10-Q 1 realmarkvib_10q-033.txt QUARTERLY REPORT FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2001 Commission File Number: 33-17579 REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP -VI B ----------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 16-1309988 ----------------------- --------------------------------- (State of organization) (IRS Employer Identification No.) 2350 North Forest Road, Suite 12A,Getzville, New York 14068 ------------------------------------------------------------ (Address of principal executive offices) (716) 636-0280 -------------- (Registrant's telephone number) Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Part I - FINANCIAL INFORMATION ------------------------------ Item 1. Financial Statements

2 Condensed Consolidated Statements of Cash Flows -----------------------------------------------

Notes to Financial Statements June 30, 2001 and 2000 Organization ------------ Realmark Property Investors Limited Partnership - VI B (the Partnership), a Delaware limited partnership, was formed on September 21, 1987, to invest in a diversified portfolio of income producing real estate investments. The general partners are Realmark Properties, Inc. (the corporate general partner) and Joseph M. Jayson (the individual general partner). Joseph M. Jayson is the sole stockholder of J.M. Jayson & Company Inc. Realmark Properties, Inc. is a wholly-owned subsidiary of J.M. Jayson & Company, Inc. Under the partnership agreement, the general partners and their affiliates can receive compensation for services rendered and reimbursement for expenses incurred on behalf of the Partnership. Basis of Presentation --------------------- The accompanying interim financial statements have been prepared in accordance with generally accepted accounting principles and, in the opinion of management, contain all necessary adjustments for a fair presentation. The Partnership's significant accounting policies are set forth in its December 31, 2000 Form 10-K. The interim financial statements should be read in conjunction with the financial statements included in that Form 10-K. The interim results should not be considered indicative of the annual results. Certain reclassifications of prior period numbers may have been made to conform to the current period presentation. 3 Property and Equipment ---------------------- The Partnership's two apartment complex properties, Fairway Club and Players Club, are being actively marketed for sale. Depreciation not recorded on these properties in the three and six month periods ended June 30, 2001 was approximately $58,000 and $116,000, respectively. Fairway Club is the subject of a contingent $4,700,000 sales agreement that, if closed, will result in a gain of approximately $1,500,000 to the Partnership and net proceeds of approximately $2,000,000. Investment in Joint Venture --------------------------- At December 31, 2000, the Partnership had an 11.5% interest in a joint venture with Realmark Property Investors Limited Partnership-II (RPILP-II), an entity affiliated through common general partners, owning 88.5%. The Joint Venture was formed to own and operate the Foxhunt Apartments, located in Dayton, Ohio. The Foxhunt property had been the subject of a plan of disposal since July 1999 and was sold for $7,600,000 on March 1, 2001, to an unaffiliated entity. After satisfaction of the $5,942,000 mortgage loan on the property and payment of closing costs, the net proceeds were approximately $1.1 million. The Partnership's equity in the net income of the venture includes its share of the net gain of approximately $4,700,000. Contingency ----------- The Partnership, as a nominal defendant, the General Partners of the Partnership and the officers and directors of the Corporate General Partner, as defendants, were served with a Summons and Complaint on April 7, 2000 in a class and derivative lawsuit instituted by Ira Gaines and on August 8, 2000 in a class and derivative lawsuit instituted by Sean O'Reilly and Louise Homburger, each in Supreme Court, County of Erie, State of New York. In September 2000, the Court signed an order consolidating these lawsuits. The consolidated lawsuit alleges claims of mismanagement and improper use of partnership funds relating to the Realmark Partnerships. The consolidated lawsuit seeks declaratory relief, unspecified damages, a receiver, an order liquidating the partnership, punitive damages, attorneys' fees and related relief. The defendants deny any liability and intend to vigorously defend this lawsuit. Because of the early stage of this lawsuit and because there has been no discovery to date, legal counsel cannot render an opinion as to the likely outcome of this case. The possible effect of this contingency is not presently determinable and, therefore, the consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Current Accounting Pronouncements --------------------------------- Statements of Financial Accounting Standards Nos. 138 and 133, which concern accounting for derivative instruments and hedging activities, became effective for the Partnership on January 1, 2001 and did not have any effect on the Partnership's financial statements. 4 PART I - Item 2. Management's Discussion and Analysis of Financial Condition ----------------------------------------------------------- and Results of Operations ------------------------- Liquidity and Capital Resources ------------------------------- The Partnership continues to maintain a steady cash position, adequate to fund its recurring cash needs. A distribution to partners was made in the year ended December 31, 2000. The ability to make distributions later in the current year will be evaluated if and when the sale of the Fairway Club property is completed. Results of Operations --------------------- For the three and six months ended June 30, 2001, the Partnership's operations, which exclude depreciation charges, produced income before its equity in the earnings of a joint venture, of $52,000 and $99,000, respectively. Income before depreciation in the same 2000 periods was $6,000 and $24,000. The increases were primarily due to expense decreases. In 2001, the occupancy rate at Players Club continues to be well over the 90% level, with rental income increasing approximately $15,000 in the second quarter and $30,000 in the six month period, as compared to the 2000 periods. However, those increases were more than offset by vacancy increases at Fairway Club that resulted in total rental income decreases of $20,000 in the second quarter and $8,000 in the first half of the year 2001, relative to the 2000 periods. The 2001 increases in other income were generated primarily by larger amounts of deposit forfeitures and termination fees at Fairway. While property operating costs showed little change in the 2001 second quarter as compared to the 2000 second quarter, they decreased approximately $16,000 in the six months ended June 30, 2001, principally because of less major repairs and renovation at Fairway. Administrative costs decreased in both 2001 periods because of lower advertising costs at Players and lower professional fees at the partnership level. The increase in the partnership's equity in the earnings of Foxhunt is attributable to the gain on the sale of Foxhunt in the first quarter of 2001. PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- The Partnership's cash equivalents are short-term, interest-bearing bank accounts and its mortgage loans are fixed-rate. It has not entered into any derivative contracts. Therefore, it has no market risk exposure. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP VI-B August 14, 2001 /s/ Joseph M. Jayson ---------------- -------------------- Date Joseph M. Jayson, Individual General Partner and Principal Financial Officer 5

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP VI-B 10-Q