Item 1. Business . . . . . . . . . . . . . . . . . . 1
Item 2.
Item 2. Properties . . . . . . . . . . . . . . . . . 5
Item 3.
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not subject to any material pending legal proceedings.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the nine months ended September 30, 1998 and year ended December 31, 1997.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS AND RELATED SECURITY HOLDER MATTERS
As of September 30, 1998, there were 799 record holders of Interests of the Partnership. There is no public market for Interests. Upon request, the General Partners will endeavor to assist an investor desiring to transfer his Interests and may utilize the services of broker-dealers in this regard. The price to be paid for the Interests as well as the commission to be received by the broker-dealer will be subject to negotiation by the investor. The General Partners will not redeem or repurchase Interests.
Reference is made to Item 6
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On October 23, 1985, the Partnership commenced an offering of $25,000,000 (subject to increase by up to $15,000,000) of Limited Partnership Interests pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The offering of Limited Partnership Interests terminated April 15, 1986. A total of 25,015 Interests were assigned to the public between October 23, 1985 and May 16, 1986.
After deducting selling expenses and other offering costs, the Partnership had approximately $22,500,000 with which to make investments in income-producing commercial and residential real property, to pay legal fees and other costs (including acquisition fees) related to such investments, and to satisfy working capital requirements. A portion of the proceeds was utilized to acquire the properties described in Item 1.
The Partnership distributed $510 per Limited Partnership Interest during 1996 which included a special distribution (of the net proceeds from (1) the sale of 1880 Country Farm Road Facility and (2) the collection of the note receivable) equal to $450 per Limited Partnership Interest. A distribution of $75 per Limited Partnership Interest from the net sale proceeds at the 5521 Meadowbrook Court Distribution Center was made during 1997. A final liquidating distribution of $136 per Limited Partnership Interest was made on July 15, 1998.
On May 21, 1998, the Partnership sold Oak View Apartments for $3,100,000 in an all cash transaction. As described in Note 2(B) of Notes to Financial Statements, the Partnership received $2,961,076 (net of closing costs). The net proceeds and a majority of the cash reserves of the Partnership were distributed to the partners via a special distribution of $136 per Limited Partnership Interest on July 15, 1998.
On August 6, 1997, the Partnership sold the 5521 Meadowbrook Court Distribution Center for $2,150,000 in an all cash transaction. As described in Note 2(c) of Notes to Financial Statements, the Partnership received $1,995,131 (net of closing costs). The Partnership distributed these proceeds to the partners via a special distribution on September 5, 1997.
On September 20, 1996, the Partnership sold the 1880 Country Farm Road Facility for $6,575,000 in an all cash transaction. As described in Note 2(e) of Notes to Financial Statements, the Partnership received $6,239,950 (net of closing costs). The Partnership distributed the majority of these proceeds to the partners via a special distribution on October 1, 1996.
On July 2, 1996, the note receivable was prepaid. The Partnership distributed the proceeds from the collection of this note on October 1, 1996.
RESULTS OF OPERATIONS
1998 COMPARED TO 1997 ---------------------
At September 30, 1998, the Partnership has sold all of its investment properties.
The decrease in rental income for the nine months ended September 30, 1998 compared to 1997 of approximately $463,600 (65.6%) is primarily due to: (1) no rental income generated at the Meadowbrook Court Distribution Center due to its being sold in August, 1997 ($100,200); and (2) less rental income at Oak View Apartments ($363,400) due to its being sold in May, 1998.
Changes to tenants have decreased $109,065 for the nine months ended September 30, 1998 as compared to 1997 due to the sale of the Meadowbrook Court Distribution Center in August 1997.
Interest income increased approximately $7,400 (24%) for the nine months ended September 30, 1998 compared to 1997. This increase is primarily attributable to increased amounts held in interest bearing short- term asset management accounts.
Other income decreased approximately $4,800 (20.4%) for the nine months ended September 30, 1998 as compared to 1997. This decrease is primarily attributable to less other income generated at Oak View Apartments due to its being sold in May, 1998.
Property operating expenses decreased approximately $291,400 (67.7%) for the nine months ended September 30, 1998 compared to 1997. This decrease is primarily due to decreases in property operating expenses at Oak View Apartments (approximately $168,800) due to its being sold in May, 1998 and at Meadowbrook Court Distribution Center (approximately $136,600) due to its being sold in August, 1997.
The decrease in depreciation expense of approximately $44,100 for the nine months ended September 30, 1998 compared to 1997 is primarily attributable to no depreciation charged at Oak View Apartments due its being held for sale in accordance with SFAS No. 121 which was adopted as of July 1, 1997.
Management fees paid to an affiliate of the General Partner decreased approximately $25,200 (66.4%) for the nine months ended September 30, 1998 as compared to 1997. This decrease is primarily attributable to the: (1) sale of Meadowbrook Court Distribution Center (approximately $6,200); and (2) the sale of Oakview Apartments (approximately $19,000).
Professional services have remained essentially flat for the nine months ended September 30, 1998 compared to 1997.
General and administration expenses have decreased approximately $25,000 (27.2%) for the nine months ended September 30, 1998 as compared to 1997. This decrease is primarily due to: (1) a decrease in overhead charges ($20,000); (2) decreases in stationery and supplies ($1,000); (3) a decrease in registered agent fees ($500); and (4) a decrease in the Illinois Replacement Tax ($1,300).
1997 COMPARED TO 1996 ---------------------
At December 31, 1997, the Partnership owned one investment property, consisting of an apartment complex located near Augusta, Georgia.
The decrease in rental income for the twelve months ended December 31, 1997 compared to 1996 of approximately $193,400 (21.5%) is primarily due to: 1) no rental income generated during 1997 at 1880 Country Farm Drive Facility ($183,300) due to its being sold in September, 1996; and 2) less rental income at the Meadowbrook Court Distribution Center ($43,700) primarily due to its being sold in August, 1997. These decreases were partially offset by an increase in rental income at Oak View Apartments ($33,600) due to an increase in occupancy.
The decrease in charges to tenants for the twelve months ended December 31, 1997 compared to 1996 of approximately $6,500 (5.7%) is primarily due to the 1997 sale of the 5521 Meadowbrook Court Distribution Center.
Interest income decreased approximately $283,600 for the twelve months ended December 31, 1997 compared to 1996. This decrease is primarily attributable to early repayment of the note receivable in July 1996.
Other income increased approximately $1,500 (7%) for the twelve months ended December 31, 1997 as compared to 1996. This increase is primarily due to an increase in tenant services and charges at Oak View Apartments.
Property operating expenses decreased approximately $74,700 (14.8%) for the twelve months ended December 31, 1997 compared to 1996. This decrease was primarily due to a decrease in property operating expenses at Meadowbrook Court Distribution Center due to its being sold in August, 1997.
The decrease in depreciation expense of approximately $169,900 (79.4%) for the twelve months ended December 31, 1997 compared to 1996 is primarily attributable to: 1) no depreciation recorded in 1997 on the 1880 Country Farm Drive Facility due to its being sold in 1996 (approximately $39,600); 2) less depreciation charged at the Meadowbrook Court Distribution Center (approximately $82,900) due to its being held for sale in accordance with SFAS No. 121; and 3) less depreciation charged at Oak View Apartments (approximately $47,400) also due to its being held for sale in accordance with SFAS No. 121 which was adopted as of July 1, 1997.
Management fees paid to an affiliate of the General Partner decreased approximately $9,400 (19.8%) for the twelve months ended December 31, 1997 as compared to 1996. This decrease is primarily attributable to: 1) the sale of 1880 Country Farm Drive Facility (approximately $2,000); and 2) less rental income at Meadowbrook Court Distribution Center (approximately $9,400). These decreases were partially offset by an increase in rental income at Oak View Apartments (approximately $2,000).
Professional services have remained essentially unchanged for the twelve months ended December 31, 1997 as compared to 1996.
General and administration expenses increased approximately $15,500 (20.3%) for the twelve months ended December 31, 1997 as compared to 1996. This increase is primarily due to: 1) an increase in costs incurred for mandated electronic filings of reports with the Securities and Exchange Commission (approximately $5,800) and 2) increases in overhead charges (approximately $8,100).
For the twelve months ended December 31, 1997 net operating income was $127,562 or $5.05 per limited partnership interest. Included in net operating income is a provision for loss of $79,619 made in March, 1997 in anticipation of the August, 1997 sale of the 5521 Meadowbrook Court Distribution Center.
INFLATION
Since inflation levels in the United States have been relatively low over the twelve years the Partnership has been in existence, inflation and changing prices have had a minimal effect on income from operations.
Inflation in future periods is not applicable since the Partnership has sold all of its properties and has terminated operations.
YEAR 2000
The General Partner has undertaken a review of its operations that may be affected by the YEAR 2000 problem. The Partnership has sold its remaining asset and terminated operations during 1998. Therefore, it is the opinion of the General Partner that there will be no effect on its operating performance or results of operations from the YEAR 2000 problem.
ITEM 7A.
ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership liquidated on September 30, 1998. As a result, there is no meaningful disclosure for this item.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
LINCAM PROPERTIES LTD. SERIES 85 (a limited partnership)
INDEX -----
PAGE ----
Independent Auditors' Report. . . . . . . . . . . . . . . 12
Balance Sheets, September 30, 1998 and December 31, 1997 . . . . . . . . . . . . . . . . . . . 13
Statements of Operations, nine months ended September 30, 1998 and years ended December 31, 1997 and 1996. . . . . . . . . . . . . . . . . . . . . . . . 15
Statements of Partners' Capital Accounts (Deficits), nine months ended September 30, 1998 and years ended December 31, 1997 and 1996. . . . . . . 16
Statements of Cash Flows, nine months ended September 30, 1998 and years ended December 31, 1997 and 1996 . . . . 17
Notes to Financial Statements . . . . . . . . . . . . . . 19
SCHEDULE --------
Real Estate and Accumulated Depreciation. . . . . . . . . III
SCHEDULES NOT FILED:
All schedules other than those indicated in the above index have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.
INDEPENDENT AUDITORS' REPORT
The Partners LincAm Properties Ltd. Series 85:
We have audited the financial statements of LincAm Properties Ltd. Series 85 (a limited partnership) as listed in the accompanying index. In connection with our audits of the financial statements, we also have audited the financial statement schedule as listed in the accompanying index. These financial statements and financial statement schedule are the responsibility of the General Partners of the Partnership. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the General Partners, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of LincAm Properties Ltd. Series 85 as of September 30, 1998 and December 31, 1997, and the results of their operations and their cash flows for the nine months ended September 30, 1998 and the years ended December 31, 1997 and 1996 in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
/S/ KPMG Peat Marwick LLP
Chicago, Illinois November 5, 1998
LINCAM PROPERTIES LTD. SERIES 85 (a limited partnership)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND YEARS ENDED DECEMBER 31, 1997 AND 1996
(1) ORGANIZATION AND BASIS OF ACCOUNTING
The Partnership was formed August 9, 1985 by filing a Certificate of Limited Partnership under the Uniform Limited Partnership Act of the State of Illinois. The initial capital was $3,000 including capital contributions of $2,000 by the General Partners and the subscription and payment for one Limited Partnership Interest of $1,000. The Agreement of Limited Partnership authorized the issuance of up to 25,000 additional Limited Partnership Interests (subject to increase by up to 15,000 Interests) pursuant to a public offering. A total of 25,015 Interests were subscribed for and issued between October 23, 1985 and May 16, 1986.
The Partnership has sold all of its properties and has distributed the sale proceeds to the partners. The final distribution to the partners was made on July 15, 1998. Operations ceased in July, 1998 following the sale of the Oak View Apartments. The Partnership is being terminated as of September 30, 1998.
For purposes of the statement of cash flows, the Partnership considers all investments purchased with original maturity of three months or less to be cash equivalents.
The Partnership records are maintained on the accrual basis of accounting as adjusted for Federal income tax reporting purposes. The accompanying financial statements have been prepared from such records after making appropriate adjustments to reflect the Partnership's accounts in accordance with generally accepted accounting principles (GAAP). Such adjustments are not recorded on the records of the Partnership. The net effect of these items is summarized below:
LINCAM PROPERTIES LTD. SERIES 85 (a limited partnership)
NOTES TO FINANCIAL STATEMENTS - (Continued)
The net income per Limited Partnership Interest as presented is based upon the Limited Partnership Interests outstanding at the end of the periods (25,016).
No provision for Federal income taxes has been made as any liability for such taxes is that of the partners rather than the Partnership.
Management of the Partnership has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates.
On January 1, 1996, the Partnership adopted Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". Properties held for sale are reflected at the lower of historical cost or estimated fair value less anticipated selling costs. In addition, properties held for sale are not depreciated.
Losses in carrying values of investment assets are provided by management when the losses become apparent and the investment asset is considered impaired. Management evaluated its investment properties at least quarterly to assess whether any impairment indications were present, comparing undiscounted future cash flows with the carrying amount of the asset. If any investment asset was considered impaired, a loss was provided to reduce the carrying value of the property to its estimated value.
The 5521 Meadowbrook Court Distribution Center was sold in August, 1997. The property was determined to be "held for sale" as of January 1, 1997. In anticipation of the sale, the Partnership made a provision for loss of $79,619 to reduce the carrying amount of the property to its estimated value.
The 1880 Country Farm Road Facility was sold in September, 1996. In anticipation of the sale, the Partnership, in June 1996, made a provision for loss of $180,534 to reduce the carrying amount of the facility to its estimated value. Management believes that no other assets are impaired; therefore, no other such losses have been required to be recognized or provided for in the accompanying financial statements.
(2) INVESTMENT PROPERTIES
(a) General
The Partnership has acquired, either directly or through a joint venture (Note 3), three apartment complexes, a distribution center, and a warehouse/research facility. One apartment complex was sold in 1993. Another apartment complex was sold in 1995. The warehouse/research facility was sold in 1996. The distribution center was sold in August 1997, and the last apartment complex was sold in May 1998. Operations have been terminated.
Depreciation on the investment properties acquired has been provided over the estimated useful lives of five to forty years using the straight- line method.
Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated over their estimated useful lives.
LINCAM PROPERTIES LTD. SERIES 85 (a limited partnership)
NOTES TO FINANCIAL STATEMENTS - (Continued)
(b) Oak View Apartments
On September 30, 1986, the Partnership acquired for $3,604,460 the Oak View Apartments, a 124 unit apartment complex located in the Augusta, Georgia metropolitan area and title to the approximately twenty acre parcel of land on which the complex is situated.
The property was classified to be "held for sale" as of July 1, 1997.
An affiliate of the General Partners of the Partnership managed the apartment complex for a fee equal to 5% of the gross revenue of the property.
On May 21, 1998, the Partnership sold this apartment complex and the land on which it is located for $3,100,000 in an all cash transaction. The Partnership received $2,961,076 after closing costs, commissions and prorations. The Partnership used those proceeds and most of its cash reserves to make a final liquidating distribution in the amount of $3,436,541 ($136 per limited partnership unit) to its partners on July 15, 1998.
(c) 5521 Meadowbrook Court Distribution Center
On January 12, 1987, the Partnership acquired for $2,492,500 an approximately 50,000 square foot distribution center and the approximately 110,000 square foot parcel of land on which the building is situated. The property is located at 5521 Meadowbrook Court in Rolling Meadows, Illinois, and had been leased to Komori America , Inc. since February 11, 1991. Komori America, Inc.'s lease expired on May 31, 1996 at which time they vacated the 50% of the distribution center they had occupied.
On January 11, 1994, the Partnership leased 25,000 square feet of the distribution center to Samsung America, Inc. On November 29, 1996, the tenant amended the lease to occupy an additional 25,000 square feet and to extend the term of the lease until July 31, 2002. Effective March 1, 1997, the tenant occupies the entire distribution center and is responsible for all operating expenses including insurance and real estate taxes during the term of the lease.
An affiliate of the General Partners managed the distribution center for a fee equal to 3% of the gross revenue of the property.
On January 1, 1997, this property was classified to be "held for sale". On August 6, 1997, the Partnership sold this facility and the land on which the building is situated for $2,150,000 in an all cash transaction. The Partnership received $1,995,131 after closing costs, prorations and commissions. On September 5, 1997, the Partnership made a special distribution of $75 per limited partnership interest to its partners.
(d) Walker's Mark Apartments
On July 29, 1987, the Partnership acquired for $5,950,000 the Walker's Mark Apartments, a 164 unit apartment complex located in Dallas, Texas, and title to the approximately seven acre parcel of land on which the complex is situated.
On August 19, 1993, the Partnership sold this apartment complex for $6,585,000. The Partnership received $911,617 in cash (after closing costs and commissions) and a note receivable for $5,485,000 which was secured by a first mortgage on the property. Through June 1996, the Partnership received monthly payments of interest only, at an annual rate of 7.5% with
LINCAM PROPERTIES LTD. SERIES 85 (a limited partnership)
NOTES TO FINANCIAL STATEMENTS - (Continued)
the note balance due October 1, 1997. Pursuant to the note agreement the buyer is required to deposit with the seller monthly payments for real estate taxes.
On July 2, 1996, the buyer prepaid the note in full. The Partnership distributed the proceeds from the collection of the note on October 1, 1996.
(e) 1880 Country Farm Road Facility
On July 1, 1988, the Partnership acquired for $7,840,000 an approximately 162,000 square foot office and warehouse/research building and title to the approximately 354,000 square foot parcel of land on which the building is situated. The property is located at 1880 Country Farm Road in Naperville, Illinois, and was leased to Babson Bros. Co. for a ten- year lease term which commenced September 1987. The terms of the lease provided that the tenant be responsible for payment of all operating expenses, including real estate taxes, during the term of the lease.
An affiliate of the General Partners managed the property for a fee equal to 1% of the gross revenue of the property.
On September 20, 1996, the Partnership sold this facility and the land on which the building is situated for $6,575,000 in an all cash transaction. The Partnership received $6,239,950 (after closing costs and commissions). The Partnership used these proceeds and the proceeds from the collection of the $5,485,000 note from the sale of the Walker's Mark Apartments to make a special distribution of $450 per limited partnership interest on October 1, 1996.
(3) VENTURE AGREEMENT - LINCAM BARTON VENTURE
On May 21, 1986, the Partnership entered into a joint venture agreement with an affiliate of the General Partners of the Partnership to acquire a 60% interest in Barton Creek Landing Apartments, a 250 unit apartment complex located in Austin, Texas, and title to the approximately nineteen acre parcel of land on which the complex is situated. The Partnership and its venture partner made initial cash capital contributions of $2,496,000 and $1,664,000, respectively, to the joint venture partnership (the "Joint Venture"), which also received a loan from the Partnership's venture partner in the amount of $8,750,000. These funds were used to pay the property's purchase price of $12,500,000. On December 22, 1986, the Joint Venture replaced the loan with additional equity totalling $8,750,000 contributed to the Joint Venture by the Partnership and its venture partner in proportion to their respective ownership percentages.
Under the terms of the Joint Venture Agreement, all costs incurred by the Joint Venture and all profits and losses and cash distributions were to be shared by the Partnership and its venture partner in proportion to their ownership percentages (60% and 40%, respectively).
On April 12, 1995, the Joint Venture sold this apartment complex for $14,871,600 in an all cash transaction. The Partnership received approximately $9,060,000 in cash distributions from the joint venture which was used to repay debt and made a special distribution of $3,537,616 or $140 per limited partnership interest. The Joint Venture was terminated as of September 30, 1995.
LINCAM PROPERTIES LTD. SERIES 85 (a limited partnership)
NOTES TO FINANCIAL STATEMENTS - (Continued)
(4) PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits and losses of the Partnership from operations for income tax purposes through the initial 1986 admission date of additional limited partners (April 23, 1986) were allocated 99% to the General Partners and 1% to the initial Limited Partner. Thereafter, the agreement provides that net profits and losses of the Partnership from operations are allocated 99% to the Limited Partners and 1% to the General Partners. Profits from the sale of investment properties will be allocated first to the General Partners in an amount equal to the greater of the General Partners' share of cash distributions from the proceeds of any such sale (as described below) or 1% of the total profits from any sale, plus an amount which will reduce the General Partners' capital accounts' (deficits), if any, to a level consistent with the future gain anticipated to be realized from the sale of properties. Losses from the sale of investment properties will be allocated 1% to the General Partners. The remaining profits and losses from sales of the Partnership's properties will be allocated to the Limited Partners.
Net profits or losses in the accompanying financial statements were allocated 99% to the Limited Partners and 1% to the General Partners, subject to adjustment upon the sale of the Partnership's final property. Differences may therefore result between allocations among the partners on the financial statement basis and the tax basis.
The General Partners are not required to make any additional capital contributions except under certain limited circumstances upon dissolution and termination of the Partnership. "Net cash receipts" from operations of the Partnership are allocated (a) 99% to the Limited Partners and 1% to the General Partners, until the Limited Partners have received a non-cumulative 10% per annum return on their Adjusted Capital Contributions (which is equal to their Capital Contributions reduced by any previous distributions of sale or repayment proceeds to them) and (b) then, 90% to the Limited Partners and 10% to the General Partners. Distributions of "sale proceeds" and "repayment proceeds" are to be allocated 99% to the Limited Partners and 1% to the General Partners until receipt by the Limited Partners of their initial contributed capital plus a cumulative cash return of 10% per annum (on a non-compounded basis) on their Adjusted Capital Contributions. Thereafter, distributions of "sale proceeds" and "repayment proceeds" are to be allocated to the General Partners until the General Partners have received distributions in an amount equal to 3% of the gross sales price of all properties sold, subject to certain limitations, with the balance distributable 85% to the Limited Partners and 15% to the General Partners. As the 10% return was not achieved, all distributions have been made 99% to the limited partners and 1% to the general partners.
(5) LEASES
There are no leases in effect at September 30, 1998 as all of the properties have been sold.
LINCAM PROPERTIES LTD. SERIES 85 (a limited partnership)
NOTES TO FINANCIAL STATEMENTS - (Concluded)
(6) TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the Partnership to the Corporate General Partner and its affiliates for the nine months ended September 30, 1998 and for the years ended December 31, 1997 and 1996 are as follows:
1998 1997 1996 ------- ------- -------
Property management fees. . . . $12,754 38,013 47,423
Out-of-pocket expenses. . . . . $61,050 81,235 72,726 ======= ======= =======
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no changes of auditors during the nine months ended September 30, 1998 nor the years ended December 31, 1997 or 1996.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Corporate General Partner of the Partnership is owned 50% by Amli Realty Co., a Delaware Corporation, and 50% by Lincoln National Corporation, a publicly held, diversified financial services company. Both companies are affiliates of the officers and directors of LincAm Associates Ltd., the Associate General Partner of the Partnership. The Corporate General Partner has responsibility for all aspects of the Partnership's operations, subject to the requirement that purchases and sales of real property must be approved by the Managing General Partners of the Associate General Partner of the Partnership. The relationship of the Corporate General Partner to its affiliates is described under the caption "Conflicts of Interest" at pages 15-20 of the Prospectus, a copy of which description is filed herewith and hereby incorporated herein by reference.
The directors, executive officers and other officers of the Corporate General Partner of the Partnership and key officers of certain affiliates are as follows:
NAME OFFICE ---- ------
Gregory T. Mutz. . . . . . . . . . . Chairman and Director John E. Allen. . . . . . . . . . . . President and Director Lawrence T. Kissko . . . . . . . . . Vice President, Assistant Secretary and Director Marybeth Montgomery. . . . . . . . . Vice President, Assistant Secretary and Director Charles C. Kraft . . . . . . . . . . Treasurer Charlotte A. Sparrow . . . . . . . . Secretary Susan S. Bersh . . . . . . . . . . . Investor Relations Coordinator
There are no family relationships among any of the foregoing directors or officers.
The business experience of each director and officer of the Corporate General Partner of the Partnership is as follows:
Gregory T. Mutz (age 52) is the Chairman and a Director of LincAm Properties, Inc. Mr. Mutz is also the Chairman of the Board of Directors of AMLI Residential Properties Trust and Chairman of the Board of AMLI Commercial Properties, L.L.C. the successor companies to AMLI Realty Co., which he co-founded in 1980. Mr. Mutz is also Chairman of the Board of Excell Global Services, L.L.C., a call service and data management company.
Mr. Mutz has over twenty years of real estate experience. Prior to founding AMLI, he was an officer of White, Weld & Co., Incorporated (1976- 78) and was associated with the Chicago law firm of Mayer, Brown & Platt (1973-76). He received a B.A. from DePauw University in 1967 and a J.D. from the University of Michigan Law School in 1973. Mr. Mutz is a director of Baldwin & Lyons (a casualty insurance company) a Director of the Chicago Trust Company family of Mutual Funds, a Director of AVTEL Communications (telecom company), a Director of the Illinois Chapter of The Nature Conservancy, and a Director of the National Multi-Housing Council.
John E. Allen (age 62) is the President and a Director of LincAm Properties, Inc. Mr. Allen is also Vice Chairman of the Board of AMLI Residential Properties Trust, Vice Chairman of the Board of AMLI Commercial Properties, L.L.C. and President and a Director of AMLI Realty Co., which he co-founded in 1980. Mr. Allen is also a member of the Boards of Directors of UICI, AVTEL Communications, Inc. and Excell Global Services, L.L.C. Mr. Allen has over twenty years of real estate experience. Prior to co-founding AMLI, he was a partner at the Chicago law firm of Mayer, Brown & Platt, with which he had been associated since 1964. While with Mayer, Brown & Platt, Mr. Allen was involved extensively with equity financing and joint ventures for numerous real estate projects in the U.S. and abroad. Mr. Allen received a B.S. in Business from Indiana University in 1961 and a J.D. from the Indiana University School of Law in 1964. He is a member of the National Association of Real Estate Investment Trusts ("NAREIT").
Lawrence T. Kissko (age 51) is a Vice President, an Assistant Secretary and Director of LincAm Properties, Inc. He is also Vice President and Director of Real Estate Investment of Lincoln Investment Management, Inc. In this position Mr. Kissko is responsible for the management of the real estate and mortgage loan production. Prior to joining Lincoln in 1983, Mr. Kissko was associated with Union Mutual Life Insurance Company of Portland, Maine. Prior to that, he was associated with Massachusetts Mutual Life Insurance Company. With both companies, Mr. Kissko was responsible for real estate investment activities. Mr. Kissko holds a Master's degree in Business Administration from State University of New York at Albany, and a Bachelor's degree in Management from Rensselaer Polytechnic Institute in Troy, New York.
Marybeth Montgomery (age 55) is a Vice President, an Assistant Secretary and Director of LincAm Properties, Inc. and is Vice President and Director of Real Estate Asset Management at Lincoln National Corporation. Ms. Montgomery is responsible for Lincoln's real estate equity portfolio coast to coast. Ms. Montgomery joined Lincoln in 1983 after serving as a regional property manager for Gene B. Glick of Indiana. She attended Indiana University and is a Certified Property Manager, Certified Apartment Manager and holds a real estate broker's license.
Charles C. Kraft (age 51) is Treasurer of LincAm Properties, Inc. He is also a Senior Vice President and Treasurer of AMLI Residential Properties Trust and has been associated with AMLI since 1983. Mr. Kraft is responsible for AMLI's financial reporting, tax planning, treasury, employee benefits and cash management operations. Prior to joining AMLI, he was associated with the Chicago office of KPMG Peat Marwick (1968-1982) in the firm's national real estate practice. Mr. Kraft received an A.B. from Wabash College in 1968. He is a past Director of the Chicago Board of Realtors and is a CPA. Mr. Kraft is a member of The American Institute of Certified Public Accountants and the Illinois CPA Society.
Charlotte A. Sparrow (age 40) is the Secretary of LincAm Properties, Inc. She is also Secretary of Amli Realty Co. and Secretary of Amli Residential Properties Trust. Prior to joining Amli, Ms. Sparrow was a paralegal with the law firm of Mayer, Brown & Platt (1982-1993). Ms. Sparrow received a B.A. from Ripon College in 1980.
Susan S. Bersh (age 35) is Investor Relations Coordinator for LincAm Properties, Inc. She is also the Marketing and Communications Coordinator for Amli Realty Co. and a Vice President and the Investor Relations and Public Relations Director for Amli Residential Properties Trust. Ms. Bersh is a Registered Representative for Direct Participation Programs and has passed the Uniform Securities Agent State Law Exam. She graduated from the University of Illinois with a B.A. degree in Economics in 1985.
All of the outstanding shares of the Corporate General Partner are owned 50% by Amli Realty Co. and 50% by Lincoln National Corporation. The Corporate General Partner is not prohibited from paying dividends to its shareholders. The Partnership Agreement provides that the purchasers of Interests will acquire no interest in the stock or assets of the Corporate General Partner or in any proceeds of any sales thereof (which sales are not restricted in any respect), by virtue of acquiring or owning Interests and becoming Limited Partners in the Partnership.
Purchasers of Interests will not participate in the election of directors of the Corporate General Partner. Vacancies on the Board of Directors of the Corporate General Partner occurring between annual meetings may be filled by a majority of the remaining directors. Directors of the Corporate General Partner may be paid fees by the Corporate General Partner, but no such fees will be charged to the Partnership.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Officers and directors of the Corporate General Partner receive no current or proposed direct remuneration in such capacities. The Partnership is required to pay a management fee to the Corporate General Partner and the General Partners are 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 which are described under the captions "Compensation and Fees" at pages 10-14, "Cash Distributions" at pages 69-70 and "Allocation of Profits or Losses for Tax Purposes" at page 70 of the Prospectus and at pages A-7 to A-12 of the Partnership Agreement, included as an exhibit to the prospectus, a copy of which descriptions is filed herewith and is hereby incorporated herein by reference. Reference is also made to Note 5 of Notes to Financial Statements filed with this annual report for a description of such distributions and allocations. During the nine months ended September 30, 1998, the General Partners received distributions of $34,365.
The Partnership is permitted to engage in various transactions involving affiliates of the General Partners of the Partnership, as described under the captions "Compensation and Fees" at pages 10-14, and "Conflicts of Interest" at pages 15-20 of the Prospectus and at pages A-15 to A-23 of the Partnership Agreement, included as an exhibit to the Prospectus, a copy of which descriptions is filed herewith and hereby incorporated herein by reference. The relationship of the Corporate General Partner (and its directors and officers) to its affiliates is set forth in Item 10.
During the nine months ended September 30, 1998, Amli Management Company, an affiliate of the General Partners, earned property management fees aggregating $12,754 for its services to the Partnership in connection with the operations of Oak View Apartments in Augusta, Georgia.
The General Partners of the Partnership or their affiliates may be reimbursed for their direct expenses or out-of-pocket expenses relating to the administration of the Partnership and the acquisition and operating of the Partnership's real property investments. During the nine months ended September 30, 1998, affiliates of the General Partners of the Partnership were reimbursed for such out-of-pocket expenses in the amount of $61,050, all of which was repaid as of September 30, 1998.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with the Corporate General Partner, affiliates, or their management other than those described in Items 10 and 11.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements (See Index to Financial Statements filed with this annual report).
(2) Exhibits: 27. Financial Data Schedule.
(b) No Reports on Form 8-K were required or filed since the beginning of the last quarter of the period covered by this report.
No annual report or proxy material for the nine months ended September 30, 1998 has been sent to the Partners of the Partnership. An annual report will be sent to the Partners subsequent to this filing and the Partnership will furnish copies of such report to the commission when it is sent to the Partners.
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.
LINCAM PROPERTIES LTD. SERIES 85
By: LINCAM PROPERTIES, INC. Corporate General Partner
By: /S/ JOHN E. ALLEN
John E. Allen President of Corporate General Partner
Date: October 29, 1999
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: LINCAM PROPERTIES, INC. Corporate General Partner
By: /S/ GREGORY T. MUTZ
Gregory T. Mutz Chairman and Director Principal Executive Officer
Date: October 29, 1999
By: /S/ JOHN E. ALLEN
John E. Allen President and Director
Date: October 29, 1999
By: /S/ CHARLES C. KRAFT
Charles C. Kraft, Treasurer, Principal Financial Officer and Principal Accounting Officer
Date: October 29, 1999
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with the Corporate General Partner, affiliates, or their management other than those described in Items 10 and 11.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements (See Index to Financial Statements filed with this annual report).
(2) Exhibits: 27. Financial Data Schedule.
(b) No Reports on Form 8-K were required or filed since the beginning of the last quarter of the period covered by this report.
No annual report or proxy material for the nine months ended September 30, 1998 has been sent to the Partners of the Partnership. An annual report will be sent to the Partners subsequent to this filing and the Partnership will furnish copies of such report to the commission when it is sent to the Partners.
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.
LINCAM PROPERTIES LTD. SERIES 85
By: LINCAM PROPERTIES, INC. Corporate General Partner
By: /S/ JOHN E. ALLEN
John E. Allen President of Corporate General Partner
Date: October 29, 1999
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: LINCAM PROPERTIES, INC. Corporate General Partner
By: /S/ GREGORY T. MUTZ
Gregory T. Mutz Chairman and Director Principal Executive Officer
Date: October 29, 1999
By: /S/ JOHN E. ALLEN
John E. Allen President and Director
Date: October 29, 1999
By: /S/ CHARLES C. KRAFT
Charles C. Kraft, Treasurer, Principal Financial Officer and Principal Accounting Officer
Date: October 29, 1999