FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2002
Commission File Number: 0-17466
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI-A
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(Exact name of registrant as specified in its charter)
Delaware 16-1309987
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(State of organization) (IRS Employer Identification No.)
2350 North Forest Road, Suite 12A,Getzville, New York 14068
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(Address of principal executive offices)
(716) 636-0280
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(Registrant's telephone number)
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 [ ]
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
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June 30, December 31,
2002 2001
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Assets
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Cost of property and equipment, all held for sale $ 20,752,574 20,743,204
Less accumulated depreciation 7,838,011 7,838,011
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12,914,563 12,905,193
Cash and equivalents 108,832 62,362
Other assets 846,492 858,621
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Total assets $ 13,869,887 13,826,176
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Liabilities and Partners' Equity
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Mortgage loans payable 11,593,780 11,661,131
Accounts payable and accrued expenses 937,587 739,335
Payable to affiliates 1,408,932 1,043,895
Other liabilities 243,567 236,484
Equity in losses of unconsolidated joint ventures
in excess of investment 159,358 172,215
Partners' equity (deficit) (473,337) (26,884)
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Total liabilities and partners' equity $ 13,869,887 13,826,176
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Condensed Consolidated Statements of Operations
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Three months ended June 30, Six months ended June 30,
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2002 2001 2002 2001
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Rental income $ 873,395 1,017,013 1,786,448 2,023,625
Other income 101,637 56,357 185,367 138,161
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Total income 975,032 1,073,370 1,971,815 2,161,786
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Property operating costs 798,028 693,432 1,504,213 1,490,720
Administrative expense - affiliates 110,648 117,109 220,004 208,211
Other administrative expense 132,324 89,828 193,008 172,084
Interest 272,755 289,410 556,900 577,567
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Total expenses 1,313,755 1,189,779 2,474,125 2,448,582
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Loss before equity in joint venture operations (338,723) (116,409) (502,310) (286,796)
Equity in earnings of joint ventures 31,720 36,334 55,857 15,007
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Net loss $ (307,003) (80,075) (446,453) (271,789)
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Net loss per limited partnership unit $ (1.89) (0.49) (2.75) (1.68)
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Weighted average limited partnership units 157,378 157,378 157,378 157,378
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Condensed Consolidated Statements of Cash Flows
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Six months ended June 30,
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2002 2001
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Cash provided (used) by:
Operating activities:
Net loss $(446,453) (271,789)
Adjustments - other, principally changes in other assets and liabilities 526,644 244,911
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Net cash provided (used) by operating activities 80,191 (26,878)
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Investing activities:
Additions to property and equipment (9,370) (3,140)
Distributions from joint ventures 43,000 79,500
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Net cash provided by investing activities 33,630 76,360
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Net cash used by financing activities - principal payments
on mortgage loans (67,351) (61,083)
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Net increase (decrease) in cash and equivalents 46,470 (11,601)
Cash and equivalents at beginning of period 62,362 145,428
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Cash and equivalents at end of period $ 108,832 133,827
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Notes to Consolidated Financial Statements
Six months ended June 30, 2002 and 2001
Organization
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Realmark Property Investors Limited Partnership-VI A (the Partnership), a
Delaware limited partnership, was formed on September 21, 1987, to invest in a
diversified portfolio of income-producing real estate investments. The general
partners are Realmark Properties, Inc. (the corporate general partner) and
Joseph M. Jayson (the individual general partner). Joseph M. Jayson is the sole
shareholder of J.M. Jayson & Company, Inc. Realmark Properties, Inc. is a
wholly-owned subsidiary of J.M. Jayson & Company, Inc. Under the partnership
agreement, the general partners and their affiliates can receive compensation
for services rendered and reimbursement for expenses incurred on behalf of the
Partnership.
Basis of Presentation
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The accompanying interim financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
and, in the opinion of management, contain all necessary adjustments for a fair
presentation. The Partnership's significant accounting policies are set forth in
its December 31, 2001 Form 10-K. The interim financial statements should be read
in conjunction with the financial statements included therein. The interim
results should not be considered indicative of the annual results.
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Property and Equipment
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At June 30, 2002, the Partnership owned and operated four apartment complexes
and one commercial property. It also has interests in a joint venture, as
described below. All of the Partnership and venture properties are being
marketed for sale, and, therefore, are not depreciated. Depreciation expense not
recorded for the three and six month periods ended June 30, 2002 was
approximately $168,000 and $336,000, respectively. Depreciation expense not
recorded for the three and six month period ended June 30, 2001 was
approximately $165,000 and $330,000, respectively. As previously reported in the
Partnership's December 31, 2001 Form 10-K, the Partnership has entered into
sales agreements with unaffiliated entities, for the sale of Countrybrook
Estates and Beaver Creek Apartments. These sales, if closed, will result in
gains of approximately $1,175,000 and $1,000,000, respectively, to the
Partnership. The sale agreements previously reported for Pomeroy Park and
Stonegate Townhouses were terminated.
Investment in Joint Ventures
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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, 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 investment in the venture, $74,813, was charged to equity in joint
venture operations in the quarter ended March 31, 2001.
The Partnership has a 50% interest in Research Triangle Industrial Park Joint
Venture with Realmark Property Investors Limited Partnership-II (RPILP-II), an
entity affiliated through common general partners, owning the other 50%. The
Venture owns and operates the Research Triangle Industrial Park West, an
office/warehouse facility located in Durhan County, North Carolina. Summary
financial information of the Venture follows.
Balance Sheet Information
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June 30, December 31,
2002 2001
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Net property, held for sale $ 1,473,368 1,473,368
Cash and equivalents 13,965 55,158
Escrow deposits 899,600 876,539
Other assets 198,804 252,727
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Total assets $ 2,585,737 2,657,792
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Liabilities:
Mortgage loan payable 5,208,707 5,254,865
Accounts payable and accrued expenses
73,422 134,234
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5,282,129 5,389,099
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Partners' deficit:
The Partnership (1,447,611) (1,465,069)
RPILP II (1,248,781) (1,266,238)
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(2,696,392) (2,731,307)
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Total liabilities and partners' deficit $ 2,585,737 2,657,792
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Operating Information
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Three months ended June 30, Six months ended June 30,
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2002 2001 2002 2001
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Rental income $199,907 182,620 361,646 401,240
Other 47,283 49,037 94,988 95,678
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Total income 247,190 231,657 456,634 496,918
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Property operating costs 42,033 30,177 80,293 59,161
Interest 108,276 110,241 216,405 220,121
Administrative 28,841 13,973 39,022 32,966
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Total expenses 179,150 154,391 335,720 312,248
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Net income $ 68,040 77,266 120,914 184,670
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Allocation of net income:
The Partnership 34,020 38,633 60,457 92,335
RPILP II 34,020 38,633 60,457 92,335
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$ 68,040 77,266 120,914 184,670
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PART I - Item 2. Management's Discussion and Analysis of Financial Condition
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and Results of Operations
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Liquidity and Capital Resources
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The Partnership continued to have difficulties in the first half of 2002
generating sufficient funds to cover its cash obligations without relying on
affiliates. The total amount payable to affiliates rose approximately $365,000
in the six months ended June 30, 2002. There have been no distributions to the
partners for at least the past six years.
The Partnership has entered into sales agreements with unaffiliated entities,
for the sale of Countrybrook Estates and Beaver Creek Apartments. These sales,
if closed, will result in gains of approximately $1,175,000, and $1,000,000 to
the Partnership.
Results of Operations
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As compared to the first six months of 2001, the Partnership's loss, before
equity in joint venture operation, increased approximately $215,000 to a loss of
$502,000 in 2002 from a loss of $287,000 in 2001.
Rental income decreased approximately $237,000 for the first six months. This is
due mainly to increased vacancies at Pomeroy Park of $120,000, increased
vacancies of $16,000 and increased concessions of $16,000 at Stonegate,
increased vacancies of $40,000 at Countrybrook, increased vacancies of $80,000
offset by a $65,000 increase in gross market rent at Inducon Columbia, and
increased vacancies of $40,000 offset by a $10,000 increase in gross market rent
at Beaver Creek. The decrease in rental income combined with an increase in
other income of $47,000, due to cleaning fees, late charges and termination
fees, was offset by a increase in property operating costs of $14,000, an
increase in other administrative expense of $21,000, and an increase in
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administrative expense to affiliates of $12,000. The increase in property
operating costs was due mainly to an increase in repairs at all properties
offset by decreases in payroll and utility costs. The increase in other
administrative was primarily attributable to an increase in advertising,
evictions and office supplies. The increase in administrative expense to
affiliates was primarily attributable to professional fees.
PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk
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The Partnership's cash equivalents are short-term, interest-bearing bank
accounts and its mortgage loans are fixed-rate. It has not entered into any
derivative contracts. Therefore, it has no market risk exposure.
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
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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 in New York State
court. The Partnership's settlement of this litigation is described in its
Annual Report on Form 10-K for the year ended December 31, 2001.
Item 5. Other Information
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The Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 is attached as an exhibit in this
report.
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SIGNATURES
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Pursuant to the requirements 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 PARTNERHIP - VI-A
August 14, 2002 /s/ Joseph M. Jayson
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Date Joseph M. Jayson,
Individual General Partner and
Principal Financial Officer
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Exhibit
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - VI A CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002.
In connection with the Quarterly Report of Realmark Property Investors
Limited Partnership - VI A (the "Partnership") on Form 10-Q for the period
ending June 30, 2002 as filed with the Securities and Exchange Commission on the
date hereof (the "Report"), I, Joseph M. Jayson, Individual General Partner and
Principal Financial Officer, certify, pursuant to 18 U.S.C. ss. 1350, as adopted
pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that to the best of my
knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of the operations of the
Partnership.
August 14, 2002 /s/ Joseph M. Jayson
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Date Joseph M. Jayson,
Individual General Partner and
Principal Financial Officer