the other joint venturer.
The tax basis loss for the Partnership for the year ended December 31,
1999 was $475,636 or $5.87 per limited partnership unit. For the year ended
December 31, 1998, the tax basis loss for the Partnership was $622,261 or $7.68
per limited partnership unit compared to a tax loss of $656,602 or $8.10 per
unit for the year ended December 31, 1997. The Partnership agreement provides
for the taxable income or losses to be allocated 97% to the Limited Partners and
3% to the General Partners, and in accordance with this and the Internal Revenue
Code, the loss for the year ended December 31, 1999 was allocated in this
fashion.
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership does not have investments in instruments which are subject
to market risk (e.g., derivatives, options or other interest sensitive
instruments).
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Listed under Item 14 of this report.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
As reported on Form 8-K/A, filed with the Securities and Exchange
Commission on April 17, 2000, and incorporated herein by reference in its
entirety: (i) Deloitte & Touche LLP notified the Company on January 11, 2000
that its relationship as the principal accountants to audit the Company's
financial statements had ceased; and (ii) effective January 28, 2000, the
Company engaged Toski, Schaefer & Co., P.C. as its independent accountants.
9
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
The Partnership, as an entity, does not have any directors or officers.
The Individual General Partner of the Partnership is Joseph M. Jayson. The
directors and executive officers of Realmark Properties, Inc., the Partnership's
Corporate General Partner, as of December 31, 1999, are listed below. Each
director is subject to election on an annual basis.
TITLE OF ALL POSITIONS YEAR FIRST ELECTED
NAME HELD WITH THE COMPANY TO POSITION
Joseph M. Jayson President and Director 1979
Judith P. Jayson Vice President and Director 1979
Michael J. Colmerauer Secretary 1991
Joseph M. Jayson, President and Director of Realmark Properties, Inc. and
Judith P. Jayson, Vice President and Director of Realmark Properties, Inc., are
married to each other.
The Directors and Executive Officers of the Corporate General Partner and
their principal occupations and affiliations during the last five years or more
are as follows:
Joseph M. Jayson, age 61, is Chairman, Director and sole stockholder of J.
M. Jayson and Company, Inc. and certain of its affiliated companies: U.S.
Apartments LLC, Westmoreland Capital Corporation, Oilmark Corporation and U.S.
Energy Development Corporation. In addition, Mr. Jayson is chairman of Realmark
Corporation, Chairman of Realmark Properties, Inc., wholly-owned subsidiaries of
J. M. Jayson and Company, Inc. and co-general partner of Realmark Property
Investors Limited Partnership, Realmark Property Investors Limited
Partnership-II, Realmark Property Investors Limited Partnership-III, Realmark
Property Investors Limited Partnership-IV, Realmark Property Investors Limited
Partnership-V, Realmark Property Investors Limited Partnership-VI A, and
Realmark Property Investors Limited Partnership-VI B. Mr. Jayson has been in
real estate for the last 37 years and is a Certified Property Manager as
designated by the Institute of Real Estate Management ("I.R.E.M."). Mr. Jayson
received a B.S. Degree in Education in 1961 from Indiana University , a Masters
Degree from the University of Buffalo in 1963, and has served on the Educational
Faculty of the Institute of Real Estate Management. Mr. Jayson has for the last
37 years been engaged in various aspects of real estate brokerage and
investment. He brokered residential properties from 1962 to 1964, commercial
investment properties from 1964 to 1967, and in 1967 left commercial real estate
to form his own investment firm. Since that time, Mr. Jayson and J. M. Jayson &
Company, Inc. have formed or participated in various ways with forming over 30
real estate related limited partnerships. For the past eighteen years, Mr.
Jayson and an affiliate have also engaged in developmental drilling for gas and
oil.
Judith P. Jayson, age 59, is currently Vice President and a Director of
Realmark Properties, Inc. She is also a Director of the property management
affiliate, Realmark Corporation. Mrs. Jayson has been involved in property
management for the last 28 years and has extensive experience in the hiring and
training of property management personnel and in directing, developing and
implementing property management systems and programs. Mrs. Jayson, prior to
joining the firm in 1973, taught business in the Buffalo, New York High School
System. Mrs. Jayson graduated from St. Mary of the Woods College in Terre Haute,
Indiana, with a degree in Business Administration. Mrs. Jayson is the wife of
Joseph M. Jayson, the Individual General Partner.
10
Michael J. Colmerauer, 42, is Secretary and in-house legal counsel for
J.M. Jayson and Company, Inc., Realmark Corporation, Realmark Properties, Inc.
and other companies affiliated with the General Partners. He received a
Bachelor's Degree (BA) from Canisius College in 1980 and a Juris Doctors (J.D.)
from the University of Tulsa in 1983. Mr. Colmerauer is a member of the American
and Erie County Bar Association and has been employed by the Jayson group of
companies for the last 16 years.
ITEM 11: EXECUTIVE COMPENSATION
No direct remuneration was paid or payable by the Partnership to directors
and officers (since it has no directors or officers) for the years ended
December 31, 1999, 1998 or 1997, nor was any direct remuneration paid or payable
by the Partnership to directors or officers of Realmark Properties, Inc., the
Corporate General Partner and sponsor, for the years ended December 31, 1999,
1998 or 1997.
The following table sets forth for the years ended December 31, 1999, 1998
and 1997, the compensation paid by the Partnership, directly or indirectly, to
affiliates of the General Partners (all of which are owned entirely by Joseph M.
Jayson):
Amounts
-----------------------------------------
Entity Receiving
Compensation Type of Compensation 1999 1998 1997
- ------------------------------ ------------------------------- -------- -------- --------
U.S. Capital Services Corp. Loan Placement Fees $ - $ - $ 53,600
-------- -------- --------
Realmark Properties, Inc. (The Partner distributions $ - $ - 7,500
Corporate General Partner) -------- -------- --------
Reimbursement for allocated
partnership administration
expenses related to: 70,197
Investor Services 6,635 7,049
Brokerage 10,326 10,353
Portfolio management and
accounting 48,599 68,795
Partnership management fees - -
Realmark Corporation Property management fees 88,266 78,256 80,758
Computer Service Fees 6,336 6,336 6,336
-------- -------- --------
Total $164,799 $150,152 $234,391
======== ======== ========
11
ITEM 11: EXECUTIVE COMPENSATION (CON'T)
The executive officers receive compensation from J.M. Jayson & Co., Inc.
Any portion of an officer's compensation attributable to an officer's services
to the Partnership are immaterial. The directors receive no compensation from
any entity. The Corporate General Partner is entitled to a continuing
Partnership Management Fee equal to 7% of net cash flow (as defined in the
Partnership Agreement) of which 2% is subordinated to the receipt by the Limited
Partners of a non cumulative annual cash return equal to 7% of the average of
their adjusted Capital Contributions (as defined in the Partnership Agreement).
No such fees were paid for the years ended December 31, 1999, 1998 and 1997. The
General Partners are entitled to 3% of Distributable Cash (as defined in the
Partnership Agreement) and to certain expense reimbursements with respect to
Partnership operations.
Net income or loss and proceeds arising from a sale or refinancing of
property shall be distributed: first, to the Limited Partners in an amount
equivalent to a 7% return on the average of their adjusted capital
contributions; second, to the corporate general partner a 3% property
disposition fee provided, however, that such fees shall be reduced, but not
below zero, by the amounts necessary to pay to Limited Partners whose
subscriptions were accepted by January 31, 1989, an additional cumulative annual
return (not compounded) equal to 2% of their average adjusted capital
contributions, and to Limited Partners whose subscriptions were accepted between
February 1, 1989 and June 30, 1989, an additional cumulative annual return (not
compounded) equal to 1% of their average adjusted capital contributions
commencing with the first fiscal quarter following the termination of the
offering of units; third, to the Limited Partners, an amount equal to their
capital contributions, then an amount equal to an additional 5% of the average
of their adjusted capital contributions; fourth, to all Partners, an amount
equal to their respective positive capital balances; finally, in the ratio of
87% to the Limited Partners and 13% to the General Partners.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
No person is known to the Partnership to own of record or beneficially,
more than five percent (5%) of the Units of Limited Partnership Interests of the
Partnership. The General Partners, as of December 31, 1999 owned no Units of
Limited Partnership Interest. An affiliate of the General Partner owns
approximately 1.68% of the units of Limited Partnership Interest.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) TRANSACTIONS WITH MANAGEMENT AND OTHERS
No transactions have occurred between the Partnership and those in the
management of Realmark Properties, Inc. All transactions between the Partnership
and Realmark Properties, Inc. (the Corporate General Partner) and any other
affiliated organization are described in Item 11 of this report and in Notes 6
and 7 to the financial statements.
ITEM 14: EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND
REPORTS ON FORM 8-K
(a) FINANCIAL STATEMENTS AND SCHEDULES
FINANCIAL STATEMENTS PAGE
(i) Independent Auditors' Report F-1
(ii) Independent Auditors' Report for the F-2
two fiscal years ended December 31, 1998
(iii) Balance Sheets as of December 31, F-3
1999 and 1998
(iv) Statements of Operations for the F-4
years ended December 31, 1999, 1998,
and 1997
(v) Statements of Partners' Equity for F-5
the years ended December 31, 1999,
1998, and 1997
(vi) Statements of Cash Flows for the F-6
years ended December 31, 1999, 1998,
and 1997
(vii) Notes to Financial Statements F-7
FINANCIAL STATEMENT SCHEDULES
(i) Schedule III - Real Estate and Accumulated Depreciation F-20
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or the notes
thereto.
(b) REPORTS ON FORM 8-K
None.
(c) EXHIBITS
4. Instruments defining the rights of security holders, including
indentures
(a) Amended and Restated Certificate and Agreement of Limited
Partnership filed with the Registration Statement of the
Registrant Form S-11, filed September 30, 1987 and
subsequently amended, incorporated herein by reference.
10. Material contracts
(a) Property Management Agreement with Realmark Corporation
included with the Registration Statement of the Registrant as
filed and amended to date incorporated herein by reference.
27. Financial Data Schedule
(a) Schedule is included herewith.
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP - VI-B
BY: /s/JOSEPH M. JAYSON APRIL 18, 2000
-------------------------- -------------------------------
JOSEPH M. JAYSON, DATE
INDIVIDUAL GENERAL PARTNER
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
BY: REALMARK PROPERTIES, INC.
CORPORATE GENERAL PARTNER
/s/JOSEPH M. JAYSON APRIL 18, 2000
-------------------------- -------------------------------
JOSEPH M. JAYSON, DATE
PRESIDENT AND DIRECTOR
/S/JUDITH P. JAYSON APRIL 18, 2000
-------------------------- -------------------------------
JUDITH P. JAYSON, DATE
DIRECTOR
/S/ MICHAEL J. COLMERAUER APRIL 18, 2000
-------------------------- -------------------------------
MICHAEL J. COLMERAUER DATE
SECRETARY
14
INDEPENDENT AUDITOR'S REPORT
The Partners
Realmark Property Investors Limited Partnership - VI B
We have audited the accompanying balance sheet of Realmark Property Investors
Limited Partnership - VI B as of December 31, 1999, and the related statements
of operations, partners' equity, and cash flows for the year ended December 31,
1999. Our audit also included the financial statement schedule listed in the
index at Item 14. These financial statements and the financial statement
schedule are the responsibility of the General Partners. Our responsibility is
to express an opinion on the financial statements and the financial statement
schedule based on our audit. The financial statements of Realmark Property
Investors Limited Partnership - VI B for the years ended December 31, 1998 and
1997 were audited by other auditors whose report dated April 12, 1999 expressed
an unqualified opinion on those statements.
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 the
General Partners, 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 present fairly, in all material
respects, the financial position of Realmark Property Investors Limited
Partnership - VI B as of December 31, 1999, and the results of its operations
and its cash flows for the year then ended, in conformity with generally
accepted accounting principles. Also, in our opinion, the financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.
Toski, Schaefer & Co., P.C.
Williamsville, New York
March 24, 2000
F-1
INDEPENDENT AUDITORS' REPORT
The Partners
Realmark Property Investors Limited Partnership-VIB:
We have audited the accompanying balance sheet of Realmark Property Investors
Limited Partnership-VIB as of December 31, 1998, and the related statements of
operations, partners' capital (deficit), and cash flows for each of the two
years in the period ended December 31, 1998. Our audits also included the
financial statement schedule listed in the Index at Item 14. These financial
statements and financial statement schedule are the responsibility of the
General Partners. Our responsibility is to express an opinion on the financial
statements and the financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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
General Partners, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Realmark Property Investors Limited
Partnership-VIB at December 31, 1998, and the results of its operations and its
cash flows for each of the two years in the period ended December 31, 1998 in
conformity with generally accepted accounting principles. Also, in our opinion,
such financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.
DELOITTE & TOUCHE LLP
Buffalo, New York
April 12, 1999
F-2
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Balance Sheets
December 31, 1999 and 1998
Assets 1999 1998
------ ---- ----
Property and equipment, at cost:
Land and improvements $ 780,500 780,500
Buildings and improvements 6,028,430 6,028,430
Furniture, fixtures and equipment 257,865 255,652
---------- ---------
7,066,795 7,064,582
Less accumulated depreciation 2,097,343 1,874,186
---------- ---------
Net property and equipment 4,969,452 5,190,396
Investment in joint ventures 101,543 230,429
Cash 798,022 842,779
Accounts receivable - affiliates 90,816 99,995
Escrow deposits 231,206 328,770
Mortgage costs, less accumulated amortization
of $29,530 in 1999 and $18,207 in 1998 310,176 321,499
Other assets 33,502 31,676
----------- ---------
Total assets $ 6,534,717 7,045,544
=========== =========
Liabilities and Partners' Equity
Liabilities:
Mortgages payable 5,269,300 5,309,087
Accounts payable and accrued expenses 167,611 232,180
Security deposits and prepaid rents 129,613 91,261
---------- ---------
Total liabilities 5,566,524 5,632,528
---------- ---------
Partners' equity (deficit):
General partners (155,482) (142,137)
Limited partners 1,123,675 1,555,153
--------- ---------
Total partners' equity 968,193 1,413,016
----------- ---------
Total liabilities and partners' equity $ 6,534,717 7,045,544
=========== =========
See accompanying notes to financial statements
F-3
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Statements of Operations
Years Ended December 31, 1999, 1998 and 1997
1999 1998 1997
---- ---- ----
Income:
Rental $ 1,695,604 1,446,398 1,531,418
Interest and other 189,827 183,156 120,815
----------- ---------- ---------
Total income 1,885,431 1,629,554 1,652,233
----------- ---------- ---------
Expenses:
Property operations 1,265,846 1,297,078 1,100,361
Interest 442,411 466,099 540,678
Depreciation 223,157 259,863 273,671
Administrative:
To affiliates 164,799 150,152 173,291
Other 179,914 199,383 171,175
Loss from flood - - 25,000
Total expenses 2,276,127 2,372,575 2,284,176
---------- --------- ---------
Loss before allocated loss from joint ventures (390,696) (743,021) (631,943)
Allocated loss from joint ventures (54,127) (116,796) (42,373)
----------- --------- ----------
Net loss $ (444,823) (859,817) (674,316)
=========== ========= ==========
Net loss per limited partnership unit $ (5.49) (10.61) (8.32)
=========== ========== ===========
Distributions per limited partnership unit $ - - 3.08
=========== ========== ===========
Weighted average number of limited partnership
units outstanding 78,625.1 78,625.1 78,625.1
=========== ========== ===========
See accompanying notes to financial statements
F-4
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Statements of Partners' Equity
Years Ended December 31, 1999, 1998 and 1997
General LIMITED PARTNERS
PARTNERS UNITS AMOUNT
---------- ---------- ----------
Balances at December 31, 1996 $ (88,613) 78,625.1 3,285,762
Distributions to partners (7,500) - (242,500)
Net loss (20,229) - (654,087)
---------- ---------- ----------
Balances at December 31, 1997 (116,342) 78,625.1 2,389,175
Net loss (25,795) - (834,022)
---------- ---------- ----------
Balances at December 31, 1998 (142,137) 78,625.1 1,555,153
Net loss (13,345) - (431,478)
---------- ---------- ----------
Balances at December 31, 1999 $ (155,482) 78,625.1 1,123,675
========== ========== ==========
See accompanying notes to financial statements
F-5
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Statements of Cash Flows
Years Ended December 31, 1999, 1998 and 1997
1999 1998 1997
----------- ------------ -----------
Cash flows from operating activities:
Net loss $ (444,823) (859,817) (674,316)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 234,480 271,185 372,874
Allocated loss from joint ventures 54,127 116,796 42,373
Loss from flood - - 25,000
Increase in other assets (1,826) (17,252) (818)
Increase (decrease) in:
Accounts payable and accrued expenses (64,569) (42,447) 59,107
Security deposits and prepaid rents 38,352 (50,398) 29,697
---------- ---------- ----------
Net cash used in operating
activities (184,259) (581,933) (146,083)
---------- ---------- ----------
Cash flows from investing activities:
(Increase) decrease in accounts receivable - affiliates 9,179 (42,093) (3,996)
(Increase) decrease in escrow deposits 97,564 80,038 (304,345)
Proceeds from insurance - - 80,136
Additions to property and equipment (2,213) - (188,861)
Distributions received from joint venture 74,759 - -
---------- ---------- ----------
Net cash provided by (used in)
investing activities 179,289 37,945 (417,066)
---------- ---------- ----------
Cash flows from financing activities:
Decrease (increase) in mortgage costs - 959 (339,706)
Proceeds from mortgage - - 5,360,000
Principal payments upon refinancing - - (4,209,840)
Principal payments on mortgage (39,787) (36,553) (29,626)
Distributions to partners - - (250,000)
Net cash provided by (used in)
financing activities (39,787) (35,594) 530,828
---------- ---------- ----------
Net decrease in cash (44,757) (579,582) (32,321)
Cash at beginning of year 842,779 1,422,361 1,454,682
---------- ----------
Cash at end of year $ 798,022 842,779 1,422,361
========== ========== ==========
Supplemental disclosure of cash flow information -
cash paid during the year for interest $ 450,122 436,301 437,760
========== ========== ==========
See accompanying notes to financial statements
F-6
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements
December 31, 1999, 1998 and 1997
(1) FORMATION AND OPERATION OF PARTNERSHIP
Realmark Property Investors Limited Partnership - VI B (the Partnership),
a Delaware limited partnership, was formed on September 21, 1987, to
invest in a diversified portfolio of income producing real estate
investments, its only industry segment.
In November 1988, the Partnership commenced the public offering of units
of limited partnership interest. Other than matters relating to the
organization, it had no business activities and, accordingly, had not
incurred any expenses or earned any income until the first interim
closing (minimum closing) of the offering, which occurred on February
2, 1989. All items of income and expense arose subsequent to this
date. The offer terminated on February 28, 1990 with gross offering
proceeds of $7,862,510. As of December 31, 1999, 78,625.1 units of
limited partnership interest were sold and outstanding. The general
partners are Realmark Properties, Inc. (the corporate general partner)
and Mr. Joseph M. Jayson (the individual general partner). Mr. Joseph
M. Jayson is the sole stockholder of J.M. Jayson & Company Inc.
Realmark Properties, Inc. is a wholly-owned subsidiary of J.M. Jayson
& Company, Inc. Under the partnership agreement, the general partners
and their affiliates can receive compensation for services rendered
and reimbursement for expenses incurred on behalf of the Partnership
(note 7).
The partnership agreement also provides that distribution of funds,
revenues, and costs and expenses arising from partnership activities,
exclusive of any sale or refinancing activities, are to be allocated
97% to the limited partners and 3% to the general partners.
Net income or loss and proceeds arising from a sale or refinancing shall
be distributed first to the limited partners in amounts equivalent to
a 7% return on the average of their adjusted capital contributions;
second, to the corporate general partner a 3% property disposition fee
provided, however, that such fees shall be reduced, but not below
zero, by the amounts necessary to pay to limited partners whose
subscriptions were accepted by January 31, 1989, an additional
cumulative annual return (not compounded) equal to 2% of their average
adjusted capital contributions, and to limited partners whose
subscriptions were accepted between February 1, 1989 and June 30,
1989, an additional cumulative annual return (not compounded) equal to
1% of their average adjusted capital contributions commencing with the
first fiscal quarter following the termination of the offering of
units; third, to the limited partners, an amount equal to their
capital contributions, then an amount equal to an additional 5% of the
average of their adjusted capital contributions; fourth, to all
partners, an amount equal to their respective positive capital
balances; and finally, in the ratio of 87% to the limited partners and
13% to the general partners.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual
basis of accounting.
F-7
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
(b) ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
(c) PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Depreciation is provided
for in amounts sufficient to relate the cost of depreciable assets
to operations over their estimated service lives using the
straight-line method. The estimated useful lives of the
Partnership's assets range from 5 to 25 years. Depreciation
expense totaled $223,157, $259,863 and $273,671 for the years
ended December 31, 1999, 1998 and 1997, respectively. Improvements
are capitalized, while expenditures for maintenance and repairs
are charged to expense as incurred. Upon disposal of depreciable
property, the appropriate property accounts are reduced by the
related costs and accumulated depreciation. The resulting gains
and losses are reflected in the statements of operations. The
accelerated cost recovery system and modified accelerated cost
recovery system are used to calculate depreciation expense for tax
purposes.
(d) CASH
For purposes of reporting cash flows, cash includes money market
accounts and any highly liquid debt instruments purchased with a
maturity of three months or less.
(e) ESCROW DEPOSITS
Escrow deposits represent cash which is restricted for the payment of
property taxes and insurance in accordance with the mortgage
agreement.
(f) MORTGAGE COSTS
Mortgage costs incurred in obtaining the property mortgage financing
are recorded at cost less applicable amortization. Amortization is
being computed using the straight-line method over the life of the
respective mortgages.
(g) UNCONSOLIDATED JOINT VENTURES
The Partnership's investment in Foxhunt Joint Venture and Lakeview
Joint Venture are unconsolidated joint ventures which are
accounted for on the equity method. The joint ventures are not
consolidated in the Partnership's financial statements because the
Partnership is not the majority owner.
(h) RENTAL INCOME
Rental income is recognized as earned according to the terms of the
leases. All rental income is derived from residential rental
property. The outstanding leases with respect to this property are
for terms of one year or less.
(i) LOSS PER LIMITED PARTNERSHIP UNIT
The loss per limited partnership unit is based on the weighted average
number of limited partnership units outstanding for the year.
F-8
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
(j) ACCRUED RENT RECEIVABLE
Due to the nature of accrued rent receivable, all such receivables are
fully reserved at December 31, 1999 and 1998.
(k) INCOME TAXES
No income tax provision has been included in the financial statements
since profit or loss of the Partnership is required to be reported
by the respective partners on their income tax returns.
(l) COMPREHENSIVE INCOME
The Partnership has adopted Statement of Financial Accounting
Standards (SFAS) No. 130 - "Reporting Comprehensive Income." SFAS
130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general
purpose financial statements. Comprehensive income is defined as
"the change in equity of a business enterprise during a period
from transactions and other events and circumstances from
non-owner sources." Other than net income (loss), the Partnership
has no other sources of comprehensive income.
(m) SEGMENT INFORMATION
SFAS No. 131 - "Disclosures about Segments of an Enterprise and
Related Information" establishes standards for the way public
business enterprises report information about operating segments
and annual financial statements. The Partnership's only operating
segment is the ownership and operation of income-producing real
property for the benefit of its partners.
(n) ACCOUNTING CHANGES AND DEVELOPMENTS
In June 1998, the Financial Accounting Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133 - "Accounting for
Derivative Instruments and Hedging Activities" which establishes
revised accounting and reporting standards for derivative
instruments and for hedging activities. It requires that an entity
measure all derivative instruments at fair value and recognize
such instruments as either assets or liabilities in the balance
sheets. The accounting for changes in the fair value of a
derivative instrument will depend on the intended use of the
derivative as either a fair value hedge, a cash flow hedge or a
foreign currency hedge. The effect of the changes in fair value of
the derivatives and, in certain cases, the hedged items are to be
reflected in either the statements of operations or as a component
of other comprehensive income, based upon the resulting
designation. As issued, SFAS No. 133 was effective for fiscal
years beginning after June 15, 1999. In June 1999, the FASB issued
SFAS No. 137 - "Accounting for Derivative Instruments and Hedging
Activities-Deferral of the Effective Date of FASB Statement No.
133." SFAS No. 137 defers the effective date of SFAS No. 133 for
one year to fiscal years beginning after June 15, 2000. Since the
Partnership does not currently have any derivative instruments or
hedging activities, management does not believe that SFAS No. 133
will have a material effect on the partnership financial
statements, taken as a whole.
F-9
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
(o) RECLASSIFICATIONS
Reclassifications have been made to certain 1998 and 1997 balances in
order to conform them to the 1999 presentation.
(3) ACQUISITION OF RENTAL PROPERTY
In June 1991, the Partnership acquired a 192 unit apartment complex
(Fairway Club, formerly The Villa) located in Greenville, South
Carolina for a purchase price of $3,100,000 which included $373,493 in
acquisition fees.
In June 1991, the Partnership acquired a 144 unit apartment complex
(Players Club North) located in Lutz, Florida for a purchase price of
$3,007,000 which included $190,737 in acquisition fees.
On September 27, 1991, the Partnership entered into a joint venture
agreement for the purpose of operating the Foxhunt Apartments, located
in Kettering, Ohio. See note 6 for further discussion related to the
Foxhunt Joint Venture.
On September 30, 1992, the Partnership entered into a joint venture
agreement for the purpose of operating the Lakeview Apartment complex,
located in Milwaukee, Wisconsin. See note 6 for further discussion
related to the Lakeview Joint Venture.
(4) MORTGAGES PAYABLE
The Partnership has the following mortgages payable as of December 31,
1999 and 1998:
(a) PLAYERS CLUB NORTH
A mortgage with a balance of $2,665,129 and $2,684,952 at December
31, 1999 and 1998, respectively, provides for monthly principal
and interest payments of $20,824, bearing interest at 8.48%. The
mortgage matures June 2027.
(b) FAIRWAY CLUB (FORMERLY THE VILLA)
A mortgage with a balance of $2,604,171 and $2,624,135 at December
31, 1999 and 1998, respectively, provides for monthly principal
and interest payments of $20,002 bearing interest at 8.30%. The
mortgage matures June 2027.
The above mortgages are secured by the properties to which they relate.
The aggregate maturities of the mortgages for each of the next five years
and thereafter, assuming principal payments are not accelerated, are
as follows:
2000 $ 49,639
2001 53,968
2002 58,674
2003 63,791
2004 69,354
Thereafter 4,973,874
---------
$5,269,300
==========
F-10
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(5) FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107 requires disclosure
about fair value of certain financial instruments. The fair value of
cash, accounts receivable - affiliates, other assets, accounts payable
and accrued expenses, and security deposits and prepaid rents
approximate the carrying value due to the short-term nature of these
instruments.
Management has estimated, based on current interest rates for similar
mortgages, that the fair value of the mortgages payable on Players
Club and Fairway Club (formerly The Villa) approximate $2,782,000 and
$2,675,000 at December 31, 1999, respectively. The carrying values of
the mortgages are approximately $2,665,000 and $2,604,000,
respectively. The terms of the mortgages are described in note 4.
(6) INVESTMENT IN JOINT VENTURES
On September 27, 1991, the Partnership entered into an agreement and
formed a joint venture with Realmark Property Investors Limited
Partnership-II (RPILP-II), and Realmark Property Investors Limited
Partnership - VI A (RPILP-VI A). The Joint Venture was formed for the
purpose of operating the Foxhunt Apartments, located in Dayton, Ohio
and owned by RPILP-II. Under the terms of the joint venture agreement,
the Partnership contributed $1,041,568 and RPILP - VI A contributed
$390,000 to buy out the wraparound promissory note on the property,
while RPILP-II contributed the property net of the first mortgage. The
Partnership has all of the rights and responsibilities of a general
partner in the joint venture.
On April 1, 1992, RPILP-II returned RPILP-VI A's entire capital
contribution and $580,000 of the capital originally invested by the
Partnership. The amended joint venture agreement now provides that any
income, loss, gain, cash flow, or sale proceeds be allocated 88.5% to
RPILP-II and 11.5% to the Partnership. Prior to the buyout, the
allocations were 63.14% to RPILP-II, 26.82% to the Partnership and
10.04% to RPILP-VI A. The allocated net loss of the joint venture has
been included in the statements of operation of the Partnership.
In July 1996, the Partnership entered into a plan to dispose of the
property of the Foxhunt Joint Venture with a carrying amount of
$2,886,577 at December 31, 1996 and a net loss of $129,930 for the
year then ended. Management had determined that a sale of the property
was in the best interests of the investors. As of December 31, 1996,
an agreement, cancelable by the buyer, was signed with an anticipated
sales price of $7,400,000. The agreement was subsequently canceled in
1997, and the Partnership temporarily discontinued its plan to sell
the property.
In 1999, the Partnership entered into a plan to dispose of Foxhunt
Apartments with a carrying amount of $2,442,352. Foxhunt incurred a
net loss of $470,672 for the year ended December 31, 1999. Management
has determined that a sale of the property is in the best interests of
the Partnership.
At December 31, 1999, substantial doubt exists as to whether RPILP-II
will continue as a going concern, due to the current nature of
Foxhunt's mortgage payable, recurring losses and a partners'
deficiency. Should RPILP-II be unable to continue as a going concern,
the Partnership, as a general partner, may be required to fund the
losses of the joint venture and may be obligated to satisfy the joint
venture's outstanding liabilities in excess of its ownership interest.
F-11
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(6) INVESTMENT IN JOINT VENTURES, CONTINUED
Statement of Financial Accounting Standards No. 121 - "Accounting for the
mpairment of Long-lived Assets and for Long-lived Assets to be
Disposed Of " (the Statement) requires that assets to be disposed of
be recorded at the lower of carrying value or fair value less costs to
sell. The Statement also requires that such assets not be depreciated
during the disposal period, as the assets will be recovered through
sale rather than through operations. In accordance with this
Statement, the long-lived assets of the joint venture are recorded at
the carrying amount which is the lower of carrying value or fair value
less costs to sell, and were not depreciated during the disposal
period. Fair value is determined based on estimated future cash flows.
Depreciation expense, not recorded during the disposal period, for the
year ended December 31, 1999 totaled approximately $106,000.
The following financial statements of the joint venture are presented on a
historical-cost basis. The equity ownership was determined based upon
the cash paid into the joint venture by the Partnership as a
percentage of the general partners' estimate of the fair market value
of the apartment complex and other net assets at the date of
inception. The accounts receivable - affiliates was collected during
1999.
A summary of the assets, liabilities, and partners' capital of the joint
venture as of December 31, 1999 and 1998 and the results of its
operations for the years ended December 31, 1999, 1998 and 1997 is as
follows:
F-12
FOXHUNT JOINT VENTURE
Balance Sheets
December 31, 1999 and 1998
ASSETS 1999 1998
------ --------- ---------
Cash $ 128,829 1,014,583
Property and equipment, net of accumulated depreciation 2,442,352 2,530,775
Accounts receivable - affiliates - 228,256
Deferred mortgage expense 95,983 128,910
Other assets 58,570 361,253
------------ ----------
Total assets $ 2,725,734 4,263,777
============ =========
LIABILITIES AND PARTNERS' DEFICIENCY
Liabilities:
Mortgage payable 6,000,000 6,000,000
Accounts payable and accrued expenses 180,871 294,685
Accounts payable - affiliates 19,483 -
Other liabilities 111,128 112,747
---------- ----------
Total liabilities 6,311,482 6,407,432
Partners' deficiency (3,585,748) (2,143,655)
------------ ----------
Total liabilities and partners' deficiency $ 2,725,734 4,263,777
============ =========
F-13
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(6) INVESTMENT IN JOINT VENTURES, CONTINUED
FOXHUNT JOINT VENTURE
Statements of Operations
Years Ended December 31, 1999, 1998 and 1997
1999 1998 1997
----------- ----------- -----------
Income:
Rental $ 1,410,656 1,285,350 1,404,587
Interest and other 99,410 139,155 86,892
----------- ----------- -----------
Total income 1,510,066 1,424,505 1,491,479
----------- ----------- -----------
Expenses:
Property operations 1,024,33 11,099,417 595,739
Interest 648,784 864,886 414,725
Depreciation 109,124 211,112 228,308
Administrative:
To affiliates 101,571 108,381 118,384
Others 96,928 84,340 92,747
----------- ----------- -----------
Total expenses 1,980,738 2,368,136 1,449,903
----------- ----------- -----------
Net income (loss) $ (470,672) (943,631) 41,576
=========== =========== ===========
Allocation of net income (loss):
The Partnership (54,127) (108,517) 4,781
RPILP-II (416,545) (835,114) 36,795
----------- ----------- -----------
Total $ (470,672) (943,631) 41,576
=========== =========== ===========
A reconciliation of the investment in Foxhunt Joint Venture:
1999 1998 1997
----------- ----------- -----------
Investment in joint venture at beginning of year $ 267,383 375,900 371,119
Allocation of net loss (54,127) (108,517) 4,781
Capital distribution (111,713) - -
----------- ----------- -----------
Investment in joint venture at end of year $ 101,543 267,383 375,900
=========== =========== ===========
F-14
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(6) INVESTMENT IN JOINT VENTURES, CONTINUED
On September 30, 1992, the Partnership entered into a joint venture
agreement with Realmark Property Investors Limited Partnership IV
(RPILP-IV), for the purpose of operating the Lakeview Apartment
complex, located in Milwaukee, Wisconsin and owned by RPILP-IV. Under
the terms of the agreement, the Partnership contributed $175,414,
while RPILP-IV contributed the property net of the outstanding
mortgage. The Partnership has all the rights and responsibilities of a
general partner in the joint venture.
The joint venture agreement provides that any income, loss, cash flow, or
sale proceeds be allocated 16.22% to the Partnership and 83.78% to
RPILP-IV. The allocated net loss of the joint venture has been
included in the statements of operations of the Partnership.
The equity ownership percentage was determined based upon the cash paid
into the joint venture by the Partnership as a percentage of the
general partner's estimate of the fair market value of the apartment
complex and other net assets at the date of inception.
In July 1996, the Partnership entered into a plan to dispose of the
property of the Lakeview Village Apartments with a carrying amount of
$2,507,241 at December 31, 1996 and a net loss of $222,600 for the
year ended December 31, 1996. Management had determined that a sale of
the property was in the best interests of the investors. As of
December 31, 1996, an agreement, cancelable by the buyer, was signed
with an anticipated sales price of $4,090,000. The agreement was
subsequently canceled in 1997, and management temporarily discontinued
its plans to sell the property. In 1998, management continued its
plans to sell the property, and closed the sale in December 1998. The
sales price was $3,400,000, and the resulting gain for financial
statement purposes was $851,317. Now that the Lakeview Joint Venture
no longer operates the property, it is expected that the joint venture
will be dissolved in 2000. The Lakeview Joint Venture satisfied the
majority of its mortgage liability using the proceeds from the sale of
its property. The remaining obligation was forgiven by the lender,
resulting in an extraordinary gain of $253,159 for the year ended
December 31, 1998.
ThePartnership, as general partner, may be required to satisfy the
outstanding liabilities of the Lakeview Joint Venture in excess of its
ownership interest.
Statement of Financial Accounting Standards No. 121 - "Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be
Disposed Of " (the Statement) requires that assets to be disposed of
be recorded at the lower of carrying value or fair value, less costs
to sell. The Statement also requires that such assets not be
depreciated during the disposal period, as the assets will be
recovered through sale rather than through operations. In accordance
with this statement, the long-lived assets of the Lakeview Joint
Venture were recorded at the carrying amount which was the lower of
carrying value or fair value less costs to sell, and were not
depreciated during the disposal period. Depreciation expense, not
recorded during the disposal period, for the year ended December 31,
1998 totaled approximately $161,000.
F-15
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(6) INVESTMENT IN JOINT VENTURES, CONTINUED
A summary of the assets, liabilities, and partners' capital of the Joint
Venture as of December 31, 1999 and 1998 and the results of its
operations for the years ended December 31, 1999, 1998 and 1997 is as
follows:
LAKEVIEW JOINT VENTURE
Balances Sheets
December 31, 1999 and 1998
ASSETS 1999 1998
--------------------- ---------- --------
Other assets $ - 25,264
========== ========
LIABILITIES AND PARTNERS' DEFICIENCY
Liabilities:
Accounts payable and accrued expenses - 90,452
Accounts payable - affiliates - 410,862
---------- --------
Total liabilities - 501,314
Partners' deficiency - (476,050)
---------- --------
Total liabilities and partners' deficiency $ - 25,264
========== ========
F-16
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(6) INVESTMENT IN JOINT VENTURES, CONTINUED
LAKEVIEW JOINT VENTURE
Statements of Operations
Years Ended December 31, 1999, 1998, and 1997
1999 1998 1997
---------- ---------- ----------
Income:
Rental $ - 301,197 630,559
Interest and other - 2,521 60,010
------- ---------- ----------
Total income - 303,718 690,569
------- ---------- ----------
Expenses:
Property operations - 371,634 412,541
Interest:
To affiliates - 48,251 19,374
Other - 840,974 244,688
Depreciation - - 160,588
Administrative:
To affiliates - 9,969 42,608
Others - 188,406 101,483
------- ---------- ----------
Total expenses - 1,459,234 981,282
------- ---------- ----------
Loss before gain on sale of property and
extraordinary item - (1,155,516) (290,713)
Gain on sale of property - 851,317 -
Extraordinary gain on extinguishment of debt - 253,159
---------- ----------
Net loss $ - (51,040) (290,713)
======= ========== ==========
Allocation of net loss:
The Partnership - (8,279) (47,154)
RPILP-IV - (42,761) (243,559)
------- ---------- ----------
Total $ - (51,040) (290,713)
======= ========== ==========
A reconciliation of the investment in Lakeview Joint Venture:
1999 1998 1997
---------- ---------- ----------
INVESTMENT IN JOINT VENTURE AT BEGINNING OF YEAR (36,954) (28,675) 18,479
Allocation of net loss - (8,279) (47,154)
Capital contribution 36,954 - -
------- ---------- ----------
Investment in joint venture at end of year $ - (36,954) (28,675)
======= ========== ==========
F-17
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(7) RELATED PARTY TRANSACTIONS
The Corporate general partner and its subsidiaries earned the following
fees and commissions and were reimbursed for the following expenses as
provided for in the partnership agreement for the years ended December
31, 1999, 1998 and 1997.
1999 1998 1997
-------- -------- --------
LOAN PLACEMENT FEES, 1% OF TOTAL MORTGAGE
loan amount $ - - 53,600
======== ======== ========
Reimbursement for allocated administrative costs of the corporate
general partner and its affiliates in connection with the adminis-
tration of the Partnership, including payroll, legal, rent,
depreciation, printing, computer processing, mailing, audit,
travel, communi- cations, and for other direct Partnership
expenses 70,197 65,560 86,197
Property management fees equal to 5% of the
gross monthly rental receipts of the
properties managed 88,266 78,256 80,758
Computer service charges based upon number
of apartment units 6,336 6,336 6,336
-------- -------- --------
$164,799 150,152 173,291
======== ======== ========
Accounts receivable - affiliates, which are payable on demand, amounted to
$90,816 and $99,995 at December 31, 1999 and 1998, respectively.
Partnership accounting and portfolio management fees, investor services
fees and brokerage fees are allocated based on total assets, the number
of partners, and number of units, respectively. In addition to the
above, other properties specific expenses such as payroll, benefits,
etc. are charged to property operations on the Partnership's statement
of operations.
(8) INCOME TAXES
The tax returns of the Partnership are subject to examination by federal
and state taxing authorities. Under federal and state income tax laws,
regulations and rulings, certain types of transactions, may be accorded
varying interpretations and, accordingly, reported Partnership amounts
could be changed as a result of any such examination.
F-18
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Notes to Financial Statements, Continued
(8) INCOME TAXES, CONTINUED
The reconciliation of Partners' Capital as of December 31, 1999, 1998 and
1997, as reported in the balance sheets and as reported for tax return
purposes, is as follows:
1999 1998 1997
----------- ----------- -----------
Partners' capital - balance sheets $ 968,193 1,413,016 2,272,833
Add to (deduct from):
Accumulated difference in depreciation (7,710) (8,833) (39,882)
Syndication costs 1,179,381 1,179,381 1,179,381
Other nondeductible expenses 288,115 331,298 268,885
Tax basis adjustment - joint ventures 94,802 83,555 (60,539)
----------- ----------- -----------
PARTNERS' CAPITAL - TAX RETURN PURPOSES $ 2,522,781 2,998,417 3,620,678
=========== =========== ===========
The reconciliation of net loss for the years ended December 31, 1999, 1998
and 1997, and as reported in the statements of operations, and as would
be reported for tax return purposes is as follows:
1999 1998 1997
--------- --------- ---------
Net loss - statements of operations $(444,823) (859,817) (674,316)
Add to (deduct from):
Difference in depreciation 1,123 31,049 (212)
Other nondeductible expenses (43,183) 62,413 18,489
Tax basis adjustment - joint ventures 11,247 144,094 (563)
--------- --------- ---------
Net loss - tax return purposes $(475,636) (622,261) (656,602)
========= ========= =========
F-19
SCHEDULE III
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Real Estate and Accumulated Depreciation
December 31, 1999
Initial Cost to Gross amounts at which
Partnership Carried at Close of Period
--------------------------- Cost --------------------------
Land Buildings Capitalized Land Buildings
Property and and Subsequent to and and
Description Encumbrances improvements improvements Acquisition Retirements improvements improvements Total
- -------------- ------------ ------------ ------------- ------------- ----------- ------------ ------------ --------
Fairway Club
(formerly
The Villa)
Greenville, SC $2,604,171 528,000 3,059,008 280,159 144,026 554,500 3,168,641 3,723,141
Player's Club
North
Lutz, FL 2,665,129 218,000 2,851,851 15,938 - 226,000 2,859,789 3,085,789
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
$5,269,300 746,000 5,910,859 296,097 144,026 780,500 6,028,430 6,808,930
========== ========== ========== ========== ========== ========== ========== ==========
Foxhunt Joint
Venture
Kettering, OH $6,000,000 387,500 4,890,020 235,608 - 387,500 5,125,628 5,513,128
========== ========== ========== ========== ========== ========== ========== ==========
SCHEDULE III
SCHEDULE III REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Real Estate and Accumulated Depreciation
December 31, 1999
(continued)
Life
on which
depreciation
in latest
Date statement of
Property Accumulated of Date operations
Description Depreciation Construction Acquired is computed
- ------------- ------------- ------------- --------- ----------------
Fairway Club
(formerly
The Villa)
Greenville, SC 922,762 1971 6/91 25 years
Player's Club
North
Lutz, FL 918,708 1986 6/91 25 years
1,841,470
=========
Foxhunt Joint
Venture
Kettering, OH 3,083,021 1972 9/91 25 years*
========= ==== ==== =========
* In accordance with Statement of Financial Accounting Standards No. 121,
no depreciation was recorded during the disposal period.
F-20
SCHEDULE III, CONTINUED
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
Real Estate and Accumulated Depreciation
December 31, 1999, 1998 and 1997
(1) Cost for Federal income tax purposes is $6,808,930.
(2) A reconciliation of the carrying amount of land and buildings as of
December 31, 1999, 1998 and 1997 follows:
PARTNERSHIP PROPERTIES
1999 1998 1997
---- ---- ----
Balance at beginning of year $6,808,930 6,808,930 6,764,094
Additions - - 188,862
Dispositions - - (144,026)
---------- ---------- ----------
Balance at end of year $6,808,930 6,808,930 6,808,930
========== ========== ==========
JOINT VENTURE PROPERTIES
1999 1998 1997
---- ---- ----
Balance at beginning of year $5,494,641 9,588,006 9,575,341
Additions 18,487 68,970 12,665
Dispositions - (4,162,335) -
---------- ---------- ----------
Balance at end of year $5,513,128 5,494,641 9,588,006
========== ========== ==========
(3) A reconciliation of accumulated depreciation for building and improvements
for the years ended December 31, 1999, 1998 and 1997 follows:
PARTNERSHIP PROPERTIES
1999 1998 1997
---- ---- ----
Balance at beginning of year $1,609,200 1,376,933 1,178,672
Depreciation expense 232,270 232,267 237,150
Dispositions - - (38,889)
---------- ---------- ----------
Balance at end of year (4) $1,841,470 1,609,200 1,376,933
========== ========== ==========
JOINT VENTURE PROPERTIES
1999 1998 1997
---- ---- ----
Balance at beginning of year $2,977,048 4,570,419 4,181,524
Depreciation expense 105,973 209,647 388,895
Dispositions - (1,803,018) -
---------- ---------- ----------
Balance at end of year (4) $3,083,021 2,977,048 4,570,419
========== ========== ==========
(4) Balance applies entirely to buildings. All properties are depreciated over 25 year lives.
(5) Sale of Lakeview Apartments in 1998 and flood at Fairway Club (formerly The
Villa) in 1997
F-21