ITEM 1: BUSINESS
The Registrant, Realmark Property Investors Limited Partnership IV (the "Partnership"), is a Delaware limited partnership organized in February 1985, pursuant to an Agreement and Certificate of Limited Partnership (the "Partnership Agreement"), under the Revised Delaware Uniform Limited Partnership Act. The Partnership's general partners are Realmark Properties, Inc. (the "Corporate General Partner"), a Delaware corporation, and Joseph M. Jayson (the "Individual General Partner").
The Registrant commenced the public offering of its limited partnership units, registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, on April 22, 1985, and concluded the offering on June 22, 1986, having raised a total of $23,365,900 before deducting sales commissions and expenses of the offering.
The Partnership's primary business is to own and operate income-producing real property for the benefit of its partners. As of December 31, 2001, the Partnership has disposed of its last property, Andover Park which was sold on August 16, 2001, for cash of $5,200,000 resulting in a net gain of approximately $2,400,000 to the Partnership for tax purposes. Accordingly, the Partnership is in the process of liquidating.
The business of the Partnership is not seasonal. 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.
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.
ITEM 2:
ITEM 2: PROPERTIES
As of December 31, 2001, the Partnership did not own any property investments.
ITEM 3:
ITEM 3: LEGAL PROCEEDINGS
As previously reported, the Partnership, as a nominal defendant, the General Partners of the Partnership and of affiliated public partnerships, (the "Realmark Partnerships") and the officers and directors of the Corporate General Partner, as defendants, had been involved in a class action litigation at the state court level regarding the payment of fees and other management issues.
On August 29, 2001, the parties entered into a Stipulation of Settlement (the "Settlement"). On October 4, 2001, the Court issued an "Order Preliminary Approving Settlement" (the "Hearing Order") and on November 29, 2001, the court issued an "Order and Final Judgment Approving Settlement and Awarding Fees and Expenses" and dismissing the complaints with prejudice. The Settlement provided, among other things, that:
o $1 million of the amount owed to the General Partners and/or their affiliates by Realmark Property Investors Limited Partnership - IV be forgiven.
o All of the Realmark Partnerships' properties be disposed of. The General Partners will continue to have primary authority to dispose of the other Partnerships' properties. If either (i) the General Partners have not sold 50% of the Partnerships' properties (by value) by April 2, 2002 or (ii) the General Partners have not sold 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:
ITEM 4: SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5:
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 2,436 record holders of units of limited partnership interest. In December 2001, the Partnership made a final distribution of its previously undistributed cash reserves. This distribution was made in accordance with the settlement of the lawsuit (Item 3). A total of $903,000 was distributed on behalf of the Limited Partners. Of this amount, $301,000 was paid to legal counsel in accordance with the settlement of the lawsuit and $602,000 was distributed directly to record holders of units of limited partnership interest.
ITEM 6:
ITEM 6: SELECTED FINANCIAL DATA
(1) The Partnership began reporting on the liquidation basis of accounting effective October 1, 2001. Therefore, operations for the year ended December 31, 2001 are reported on the consolidated statement of changes in net assets in liquidation for the period from October 1, 2001 to December 31, 2001, while operations for the period from January 1, 2001 to September 30, 2001 and for the years ended December 31, 2000, 1999, 1998 and 1997 are reported on the going concern basis on the consolidated statement of operations.
ITEM 7:
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources:
Since 1998, the Partnership's only remaining property, Andover Park, had been actively marketed for sale. On August 16, 2001, the Partnership sold Andover Park to an unaffiliated entity, for cash of $5,200,000. After satisfaction of the $3,924,000 mortgage loan on the property and payment of closing costs, the net proceeds available amounted to approximately $950,000. Those proceeds enabled the partnership to make a distribution to Limited Partners in the last quarter of 2001 of $602,000 after a payment of $301,000 to the plaintiff's counsel in accordance with the settlement of the lawsuit (Item 3). The remaining net proceeds are required to pay the estimated payables and costs of operating the partnership during liquidation.
Prior to the sale of Andover Park, the Partnership had continued to incur cash flow deficits and large losses from operations. The Corporate General Partner and its affiliates had regularly advanced funds and/or not taken payment of fees otherwise entitled to whenever it was necessary to cover cash shortfalls. The Corporate General Partner was under no obligation to make the advances. In accordance with the final settlement of the lawsuit, the Corporate General Partner and its affiliates were required to forgive up to $1,000,000 in affiliated party advances. An additional $654,641 was required to be forgiven by the Corporate General Partner and its affiliates because the Partnership did not have sufficient funds to satisfy this liability. Because of the negative cash flows generated by the Partnership over the years, the Partnership did not make any distributions to the partners in more than ten years prior to 2001.
Limited Partners should be aware that it is possible that they will receive an allocation of income from gain on sale of the Partnerships' properties on which they will be required to pay income taxes and there is no assurance that the distribution detailed above 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:
As a result of the sale of the sole remaining property, Andover Park, and the establishment of a plan of liquidation, the Partnership began reporting on the liquidation basis of accounting effective October 1, 2001. Therefore, operations for the period October 1, 2001 to December 31, 2001 are reported on the consolidated statement of changes in net assets in liquidation while the operations for the period January 1, 2001 to September 30, 2001 and for the years ended December 31, 2000 and 1999 are reported on the going concern basis on the consolidated statement of operations.
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
As discussed above, the Partnership began reporting on a liquidation
basis of accounting on October 1, 2001. The decrease in most components of the consolidated statement of operations for the period January 1, 2001 to September 30, 2001 was a result of the remaining property, Andover Park, being sold on August 16, 2001 and rental operations ceasing at that time. There were no individually significant factors which caused changes in revenues and expenses as of September 30, 2001 when compared to the year ended December 31, 2000 other than the sale of Andover Park.
2000 as compared to 1999
In 2000, when comparing the operations of Andover Park, rental income increased approximately 10% due to occupancy remaining stable after an increase in occupancy in 1999.
Total expenses, excluding Woodbridge Apartments, decreased approximately 10% for the year ended December 31, 2000 as compared to 1999. Property operations expense, excluding Woodbridge Apartments, decreased approximately 23% primarily due to extensive exterior painting of Andover Park in 1999. Interest expense decreased due to the related liabilities being paid down from the sale of Woodbridge Apartments, which occurred prior to 1999. Depreciation expense increased due to Andover resuming depreciation in the second quarter of 2000 after no depreciation was recorded during 1999 when the property was considered to be "held for sale". Other administrative expenses increased approximately $51,000 due to increased professional fees, while administrative expense to affiliated parties decreased approximately 47% due to a decrease in costs as a result of a reduction in the number of properties owned by the Partnership.
ITEM 7A:
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8:
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Listed under Item 14 of this report.
ITEM 9:
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None. PART III
ITEM 10:
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.
Joseph M. Jayson and Judith P. Jayson, are married to each other.
The Directors and Executive Officers of the Corporate General Partner and their principal occupations and affiliations during the last five years or more are as follows:
Joseph M. Jayson, age 63, is Chairman, Director and sole stockholder of J. M. Jayson and Company, Inc. and certain of its affiliated companies: U.S. Apartments LLC, Westmoreland Capital Corporation, Oilmark Corporation and U.S. Energy Development Corporation. In addition, Mr. Jayson is Chairman of Realmark Corporation, Chairman, President and Treasurer of Realmark Properties, Inc., wholly-owned subsidiaries of J. M. Jayson and Company, Inc. and co-general partner of Realmark Property Investors Limited Partnership, Realmark Property Investors Limited Partnership-II, Realmark Property Investors Limited Partnership-III, Realmark Property Investors Limited Partnership-IV, Realmark Property Investors Limited Partnership-V, Realmark Property Investors Limited Partnership-VI A, and Realmark Property Investors Limited Partnership-VI B. Mr. Jayson has been in the real estate business for the last 39 years and is a Certified Property Manager as designated by the Institute of Real Estate Management ("I.R.E.M."). Mr. Jayson received a B.S. Degree in Education in 1961 from Indiana University , a Masters Degree from the University of Buffalo in 1963, and has served on the Educational Faculty of the Institute of Real Estate Management. Mr. Jayson has for the last 39 years been engaged in various aspects of real estate brokerage and investment. He brokered residential properties from 1962 to 1964, commercial investment properties from 1964 to 1967, and in 1967 left commercial real estate to form his own investment firm. Since that time, Mr. Jayson and J. M. Jayson & Company, Inc. have formed or participated in various ways with forming over 30 real estate related limited partnerships. For the past 20 years, Mr. Jayson and an affiliate have also engaged in developmental drilling for gas and oil.
Judith P. Jayson, age 61, is currently Vice President and a Director of Realmark Properties, Inc. She is also a Director of the property management affiliate, Realmark Corporation. Mrs. Jayson has been involved in property management for the last 30 years and has extensive experience in the hiring and training of property management personnel and in directing, developing and implementing property management systems and programs. Mrs. Jayson, prior to joining the firm in 1973, taught business in the Buffalo, New York High School System. Mrs. Jayson graduated from St. Mary of the Woods College in Terre Haute, Indiana, with a degree in Business Administration.
ITEM 11:
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:
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. The General Partners, and the executive officers of the Corporate General Partner, as of December 31, 2001, owned 38.1 units of limited partnership interest. The General Partners and affiliates received their proportionate share, as limited partners, of the distribution paid in the last quarter of 2001.
ITEM 13:
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The properties of the Partnership's subsidiaries were 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 were 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".
(b) Reports on Form 8-K
None.
(c) Exhibits
2. Plan of acquisition, reorganization, arrangement, liquidation, or succession
(a) Stipulation of Settlement Agreement dated August 29, 2001 is filed herewith.
(b) Order and Final Judgment Approving Settlement and Awarding Fees and Expenses dated November 29, 2001 is filed herewith.
4. Instruments defining the rights of security holders, including indentures.
(a) First Amended and Restated Agreement and Certificate of Limited Partnership filed with the Registration Statement of the Registrant Form S-11, filed February 14, 1985, and subsequently amended, incorporated herein by reference.
(b) Partnership Agreement included with the Registration Statement of the Registrant as filed and amended to date 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) Joint Venture Agreement with Realmark Property Investors Limited Partnership VI - B as filed and amended to date incorporated herein by reference.
(c) Property sale agreement with an unrelated third-party included with the Partnership's report on Form 8-K on August 31, 2001 is incorporated by reference.
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 - IV
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 Director
INDEPENDENT AUDITOR'S REPORT ----------------------------
The Partners Realmark Property Investors Limited Partnership - IV:
We have audited the accompanying consolidated balance sheet of Realmark Property Investors Limited Partnership - IV and Subsidiary as of December 31, 2000, and the related consolidated statements of operations, partners' deficit, and cash flows for each of the two years in the period ended December 31, 2000, and for the period January 1, 2001 to September 30, 2001. In addition, we have audited the consolidated statement of net assets in liquidation as of December 31, 2001, and the related consolidated statement of changes in net assets in liquidation for the period October 1, 2001 to December 31, 2001. Our audits also included the financial statement schedule listed in the index at Item 14.