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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 EXCHANGE ACT OF 1934. (NO FEE
REQUIRED)
Commission File Number 0-16561
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
(Exact Name of Registrant as specified in its Charter)
Delaware 16-1275925
- -------------------- ---------------------------------
(State of Formation) (IRS Employer Identification No.)
2350 North Forest Road
Suite 21-B
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
PART I
ITEM 1: BUSINESS
- -----------------
The Registrant, Realmark Property Investors Limited Partnership-V (the
"Partnership"), is a Delaware limited partnership organized in 1985, 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").
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 July 14, 1986, and concluded the offering
on October 31, 1987, having raised a total of $20,999,800 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, 1996, the Partnership owned six (6) apartment
complexes totaling 972 units, a 65,334 square foot office/warehouse building in
Nashville, Tennessee, a 115,021 square foot office complex in Durham, North
Carolina, and a 50% interest in a joint venture in an office/warehouse complex
in Amherst, New York. The Partnership also owns a 50% joint venture interest in
another office/warehouse complex in Amherst, New York.
The business of the Partnership is not seasonal. As of December 31, 1996,
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, 1996 were employees of the Corporate General Partner or its
affiliates.
The Partnership's 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 a build-up of equity through the reduction of mortgage
loans.
The occupancy for each complex as of December 31, 1996, 1995 and 1994 was
as follows:
1996 1995 1994
---- ---- ----
Williamsburg North 88% 92 % 92 %
Fountains 89% 97 % 96 %
Camelot 97% 98 % 98 %
O'Hara 92% 95 % 95 %
Wayne Estates 93% 96 % 96 %
Jackson Park 97% 99 % 98 %
The Paddock 89% 100 % 90 %
Commercial Park West 99% 98 % 97 %
2
The percentage of total Partnership revenue generated from each complex as
of December 31, 1996, 1995 and 1994 was as follows:
1996 1995 1994
---- ---- ----
Williamsburg North 14% 14 % 14 %
Fountains 17% 17 % 17 %
Camelot 18% 18 % 18 %
O'Hara 7% 7 % 7 %
Wayne Estates 12% 12 % 12 %
Jackson Park 8% 8 % 8 %
The Paddock 5% 5 % 5 %
Commercial Park West 19% 19 % 19 %
ITEM 2: PROPERTIES
- ------- ----------
The following is a list of residential apartment complexes owned by the
Partnership at December 31, 1996:
Property Name
and Location General Character of Property Purchase Date
------------ ----------------------------- -------------
Williamsburg North Apts. Apartment complex; 16 buildings on 10 acres. December 1987
Columbus, IN 192 units. The outstanding mortgage balance
at December 31, 1996 was $1,846,372,
maturing July 1997, with monthly payments of
$18,213, including interest at 10.445%.
The Fountains Apts. Apartment complex; 10 buildings on 20 acres. February 1988
Westchester, OH 215 units. The mortgage has an outstanding
balance of $3,454,767 at December 31, 1996
and calls for monthly payments of $32,829,
including interest at 9.815%. The mortgage
was originally due February 1, 1997; no
extension has been made, and the mortgage is
payable on demand.
Camelot East Apts. Apartment complex; 23 buildings on 6 acres; May 1988
Louisville, KY 205 units.
O'Hara Apts. Apartment complex; 12 buildings on 9 acres; June 1988
Greenville, SC 100 units.
Wayne Estates Apts. Apartment complex; 17 buildings on 10 acres; July 1988
Huber Heights, OH 158 units.
3
ITEM 2: PROPERTIES (Con't.)
- ------- -------------------
Property Name
and Location General Character of Property Purchase Date
------------ ----------------------------- -------------
Camelot East Apartments, O'Hara Apartments and Wayne Estates Apartments mortgages
were refinanced in 1994 into one mortgage held in the name of Realmark Property Investors
Limited Partnership-V. The outstanding mortgage balance at December 31, 1996 was
$8,070,319, allocated $4,107,792 to Camelot East, $1,315,463 to O'Hara and $2,647,064 to
Wayne Estates. The loan matures October 1998 with monthly payments of $74,968, bearing
interest at 10%.
Jackson Park Apartment complex; 102 units. The April 1989
Seymour, IN outstanding mortgage balance at December
31, 1996 was $1,237,578, maturing October
2000 with monthly payments of $14,140,
including interest at 12.375%.
The above apartment complexes are being managed for the Partnership by Realmark
Corporation, an affiliate of the General Partner.
The following is a list of commercial properties owned by the Partnership at December
31, 1996:
The Paddock Building Office/Warehouse Building; 65,334 square May 1987
Nashville, TN feet. The property is currently managed by
a third party. Realmark Corporation, an
affiliate of the Corporate General Partner,
closely monitors the operations. The
outstanding mortgage balance at December 31,
1996 was $1,690,505. The mortgage provides
for monthly payments of $18,301 including
interest at 8.75% and matures June 1998. In
addition, a $180,000, 10% demand note with
monthly interest payments of $1,500.
Commercial Park West Office complex; 3 buildings totaling June 1991
Durham, NC 115,021 square feet. The property is
managed by a third party, with Realmark
Corporation, an affiliate of the Corporate
General Partner, closely monitoring the
operations. The outstanding mortgage balance
at December 31, 1996 was $4,858,051
providing for annual principal and interest
payments of $516,012 including interest at
10%. The mortgage matures June 2001.
4
ITEM 2: PROPERTIES (Con't.)
- ------- -------------------
Property Name
and Location General Character of Property Purchase Date
------------ ----------------------------- -------------
Inducon - East Office/warehouse complex; 6 buildings on April 1987
Joint Venture 15 acres; approximately 150,000 sq. ft of
Amherst, NY rentable space. The venture has three bonds
payable in the amount of $2,931,564,
$684,859 and $2,975,000 at December 31, 1996
with interest at 10.25%, 10.25% and 9.45%,
respectively. These bonds mature November
1999, November 1999 and December 1999,
respectively. The Partnership holds a 50%
joint venture interest.
Inducon - East Phase III The development consists of one 25,200 sq. ft. September 1992
Joint Venture building on 4.2 acres of land. Additionally,
Amherst, NY construction on a second building measuring
approximately 21,300 sq. ft. was completed
in 1996. The Venture has a demand loan
with an outstanding balance of $622,077 at
December 31, 1996, providing for monthly principal
and interest payments of $14,888 at a rate of prime
plus 1.5% with a five year amortization. The
Partnership holds a 50% joint venture interest.
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: SUBMISSION OF MATTERS TO A VOTE OF SECURITY
- ------- -------------------------------------------
HOLDERS.
--------
None.
5
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.
There were no Partnership distributions for the years ended December 31,
1996 and 1995. Partnership distributions for the year ended December 31, 1994
totaled $108,268 or $5.00 per limited partnership unit.
As of December 31, 1996, there were 2,264 record holders of units of
Limited Partnership Interest.
6
ITEM 6: SELECTED FINANCIAL DATA
Realmark Properties Investors Limited Partnership-V
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 $ 26,050,643 $ 27,477,303 $ 29,432,301 $ 29,925,512 $ 31,709,073
============ ============ ============ ============ ============
Notes payable and
long-term obligations $ 21,337,592 $ 21,606,473 $ 21,918,069 $ 21,165,091 $ 21,440,659
============ ============ ============ ============ ============
_________________________________________________________________________________________________________
Revenue $ 7,012,767 $ 7,213,894 $ 6,799,739 $ 6,309,766 $ 6,026,205
Expenses 7,919,987 8,782,511 7,745,256 7,115,460 7,057,069
------------ ------------ ------------ ------------ ------------
Loss before allocated
loss from joint ventures (907,220) (1,568,617) (945,517) (805,694) (1,030,864)
Loss from Joint Ventures (354,921) (394,263) (338,372) (280,969) (309,681)
------------ ------------ ------------ ------------ ------------
Net loss ($ 1,262,141) ($ 1,962,880) ($ 1,283,889) ($ 1,086,663) ($ 1,340,545)
============ ============ ============ ============ ============
_________________________________________________________________________________________________________
Net cash provided by
operating activities $ 825,354 $ 402,933 $ 81,380 $ 689,790 $ 584,815
Principal payments on
long-term debt net of
proceeds from debt
financing (268,881) (311,596) 752,978 (275,568) (143,808)
------------ ------------ ------------ ------------ ------------
Net cash provided by
operating activities
less principal
payments on
long-term debt $ 556,473 $ 91,337 $ 834,358 $ 414,222 $ 441,007
============ ============ ============ ============ ============
_________________________________________________________________________________________________________
Loss per limited
partnership unit ($ 58.29) ($ 90.65) ($ 59.30) ($ 50.19) ($ 61.91)
============ ============ ============ ============ ============
Distributions per limited
partnership unit $ -- $ -- $ 5.00 $ 18.75 $ 15.00
============ ============ ============ ============ ============
Weighted average number
of limited partnership
units outstanding 21,002.8 21,002.8 21,002.8 21,002.8 21,002.8
============ ============ ============ ============ ============
7
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
----------------------------------------------
Liquidity and Capital Resources:
- --------------------------------
The Partnership had success during the year ended December 31, 1996 in
controlling expenses, the result of which can be seen in the almost 36% decrease
in the loss for the year. Occupancy levels decreased through much of 1996
causing a decrease in revenues, but management feels confident that with the
improvements being made to the properties, as well as those planned, that this
situation will turn around in the coming year. Cash flow from operations
improved significantly over that of the two previous years; this additional cash
flow is being used to fund capital improvements at the properties in the
partnership.
Management has implemented corrective action plans in response to the going
concern considerations discussed in Note 13 to the financial statements.
Management is attempting to refinance some properties in this Partnership, and
is close to finalizing a deal as of the date of this writing. The refinancing
will also improve cash flow in the Partnership. Management feels that the
refinancing of several properties in the Partnership and/or the sale of such
properties will affect the future viability of the Partnership.
Management also has plans to improve the financial operations of the
Partnership through tighter cash management by way of the closer monitoring of
expenses such as payroll, advertising and maintenance, which have typically been
the expenses that have increased from year to year. Additionally, tighter credit
policies have been put into place as a means of avoiding the collection problems
which the properties incurred during the past several years.
Accounts receivable - affiliates totaled $17,233 and $147,846 at December
31, 1996 and 1995, respectively. The outstanding balance is in the process of
being reimbursed.
The Partnership made no distributions in the years ended December 31, 1996
and 1995. Management hopes to make a distribution in the coming year, but at
this date, all available cash is being utilized to fund necessary improvements
to the properties.
Results of Operations:
- ----------------------
For the year ended December 31, 1996, the Partnership incurred a net loss
of $1,262,141 or $58.29 per limited partnership unit. This is a large decrease
from the year ended December 31, 1995 when the loss incurred totaled $1,962,880
or $90.65 per limited partnership unit, and it is more in line with the loss
which resulted in 1994 totaling $1,283,889 or $59.30 per limited partnership
unit.
Partnership revenues for the year ended December 31, 1996 totaled
$7,012,767, consisting of rental income of $6,661,327 and other income, which
includes interest, laundry income, and other miscellaneous sources of income of
$351,440. The decrease in rental revenue from that of the previous year is the
result of decreasing occupancies at several of the residential complexes in the
Partnership, such as Williamsburg North and The Fountains; occupancy also
dropped at The Paddock, which was 100% occupied as of December 31, 1995.
Commercial Park West, Camelot East and Jackson Park were three of the stronger
performers at the end of 1996. In order to limit vacancies and improve cash
collections, management continues to offer incentive programs, such as free
months rent or discounted rents for signed leases. Even when such a program is
successful, however, it does result in a short-term decrease in revenues until
full rent is paid. Rental revenues in the year ended December 31, 1995 amounted
to $6,826,595 and in the year ended December 31, 1994 totaled $6,478,373.
8
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Con't.)
------------------------------------------------------
Results of Operations (Con't.):
- -------------------------------
Partnership expenses for the year ended December 31, 1996 totaled
$7,919,987, a considerable decrease over the expenses of the year ended December
31, 1995 which were $8,782,511, yet a slight increase over those of 1994 which
totaled $7,745,256. The decrease can be attributed to lower property operations
costs and administrative costs paid to affiliates incurred during 1996.
Throughout the year, decreases were seen in payroll and associated costs,
repairs and maintenance expenses and contracted services. Additionally, a
decrease in accounting and portfolio management expenses was responsible for the
decline in administrative costs paid to affiliates. Management has focused on
closely monitoring expenses and identifying ways of controlling and cutting them
through utility savings devices, increasing in-house maintenance work, etc.
Other expenses remained fairly constant as compared to the previous year.
The Partnership expects to incur slightly higher property operations
expenses in the coming year due to the costs associated with preparing the
residential units for new tenants (i.e. cleaning, painting, appliance and
carpeting costs). Although this work is necessary in order to increase rental
revenue(s) generated, management continues to keep in mind that expenditures
must be closely monitored so as not to hurt the cash flow from operations of the
Partnership. One means of controlling such expenses has been management's
success at obtaining large price discounts on paint, carpeting and appliances
through negotiations with large national companies such as Whirlpool.
Inducon - East Joint Venture generated a net loss of $328,299 for the year
ended December 31, 1996 as compared to the loss which resulted in the years
ended December 31, 1995 and 1994 of $439,442 and $413,223, respectively. In
accordance with the joint venture agreement, 95% of the income or losses are
passed through to the Partnership and the remaining 5% is allocated to the other
joint venture partner.
Inducon - East Phase III Joint Venture generated a net loss of $45,302 for
the year ended December 31, 1996 as compared to the income which resulted in the
years ended December 31, 1995 and 1994 of $24,428 and $57,042, respectively. In
accordance with the joint venture agreement, 95% of the income or losses are
passed through to the Partnership and the remaining 5% is allocated to the other
joint venture partner.
For the year ended December 31, 1996, the tax basis loss was $721,465 or
$33.32 per limited partnership unit compared to a tax loss of $1,412,223 or
$65.22 per unit for the year ended December 31, 1995 and a tax loss of
$1,073,110 or $49.56 per limited partnership unit for the year ended December
31, 1994.
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.
---------------------------------------
None.
9
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE
- -------- ---------------------------------------
REGISTRANT.
-----------
The Partnership, as an entity, does not have any directors or officers. The
Individual General Partner of the Partnership is Joseph M. Jayson. The directors
and executive officers of Realmark Properties, Inc., the Partnership's Corporate
General Partner, as of March 1, 1997, 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 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 and Director and sole stockholder of
J.M. Jayson & Company, Inc. and certain of its affiliated companies:
Westmoreland Capital Corporation, Oilmark Corporation and U.S. Energy
Development Corporation. In addition, Mr. Jayson is President and Director of
Realmark Corporation and Realmark Properties, Inc., wholly owned subsidiaries of
J.M. Jayson & 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
engaged in real estate business 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 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 sixteen years, Mr. Jayson and J.M. Jayson & Company, Inc. and an
affiliate have also engaged in developmental drilling for gas and oil.
10
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE
- -------- ---------------------------------------
REGISTRANT. (Con't.)
--------------------
Judith P. Jayson, age 57, is currently Vice-President and 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 & 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 its fiscal 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.
11
ITEM 11: EXECUTIVE COMPENSATION. (Con't.)
- -------- --------------------------------
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:
Entity Receiving Type of
Compensation Compensation 1996 1995 1994
------------ ------------ ---- ---- ----
US Capital Corp. Refinancing services $ - $ 18,311 $ 82,500
---------- ------------ ----------
(An affiliate of the
General Partners)
Realmark Properties, Inc.
(The Corporate
General Partner) Partner distributions - - 3,248
---------- ------------ ----------
Reimbursement for
allocated partnership
administration expenses:
Investor Services Fees 12,699 10,116 29,568
Brokerage 34,571 22,255 37,309
Portfolio Management
& Accounting Fees 271,526 501,531 344,723
Partnership Mgmt. Fees 56,100 31,969 33,150
Realmark Corporation Property Management Fees 365,877 492,487 358,202
Computer Service Fees 20,592 20,592 19,986
---------- ------------ ----------
761,365 1,078,950 822,938
---------- ------------ ----------
Total $ 761,365 $ 1,097,261 $ 908,686
========== ============ ==========
INSERT COMPENSATION
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. The General Partners are also entitled to 3% of Distributable Cash,
as defined in the Partnership Agreement (no such amounts were distributed for
the years ended December 31, 1996 and 1995; this amount totaled $3,248 for the
year ended December 31, 1994) and to certain expense reimbursements with respect
to Partnership operations.
The General Partners are also allowed to collect a property disposition fee
upon 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 2.75% of the sales price. The
property disposition fee is subordinate to payments to the Limited Partners of a
cumulative annual return (not compounded) equal to 7% of their average adjusted
capital balances and to repayment to the Limited Partners of an amount equal to
their original capital contributions.
Since the conditions described above have not been met, no disposition fee
was paid or accrued on the sale of Pelham East.
The General Partners may also be entitled to 13% of any remaining sale or
refinancing proceeds after payments to the Limited Partners pursuant to the
terms outlined in the Partnership Agreement.
13
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
- -------- -----------------------------------------------
AND MANAGEMENT.
---------------
No person owns of record or beneficially more than five percent (5%) of the
units of Limited Partnership Interest of the Partnership. The General Partners,
as of December 31, 1996, owned three (3) units of Limited Partnership Interest.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
- -------- -----------------------------------------------
No transactions have occurred between the Partnership and the officers and
directors 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 4 to
the Financial Statements.
13
ITEM 14: EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND
- -------- ---------------------------------------------
REPORTS ON FORM 8-K.
--------------------
(a) Financial Statements and Schedules.
-----------------------------------
FINANCIAL STATEMENTS PAGE
-------------------- ----
(i) Independent Auditors' Report 15
(ii) Balance Sheets at December 31, 1996 and 1995 16
(iii) Statements of Operations for the years ended
December 31, 1996, 1995 and 1994 17
(iv) Statements of Partners' Capital (Deficit) for the
years ended December 31, 1996, 1995 and 1994 18
(v) Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994 19
(vi) Notes to Financial Statements 20 - 34
FINANCIAL STATEMENT SCHEDULES
-----------------------------
(i) Schedule III - Real Estate and Accumulated Depreciation 35 - 36
(ii) Schedule IV - Mortgage Loans on Real Estate 37
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 holder, including
indentures
(a) Certificate of Limited Partners filed with the Registration
Statement of the Registrant Form S-11, filed February 28,
1986, and subsequently amended, incorporated herein by
reference.
10. Material Contracts
(a) Property Management Agreement with Realmark Corporation
included with the Registration Statement, Form S-11, of the
Registrant as filed and amended to date, incorporated herein
by reference.
(c) Partnership Agreement included with the Registration
Statement of the Registrant as filed and amended to date,
incorporated herein by reference.
(b) Joint Venture Agreements as filed and amended to date,
incorporated herein by reference.
14
INDEPENDENT AUDITORS' REPORT
The Partners
Realmark Property Investors Limited Partnership-V
We have audited the accompanying balance sheets of Realmark Property Investors
Limited Partnership-V 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 the 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-V 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 schedules, when considered in relation to the
basic financial statements taken as a whole, present fairly in all material
respects the information set forth therein.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 13 to the
financial statements, the Partnership has two mortgages due in 1997 which raises
substantial doubt about its ability to continue as a going concern. Management's
plans concerning these matters are also described in Note 13. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
DELOITTE & TOUCHE, LLP
Buffalo, New York
April 4, 1997
15
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
Assets 1996 1995
- ------ ------------ ------------
Property, at cost:
Land $ 2,221,900 $ 2,221,900
Buildings 29,491,904 29,191,450
Furniture, fixtures and equipment 2,430,000 2,430,000
------------ ------------
34,143,804 33,843,350
Less accumulated depreciation 12,087,478 10,689,782
------------ ------------
Property, net 22,056,326 23,153,568
Investments in real estate joint ventures 1,939,576 2,294,497
Investment in land 373,282 373,282
Cash 800,741 453,883
Accounts receivable, net of allowance for doubtful accounts of
$541,099 and $377,812 in 1996 and 1995, respectively 19,588 51,596
Accounts receivable - affiliates 17,233 147,846
Mortgage escrow 483,107 574,577
Mortgage costs, net of accumulated amortization
of $364,296 and $259,823 in 1996 and 1995, respectively 230,581 295,280
Other assets 130,209 132,774
------------ ------------
Total Assets $ 26,050,643 $ 27,477,303
============ ============
Liabilities and Partners' Capital
- ---------------------------------
Liabilities:
Mortgages and note payable $ 21,337,592 $ 21,606,473
Accounts payable and accrued expenses 874,387 769,432
Interest payable 177,135 179,518
Security deposits and prepaid rents 366,976 365,186
------------ ------------
Total Liabilities 22,756,090 22,920,609
------------ ------------
Partners' capital (deficit):
General partners (459,529) (421,665)
Limited partners 3,754,082 4,978,359
------------ ------------
Total Partners' Capital 3,294,553 4,556,694
------------ ------------
Total Liabilities and Partners' Capital $ 26,050,643 $ 27,477,303
============ ============
See notes to financial statements
16
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
----------- ----------- -----------
Income:
Rental $ 6,661,327 $ 6,826,595 $ 6,478,373
Interest and other 351,440 387,299 321,366
----------- ----------- -----------
Total income 7,012,767 7,213,894 6,799,739
----------- ----------- -----------
Expenses:
Property operations 2,994,570 3,528,715 2,842,609
Interest 2,160,419 2,153,643 2,127,202
Depreciation and amortization 1,533,249 1,545,222 1,611,670
Administrative:
Paid to affiliates 761,365 1,078,950 822,938
Other 470,384 475,981 340,837
----------- ----------- -----------
Total expenses 7,919,987 8,782,511 7,745,256
----------- ----------- -----------
Loss before allocated loss from joint venture (907,220) (1,568,617) (945,517)
Allocated loss from joint ventures (354,921) (394,263) (338,372)
----------- ----------- -----------
Net loss ($1,262,141) ($1,962,880) ($1,283,889)
=========== =========== ===========
Loss per limited partnership unit ($ 58.29) ($ 90.65) ($ 59.30)
=========== =========== ===========
Distributions per limited partnership unit $ -- $ -- $ 5.00
=========== =========== ===========
Weighted average number of limited partnership
units outstanding 21,002.8 21,002.8 21,002.8
=========== =========== ===========
See notes to financial statements
17
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
General Limited Partners
Partners ----------------
Amount Units Amount
------ ----- ------
Balance, January 1, 1994 ($ 321,014) 21,002.8 $ 8,232,745
Distributions to Partners (3,248) -- (105,020)
Net loss (38,517) -- (1,245,372)
----------- -------- -----------
Balance, December 31, 1994 (362,779) 21,002.8 6,882,353
Net loss (58,886) -- (1,903,994)
----------- -------- -----------
Balance, December 31, 1995 (421,665) 21,002.8 4,978,359
Net loss (37,864) -- (1,224,277)
----------- -------- -----------
Balance, December 31, 1996 ($ 459,529) 21,002.8 $ 3,754,082
=========== ======== ===========
See notes to financial statements
18
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
----------- ----------- -----------
Cash Flows from operating activities:
Net loss ($1,262,141) ($1,962,880) ($1,283,889)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 1,533,249 1,545,222 1,611,670
Net loss from joint ventures 354,921 394,263 338,372
Changes in operating assets and liabilities:
Accounts receivable 32,008 63,131 (20,844)
Mortgage escrow 91,470 42,261 (438,107)
Other assets (28,516) 1,458 (271,790)
Accounts payable and accrued expenses 104,956 338,081 10,401
Interest payable (2,383) (2,079) 8,388
Security deposits and prepaid rents 1,790 (16,524) 127,179
----------- ----------- -----------
Net cash provided by operating activities: 825,354 402,933 81,380
----------- ----------- -----------
Cash flows from investing activities:
Accounts receivable - affiliates 130,613 1,087 50,493
Property acquisitions (300,454) (83,610) (306,971)
Proceeds from note receivable -- 250,000 --
Contributions to joint venture (net of distributions) -- -- (472,082)
----------- ----------- -----------
Net cash (used in) provided by investing activities (169,841) 167,477 (728,560)
----------- ----------- -----------
Cash flows from financing activities:
Distributions to partners -- -- (108,268)
Principal payments on mortgages (268,881) (311,596) (7,497,022)
Mortgage costs related to refinancing (39,774) (31,144) (54,739)
Mortgage proceeds -- -- 8,250,000
----------- ----------- -----------
Net cash (used in) provided by financing activities (308,655) (342,740) 589,971
----------- ----------- -----------
Net increase (decrease) in cash 346,858 227,670 (57,209)
Cash - beginning of year 453,883 226,213 283,422
----------- ----------- -----------
Cash - end of year $ 800,741 $ 453,883 $ 226,213
=========== =========== ===========
See notes to financial statements
19
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
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-V (the "Partnership"), a
Delaware Limited Partnership, was formed on February 28, 1986, to invest in a
diversified portfolio of income-producing real estate investments.
In July 1986, the Partnership commenced the public offering of units of
limited partnership interest. Other than matters relating to 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 December 5, 1986. All items of income and expense
arose subsequent to this date. As of December 31, 1987, 20,999.8 units of
limited partnership interest were sold and outstanding, excluding 3 units held
by an affiliate of the General Partners. The offering terminated on October 31,
1987 with gross offering proceeds of $20,999,800. The General Partners are
Realmark Properties, Inc., the Corporate General Partner, and Joseph M. Jayson,
the Individual General Partner. Joseph M. Jayson is the sole shareholder 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 4).
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 shall be
distributed first to the limited partners in amounts equivalent to a 7% return
on the average of their adjusted capital contributions, then an amount equal to
their capital contributions, then an amount equal to an additional 5% of the
average of their adjusted capital contributions after the corporate general
partner receives a 2.75% property disposition fee, then to all partners in 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.
20
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
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) Property and Depreciation
-------------------------
Depreciation is provided using the straight-line method over the estimated
useful lives of the respective assets and totaled $1,397,696, $1,419,825 and
$1,498,519 for the years ended December 31, 1996, 1995 and 1994, respectively.
The estimated useful lives of the Partnership's 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
and Modified Accelerated Cost Recovery System are used to calculate depreciation
expense for tax purposes.
(c) Rental Income
-------------
Leases for residential properties have terms of one year or less.
Commercial leases have terms of from one to six years. Rental income is
recognized on the straight line method over the term of the lease.
(d) Investments in Real Estate Joint Ventures
-----------------------------------------
The investments in real estate joint ventures are accounted for on the
equity method.
(e) Cash
----
For purposes of reporting cash flows, cash includes the following items:
cash on hand; cash in checking; and money market savings.
(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.
21
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
3. ACQUISITION AND DISPOSITIONS OF RENTAL PROPERTY:
------------------------------------------------
In April 1987, the Partnership acquired a 50% interest in Inducon - East
Joint Venture, a 150,000 square foot office/warehouse located in Amherst, New
York. The Partnership contributed $2,414,592 of capital to the joint venture.
In May 1987, the Partnership acquired a 65,334 square foot office building
(the Paddock Building) located in Nashville, Tennessee, for a purchase price of
$3,163,324, which included $148,683 in acquisition fees.
In December 1987, the Partnership acquired a 192 unit apartment complex
(Williamsburg North) located in Columbus, Indiana for a purchase price of
$3,525,692, which included $285,369 in acquisition fees.
In February 1988, the Partnership acquired a 215 unit apartment complex
(The Fountains) located in Westchester, Ohio for a purchase price of $5,293,068,
which included $330,155 in acquisition fees.
In May 1988, the Partnership acquired a 100 unit apartment complex (Pelham
East) located in Greenville, South Carolina, for a purchase price of $2,011,927,
which included $90,216 in acquisition fees. In March 1990, the Partnership sold
the 100 unit apartment complex for a sale price of $2,435,000 which generated a
net gain for financial statement purposes of $572,562.
In May 1988, the Partnership acquired a 205 unit apartment complex (Camelot
East) located in Louisville, Kentucky for a purchase price of $6,328,363, which
included $362,540 in acquisition fees.
In June 1988, the Partnership acquired a 100 unit apartment complex
(O'Hara) located in Greenville, South Carolina, for a purchase price of
$2,529,390, which included $498,728 in acquisition fees.
In July 1988, the Partnership acquired a 158 unit apartment complex (Wayne
Estates) located in Huber Heights, Ohio, for a purchase price of $4,250,013,
which included $793,507 in acquisition fees.
In April 1989, the Partnership acquired a 102 unit apartment complex
(Jackson Park) located in Seymour, Indiana for a purchase price of $1,911,585,
which included $111,585 in acquisition fees.
22
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
3. ACQUISITION AND DISPOSITIONS OF RENTAL PROPERTY (Con't.):
---------------------------------------------------------
In June 1991, the Partnership acquired a 115,021 square foot office complex
(Commercial Park West) located in Durham, North Carolina, for a purchase price
of $5,773,633, which included $273,663 in acquisition fees.
In September 1992, Inducon East - Phase III Joint Venture (the "Phase III
Venture") was formed pursuant to an agreement dated September 8, 1992 between
the Partnership and Inducon Corporation. The primary purpose of the Phase III
Venture is to acquire land and construct office/warehouse buildings as
income-producing property. The development, located in Amherst, New York,
consists of 4.2 acres of land and two buildings measuring approximately 25,200
and 21,300 square feet, respectively. As of December 31, 1995, both buildings
had been fully constructed and placed in service.
4. RELATED PARTY TRANSACTIONS:
---------------------------
The corporate general partner and its affiliates earned the following fees
and commissions as provided for in the partnership agreement for the years ended
December 31, 1996, 1995 and 1994:
1996 1995 1994
----------- ---------- ----------
Refinancing services equal to 1% of loan balance
at time service is rendered $ - $ 18,311 $ 82,500
Partnership management fee - equal to 7% of the
net cash flow of the partnership as defined in the
partnership agreement 56,100 31,969 33,150
Reimbursement for allocated administrative
expenses of the corporate general partner
including payroll, legal, rent, depreciation,
printing, audit, travel and communications related
to partnership accounting, partner communications
and property marketing 318,796 533,902 411,600
Computer service charges based on number of
apartment units 20,592 20,592 19,986
Property management fees computed at 3 - 6% of
gross monthly rental receipts on properties
managed 365,877 492,487 358,202
---------- ----------- ---------
761,365 1,078,950 822,938
---------- ----------- ---------
$ 761,365 $ 1,097,261 $ 905,438
========== =========== =========
23
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
4. RELATED PARTY TRANSACTIONS (Con't.):
------------------------------------
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.
The General Partners are also allowed to collect a property disposition fee
upon 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 2.75% of the sales price. The
property disposition fee is subordinate to payments to the Limited Partners of a
cumulative annual return (not compounded) equal to 7% of their average adjusted
capital balances and to repayment to the Limited Partners of an amount equal to
their original capital contributions. Since these conditions described above
have not been met, no disposition fees were paid or accrued on the sale of
Pelham East.
Accounts receivable - affiliates totaled $17,233 and $147,846 as of
December 31, 1996 and 1995, respectively.
5. INVESTMENT IN LAND:
-------------------
The Partnership owns approximately 96 acres of vacant land in Amherst, New
York. The investment balance of $373,282 as of December 31, 1996 and 1995
approximates its fair market value.
6. MORTGAGES AND NOTE PAYABLE:
---------------------------
The Partnership has the following mortgages and notes payable:
The Paddock Building
- --------------------
An 8.75% mortgage with a balance of $1,690,505 and $1,764,345 at December
31, 1996 and 1995, respectively, which provides for annual principal and
interest payments of $219,612 payable in equal monthly installments with a final
payment of $1,589,511 due in June 1998. Also, a 10% demand note payable with a
balance of $180,000 and $166,787 as of December 31, 1996 and 1995, respectively,
providing for monthly interest payments of $1,500.
24
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
6. MORTGAGES AND NOTES PAYABLE (Con't.):
-------------------------------------
The Williamsburg North Apartments
- ---------------------------------
A 10.445% mortgage with a balance of $1,846,372 and $1,870,673 at December
31, 1996 and 1995, respectively, which provides for annual principal and
interest payments of $218,556 payable in equal monthly installments with a final
payment of $1,833,241 due on July 1, 1997.
The Fountains Apartments
- ------------------------
A 9.815% mortgage with a balance of $3,454,767 and $3,506,826 at December
31, 1996 and 1995, respectively, which provides for annual principal and
interest payments of $393,948 payable in equal monthly installments with a final
payment of $3,450,193 due on February 1, 1997. No extension has been made, and
the mortgage is payable on demand.
Camelot East Apartments, O'Hara Apartments, Wayne Estates Apartments
- --------------------------------------------------------------------
A 10% mortgage with a balance of $8,070,319 and $8,158,075 at December 31,
1996 and 1995, respectively, allocated $4,107,792 to Camelot East, $1,315,463 to
O'Hara and $2,647,064 to Wayne Estates at December 31, 1996. The loan provides
for annual principal and interest payments of $899,616 payable in equal monthly
installments with the remaining balance of $7,894,059 due October 1998.
Jackson Park
- ------------
A 12.375% mortgage note with a balance of $1,237,578 and $1,253,047 at
December 31, 1996 and 1995, respectively, which provides for annual principal
and interest payments of $169,680 payable in equal monthly installments with a
final payment of $1,159,223 due on October 1, 2000.
Commercial Park West
- --------------------
A mortgage with a balance of $4,858,051 and $4,886,720 at December 31, 1996
and 1995, respectively. The mortgage provided for annual principal and interest
payments through June 1996 at a rate of 9.25%. On July 1, 1996, interest changed
to 10%, with annual principal and interest payments of $516,012 payable in equal
monthly installments. The remaining balance of $4,691,234 is due June 2001.
The mortgage notes are secured by the individual apartment complexes to which
they relate.
The Partnership's mortgages and note payable are of a non-recourse nature.
25
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
6. MORTGAGES AND NOTES PAYABLE (Con't.):
-------------------------------------
The aggregate maturities of mortgages and note payable for each of the next
five years and thereafter are as follows:
Year Amount
1997 $ 5,737,559
1998 9,608,213
1999 60,978
2000 1,220,551
2001 4,710,291
-------------
TOTAL $ 21,337,592
=============
7. FAIR VALUE OF FINANCIAL INSTRUMENTS:
------------------------------------
Statement of Financial Accounting Standards No. 107 requires disclosure
about fair value of certain financial instruments. The fair values of cash,
accounts receivable, accounts receivable - affiliates, accounts payable, accrued
expenses and deposit liabilities approximate the carrying value due to the
short-term nature of these instruments.
Management has estimated that the fair values of the mortgages payable on
Williamsburg North Apartments and The Fountains Apartments approximate their
carrying values as they are due and payable in 1997.
Management has estimated fair values of the mortgages payable on the
following properties based on currently available rates:
Approximate Carrying
Property Fair Value Value
- -------- ---------- -----
Camelot East Apartments, O'Hara Apartments, $ 8,345,000 $ 8,070,319
Wayne Estates Apartments
Jackson Park 1,395,000 1,237,578
Commercial Park West 5,153,000 4,858,051
The fair value of the mortgage and note payable on The Paddock cannot be
determined because it is uncertain if comparable estimates could be obtained in
the current market due to significant impending vacancies anticipated at the
property.
26
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
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 tax returns of the Partnership are subject to examination by the
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.
Partners' capital as of 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 $ 3,294,553 $ 4,556,694 $ 6,519,574
Add to (deduct from):
Accumulated difference in depreciation 1,635,883 1,383,929 1,039,080
Difference in investment in Joint Venture 429,468 316,176 208,758
Syndication fees 2,352,797 2,352,797 2,352,797
Accumulated difference in amortization
of organization costs 21,738 21,738 21,738
Other nondeductible expenses 434,017 258,583 160,193
------------ ------------ ------------
Partners' Capital - tax return purposes $ 8,168,456 $ 8,889,917 $ 10,302,140
============ ============ ============
The reconciliation of net loss for the years ended December 31, 1996, 1995
and 1994 as reported in the statement of operations, and as reported for tax
return purposes, is as follows:
1996 1995 1994
------------ ------------ ------------
Net loss -
Statement of operations $ (1,262,141) $ (1,962,880) $ (1,283,889)
Add to (deduct from):
Difference in depreciation 251,954 344,849 315,683
Difference in investment in
joint venture 113,292 107,418 105,527
Other nondeductible expenses 175,430 98,390 (210,431)
------------ ------------ ------------
Net loss - tax return purposes $ (721,465) $ (1,412,223) $ (1,073,110)
============ ============ ============
27
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
9. INVESTMENTS IN JOINT VENTURES
-----------------------------
Inducon-East Joint Venture (the "Venture") was formed pursuant to an
agreement dated April 22, 1987 between the Partnership and Curtlaw Corporation,
a New York corporation (the "Corporation"). The primary purpose of the Venture
was to acquire land and construct office/warehouse buildings as income-producing
property. The development consists of two parcels of land being approximately
8.4 acres for Phase I and 6.3 acres for Phase II. Phase I consists of two (2)
buildings of approximately 38,000 and 52,000 square feet, while Phase II
consists of four (4) buildings totaling approximately 75,000 square feet, with
each building being approximately 19,000 square feet. At December 31, 1995, both
buildings in Phase I and all four buildings in Phase II had been placed in
service.
The Partnership has contributed capital of $2,744,901 to the Venture. The
remaining funds needed to complete Phase I came from $3,950,000 taxable
industrial revenue bonds which the Venture received in 1989. The Venture
completed the financing of the Phase II project with an additional $3,200,000
taxable industrial revenue bond.
The total cost of Phase I and Phase II were approximately $4,425,000 and
$4,600,000, respectively.
The Joint Venture Agreement provides for the following:
Ownership of the Joint Venture is divided equally between the Partnership
and the Corporation. The Joint Venture agreement provides that income and losses
will be allocated 95% to the Partnership and 5% to the Corporation. Net cash
flow from the Joint Venture is to be distributed to the partnership and
Corporation in accordance with the terms of the Joint Venture Agreement.
28
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
9. INVESTMENTS IN JOINT VENTURES (Con't.):
A summary of the assets, liabilities and partners' capital of the Inducon
East 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:
INDUCON - EAST JOINT VENTURE
BALANCE SHEETS
December 31, 1996 and 1995
Assets 1996 1995
- ------ ----------- -----------
Land, at cost $ 500,100 $ 500,100
Land improvements 435,769 435,769
Buildings 8,427,982 8,427,089
----------- -----------
9,363,851 9,362,958
Less accumulated depreciation 2,517,641 2,110,752
----------- -----------
Property net 6,846,210 7,252,206
Cash -- 123,643
Mortgage costs net of accumulated amortization of
$338,263 and $294,752 107,036 140,365
Other assets 201,297 117,502
----------- -----------
Total Assets $ 7,154,543 $ 7,633,716
=========== ===========
Liabilities and Partners' Capital
- ---------------------------------
Liabilities:
Cash overdraft $ 7,915 $ --
Bonds payable 6,591,423 6,705,044
Accounts payable and accrued expenses 283,157 297,691
Amounts due affiliates 96,312 126,946
----------- -----------
Total liabilities 6,978,807 7,129,681
----------- -----------
Partners' Capital (Deficit):
The Partnership 310,561 622,445
The Corporation (134,825) (118,410)
----------- -----------
Total Partner's Capital 175,736 504,035
----------- -----------
Total Liabilities and Partner's Capital $ 7,154,543 $ 7,633,716
=========== ===========
29
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
9. INVESTMENT IN JOINT VENTURES (Con't.):
--------------------------------------
INDUCON - EAST JOINT VENTURE
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994
----------- ----------- -----------
Income:
Rental $ 1,417,963 $ 1,319,591 $ 1,206,127
Interest and other 6,159 6,511 8,650
----------- ----------- -----------
Total Income 1,424,122 1,326,102 1,214,777
----------- ----------- -----------
Expenses:
Property operations 359,998 460,494 316,897
Interest 659,497 672,149 687,748
Depreciation and amortization 489,395 488,073 481,092
Administrative:
Affiliates 63,104 98,639 60,570
Other 180,427 46,189 81,693
----------- ----------- -----------
Total Expenses 1,752,421 1,765,544 1,628,000
----------- ----------- -----------
Loss from operations ($ 328,299) ($ 439,442) ($ 413,223)
=========== =========== ===========
Allocation of net loss:
The Partnership ($ 311,884) ($ 417,470) ($ 392,562)
The Corporation (16,415) (21,972) (20,661)
----------- ----------- -----------
Total ($ 328,299) ($ 439,442) ($ 413,223)
=========== =========== ===========
A reconciliation of the investments in Inducon - East Joint Venture:
1996 1995 1994
----------- ----------- -----------
Investment in joint venture at beginning of year $ 622,445 $ 1,039,915 $ 1,102,168
Capital contributions -- -- 330,309
Allocation of net loss (311,884) (417,470) (392,562)
----------- ----------- -----------
Investment in joint venture at end of year $ 310,561 $ 622,445 $ 1,039,915
=========== =========== ===========
Inducon East Phase III Joint Venture (the "Phase III Venture") was formed
pursuant to an agreement dated September 8, 1992 between the Partnership and the
Corporation. The Primary purpose of the Phase III Venture is to acquire land and
construct office/warehouse buildings as income-producing property. The
development consists of 4.2 acres of land and two buildings with approximately
25,200 and 21,300 square feet, respectively. The first building measuring 25,200
square feet was placed in service during 1994. Construction on the second
building was completed during 1995.
30
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
9. INVESTMENT IN JOINT VENTURES (Con't.):
--------------------------------------
The Partnership has contributed $1,582,316 to the Phase III Venture. The
remaining funds needed to complete construction came from a $750,000
construction loan. The balance of this loan at December 31, 1996 and 1995 was
$622,077 and $619,779, respectively.
The Total cost of the Phase III venture was approximately $2,450,000.
The Joint Venture Agreement provides for the following:
Ownership of the Joint Venture is divided equally between the Partnership
and the Corporation. The Joint Venture agreement provides that income and losses
be allocated 95% to the Partnership and 5% to the Corporation. Net cash flow
from the Joint Venture is to be distributed to the partnership and Corporation
in accordance with the terms of the Joint Venture Agreement.
31
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
9. INVESTMENT IN JOINT VENTURES (Con't.):
A summary of the assets, liabilities and partners' capital of the Phase III
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:
INDUCON - EAST PHASE III JOINT VENTURE
BALANCE SHEETS
December 31, 1996 and 1995
Assets 1996 1995
- ------ ---------- ----------
Property, at cost:
Land $ 141,400 $ 141,400
Building 2,465,057 2,300,806
---------- ----------
2,606,457 2,442,206
Less accumulated depreciation 164,743 100,426
---------- ----------
Property net 2,441,714 2,341,780
Accounts receivable 1,149 3,665
Accounts receivable - affiliates 116,475 117,805
Prepaid expenses 2,204 5,346
Deferred financing costs, net of accumulated amortization
of $17,314 and $7,870 35,589 39,352
Leasing commissions, net of accumulated amortization
of $38,547 and $23,289 42,942 46,207
---------- ----------
Total Assets $2,640,073 $2,554,155
========== ==========
Liabilities and Partners' Capital
Liabilities:
Cash overdraft $ 272,928 $ 130,584
Construction loan payable 622,077 619,779
Accounts payable and accrued expenses 113,597 127,019
---------- ----------
Total liabilities 1,008,602 877,382
---------- ----------
Partners' Capital:
The Partnership 1,629,015 1,672,051
The Corporation 2,456 4,722
---------- ----------
Total Partner's Capital 1,631,471 1,676,773
---------- ----------
Total Liabilities and Partner's Capital $2,640,073 $2,554,155
========== ==========
32
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
9. INVESTMENT IN JOINT VENTURES (Con't.):
--------------------------------------
INDUCON - EAST PHASE III JOINT VENTURE
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994
--------- --------- ---------
Income:
Rental $ 268,202 $ 196,478 $ 150,190
Interest and other income 28,731 22,430 17,544
--------- --------- ---------
Total Income 296,933 218,908 167,734
--------- --------- ---------
Expenses:
Property operations 213,758 110,090 48,653
Depreciation and amortization 89,019 68,244 47,119
Administrative:
Affiliates 24,119 6,299 7,510
Other 15,339 9,847 7,410
--------- --------- ---------
Total Expenses 342,235 194,480 110,692
--------- --------- ---------
Net (loss) income ($ 45,302) $ 24,428 $ 57,042
========= ========= =========
Allocation of net (loss) income:
The Partnership ($ 43,037) $ 23,207 $ 54,190
Other Joint Venturer (2,265) 1,221 2,852
--------- --------- ---------
Total ($ 45,302) $ 24,428 $ 57,042
========= ========= =========
A reconciliation of the Partnership's investment in the Phase III Venture
is as follows:
1996 1995 1994
----------- ----------- -----------
Investment in joint venture at beginning of year $ 1,672,052 $ 1,648,845 $ 1,452,883
Capital contributions -- -- 141,772
Allocation of net income (43,037) 23,207 54,190
----------- ---------- -----------
Investment in joint venture at end of year $ 1,629,015 $ 1,672,052 $ 1,648,845
=========== =========== ===========
33
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
10. LEASES:
-------
In connection with the commercial properties owned, the Partnership has
entered into lease agreements with terms of one to five years. Minimum future
rentals to be received for each of the next five years, under noncancelable
operating leases are as follows:
Year Amount
- ---- ------
1997 $ 1,307,716
1998 899,688
1999 673,582
2000 517,994
2001 242,814
11. SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
-----------------------------------------------
1996 1995 1994
---- ---- ----
Cash paid for interest $2,162,802 $2,155,722 $2,118,814
========== ========== ==========
12. RECLASSIFICATIONS:
------------------
Certain reclassifications have been made to 1995 and 1994 balances to
conform to the classifications used for 1996 balances.
13. GOING CONCERN:
--------------
The mortgages on Williamsburg North Apartments and the Fountains Apartments
totaling $1,846,372 and $3,454,767, respectively are due and payable in 1997.
This raises substantial doubt about the Partnership's ability to continue as a
going concern. Management is currently in negotiations to refinance both
mortgages.
34
SCHEDULE III
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
Initial Cost to Gross amounts at which
Partnership Cost Carried at Close of Period
---------------------------- Capitalized ------------------------------------ (3)(4)
Subsequent to (1) (2) (1)(2) Accumulated
Property Description Encumbrances Land Buildings Acquisition Land Buildings Total Depreciation
The Paddock Building
Nashville, TN $ 1,870,505 $ 261,000 $ 2,902,324 $ 236,431 $ 261,000 $ 3,138,755 $ 3,399,755 $ 1,217,742
Williamsburg North Apts
Columbus, OH 1,846,372 161,250 2,884,442 35,069 161,250 2,919,511 3,080,761 1,050,039
The Fountain Apartments
Westchester, OH 3,454,767 247,400 4,508,167 83,986 247,400 4,592,153 4,839,553 1,652,720
Camelot Apartments
Louisville, KY 4,107,792 297,250 5,518,613 31,885 297,250 5,550,498 5,847,748 1,915,173
O'Hara Apartments
Greenville, SC 1,315,463 100,000 1,931,940 327,593 100,000 2,259,533 2,359,533 698,888
Wayne Estates
Huber Heights, OH 2,647,064 175,000 3,173,378 326,508 175,000 3,499,886 3,674,886 1,118,288
Jackson Park
Seymour, IN 1,237,578 180,000 1,462,027 153,700 180,000 1,615,727 1,795,727 454,942
Commercial Park West
Durham, NC 4,858,051 800,000 5,191,538 724,303 800,000 5,915,841 6,715,841 1,531,828
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total $21,337,592 $ 2,221,900 $27,572,429 $ 1,919,475 $ 2,221,900 $29,491,904 $31,713,804 $ 9,639,620
=========== =========== =========== =========== =========== =========== =========== ===========
Inducon - East JV
Amherst, NY $ 6,591,423 $ 177,709 $ - $ 9,186,142 $ 500,100 $ 8,863,751 $ 9,363,851 $ 2,517,641
=========== =========== =========== =========== =========== =========== =========== ===========
Inducon - East Phase III JV
Amherst, NY $ 622,077 $ 141,400 $ - $ 2,465,057 $ 141,400 $ 2,465,057 $ 2,606,457 $ 164,743
=========== =========== =========== =========== =========== =========== =========== ===========
________________________________________________________________________________________________________________________________
Life on Which
Depreciation
In Latest
Statement
Date of Of Operations
Property Description Construction Is Computed
The Paddock Building
Nashville, TN 5/87 25 Years
Williamsburg North Apts
Columbus, OH 2/87 25 Years
The Fountain Apartments
Westchester, OH 2/88 25 Years
Camelot Apartments
Louisville, KY 5/88 25 Years
O'Hara Apartments
Greenville, SC 6/88 25 Years
Wayne Estates
Huber Heights, OH 7/88 25 Years
Jackson Park
Seymour, IN 4/89 25 Years
Commercial Park West
Durham, NC 6/91 25 Years
Total
Inducon - East JV
Amherst, NY 4/87 25 Years
Inducon - East Phase III JV
Amherst, NY 9/92 25 Years
35
SCHEDULE III
(Continued)
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(1) Cost for Federal income tax purposes is $31,713,804.
(2) A reconciliation of the carrying amount of land and buildings for the years
ended December 31, 1996, 1995 and 1994 follows:
Partnership Properties
1996 1995 1994
----------- ----------- -----------
Balance at beginning of period $31,413,350 $31,329,740 $31,022,769
Additions 300,454 83,610 306,971
Balance at end of period $31,713,804 $31,413,350 $31,329,740
=========== =========== ===========
Joint Venture Properties
1996 1995 1994
----------- ----------- -----------
Balance at beginning of period $11,805,164 $10,989,647 $10,685,101
Additions 165,144 815,517 304,546
Balance at end of period $11,970,308 $11,805,164 $10,989,647
=========== =========== ===========
(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 $ 8,257,160 $ 6,968,497 $ 5,748,552
Additions charged to cost and expenses
during the period 1,382,460 1,288,663 1,219,945
Balance at end of period (4) $ 9,639,620 $ 8,257,160 $ 6,968,497
=========== =========== ===========
Joint Venture Properties
1996 1995 1994
----------- ----------- -----------
Balance at beginning of period $ 2,211,178 $ 1,746,750 $ 1,338,053
Additions charged to cost and expenses
during the period 471,206 464,428 408,697
Balance at end of period (4) $ 2,682,384 $ 2,211,178 $ 1,746,750
=========== =========== ===========
(4) Balance applies entirely to buildings and improvements.
36
SCHEDULE IV
- -----------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-V
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1996
Principal
Amount of
Final Carrying Loan Subject to
Interest Maturity Face Amount Amount of Delinquent
Description Rate Date Periodic Payment Term Prior Liens of Mortgage Mortgage Principal or
----------- ---- ---- --------------------- ----------- ----------- -------- Interest
---------------
Second Mortgage, 9% 05/01/95 Interest payable quarterly, First $ 250,000 $ 0 None
on Pelham East principal payment due Mortgage
Apartment in at maturity on Pelham
Greenville, South East
Carolina
Reconciliation of the carrying amount of mortgage loans on real estate.
1995 1994
---------- ----------
Balance at beginning of period $ 250,000 $ 250,000
Deductions during period:
Collections of principal 250,000 -
---------- ----------
Balance at close of period $ 0 $ 250,000
========== ==========
37
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 - V
By: /s/ Joseph M. Jayson 4/11/97
------------------------------------------- ---------------
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 4/11/97
-------------------------------------------- ---------------
JOSEPH M. JAYSON, President Date
Principal Executive Officer and Director
/s/ Michael J. Colmerauer 4/11/97
-------------------------------------------- ---------------
MICHAEL J. COLMERAUER, Date
Secretary
38
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 of security holders.
39