FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2001
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
Commission File Number 0-17466
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
------------------------------------------------------
(Exact Name of Registrant as specified in its Charter)
Delaware 16-1309987
- ------------------- ---------------------------------
(State of Formation) (IRS Employer Identification No.)
2350 North Forest Road
Suite 12-A
Getzville, New York 14068
(Address of Principal Executive Office)
Registrant's Telephone Number: (716) 636-9090
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units of Limited
Partnership Interest
Indicate by a check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
DOCUMENTS INCORPORATED BY REFERENCE
See Item 14 for a list of all documents incorporated by reference
PART I
ITEM 1: BUSINESS
The Registrant, Realmark Property Investors Limited Partnership-VI A
(the "Partnership"), is a Delaware Limited Partnership organized in September
1987 pursuant to an Amended and Restated Certificate and Agreement of Limited
Partnership (the "Partnership Agreement"), under the 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 November 10, 1987, and concluded the
offering on November 10, 1988, having raised a total of $15,737,790 before
deducting sales commissions and expenses of the offering.
The Partnership's primary business and its only industry segment is to
own and operate income-producing real property for the benefit of its partners.
At December 31, 2001 the Partnership, either directly or through limited
liability, wholly-owned subsidiary companies, owned four apartment complexes
totaling 680 units and an office complex consisting of three buildings with a
combined 92,000 square feet of rentable space. The Partnership also has a 50%
joint partner interest in Research Triangle Industrial Park Joint Venture, which
owns an office/distribution facility in Raleigh, North Carolina. Additionally,
the Partnership had a 40% joint partner interest in Realmark/Gold Key
Associates, which owned the Carriage House of Englewood, Ohio apartment complex.
The other interests in the ventures are owned by limited partnerships affiliated
with the Partnership through common general partners. On March 1, 2001, the
Carriage House property was sold. Refer to Item 7 and the notes to the financial
statements for details of this transaction. All of the other properties are
currently being actively marketed for sale.
In 2002, the Partnership entered into sales agreements with
unaffiliated parties for the sale of the following:
Agreement Sales Approximate
Property Date Price Taxable Gain
-------- ---- ----- ------------
Pomeroy Park February 27, 2002 $ 4,700,000 1,940,000
Countrybrook Estates March 12, 2002 5,200,000 1,250,000
Stonegate Townhouses March 26, 2002 5,650,000 2,470,000
Beaver Creek April 2, 2002 2,440,000 1,000,000
============ =========
These sales, if closed, will result in the taxable gains identified
above, however, this doesn't necessarily mean that cash proceeds would be
available for distribution in an amount equal to the gain.
It is anticipated that the Partnership will be entering into sales
contracts in the near future (one to six months) which will be subject to sales
conditions which are customary for sales contracts and there is no assurance
that the sales will be consummated.
The business of the Partnership is not seasonal and it competes on the
basis of rental rates and property operations with similar types of properties
in vicinities in which the Partnership's properties are located. The Partnership
has no real property investments located outside the United States. The
Partnership does not segregate revenue or assets by geographic region, since, in
management's view, such a presentation would not be significant to an
understanding of the Partnership's business or financial results taken as a
whole. As of December 31, 2001, 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, 2001 were employees of the
Corporate General Partner or its affiliates.
2
The occupancy for each complex at December 31was as follows:
Property 2001 2000 1999
-------- ---- ---- ----
Beaver Creek 88% 98% 100%
Countrybrook Estates 78% 84% 85%
Stonegate Townhouses 93% 95% 97%
Pomeroy Park 74% 90% 91%
Inducon - Columbia 75% 78% 99%
Carriage House of Englewood - 85% 89%
Research Triangle 100% 100% 100%
The percent of total Partnership revenue generated by each complex for
the last three years was as follows:
2001 2000 1999
---- ---- ----
Beaver Creek 12% 10% 12%
Countrybrook Estates 25% 28% 29%
Stonegate Townhouses 23% 22% 22%
Pomeroy Park 28% 26% 24%
Inducon - Columbia 12% 14% 13%
This annual report contains certain forward-looking statements
concerning the Partnership's current expectations as to future results. Words
such as "believes", "forecasts", "intends", "possible", "expects", "estimates",
"anticipates" or "plans" and similar expressions are intended to identify
forward-looking statements. Such statements may not ultimately turn out to be
accurate due to, among other things, economic or market conditions or the
failure of the Partnership to sell an investment which is under contract.
ITEM 2: PROPERTIES
The following is a list of properties owned by the Partnership and its
joint venture investees as of December 31, 2001:
Property Name
and Location General Character of Property Purchase Date
- ------------ ----------------------------- -------------
Beaver Creek 80 unit apartment complex on 10 1989
Monaca, PA acres of land, securing an 8.23%
mortgage loan with a balance of
$1,304,209 at December 31, 2001,
maturing in 2027.
Countrybrook Estates 240 unit apartment complex, securing 1989
Louisville, KY a 7.89% mortgage loan with a balance of
$3,930,585 at December 31, 2001,
maturing in 2029.
Stonegate Townhouses 130 unit apartment complex, securing 1990
Mobile, AL an 8.43% mortgage loan with a
balance at December 31, 2001 of
$2,558,790, maturing in 2027.
3
Pomeroy Park 230 unit apartment complex, securing a 12% 1991
Tulsa, OK mortgage loan with a balance at December
31, 2001 of $1,794,759, maturing in 2002.
Inducon-Columbia An office complex consisting of 1989
Columbia, SC three buildings with a combined
92,000 square feet of rentable
space, securing a 7.86% mortgage
loan with a balance at December
31,2001 of $2,072,788, maturing in 2022.
Research Triangle A 150,000 square foot office/ 1992
Industrial Park warehouse financed with a 8.06%
Raleigh, NC having a balance of $5,254,865 at
December 31, 2001.
ITEM 3: LEGAL PROCEEDINGS
As previously reported, the Partnership, as a nominal defendant, the
General Partners of the Partnership and of affiliated public partnerships, (the
"Realmark Partnerships") and the officers and directors of the Corporate General
Partner, as defendants, had been involved in a class action litigation at the
state court level regarding the payment of fees and other management issues.
On August 29, 2001, the parties entered into a Stipulation of
Settlement (the "Settlement"). On October 4, 2001, the Court issued an "Order
Preliminary Approving Settlement" (the "Hearing Order") and on November 29,
2001, the court issued an "Order and Final Judgment Approving Settlement and
Awarding Fees and Expenses" and dismissing the complaints with predjudice. The
Settlement provided, among other things, that:
o The payable to the General Partners and/or their affiliates by the
Realmark Property Investors Limited Partnership VI-A at March 31, 2001,
in the amount of $481,598, cease to accrue interest.
o All of the Realmark Partnerships' properties be disposed of. The
General Partners will continue to have primary authority to dispose of
the Partnerships' properties. If either (i) the General Partners have
not sold or contracted to sell 50% of the Partnerships' properties (by
value) by April 2, 2002 or (ii) the General Partners have not sold or
contracted to sell 100% of the Partnerships' properties by September
29, 2002, then the primary authority to dispose of the Partnerships'
properties will pass to a sales agent designated by plaintiffs' counsel
and approved by the Court. As of April 2, 2002, the General Partners
have contracted to sell more than 50% of the Partnerships' properties
(by value).
The settlement also provided for the payment by the Partnerships of
fees to the plaintiffs' attorneys. These payments, which are not calculable at
this time but may be significant, are payable out of the proceeds from the sale
of all of the properties owned by all of the Realmark Partnerships, following
the sale of the last of these properties in each partnership. Plaintiffs'
counsel will receive 15% of the amount by which the sales proceeds distributable
to limited partners in each partnership exceeds the value of the limited
partnership units in each partnership (based on the weighted average of the
units' trading prices on the secondary market as reported by Partnership
Spectrum for the period May through June 2001). In no event may the increase on
which the fees are calculated exceed 100% of the market value of the units as
calculated above.
ITEM 4: SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
4
PART II
ITEM 5: MARKET FOR REGISTRANT'S UNITS OF LIMITED PARTNERSHIP INTEREST
There is currently no active trading market for the units of limited
partnership interest of the Partnership and it is not anticipated that any will
develop in the future. Accordingly, information as to the market value of a unit
at any given date is not available. As of December 31, 2001, there were 1,735
record holders of units of limited partnership interest.
The Partnership is a limited partnership and, accordingly, does not pay
dividends. It does, however, make distributions of cash to its partners. The
partnership agreement provides for the distribution to the partners of net cash
flow from operations. In connection with the pending sale of the Partnership's
properties (Item 3), it is anticipated that there will be no future
distributions of net cash flow from operations. All future distributions of net
cash from sales proceeds will be distributed, to the extent available, 100% to
the Limited Partners until there has been a return of the Limited Partner's
capital contribution plus an amount sufficient to provide a 7%, not compounded,
return on their adjusted capital contributions for all years following the
termination of the offering of the units. It is anticipated that there will not
be sufficient cash flow from the sale of the Partnership's remaining properties
to provide this return to the Limited Partners. There were no distributions to
partners made in 2001, 2000 or 1999.
The gain on the sale of the properties will be allocated in the same
proportions as distributions of distributable cash from sale proceeds
(anticipated to be 100% to the Limited Partners). In the event there is no
distributable cash from sale proceeds, taxable income will be allocated 87% to
the Limited Partners and 13% to the General Partners. Any tax loss arising from
a sale will be allocated 97% to the Limited Partners and 3% to the General
Partners. The above is subject to tax laws that were applicable at the time of
the formation of the Partnership and may be adjusted due to subsequent changes
in the Internal Revenue Code.
5
ITEM 6: SELECTED FINANCIAL DATA
At or for the years ended December 31,
--------------------------------------------------------------------------------
2001 2000 1999 1998 1997
--------------------------------------------------------------------------------
Balance sheet data
Net rental property $ 12,905,193 12,902,052 13,350,614 14,015,558 14,627,250
Total assets 13,826,176 13,885,786 14,444,783 15,106,049 16,284,862
Mortgage loans payable 11,661,131 11,783,657 11,893,713 11,392,501 11,463,892
Partners' equity (deficit) (26,884) 642,321 1,535,019 2,225,574 3,440,705
=============================================================================
Operating data
Rental income 3,935,066 4,016,788 4,112,626 3,873,839 3,538,666
Other income 279,387 235,859 306,725 337,083 453,464
-----------------------------------------------------------------------------
Total revenue 4,214,453 4,252,647 4,419,351 4,210,922 3,992,130
-----------------------------------------------------------------------------
Property operating costs 2,975,319 2,853,456 2,601,748 2,597,419 2,569,545
Depreciation -- 521,290 761,550 723,579 618,347
Interest expense 1,129,347 1,151,708 1,141,622 1,214,669 1,156,924
Administrative expenses 831,885 721,056 648,615 778,943 864,321
-----------------------------------------------------------------------------
Total expenses 4,936,551 5,247,510 5,153,535 5,314,610 5,209,137
-----------------------------------------------------------------------------
Loss before equity in joint
venture operations (722,098) (994,863) (734,184) (1,103,688) (1,217,007)
Equity in joint venture operations 52,893 102,165 43,629 (111,443) 95,051
-----------------------------------------------------------------------------
Net loss (669,205) (892,698) (690,555) (1,215,131) (1,121,956)
=============================================================================
Cash flow data
Net cash provided (used) by:
Operating activities (63,983) (71,141) (451,048) 250,131 (728,504)
Investing activities 103,443 62,272 233,394 138,113 (625,828)
Financing activities (122,526) (110,056) 394,456 (300,693) 1,354,332
-----------------------------------------------------------------------------
Net increase (decrease) in cash
and equivalents (83,066) (118,925) 176,802 87,551 --
=============================================================================
Per limited partnership unit:
Net loss $ (4.10) (5.50) (4.26) (7.49) (6.92)
=============================================================================
6
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
In 2001, 2000 and 1999, the Partnership was unable to generate cash
flows from operations and needed to delay the payment of amounts due to
affiliates and others to cover the operating cash shortfall and debt service. In
2000, the Partnership utilized cash from the prior year mortgage refinancing of
Countrybrook Estate Apartments and a distribution from the Research Triangle
joint venture to fund fixed asset additions. In 2001, an overall decrease in
cash of approximately $83,000 was experienced. Carriage House of Englewood, of
which this Partnership was a 40% joint venture partner, was sold on March 1,
2001. However, the Partnership did not receive any of the proceeds from the
sale, as the proceeds were not sufficient to satisfy the liabilities of the
property. There have been no distributions to partners for at least the past six
years. In accordance with the settlement of the lawsuit (Item 3), it is
anticipated that with the sale of the properties, the Partnership may be in a
position to make distributions to the Limited Partners. These distributions will
be reduced by the amount of fees payable to the plaintiffs' legal counsel in
connection with the settlement agreement (Item 3), any outstanding liabilities
and any mortgage prepayment penalties incurred with regard to the sale of the
Partnership's properties.
Limited Partners should be aware that it is possible that they will
receive an allocation of income from gain on sale of properties on which they
will be required to pay income taxes and there is no assurance that
distributions from the sale of the properties will be sufficient to satisfy
these obligations.
Except as described above and in the consolidated financial statements,
the General Partner is not aware of any trends or events, commitments or
uncertainties that may impact liquidity in a material way.
Results of Operations:
The results of operations of the Partnership for the year ended
December 31, 2001, before equity in earnings from joint ventures, produced a net
loss of $722,098. Effective January 1, 2001, management began formally marketing
all properties in the Partnership for sale, therefore, the properties were not
depreciated in 2001. Excluding depreciation, the results of operations, before
equity in earnings from joint ventures, were a net loss of $473,573 in 2000 and
net income of $27,366 in 1999.
Inflation has been consistently low during the periods presented in the
consolidated financial statements and, as a result, has not had a significant
effect on the operations of the Partnership or its properties.
2001 as compared to 2000
Rental income decreased approximately $82,000 for the year ended
December 31, 2001 as compared to 2000. Rental income decreased approximately
$105,000 and $51,000 at Countrybrook and Inducon Columbia, respectively, with
the largest decrease at Countrybrook, resulting from a decrease in occupancy
from 84% at December 31, 2000 to 78% at December 31, 2001. This decrease was
offset by an increase in rental income at Beaver Creek of approximately $56,000
and other minor increases at the other properties. Other income increased by 18%
in 2001 due primarily to an increase in security deposit forfeitures and late
charge fees at Pomeroy Park of approximately $16,000 and $12,000, respectively,
and an increase in termination fees of approximately $16,000 at Stonegate
Townhouses.
Total expenses, excluding depreciation, increased approximately 4% for
the year ended December 31, 2001. Property operations increased approximately
7
$124,000 due primarily to increases in utility expense of approximately $69,000,
$46,000 and $16,000 at Pomeroy Park, Countrybrook and Inducon Columbia,
respectively, offset by a decrease in cable expense of $27,000 at Stonegate
Townhouses, and an increase in real estate taxes for Countrybrook of
approximately $18,000 due to an increase in its tax assessment. Other
administrative expense increased approximately 11% due to increased legal fees.
Administrative expense to affiliated parties increased 20% because of an
allocation revision. Interest expense to affiliated parties decreased
approximately $16,000 from 2000 to 2001 due to interest no longer being accrued
on $481,598 of the payable to affiliated parties in compliance with the
settlement of the lawsuit (item 3).
2000 as compared to 1999
In 2000, rental income decreased approximately $96,000, in spite of
rate increases for cable service at two of the properties, due to occupancy
levels at all of the Partnership's wholly-owned properties decreasing. Other
income decreased approximately $71,000 primarily due to decreased common area
maintenance charges and late charges.
Total expenses, excluding depreciation, increased approximately 8% for
the year ended December 31, 2000 as compared to 1999. Property operations
increased approximately $252,000 due primarily to an increase in utility expense
of approximately $94,000 and $40,000 at Pomeroy Park and Countrybrook,
respectively, $54,000 of plumbing and related expenses at Countrybrook where
significant flooding occurred, and more than $50,000 of pool repairs at Beaver
Creek. Interest expense remained relatively stable with an increase of less than
1%. Administrative expenses increased in 2000 primarily due to increased
advertising, incurred to maintain occupancy levels, and professional fees.
Joint Venture
The Research Triangle joint venture once again experienced high
occupancy, however, rental income decreased approximately 12% in 2001 due to the
sole tenant of Research Triangle not paying timely and an allowance being
established for the remaining receivable. There is a shortage of rental payments
from the tenant of approximately $12,000 per month, which the Partnership is
negotiating because of a new lease with the tenant. The sole tenant's lease has
expired and they are on a month-to-month lease, pending said negotiation. Total
expenses, excluding depreciation, decreased less than 4%. Because the joint
venture has had net income during each of the last three years, the
partnership's 50% equity interest has enabled the Partnership to receive cash
distributions from the Venture of $104,500 in 2001, $135,000 in 2000 and
$330,000 in 1999.
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership invests only in short term money market instruments, in
amounts in excess of daily working cash requirements. The rates of earnings on
those investments increase or decrease in line with the general movement of
interest rates. The mortgage loans on the Partnership's properties are fixed
rate and therefore, are not subject to market risk.
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 December 31, 2001, are listed below. Each
director is subject to election on an annual basis.
Title of All Positions Held with
Name the Corporate General Partner Year First Elected to Position
- ---- ----------------------------- ------------------------------
Joseph M. Jayson Chairman of the Board, President 1979
and Treasurer
Judith P. Jayson Vice President and Director 1979
Joseph M. Jayson and Judith P. Jayson 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 63, is Chairman, Director and sole stockholder of
J. M. Jayson and Company, Inc. and certain of its affiliated companies: U.S.
Apartments LLC, Westmoreland Capital Corporation, Oilmark Corporation and U.S.
Energy Development Corporation. In addition, Mr. Jayson is Chairman of Realmark
Corporation, Chairman, President and Treasurer of Realmark Properties, Inc.,
wholly-owned subsidiaries of J. M. Jayson and Company, Inc. and co-general
partner of Realmark Property Investors Limited Partnership, Realmark Property
Investors Limited Partnership-II, Realmark Property Investors Limited
Partnership-III, Realmark Property Investors Limited Partnership-IV, Realmark
Property Investors Limited Partnership-V, Realmark Property Investors Limited
Partnership-VI A, and Realmark Property Investors Limited Partnership-VI B. Mr.
Jayson has been in the real estate business for the last 39 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 39 years been engaged in various aspects
of real estate brokerage and investment. He brokered residential properties from
1962 to 1964, commercial investment properties from 1964 to 1967, and in 1967
left commercial real estate to form his own investment firm. Since that time,
Mr. Jayson and J. M. Jayson & Company, Inc. have formed or participated in
various ways with forming over 30 real estate related limited partnerships. For
the past 20 years, Mr. Jayson and an affiliate have also engaged in
developmental drilling for gas and oil.
Judith P. Jayson, age 61, 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 30 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.
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), 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
9
year ended December 31, 2001. The Corporate General Partner and its affiliate,
Realmark Corporation, are entitled to fees and to certain expense reimbursements
with respect to Partnership operations, as set forth in item 13 hereof and in
the notes to the consolidated financial statements.
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 5% of the units of limited partnership interests of the Partnership,
except for affiliates of the General Partners that own 9651.1 units of limited
partnership interest amounting to approximately 6.1% of the Partnership interest
at December 31, 2001. The General Partners and the executive officers of the
Corporate General Partners, as of December 31, 2001, owned 90 units of limited
partnership interest. The General Partners and affiliates will receive their
proportionate share, as limited partners, of any distributable proceeds from the
sale of the properties.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The properties of the Partnership and its subsidiaries are managed
by Realmark Corporation, an affiliate of the Partnership's corporate general
partner, for a fee of generally 5% of annual net rental income of the
properties. Realmark Corporation and the Corporate General Partner are also
reimbursed for disbursements made on behalf of the Partnership. Those
transactions are further described, and quantified, in the note to the
consolidated financial statements entitled "Related Party Transactions".
ITEM 14: EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
(a) Consolidated Financial Statements Page
----
Independent Auditor's Report F-1
Consolidated Balance Sheets as of December 31, 2001 and 2000 F-2
Consolidated Statements of Operations for the years ended
December 31, 2001, 2000 and 1999 F-3
Consolidated Statements of Partners' Equity for the years
ended December 31, 2001, 2000, and 1999 F-4
Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2000, and 1999 F-5
Notes to Consolidated Financial Statements F-6
FINANCIAL STATEMENT SCHEDULE
(i) Schedule III - Real Estate and Accumulated Depreciation F-16
All other schedules are omitted because they are not applicable or the
required information is shown in the consolidated financial statements
or the notes thereto.
(b) Reports on Form 8-K
None.
(c) Exhibits
2. Plan of acquisition, reorganization, arrangement, liquidation,
or succession
(a) Stipulation of Settlement Agreement dated August 29, 2001
is filed herewith.
(b) Order and Final Judgment Approving Settlement and Awarding
Fees and Expenses dated November 29, 2001 is filed
herewith.
10
4. Instruments defining the rights of security holders,
including indentures.
(a) Amended and Restated Certificate and Agreement of Limited
Partnership filed with the Registration Statement of the
Registrant Form S-11, filed September 30, 1987, and
subsequently amended, incorporated herein by reference.
10. Material contracts.
(a) Property Management Agreement with Realmark Corporation
included with the Registration Statement, Form S-11, of
the Registrant as filed and amended to date, incorporated
herein by reference.
(b) Property sales agreements, with unrelated third-parties
dated February 27, 2002, March 12, 2002, March 26, 2002
and April 2, 2002 are filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP - VI-A
By: /s/ Joseph M. Jayson April 15, 2002
----------------------------------- ------------------
JOSEPH M. JAYSON, Date
Individual General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By: REALMARK PROPERTIES, INC.
Corporate General Partner
/s/ Joseph M. Jayson April 15, 2002
----------------------------------- ------------------
JOSEPH M. JAYSON, Date
President, Treasurer and Director
/s/ Judith P. Jayson April 15, 2002
----------------------------------- ------------------
JUDITH P. JAYSON, Date
Vice President and Director
11
INDEPENDENT AUDITOR'S REPORT
----------------------------
The Partners
Realmark Property Investors Limited
Partnership - VI A:
We have audited the accompanying consolidated balance sheets of Realmark
Property Investors Limited Partnership - VI A and Subsidiaries as of December
31, 2001 and 2000, and the related consolidated statements of operations,
partners' equity, and cash flows for each of the three years in the period ended
December 31, 2001. Our audits also included the financial statement schedule
listed in the index at Item 14. These consolidated financial statements and
financial statement schedule are the responsibility of the General Partners. Our
responsibility is to express an opinion on the consolidated financial statements
and the financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by the General Partners, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Realmark Property
Investors Limited Partnership - VI A and Subsidiaries as of December 31, 2001
and 2000, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States of America. Also,
in our opinion, the financial statement schedule, when considered in relation to
the basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
As discussed in note 9 to the consolidated financial statements, the Partnership
settled a class and derivative lawsuit in which it was involved. As a result of
this settlement, the Partnership is currently in the process of winding up its
operations and disposing of its investments. It is anticipated that this process
will take place within the next twelve months.
Williamsville, New York TOSKI, SCHAEFER & CO., P.C.
March 25, 2002, except for Note 9,
as to which the date is April 2, 2002
F-1
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2001 and 2000
Assets 2001 2000
------ ---- ----
Property and equipment, at cost, all held for sale in 2001:
Land and improvements $ 2,159,398 2,159,398
Buildings and improvements 17,472,132 17,472,132
Furniture and equipment 1,111,674 1,108,533
------------ ------------
20,743,204 20,740,063
Less accumulated depreciation 7,838,011 7,838,011
------------ ------------
Net property and equipment 12,905,193 12,902,052
Cash and equivalents 62,362 145,428
Accounts receivable 77 6,402
Escrow deposits 478,414 376,203
Deferred mortgage costs, net of accumulated amortization of
$348,660 in 2001 and $280,014 in 2000 303,339 362,749
Other assets 76,791 92,952
------------ ------------
Total assets $ 13,826,176 13,885,786
============ ============
Liabilities and Partners' Equity
--------------------------------
Liabilities:
Mortgage loans payable 11,661,131 11,783,657
Accounts payable and accrued expenses 634,972 500,041
Accrued interest payable 104,363 100,491
Payable to affiliated parties 1,043,895 511,204
Security deposits and prepaid rents 236,484 227,464
------------ ------------
Total liabilities 13,680,845 13,122,857
------------ ------------
Losses of unconsolidated joint ventures in excess of investment,
net of unamortized excess purchase price of $146,663 in 2001
and $155,863 in 2000 172,215 120,608
Partners' equity (deficit):
General partners (407,211) (382,509)
Limited partners 380,327 1,024,830
------------ ------------
Total partners' equity (deficit) (26,884) 642,321
------------ ------------
Total liabilities and partners' equity $ 13,826,176 13,885,786
============ ============
See accompanying notes to consolidated financial statements
F-2
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Consolidated Statements of Operations
Years Ended December 31, 2001, 2000 and 1999
2001 2000 1999
---- ---- ----
Income:
Rental $ 3,935,066 4,016,788 4,112,626
Interest and other income 279,387 235,859 306,725
----------- ----------- -----------
Total income 4,214,453 4,252,647 4,419,351
----------- ----------- -----------
Expenses:
Property operations 2,975,319 2,853,456 2,601,748
Interest:
Affiliated parties 28,227 44,101 22,565
Other 1,101,120 1,107,607 1,119,057
Depreciation -- 521,290 761,550
Administrative:
Affiliate parties 447,357 373,572 362,487
Other 384,528 347,484 286,128
----------- ----------- -----------
Total expenses 4,936,551 5,247,510 5,153,535
----------- ----------- -----------
Loss before equity in earnings (loss) of
joint ventures (722,098) (994,863) (734,184)
Equity in earnings of joint ventures 52,893 102,165 43,629
----------- ----------- -----------
Net loss $ (669,205) (892,698) (690,555)
=========== =========== ===========
Net loss per limited partnership unit $ (4.10) (5.50) (4.26)
=========== =========== ===========
Weighted average number of limited partnership
units outstanding 157,378 157,378 157,378
=========== =========== ===========
See accompanying notes to consolidated financial statements
F-3
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Consolidated Statements of Partners' Equity
Years Ended December 31, 2001, 2000 and 1999
General Limited Partners
Partners Units Amount
-------- ----- ------
Balances at December 31, 1998 $ (335,011) 157,378 2,560,585
Net loss (20,717) -- (669,838)
---------- ---------- ----------
Balances at December 31, 1999 (355,728) 157,378 1,890,747
Net loss (26,781) -- (865,917)
---------- ---------- ----------
Balances at December 31, 2000 (382,509) 157,378 1,024,830
Net loss (24,702) -- (644,503)
---------- ---------- ----------
Balances at December 31, 2001 $ (407,211) 157,378 380,327
========== ========== ==========
See accompanying notes to consolidated financial statements
F-4
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years Ended December 31, 2001, 2000 and 1999
2001 2000 1999
---- ---- ----
Cash flows from operating activities:
Net loss $ (669,205) (892,698) (690,555)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 59,410 589,513 867,738
Equity in earnings of joint ventures (54,977) (102,165) (43,629)
Changes in:
Accounts receivable 6,325 (6,402) 4,203
Escrow deposits (102,211) (74,915) 113,474
Other assets 16,161 4,604 (32,182)
Accounts payable and accrued expenses 134,931 231,620 (369,083)
Accrued interest payable 3,872 (926) (21,199)
Payable to affiliated parties 532,691 167,761 (284,295)
Security deposits and prepaid rents 9,020 12,467 4,480
----------- ----------- -----------
Net cash used in operating
activities (63,983) (71,141) (451,048)
----------- ----------- -----------
Cash flows from investing activities:
Distributions received from joint venture 106,584 135,000 330,000
Additions to property and equipment (3,141) (72,728) (96,606)
----------- ----------- -----------
Net cash provided by investing
activities 103,443 62,272 233,394
----------- ----------- -----------
Cash flows from financing activities:
Mortgage acquisition costs -- -- (106,756)
Proceeds from mortgage refinancing -- -- 4,000,000
Principal payments upon refinancing -- -- (3,415,000)
Principal payments on mortgage loans (122,526) (110,056) (83,788)
----------- ----------- -----------
Net cash provided by (used in)
financing activities (122,526) (110,056) 394,456
----------- ----------- -----------
Net increase (decrease) in cash and equivalents (83,066) (118,925) 176,802
Cash and equivalents at beginning of year 145,428 264,353 87,551
----------- ----------- -----------
Cash and equivalents at end of year $ 62,362 145,428 264,353
=========== =========== ===========
Supplemental disclosure of cash flow information -
cash paid for interest $ 1,033,515 1,041,001 1,078,367
=========== =========== ===========
See accompanying notes to consolidated financial statements
F-5
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999
(1) Formation and Operation of Partnership
Realmark Property Investors Limited Partnership-VI A (the Partnership) is a
Delaware limited partnership formed on September 21, 1987, to invest in
a diversified portfolio of income-producing real estate investments.
In 1987 and 1988, the Partnership sold, through a public offering, 157,378
units of limited partnership interest, including 30 units held by an
affiliate of the General Partners, for $15,737,790. The General
Partners are Realmark Properties, Inc. (the Corporate General Partner)
and Joseph M. Jayson (the Individual General Partner) who is the sole
stockholder of J.M. Jayson & Company, Inc. Realmark Properties, Inc. is
a wholly-owned subsidiary of J.M. Jayson & Company, Inc.
Under the partnership agreement, the General Partners and their affiliates
can receive compensation for services rendered and reimbursement for
expenses incurred on behalf of the Partnership (note 5).
(2) Summary of Significant Accounting Policies
(a) Basis of Accounting and Consolidation
The accompanying consolidated financial statements have been prepared
on the accrual basis of accounting in accordance with accounting
principles generally accepted in the United States of America and
include the accounts of the Partnership and its four subsidiaries,
that are wholly-owned:
(1) Realmark - Columbia, LLC that owns Inducon-Columbia, a three
building office complex in Columbia, South Carolina, acquired
in 1989 and 1991 for $4,670,991.
(2) Realmark - Beaver, LLC that owns Beaver Creek, an 80 unit
apartment complex located in Monaca, Pennsylvania, acquired in
1989 for $1,879,943.
(3) Realmark - Countrybrook, LLC that owns Countrybrook Estates, a 240
unit apartment complex located in Louisville, Kentucky, acquired
in 1989 for $5,670,984.
(4) Realmark - Stonegate, LLC that owns Stonegate, a 130 unit
apartment complex located in Mobile, Alabama, acquired in 1990 for
$4,145,367.
The Partnership also owns a residential property, Pomeroy Park.
In consolidation, all intercompany accounts and transactions have been
eliminated.
(b) Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
F-6
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2) Summary of Significant Accounting Policies, Continued
(c) Property and Equipment
Property and equipment are recorded at cost. Depreciation is provided
using the straight-line method over the estimated useful lives of
the assets, from 5 to 25 years. Significant improvements are
capitalized, while expenditures for maintenance, repairs and
replacements are charged to expense as incurred. Upon disposal of
depreciable property, the appropriate property accounts are
reduced by the related costs and accumulated depreciation and
gains and losses are reflected in the consolidated statements of
operations.
The Partnership reviews long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying
amount of the assets may not be recoverable. In determining
whether there is an impairment of long-lived assets, the
Partnership compares the sum of the expected future net cash flows
(undiscounted and without interest charges) to the carrying amount
of the assets. At December 31, 2001, no impairment in value has
been recognized.
The Partnership and its ventures' policy is to consider a property to
be held for sale or disposition when the Partnership or venture
has committed to a plan to sell or dispose of such property and
active marketing activity has commenced or is expected to commence
in the near term or the Partnership or venture has concluded that
it may dispose of the property by no longer funding operating
deficits or debt service requirements of the property thus
allowing the lender to realize upon its security. Any properties
identified as "held for sale or disposition" are no longer
depreciated. All the properties were held for sale in 2001.
(d) Cash and Equivalents
Cash and equivalents include money market accounts and any highly
liquid debt instruments purchased with a maturity of three months
or less.
(e) Deferred Mortgage Costs
Costsincurred in obtaining mortgage financing are deferred and
amortized using the straight-line method over the life of the
respective mortgage.
(f) Unconsolidated Joint Ventures
The Partnership's investment in Carriage House of Englewood Joint
Venture (which was sold in 2001) and Research Triangle Joint
Venture is in unconsolidated joint ventures which are accounted
for on the equity method. These joint ventures are not
consolidated in the Partnership's financial statements because the
Partnership is not the majority owner.
(g) Rental Income
Rental income is recognized as earned according to the terms of the
leases. Leases for residential properties are generally for
periods of one year or less, payable monthly. Commercial leases
F-7
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2) Summary of Significant Accounting Policies, Continued
(g) Rental Income, Continued
are generally for periods of one to five years. Delinquent
residential property rent is not recorded.
(h) Per Unit Data
Per limited partnership unit data is based on the weighted average
number of limited partnership units outstanding for the year.
(i) Fair Value of Financial Instruments
The fair value of the Partnership's financial instruments approximated
their carrying values at December 31, 2001.
(j) Income Allocation and Distributable Cash Flow
The partnership agreement provides that income not arising from sale
and refinancing activities and all partnership losses are to be
allocated 97% to the Limited Partners and 3% to the General
Partners. Partnership income arising from sale or refinancing
activities is allocated in the same proportion as distributions or
distributable cash from sale proceeds. In the event there is no
distributable cash from sale proceeds, taxable income will be
allocated 87% to the Limited Partners and 13% to the General
Partners. The above is subject to tax laws that were applicable at
the time of the formation of the Partnership and may be adjusted
due to subsequent changes in the Internal Revenue Code.
The partnership agreement also provides for the distribution to the
partners of net cash flow from operations. In connection with the
pending sale of the Partnership's properties (note 9), it is
anticipated that there will be no future distributions of net cash
flow from operations. Sale or refinancing proceeds are distributed
to the extent available, 100% to the Limited Partners until there
has been a return of the Limited Partner's capital contribution
plus an amount sufficient to provide a 7%, not compounded, return
on their adjusted capital contributions for all years following
the termination of the offering of the units. It is anticipated
that there will not be sufficient cash flow from the sale of the
Partnership's remaining properties to provide this return to the
Limited Partners. There were no distributions to partners made in
2001, 2000 or 1999.
(k) Income Taxes
No income taxes are included in the consolidated financial statements
since the taxable income or loss of the Partnership is reportable
by the partners on their income tax returns. At December 31, 2001,
net assets for financial reporting purposes were $1,561,000 less
than the tax bases of the net assets.
(l) Segment Information
The Partnership's operating segments all involve the ownership and
operation of income-producing real property, and are aggregated
into one reporting segment.
F-8
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2) Summary of Significant Accounting Policies, Continued
(m) Recent Pronouncements
In June 2001, the FASB issued SFAS No. 141, "Business Combinations,"
and SFAS No. 142, "Goodwill and Other Intangible Assets." Under
these new standards, all acquisitions subsequent to June 30, 2001
must be accounted for under the purchase method of accounting and
purchased goodwill is no longer amortized over its useful life.
Rather, goodwill will be subject to a periodic impairment test
based upon its fair value.
In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations" ("SFAS 143"). SFAS 143 establishes
accounting standards for recognition and measurement of a
liability for the costs of asset retirement obligations. Under
SFAS 143, the costs of retiring an asset will be recorded as a
liability when the retirement obligation arises, and will be
amortized to expense over the life of the asset.
In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS
144 addresses financial accounting and reporting for the
impairment or disposal of long-lived assets and discontinued
operations.
The Partnership is currently evaluating the impact of these
pronouncements to determine the effect, if any, they may have on
the consolidated financial position and results of operations. The
Partnership is required to adopt each of these standards in the
first quarter of 2002.
(3) Disposal of Rental Property
Effective July 1, 1999, management entered into a plan to dispose of the
property of Pomeroy Park. Depreciation expense, not recorded during the
disposal period, for the years ended December 31, 2001 and 1999 totaled
approximately $114,000 and $54,000, respectively. In 2001, all of the
properties are being actively marketed for sale. The carrying value of
the assets as of December 31, 2001 and the properties net income or
loss and depreciation expense not recorded for the year ended December
31, 2001 is as follows:
Depreciation
Carrying value Net income expense not
Property of assets (loss) recorded
-------- --------- ------ --------
Countrybrook Estates $ 3,771,049 (293,651) 188,000
Inducon - Columbia 2,718,023 37,712 120,000
Stonegate Townhouses 2,649,153 187,747 163,000
Beaver Creek 1,174,864 41,505 66,000
Pomeroy Park 2,592,104 (308,735) 114,000
========= ======== =======
F-9
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(4) Mortgage Loans Payable
Mortgage loans payable are as follows:
Total Balance
Interest monthly December 31,
Property collateral rate Maturity payment 2001 2000
------------------- ---- -------- ------- ---- ----
Countrybrook Estates 7.89% 2029 $ 29,044 $ 3,930,585 3,963,270
Inducon - Columbia 7.86% 2022 16,787 2,072,788 2,107,392
Stonegate Townhouses 8.43% 2027 20,207 2,558,790 2,581,516
Beaver Creek 8.23% 2027 10,137 1,304,209 1,316,468
Pomeroy Park 12.00% 2002 19,750 1,794,759 1,815,011
======== ------------ -----------
$ 11,661,131 11,783,657
============ ===========
The aggregate maturities of the mortgages for each of the five years
following 2001 and thereafter, assuming principal payments will not be
accelerated, are as follows:
2002 $ 1,917,066
2003 132,520
2004 143,587
2005 155,579
2006 168,573
Thereafter 9,143,806
------------
$ 11,661,131
============
(5) Related Party Transactions
The Corporate General Partner and its affiliates earn fees, principally for
property and partnership management and are reimbursed for services
rendered to the Partnership, as provided for in the partnership
agreement. A summary of those items follows:
2001 2000 1999
---- ---- ----
Property management fees based on a percent-
age (generally 5%) of rental income $ 190,803 198,353 196,815
Reimbursement for cost of services to the Partnership
that include investor relations, marketing of
properties, professional fees, communications,
supplies, accounting, printing, postage and
other items 256,554 175,219 165,672
--------- ------- -------
$ 447,357 373,572 362,487
========= ======= =======
F-10
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(5) Related Party Transactions, Continued
In addition to the above, other properties specific expenses such as
payroll, benefits, etc. are charged to property operations on the
Partnership's consolidated statements of operations. Payables to
affiliated parties are on demand and bear interest at 11%.
Loan placement fees are paid or accrued to an affiliate of the General
Partners. The fee is calculated as 1% of the mortgage loan amounts.
These fees totaled $40,000 for the year ended December 31, 1999. No
such fees were paid during the years ended December 31, 2001 and 2000.
Property Disposition Fees
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 3% 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 have been paid or accrued on
properties sold in prior years.
(6) Investments in Joint Ventures
The Partnership had a 40% interest in a joint venture with Realmark
Property Investors Limited Partnership (RPILP), an entity affiliated
through common general partners. The venture was formed to own and
operate an apartment complex, Carriage House of Eaglewood Apartments,
Englewood, Ohio. Since July 1996, when a plan to dispose of the
venture's property was established, Carriage House had been carried at
the lower of depreciated cost or fair value less costs to sell and was
not depreciated. Carriage House was sold on March 1, 2001. While the
venture recorded a net gain on the sale, the net proceeds were not
sufficient to satisfy the liabilities related to the property.
Therefore, the balance of the Partnership's investments in the venture,
$74,813, was charged to equity in joint venture operations during 2001.
The Partnership also has a 50% interest in a joint venture with Realmark
Property Investors Limited Partnership-II (RPILP-II), an entity
affiliated through common general partners. The venture owns and
operates the Research Triangle Industrial Park West, an
office/warehouse facility located in Research Triangle Park, North
Carolina. The joint venture agreement provides that any income, loss,
gain, cash flow, or sale proceeds be allocated 50% to the Partnership
and 50% to RPILP-II.
F-11
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(6) Investments in Joint Ventures, Continued
Summary financial information for the Venture follows:
Balance Sheet Information
-------------------------
December 31,
Assets 2001 2000
------ ---- ----
Property, net of accumulated depreciation $ 1,473,368 1,473,368
Cash and equivalents 55,158 19,187
Escrow deposits 876,539 779,012
Other assets 252,727 332,959
----------- ---------
Total assets $ 2,657,792 2,604,526
=========== =========
Liabilities and Partners' Deficit
---------------------------------
Liabilities:
Mortgage loan payable 5,254,865 5,340,629
Accounts payable and accrued expenses 134,234 60,016
----------- ---------
Total liabilities 5,389,099 5,400,645
----------- ---------
Partners' deficit:
The Partnership (1,465,069) (1,497,475)
RPILP-II (1,266,238) (1,298,644)
----------- ---------
Total partners' deficit (2,731,307) (2,796,119)
----------- ---------
Total liabilities and partners' deficit $ 2,657,792 2,604,526
=========== =========
F-12
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(6) Investments in Joint Ventures, Continued
Operating Information
---------------------
Years ended December 31,
------------------------
2001 2000 1999
---- ---- ----
Income:
Rental $ 899,322 1,026,251 1,009,978
Other 11,812 13,456 11,823
--------- --------- ---------
Total income 911,134 1,039,707 1,021,801
--------- --------- ---------
Expenses:
Property operations 127,047 133,400 135,252
Interest 442,817 450,766 455,838
Depreciation -- 100,518 103,480
Administrative:
Affiliated parties 47,449 67,413 63,230
Other 20,009 10,992 8,655
--------- --------- ---------
Total expenses 637,322 763,089 766,455
--------- --------- ---------
Net income $ 273,812 276,618 255,346
========= ========= =========
Allocation of net income:
The Partnership 136,906 138,309 127,673
RPILP-II 136,906 138,309 127,673
--------- --------- ---------
Total $ 273,812 276,618 255,346
========= ========= =========
A reconciliation of the Partnership's investment in the Research Triangle Joint
Venture is as follows:
2001 2000 1999
---- ---- ----
Investment in joint venture at beginning of year $(195,421) (189,530) 21,997
Distributions from joint venture (104,500) (135,000) (330,000)
Amortization of excess purchase price (9,200) (9,200) (9,200)
Allocation of net income 136,906 138,309 127,673
--------- --------- ---------
Losses in excess of investment in joint venture
at end of year $(172,215) (195,421) (189,530)
========= ========= =========
F-13
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(7) Leases (Lessee)
In connection with the development of property in Columbia, South
Carolina, the Partnership entered into an operating lease with the
Richland-Lexington Airport District for a period of sixty years, at
$89,000 per year. The lease covers nine acres located within the
boundaries of the Columbia Metropolitan Airport in an area designated
as a Foreign Trade Zone. The lease agreement includes an option to
lease 5.5 acres of land. At December 31, 2001, payments with regard to
this lease are past due. A liability amounting to $55,332 was recorded
in connection with this lease agreement. The terms of the lease
agreement allow for the lessor to cancel the lease if the lessee (the
Partnership) fails to make payment of the agreed upon rental within 30
days after receipt of written notice from the lessor that the rental
payment is past due. No such notice has been received as of March 25,
2002.
(8) Leases (Lessor)
In connection with the Inducon - Columbia property, the Partnership has
entered into commercial lease agreements with terms from one to five
years. Minimum future rentals to be received in the future under
noncancelable operating leases are as follows:
Year Amount
---- ------
2002 $181,301
2003 91,830
2004 65,114
2005 65,114
========
(9) Settlement of Lawsuit
As previously reported, the Partnership, as a nominal defendant, the
General Partners of the Partnership and of affiliated public
partnerships (the "Realmark Partnerships") and the officers and
directors of the Corporate General Partner, as defendants, had been
involved in a class action litigation at the state court level
regarding the payment of fees and other management issues.
On August 29, 2001, the parties entered into a Stipulation of Settlement
(the "Settlement"). On October 4, 2001, the Court issued an "Order
Preliminarily Approving Settlement" (the "Hearing Order") and on
November 29, 2001, the court issued an "Order and Final Judgment
Approving Settlement and Awarding Fees and Expenses" and dismissing the
complaints with predjudice. The Settlement provided, among other
things, that:
F-14
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(9) Settlement of Lawsuit, Continued
o The payable to the General Partners and/or their affiliates by
Realmark Property Investors Limited Partnership VI-A at March 31,
2001, in the amount of $481,598, cease to accrue interest.
o All of the Realmark Partnerships' properties be disposed of. The
General Partners will continue to have primary authority to dispose
of the Partnerships' properties. If either (i) the General Partners
have not sold or contracted to sell 50% of the Partnerships'
properties (by value) by April 2, 2002 or (ii) the General Partners
have not sold or contracted to sell 100% of the Partnerships'
properties by September 29, 2002, then the primary authority to
dispose of the Partnerships' properties will pass to a sales agent
designated by plaintiffs' counsel and approved by the Court. As of
April 2, 2002, the General Partners have contracted to sell more
than 50% of the Partnerships' properties (by value).
The settlement also provided for the payment by the Partnerships of fees to
the plaintiffs' attorneys. These payments, which are not calculable at
this time but may be significant, are payable out of the proceeds from
the sale of all of the properties owned by all of the Realmark
Partnerships, following the sale of the last of these properties in
each partnership. Plaintiffs' counsel will receive 15% of the amount by
which the sales proceeds distributable to limited partners in each
partnership exceeds the value of the limited partnership units in each
partnership (based on the weighted average of the units' trading prices
on the secondary market as reported by Partnership Spectrum for the
period May through June 2001). In no event may the increase on which
the fees are calculated exceed 100% of the market value of the units as
calculated above.
(10) Subsequent Events
In 2002, the Partnership entered into sales agreements with unaffiliated
parties for the sale of the following:
Agreement Sales Approximate
Property Date Price Taxable Gain
-------- ---- ----- ------------
Pomeroy Park February 27, 2002 $ 4,700,000 1,940,000
Countrybrook Estates March 12, 2002 5,200,000 1,250,000
Stonegate Townhouses March 26, 2002 5,650,000 2,470,000
Beaver Creek April 2, 2002 2,440,000 1,000,000
=========== =========
F-15
Schedule III
------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
AND SUBSIDIARIES
Real Estate and Accumulated Depreciation
December 31, 2001
Gross amounts at which
Initial cost to Cost Carried at Close of Period
Partnership capitalized --------------------------
Property --------------- subsequent to Land and Buildings and Accumulated
Description Encumbrances Land Buildings acquisition Retirements improvements improvements Total depreciation
----------- ------------ ---- --------- ----------- ----------- ------------ ------------- ----- ------------
BeaverCreek
Pittsburgh, PA $ 1,304,209 282,000 1,437,944 169,871 -- 317,000 1,572,815 1,889,815 714,951
Countrybrook
Estates
Louisville, KY 3,930,585 882,272 4,277,115 448,540 279,908 884,622 4,443,397 5,328,019 1,563,606
Stonegate
Mobile, AL 2,558,790 419,544 3,487,160 323,856 -- 427,494 3,803,066 4,230,560 1,581,407
Pomeroy Park
Tulsa, OK 1,794,759 525,000 2,304,303 615,575 -- 525,000 2,919,878 3,444,878 855,118
Inducon-Columbia
Columbia, SC 2,072,788 -- 1,503,710 3,234,548 -- 5,282 4,732,976 4,738,258 2,020,234
------------ --------- ---------- --------- ------- --------- ---------- ---------- ---------
$ 11,661,131 2,108,816 13,010,232 4,792,390 279,908 2,159,398 17,472,132 19,631,530 6,735,316
============ ========= ========== ========= ======= ========= ========== ========== =========
Research Triangle
J. V.
Raleigh, NC $ 5,254,865 338,112 4,920,738 9,329 -- 338,112 4,930,067 5,268,179 3,794,811
============ ========= ========== ========= ======= ========= ========== ========== =========
(RESTUBBED TABLE)
Life
on which
depreciation
in latest
Date statement of
of Date operations
construction acquired is computed
------------ -------- -----------
BeaverCreek
Pittsburgh, PA 1975 2/89 -- *
Countrybrook
Estates
Louisville, KY 1972 6/89 -- *
Stonegate
Mobile, AL 1985 3/90 -- *
Pomeroy Park
Tulsa, OK 1970 3/91 -- *
Inducon-Columbia
Columbia, SC 1989 5/89 -- *
==== ==== =====
Research Triangle
J. V.
Raleigh, NC 1983 8/92 -- *
==== ==== =====
* In accordance with Statement of Financial Accounting Standards No. 121, no
depreciation was recorded during the disposal period January 1, 2001 through
December 31, 2001.
F-16
Schedule III, Cont.
-------------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A
Real Estate and Accumulated Depreciation
December 31, 2001, 2000 and 1999
(1) Cost for Federal income tax purposes of Partnership properties is
$19,631,530.
(2) A reconciliation of the carrying amount of land and buildings as of
December 31, 2001, 2000 and 1999 is as follows:
Partnership Properties
----------------------
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 19,631,530 19,563,640 19,467,034
Additions -- 67,890 96,606
------------ ---------- -----------
Balance at end of year $ 19,631,530 19,631,530 19,563,640
============ ========== ===========
Joint Venture Properties
------------------------
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 8,131,032 8,123,502 8,123,502
Additions -- 7,530 --
Dispositions (5) 2,862,853 -- --
----------- ---------- -----------
Balance at end of year $ 5,268,179 8,131,032 8,123,502
=========== ========== ===========
(3) A reconciliation of accumulated depreciation for the years ended December
31, 2001, 2000 and 1999 is as follows:
Partnership Properties
----------------------
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 6,735,316 6,214,453 5,454,642
Depreciation expense -- 520,863 759,811
----------- ---------- ----------
Balance at end of year (4) $ 6,735,316 6,735,316 6,214,453
=========== ========== ==========
Joint Venture Properties
------------------------
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 5,391,388 5,290,870 5,187,390
Depreciation expense -- 100,518 103,480
Dispositions (5) 1,596,577 -- --
----------- ----------- -----------
Balance at end of year (4) $ 3,794,811 5,391,388 5,290,870
=========== =========== ===========
(4) Balance applies entirely to buildings and improvements.
(5) Sale of Carriage House of Englewood Apartments in 2001.
F-17