-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UsdD/p+E0OYCYTz/Eelx0lzl3GOcL1ltN07QvEYcAQukOyN+nuiY1tYK6vv7BUAC r+1MILBG6int8FhKzEhntw== 0000897101-99-000257.txt : 19990326 0000897101-99-000257.hdr.sgml : 19990326 ACCESSION NUMBER: 0000897101-99-000257 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990325 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRIFFIN REAL ESTATE FUND II CENTRAL INDEX KEY: 0000319716 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 41398390 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-11200 FILM NUMBER: 99572864 BUSINESS ADDRESS: STREET 1: 510 MARQUETTE AVE STREET 2: SUITE 300 CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123382828 MAIL ADDRESS: STREET 1: 510 MARQUETTE AVE STREET 2: SUITE 300 CITY: MINNEAPOLIS STATE: MN ZIP: 55402 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1998. Commission file number 0-11200 GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP Minnesota 41-1398390 510 Marquette Avenue, Suite 300 Minneapolis, Minnesota 55402 Registrant's telephone number (612) 338-2828 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered - ------------------- ------------------------ None None Securities registered pursuant to Section 12(g) of the act: $11,000,000 Indicate by 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 check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained to the best of 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. [ ] Forms 8-K dated September 9, 1998 and January 27, 1999 is incorporated by reference in this report. GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP TABLE OF CONTENTS PAGE PART I Item 1 Business........................................................1-2 Item 2 Properties........................................................3 Item 3 Legal Proceedings.................................................3 Item 4 Submission of Matters to a Vote of Limited Partners...............................................3 PART II Item 5 Market for the Partnership's Limited Partnership Interests and Related Limited Partner Matters.....................3 Item 6 Selected Financial Data...........................................4 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations...................5-7 Item 8 Financial Statements and Supplementary Data.......................8 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...............................8 PART III Item 10 The General Partner of the Partnership..........................8-9 Item 11 Management Remuneration and Transactions.........................10 Item 12 Limited Partnership Ownership of Certain Beneficial Owners and Management.................................11 Item 13 Certain Relationships and Related Transactions.....................................................11 PART IV Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K..........................................12 SIGNATURES .................................................................13 GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP PART I Item 1. Business The registrant, Griffin Real Estate Fund-II, A Limited Partnership (the "Partnership"), was organized on September 19, 1980 under the laws of the State of Minnesota. The Partnership was formed by the general partner, Investment Associates, a Minnesota general partnership, to acquire existing, income-producing real properties for rental purposes. On February 2, 1981 the Partnership commenced an offering of $10,000,000 pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The offering terminated December 15, 1982 upon the acceptance of 2200 units ($11,000,000), the maximum allowed under the registration. The Partnership is engaged solely in the business of real estate investment, and is limiting its investment to the real property acquired at its inception plus reasonable repairs and capital improvements. The goal of these investments is to generate both capital gain income and current income from cash flow. The Partnership does not invest in real estate mortgages, securities of or interests in persons primarily engaged in real estate activities, or in other securities. A presentation of information about industry segments is not applicable and would not be material to an understanding of the Partnership's business taken as a whole. The General Partner manages and controls all of the affairs of the Partnership, including deciding when and on what terms properties should be sold or refinanced. As of December 31, 1998 the Partnership has made the real property investment set forth in the following table: Name, type of property Date of Type of and location (a) Size Purchase Ownership (b) ---------------------- --------- -------- --------- 1. Olde English Village Apts. 264 units 8/31/82 Mortgage Note West Des Moines, Iowa (a) Reference is made to Schedule III of this annual report. (b) Reference is made to Note 3 of Notes to Financial Statements filed with this annual report for the current outstanding principal balances and a description of the long-term indebtedness secured by the Partnership's real property investment; The Terms of Transactions between the Partnership and affiliates of the General Partner are described in Item 11 to which reference is hereby made. It is the Partnership's policy to conduct its business activities in accordance with the Partnership Agreement which may not be changed without a vote of a majority of the Limited Partnership units outstanding. Pursuant to the Partnership Agreement, the Partnership may not issue senior securities, make loans to other persons, invest in the securities of other entities for the purposes of exercising control, underwrite the securities of others or offer securities in exchange for property. -1- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP As circumstances dictate, the Partnership has the right under the Partnership Agreement to borrow money, and to use its investments in real property as collateral for that debt. The amount of debt for acquisitions was subject to a maximum of 75% loan to value. Although not required, the General Partner intends to maintain this limit with any subsequent refinancings. No refinancings occurred in 1998, 1997, or 1996. There is no limit on the number of mortgages that may be taken out on any one piece of the Partnership's real properties. The Partnership Agreement provides for the redemption of limited partnership units under certain circumstances. In 1998, 1997, and 1996 the Partnership redeemed no units. It is the policy of the General Partner to report on a quarterly basis to the limited partners. Each interim report contains limited financial reporting with a management discussion of operations and goals for the Partnership. The annual report contains financial statements that are audited by independent public accountants, and is accompanied by a management discussion of operations and goals. AVERAGE EFFECTIVE ANNUAL RENTAL PER UNIT Lunnonhaus Olde English Villas of Candleridge Village Village Patricia Park Apartments Apartments Apartments Apartments Urbandale, IA Golden, CO W. Des Moines, IA Urbandale, IA - -------------------------------------------------------------------------------- 1998 * $7,786 $6,371 * - -------------------------------------------------------------------------------- 1997 6,397 7,453 5,996 5,650 - -------------------------------------------------------------------------------- 1996 6,494 7,114 6,094 6,095 - -------------------------------------------------------------------------------- 1995 6,605 6,699 6,329 6,435 - -------------------------------------------------------------------------------- 1994 6,345 6,311 6,094 6,214 - -------------------------------------------------------------------------------- * Indicates the partnership did not own the property at any time during the year. SCHEDULE OF REAL ESTATE TAXES Lunnonhaus Olde English Villas of Candleridge Village Village Patricia Park Apartments Apartments Apartments Apartments Urbandale, IA Golden, CO W. Des Moines, IA Urbandale, IA - -------------------------------------------------------------------------------- 1998 Tax Rate * (a) (a) * Assessment * (a) (a) * - -------------------------------------------------------------------------------- 1997 Tax Rate * 89.573 34.36266 * Assessment * $74,071 $272,482 * - -------------------------------------------------------------------------------- 1996 Tax Rate 34.07312 89.059 34.07312 34.07312 Assessment $151,068 $65,983 $268,332 $127,987 - -------------------------------------------------------------------------------- 1995 Tax Rate 33.32970 89.412 33.32970 33.32970 Assessment $143,756 $66,244 $261,864 $121,792 - -------------------------------------------------------------------------------- 1994 Tax Rate 34.39191 90.98 34.66721 34.39191 Assessment $128,614 $59,799 $242,212 $119,900 - -------------------------------------------------------------------------------- * Indicates the Partnership did not own the property at the time of the assessment. (a) Data not yet available. It is the opinion of the General Partner that the Partnership's property is adequately covered by insurance. -2- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP Item 2. Properties The Partnership owns the real property referred to in Item 1 to which reference is hereby made. Item 3. Legal Proceedings On September 20, 1995 Everest Investors, LLC ("Everest") filed a lawsuit in Hennepin County Minnesota's Fourth Judicial District Court against Investment Associates ("General Partner"), the general partner of Griffin Real Estate Fund-II, A Limited Partnership ("Partnership"). The lawsuit alleged that the General Partner had wrongfully denied Everest access to the books and records of the Partnership. The court granted, in part, Everest's request for access to the books and records and ordered the General Partner to provide Everest access to these records. The General Partner complied with this court order. Everest continued to seek access to additional books and records of the Partnership beyond the scope of the court order. The General Partner vigorously defended the Partnership's right to keep its proprietary records from being reviewed by Everest, who has not been admitted as a limited partner of the Partnership despite having been assigned a financial interest in 126 units by some original limited partners. The General Partner filed for a dismissal of the matter. The court heard arguments on September 29, 1995, October 26, 1995 and November 17, 1995. On November 27, 1995 the court dismissed Everest's lawsuit. Everest appealed the dismissal in the Minnesota Court of Appeals on March 12, 1996. Briefs were filed and oral arguments were heard by the court on July 1, 1996. On September 10, 1996 the court affirmed the dismissal. Item 4. Submission of Matters to a Vote of Limited Partners There were no matters submitted to a vote of the Limited Partners. PART II Item 5. Market for the Partnership's Limited Partnership Interests and Related Limited Partner Matters There are approximately 707 holders of record of units of the Partnership. There is no public market for units and it is not anticipated that a public market for units will develop. The General Partner will not redeem or repurchase units except upon death of the original limited partner. Reference is made to Item 6 in this annual report for a discussion of cash distributions made to the Limited Partners. -3- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP Item 6. Selected Financial Data Griffin Real Estate Fund-II, A Limited Partnership For the Years Ended December 31, 1998, 1997, 1996, 1995, and 1994
1998 1997 1996 1995 1994 ----------- ----------- ----------- ----------- ----------- Total Revenues $13,107,038 $ 9,542,670 $ 5,589,366 $ 5,472,890 $ 5,148,672 Net Income before 10,088,953 5,303,794 539,331 324,981 151,515 extraordinary item Net Income before 4,565.70 2,359.35 234.49 141.24 65.81 extraordinary item per limited partnership unit (c) Extraordinary item - -- (142,121) -- -- -- Loss on extingishment of debt Extraordinary item - -- (63.23) -- -- -- Loss on extingishment of debt per limited unit (c) Net Income 10,088,953 5,161,673 539,331 324,981 151,515 Net Income per limited 4,565.70 2,296.12 234.49 141.24 65.81 partner unit (c) Total Assets 4,441,242 9,902,298 14,308,137 14,837,677 15,184,304 Mortgages and 5,143,606 9,031,201 14,510,958 14,801,452 15,067,907 Contracts for deed Cash distributions $ 5,293.00 $ 1,660.00 $ 357.54 $ 187.53 -- per limited partner unit (b)
(a) The above selected financial data should be read in conjunction with the financial statements and the related notes appearing in Exhibit 13 in this annual report. (b) Cash distributions of $8,811 per Limited Partnership unit have been made to the Limited Partners since the inception of the Partnership. These distributions have not resulted in taxable income to such Limited Partners and have therefore represented a return of capital. Each Partner's taxable income (or loss) from the Partnership in each year is equal to his allocable share of the taxable income (loss) of the Partnership, without regard to cash generated or distributed by the Partnership. (c) Net income before extraordinary item, extraordinary item and Net income per limited partnership unit is based upon the weighted average number of limited partnership units outstanding during the period, which is 2,185 for the current year. -4- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. RESULTS OF OPERATIONS Summary of Operations - 1998 Compared to 1997 The year 1998 was marked by the continued disposition of the Partnership properties that began in 1997. One of the remaining two properties was sold during 1998 and the other was sold in January 1999. As a result of the sale of the remaining property, the Partnership was terminated on February 28, 1999. Quarterly distributions continued through the third quarter of 1998 at $400 per unit for an annual rate of return of 8% of the limited partners' original investment. On August 26, 1998 the Partnership sold Lunnonhaus Village Apartments. This sale and the two property sales in 1997 mean that comparison of results from one year to the next is not possible for the Partnership taken as a whole. The following discussion is therefore limited to the one remaining property that was held for the entire year. Olde English Village Apartments: Physical occupancy recovered to 96% from the 87% level reached in the first quarter of 1998. This is a welcome reversal of the trend that began in late 1996 and continued through 1997 when the Des Moines market was unusually soft. Gross potential rents rose 2.2% from 1997 to 1998. Rent loss decreased by $68,922 from $221,152 in 1997 to $152,230 in 1998. These two factors overcame a small decrease in other income to bring total income up 6% from $1,666,370 in 1997 to $1,766,765 in 1998. Continued vacancies earlier in 1998 caused a continued increase in the areas of repairs and maintenance expense and in painting and decorating as the apartments were made rent ready. Repairs and maintenance increased from $60,660 in 1997 to $84,076 in 1998. Advertising also increased 31% in an attempt to lease the vacant units. Total advertising rose from $26,907 in 1997 to $35,207 in 1998. Capital expenditures of $247,881 were used mostly for landscaping and garage roof repairs, along with the normal carpet and appliance replacements and numerous other small projects. Summary of Operations - 1997 Compared to 1996 The year 1997 was a year of transition for the Partnership. The General Partner began the marketing of the properties for sale, resulting in the sale of two of the four apartment communities. The remaining two continue to be marketed for sale. Quarterly distributions from operations for 1997 were increased to $400 per unit (including distributions paid in January 1998) or an annual return of 8% of the limited partners' original investment. On May 27, 1997 the Partnership sold the Candleridge Apartments and the Villas of Patricia Park Apartments, therefore comparison of results from one year to the next is not possible for the Partnership taken as a whole. The following discussion is therefore limited to the two remaining properties that were held for the entire year. -5- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP Lunnonhaus Village Apartments: Physical occupancy remained at or near 100% during 1997 which compares closely to 1996. Rental rates increased 4.4% and with a slight increase in other income, total revenues increased 5.0% over 1996. Operating expenses in total were up only slightly from 1996. Utilities increased 10% from $196,662 in 1996 to $216,333 in 1997. However, there were other expenses that decreased enough to largely offset this. Most notably, repairs and maintenance dropped 8.2% from $247,579 in 1996 to $228,727 in 1997. The decrease is mainly a result of fewer carpet and appliance replacements during 1997. Real estate tax expense increased by $10,423 from $65,871 in 1996 to $76,294 in 1997. Capital expenditures of $167,768 were used to repair sidewalks, steps, siding, roofs to remodel the clubhouse and to purchase laundry equipment. Olde English Village Apartments: Physical occupancy rebounded a bit during 1997 from the 87% level as of December 31, 1996. However, after reaching the low 90's it had slipped back to 88% by December 31, 1997 due to the soft Des Moines market. Rental rates increased almost 3%, but with the increases in vacancy and a decrease in other income, total income dropped 3.6% in 1997. Increased tenant turnover caused a commensurate increase in expenses in the areas of repairs and maintenance and in painting and decorating as the apartments were made rent ready. Repairs and maintenance increased from $223,822 in 1996 to $317,835 in 1997. Advertising also increased 68% in an attempt to lease the vacant units. The amount spent rose 68% from $16,011 in 1996 to $26,907 in 1997. Capital expenditures of $203,984 were used to patch and seal the parking lot, replace concrete, for wood, roof and window replacement, for fence repairs and restroom remodeling. The lease on the property's truck was also bought out. YEAR 2000 The year 2000 compliance issue concerns the inability of computerized information systems to accurately calculate, store or use a date after 1999. This could have resulted in a system failure or miscalculations causing disruptions of operations. The General Partner had been evaluating the accounting software to find out if a Year 2000 problem existed. However, given that the Partnership terminated on February 28, 1999 this is no longer an issue. LIQUIDITY The Partnership had approximately $149,401 of cash reserves on hand at December 31, 1998. This provided the Partnership with ample liquidity with which to operate the Partnership up to its termination on February 28, 1999. The Partnership sold Olde English Village Apartments on January 14, 1999 and distributed sales proceeds of $1,573 to unitholders of record on February 18, 1999. Candleridge and Villas of Patricia Park Apartments were both sold on May 27, 1997. Sales proceeds of $1,285 per unit were distributed on June 17, 1997 to unitholders of record on May 27, 1997. Lunnonhaus Village Apartments was sold on August 26, 1998. Sales proceeds of $4,741 per unit were distributed on September 2, 1998 to unitholders of record on August 26, 1998. -6- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP OCCUPANCY TABLE Lunnonhaus Olde English Villas Candleridge Village Village of Patricia Apartments Apartments Apartments Park Apartments Urbandale, IA Golden, CO W. Des Moines, IA Urbandale, IA ------------- ---------- ----------------- --------------- 3/31/98 * 99% 87% * 6/30/98 * 99% 92% * 9/30/98 * * 95% * 12/31/98 * * 96% * 3/31/97 96% 99% 89% 84% 6/30/97 * 100% 91% * 9/30/97 * 100% 93% * 12/31/97 * 100% 88% * 3/31/96 96% 100% 94% 96% 6/30/96 95% 98% 92% 91% 9/30/96 96% 100% 94% 95% 12/31/96 94% 100% 87% 89% 3/31/95 95% 100% 97% 93% 6/30/95 99% 99% 99% 96% 9/30/95 97% 99% 100% 98% 12/31/95 99% 100% 97% 95% 3/31/94 92% 100% 93% 97% 6/30/94 98% 99% 92% 95% 9/30/94 96% 100% 99% 98% 12/31/94 94% 99% 98% 98% * Indicates the Partnership did not own the property at the end of the quarter. -7- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP Item 8. Financial Statements and Supplementary Data The Table of Contents to Financial Statements, Financial Statements and Supplementary Data listed in Item 14 are referenced herein as included in the exhibits attached to this report and are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There have been no changes in independent auditors and as of the date of the filing, there were no material disagreements with the current independent auditors (Larson, Allen, Weishair & Co.,LLP) regarding any of the following: 1) Accounting principles or practices 2) Extent and quality of financial statement disclosure 3) Auditing scope or procedures PART III Item 10. The General Partner of the Partnership The General Partner of the Partnership is Investment Associates, a Minnesota general partnership formed in September of 1980 by certain directors and officers of Griffin Companies for the sole purpose of acting as General Partner of the Partnership. As General Partner, Investment Associates manages and controls the affairs of the Partnership and has general responsibility and authority in all matters affecting its business. Griffin Companies, a Minnesota corporation organized in 1969, is engaged in real estate brokerage, real estate investment counseling, and management of commercial and multi-family real estate. Griffin Companies and its Affiliates have organized and served as general partners in thirty-two privately placed partnerships and six publicly offered partnerships, which were formed for the purpose of real estate investment. The General Partner and its Affiliates provide executive, supervisory and certain administrative services for the Partnership's operations and the General Partner is responsible for determining whether, when and on what terms properties should be sold or refinanced. In addition, the books and records of the Partnership are maintained by Griffin Companies, and are subject to audit by independent certified public accountants. The partners of the General Partner intend to devote only as much of their time to the business of the Partnership as they determine to be reasonably required. Limited Partners have no right to participate in the management of the Partnership. Effective February 29, 1998 Thomas A. Robeson, one of the partners of the General Partner, withdrew as a partner. Effective December 31, 1994 James R. Wadsworth, one of the partners of the General Partner, withdrew as a partner. Also effective July 22, 1997 Frederick R. Lamb, one of the partners of the General Partners, withdrew as a partner. Their shares of ownership and their shares of future profits and losses were assigned to and split equally between Larry D. Fransen and Robert S. Dunbar. Mr. Fransen and Mr. Dunbar were already partners of the General Partner. The identity and business experience of each of the partners of the General Partner is as follows: -8- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP Larry D. Fransen (age 58) founded Griffin Companies in 1969. He is a Director and senior officer of each of its operating entities, in addition to serving as Chairman. Since 1969, he has acted as general partner in many partnerships investing in apartments, office buildings, warehouses, land and motels. Acting on behalf of Griffin Companies' clients, Mr. Fransen has negotiated the acquisition and disposition of more than one billion dollars in investment real estate properties nationwide. He is a member of numerous professional organizations, including the Greater Minneapolis Area Board of Realtors, the Minnesota Association of Realtors, the National Association of Realtors (NAR), Minnesota Multi Housing Association (MHA), National Multi-Housing Council (NMHC), the National Apartment Association (NAA), Commercial and Investment Institute, National Association of Real Estate Investment Trusts (NAREIT), and the Pension Real Estate Association (PREA). Mr. Fransen holds the CCIM (Certified Commercial Investment Member) designation of the Commercial Investment Institute, as well as the SRS (Specialist in Real Estate Securities) designation. For 13 years, he was an instructor for the Commercial Investment Institute and served as the group's national president in 1983. He has been awarded the Omega Tau Rho Medal of Service for his years of service to the National Association of Realtors. Robert S. Dunbar (age 59) is Chief Executive Officer of Griffin Companies. Following several years with Control Data Corporation where he held various administrative and management positions, he was named Executive Vice President of the U.S. Jaycees in 1970, with responsibility for planning, budgeting and administration of the national organization. In 1972, he joined Ed. Phillips & Sons Company in Minneapolis, Minnesota as a sales manager. In 1975 he was elected President of Westland Capital Corporation, a Minneapolis venture capital firm, where he was responsible for analyzing various companies for potential investment opportunities. He joined Griffin Companies in 1977. Mr. Dunbar is a member of the Institute of Real Estate Management (IREM) and the Minnesota Multi Housing Association (MHA). He holds the Certified Apartment Manager (CAM) designation of the National Apartment Association and is a Certified Property Manager (CPM) as designated by the National Association of Realtors. Mr. Dunbar also holds a Minnesota Real Estate Broker's License and has completed the necessary course work for their prestigious Certified Commercial Investment Member (CCIM) designation conferred by the Commercial Investment Institute. He is a member of the national Multi-Housing Council and The Executive Committee (T.E.C.). He also serves on the Board of Trustees of Northwestern College. Messrs. Fransen and Dunbar together own 100% of the issued and outstanding shares of common stock of Griffin Companies. The partners of the General Partner represent and warrant that they have a collective personal net worth on an unaudited cost basis and on an unaudited estimated current value basis (measured as total assets at estimated current value less all liabilities) in excess of $1,500,000. The assets of the partners of the General Partner are largely invested in interests in real property and in Griffin Companies, therefore it may be difficult to precisely value such assets or to liquidate such assets expeditiously or on terms favorable to the seller. -9- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP Item 11. Management Remuneration and Transactions Partners of the General Partner receive no current or proposed direct remuneration in such capacity. The Partnership is required to pay a management fee to Griffin Companies and the General Partner is entitled to receive a share of cash distributions, when and as cash distributions are made to the Limited Partners, and a share of profits or losses as described below: . Profits, losses, and cash flow distributions, other than from refinancing or from the sale of Partnership properties, are allocated 95% to the limited partners and 5% to the general partner. . Net proceeds from refinancing or from the sale of property other than upon liquidation, less any necessary liability reserves or debt payments, will be distributed in the following order subject to the general partner receiving at least 1% of the distributions: .. First, to the limited partners to the extent that prior distributions are less than the original capital contribution plus 6% per annum (as defined in the Partnership Agreement); .. Second, any unpaid real estate commissions due to the general partner on the resale of the Partnership properties; .. Third, any remaining balance, 80% to the limited partners and 20% to the general partner. The Partnership is entitled to engage in various transactions involving affiliates of the General Partner of the Partnership. Griffin Companies ("Griffin"), an affiliate of the General Partner, may be reimbursed for direct expenses relating to the administration of the Partnership and operation of the Partnership real property investments. Griffin received approximately $43,944, $23,857 and $24,064 in 1998, 1997, and 1996 respectively, for these expenses. Reference is made to Note 4 of Notes to Financial Statements appearing elsewhere in this annual report for a description of related party transactions. -10- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP Item 12. Limited Partnership Ownership of Certain Beneficial Owners and Management Everest Investors, LLC, located at 11755 Wilshire Boulevard, Suite 2360 Los Angeles, California 90025, is the only person or "group" known by the Partnership to own beneficially more than 5% of the outstanding units of the Partnership. Everest Investors, LLC has only a financial interest in their units which were assigned by the original owners of 126 units. Everest has not been admitted as a limited partner of the partnership. Amount and Nature Percent of Class of Beneficial Outstanding at Title of Class Ownership December 31, 1998 -------------- --------- ----------------- Limited Partnership Units 126 units, purchased at 5.8% $2,387.50 per unit The individual general partners of the General Partner as a group have the following interest in the Partnership: Amount and Nature Percent of Class of Beneficial Outstanding at Title of Class Ownership December 31,1998 -------------- --------- ----------------- Limited Partnership Units 26 units purchased at 1.2% $4,462 per unit No partner of the General Partner possesses a right to acquire beneficial ownership of interest of the Partnership. There exists no arrangement, known to the Partnership, the operation of which may at subsequent date result in a change in control of the Partnership. Item 13. Certain Relationships and Related Transactions The partners of Investment Associates, the general partner of the Partnership, are also owners and employees of Griffin Companies, a Minnesota corporation. Accounts payable - affiliates consists of unpaid management fees to and advances from Griffin Companies. The following is a summary of approximate fees incurred for the years ended December 31: 1998 1997 1996 -------- -------- -------- Property management fees $219,394 $259,996 $302,319 Major improvement supervisory fees 24,198 68,502 73,408 -11- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K The following documents are filed as part of this report: Exhibit 13: Financial Statements and Schedules. An 8-K was filed on June 12, 1997 in regards to the sale of the Candleridge Apartments and Villas of Patricia Park Apartments on May 27, 1997. Another 8-K was filed on September 9, 1998 in regards to the sale of Lunnonhaus Village Apartments on August 26, 1998. An 8-K was filed on January 27, 1999 in regards to the sale of Olde English Village on January 14, 1999. Proforma Financial Information was included with these filings. No annual report or proxy material for the fiscal year 1998 has been sent to the Partners of the Partnership. An annual report will be sent to the Partners subsequent to this filing substantially similar to this form 10K. -12- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP 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. Dated: March 29, 1999 Griffin Real Estate Fund-II, A Limited Partnership By: Larry D. Fransen\s\ ---------------------------- Larry D. Fransen for the General Partner Investment Associates Pursuant to the requirements of the Securities and Exchange Act of 1934, this Report has been signed below by the following person on behalf of the Registrant and in the capacity and on the date indicated. Dated: March 29, 1999 By: Larry D. Fransen\s\ ---------------------------- Larry D. Fransen Managing General Partner of the General Partner Investment Associates -13- EX-13 2 1998 ANNUAL REPORT EXHIBIT 13 GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES INCLUDED IN ANNUAL REPORT (FORM 10-K) FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 TABLE OF CONTENTS Page Independent Auditor's Report................................................ 1 Balance Sheets, December 31, 1998 and 1997.................................. 2 Statements of Operations for the Years Ended December 31, 1998, 1997 and 1996............................................ 3 Statements of Cash Flows for the Years Ended December 31, 1998, 1997 and 1996...................................... 4 Statements of Changes in Partners' Equity (Deficit) for the Years Ended December 31, 1998, 1997 and 1996........................ 5 Notes to Financial Statements...............................................6-10 Financial Statement Schedules............................................... 11 III Real Estate and Accumulated Depreciation, December 31, 1998............................................... 11 All schedules other than those indicated in the Table of Contents have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes. INDEPENDENT AUDITOR'S REPORT Griffin Real Estate Fund-II, A Limited Partnership Minneapolis, Minnesota We have audited the accompanying balance sheets of Griffin Real Estate Fund-II, A Limited Partnership, as of December 31, 1998 and 1997 and the related statements of operations, changes in partner's equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 1998. Our audits also included the financial statement schedules listed in the table of contents at Exhibit 13. These financial statements and financial statement schedules are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, 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 financial statements referred to above present fairly, in all material respects, the financial position of Griffin Real Estate Fund-II, A Limited Partnership, as of December 31, 1998 and 1997, and the results of its operations and its cash flows of each of the years in the three-year period ended December 31, 1998 in conformity with generally accepted accounting principles. Also, in our opinion, the financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. As discussed in Note 1 and Note 5 to the financial statements, the Partnership sold its remaining property on January 14, 1999 and was liquidated on February 28, 1999. LARSON, ALLEN, WEISHAIR & CO., LLP Minneapolis, Minnesota March 5, 1999 -1- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP BALANCE SHEETS DECEMBER 31, 1998 AND 1997 ASSET 1998 1997 ------------ ------------ Cash and cash equivalents $ 149,401 $ 628,333 Escrow deposits 128,094 224,511 Receivables and other assets 15,510 19,784 ------------ ------------ Total 293,005 872,628 ------------ ------------ PROPERTY AND EQUIPMENT: Land 815,329 1,529,374 Buildings and improvements 7,592,813 16,430,929 Furniture and equipment 798,704 1,339,243 ------------ ------------ Total 9,206,846 19,299,546 Less accumulated depreciation 5,071,953 10,292,116 ------------ ------------ Property and equipment - net 4,134,893 9,007,430 ------------ ------------ Debt financing costs (net of accumulated amortization - 1998, $196,974; 13,344 22,240 1997, $188,078) ------------ ------------ TOTAL ASSETS $ 4,441,242 $ 9,902,298 ============ ============ LIABILITIES AND PARTNERS' EQUITY LIABILITIES: Accounts payable: Affiliate $ 3,124 $ 8,657 Other 362,134 135,272 Security deposits 33,705 90,063 Accrued expenses: Real estate taxes 272,482 342,403 Interest 36,554 60,576 Mortgage notes payable 5,143,606 9,031,201 ------------ ------------ Total liabilities 5,851,605 9,668,172 ------------ ------------ PARTNERS' EQUITY: General Partner (518,256) (462,914) Limited Partners (892,107) 697,040 ------------ ------------ Total Partners' Equity (Deficit) (1,410,363) 234,126 ------------ ------------ TOTAL LIABILITIES AND PARTNERS' EQUITY $ 4,441,242 $ 9,902,298 ============ ============ See Notes to Financial Statements -2- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
1998 1997 1996 ------------ ------------ ------------ REVENUES: Rent (less vacancies: 1998, $157,377; 1997, $268,496; 1996, $249,891) $ 3,122,683 $ 4,335,378 $ 5,263,634 Interest 41,377 45,414 39,501 Other 154,010 208,541 286,231 Gain on sale of property 9,788,968 4,953,337 -- ------------ ------------ ------------ Total revenues 13,107,038 9,542,670 5,589,366 ------------ ------------ ------------ EXPENSES: Interest 630,518 903,543 1,187,555 Depreciation and amortization 550,213 803,521 980,071 Real estate taxes 288,714 470,006 611,626 Repairs and maintenance 478,531 662,336 678,240 Utilities 286,981 411,435 452,082 Salaries and employee benefits 372,366 458,340 515,722 Management fees to related parties 219,394 259,996 302,319 Administrative 116,139 150,699 175,891 Insurance 69,286 108,003 133,277 Bad debts (2,628) 5,479 3,336 Other 8,571 5,518 9,916 ------------ ------------ ------------ Total expenses 3,018,085 4,238,876 5,050,035 ------------ ------------ ------------ NET INCOME BEFORE EXTRAORDINARY ITEM 10,088,953 5,303,794 539,331 EXTRAORDINARY ITEM - LOSS ON EXTINGUISHMENT OF DEBT -- (142,121) -- ------------ ------------ ------------ NET INCOME $ 10,088,953 $ 5,161,673 $ 539,331 ============ ============ ============ NET INCOME ALLOCATED TO GENERAL PARTNER $ 112,888 $ 144,640 $ 26,967 ============ ============ ============ NET INCOME ALLOCATED TO LIMITED PARTNERS $ 9,976,065 $ 5,017,033 $ 512,364 ============ ============ ============ PER UNIT: NET INCOME BEFORE EXTRAORDINARY ITEM $ 4,565.70 $ 2,359.35 $ 234.49 EXTRAORDINARY ITEM -- (63.23) -- ------------ ------------ ------------ NET INCOME $ 4,565.70 $ 2,296.12 $ 234.49 ============ ============ ============
See Notes to Financial Statements -3- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
1998 1997 1996 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 10,088,953 $ 5,161,673 $ 539,331 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sale of property (9,788,968) (4,953,337) -- Extraordinary Item - Loss on extinguishment of debt -- 142,121 -- Depreciation and amortization 550,213 803,521 980,071 Decrease (increase) in: Receivables and other assets 4,274 11,656 14,121 Escrows 96,417 113,801 (6,364) Increase (decrease) in: Accounts payable 221,329 (48,397) 13,264 Security deposits (56,358) (51,100) (2,409) Accrued expenses (93,943) (289,672) 33,101 ------------ ------------ ------------ Net cash provided by operating activities 1,021,917 890,266 1,571,115 ------------ ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property and equipment 14,168,142 8,365,575 -- Purchase of property and equipment (44,278) (371,752) (501,083) ------------ ------------ ------------ Net cash provided (used) by investing activities 14,123,864 7,993,823 (501,083) ------------ ------------ ------------ CASH FROM FINANCING ACTIVITIES: Distributions to partners (11,733,442) (3,698,586) (822,333) Payments on mortgages and contracts for deed (3,891,271) (5,479,757) (290,494) Prepayment penalties on mortgages -- (52,235) -- Payments for debt financing costs -- (26,688) -- ------------ ------------ ------------ Net cash used by financing activities (15,624,713) (9,257,266) (1,112,827) ------------ ------------ ------------ DECREASE IN CASH AND CASH EQUIVALENTS (478,932) (373,177) (42,795) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 628,333 1,001,510 1,044,305 ------------ ------------ ------------ CASH AND CASH EQUIVALENTS - END OF YEAR $ 149,401 $ 628,333 $ 1,001,510 ============ ============ ============ CASH PAID FOR INTEREST $ 654,540 $ 942,224 $ 1,188,805 ============ ============ ============
See Notes to Financial Statements -4- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP CHANGES IN PARTNERS' EQUITY (DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 GENERAL LIMITED PARTNER'S PARTNERS' EQUITY EQUITY (DEFICIT) (DEFICIT) TOTAL ------------ ------------ ------------ PARTNERS' DEFICIT DECEMBER 31, 1995 $ (521,918) $ (424,041) $ (945,959) NET INCOME 26,967 512,364 539,331 DISTRIBUTIONS (41,117) (781,216) (822,333) ------------ ------------ ------------ PARTNERS' DEFICIT DECEMBER 31, 1996 (536,068) (692,893) (1,228,961) NET INCOME 144,640 5,017,033 5,161,673 DISTRIBUTIONS (71,486) (3,627,100) (3,698,586) ------------ ------------ ------------ PARTNERS' EQUITY (DEFICIT) DECEMBER 31, 1997 (462,914) 697,040 234,126 NET INCOME 112,888 9,976,065 10,088,953 DISTRIBUTIONS (168,229) (11,565,213) (11,733,442) ------------ ------------ ------------ PARTNERS' EQUITY (DEFICIT) DECEMBER 31, 1998 $ (518,256) $ (892,107) $ (1,410,363) ============ ============ ============ See Notes to Financial Statements -5- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998, 1997 AND 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of the Partnership - Griffin Real Estate Fund-II, A Limited Partnership (the Partnership), was organized on September 18, 1980 under the laws of the State of Minnesota. As of December 31, 1998 there are 2,200 limited partnership units authorized and 2,185 outstanding. Termination of Partnership - Effective February 28, 1999, the Partnership was terminated. A final liquidating distribution was made on February 18, 1999 to the general and limited partners. Statements of Cash Flows - For the purpose of the statements of cash flows, the Partnership considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents. Cash equivalents of $149,401 and $628,333 at December 31, 1998 and 1997, respectively, consist of government money market portfolios with banks and are recorded at cost which approximates market value. The Partnership places its temporary cash investments with high credit quality financial institutions. At times such investments may be in excess of the FDIC insurance limit. Use of Estimates - The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expense during the reported period. Actual results could differ from those estimates. Financial Instruments - The carrying amounts for all financial instruments approximates fair value. The carrying amounts for cash, receivables, accounts payable and accrued liabilities, and loans payable approximate fair value because of the short maturity of these instruments. The fair value of long-term debt approximates the current rates at which the Partnership could borrow funds with similar remaining maturities. Properties and Depreciation - Properties are stated at cost including capitalized acquisition fees and are depreciated using a straight-line method over the estimated useful lives of the related assets (buildings, 25 years; furnishings and equipment, 5 years). For income tax purposes, the Partnership depreciates the buildings over 15 to 19 years using the Accelerated Cost Recovery System. Building improvements made subsequent to January 1, 1987 are depreciated over 27.5 years using the Modified Cost Recovery System for tax purposes. Escrow Deposits - The escrow deposits consist of funds held for future payment of real estate taxes, insurance premiums and replacement reserves for major expenditures. Leases - Apartment leases are generally renewable on a six month to one year basis. -6- GRIFFIN REAL ESTATE FUND II, A LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998, 1997 AND 1996 Offering Costs - Expenses incurred in connection with the registration and offering of the partnership units syndication costs, including selling commissions and advertising, are recorded as a reduction of Partners' Equity. Such costs are not deductible for income tax purposes by the Partnership nor its partners. Debt Financing Costs - Costs incurred in connection with securing financing on Partnership properties have been capitalized and are being amortized on the straight-line basis over the remaining life of the related financing agreement. Income Taxes - The financial statements of the Partnership do not include a provision for income taxes as the income and losses of the Partnership are allocated to the individual partners for inclusion in their income tax returns. Net Income Per Limited Partnership Unit - The net income per limited partnership unit is computed by dividing the net income allocated to limited partners by the weighted average number of limited partnership units outstanding during the year. 2. ORGANIZATION The Limited Partnership Agreement and Certificate of Limited Partnership (Partnership Agreement) contains certain provisions, among others, described as follows: . The management and general responsibility of operating the Partnership business shall be vested exclusively in the general partner. . Profits, losses, and cash flow distributions, other than from refinancing or from the sale of Partnership properties, are allocated 95% to the limited partners and 5% to the general partner. . Net proceeds from refinancing or from the sale of property other than upon liquidation, less any necessary liability reserves or debt payments, will be distributed in the following order subject to the general partner receiving at least 1% of the distributions: .. First, to the limited partners to the extent that prior distributions are less than the original capital contribution plus 6% per annum (as defined in the Partnership Agreement); .. Second, any unpaid real estate commissions due to the general partner on the resale of the Partnership properties; .. Third, any remaining balance, 80% to the limited partners and 20% to the general partner. . The Partnership will terminate on December 31, 2021 or earlier upon the sale of substantially all of the properties or the occurrence of certain other events as stated in the Partnership Agreement. -7- GRIFFIN REAL ESTATE FUND II, A LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998, 1997 AND 1996 3. MORTGAGE NOTES PAYABLE Mortgage notes payable consist of the following at December 31: 1998 1997 ----------- ----------- Mortgage note (Olde English Village) monthly installments of $48,411 Principal and interest (8.051% at December 31, 1998) due July 1, 2000 $ 5,143,606 5,263,528 Mortgage note (Lunnonhaus) monthly installments of $31,166 including interest at 7%, due June 2014 -- 3,767,673 ----------- ----------- Total mortgage notes payable $ 5,143,606 $ 9,031,201 =========== =========== All property is pledged as collateral to the mortgage notes payable. Future principal maturities are as follows: 1999 $ 149,459 2000 4,994,147 ------------ Total $ 5,143,606 ============ During 1997, the Partnership extended the Olde English Village Mortgage Note. The loan amount is $5,600,000 with variable monthly installments of principal and interest. Interest is adjusted quarterly to 350 basis points above the Treasury yield. Although the mortgage note was due June 30, 1997, it carried an option, which the Partnership exercised, to extend the maturity date for an additional term of 3 years to July 1, 2000. The extension required an extension fee payment equal to 1/2 of 1% of the outstanding principal balance at the time of extension, or $26,688. The lender has the right to call the note upon certain events. The above debt is non-recourse to the individual partners. 4. RELATED PARTY TRANSACTIONS The partners of Investment Associates, the general partner of the Partnership, are also owners and employees of Griffin Companies, a Minnesota corporation. Accounts payable - affiliates consists of unpaid management fees to and advances from Griffin Companies. The following is a summary of approximate fees incurred for the years ended December 31: 1998 1997 1996 --------- --------- --------- Property management fee $ 219,394 $ 259,996 $ 302,319 Major improvement supervisory fees 24,198 68,502 73,408 -8- GRIFFIN REAL ESTATE FUND II, A LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998, 1997 AND 1996 5. SALE OF PROPERTIES The Partnership sold Lunnohaus Village Apartments on August 26, 1998. The Partnership also sold the Candleridge Apartments and Villas of Patricia Park Apartments on May 27, 1997. Details of these sales are as follows:
1998 1997 ------------ ------------------------------ Lunnonhaus Villas of Village Candleridge Patricia Park Apartments Apartments Apartments ------------ ------------ ------------ Sales price $ 14,200,000 $ 4,700,000 $ 3,700,000 Cost basis (4,375,498) (1,932,061) (1,480,176) Selling expenses (35,534) (14,416) (20,010) ------------ ------------ ------------ Gain on sale $ 9,788,968 $ 2,753,523 $ 2,199,814 ============ ============ ============ Debt extinguishment $ 3,692,651 $ 2,799,008 $ 2,424,539 ============ ============ ============ Extraordinary loss on debt extinguishment: Write off unamortized loan costs $ -- $ 46,946 $ 42,940 Prepayment penalty $ -- 27,990 24,245 ------------ ------------ ------------ $ -- $ 74,936 $ 67,185 ============ ============ ============
On January 14, 1999 the Partnership sold its remaining property for $9,000,000 with sales costs of $23,810. 6. TAXABLE INCOME The net income shown on the financial statements is reconciled to the taxable income as follows:
1998 1997 1996 ------------ ------------ ------------ Net income per financial statements $ 10,088,953 $ 5,161,673 $ 539,331 Excess of tax depreciation under (over) book depreciation 429,668 278,673 (60,174) Gain on sale of property for tax purposes in excess of gain for financial statements 2,735,095 2,140,024 -- Rental income for financial statements in excess of (less than) rental income for tax purposes (93,275) 21,752 3,319 ------------ ------------ ------------ Taxable income $ 13,160,441 $ 7,602,122 $ 482,476 ============ ============ ============
-9- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998, 1997, AND 1996 7. PARTNERS' DEFICIT RECONCILIATION Reconciliation of financial statement equity (deficit) to tax return deficit is as follows:
1998 1997 1996 ------------ ------------ ------------ Equity (deficit) per financial statements $ (1,410,363) $ 234,126 $ (1,228,961) Cumulative excess of tax depreciation over financial statement depreciation (2,179,958) (5,344,720) (7,763,417) Prepaid rent recognized as income for tax purposes 2,543 95,818 74,066 ------------ ------------ ------------ Deficit per tax return $ (3,587,778) $ (5,014,776) $ (8,918,312) ============ ============ ============
-10- GRIFFIN REAL ESTATE FUND-II, A LIMITED PARTNERSHIP REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1998 SCHEDULE III
Costs Capitalized Subsequent Initial Cost to to Gross Amount at Which Carried Partnership (a) Acquisition at Close of Period (b) (c) --------------- ---------- ----------------------------- Date Bldgs/ Land/Bldg Buildings Accumulated of Date Description Encumbrances Land Improve Improve Land & Improve Total Deprec.(d) Const Acquired ---------- -------- ---------- ---------- -------- ---------- ---------- ---------- ---- ------- W. DES MOINES, IA Olde English Village $5,143,606 $815,329 $6,745,860 $1,645,656 $815,329 $8,391,516 $9,206,846 $5,071,953 1972 8/31/82 ---------- -------- ---------- ---------- -------- ---------- ---------- ---------- ---- ------- Total $5,143,606 $815,329 $6,745,860 $1,645,656 $815,329 $8,391,516 $9,206,846 $5,071,953 ========== ======== ========== ========== ======== ========== ========== ==========
(a) The cost to the Partnership represents the original purchase price of the properties. (b) The aggregate cost of real estate owned at December 31, 1998 for federal income tax purposes is $9,206,846. (c) Reconciliation of property:
1996 1997 1998 ------------ ------------ ------------ Balance at beginning of period $ 26,266,330 $ 26,767,413 $ 19,299,546 Additions during period Improvements 501,083 371,752 44,278 Dispositions -- (7,839,619) (10,136,978) ------------ ------------ ------------ Balance at end of period $ 26,767,413 $ 19,299,546 $ 9,206,846 ============ ============ ============
(d) Reconciliation of accumulated depreciation:
Balance at beginning of period $ 13,062,669 $ 13,959,999 $ 10,292,116 Depreciation expense for perio 897,330 759,499 541,317 Dispositions -- (4,427,382) (5,761,480) ------------ ------------ ------------ Balance at end of period $ 13,959,999 $ 10,292,116 $ 5,071,953 ============ ============ ============
Depreciation calculated on 5-27.5 year lives using the straight-line method on real porperty and accelerated for personal property. -11- EX-27 3 FINANCIAL DATA SCHEDULE
5 YEAR DEC-31-1998 DEC-31-1998 149,401 0 15,510 0 0 293,005 9,206,846 5,071,953 4,441,242 857,458 4,994,147 0 0 0 (1,410,363) 4,441,242 0 13,065,661 0 0 2,387,567 0 589,141 10,088,953 0 10,088,953 0 0 0 10,088,953 4,565.70 0 THIS ENTITY IS A LIMITED PARTNERSHIP. THE OTHER STOCKHOLDERS' EQUITY LINE REPRESENTS TOTAL PARTNERSHIP EQUITY. THE EPS-PRIMARY LINE REPRESENTS NET INCOME PER LIMITED PARTNERSHIP UNIT.
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