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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 (FEE REQUIRED)
For the Fiscal Year Ended December 31, 1996
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934. (NO FEE REQUIRED)
Commission File Number 33-17579
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
(Exact Name of Registrant as specified in its Charter)
Delaware 16-1309988
-------------------- --------------------------------
(State of Formation) (IRS Employer Identification No.)
2350 North Forest Road
Suite 12-A
Getzville, New York 14068
(Address of Principal Executive Office)
Registrant's Telephone Number: (716) 636-9090
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units of Limited
Partnership
Interest
Indicate by a check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.(X)
DOCUMENTS INCORPORATED BY REFERENCE
See page 13 for a list of all documents incorporated by reference
1
PART I
ITEM 1: BUSINESS
- - ------- --------
The registrant, Realmark Property Investors Limited Partnership-IV B ("the
Partnership"), is a Delaware limited partnership organized in 1987 pursuant to
an Agreement and Certificate of Limited Partnership (the "Partnership
Agreement"), under the revised Delaware 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"). During 1988, Realmark Properties-IV B Associates
("Associates") and RPI Investors-II, Inc. (formally the "Corporate General
Partner") were merged with Realmark Properties, Inc.
The Registrant commenced the public offering of its limited partnership
units, registered with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, on November 11, 1988. The first interim
closing took place on February 2, 1989, and the initial $2,134,300 of
contributed capital was released to the Partnership at which time it began
operations. The offering was concluded February 28, 1990 at which time the
Partnership had raised $7,862,510, before deducting sales commissions and
syndication costs.
The Partnership's primary business and its only industry segment is to own
and operate income-producing real property for the benefit of its limited
partners. Through December 31, 1996, the Partnership owned two apartment
complexes, totaling 336 units. In addition, the Partnership is a partner in the
Foxhunt Apartments Joint Venture owning 11.5% of a 250 unit apartment complex in
Kettering, Ohio, and in the Lakeview Apartments Joint Venture, owning 16.22% of
a 168 unit apartment complex in Milwaukee, Wisconsin.
In June 1991, the Partnership purchased the 144 unit Players Club North
Apartments, located in Lutz, Florida, and the Villa Apartments, a 192 unit
apartment complex in Greenville, South Carolina. The average occupancy level at
Players Club in 1996 was 94%; the Villa averaged approximately 92%. For 1995,
occupancy at Players Club North averaged 96%, while the Villa was 96%. Occupancy
during 1994 averaged 97% at Players Club North and 91% at the Villa. The Villa
accounted for approximately 55% of total Partnership revenue generated during
1996. Players Club generated approximately 45% of total Partnership revenue
during the year. For the years ended December 31, 1995 and 1994, the Villa
generated 54% and 52% of total Partnership revenue, and Players Club accounted
for 46% and 48% of total Partnership revenue, respectively.
The business of the Partnership is not seasonal. The Partnership, as of
December 31, 1996, did not directly employ any persons in a full-time position.
All regular employees who rendered services on behalf of the Partnership through
December 31, 1996 were employees of the Corporate General Partner or its
affiliates.
The Partnership's 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) achieve build-up of equity through the
reduction of mortgage loans.
2
ITEM 2: PROPERTIES
- - ------- ----------
The following is a list of Properties and Joint Ventures owned by the
Partnership as of December 31, 1996:
Property Name
and Location General Character of Property Purchase Date
------------ ----------------------------- -------------
Players Club North A 144 unit apartment complex. The June 1991
Lutz, FL mortgage balance at 12/31/96 was
$2,273,368, maturing July 1998, and
providing for monthly principal and interest
payments of $20,402 bearing interest at 10%.
The Villa A 192 unit apartment complex. The mortgage June 1991
Greenville, SC balance at 12/31/96 was $1,951,738,
maturing August 1998, and providing for
monthly principal and interest payments of
$17,998 bearing interest at 9.875%.
Joint Venture
Name and Location
Foxhunt Apartments A 250 unit apartment complex. The mortgage September 1991
Joint Venture balance at 12/31/96 was $4,528,289,
Kettering, OH maturing April 2027, and providing for
monthly principal and interest payments of
$36,358 bearing interest at 9.00%.
Lakeview JV A 168 unit apartment complex. The mortgage September 1992
Milwaukee, WI payable at 12/31/96 was $2,508,128,
providing for monthly principal and interest
payments of $19,410 bearing interest at
8.25%. The term of the mortgage is 10 years
with the remaining balance due and payable
on February 1, 2006.
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.
ITEM 4: SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
- - ------- ----------------------------------------------------
None.
3
PART II
ITEM 5: MARKET FOR REGISTRANT'S UNITS OF LIMITED
- - ------- ----------------------------------------
PARTNERSHIP INTEREST
--------------------
There is currently no active trade market for the units of Limited
Partnership Interest of the Partnership and it is not anticipated that any will
develop in the future.
As of December 31, 1996, there were 1,119 record holders of units of
Limited Partnership Interest.
4
ITEM 6: SELECTED FINANCIAL DATA
Realmark Properties Investors Limited Partnership-VI B
Year Ended Year Ended Year Ended Year Ended Year Ended
Dec. 31, 1996 Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992
------------- ------------- ------------- ------------- -------------
Total assets $ 7,749,737 $ 8,048,753 $ 9,447,468 $ 7,981,018 $ 8,341,110
=========== =========== =========== =========== ===========
Notes payable and
long-term obligations $ 4,225,106 $ 4,263,769 $ 4,298,714 $ 2,318,001 $ 2,325,000
=========== =========== =========== =========== ===========
_____________________________________________________________________________________________________________
Revenue $ 1,683,954 $ 1,715,088 $ 1,618,645 $ 1,449,496 $ 1,435,512
Expenses 1,854,988 2,412,220 2,051,597 1,756,195 1,579,014
----------- ----------- ----------- ----------- -----------
Income (loss) before
allocated loss from
joint ventures (171,034) (697,132) (432,952) (306,699) (143,502)
Allocated loss from
joint ventures (51,048) (73,723) (70,786) (28,933) (13,676)
----------- ----------- ----------- ----------- -----------
Net Loss $ (222,082) $ (770,855) $ (503,738) $ (335,632) $ (157,178)
=========== =========== =========== =========== ===========
_____________________________________________________________________________________________________________
Net cash provided by
(used in) operating
activities $ 170,266 $ 95,718 $ (195,511) $ 21,191 $ (2,554)
Principal payments on
long-term debt (38,663) (34,945) (19,287) (6,999) --
----------- ----------- ----------- ----------- -----------
Net cash (used in)
provided by
operating activities
less principal payments $ 131,603 $ 60,773 $ (214,798) $ 14,192 $ (2,554)
=========== =========== =========== =========== ===========
_____________________________________________________________________________________________________________
(Loss) income per limited
partnership unit $ (2.74) $ (9.51) $ (6.21) $ (4.14) $ (1.94)
=========== =========== =========== =========== ===========
Distributions per
limited partnership
unit $ 0.23 $ 0.96 $ 0.50 $ 1.25 $ 3.12.25
=========== =========== =========== =========== ===========
Weighted average number
of limited partnership
units outstanding 78,625.1 78,625.1 78,625.1 78,625.1 78,625.1
=========== =========== =========== =========== ===========
5
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- - ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Liquidity and Capital Resources:
- - --------------------------------
The Partnership continues to benefit from two fairly strong markets for
residential rental properties: Players Club in Lutz, Florida and The Villas in
Greenville, South Carolina. The Partnership had positive cash flow from
operations through the year ended December 31, 1996. Management is confident
that the properties in this Partnership will continue to prosper financially in
the coming year. Expenses are felt to be under control as they are continually
being reviewed and monitored closely. With occupancy levels increasing at the
end of 1996 and continuing into 1997, rental revenue is expected to increase
thus adding to the Partnership's positive cash flow.
The Partnership made distributions totaling $18,976 or $0.23 per limited
partnership unit during the year ended December 31, 1996; distributions in 1995
totaled $77,910 or $0.96 per limited partnership unit, exclusive of a payment
constituting a return of capital totaling $500,000; 1994 distributions totaled
$40,529 or $0.50 per limited partnership unit. A larger distribution was not
made during 1996 as management was utilizing all cash to fund necessary
improvements to the properties. Management anticipates making a distribution to
all partners during the first quarter of 1997.
Foxhunt Apartments came under contract for sale during July 1996. The sale
was subject to a number of contingencies and was cancelable by the purchaser.
The sales price negotiated is $7,400,000. Until such time as all of the buyer's
due diligence was performed, no closing date could be established. It appears as
of the date of this writing that the sale will not close. The General Partners
feel that the sale of this property is in the best interest of the joint
venturers, so management continues to look for potential buyers.
Also on July 16, 1996 a contract for the sale of Lakeview Village was
entered into on behalf of the joint venturers. The sales price negotiated is
$4,090,000. The contract is subject to a number of contingencies and is
cancelable by the purchaser. No firm closing date on the sale has been
established to date. The General Partners continue to aggressively seek other
buyers for this property since the sale is deemed to be in the best interests of
the joint venturers.
Results of Operations:
- - ----------------------
For the year ended December 31, 1996, the Partnership incurred a net loss
of $222,082 or $2.74 per limited partnership unit. This is a large decrease from
the years ended December 31, 1995 and 1994 when losses incurred totaled $770,855
or $9.51 per limited partnership unit and $503,738 or $6.21 per limited
partnership unit, respectively.
6
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- - ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Con't.)
------------------------------------------------------
Results of Operations (Con't.):
- - -------------------------------
Partnership revenues for the year ended December 31, 1996 totaled
$1,683,954, consisting of rental income of $1,552,571 and other income, which
includes interest, laundry income, and other miscellaneous sources of income of
$131,383. The decrease in rental revenue from that of the previous years,
although slight, may be attributed to a decrease in occupancy at Players Club
mostly during the third quarter of 1996. Occupancy at the Villas remained
relatively constant throughout the year. At December 31, 1996, both Players Club
and The Villas appear to be taking advantage of the strong rental markets in
which they are located as occupancy percentages are increasing as compared to
the previous quarter. Management has made various changes in personnel at
Players Club in hopes that new, more experienced staff will attract new tenants,
as well as retain current tenants, while bringing a new managing and leasing
strategy to the property. In order to increase occupancies during 1996,
management offered incentive programs throughout the year, which as of year-end,
appears to have been successful based on the increased occupancy noted at
Players Club. Although this was successful in increasing occupancies, it did
result in a short-term decrease in revenues. Rental revenues in the year ended
December 31, 1995 amounted to $1,597,470 and in the year ended December 31, 1994
totaled $1,501,718. There was also approximately a 12% increase in other income
during the year ended December 31, 1996. This can be attributed to increases in
both laundry income and termination fees collected.
Partnership expenses for the year ended December 31, 1996 totaled
$1,854,988, a substantial decrease over the expenses of the years ended December
31, 1995 and 1994 which were $2,412,220 and $2,051,597, respectively. The
largest decrease in expenses may be seen in property operations costs.
Management closely monitored such costs throughout the year, especially focusing
on expenses related to payroll and associates costs, repairs and maintenance and
contracted services. Utility costs were also measured frequently, and
cost-savings ideas were implemented wherever possible and practical. The
Partnership has achieved a decrease in operations expenses of a remarkable
$492,244 as compared to the previous year and approximately $112,000 over the
1994 amount. Administrative expenses totaled $373,953 for the year ended
December 31, 1996, which was a relatively small decrease over the 1995 amount of
$385,701, yet a more sizable decrease when compared to the 1994 expenses
totaling $527,691. The decrease in administrative expenses paid to affiliates is
the result of decreased accounting and portfolio management fees and investor
services and brokerage fees. The increase in other administrative costs is due
to several line items, including increased legal fees and more costly
advertising campaigns, undertaken to increase occupancies.
Management has plans in the coming year to make several capital
improvements to both The Villas and Players Club, including but not limited to
interior painting, replacement of carpets and appliances, and improvements to
landscaping. This work is necessary in order to continually increase rental
revenue(s) generated, but in order to keep costs under control, management has
successfully obtained large price discounts on paint, carpeting and appliances
through negotiations with large national companies, such as Whirlpool.
The Foxhunt Joint Venture had a net loss of $129,930 for the year ended
December 31, 1996. This loss is a fairly significant decrease as compared to
that of 1995 which amounted to $270,419 and that of 1994 which was $169,905. In
accordance with the joint venture agreement, 11.5% of the loss is allocated to
the Partnership and 88.5% is allocated to the other joint venturer. Accordingly,
$14,942 of the 1996 loss is allocated to the Partnership and $114,988 is
allocated to the other joint venture partner; $239,321 of the 1995 loss was
allocable to the other joint venturer, while for the year 1994, $150,366 was
allocable to the other venturer.
7
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- - ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Con't.)
------------------------------------------------------
Results of Operations (Con't.):
- - -------------------------------
The Lakeview Village Joint Venture generated a net loss of $222,600 for the
year ended December 31, 1996. This loss, although less than the two previous
years, is still a fairly significant indication of the problems this property
has had over the past several years. Vacancies and delinquencies were the
property's two biggest downfalls in 1996, both of which resulted in significant
cash flow difficulties for the property. The loss for 1995 and 1994 was $262,797
and $315,948, respectively. In accordance with the joint venture agreement,
16.22% of the loss is allocated to the Partnership and 83.78% is allocated to
the other joint venturer. For 1996, $36,106 of the loss is allocated to the
Partnership and $186,494 is allocated to the other joint venture partner;
$220,172 of the 1995 loss was allocable to the other joint venturer, while for
the year 1994, $264,701 was allocable to the other venturer.
For the year ended December 31, 1996, the tax basis loss for the
Partnership was $136,486 or $1.68 per limited partnership unit compared to a tax
loss of $707,299 or $8.73 per unit for the year ended December 31, 1995 and a
tax loss of $520,051 or $6.42 per limited partnership unit for the year ended
December 31, 1994. The Partnership agreement provides for the taxable income or
losses to be allocated 97% to the Limited Partners and 3% to the General
Partners, and in accordance with this and the Internal Revenue Code, the loss
for the year ended December 31, 1996 was allocated in this fashion.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- - ------- -------------------------------------------
Listed under Item 14 of this report.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
- - ------- ---------------------------------------------
ON ACCOUNTING AND FINANCIAL DISCLOSURE
--------------------------------------
None.
8
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 March 1, 1996, are listed below. Each director is subject
to election on an annual basis.
Title of All Positions
Name Held with the Company Year First Elected Director
- - ---- --------------------- ---------------------------
Joseph M. Jayson President and Director 1979
Judith P. Jayson Vice President, and Director 1979
Michael J. Colmerauer Secretary
Joseph M. Jayson, President and Director of Realmark Properties, Inc. and
Judith P. Jayson, Vice President and Director of Realmark Properties, Inc., are
married to each other.
The Directors and Executive Officers of the Corporate General Partner and
their principal occupations and affiliations during the last five years or more
are as follows:
Joseph M. Jayson, age 58, is Chairman, Director and sole stockholder of J.
M. Jayson and Company, Inc. and certain of its affiliated companies:
Westmoreland Capital Corporation, Oilmark Corporation and U.S. Energy
Development Corporation. In addition, Mr. Jayson is chairman of Realmark
Corporation, Chairman of Realmark Properties, Inc., wholly-owned subsidiaries of
J. M. Jayson and Company, Inc. and co-general partner of Realmark Property
Investors Limited Partnership, Realmark Property Investors Limited
Partnership-II, Realmark Property Investors Limited Partnership-III, Realmark
Property Investors Limited Partnership-IV, Realmark Property Investors Limited
Partnership-V, Realmark Property Investors Limited Partnership-VI A, and
Realmark Property Investors Limited Partnership-VI B. Mr. Jayson is a member of
the Investment Advisory Board of the Corporate General Partner. Mr. Jayson has
been in real estate for the last 34 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
34 years been engaged in various aspects of real estate brokerage and
investment. He brokered residential properties from 1962 to 1964, commercial
investment properties from 1964 to 1967, and in 1967 left commercial real estate
to form his own investment firm. Since that time, Mr. Jayson and J. M. Jayson &
Company, Inc. have formed or participated in various ways with forming over 31
real estate related limited partnerships. For the past sixteen years, Mr. Jayson
and J.M. Jayson & Company, Inc., and an affiliate have also engaged in
developmental drilling for gas and oil.
9
Judith P. Jayson, age 57, 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 35 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, 39, is Secretary and in-house legal counsel for J.M.
Jayson and Company, Inc., Realmark Corporation, Realmark Properties, Inc. and
other companies affiliated with the General Partners. He received a Bachelor's
Degree (BA) from Canisius College in 1980 and a Juris Doctors (J.D.) from the
University of Tulsa in 1983. Mr. Colmerauer is a member of the American and Erie
County Bar Association and has been employed by the Jayson group of companies
for the last 13 years.
ITEM 11: EXECUTIVE COMPENSATION
- - -------- ----------------------
No direct remuneration was paid or payable by the Partnership to directors
and officers (since it has no directors or officers) for the years ended
December 31, 1996, 1995 or 1994, 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, 1996,
1995 or 1994.
The following table sets forth for the years ended December 31, 1996, 1995
and 1994, the compensation paid by the Partnership, directly or indirectly, to
affiliates of the General Partners:
Amounts
Entity Receiving Type of -------
Compensation Compensation 1996 1995 1994
------------ ------------ ---- ---- ----
Realmark Properties, Inc. Partner distributions $ 569 $ 2,337 $ 1,216
----------- ---------- ----------
(The Corporate General
Partner) Reimbursement for
allocated partnership
administration expenses
related to:
Investor services 6,276 5,000 11,696
Brokerage 6,914 4,451 8,643
Portfolio management
and accounting 66,184 112,745 215,288
Partnership management fees 15,900 3,268 15,900
Realmark Corporation Property management fees 80,736 84,143 78,247
Computer service fees 8,500 6,336 4,176
----------- ---------- ----------
184,510 215,943 333,950
----------- ---------- ----------
U.S. Capital Services Mortgage loan placement fee - - 20,000
----------- ---------- ----------
(An Affiliate of the
General Partners)
Total $ 185,079 $ 218,280 $ 355,166
=========== ========== ==========
10
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). These fees
amounted to $15,900, $3,268 and $15,900 for the years ended December 31, 1996,
1995 and 1994, respectively. 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 and amount
equivalent to a 7% return on the average of their adjusted capital
contributions; second, to the corporate general partner a 3% property
disposition fee provided, however, that such fees shall be reduced, but not
below zero, by the amounts necessary to pay to Limited Partners whose
subscriptions were accepted by January 31, 1989, an additional cumulative annual
return (not compounded) equal to 2% of their average adjusted capital
contributions, and to Limited Partners whose subscriptions were accepted between
February 1, 1989 and June 30, 1989, an additional cumulative annual return (not
compounded) equal to 1% of their average adjusted capital contributions
commencing with the first fiscal quarter following the termination of the
offering of units; third, to the Limited partners, an amount equal to their
capital contributions, then an amount equal to an additional 5% of the average
of their adjusted capital contributions; fourth, to all Partners, an amount
equal to their respective positive capital balances; finally, in the ratio of
87% to the Limited Partners and 13% to the General Partners.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
- - -------- -----------------------------------------------
AND MANAGEMENT
--------------
No person is known to the Partnership to own of record or beneficially,
more than five percent (5%) of the Units of Limited Partnership Interests of the
Partnership. The General Partners, as of December 31, 1996 owned no Units of
Limited Partnership Interest.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- - -------- ----------------------------------------------
(a) Transactions with Management and Others
---------------------------------------
No transactions have occurred between the Partnership and those in the
management of Realmark Properties, Inc. All transactions between the Partnership
and Realmark Properties, Inc. (the Corporate General Partner) and any other
affiliated organization are described in Item 11 of this report and in Note 7 to
the financial statements.
11
ITEM 14: EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND
- - -------- ----------------------------------------------
REPORTS ON FORM 8-K
-------------------
(a) Financial Statements and Schedules
----------------------------------
FINANCIAL STATEMENTS Page
-------------------- ----
(i) Independent Auditors' Report 13
(ii) Balance Sheets as of December 31, 1996 and 1995 14
(iii) Statements of Operations for years ended December 31,
1996, 1995, and 1994. 15
(iv) Statements of Partners' Capital (Deficit) for years
ended December 31, 1996, 1995, and 1994 16
(v) Statements of Cash Flows for years ended
December 31, 1996, 1995, and 1994 17
(vi) Notes to Financial Statements 18 - 29
FINANCIAL STATEMENT SCHEDULES
-----------------------------
(i) Schedule III - Real Estate and Accumulated Depreciation 30 - 31
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or the notes thereto.
(b) Reports on Form 8-K
-------------------
None.
(c) Exhibits
--------
4. Instruments defining the rights of security holders, including
indentures
(a) Certificate of Limited Partners 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
(b) Property Management Agreement with Realmark Corporation
included with the Registration Statement of the Registrant
as filed and amended to date incorporated herein by
reference.
12
INDEPENDENT AUDITORS' REPORT
The Partners
Realmark Property Investors Limited Partnership-VI B:
We have audited the accompanying balance sheets of Realmark Property Investors
Limited Partnership- VI B as of December 31, 1996 and 1995, and the related
statements of operations, partners' capital (deficit), and cash flows for each
of the three years in the period ended December 31, 1996. Our audits also
included the financial statement schedules listed in the Index at Item 14. These
financial statements and financial statement schedules are the responsibility of
the General Partners. Our responsibility is to express an opinion on the
financial statements and financial statement schedules 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 B at December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted accounting principles.
Also, in our opinion, such financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Buffalo, New York
March 25, 1997
13
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
Assets 1996 1995
----------- -----------
Property, at cost:
Land $ 746,000 $ 746,000
Buildings and improvements 6,018,094 5,981,594
Furniture, fixtures and equipment 255,652 255,652
----------- -----------
7,019,746 6,983,246
Less accumulated depreciation 1,379,541 1,110,360
----------- -----------
Property, Net 5,640,205 5,872,886
Investment in joint ventures 389,598 440,646
Cash 1,508,588 641,724
Accounts receivable - affiliates -- 802,099
Mortgage costs, net of accumulated amortization
of $189,098 and $137,762 93,277 133,251
Other assets 118,069 158,147
----------- -----------
Total Assets $ 7,749,737 $ 8,048,753
=========== ===========
Liabilities and Partners' Capital
Liabilities:
Mortgages payable $ 4,225,106 $ 4,263,769
Accounts payable and accrued expenses 215,520 261,611
Security deposits and prepaid rents 111,962 85,166
----------- -----------
Total Liabilities 4,552,588 4,610,546
----------- -----------
Partners' Capital (Deficit):
General partners (88,613) (81,382)
Limited partners 3,285,762 3,519,589
----------- -----------
Total Partners' Capital 3,197,149 3,438,207
----------- -----------
Total Liabilities and Partners' Capital $ 7,749,737 $ 8,048,753
=========== ===========
See notes to financial statements
14
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
----------- ----------- -----------
Income:
Rental $ 1,552,571 $ 1,597,470 $ 1,501,718
Interest and other 131,383 117,618 116,927
----------- ----------- -----------
Total income 1,683,954 1,715,088 1,618,645
----------- ----------- -----------
Expenses:
Property operations 826,421 1,318,665 938,879
Interest:
Other 334,097 426,414 303,652
Depreciation and amortization 320,517 281,440 281,375
Administrative:
Paid to affiliates 184,510 215,943 333,950
Other 189,443 169,758 193,741
----------- ----------- -----------
Total expenses 1,854,988 2,412,220 2,051,597
----------- ----------- -----------
Loss before allocated loss from joint ventures (171,034) (697,132) (432,952)
Allocated loss from joint ventures (51,048) (73,723) (70,786)
----------- ----------- -----------
Net loss $ (222,082) $ (770,855) $ (503,738)
=========== =========== ===========
Loss per limited partnership unit $ (2.74) $ (9.51) $ (6.21)
=========== =========== ===========
Distributions per limited partnership unit $ 0.23 $ 0.96 $ 0.50
=========== =========== ===========
Weighted average number of limited partnership
units outstanding 78,625.1 78,625.1 78,625.1
=========== =========== ===========
See notes to financial statements
15
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
STATEMENTS OF PARTERS' CAPITAL (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
General Limited Partners
Partners ----------------
Amount Units Amount
Balance, January 1, 1994 $ (39,591) 78,625.1 $ 5,370,830
Distributions to partners (1,216) -- (39,313)
Net loss (15,112) -- (488,626)
----------- -------- -----------
Balance, December 31, 1994 (55,919) 78,625.1 4,842,891
Distributions to partners (2,337) -- (75,573)
Return of Capital to limited partners -- -- (500,000)
Net loss (23,126) -- (747,729)
----------- -------- -----------
Balance, December 31, 1995 (81,382) 78,625.1 3,519,589
Distributions to partners (569) -- (18,407)
Net loss (6,662) -- (215,420)
----------- -------- -----------
Balance, December 31, 1996 $ (88,613) 78,625.1 $ 3,285,762
=========== ======== ===========
See notes to financial statements
16
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
----------- ----------- -----------
Cash Flows from operating activities:
Net loss $ (222,082) $ (770,855) $ (503,738)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 320,517 281,440 281,375
Allocated loss from joint ventures 51,048 73,723 70,786
Property acquisition costs -- 497,209 --
Changes in operating assets and liabilities:
Other assets 40,078 29,206 (73,938)
Accounts payable and accrued expenses (46,091) (22,749) 13,489
Security deposits and prepaid rents 26,796 7,744 16,515
----------- ----------- -----------
Net cash provided by (used in) operating activities 170,266 95,718 (195,511)
----------- ----------- -----------
Cash flows from investing activities:
Decrease (increase) in accounts receivable - affiliates 802,099 (746,722) 37,921
Property acquisition (36,500) -- --
----------- ----------- -----------
Net cash provided by (used in) investing activities 765,599 (746,722) 37,921
----------- ----------- -----------
Cash flows from financing activities:
Principal payments on mortgage (38,663) (34,945) (19,287)
Distributions to partners/return of capital (18,976) (577,910) (40,529)
(Increase) decrease in mortgage costs (11,362) 9,974 (117,793)
Proceeds from mortgage -- -- 2,000,000
----------- ----------- -----------
Net cash (used in) provided by financing activities (69,001) (602,881) 1,822,391
----------- ----------- -----------
Net increase (decrease) in cash 866,864 (1,253,885) 1,664,801
Cash - beginning of year 641,724 1,895,609 230,808
----------- ----------- -----------
Cash - end of year $ 1,508,588 $ 641,724 $ 1,895,609
=========== =========== ===========
See notes to financial statements
17
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1. FORMATION AND OPERATION OF PARTNERSHIP:
---------------------------------------
Realmark Property Investors Limited Partnership-VI B (the
"Partnership"), a Delaware Limited Partnership, was formed on September 21,
1987, to invest in a diversified portfolio of income producing real estate
investments.
In November 1988, the Partnership commenced the public offering of
units of limited partnership interest. Other than matters relating to the
organization, it had no business activities and, accordingly, had not incurred
any expenses or earned any income until the first interim closing (minimum
closing) of the offering, which occurred on February 2, 1989. All items of
income and expense arose subsequent to this date. The offer terminated on
February 28, 1990 with gross offering proceeds of $7,862,510. As of December 31,
1996, 78,265.1 units of limited partnership interest were sold and outstanding.
The General Partners are Realmark Properties, Inc., the Corporate General
Partner, and Mr. Joseph M. Jayson, the Individual General Partner. 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 (See Note 7).
The Partnership agreement also provides that distribution of funds,
revenues, and costs and expenses arising from partnership activities, exclusive
of any sale or refinancing activities, are to be allocated 97% to the Limited
Partners and 3% to the General Partners.
Net income or loss and proceeds arising from a sale or refinancing
shall be distributed first to the limited partners in amounts equivalent to a 7%
return on the average of their adjusted capital contributions, second, to the
corporate general partner a 3% property disposition fee provided, however, that
such fees shall be reduced, but not below zero, by the amounts necessary to pay
to Limited Partners whose subscriptions were accepted by January 31,1989, an
additional cumulative annual return (not compounded) equal to 2% of their
average adjusted capital contributions, and to Limited Partners whose
subscriptions were accepted between February 1, 1989 and June 30, 1989, an
additional cumulative annual return (not compounded) equal to 1% of their
average adjusted capital contributions commencing with the first fiscal quarter
following the termination of the offering of units; third, to the limited
Partners, an amount equal to their capital contributions, then an amount equal
to an additional 5% of the average of their adjusted capital contributions;
fourth, to all Partners, an amount equal to their respective positive capital
balances; and finally, in the ratio of 87% to the Limited Partners and 13% to
the General Partners.
18
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
(a) Use of Estimates:
-----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(b) Income (Loss) Per Limited Partnership Unit:
------------------------------------------
The income (loss) per limited partnership unit is based on the weighted
average number of limited partnership units outstanding for the year.
(c) Cash:
----
For the purposes of reporting cash flows, cash includes the following
items: cash on hand; cash in checking; and money market savings.
(d) Property and Depreciation:
-------------------------
Depreciation is provided on the straight-line method over the estimated
useful lives of the respective assets, and totaled $269,181, $240,077 and
$239,699 for the years ended December 31, 1996, 1995 and 1994, respectively. The
estimated useful lives of the Partnership assets range from 5 to 25 years.
Expenditures for maintenance and repairs are expensed as incurred. Major
renewals and betterments are capitalized. The Accelerated Cost Recovery System
or Modified Accelerated Cost Recovery System is used to calculate depreciation
expense for tax purposes.
(e) Property Acquisition Costs:
--------------------------
Acquisition fees are paid to the General Partner as properties are
specified, which generally occurs when a contract to purchase the property is
entered into. Acquisition fees are allocated to specific properties when actual
closing takes place. There were no capitalized acquisition fees at December 31,
1996.
19
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Con't.):
---------------------------------------------------
(f) Mortgage Costs:
--------------
Mortgage costs incurred in obtaining property mortgage financing have been
deferred and are being amortized over the terms of the respective mortgages.
(g) Rental Income:
-------------
Rental Income is recognized on the straight line method over the terms of
the leases. The outstanding leases with respect to these residential rental
properties owned are for terms of no more than one year.
(h) Unconsolidated Joint Ventures:
-----------------------------
The Partnership's investment in unconsolidated joint ventures is accounted
for on the equity method.
(i) Accrued Rent Receivable:
-----------------------
Due to the nature of accrued rent receivable, all such receivables are
fully reserved. The allowance for doubtful accounts was $313,192 and $213,343 at
December 31, 1996 and 1995, respectively.
3. ACQUISITION OF RENTAL PROPERTY:
------------------------------
In June 1991, the Partnership acquired a 192 unit apartment complex (The
Villa) located in Greenville, South Carolina for a purchase price of $3,100,000
which included $373,493 in acquisition fees.
In June 1991, the Partnership acquired a 144 unit apartment complex
(Players Club North) located in Lutz, Florida for a purchase price of $3,007,000
which included $190,737 in acquisition fees.
On September 27, 1991, the Partnership entered into a joint venture
agreement for the purpose of operating the Foxhunt Apartments, located in
Dayton, Ohio. See Footnote 6 for further discussion related to the Foxhunt Joint
Venture.
On September 30, 1992, the Partnership entered into a joint venture
agreement for the purpose of operating the Lakeview Village Apartment complex,
located in Milwaukee, Wisconsin. See Footnote 6 for further discussion related
to the Lakeview Joint Venture.
20
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
4. MORTGAGES PAYABLE:
-----------------
The partnership has the following mortgages:
Players Club North
------------------
A mortgage with a balance of $2,273,368 and $2,289,944 at December 31,1996
and 1995, respectively, providing for monthly principal and interest payments of
$20,402, bearing interest at 10%. The note matures July 1998. The mortgage is
secured by the assets of Players Club Apartment complex.
The Villa
---------
A mortgage with a balance of $1,951,738 and $1,973,825 at December 31,1996
and 1995, respectively, providing for monthly principal and interest payments of
$17,998, bearing interest at 9.875%. The note matures August 1998. The mortgage
is secured by the assets of The Villa Apartment complex.
The aggregate maturities of the mortgages for each of the next two years
are as follows:
Year Amount
- - ---- ------
1997 $ 43,853
1998 4,181,253
-------------------
$ 4,225,106
===================
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
Statement of Financial Accounting Standards No. 107 requires disclosure
about fair value of certain financial instruments. The fair value of cash,
accounts receivable - affiliates, other assets, accounts payable and accrued
expenses, and security deposits and prepaid rents approximate the carrying value
due to the short-term nature of these instruments.
Management has estimated that the fair values of the mortgages payable of
the Villa and Players Club, which have carrying values of $1,951,738 and
$2,273,368, respectively, based on currently available rates for debt of similar
terms, is approximately $2,008,000 and $2,325,000, respectively.
6. INVESTMENTS IN JOINT VENTURES:
------------------------------
On September 27, 1991, the Partnership entered into an agreement and formed
a joint venture with Realmark Property Investors Limited Partnership-II
(RPILP-II), and Realmark Property Investors Limited Partnership-VI A (RPILP-VI
A). The Joint Venture was formed for the purpose of operating the Foxhunt
Apartments, located in Dayton, Ohio and owned by RPILP-II. Under the terms of
the Joint Venture agreement, the Partnership contributed $1,041,568 and RPILP-VI
A contributed $390,000 to buy out the wraparound promissory note on the
property, while RPILP-II contributed the property net of the first mortgage.
21
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
6. INVESTMENTS IN JOINT VENTURES (Con't.):
---------------------------------------
On April 1, 1992, RPILP-II returned RPILP-VI A's entire capital
contribution and $580,000 of the capital originally invested by the Partnership.
The amended Joint Venture agreement now provides that any income, loss, gain,
cash flow, or sale proceeds be allocated 88.5% to RPILP-II and 11.5% to the
Partnership. Prior to the buyout, the allocations were 63.14% to RPILP-II,
26.82% to the Partnership and 10.04% to RPILP-VI A. The allocated net loss of
the Joint Venture has been included in the statements of operation of the
Partnership.
At December 31, 1996, instances of noncompliance related to Foxhunt's
section 223f Department of Housing and Urban Development (HUD) mortgage have
been identified.
In July 1996, the Partnership entered into a plan to dispose of the
property, plant and equipment of the Foxhunt Joint Venture with a carrying
amount of $2,886,577 at December 31, 1996 and a net loss of $129,930 for the
year ended December 31, 1996.
Management has determined that a sale of the property is in the best
interests of the investors. As of December 31, 1996, an agreement, cancelable by
the buyer, was signed with an anticipated sales price of $7,400,000. The actual
date of closing on the sale of the property will depend on financing
availability, tax credit availability and other factors.
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 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 year
ended December 31, 1996 totaled approximately $93,000.
The following financial statements of the Joint Venture are presented on a
historical-cost basis. The equity ownership was determined based upon the cash
paid into the Joint Venture by the Partnership as a percentage of the General
Partner's estimate of the fair market value of the apartment complex and other
net assets at the date of inception.
22
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
6. INVESTMENTS IN JOINT VENTURES (Con't.):
--------------------------------------
A summary of the assets, liabilities, and partners' capital of the Joint
Venture as of December 31, 1996 and 1995 and the results of its operations for
the years ended December 31, 1996, 1995 and 1994 is as follows:
FOXHUNT JOINT VENTURE
BALANCE SHEETS
December 31, 1996 and 1995
Assets 1996 1995
----------- -----------
Cash and cash equivalents $ 162,914 $ 155,903
Property, net of accumulated depreciation 2,886,577 3,016,534
Accounts receivable - affiliates 249,929 269,073
Mortgage costs 253,937 262,331
Other assets 335,272 330,833
----------- -----------
Total Assets $ 3,888,629 $ 4,034,674
=========== ===========
Liabilities and Partners' (Deficiency)
Liabilities:
Mortgage payable $ 4,528,289 $ 4,555,682
Accounts payable and accrued expenses 262,871 254,356
Other liabilities 68,038 65,275
----------- -----------
Total liabilities 4,859,198 4,875,313
----------- -----------
Partners' (Deficiency) (970,569) (840,639)
----------- -----------
Total Liabilities and Partners' (Deficiency) $ 3,888,629 $ 4,034,674
=========== ===========
23
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
FOXHUNT JOINT VENTURE
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
----------- ----------- -----------
Income:
Rental $ 1,287,116 $ 1,343,601 $ 1,311,792
Interest and other 61,478 90,780 74,134
----------- ----------- -----------
Total Income 1,348,594 1,434,381 1,385,926
----------- ----------- -----------
Expenses:
Property operations 701,068 840,281 701,883
Interest 408,694 411,061 413,228
Depreciation and amortization 138,352 228,066 224,956
Administrative:
Paid to others 133,103 130,415 116,733
Paid to affiliates 97,307 94,977 99,031
----------- ----------- -----------
Total Expenses 1,478,524 1,704,800 1,555,831
----------- ----------- -----------
Loss from operations $ (129,930) $ (270,419) $ (169,905)
=========== =========== ===========
Allocation of net loss:
The Partnership $ (14,942) $ (31,098) $ (19,539)
RPILP II (114,988) (239,321) (150,366)
----------- ----------- -----------
Total $ (129,930) $ (270,419) $ (169,905)
=========== =========== ===========
A reconciliation of the investments in Foxhunt Joint Venture:
1996 1995 1994
--------- --------- ---------
Investment in joint venture at beginning of year $ 386,061 $ 417,159 $ 440,658
Allocation of net loss (14,942) (31,098) (3,960)
--------- --------- ---------
Investment in joint venture at end of year $ 371,119 $ 386,061 $ 436,698
========= ========= =========
24
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
6. INVESTMENT IN JOINT VENTURES (Con't.)
-------------------------------------
On September 30, 1992, the Partnership entered into a joint venture
agreement with Realmark Property Investors Limited Partnership IV (RPILP-IV),
for the purpose of operating the Lakeview Apartment complex, located in
Milwaukee, Wisconsin, and owned by RPILP-IV. Under the terms of the agreement,
the Partnership contributed $175,414, while RPILP-IV contributed the property
net of the outstanding mortgage.
At December 31, 1996, substantial doubt exists as to whether RPILP-IV will
continue as a going concern, due to cash flow difficulties, recurring losses and
a total partners deficiency of approximately $3.2 million.
The joint venture agreement provides that any income, loss, cash flow, or
sale proceeds be allocated 16.22% to the Partnership and 83.78% to RPILP-IV. The
allocated net loss of the joint venture has been included in the statements of
operations for the Partnership.
The equity ownership percentage was determined based upon the cash paid
into the Joint Venture by the Partnership as a percentage of the General
Partner's estimate of the fair market value of the apartment complex and other
net assets at the date of inception.
In July 1996, the Partnership entered into a plan to dispose of the
property, plant and equipment of the Lakeview Village Apartments with a carrying
amount of $2,507,241 at December 31, 1996 and a net loss of $222,600 for the
year ended December 31, 1996.
Management has determined that a sale of the property is in the best
interests of the investors. As of December 31, 1996, an agreement, cancelable by
the buyer, was signed with an anticipated sales price of $4,090,000. The actual
date of closing on the sale of the property will depend on financing
availability, tax credit availability and other factors.
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 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 year
ended December 31, 1996 totaled approximately $85,000.
25
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
6. INVESTMENT IN JOINT VENTURES (Con't.)
-------------------------------------
A summary of the assets, liabilities, and partners' capital of the Joint
Venture as of December 31, 1996 and 1995 and the results of its operations for
the years ended December 31, 1996, 1995 and 1994 is as follows:
LAKEVIEW JOINT VENTURE
BALANCE SHEETS
December 31, 1996 and 1995
Assets 1996 1995
- - ----------- ----------- -----------
Cash and cash equivalents $ -- $ 2,461
Property, net of accumulated depreciation 2,507,241 2,463,639
Accounts receivable - affiliates -- 158,875
Other assets 311,430 139,856
----------- -----------
Total Assets $ 2,818,671 $ 2,764,831
=========== ===========
Liabilities and Partners' Captial
Liabilities:
Cash overdraft $ 2,373 $ --
Mortgage payable 2,508,128 2,311,688
Accounts payable and accrued expenses 221,736 279,426
Accounts payable - affiliates 165,995 --
Other liabilities 54,736 85,414
----------- -----------
Total liabilities 2,950,595 2,676,528
----------- -----------
Partners' (Deficiency) Capital (134,297) 88,303
----------- -----------
Total Liabilities and Partners' Capital $ 2,818,671 $ 2,764,831
=========== ===========
26
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
6. INVESTMENT IN JOINT VENTURES (Con't.)
LAKEVIEW JOINT VENTURE
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
----------- ----------- -----------
Income:
Rental $ 665,480 $ 801,614 $ 718,587
Interest and other 41,898 25,335 25,324
----------- ----------- -----------
Total Income 707,378 826,949 743,911
----------- ----------- -----------
Expenses:
Property operations 401,714 419,997 497,046
Interest:
Other 207,820 265,009 276,616
Affiliates 19,005 -- --
Depreciation and amortization 129,462 185,592 168,259
Administrative:
Paid to others 132,603 129,152 74,136
Paid to affiliates 39,374 89,996 43,802
----------- ----------- -----------
Total Expenses 929,978 1,089,746 1,059,859
----------- ----------- -----------
Loss from operations $(222,600.0) $(262,797.0) $(315,948.0)
=========== =========== ===========
Allocation of net loss:
The Partnership $ (36,106.0) $ (42,625.0) $ (51,247.0)
RPILP-IV (186,494) (220,172) (264,701)
----------- ----------- -----------
Total $ (222,600) $ (262,797) $ (315,948)
=========== =========== ===========
A reconciliation of the investments in Lakeview Joint Ventures:
1996 1995 1994
--------- --------- ---------
Investment in joint venture at beginning of year $ 54,585 $ 97,210 $ 148,457
Allocation of net loss (36,106) (42,625) (51,247)
--------- --------- ---------
Investment in joint venture at end of year $ 18,479 $ 54,585 $ 97,210
========= ========= =========
27
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
7. RELATED PARTY TRANSACTIONS:
The Corporate general partner and its subsidiaries earned the following
fees and commissions and were reimbursed for the following expenses as provided
for in the partnership agreement for the years ended December 31, 1996, 1995 and
1994.
1996 1995 1994
-------- -------- --------
Mortgage placement fee equal to 1% of mortgage
acquired (capitalized as mortgage costs) $ -- $ -- $ 20,000
-------- -------- --------
Partnership management fee equal to 7% of net
cash flow (as defined in the Partnership
Agreement), 2% of which is subordinated to the
limited Partners receiving an annual cash return
equal to 7% of their adjusted capital
contributions 15,900 3,268 15,900
Reimbursement for allocated administrative
costs of the corporate general partner, including
payroll, legal, rent, depreciation, printing,
computer processing, mailing, audit, travel,
communications, and partnership operations 79,374 122,196 235,627
Property management fees equal to 5% of the
gross monthly rental receipts of the properties
managed 80,736 84,143 78,247
Computer service charges based upon number
of apartment units 8,500 6,336 4,176
-------- -------- --------
184,510 215,943 333,950
-------- -------- --------
$184,510 $215,943 $353,950
======== ======== ========
Accounts receivable - affiliates, which are payable on demand, amounted to
$0 and $802,099 at December 31,1996 and 1995 respectively.
Partnership accounting and portfolio management fees, investor services
fees and brokerage fees are allocated based on total assets, the number of
partners, and number of units, respectively. In addition to the above, other
property specific expenses, such as payroll, benefits, etc. are charged to
property operations on the Statement of Operations.
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
8. 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.
The reconciliation of net loss for the years ended December 31, 1996, 1995
and 1994, and as reported in the statement of operations, and as would be
reported for tax return purposes is as follows:
1996 1995 1994
----------- ----------- -----------
Net loss -
Statement of operations $ (222,082) $ (770,855) $ (503,738)
Add to (deduct from):
Difference in depreciation 27,146 (244) (9,723)
Other nondeductible expenses 73,185 56,117 1,652
Tax basis adjustement - Joint Ventures (14,735) 7,683 (8,242)
----------- ----------- -----------
Net loss - tax return purposes $ (136,486) $ (707,299) $ (520,051)
=========== =========== ===========
The reconciliation of Partners' Capital at December 31, 1996, 1995 and
1994, as reported in the balance sheet and as reported for tax return purposes,
is as follows:
1996 1995 1994
----------- ----------- -----------
Partners' Capital - Balance Sheet $ 3,197,149 $ 3,438,207 $ 4,786,972
Add to (deduct from):
Accumulated difference in depreciation (39,670) (66,816) (66,572)
Syndication fees 1,179,381 1,179,381 1,179,381
Other nondeductible expenses 250,396 177,211 121,094
Tax basis adjustment - Joint Ventures (59,976) (45,241) (52,924)
----------- ----------- -----------
Partners' Capital - tax return purposes $ 4,527,280 $ 4,682,742 $ 5,967,951
=========== =========== ===========
9. SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
1996 1995 1994
---- ---- ----
Cash paid for interest $ 335,406 $ 425,867 $ 287,235
=========== =========== ===========
10. RECLASSIFICATIONS:
Certain reclassifications have been made to the 1994 and 1995 balances to
conform with the classifications used in 1996.
29
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
Initial Cost to
Partnership Cost
---------------------------------- Capitalized
Subsequent
Property to
Description Encumbrances Land Buildings Acquisition
The Villa
Greenville, SC $ 1,951,738 $ 528,000 $ 3,059,008 $ 99,235
Player's Club North
Lutz, FL 2,273,368 218,000 2,851,851 8,000
---------------- --------------- ---------------- ----------------
$ 4,225,106 $ 746,000 $ 5,910,859 $ 107,235
================ =============== ================ ================
Foxhunt Joint Vtr.
Dayton, OH $ 4,528,289 $ 387,500 $ 4,890,020 $ 148,151
================ =============== ================ ================
Lakeview Joint Vtr.
Milwaukee, WI $ 2,508,128 $ 200,000 $ 3,785,880 $ 163,791
================ =============== ================ ================
_______________________________________________________________________________________________________________________
Gross amounts at which
Carried at Close of Period
---------------------------------------------------
(3)(4)
Property (1)(2) Accumulated Date of Date
Description Land Buildings Total Depreciation Construction Acquired
The Villa
Greenville, SC $ 528,000 $ 3,158,243 $ 3,686,243 $ 608,035 1971 06/91
Player's Club North
Lutz, FL 218,000 2,859,851 3,077,851 570,637 1986 06/91
--------------- --------------- ---------------- ----------------
$ 746,000 $ 6,018,094 $ 6,764,094 $ 1,178,672
=============== =============== ================ ================
Foxhunt Joint Vtr.
Dayton, OH $ 387,500 $ 5,038,171 $ 5,425,671 $ 2,539,094 1972 09/91
=============== =============== ================ ================
Lakeview Joint Vtr.
Milwaukee, WI $ 200,000 $ 3,949,670 $ 4,149,670 $ 1,642,430 1971 09/92
=============== =============== ================ ================
30
SCHEDULE III
(Continued)
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(1) Cost for Federal income tax purposes is $6,764,094.
(2) A reconciliation of the carrying amount of land and buildings as of
December 31, 1996, 1995 and 1994 follows:
Partnership Properties
----------------------
1996 1995 1994
---------- ---------- ----------
Balance at beginning of period $6,727,594 $6,727,594 $6,727,594
Additions 36,500 -- --
---------- ---------- ----------
Balance at end of period $6,764,094 $6,727,594 $6,727,594
========== ========== ==========
Joint Venture Properties
------------------------
1996 1995 1994
---------- ---------- ----------
Balance at beginning of period $9,440,469 $9,409,359 $9,409,359
Additions 134,872 31,110 --
---------- ---------- ----------
Balance at end of period $9,575,341 $9,440,469 $9,409,359
========== ========== ==========
(3) A reconciliation of accumulated depreciation for the years ended December
31, 1996, 1995 and 1994 follows:
Partnership Properties
----------------------
1996 1995 1994
---------- ---------- ----------
Balance at beginning of period $ 946,012 $ 742,457 $ 524,944
Depreciation expense 232,660 203,555 217,513
---------- ---------- ----------
Balance at end of period $1,178,672 $ 946,012 $ 742,457
========== ========== ==========
Joint Venture Properties
------------------------
1996 1995 1994
---------- ---------- ----------
Balance at beginning of period $3,960,296 $3,588,032 $3,185,677
Depreciation expense 221,228 372,264 402,355
---------- ---------- ----------
Balance at end of period $4,181,524 $3,960,296 $3,588,032
========== ========== ==========
(4) Balance applies entirely to buildings. All properties are depreciated
over 25 years lives.
31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-VI B
By: /s/ Joseph M. Jayson 3/28/97
------------------------------------------- ---------------
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: /s/ Joseph M. Jayson 3/28/97
-------------------------------------------- ---------------
JOSEPH M. JAYSON, President Date
Principal Executive Officer and Director
/s/ Michael J. Colmerauer 3/28/97
-------------------------------------------- ---------------
MICHAEL J. COLMERAUER, Date
Secretary
32
Supplemental Information to be Furnished with Reports Filed Pursuant
to Section 15(d) of the Act by Registrants Which Have Not Registered
Securities Pursuant to Section 12 of the Act.
The Form 10-K is sent to security holders. No other annual report is
distributed. No proxy statement, form of proxy or other proxy soliciting
material was sent to any of the registrant's security holders with respect
to any annual or other meeting or security holders.
33