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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 EXCHANGE ACT OF 1934.
COMMISSION FILE NUMBER 0-17466
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 16-1309987
- ------------------- ---------------------------------
(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 A
(the "Partnership"), is a Delaware Limited Partnership organized in September
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 10, 1987, and concluded the
offering on November 10, 1988, having raised a total of $15,737,790 before
deducting sales commissions and expenses of the offering.
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. As of December 31, 1999 the Partnership owned four (4) apartment
complexes totaling 680 units. The Partnership also owns an office complex
consisting of three buildings with a combined 92,000 square feet of rentable
space. Additionally, the Partnership is a partner in the Carriage House of
Englewood (formerly Gold Key) and Research Triangle Joint Ventures. The Joint
Venture agreements provide the Partnership with a 40% ownership in a 144 unit
apartment complex located in Dayton, Ohio (Carriage House of Englewood) and a
50% ownership in an office/distribution facility in Raleigh, North Carolina
(Research Triangle). See also Item 7.
The business of the Partnership is not seasonal. As of December 31,
1999, the Partnership did not directly employ any persons in a full-time
position. All persons who regularly rendered services on behalf of the
Partnership through December 31, 1999 were employees of the Corporate General
Partner or its affiliates.
The Partnership investment objectives are to (1) provide a return of
capital plus capital gains from the sale of appreciated properties; (2) provide
partners with cash distributions until properties are sold; (3) preserve and
protect partners capital and; (4) increase Partnership equity through the
reduction of mortgage loans.
Occupancy for each complex as of December 31, 1999, 1998 and 1997 was
as follows:
1999 1998 1997
---- ---- ----
Properties
Beaver Creek 100% 94% 95%
Countrybrook Estates (formerly West Creeke) 85% 91% 84%
Stonegate Townhouses 97% 95% 91%
Pomeroy Park (formerly The Commons on Lewis Ave.) 91% 94% 76%
Inducon - Columbia 99% 85% 98%
Joint Ventures
- --------------
Carriage House of Englewood 89% 77% 72%
Research Triangle 100% 100% 100%
2
ITEM 1: (CONTINUED) BUSINESS
- ------------------- --------
The percentage of total Partnership revenue on a consolidated basis
generated from each complex as of December 31, 1999, 1998 and 1997 was as
follows:
1999 1998 1997
---- ---- ----
Beaver Creek 12% 10% 12 %
Countrybrook Estates 29% 29% 28 %
Stonegate Townhouses 22% 19% 20 %
Pomeroy Park 24% 26% 23 %
Inducon - Columbia 13% 16% 17 %
The financial statements and financial statement schedule have been
prepared assuming that the Partnership will continue as a going concern. The
Partnership has recurring losses from operations, operating cash flow
deficiencies and is currently not in compliance with certain debt covenants
related to certain mortgages payable.
These issues raise substantial doubt about the Partnership's ability to continue
as a going concern. Management's plans regarding these matters are described in
Note 11 to the financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. Please refer
to Item 7 and Note 11 to the financial statements for more information regarding
this issue.
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.
ITEM 2: PROPERTIES
- ------- ----------
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
- ----------------- ----------------------------- -------------
Beaver Creek 80 unit apartment complex on 10 February 1989
Monaca, PA acres of land. The outstanding
mortgage payable at December 31,
1999 was $1,327,451 due July 2027
3
ITEM 2: PROPERTIES (CON'T.)
- ------- -------------------
PROPERTY
NAME AND LOCATION (CONT.) GENERAL CHARACTER OF PROPERTY PURCHASE DATE
- ------------------------- ----------------------------- -------------
with monthly payments of $10,137
including interest of 8.23%.
Countrybrook Estates 240 unit apartment complex. The June 1989
Louisville, KY outstanding mortgage payable at
December 31, 1999 was $3,992,594
with monthly payments of $29,044
bearing interest at 7.89%. The
mortgage matures September 2029.
Stonegate Townhouses 130 unit apartment complex. The March 1990
Mobile, AL outstanding mortgage payable at
December 31, 1999 was $2,601,789
due July 2027 with monthly
payments of $20,207 including
interest of 8.43%.
Pomeroy Park 230 unit apartment complex. March 1991
Tulsa, OK The mortgage balance at December
31, 1999 was $1,832,984 maturing
April 2001 with monthly
principal and interest payments
determined by an interest rate
ranging from 8% - 12% annually
(12% at December 31, 1999).
Inducon-Columbia An office complex consisting of May 1989
Columbia, SC three buildings with a combined
92,000 square feet of rentable
space. The property is managed
by an unrelated third party,
with Realmark Corporation, an
affiliate of the General
Partners, supervising the
operations. The outstanding
mortgage payable balance at
December 31,1999 was $2,138,895
with monthly payments of $16,787
including interest at 7.867%
4
ITEM 2: PROPERTIES (CON'T.)
- ------- -------------------
JOINT VENTURE
NAME AND LOCATION (CONT'D.) GENERAL CHARACTER OF PROPERTY PURCHASE DATE
- --------------------------- ----------------------------- -------------
The maturity date of the mortgage is
October 2022.
Carriage House A 144 unit apartment complex. May 1992
of Englewood The mortgage payable at
Joint Venture December 31, 1999 was $2,867,486
Dayton, OH maturing June 2027, and providing
for monthly principal and
interest payments of $23,503
bearing interest at 9%.
Research Triangle A 150,000 square foot office August 1992
Joint Venture warehouse financed with a 8.06%
Research mortgage maturing September 2022,
Triangle, NC which provides for monthly
principal and interest payments
of $43,251. The balance as of
December 31, 1999 was
$5,418,498.
With the exception of Inducon-Columbia, the above apartment complexes are
managed for the Partnership by Realmark Corporation, an affiliate of the General
Partner.
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; however, for a
discussion of litigation which is pending against the General Partners and
certain other associates, please see item 7.
ITEM 4: SUBMISSION 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 established trading market for the units of
Limited Partnership Interest of the Partnership and it is not anticipated that
any will develop in the future.
5
ITEM 5: MARKET FOR REGISTRANT'S UNITS OF LIMITED PARTNERSHIP INTEREST (CONT.)
- ------- ---------------------------------------------------------------------
As of December 31, 1999, there were 1,809 record holders of units of
Limited Partnership Interest.
There were no distributions made during the years ended December 31,
1999, 1998 and 1997.
6
ITEM 6: SELECTED FINANCIAL DATA
- -------------------------------
Realmark Properties Investors Limited Partnership-VI A
------------------------------------------------------
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 $ 14,444,783 $ 15,106,049 $ 16,284,862 $ 15,139,125 $16,251,096
============ ============ ============ ============ ===========
Mortgages and
notes payable $ 11,893,713 $ 11,392,501 $ 11,463,892 $ 9,573,161 $ 9,672,590
============ ============ ============ ============ ===========
Revenue $ 4,419,351 $ 4,210,922 $ 3,992,130 $ 4,039,286 $ 4,190,474
Expenses 5,153,535 5,314,610 5,209,137 4,860,288 5,312,606
------------ ------------ ------------ ------------ -----------
Loss before allocated
(loss) income from
Joint Ventures (734,184) (1,103,688) (1,217,007) (821,002) (1,122,132)
Allocated (loss) income
from Joint Ventures 43,629 (111,443) 95,051 (165,190) (184,772)
------------ ------------ ------------ ------------
Net loss $ (690,555) $ (1,215,131) $ (1,121,956) $ (986,192) $(1,306,904)
============ ============ ============ ============ ===========
Net cash (used in)
provided by operating
activities $ (280,227) $ (387,212) $ (245,265) $ 15,947 307,437
Principal payments upon
refinancing (3,415,000) - (7,641,618) -
Principal payments on
debt (83,788) (71,391) (78,350) (99,429) (44,715)
------------ ------------ ------------ ------------ -----------
Net cash (used in)
provided by operating
activities less
principal payments $ (3,779,015) $ (458,603) $ (7,965,233) $ (83,482) $ 262,722
============ ============ ============ ============ ===========
Loss per limited
partnership unit $ (4.26) $ (7.49) $ (6.92) $ (6.08) $ (8.06)
============ ============ ============ ============ ===========
Distributions per
limited partnership
unit $ - $ - $ - $ - $ -
============ ============ ============ ============ ===========
Weighted average
number of limited
partnership units
outstanding 157,378 157,378 157,378 157,378 $ 157,378
============ ============ ============ ============ ===========
7
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES:
The Partnership utilized cash from a mortgage refinancing and
distributions received from a Joint Venture to fund a cash flow shortage from
operations of approximately $280,000 in 1999 and to significantly reduce
accounts payable to unaffiliated and affiliated parties. Management is
continuing to focus its efforts on ways of improving collections and increasing
and/or maintaining occupancy at all of the residential complexes in the
Partnership. Incentive programs have been implemented which reward on-site
personnel for increased occupancy, resident retention and improved collections.
Additionally, incentive packages offering monetary payments for resident
referrals are being promoted heavily. Management continues to offer incentive
programs to tenants, such as free months rent or discounted rents for signed
leases. Both resident managers and leasing specialists at the properties
continue to be evaluated and trained to make sure the property has the best and
most capable staff that management can find. Advertising also continues to be
stressed by management as one of the most effective means of attracting new
tenants; several ads a week are placed in leasing and apartment guides/magazines
and local newspapers. Managers continually monitor ads and the "traffic" of
potential renters that they attract and report the results to management so that
strategies can be instituted, changed or strengthened.
There were no distributions made for the years ended December 31, 1999,
1998 or 1997. Management for the Partnership has been utilizing its cash to fund
building improvements and significant maintenance; management expects to
continue significant maintenance (e.g. painting, carpet and appliance
replacements, etc.) to the properties in an effort to increase occupancies. As a
result, it is unlikely at this time that any distributions will be made during
2000.
The bridge loan mortgage on Countrybrook Estates Apartments was
replaced by a permanent mortgage during 1999. A result of the new financing
gives the Partnership a lowered interest rate being paid on the property's
mortgage. Much of the excess funds provided by the refinancing were used in
current operations and for building improvements and significant maintenance.
Research Triangle Industrial Park West Joint Venture had net income of
$255,346, $175,218 and $65,136 for the years ended December 31, 1999, 1998 and
1997 respectively. Regular increases in rental income are expected due to rental
escalation clauses in several of the tenants' leases. In accordance with the
joint venture agreement, one-half of the income or loss is allocated to each
joint venturer. The Partnership received distributions of $330,000 and $250,000
from the joint venture in 1999 and 1998, respectively. No distributions were
received in 1997.
Carriage House of Englewood, of which this Partnership is a 40% joint
venture partner, continued to experience severe cash flow shortages during the
year ended December 31, 1999. Although HUD and the mortgagee have assisted the
Partnership through the release in past years of the escrowed funds and
suspension of future deposits into the escrow reserve, unless the property shows
continued significant improvement in occupancy and collections, as well as a
decrease in expenses, the property could be in a position to default on its
mortgage, thus throwing it into a foreclosure. With this in mind, the Corporate
General Partner is aggressively marketing the property to potential buyers. At
this time it remains highly unlikely that a sale
8
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CON'T.)
------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES (CON'T.):
would result in any distribution to the Limited Partners due to the amount of
the liabilities of the Partnership joint venture members.
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
the 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.
Management is aware of the need to implement corrective action plans in
response to the going concern considerations discussed in Note 11 to the
financial statements. As discussed previously, management believes that
marketing is a vital part of alleviating the properties' financial problems.
Additionally, closer monitoring of expenditures, tighter credit policies and
scheduled physical improvements to the properties continue to be priorities. It
is hoped that efforts to correct the continual cash flow shortages and losses
will lead to the ultimate cure of such problems. The future viability of the
Partnership continues to be dependent upon management's efforts to increase
revenues, reduce/control expenses and, in some cases, sell properties. Effective
July 1, 1999, management developed a plan to dispose of the property of Pomeroy
Park, the mortgage on which comes due in April 2001. The plan will be adapted as
conditions and circumstances warrant.
The Partnership, as a nominal defendant, the General Partners of the
Partnership and the three individuals constituting the officers and directors of
the Corporate General Partner, as defendants, were served with a summons and
complaint on April 19, 2000 in a class and derivative action instituted by Ira
Gaines in Supreme Court, County of Erie, State of New York. The action alleges
breaches of contract and breaches of fiduciary duty and seeks an accounting, the
removal of the General Partners, the liquidation of the Partnership and the
appointment of a receiver to supervise the liquidation, and damages. The General
Partners and the officers and directors of the Corporate General Partner
have filed a motion to dismiss the complaint and intend to vigorously pursue
their defense.
RESULTS OF OPERATIONS:
For the year ended December 31, 1999, the Partnership incurred a net
loss of $690,555, or $4.26 per limited partnership unit. That result represents
a 43% improvement compared to
9
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CON'T.)
------------------------------------------------------
RESULTS OF OPERATIONS (CON'T.):
1998 and a 38% improvement compared to 1997. Net losses in those years were
$1,215,131, or $7.49 per limited partnership unit, and $1,121,956, or $6.92 per
limited partnership unit, respectively. Increases in revenue and decreases in
expense combined in 1999 to account for the marked improvement.
Partnership revenues for the year ended December 31, 1999 totaled
$4,419,351, consisting of rental income of $4,112,626 and other income of
$306,725, which includes interest, laundry income, and other miscellaneous
sources of income. Rental revenues in the two years ended December 31, 1998 and
1997 totaled $3,873,839 and $3,538,666, respectively. The increase in rental
revenue compared to 1998 and 1997 is partially the result of increasing
occupancy at Inducon Columbia, Stonegate and Beaver Creek. Occupancy at those
properties at December 31, 1999 were 99%, 97% and 100%, respectively, as
compared to 85%, 95% and 94%, respectively, at December 31, 1998 and 98%, 91%
and 95%, respectively, at December 31, 1997.
The Partnership's $5,153,535 of total expenses in 1999 represents a
decrease compared to the expenses of the years ended December 31, 1998 and 1997
which totaled $5,314,610 and $5,209,137, respectively. The primary reason for
the decrease in total expenses was due to lower other administrative expenses.
This significant decrease of over $140,000 compared to 1998 and $189,000
compared to 1997 was due to lower legal, advertising and rental costs.
The Partnership anticipates continued increases in property rental
income in the year 2000 due to increased rental rates and occupancies. The
operating expenses should remain constant. Pomeroy Park continues to be the
biggest concern for expense due to its aging chiller system. Increasing
occupancy and decreasing delinquencies remain the major focus of management.
Tighter credit policies, extended incentive programs and improved cost
management continue to be management's means of improving both net income and
cash flow in the Partnership.
The Partnership's interest in Research Triangle Park West Joint Venture
once again experienced high occupancy and good cash collections. The Joint
Venture reported net income of $255,346 for the year ended December 31, 1999.
This is a considerable increase from 1998 when the property showed net earnings
of $175,218 and 1997, which totaled $65,136. The property maintained 100%
occupancy during each of the last three years and is expected to do the same in
2000. Regular increases in rental income are expected due to rental escalation
clauses in several of the tenants' leases. In accordance with the joint venture
agreement, one-half of the income is allocated to each joint venturer.
10
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CON'T.)
------------------------------------------------------
RESULTS OF OPERATIONS (CON'T.):
Vacancies, delinquencies, high debt service and operating cost at
Carriage House of Englewood continue to plague this Partnership as a joint
venturer. The Joint Venture had a net loss of $187,110 for the year ended
December 31, 1999. This loss, however, represents a decrease compared to the
losses for the years ended December 31, 1998 and 1997, which were $265,996 and
$253,956, respectively. The decrease in loss is attributable directly to the
increase in occupancy seen over the last two years. In accordance with the joint
venture agreement, 40% of the income or loss is allocated to the Partnership and
the balance to the other joint venturer. The property expects continuing high
property operations expenses in the coming months due to the maintenance work
that needs to be done. More work needs to be completed in order to prepare units
for new tenants and to satisfy current tenants (i.e. cleaning, painting,
appliance and carpeting costs), as well as to physically improve the exterior of
the complex. For 2000, management intends to do roof repairs and sidewalk
repairs. The repair and improvement plans would require the advance of capital
by the Corporate General Partner which the Corporate General Partner is not
obligated to provide.
For the year ended December 31, 1999, the tax basis loss was $562,657,
or $3.47 per limited partnership unit compared to a tax loss of $1,350,483, or
$8.32 per unit for the year ended December 31, 1998 and a tax loss of $923,925,
or $5.69 per limited partnership 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 years ended December
31, 1999, 1998 and 1997 were all 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 the 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.
11
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
NAME HELD WITH THE COMPANY ELECTED 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 Director 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 & 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 and Director
of Realmark Corporation and President and Chairman and Director of Realmark
Properties, Inc., wholly owned subsidiaries of J.M. Jayson & Company, Inc. and
co-general partner of Realmark Properties Investors Limited Partnership,
Realmark Properties Investors Limited Partnership-II, Realmark Properties
Investors Limited Partnership-III, Realmark Properties Investors Limited
Partnership-IV, Realmark Properties Investors Limited Partnership-V, Realmark
Properties Investors Limited Partnership-VI A and Realmark Properties Investors
Limited Partnership-VI B. Mr. Jayson is a member of the Investment Advisory
Board of the Corporate General Partner. Mr. Jayson has been engaged in real
estate business 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 and
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 in forming
over 30 real estate related limited partnerships. For the past eighteen years,
Mr. Jayson and J.M. Jayson & Company, Inc. and an affiliate have also engaged in
developmental drilling for gas and oil.
12
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE
- ------- ---------------------------------------
REGISTRANT (CON'T)
------------------
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.
Michael J. Colmerauer, 42, is Secretary and in-house legal counsel for
J.M. Jayson & 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.
13
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 or accrued as payable by the Partnership,
directly or indirectly, to affiliates of the General Partners (all of which are
owned entirely by Joseph M. Jayson):
Entity Receiving Type of
Compensation Compensation 1999 1998 1997
---------------- ------------ --------- --------- ---------
U.S. Capital, Inc. Loan placement fees $ 40,000 $ - $ 102,878
========= ========= ==========
Realmark Properties, Inc. Interest charged on accounts
(the Corporate General payable - affiliates $ 22,565 $ 39,510 $ 11,861
Partner) ========= ========= ==========
Partnership Management Fees - - 18,000
Reimbursements for
allocated Partnership
administrative expenses $ 142,529 $ 140,253 $ 188,378
Realmark Corporation Property Management Fees 208,498 200,937 188,714
Computer Service Fees 11,460 11,460 11,460
--------- --------- ----------
Total $ 362,487 $ 352,650 $ 388,552
========= ========= ==========
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). Since the net cash flow of the Partnership, as defined in the
agreement, was negative for the years ended December 31, 1999, 1998 and 1997 no
fees were earned by the Corporate General Partner for those years. 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
14
ITEM 11: EXECUTIVE COMPENSATION (CONT.)
- ---------------------------------------
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, 1998 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 3.86% of the units of Limited Partnership Interest.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
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.
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 at December 31, 1999 and 1998 F-3
(iv) Statements of Operations for the years ended
December 31, 1999, 1998 and 1997 F-4
(v) Statements of Partners' Capital (Deficit) for the
years ended December 31, 1999, 1998 and 1997 F-5
(vi) Statements of Cash Flows for the years ended
15
ITEM 14: EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND
- -------- ----------------------------------------------
REPORTS ON FORM 8-K (CONT.).
----------------------------
December 31, 1999, 1998 and 1997 F-6
(vii) Notes to Financial Statements F-7
FINANCIAL STATEMENT SCHEDULE
----------------------------
(i) Schedule III - Real Estate and Accumulated Depreciation F-23
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.
(i) 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.
16
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-A
BY: /s/Joseph M. Jayson July 5, 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 July 5, 2000
------------------------------ ----------------------
JOSEPH M. JAYSON, DATE
PRESIDENT AND DIRECTOR
/s/Judith P. Jayson July 5, 2000
------------------------------ ----------------------
JUDITH P. JAYSON, DATE
DIRECTOR
/s/Michael J. Colmerauer July 5, 2000
------------------------------ ----------------------
MICHAEL J. COLMERAUER DATE
SECRETARY
17
REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP - VI A
Financial Statements
December 31, 1999 and 1998
(With Independent Auditor's Report Thereon)
INDEPENDENT AUDITOR'S REPORT
----------------------------
The Partners
Realmark Property Investors Limited Partnership - VI A:
We have audited the accompanying balance sheet of Realmark Property Investors
Limited Partnership - VI A as of December 31, 1999, and the related statements
of operations, partners' capital (deficit), 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 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 A for the years ended
December 31, 1998 and 1997 were audited by other auditors whose report dated
April 12, 1999, on those statements included an explanatory paragraph that
described substantial doubt about the Partnership's ability to continue as a
going concern as discussed in note 11 to those financial 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 A 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.
The accompanying financial statements and financial statement schedule have been
prepared assuming that the Partnership will continue as a going concern. As
discussed in Note 11, the Partnership's recurring losses from operations,
operating cash flow deficiencies and the current nature of its mortgages payable
raise substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 11. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Williamsville, New York TOSKI, SCHAEFER & CO., P.C.
April 14, 2000
(April 19, 2000 as to note 14)
F-1
INDEPENDENT AUDITORS' REPORT
The Partners
Realmark Property Investors Limited Partnership-VI A:
We have audited the accompanying balance sheets of Realmark Property Investors
Limited Partnership-VI A as of December 31, 1998 and 1997, and the related
statements of operations, partners' capital (deficit), and cash flows for each
of the three 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-VI A at December 31, 1998 and 1997, and the results of its
operations and its cash flows for each of the three 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.
The accompanying financial statements and financial statement schedule have been
prepared assuming that the Partnership will continue as a going concern. As
discussed in Note 11, the Partnership's recurring losses from operations,
operating cash flow deficiencies and mortgages payable due in 1999 raise
substantial doubt about its ability to continue as a going concern. Management's
plans concerning these matters are also described in Note 11. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Deloitte & Touche LLP
Buffalo, New York
April 12, 1999
F-2
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Balance Sheets
December 31, 1999 and 1998
Assets 1999 1998
------------ ------------
Property and equipment, at cost (including assets held for
sale, note 13):
Land and land improvements $ 2,159,398 2,159,398
Buildings 17,404,242 17,307,636
Furniture and fixtures 1,103,695 1,103,695
------------ ------------
20,667,335 20,570,729
Less accumulated depreciation 7,316,721 6,555,171
------------ ------------
Net property and equipment 13,350,614 14,015,558
Investment in joint ventures, including unamortized excess
purchase price of $174,263 at December 31, 1998 - 88,197
Cash 264,353 87,551
Accounts receivable - 4,203
Escrow deposits 301,288 414,762
Mortgage costs, net of accumulated amortization of $211,791
and $272,395 at December 31, 1999 and 1998, respectively 430,972 430,404
Other assets 97,556 65,374
------------
Total assets $ 14,444,783 15,106,049
============ ============
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Mortgages payable 11,893,713 11,392,501
Accounts payable and accrued expenses 268,421 637,504
Interest payable 101,417 122,616
Accounts payable - affiliates 233,042 517,337
Security deposits and prepaid rents 214,997 210,517
------------ ------------
Total liabilities 12,711,590 12,880,475
------------ ------------
Losses of unconsolidated joint ventures in excess of investment,
net of unamortized excess purchase price of $165,063 at
December 31, 1999 198,174 -
Partners' capital (deficit):
General partners (355,728) (335,011)
Limited partners 1,890,747 2,560,585
------------ ------------
Total partners' capital 1,535,019 2,225,574
------------ ------------
Total liabilities and partners' capital $ 14,444,783 15,106,049
============ ============
See accompanying notes to financial statements
F-3
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Statements of Operations
Years ended December 31, 1999, 1998 and 1997
1999 1998 1997
----------- ----------- -----------
Income:
Rental $ 4,112,626 3,873,839 3,538,666
Gain from insurance proceeds
on flood loss - - 84,002
Interest and other income 306,725 337,083 369,462
----------- ----------- -----------
Total income 4,419,351 4,210,922 3,992,130
----------- ----------- -----------
Expenses:
Property operations 2,601,748 2,597,419 2,569,545
Interest:
To affiliates 22,565 39,510 11,861
Other 1,119,057 1,175,159 1,145,063
Depreciation 761,550 723,579 618,347
Administrative:
To affiliates 362,487 352,650 388,552
Other 286,128 426,293 475,769
----------- ----------- -----------
Total expenses 5,153,535 5,314,610 5,209,137
----------- ----------- -----------
Loss before allocated income (loss) from
joint ventures (734,184) (1,103,688) (1,217,007)
Allocated income (loss) from joint ventures 43,629 (111,443) 95,051
----------- ----------- -----------
Net loss $ (690,555) (1,215,131) (1,121,956)
=========== =========== ===========
Net loss per limited partnership unit $ (4.26) (7.49) (6.92)
=========== =========== ===========
Weighted average number of limited
partnership units outstanding $ 157,378 157,378 157,378
=========== =========== ===========
See accompanying notes to financial statements
F-4
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Statements of Partners' Capital (Deficit)
Years ended December 31, 1999, 1998 and 1997
General Limited Partners
Partners Units Amount
---------- ---------------- ----------
Balances at December 31, 1966 $ (264,898) 157,378 4,827,559
Net loss (33,659) - (1,088,297)
---------- ---------- ----------
Balances at December 31, 1997 (298,557) 157,378 3,739,262
Net loss (36,454) - (1,178,677)
---------- ---------- ----------
Balances at December 31, 1998 (335,011) 157,378 2,560,585
Net loss (20,717) - (669,838)
---------- ---------- ----------
Balances at December 31, 1999 $ (355,728) 157,378 1,890,747
========== ========== ==========
See accompanying notes to financial statements
F-5
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Statements of Cash Flows
Years ended December 31, 1999, 1998 and 1997
1999 1998 1997
----------- ----------- -----------
Cash flows from operating activities:
Net loss $ (690,555) (1,215,131) (1,121,956)
Adjustments to reconcile net loss to net cash
used in operating activities:
Gain from insurance proceeds - - (84,002)
Depreciation and amortization 867,738 855,691 739,721
Allocated loss (income) from joint ventures (43,629) 111,443 (95,051)
(Increase) decrease in:
Accounts receivable 4,203 26,882 19,252
Other assets (32,182) (21,300) 3,566
Increase (decrease) in:
Accounts payable and accrued expenses (369,083) (154,894) 252,257
Interest payable (21,199) 37,698 7,182
Security deposits and prepaid rents 4,480 (27,601) 33,766
----------- ----------- -----------
Net cash used in operating
activities (280,227) (387,212) (245,265)
----------- ----------- -----------
Cash flows from investing activities:
(Increase) decrease in escrow deposits 113,474 155,535 (518,768)
(Decrease) increase in accounts payable - affiliates (284,295) 481,808 35,529
Distributions received from joint venture 330,000 250,000 -
Additions to property and equipment (96,606) (111,887) (913,399)
Insurance proceeds on flood loss - - 287,571
----------- ----------- -----------
Net cash provided by (used in)
investing activities 62,573 775,456 (1,109,067)
----------- ----------- -----------
Cash flows from financing activities:
(Decrease) increase in cash overdraft - (229,302) 48,228
Mortgage acquisition costs (106,756) - (584,627)
Proceeds from mortgages 4,000,000 - 9,610,699
Principal payments upon refinancing (3,415,000) - (7,641,618)
Principal payments on debt (83,788) (71,391) (78,350)
----------- ----------- -----------
Net cash provided by (used in)
financing activities 394,456 (300,693) 1,354,332
----------- ----------- -----------
Net increase in cash 176,802 87,551 -
Cash at beginning of year 87,551 - -
-----------
Cash at end of year $ 264,353 87,551
=========== ==========
Supplemental disclosure of cash flow information -
cash paid for interest $ 1,078,367 1,005,349 1,034,123
=========== =========== ===========
See accompanying notes to financial statements
F-6
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements
December 31, 1999, 1998 and 1997
(1) Formation and Operation of Partnership
- -------------------------------------------
Realmark Property Investors Limited Partnership-VI A (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 1987, 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
12, 1988. All items of income and expense arose subsequent to this
date. As of December 31, 1999, 157,378 units of limited partnership
interest were sold and outstanding, including 30 units held by an
affiliate of the general partners. The offering terminated on November
10, 1988 with gross offering proceeds of $15,737,790. 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 6).
The partnership agreement also provides that distribution of funds,
revenues, 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 of
property shall be distributed: first, to the limited partners an amount
equivalent to a 7% return on the average of their adjusted capital
contributions; second, to the limited partners an amount equal to the
return of their capital investment; third, 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,
1988, 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, 1988 and
March 31, 1988, 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; fourth, 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; fifth, 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.
F-7
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(2) Summary of Significant Accounting Policies
- -----------------------------------------------
(a) Basis of Accounting
-----------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting.
(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 31.5 years. Depreciation expense totaled $761,550, $723,579
and $618,347 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, insurance and repairs and replacements 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
computed using the straight-line method over the life of the
respective mortgages.
(g) Unconsolidated Joint Ventures
---------------------------------
The Partnership's investment in Carriage House of Englewood Joint
Venture and Research Triangle Joint Venture is in unconsolidated
joint ventures which are accounted for on the equity method. These
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 on the straight line method over the terms
of the leases. The outstanding leases with respect to rental
properties owned are for terms of no more than one year for
residential properties and no more than five years for commercial
properties.
F-8
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(2) Summary of Significant Accounting Policies, Continued
- ----------------------------------------------------------
(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.
(j) Accrued Residential Rent Receivable
---------------------------------------
Due to the nature of accrued residential 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 in 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 Standards 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 A
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 February 1989, the Partnership acquired an 80 unit apartment complex
(Beaver Creek) located in Monaca, Pennsylvania for a purchase price of
$1,879,943, which includes $347,404 in acquisition fees.
In June 1989, the Partnership acquired a 240 unit apartment complex
(Countrybrook Estates, formerly West Creeke) located in Louisville,
Kentucky for a purchase price of $5,670,984, which includes $334,285 in
acquisition fees. In September 1992, the Partnership abandoned the
sewage treatment station located on the grounds of the apartment
complex which generated a net loss on disposal for financial statement
purposes of $74,671.
Inducon Joint Venture-Columbia (the Venture) was formed pursuant to an
agreement dated March 16, 1988 between the Partnership and Trion
Development Group, Inc., a New York corporation (the Corporation). The
primary purpose of the Venture was to acquire or lease land and
construct office/warehouse buildings as income-producing property. The
Partnership contributed initial capital to the Venture of $1,064,950
which was used to fund the initial development costs. On May 19, 1989
the Partnership purchased the Corporation's interest in the Inducon
Joint Venture-Columbia for $130,000. The office complex, located in
Columbia, South Carolina, consists of three buildings. The first
building was put into service in July 1989 and has a total cost of
$1,891,995 which includes $311,358 in acquisition fees. The second and
third buildings were put into service in December 1991 and have a total
cost of $2,778,996 which includes $48,796 of capitalized interest.
In March 1990, the Partnership acquired a 130 unit apartment complex
(Stonegate) located in Mobile, Alabama for a purchase price of
$4,145,367, which includes $225,620 in acquisition fees.
In March 1991, the Partnership acquired a 230 unit apartment complex
(Pomeroy Park, formerly The Commons on Lewis Avenue) located in Tulsa,
Oklahoma for a purchase price of $2,965,803, which includes $269,721 in
acquisition fees.
In September 1991, the Partnership entered into an agreement and formed a
joint venture with Realmark Property Investors Limited Partnerships II
and VI B (RPILP-II and RPILP-VI B), for the purpose of operating the
250 unit Foxhunt Apartment complex located in Kettering, Ohio and owned
by RPILP II. In April 1992, the Partnership's capital contribution of
$389,935 plus interest was returned by RPILP II and the Partnership's
interest in the joint venture ended.
In May 1992, the Partnership entered into an agreement to form a joint
venture with Realmark Property Investors Limited Partnership (RPILP)
for the purpose of operating the 144 unit Carriage House of Englewood,
formerly Gold Key Apartments, an apartment complex located in Dayton,
Ohio and owned by RPILP.
F-10
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(3) Acquisition of Rental Property, Continued
- ----------------------------------------------
In August 1992, the Partnership entered into a joint venture agreement for
the purpose of operating Research Triangle Industrial Park West, a
150,000 square foot office/warehouse facility located in Research
Triangle Park, North Carolina. The original joint venture agreement to
develop and operate the property, created between RPILP-II and Adaron
Group (Adaron), was dissolved, and the Partnership acquired all rights
previously held by Adaron. The agreement provides for 50% of any income
or loss to be allocated to both the Partnership and RPILP II.
(4) Mortgages Payable
- ----------------------
The Partnership has the following mortgages payable as of December 31, 1999
and 1998:
Countrybrook Estates (formerly West Creeke)
------------------------------------------
A mortgage with a balance of $3,415,000 at December 31, 1998 due with
monthly payments of interest only bearing a rate of 3.50% above the one
month LIBOR rate (9.0625% at December 31, 1998) was refinanced in 1999.
A new mortgage with a balance of $3,992,594 at December 31, 1999 provides
for monthly principal and interest payments of $29,044 bearing interest
at 7.89%. The mortgage matures September, 2029.
Inducon-Columbia
----------------
A mortgage with a balance of $2,138,895 and $2,168,462 at December 31,
1999 and 1998, respectively, provides for monthly principal and
interest payments of $16,787 bearing interest at 7.867%. The mortgage
matures October 2022.
Stonegate
---------
A mortgage with a balance of $2,601,789 and $2,621,004 at December 31,
1999 and 1998, respectively, provides for monthly principal and
interest payments of $20,207 bearing interest at 8.43%. The mortgage
matures July 2027.
Beaver Creek
------------
A mortgage with a balance of $1,327,451 and $1,337,685 at December 31,
1999 and 1998, respectively, provides for monthly principal and
interest payments of $10,137 bearing interest at 8.23%. The mortgage
matures July 2027.
Pomeroy Park (formerly The Commons on Lewis Avenue)
--------------------------------------------------
A mortgage with a balance of $1,832,984 and $1,850,350 at December 31,
1999 and 1998, respectively, provides for monthly principal and
interest payments calculated based upon an interest rate ranging from
8-12% annually (12% at December 31, 1999). The remaining balance is due
April 2001.
The Partnership is currently not in compliance with certain debt covenants
related to the above mortgages.
F-11
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(4) Mortgages Payable, Continued
- ---------------------------------
The aggregate maturities of the mortgages payable for each of the next five
years and thereafter, assuming principal payments will not be
accelerated, are as follows:
Year Amount
---- ------
2000 $ 125,663
2001 1,928,366
2002 124,551
2003 134,953
2004 146,224
Thereafter 9,433,956
---------
$ 11,893,713
============
The mortgages are secured by the properties to which they relate.
(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, other assets, accounts payable - affiliates,
accounts payable, accrued expenses and security deposits and prepaid
rents approximate the carrying value due to the short-term nature of
these instruments.
Management has estimated the following fair values of its mortgages
payable, based on currently available rates for mortgages of similar
terms:
Fair Value Carrying Value
---------- --------------
Inducon Columbia $2,116,000 $2,139,000
Beaver Creek $1,355,000 $1,327,000
Stonegate $2,704,000 $2,602,000
Pomeroy Park $1,881,000 $1,833,000
The fair value of the mortgage payable on Countrybrook approximates its
carrying value of $3,993,000 due to the mortgage's recent nature.
Refer to note 4 for a description of the terms of the mortgages payable.
(6) Related Party Transactions
- -------------------------------
Management fees for the management of certain of the Partnership properties
are paid to an affiliate of the general partner. The management
agreement provides for 5% of gross monthly rental receipts of the
complexes to be paid as fees for administering the operations of the
properties. These fees totaled $208,498, $200,937 and $188,714 for the
years ended December 31, 1999, 1998 and 1997, respectively.
F-12
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(6) Related Party Transactions, Continued
- ------------------------------------------
According to the terms of the partnership agreement, the general partner is
also entitled to receive a partnership management fee equal to 7% of
net cash flow (as defined in the partnership agreement), 2(degree)% of
which is subordinated to the limited partners having received an annual
cash return equal to 7% of their adjusted capital contributions. The
Corporate general partner is paid its 5% partnership management fee
annually as cash flow allows. No such fees were paid or accrued for the
years ended December 31, 1999, 1998 and 1997.
The general partners are also allowed to collect a property disposition fee
upon the sale of acquired properties. This fee is not to exceed the
lesser of 50% of amounts customarily charged in arm's-length
transactions by others rendering similar services for comparable
properties or 3% of the sales price. The property disposition fee is
subordinate to the limited partners receipt of a cumulative annual
return (not compounded) equal to 7% of their average adjusted capital
contributions and to repayment to the limited partners of an amount
equal to their original capital contributions. No properties have been
sold as of December 31, 1999 and accordingly, there have been no
property disposition fees paid or earned by the general partners.
Pursuant to the terms of the partnership agreement, the Corporate general
partner charges the Partnership for reimbursement of certain costs and
expenses incurred by the Corporate general partner and its affiliates
in connection with the administration of the Partnership and for other
direct Partnership expenses and for acquisition of properties. These
charges were for the Partnership's allocated share of costs and
expenses such as payroll, travel and communication costs related to
partnership accounting, partner communication and relations, and
acquisitions of properties and are included in property operations.
Additionally, Partnership accounting and portfolio management fees,
investor services fees and brokerage fees are allocated based on total
assets, number of partners and number of units, respectively. These
costs amounted to $142,529, $140,253 and $188,378 for the years ended
December 31, 1999, 1998 and 1997, respectively.
Accounts payable - affiliates, which are payable on demand, amounted to
$233,042 and $517,337 as of December 31, 1999 and 1998, respectively.
Interest is charged on accounts payable - affiliates at an annual rate
of 11%. Related interest expense amounted to $22,565, $39,510 and
$11,861 for the years ended December 31, 1999, 1998 and 1997,
respectively.
Computer service charges for the Partnership are paid or accrued to an
affiliate of the general partners. The fee is based upon the number of
apartment units and totaled $11,460 for the years ended December 31,
1999, 1998 and 1997 respectively.
Loan placement fees are paid or accrued to an affiliate of the general
partners. The fee is calculated as 1% of the mortgage loan amounts.
These fees totaled $40,000 and $102,878 for the years ended December
31, 1999 and December 31, 1997, respectively. No such fees were paid
during the year ended December 31, 1998.
(7) Income Taxes
- -----------------
No provision has been made for income taxes since the income or loss of
the Partnership is to be included in the tax returns of the individual
partners.
F-13
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(7) Income Taxes, Continued
- ---------------------------
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.
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 sheet $ 1,535,019 2,225,574 3,440,705
Add to (deduct from):
Accumulated difference in depreciation 328,891 200,993 220,283
Syndication fees 2,312,863 2,312,863 2,312,863
Other nondeductible expenses 578,745 578,745 543,162
Tax basis adjustment - joint ventures 800,244 800,244 951,889
----------- ----------- -----------
Partners' capital - tax return purposes $ 5,555,762 6,118,419 7,468,902
=========== =========== ===========
The reconciliation of net loss for the years ended December 31, 1999, 1998
and 1997 as reported in the statement of operations, and as would be
reported for tax purposes, is as follows:
1999 1998 1997
----------- ----------- -----------
Net loss - statement of operations $ (690,555) (1,215,131) (1,121,956)
Add to (deduct from):
Difference in depreciation 127,898 (19,290) (35,280)
Other nondeductible expenses - 35,583 151,955
Tax basis adjustment - joint ventures - (151,645) 81,356
----------- ----------- -----------
Net loss - tax return purposes $ (562,657) (1,350,483) (923,925)
=========== =========== ===========
(8) 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 B (RPILP-VI B). The Joint Venture was formed for the
purpose of operating an apartment complex (Foxhunt Apartments located
in Dayton, Ohio) owned by RPILP-II. Under the terms of the original
joint venture agreement, the partnership contributed $390,000 and
RPILP-VI B contributed $1,041,568 to buy out the wraparound promissory
note on the property. RPILP-II contributed the property net of the
first mortgage.
On April 1, 1992, the Partnership's interest in the joint venture was
bought out by RPILP-II for $389,935 plus interest at 15%. The joint
venture agreement had provided that any income, loss, gain, cash flow
and sale proceeds be allocated 63.14% to RPILP-II, 10.04% to the
Partnership and 26.82% to RPILP-VI B.
F-14
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(8) Investment in Joint Ventures, Continued
- --------------------------------------------
On May 5, 1992, the Partnership entered into an agreement to form a joint
venture with Realmark Property Investors Limited Partnership (RPILP)
for the purpose of operating Carriage House of Englewood (formerly the
Gold Key Apartments), an apartment complex located in Englewood, Ohio
and owned by RPILP. Under the terms of the original agreement, the
Partnership contributed $497,912 and RPILP contributed the property net
of the outstanding mortgage. On March 1, 1993, the Partnership
contributed an additional $125,239 to the joint venture.
The original joint venture agreement provided that any income, loss, gain,
cash flow, or sale proceeds be allocated 68% to RPILP and 32% to the
Partnership. An amended joint venture agreement provides that any
income, loss, gain, cash flow, or sale proceeds be allocated 40% to the
Partnership and 60% to RPILP.
The Partnership accounts for its interest on the equity method. The equity
ownership 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
assets at the date of inception.
In July 1996, the Partnership entered into a plan to dispose of the
property of the joint venture with a carrying amount of $1,271,321 and
$1,265,469 at December 31, 1999 and 1998, respectively. The Joint
Venture incurred losses of approximately $187,000, $266,000 and
$254,000 for the years ended December 31, 1999, 1998 and 1997,
respectively. Management has determined that a sale of the property is
in the best interests of the investors. Management continues to
actively market the property.
Financial Accounting Standards Statement 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 Joint Venture, classified as held for sale
on the balance sheet, are recorded at the carrying amount which is the
lower of carrying value or fair value less costs to sell, and have not
been 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 years ended December 31,
1999, 1998 and 1997 totaled approximately $120,000, $120,000 and
$122,000, respectively. Management believes that the property's fair
value has not changed significantly since being classified as held for
sale.
The Carriage House of Englewood's mortgage is insured by the Department of
Housing and Urban Development (HUD). The mortgage is subject to a HUD
regulatory agreement which places restrictions on the operations of the
joint venture. As of December 31, 1999, the joint venture was not in
compliance with several of these regulations. The consequences of the
non-compliance with these restrictions could include HUD-imposed
sanctions such as fines or interest charges. Additionally, the
violation of the regulatory agreement could be deemed an event of
default by the mortgagor, and HUD could possibly take over as holder of
the mortgage.
F-15
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(8) Investment in Joint Ventures, Continued
- --------------------------------------------
Given the uncertainty surrounding the outcome of the noncompliance, the
joint venture's recurring losses from operations, cash flow
difficulties, and partners' deficit, substantial doubt exists about the
joint venture's ability to continue as a going concern.
A summary of the assets, liabilities and partners' capital (deficit) of
the Carriage House of Englewood 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:
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
Balance Sheets
December 31, 1999 and 1998
Assets 1999 1998
------ ----------- -----------
Land and land improvements $ 367,500 367,500
Building 2,487,823 2,487,823
Building equipment 169,993 164,141
----------- -----------
3,025,316 3,019,464
Less accumulated depreciation 1,753,995 1,753,995
----------- -----------
Property, net 1,271,321 1,265,469
Cash 6,818 12,112
Security deposits 40,365 14,604
Escrow deposits 52,598 65,464
Mortgage costs, net of accumulated amortization
of $44,020 in 1999 and $38,278 in 1998 156,931 162,673
Other assets 15,555 16,737
----------- -----------
Total assets $ 1,543,588 1,537,059
=========== ===========
Liabilities and Partners' Deficit
Liabilities:
Mortgage payable $ 2,867,486 2,890,315
Accounts payable and accrued expenses 184,799 205,235
Accounts payable - affiliates 768,924 555,404
Accrued interest 21,506 21,677
Security deposits and prepaid rents 66,026 42,470
----------- -----------
Total liabilities 3,908,741 3,715,101
----------- -----------
Partners' capital (deficit):
The Partnership (8,644) 66,200
RPILP (2,356,509) (2,244,242)
----------- -----------
Total partners' deficit (2,365,153) (2,178,042)
----------- -----------
Total liabilities and partners' deficit $ 1,543,588 1,537,059
=========== ===========
F-16
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(8) Investment in Joint Ventures, Continued
- --------------------------------------------
CARRIAGE HOUSE OF ENGLEWOOD JOINT VENTURE
Statements of Operations
Years ended December 31, 1999, 1998 and 1997
1999 1998 1997
--------- --------- ---------
Income:
Rental $ 682,576 581,864 583,445
Other income 72,537 41,465 42,620
--------- --------- ---------
Total income 755,113 623,329 626,065
--------- --------- ---------
Expenses:
Property operations 468,179 422,898 436,621
Interest:
Paid to affiliates 78,822 55,750 31,966
Other 264,773 266,771 268,549
Administrative:
Paid to affiliates 47,527 48,717 55,506
Other 82,922 95,189 87,379
--------- --------- ---------
Total expenses 942,223 889,325 880,021
--------- --------- ---------
Net loss $(187,110) (265,996) (253,956)
========= ========= =========
Allocation of net loss:
The Partnership $ (74,844) (106,398) (101,583)
RPILP (112,266) (159,598) (152,373)
--------- --------- ---------
Total $(187,110) (265,996) (253,956)
========= ========= =========
A reconciliation of the Partnership's investment in the Carriage House of
Englewood Joint Venture is as follows:
1999 1998 1997
--------- --------- ---------
Investment in joint venture at beginning of year $ 66,200 256,052 362,134
Amortization of excess purchase price - (83,454) (4,499)
Allocation of net loss (74,844) (106,398) (101,583)
--------- --------- ---------
Investment in (losses in excess of investment in)
joint venture at end of year $ (8,644) 66,200 256,052
========= ========= =========
F-17
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(8) Investment in Joint Ventures, Continued
- --------------------------------------------
The excess purchase price included in the investment in Carriage House of
Englewood Joint Venture at December 31, 1997 was fully amortized during
the year ended December 31, 1998 as the asset was determined to be
impaired based upon historical losses being allocated to the
Partnership.
On August 20, 1992, the Partnership entered into a joint venture agreement
for the purpose of operating Research Triangle Industrial Park West, an
office/warehouse facility located in Research Triangle Park, North
Carolina. The original joint venture agreement to develop and operate
the property, created between Realmark Property Investors Limited
Partnership-II (RPILP-II) and Adaron Group (Adaron), was dissolved, and
the Partnership acquired Adaron's investment in the joint venture. In
the transaction, the Partnership paid $575,459 to Adaron and acquired
the equity and all rights previously held by Adaron. The agreement
provides for 50% of any income or loss to be allocated to both the
Partnership and RPILP-II.
A summary of the assets, liabilities and partners' deficit of the
Research Triangle 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 follows.
F-18
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(8) Investment in Joint Ventures, Continued
- --------------------------------------------
RESEARCH TRIANGLE JOINT VENTURE
Balance Sheets
December 31, 1999 and 1998
Assets 1999 1998
----------- -----------
Land $ 338,112 338,112
Land improvements 799,430 799,430
Buildings 4,130,637 4,130,637
----------- -----------
5,268,179 5,268,179
Less accumulated depreciation 3,694,293 3,590,813
----------- -----------
Property, net 1,573,886 1,677,366
Cash 149,508 688,674
Accounts receivable - affiliates 599 29,925
Accounts receivable - other 32,261 -
Escrow deposits 694,740 559,679
Other assets 239,054 257,127
----------- -----------
Total assets $ 2,690,048 3,212,771
=========== ===========
Liabilities and Partners' Deficit
Liabilities:
Mortgage payable 5,418,498 5,504,596
Accounts payable and accrued expenses 74,287 106,256
----------- -----------
Total liabilities 5,492,785 5,610,852
----------- -----------
Partners' Deficit:
The Partnership (1,500,784) (1,298,455)
RPILP-II (1,301,953) (1,099,626)
----------- -----------
Total partners' deficit (2,802,737) (2,398,081)
----------- -----------
Total liabilities and partners' deficit $ 2,690,048 3,212,771
=========== ===========
F-19
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(8) Investment in Joint Ventures, Continued
- --------------------------------------------
RESEARCH TRIANGLE JOINT VENTURE
Statements of Operations
Years ended December 31, 1999, 1998 and 1997
1999 1998 1997
----------- ----------- -----------
Income:
Rental $ 1,009,978 962,352 886,634
Other 11,823 6,985 5,496
----------- ----------- -----------
Total income 1,021,801 969,337 892,130
----------- ----------- -----------
Expenses:
Property operations 131,014 114,857 101,896
Interest 455,838 457,626 470,041
Depreciation and amortization 107,718 128,094 166,828
Administrative:
To affiliates 63,230 63,652 60,177
Other 8,655 29,890 28,052
----------- ----------- -----------
Total expenses 766,455 794,119 826,994
----------- ----------- -----------
Net income $ 255,346 175,218 65,136
=========== =========== ===========
Allocation of net income:
The Partnership $ 127,673 87,609 32,568
RPILP-II 127,673 87,609 32,568
----------- ----------- -----------
Total $ 255,346 175,218 65,136
=========== =========== ===========
A reconciliation of the Partnership's investment in the Research Triangle Joint
Venture is as follows:
1999 1998 1997
----------- ----------- -----------
Investment in joint venture at beginning of year $ 21,997 193,588 170,220
Distributions from joint venture (330,000) (250,000) -
Amortization of excess purchase price (9,200) (9,200) (9,200)
Allocation of net income 127,673 87,609 32,568
----------- ----------- -----------
Investment in (losses in excess of investment in)
joint venture at end of year $ (189,530) 21,997 193,588
=========== =========== ===========
F-20
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(9) Leases (Lessee)
- --------------------
In connection with the development of property in Columbia, South
Carolina, the Partnership entered into a land lease agreement with the
Richland-Lexington Airport District for a period of sixty years. The
lease covers two parcels of land approximately 4.5 acres each, located
within the boundaries of the Columbia Metropolitan Airport in an area
designated as a Foreign Trade Zone. The lease requires minimum monthly
rental payments of approximately $7,400. The lease is being accounted
for as an operating lease. The agreement also includes an option to
lease a third parcel of land measuring approximately 5.5 acres.
Minimum future rental payments for each of the next five years are as
follows:
Year Amount
---- ------
2000 $ 89,000
2001 89,000
2002 89,000
2003 89,000
2004 89,000
(10) Leases (Lessor)
- ---------------------
In connection with the Inducon - Columbia property, the Partnership has
entered into commercial lease agreements with terms from one to five
years. Minimum future rentals to be received in the future under
noncancelable operating leases are as follows:
Year Amount
---- ------
2000 $ 225,081
2001 43,543
2002 33,275
(11) Going Concern Considerations
- ----------------------------------
The accompanying financial statements and financial statement schedule
have been prepared assuming that the Partnership will continue as a
going concern.
The Partnership has sustained recurring losses from operations and has
experienced operating cash flow difficulties. Additionally, the
Partnership is currently not in compliance with certain debt covenants
which allows the mortgagees to accelerate repayment of the mortgages
payable. These issues raise substantial doubt about the Partnership's
ability to continue as a going concern.
Management believes that the sale of Pomeroy Park is in the best interests
of the limited partners. With the improvements completed at
Countrybrook Estates, management plans to increase rents charged in
the coming year. Management intends to closely monitor and control
expenses at all complexes.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
F-21
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Notes to Financial Statements, Continued
(12) Gain from Insurance Proceeds
- ----------------------------------
On March 1, 1997, Countrybrook Estates experienced a flood that resulted
in property damage estimated at a net book value of $203,569. The
Partnership received insurance proceeds totaling $287,751, resulting
in a gain for financial statement purposes of $84,002.
(13) Long-Lived Assets
- -----------------------
In 1997, the Partnership entered into a plan to dispose of the property
of Countrybrook Estates with a carrying amount of $4,047,737 at
December 31, 1997. Countrybrook Estates incurred a net loss of
approximately $207,000 for the year ended December 31, 1997.
Management had determined that the sale of the property was in the
best interests of the limited partners. As of December 31, 1997, an
agreement cancelable by the buyer was signed with an anticipated sales
price of approximately $6,060,000. This agreement was canceled in the
first quarter of 1998, and the Partnership discontinued its plans to
sell the property.
In the third quarter of 1998, the Partnership entered into a plan to
dispose of the property of Pomeroy Park with a carrying amount of
$2,605,021 and $2,633,733 at December 31, 1999 and 1998, respectively.
Pomeroy Park incurred net losses of approximately $307,000, $303,000
and $470,000 for the years ended December 31, 1999, 1998 and 1997,
respectively. Management had determined that the sale of the property
was in the best interests of the limited partners. Effective January
1, 1999, management discontinued its plan to dispose of the property.
Effective July 1, 1999, management entered into a new plan to dispose
of the property of Pomeroy Park. Management has determined that the
sale of the property is in the best interests of the limited partners.
Financial Accounting Standards Statement 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 Partnership,
classified as held for sale on the balance sheet, are recorded at the
carrying amount which is the lower of carrying value or fair value
less costs to sell, and have not been depreciated during the disposal
period. Depreciation expense, not recorded during the disposal period,
for the years ended December 31, 1999, 1998 and 1997 totaled
approximately $54,000, $71,000 and $175,000, respectively. Management
believes that the property's fair value has not changed significantly
since being classified as held for sale.
(14) Subsequent Event
- ----------------------
The Partnership, as a nominal defendant, the General Partners of the
Partnership and the three individuals constituting the officers and
directors of the Corporate General Partner, as defendants, were served
with a Summons and Complaint on April 19, 2000 in a class and
derivative action instituted by Ira Gaines in Supreme Court, County of
Erie, State of New York. The action alleges breaches of contract and
breaches of fiduciary duty and seeks an accounting, the removal of the
General Partners, the liquidation of the Partnership and the
appointment of a receiver to supervise the liquidation, and damages.
The General Partners are presently reviewing the complaints and intend
to vigorously pursue their defense.
F-22
Schedule III
------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Real Estate and Accumulated Depreciation
December 31, 1999
Gross amounts at which
Initial Cost to Cost Carried at Close of Period
Partnership capitalized ------------------------------------
Property -------------------- subsequent to
description Encumbrances Land Buildings Acquisition Retirements Land Buildings Total
----------- ------------ --------- ---------- ------------- ----------- --------- --------- ----------
BeaverCreek
Pittsburgh, PA $ 1,327,451 282,000 1,437,944 169,871 - 317,000 1,572,815 1,889,815
Countrybrook
Estates
Louisville, KY 3,992,594 882,272 4,277,115 448,540 279,908 884,622 4,443,397 5,328,019
Stonegate
Mobile, AL 2,601,789 419,544 3,487,160 323,856 - 427,494 3,803,066 4,230,560
Pomeroy Park
Tulsa, OK 1,832,984 525,000 2,304,303 547,685 - 525,000 2,851,988 3,376,988
Inducon-Columbia
Columbia, SC 2,138,895 - 1,503,710 3,234,548 - 5,282 4,732,976 4,738,258
----------- --------- ---------- --------- ------- --------- ---------- ----------
$11,893,713 2,108,816 13,010,232 4,724,500 279,908 2,159,398 17,404,242 19,563,640
=========== ========= ========== ========= ======= ========= ========== ==========
Carriage House of
Englewood J. V
Dayton, OH $ 2,867,486 367,500 2,341,254 146,569 - 367,500 2,487,823 2,855,323
=========== ========= ========== ========= ======= ========= ========== ==========
Research Triangle
J. V
Raleigh, NC $ 5,418,498 338,112 4,920,738 9,329 - 338,112 4,930,067 5,268,179
=========== ========= ========== ========= ======= ========= ========== ==========
(Table cont'd)
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Real Estate and Accumulated Depreciation
December 31, 1999
Life
on which
depreciation
in latest
Date statement of
Accumulated of Date operations
depreciation construction acquired is computed
- ------------- ----------- ------- -----------------
649,158 1975 2/89 15-27 1/2yrs.
1,516,982 1972 6/89 15-27 1/2yrs.
1,417,969 1985 3/90 15-27 1/2yrs.
771,967 1970 3/91 15-27 1/2yrs.
1,858,377 1989 5/89 5-31 1/2yrs.
- --------
6,214,453
=========
1,596,577 1971 5/92 15-25 yrs.*
========
3,694,293 1983 8/92 25 yrs.
========
* In accordance with Statement of Financial Accounting Standards No. 121, no
depreciation was recorded during the disposal period.
F-23
Schedule III, Cont.
-------------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Real Estate and Accumulated Depreciation
December 31, 1999
(1) Cost for Federal income tax purposes of Partnership properties is
$19,563,640.
(2) A reconciliation of the carrying amount of land and buildings as of
December 31, 1999, 1998 and 1997 is as follows:
Partnership Properties
----------------------
1999 1998 1997
---------- ----------- -----------
Balance at beginning of year $19,467,034 19,357,332 18,774,247
Additions 96,606 109,702 862,993
Disposals - - (279,908)
---------- ----------- -----------
Balance at end of year $19,563,640 19,467,034 19,357,332
=========== =========== ===========
Joint Venture Properties
------------------------
1999 1998 1997
---------- ----------- -----------
Balance at beginning of year $8,123,502 8,110,812 8,049,484
Additions - 12,690 61,328
---------- ----------- -----------
Balance at end of year $8,123,502 8,123,502 8,110,812
========== =========== ===========
(3) A reconciliation of accumulated depreciation for buildings and improvements
for the years ended December 31, 1999, 1998 and 1997 is as follows:
Partnership Properties
----------------------
1999 1998 1997
---------- ----------- -----------
Balance at beginning of year $5,454,642 4,735,269 4,212,761
Depreciation expense 759,811 719,373 598,847
Dispositions - - (76,339)
---------- ----------- -----------
Balance at end of year (4) $6,214,453 5,454,642 4,735,269
========== =========== ===========
Joint Venture Properties
------------------------
1999 1998 1997
---------- ----------- -----------
Balance at beginning of year $5,187,390 5,066,035 4,935,502
Depreciation expense 103,480 121,355 130,533
---------- ----------- -----------
Balance at end of year (4) $5,290,870 5,187,390 5,066,035
========== =========== ===========
(4) Balance applies entirely to buildings.
F-24
Schedule III, Cont.
-------------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Real Estate and Accumulated Depreciation
December 31, 1999
(1) Cost for Federal income tax purposes of Partnership properties is
$19,563,640.
(2) A reconciliation of the carrying amount of land and buildings as of
December 31, 1999, 1998 and 1997 is as follows:
Partnership Properties
----------------------
1999 1998 1997
----------- ----------- -----------
Balance at beginning of year $19,467,034 19,357,332 18,774,247
Additions 96,606 109,702 862,993
Disposals - - (279,908)
----------- ----------- -----------
Balance at end of year $19,563,640 19,467,034 19,357,332
=========== =========== ===========
Joint Venture Properties
------------------------
1999 1998 1997
----------- ----------- -----------
Balance at beginning of year $8,123,502 8,110,812 8,049,484
Additions - 12,690 61,328
---------- ----------- -----------
Balance at end of year $8,123,502 8,123,502 8,110,812
========== =========== ===========
(3) A reconciliation of accumulated depreciation for buildings and improvements
for the years ended December 31, 1999, 1998 and 1997 is as follows:
Partnership Properties
----------------------
1999 1998 1997
----------- ----------- -----------
Balance at beginning of year $5,454,642 4,735,269 4,212,761
Depreciation expense 759,811 719,373 598,847
Dispositions - - (76,339)
---------- ----------- ----------
Balance at end of year (4) $6,214,453 5,454,642 4,735,269
========== =========== ==========
Joint Venture Properties
------------------------
1999 1998 1997
----------- ----------- -----------
Balance at beginning of year $5,187,390 5,066,035 4,935,502
Depreciation expense 103,480 121,355 130,533
---------- ----------- ----------
Balance at end of year (4) $5,290,870 5,187,390 5,066,035
========== =========== ==========
(4) Balance applies entirely to buildings.
F-25