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 AND EXCHANGE ACT OF 1934
Commission File Number 33-17579
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
------------------------------------------------------
(Exact Name of Registrant as specified in its Charter)
Delaware 16-1309988
- -------------------- ---------------------------------
(State of Formation) (IRS Employer Identification No.)
2350 North Forest Road
Suite 12-A
Getzville, New York 14068
(Address of Principal Executive Office)
Registrant's Telephone Number: (716) 636-9090
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units of Limited
Partnership Interest
Indicate by a check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-K or any
amendment to this Form 10-K. (X)
DOCUMENTS INCORPORATED BY REFERENCE
See Item 14 for a list of all documents incorporated by reference
PART I
ITEM 1: BUSINESS
The Registrant, Realmark Property Investors Limited Partnership-VI B
("the Partnership"), is a Delaware limited partnership organized in 1987
pursuant to an Amended and Restated Certificate and Agreement of Limited
Partnership (the "Partnership Agreement"), under the 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 11, 1988. The first interim
closing took place on February 2, 1989, and the initial $2,134,300 of
contributed capital was released to the Partnership at which time it began
operations. The offering was concluded February 28, 1990 at which time the
Partnership had raised $7,862,510, before deducting sales commissions and
syndication costs.
The Partnership's primary business and its only industry segment is to
own and operate income-producing real property for the benefit of its partners.
As of December 31, 2001, the Partnership, through a limited liability,
wholly-owned subsidiary company, owns a 144-unit apartment complex, known as
Players Club North Apartments, located in Lutz, Florida. This property is
currently being actively marketed for sale. On March 13, 2002, the Partnership
entered into a $5,573,000 sale agreement with an unaffiliated entity, for the
sale of Players Club. This sale, if closed, will result in a gain of
approximately $3,300,000 to the Partnership for tax purposes; however, that
doesn't necessarily mean that cash proceeds would be available for distribution
in an amount equal to the gain. On August 16, 2001, the Partnership sold Fairway
Club Apartments, a 192-unit apartment complex located in Greeneville, South
Carolina. In addition, since 1992, the Partnership held an 11.5% interest in
Realmark/Foxhunt Limited Partnership, a joint venture owning a 250 unit
apartment complex in Kettering, Ohio. On March 1, 2001, the Foxhunt property was
sold, as discussed in the notes to the financial statements and in management's
discussion and analysis.
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.
The occupancy for each complex as of December 31 was as follows:
2001 2000 1999
---- ---- ----
Fairway Club - 82% 86%
Players Club 94% 97% 88%
The percent of total Partnership revenue generated by each complex for
the last three years was as follows:
2001 2000 1999
---- ---- ----
Fairway Club 40% 52% 55%
Players Club 60% 48% 45%
2
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 the property owned by the Partnership at December 31, 2001:
Property Name
and Location General Character of Property Purchase Date
------------ ----------------------------- -------------
Players Club North A 144 unit apartment complex securing an 8.48% June 1991
Lutz, FL mortgage loan with a balance at 12/31/01 of
$2,620,735, maturing June 2027
ITEM 3: LEGAL PROCEEDINGS
As previously reported, the Partnership, as a nominal defendant, the
General Partners of all 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 prejudice. The
Settlement provided, among other things, that 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.
3
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 1,020
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
last property (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
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 last property to
provide this return to the Limited Partners.
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. 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.
4
ITEM 6: SELECTED FINANCIAL DATA
At or for the years ended December 31,
-----------------------------------------------------------------------
2001 2000 1999 1998 1997
-----------------------------------------------------------------------
Balance sheet data
Net rental property $ 2,063,632 4,748,429 4,969,452 5,190,396 5,450,259
Total assets 3,013,832 5,986,548 6,534,717 7,045,544 8,034,759
Mortgage loans payable 2,620,735 5,227,302 5,269,300 5,309,087 5,345,640
Partners' equity 244,526 543,775 968,193 1,413,016 2,272,833
=======================================================================
Operating data
Rental income 1,497,317 1,863,378 1,695,604 1,446,398 1,531,418
Other income 113,521 109,956 189,827 183,156 120,815
-----------------------------------------------------------------------
Total revenue 1,610,838 1,973,334 1,885,431 1,629,554 1,652,233
-----------------------------------------------------------------------
Property operating costs 909,920 1,151,282 1,245,846 1,297,078 1,125,361
Depreciation -- 233,113 223,157 259,863 237,150
Interest expense 492,158 458,931 462,411 466,099 577,199
Administrative expenses 304,555 368,139 344,713 349,535 344,466
-----------------------------------------------------------------------
Total expenses 1,706,633 2,211,465 2,276,127 2,372,575 2,284,176
-----------------------------------------------------------------------
Loss before equity in joint
venture operations and gain on
sale of property (95,795) (238,131) (390,696) (743,021) (631,943)
Equity in earnings (loss) of
joint venture 545,015 3,469 (54,127) (116,796) (42,373)
Gain on sale of property 1,851,531 -- -- -- --
-----------------------------------------------------------------------
Net income (loss) 2,300,751 (234,662) (444,823) (859,817) (674,316)
=======================================================================
Cash flow data
Net cash provided (used) by:
Operating activities 66,024 151,055 (77,516) (543,988) (454,424)
Investing activities 4,772,304 (8,640) 72,546 -- (108,725)
Financing activities (5,206,567) (231,754) (39,787) (35,594) 530,828
-----------------------------------------------------------------------
Net decrease in cash
and equivalents (368,239) (89,339) (44,757) (579,582) (32,321)
=======================================================================
Per limited partnership unit:
Net income (loss) $ 29.09 (2.90) (5.49) (10.61) (8.32)
Distributions $ 33.07 2.34 -- -- 3.08
=======================================================================
5
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources:
Effective January 1, 2001, management began formally marketing all
properties in the Partnership for sale. On August 16, 2001, the Partnership sold
Fairway Club Apartments to an unaffiliated entity, for cash of $4,373,000 and a
$327,000 note receivable from the purchaser. After satisfaction of the
$2,567,000 mortgage loan on the property and payment of closing costs, the
proceeds available amounted to approximately $1.85 million. The proceeds from
the sale, along with the Partnerships existing cash position, enabled the
partnership to make a distribution to the Limited Partners in the last quarter
of 2001 of $2,600,000.
At December 31, 2001, the Partnership's cash position of approximately
$340,000 is adequate to fund its anticipated recurring cash needs. While cash
was used during 2000 and 1999 to fund operations and to fund capital
improvements, adequate liquidity enabled the Partnership to also make a $189,756
distribution to partners in the fourth quarter of 2000. There was no
distribution in 1999. In accordance with the settlement of the lawsuit (item 3),
it is anticipated that with the sale of the remaining property, 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, excluding equity in
earnings from a joint venture and a gain on sale of property for the year ended
December 31, 2001, produced a net loss of $95,795. The results compare to a net
loss, excluding depreciation, of $5,018 in 2000 and a net loss of $167,539 in
1999.
If the sale of Fairway Club Apartments had occurred on January 1, 2000,
the results for the year ended December 31, 2000 would have been a net loss,
excluding depreciation, of $65,408, resulting from decreases in revenue and
expense of $1,031,000 and $971,000, respectively. If the sale of Fairway Club
Apartments had occurred on January 1, 1999, the results for the year ended
December 31, 1999 would have been net income, excluding depreciation, of
$59,632, resulting from decreases in revenue and expense of $946,000 and
$1,173,000, respectively. For the year ended December 31, 2001, net income would
have been $29,000, resulting from decreases in revenue and expense of $628,000
and $754,000, respectively.
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 20% for the year ended December 31, 2001 as
compared to 2000. Excluding Fairway Club Apartments (the "Sold Asset") rental
income increased approximately 3% due to increased occupancy during the year at
Players Club. Other income, excluding the Sold Asset, increased by approximately
$14,000 in 2001 due to an increase in termination fees charged to tenants.
6
Total expenses, excluding the operations of the Sold Asset, decreased
approximately 15% for the year ended December 31, 2001. Property operations
decreased approximately $31,000 due primarily to a decrease in water expense at
Players Club. Depreciation expense, excluding the Sold Asset, decreased due to
Players Club being held for sale and no depreciation expense being taken in
2001. Other administrative expense, excluding the Sold Asset, decreased
approximately 23% due to decreased legal fees at the Partnership level.
Administrative expense to affiliated parties, excluding the Sold Asset,
increased approximately $11,000 because of an allocation revision and an
increase in management fees as a result of higher occupancy. Interest expense
remained consistent from 2001 to 2000.
2000 as compared to 1999
In 2000, excluding the Sold Asset, rental income increased
approximately 5% due to the increase in occupancy at Players Club from 88% at
December 31, 1999 to 97% at December 31, 2000. Other income decreased
approximately $42,000 due to decreased fees and forfeitures.
Total expenses, excluding the Sold Asset, increased approximately 14%
for the year ended December 31, 2000 as compared to 1999. Property operations
expense increased approximately $85,000 due primarily to an increase in repair
and contract work at Players Club. Depreciation expense, excluding the Sold
Asset, increased approximately $10,000 due to the addition of fixed assets.
Other administrative expenses, excluding the Sold Asset, increased approximately
$54,000 due to increased professional fees and advertising. Administrative
expense to affiliated parties, excluding the Sold Asset, increased approximately
$9,500 due to increased management fees as a result of higher occupancy.
Joint Venture
The Foxhunt Joint Venture generated net income of $30,165 in 2000 as
compared to a 1999 net loss of $470,672. The decrease in the loss was primarily
the result of increased rental income of approximately $26,000, a decrease in
interest and other income of $35,000, and a decrease in property operations,
interest and depreciation expenses of approximately $510,000. The latter
decreased approximately $109,000 in 2000 since the Foxhunt property became the
subject of a formal plan of disposal on July 1, 1999. The Foxhunt property was
sold on March 1, 2001 resulting in a gain on sale of property in the amount of
$4,760,295, which resulted in a distribution to the Partnership from the joint
venture of $646,577 for the year ended December 31, 2001.
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.
7
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.
8
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
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 4046.2 units of limited
partnership interest amounting to approximately 5.2% of the Partnership interest
at December 31, 2001. The General Partners and the executive officers of the
Corporate General Partner, as of December 31, 2001, owned 21 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's 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-14
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.
9
(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.
4. Instruments defining the rights of security holders, including
indentures
(a) Amended and Restated Certificate and Agreement of Limited
Partnership filed with the Registration Statement of the
Registrant Form S-11, filed September 30, 1987 and
subsequently amended, incorporated herein by reference.
10. Material contracts
(a) Property Management Agreement with Realmark Corporation
included with the Registration Statement of the Registrant
as filed and amended to date incorporated herein by
reference.
(b) Property sales agreement with an unrelated third-party
included with the Partnership's report on Form 8-K on
August 31, 2001 is incorporated herein by reference.
(c) Property sales agreement with an unrelated third party
dated March 13, 2002 is 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-B
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
10
INDEPENDENT AUDITOR'S REPORT
----------------------------
The Partners
Realmark Property Investors Limited
Partnership - VI B:
We have audited the accompanying consolidated balance sheets of Realmark
Property Investors Limited Partnership - VI B 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 the
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 B 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 7 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.
TOSKI, SCHAEFER & CO., P.C.
Williamsville, New York
March 25, 2002, except for Note 7,
as to which the date is April 2, 2002
F-1
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
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 $ 226,000 780,500
Buildings and improvements 2,871,879 6,040,520
Furniture and equipment 130,652 257,865
----------- -----------
3,228,531 7,078,885
Less accumulated depreciation 1,164,899 2,330,456
----------- -----------
Net property and equipment 2,063,632 4,748,429
Cash and equivalents 340,444 708,683
Receivables from affiliated parties 87,571 9,524
Note receivable 326,950 --
Escrow deposits 11,707 77,372
Investment in joint venture -- 101,562
Deferred mortgage costs, less accumulated amortization
of $29,502 in 2001 and $40,854 in 2000 161,785 298,852
Other assets 21,743 42,126
----------- -----------
Total assets $ 3,013,832 5,986,548
=========== ===========
Liabilities and Partners' Equity
--------------------------------
Liabilities:
Mortgage loans payable 2,620,735 5,227,302
Accounts payable and accrued expenses 72,523 74,087
Accrued interest payable 19,137 37,771
Security deposits and prepaid rents 56,911 103,613
----------- -----------
Total liabilities 2,769,306 5,442,773
----------- -----------
Partners' equity (deficit):
General partners (154,738) (168,215)
Limited partners 399,264 711,990
----------- -----------
Total partners' equity 244,526 543,775
----------- -----------
Total liabilities and partners' equity $ 3,013,832 5,986,548
=========== ===========
See accompanying notes to consolidated financial statements
F-2
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Consolidated Statements of Operations
Years Ended December 31, 2001, 2000, and 1999
2001 2000 1999
---- ---- ----
Income:
Rental $ 1,497,317 1,863,378 1,695,604
Interest and other 113,521 109,956 189,827
----------- ----------- -----------
Total income 1,610,838 1,973,334 1,885,431
----------- ----------- -----------
Expenses:
Property operations 909,920 1,151,282 1,245,846
Interest 492,158 458,931 462,411
Depreciation -- 233,113 223,157
Administrative:
Affiliated parties 165,939 177,503 164,799
Other 138,616 190,636 179,914
----------- ----------- -----------
Total expenses 1,706,633 2,211,465 2,276,127
----------- ----------- -----------
Loss before equity in earnings (loss) of joint ventures
and gain on sale of property (95,795) (238,131) (390,696)
Equity in earnings (loss) of joint ventures 545,015 3,469 (54,127)
Gain on sale of property 1,851,531 -- --
----------- ----------- -----------
Net income (loss) $ 2,300,751 (234,662) (444,823)
=========== =========== ===========
Net income (loss) per limited partnership unit $ 29.09 (2.90) (5.49)
=========== =========== ===========
Distributions per limited partnership unit $ 33.07 2.34 --
=========== =========== ===========
Weighted average number of limited partnership
units outstanding 78,625.1 78,625.1 78,625.1
=========== =========== ===========
See accompanying notes to consolidated financial statements
F-3
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Consolidated Statements of Partners' Equity
Years Ended December 31, 2001, 2000, and 1999
Limited Partners
General --------------------
Partners Units Amount
-------- ----- ------
Balances at December 31, 1998 $ (142,137) 78,625.1 1,555,153
Net loss (13,345) -- (431,478)
---------- -------- ----------
Balances at December 31, 1999 (155,482) 78,625.1 1,123,675
Net loss (7,040) -- (227,622)
Distributions to partners (5,693) -- (184,063)
---------- -------- ----------
Balances at December 31, 2000 (168,215) 78,625.1 711,990
Net income 13,477 -- 2,287,274
Distributions to partners -- -- (2,600,000)
---------- -------- ----------
Balance at December 31, 2001 $ (154,738) 78,625.1 399,264
========== ======== ==========
See accompanying notes to consolidated financial statements
F-4
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years Ended December 31, 2001, 2000, and 1999
2001 2000 1999
---- ---- ----
Cash flows from operating activities:
Net income (loss) $ 2,300,751 (234,662) (444,823)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization 137,067 244,437 234,480
Equity in (earnings) loss of joint ventures (545,015) (3,469) 54,127
Gain on sale of property (1,851,531) -- --
Changes in:
Receivables from affiliated parties (78,047) 81,292 9,179
Escrow deposits (15,974) 153,834 97,564
Other assets 20,383 (8,624) (1,826)
Accounts payable and accrued
expenses 19,560 (55,753) (64,569)
Security deposits and prepaid rents 78,830 (26,000) 38,352
----------- ----------- -----------
Net cash provided by (used in)
operating activities 66,024 151,055 (77,516)
----------- ----------- -----------
Cash flows from investing activities:
Proceeds from sale of property 4,125,727 -- --
Additions to property and equipment -- (12,090) (2,213)
Distributions received from joint venture 646,577 3,450 74,759
----------- ----------- -----------
Net cash provided by (used in)
investing activities 4,772,304 (8,640) 72,546
----------- ----------- -----------
Cash flows from financing activities:
Principal payments on mortgage loans (2,606,567) (41,998) (39,787)
Distributions to partners (2,600,000) (189,756) --
----------- ----------- -----------
Net cash used in financing
activities (5,206,567) (231,754) (39,787)
----------- ----------- -----------
Net decrease in cash and equivalents (368,239) (89,339) (44,757)
Cash and equivalents at beginning of year 708,683 798,022 842,779
----------- ----------- -----------
Cash and equivalents at end of year $ 340,444 708,683 798,022
=========== =========== ===========
Supplemental disclosure of cash flow information -
cash paid for interest $ 376,078 447,911 450,122
=========== =========== ===========
See accompanying notes to consolidated financial statements.
F-5
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
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 B (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 1989 and 1990, the Partnership sold, through a public offering,
78,625.1 units of limited partnership interest for $7,862,510. 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 two subsidiaries,
that are wholly-owned:
(1) Realmark-Players, LLC that owns Players Club North, a 144 unit
apartment complex located in Lutz, Florida, acquired in 1991
for $3,007,000.
(2) Realmark-Villa, LLC that owned Fairway Club, a 192 unit
apartment complex located in Greeneville, South Carolina,
acquired in 1991 for $3,100,000. On August 16, 2001 Fairway
Club was sold.
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 B
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 impairments 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. The Partnership's remaining property is 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) Joint Ventures
The Partnership's minority interests in joint ventures are accounted
for on the equity method.
(g) Rental Income
Rental income is recognized as earned according to the terms of the
leases that are generally for periods of one year or less, payable
monthly. Delinquent rents are not recorded.
F-7
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2) Summary of Significant Accounting Policies, Continued
(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 of
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 last property (note 7), 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 last property to provide this return to the Limited
Partners.
(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 $113,000 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.
(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.
F-8
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2) Summary of Significant Accounting Policies, Continued
(m) Recent Pronouncements, Continued
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
On August 16, 2001, the Partnership sold Fairway Club Apartments to an
unaffiliated entity, for cash of $4,373,000 and a $327,000 note from
the purchaser, and recognized a related gain on the sale amounting to
$1,851,531. The note bears interest at the rate of 7% annually through
December 31, 2001 and 8% annually, thereafter, until December 31, 2002,
when all principal and accrued interest shall be due and payable.
In 2001, management entered into a plan to dispose of its one remaining
property. The carrying value of the assets of Players Club was
$2,063,632 at December 31, 2001, and the property generated net income
of $154,371 during the year then ended. Depreciation expense, not
recorded during the disposal period, for the year ended December 31,
2001 totaled approximately $116,000.
(4) Mortgage Loans Payable
Mortgage loans payable are as follows:
Total Balance
Interest monthly December 31,
Property collateral rate Maturity payment 2001 2000
------------------- ---- -------- ------- ---- ----
Players Club North 8.48% 2027 $ 20,824 $ 2,620,735 2,644,202
Fairway Club 8.30% -- 20,002 -- 2,583,100
======== ------------- ---------
$ 2,620,735 5,227,302
============= =========
F-9
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(4) Mortgage Loans Payable, Continued
The aggregate maturities of the mortgages for each of the five years
following 2001 and thereafter, assuming principal payments are not
accelerated, are as follows:
2002 $ 28,749
2003 31,284
2004 34,043
2005 37,044
2006 40,311
Thereafter 2,449,304
-----------
$ 2,620,735
===========
(5) Investment in Joint Venture
The Partnership has an 11.5% interest in a joint venture with Realmark
Property Investors Limited Partnership-II (RPILP-II), an entity
affiliated through common general partners. The venture owned and
operated the Foxhunt Apartments, Dayton, Ohio. The joint venture
agreement provided that any income, loss, gain, cash flow, or sale
proceeds be allocated 88.5% to RPILP-II and 11.5% to the Partnership.
In July 1999, the venturers developed a plan to dispose of Foxhunt
Apartments. Accordingly, no depreciation of the apartments has been
recorded since then. On March 1, 2001, the apartment complex was sold
to an unaffiliated entity, for $7,600,000 resulting in a net gain to
the joint venture for financial reporting purposes of approximately
$4,760,000, after considering costs of the sale. The net proceeds
realized by the venture were approximately $1.1 million.
The following financial information of the joint venture is presented on a
historical-cost basis. The equity ownership was determined based upon
the cash contributed to the joint venture by the Partnership as a
percentage of the general partners' estimate of the fair market value
of the apartment complex and other net assets at the date of inception.
Balance Sheet Information
-------------------------
December 31,
Assets 2001 2000
------ ---- ----
Property and equipment, net of accumulated depreciation $ -- 2,442,352
Other assets 19,117 245,457
--------- ----------
Total assets $ 19,117 2,687,809
========= ==========
F-10
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(5) Investment in Joint Ventures, Continued
Balance Sheet Information, Continued
------------------------------------
December 31,
Liabilities and Partners' Deficiency 2001 2000
------------------------------------ ---- ----
Liabilities:
Mortgage loan payable $ -- 5,950,373
Other liabilities 19,117 323,019
---------- ----------
Total liabilities 19,117 6,273,392
Partners' deficiency -- (3,585,583)
---------- ----------
Total liabilities and partners' deficiency $ 19,117 2,687,809
========== ==========
Operating Information
---------------------
Years ended December 31,
------------------------
2001 2000 1999
---- ---- ----
Income:
Rental $ 250,547 1,436,572 1,410,656
Interest and other income 7,842 64,233 99,410
--------------- ----------- -----------
Total income 258,389 1,500,805 1,510,066
--------------- ----------- -----------
Expenses:
Property operations 155,995 733,839 1,024,331
Interest 82,090 534,817 648,784
Depreciation -- -- 109,124
Administrative:
Affiliated parties 18,437 113,600 101,571
Other 22,897 88,384 96,928
--------------- ----------- -----------
Total expenses 279,419 1,470,640 1,980,738
--------------- ----------- -----------
Net income (loss) before gain on sale of property (21,030) 30,165 (470,672)
Gain on sale of property 4,760,295 -- --
--------------- ----------- -----------
Net income (loss) $ 4,739,265 30,165 (470,672)
=============== =========== ===========
Allocation of net income (loss):
The Partnership 545,015 3,469 (54,127)
RPILP-II 4,194,250 26,696 (416,545)
--------------- ----------- -----------
Total $ 4,739,265 30,165 (470,672)
=============== =========== ===========
F-11
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(5) Investment in Joint Ventures, Continued
A reconciliation of the Partnership's investment in the Foxhunt Joint
Venture follows:
2001 2000 1999
---- ---- ----
Beginning balance $ 101,562 101,543 267,383
Equity in net income (loss) 545,015 3,469 (54,127)
Cash distribution (646,577) (3,450) (111,713)
------------ ------------ ----------
Ending balance $ -- 101,562 101,543
============ ============ ==========
(6) Related Party Transactions
Transactions with General Partners
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
percentage (generally 5%) of rent income $ 79,541 95,533 88,266
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 86,398 81,970 76,533
------------- -------- --------
$ 165,939 177,503 164,799
============= ======== ========
In addition to the above, other property specific expenses such as
payroll, benefits, etc. are charged to property operations on the
Partnership's consolidated statements of operations. Receivables from
affiliated parties are payable on demand and bear interest at 11%.
Property Disposition Fees
According to the terms of the partnership agreement, 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 have not been met, no
disposition fees have been paid or accrued on properties sold in prior
years.
F-12
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(7) 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
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 prejudice. The Settlement provided, among other things,
that 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.
(8) Subsequent Event
On March 13, 2002, the Partnership entered into a $5,573,000 sale
agreement with an unaffiliated entity, for the sale of Players Club.
This sale, if closed, will result in a gain of approximately $3,300,000
to the Partnership.
F-13
Schedule III
------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Real Estate and Accumulated Depreciation
December 31, 2001
Initial cost to Gross amounts at which
Partnership Cost carried at close of period
--------------- capitalized --------------------------
Property Land and Buildings and subsequent to Land and Buildings and Accumulated
Description Encumbrances improvements improvements acquisition improvements improvements Total depreciation
----------- ------------ ------------ ------------- ----------- ------------ ------------ ----- ------------
Player's Club
North
Lutz, FL $ 2,620,735 218,000 2,851,851 28,028 226,000 2,871,879 3,097,879 1,164,899
=========== ========= ========== ======== ========= ========= ========= ==========
(RESTUBBED TABLE)
Life
on which
depreciation
in latest
Date statement of
of Date operations
construction acquired is computed
------------ -------- -----------
Player's Club
North
Lutz, FL 1986 6/91 -- *
* 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-14
Schedule III, Continued
-----------------------
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI B
AND SUBSIDIARIES
Real Estate and Accumulated Depreciation
December 31, 2001, 2000, and 1999
(1) Cost for Federal income tax purposes is $3,097,879.
(2) A reconciliation of the carrying amount of land and buildings as of December
31, 2001, 2000 and 1999 follows:
Partnership Properties
----------------------
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 6,821,020 6,808,930 6,808,930
Additions -- 12,090 --
Dispositions (6) (3,723,141) -- --
--------------- ------------ ------------
Balance at end of year $ 3,097,879 6,821,020 6,808,930
=============== ============ ============
Joint Venture Properties
------------------------
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 5,513,128 5,513,128 5,494,641
Additions -- -- 18,487
Dispositions (5) (5,513,128) -- --
--------------- -------------- --------------
Balance at end of year $ -- 5,513,128 5,513,128
=============== ============== ==============
(3) A reconciliation of accumulated depreciation for building and
improvements for the years ended December 31, 2001, 2000, and 1999 is
as follows:
Partnership Properties
----------------------
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 2,074,141 1,841,470 1,609,200
Depreciation expense -- 232,671 232,270
Dispositions (6) (1,041,942) -- --
--------------- ---------- ----------
Balance at end of year (4) $ 1,032,199 2,074,141 1,841,470
=============== ========== ==========
Joint Venture Properties
------------------------
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 3,083,021 3,083,021 2,977,048
Depreciation expense -- -- 105,973
Dispositions (5) (3,083,021) -- --
--------------- ----------- -----------
Balance at end of year (4) $ -- 3,083,021 3,083,021
=============== =========== ===========
(4) Balance applies entirely to buildings and improvements.
(5) Sale of Foxhunt Apartments in 2001.
(6) Sale of Fairway Club Apartments in 2001.
F-15