Item 1. Business
The Registrant, Inland Mortgage Investors Fund, L.P. (the "Partnership"), was a limited partnership formed on December 5, 1985 pursuant to the Delaware Revised Uniform Limited Partnership Act. On February 12, 1986, the Partnership commenced an Offering of 40,000 Limited Partnership Units (the "Units") at $500 per Unit, pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on February 12, 1987, with total sales of 20,129.24 Units resulting in gross offering proceeds of $10,064,620, not including $500 which is the General Partner contribution. All of the holders of these Units were admitted to the Partnership. A majority of these proceeds were used to fund first mortgage loans. The Partnership funded fifteen loans between October 1986 and August 1988 utilizing $8,466,875 of offering proceeds collected, net of participations. The Limited Partners of the Partnership share in the benefits of ownership of the Partnership's first mortgage receivable investments in proportion to the number of Units held. Inland Real Estate Investment Corporation was the General Partner.
The Partnership was engaged in the business of making and acquiring loans collateralized by mortgages on improved, income producing multi-family residential properties in or near Chicago, Illinois. The loans were serviced by Inland Mortgage Servicing Corporation, a subsidiary of the General Partner. The Partnership did not segregate revenues or assets by geographic region, and such a presentation would not be material to an understanding of the Partnership's business taken as a whole.
The Partnership had no employees during 1999.
The terms of transactions between the Partnership and Affiliates of the General Partner are set forth in Item 11 below and Note 3 of the Notes to Financial Statements (Item 8 of this Annual Report) to which reference is hereby made.
Item 2.
Item 2. Properties
The Partnership had acquired title to a 62-unit apartment building located in Aurora, Illinois on April 4, 1997 in settlement of a loan that had previously been in default. The property was sold on March 30, 1999.
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 1999.
PART II
Item 5.
Item 5. Market for the Partnership's Limited Partnership Units and Related Security Holder Matters
As of June 25, 1999, there were 737 holders of Units of the Partnership. There is no public market for Units nor is it anticipated that any public market for Units will develop. Reference is made to Item 6
Item 6. Selected Financial Data
INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership)
For the period from January 1, 1999 to June 25, 1999 (Termination Date) and for the years ended December 31, 1998, 1997, 1996 and 1995
(not covered by the Report of Independent Accountants)
1999 1998 1997 1996 1995 ---- ---- ---- ---- ---- Total assets......... $ - 1,151,562 1,232,074 4,965,920 5,923,235 =========== =========== =========== =========== ==========
Total income......... $ 72,351 260,149 382,462 434,350 596,496 =========== =========== =========== =========== ==========
Net income (loss).... $ 57,364 (55,906) 58,174 361,529 521,719 =========== =========== =========== =========== ========== Net income (loss) allocated to the one General Partner Unit$ (1,815) (559) 3,210 17,786 26,480 =========== =========== =========== =========== ========== Net income (loss) per Unit allocated to Limited Partners from (b)........... $ 2.94 (2.75) 2.73 17.08 24.60 =========== =========== =========== =========== ==========
Distributions to Limited Partners from: Operations........... - - 127,627 391,806 509,563 Repayment proceeds... 1,160,925 - 3,723,959 900,900 530,920 ----------- ----------- ----------- ----------- ---------- $1,160,925 - 3,851,586 1,292,706 1,040,483 =========== =========== =========== =========== ========== Distributions per Unit to Limited Partners from (b): Operations........... - - 6.34 19.46 25.31 Repayment proceeds... 57.67 - 185.00 44.76 26.38 ----------- ----------- ----------- ----------- ---------- $ 57.67 - 191.34 64.22 51.69 =========== =========== =========== =========== ==========
(a) The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this Annual Report.
(b) The net income per Unit, basic and diluted, and distributions per Unit are based upon the weighted average number of Units outstanding of 20,129.24.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources
On February 12, 1986, the Partnership commenced an Offering of 40,000 Limited Partnership Units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on February 12, 1987, with a total of 20,129 Units being sold to the public at $500 per Unit resulting in $10,064,620 of gross offering proceeds which were received by the Partnership, not including the General Partner's contribution of $500. The Partnership funded fifteen loans between October 1986 and August 1988 utilizing $8,466,875 of capital proceeds collected, net of participations. On June 25, 1999, the Partnership terminated. In connection with the liquidation and termination of the Partnership, funds of $19,900 were transferred to the General Partner on June 17, 1999, representing the estimated potential remaining obligation (including administrative costs) of the Partnership. On June 25, 1999, the Partnership paid a final liquidating cash distribution to the Limited Partners in the aggregate amount of $1,160,924 which includes net sales proceeds from the sale of investment property.
Results of Operations
On March 30, 1999, the Partnership sold its remaining asset, a 62-unit apartment building located at Indian Trail Road in Aurora, Illinois, to two unaffiliated individuals for $1,275,000 on an all cash basis. The Partnership had acquired title to this property on April 4, 1997 and had been accounting for it as an investment property held for sale. The property had a basis of $1,131,639, resulting in a gain of $138,788, net of closing costs. Net sales proceeds were included in the final liquidating cash distribution to the Limited Partners on June 25, 1999.
Rental income decreased for the periods ended June 25, 1999, as compared to the three and six months ended June 30, 1998, due to lower occupancy at the Indian Trail Road property as well as the fact that the property was sold on March 30, 1999.
Interest income increased for the periods ended June 25, 1999, as compared to the three and six months ended June 30, 1998, due to the net sales proceeds from the sale of investment property on March 30, 1999 being invested until the final distribution on June 25, 1999.
Professional services to Affiliates increased for the period ended June 25, 1999, as compared to the three months ended June 30, 1998, due to an increase in legal services required by the Partnership. Professional services to Affiliates decreased for the period ended June 25, 1999, as compared to the six months ended June 30, 1998, due to a decrease in accounting services which is partially offset by an increase in legal services required by the Partnership. Professional services to non-affiliates increased for the periods ended June 25, 1999, as compared to the three and six months ended June 30, 1998, due to an increase in accounting and legal services required by the Partnership.
General and administrative expenses to non-affiliates decreased for the period ended June 25, 1999, as compared to the six months ended June 30, 1998, due primarily to decreases in postage and printing expenses.
Property operating expenses to non-affiliates and Affiliates decreased for the periods ended June 25, 1999, as compared to the three and six months ended June 30, 1998, due to the fact that the property was sold on March 30, 1999.
The following is a list of approximate occupancy levels for the Partnership's investment property as of the end of each quarter during 1998 and 1999:
1998 1999 ------------------------ ------------ at at at at at at Properties 03/31 06/30 09/30 12/31 03/31 06/25* ---------- ----- ----- ----- ----- ----- ----- Indian Trail Road 91% 85% 82% 79% N/A N/A Aurora, Illinois
* Termination Date
Year 2000 Issues
As of June 25, 1999, Inland Mortgage Investors Fund, L.P. terminated, and therefore, will not be impacted by the so-called "Year 2000 Issue".
Inflation
Not Applicable.
Item 7(a). Quantitative and Qualitative Disclosures About Market Risk
Not Applicable.
Item 8.
Item 8. Financial Statements and Supplementary Data
INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership)
Index ----- Page ---- Report of Independent Accountants........................................ 9
Financial Statements:
Balance Sheets, June 25, 1999 (Termination Date) and December 31, 1998.................................................... 10
Statements of Operations, for the period from January 1, 1999 to June 25, 1999 (Termination Date) and for the years ended December 31, 1998 and 1997..................................... 11
Statements of Partners' Capital, for the period from January 1, 1999 to June 25, 1999 (Termination Date) and for the years ended December 31, 1998 and 1997..................................... 12
Statements of Cash Flows, for the period From January 1, 1999 to June 25, 1999 (Termination Date) and for the years ended December 31, 1998 and 1997........................................... 13
Notes to Financial Statements.......................................... 14
Schedules not filed:
All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.
REPORT OF INDEPENDENT ACCOUNTANTS
The Partners of Inland Mortgage Investors Fund, L.P.
In our opinion, the accompanying balance sheets and the related statements of operations, partners' capital and cash flows present fairly, in all material respects, the financial position of Inland Mortgage Investors Fund, L.P. (the "Company") at June 25, 1999 (Termination Date) and December 31, 1998, and the results of its operations and its cash flows for the period from January 1, 1999 to June 25, 1999 and for each of the two years in the period ended December 31, 1998 in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.
As discussed in Note 1 of the financial statements, on June 25, 1999, the Company was terminated subsequent to the distribution of its remaining assets.
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois August 12, 1999
INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership)
Balance Sheets
June 25, 1999 (Termination Date) and December 31, 1998
Assets ------ 1999 1998 ---- ---- Cash and cash equivalents (Note 1)................ $ - 14,310 Accrued interest and other receivables............ - 5,613
Investment property held for sale (Notes 1 and 4): Land............................................ - 140,101 Building and improvements....................... - 991,538 ------------ ------------ Total assets...................................... $ - 1,151,562 ============ ============
Liabilities and Partners' Capital --------------------------------- Liabilities: Accounts payable................................ $ - 5,817 Due to Affiliates (Note 3)...................... - 472 Security deposits............................... - 10,416 Accrued real estate taxes....................... - 28,369 Unearned income (Note 1)........................ - 2,927 ------------ ------------ Total liabilities................................. - 48,001 ------------ ------------ Partners' capital (Notes 1, 2 and 3): General Partner: Capital contribution.......................... 500 500 Cumulative net income......................... 276,157 277,972 Cumulative cash distributions................. (276,657) (276,657) ------------ ------------ - 1,815 Limited Partners: ------------ ------------ Units of $500. Authorized 40,000 Units, 20,129.24 Units outstanding (net of offering costs of $1,082,660, of which $219,526 was paid to Affiliates)............ 8,981,960 8,981,960 Cumulative net income......................... 5,765,408 5,706,229 Cumulative cash distributions................. (14,747,368) (13,586,443) ------------ ------------ - 1,101,746 ------------ ------------ Total Partners' capital........................... - 1,103,561 ------------ ------------ Total liabilities and Partners' capital........... $ - 1,151,562 ============ ============
See accompanying notes to financial statements.
INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership)
Statements of Operations
For the period from January 1, 1999 to June 25, 1999 (Termination Date) and for the years ended December 31, 1998 and 1997
Income: 1999 1998 1997 Interest and fees on mortgage loans ---- ---- ---- receivable (Note 5)............. $ - - 43,540 Interest on investments........... 13,737 2,531 73,496 Rental income..................... 56,650 253,430 188,023 Other income...................... 1,964 4,188 77,403 ------------ ------------ ------------ 72,351 260,149 382,462 Expenses: ------------ ------------ ------------ Professional services to Affiliates...................... 3,472 6,829 8,913 Professional services to non-affiliates.................. 28,790 19,407 21,364 General and administrative expenses to Affiliates.......... 10,588 18,178 27,554 General and administrative expenses to non-affiliates...... 4,595 5,518 6,349 Property operating expenses to Affiliates................... 3,905 17,526 9,060 Property operating expenses to non-affiliates............... 102,425 248,597 251,048 ------------ ------------ ------------ 153,775 316,055 324,288 ------------ ------------ ------------ Operating income (loss)............. (81,424) - - Gain on sale of investment property (Note 4).......................... 138,788 - - ------------ ------------ ------------ Net income (loss)................... $ 57,364 (55,906) 58,174 ============ ============ ============ Net income (loss) allocated to: General Partner................... (1,815) (559) 3,210 Limited Partners.................. 59,179 (55,347) 54,964 ------------ ------------ ------------ Net income (loss)................... $ 57,364 (55,906) 58,174 ============ ============ ============ Net income (loss) from operations allocated to the one General Partner Unit...................... $ (1,815) (559) 3,210 ============ ============ ============ Net income (loss) per Unit, basic and diluted, allocated to Limited Partners per Limited Partnership Units of 20,129.24................ $ 2.94 (2.75) 2.73 ============ ============ ============
See accompanying notes to financial statements.
INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership)
Statements of Partners' Capital
For the period from January 1, 1999 to June 25, 1999 (Termination Date) and for the years ended December 31, 1998 and 1997
General Limited Partner Partners Total ------------- ------------- ------------ Balance at January 1, 1997.......... $ 5,881 4,953,715 4,959,596
Net income.......................... 3,210 54,964 58,174 Distributions to Partners ($191.34 per Limited Partnership Unit based on Units of 20,129.24)(Note 2).... (6,717) (3,851,586) (3,858,303) ------------ ------------ ------------ Balance at December 31, 1997........ 2,374 1,157,093 1,159,467
Net loss............................ (559) (55,347) (55,906) ------------ ------------ ------------ Balance at December 31, 1998........ 1,815 1,101,746 1,103,561
Net income.......................... (1,815) 59,179 57,364 Distributions to Partners ($57.67 per Limited Partnership Unit based on Units of 20,129.24)(Note 2)....... - (1,160,925) (1,160,925) Balance at June 25, 1999 ------------ ------------ ------------ (Termination Date)................ $ - - - ============ ============ ============
See accompanying notes to financial statements.
INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership)
Statements of Cash Flows
For the period from January 1, 1999 to June 25, 1999 (Termination Date) and for the years ended December 31, 1998 and 1997
1999 1998 1997 Cash flows from operating activities: ---- ---- ---- Net income (loss)................. $ 57,364 (55,906) 58,174 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Gain on sale of investment property........................ (138,788) - - Changes in assets and liabilities: Accrued interest and other receivables................. 5,613 2,233 18,821 Accounts payable.............. (5,817) (6,122) 11,887 Unearned income............... (2,927) 1,835 (2,751) Security deposits............. (10,416) (5,460) 15,876 Accrued real estate taxes..... (28,369) (13,103) 41,472 Due to Affiliates............. (472) (1,756) (201) Net cash provided by (used in) ------------ ------------ ------------ operating activities.............. (123,812) (78,279) 143,278 ------------ ------------ ------------ Cash flows from investing activities: Additions to investment property.. - (16,301) (114,617) Proceeds from sale of investment property........................ 1,270,427 - 2,712,445 Net cash provided by (used in) ------------ ------------ ------------ investing activities.............. 1,270,427 (16,301) 2,597,828 ------------ ------------ ------------ Cash flows from financing activities: Distributions paid................ (1,160,925) - (3,858,303) Net cash used in financing ------------ ------------ ------------ activities........................ (1,160,925) - (3,858,303) Net decrease in cash and ------------ ------------ ------------ cash equivalents.................. (14,310) (94,580) (1,117,197) Cash and cash equivalents at beginning of year................. 14,310 108,890 1,226,087 Cash and cash equivalents at ------------ ------------ ------------ end of year....................... $ - 14,310 108,890 ============ ============ ============
Supplemental schedule of non-cash investing activities:
Foreclosure of mortgaged property (Note 5): Reduction of mortgage loans receivable........................ $ - - 1,000,721 Increase in investment property..... - - (1,000,721) ------------ ------------ ------------ $ - - - ============ ============ ============
See accompanying notes to financial statements.
INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership)
Notes to Financial Statements
For the period from January 1, 1999 to June 25, 1999 (Termination Date) and for the years ended December 31, 1998 and 1997
(1) Organization and Basis of Accounting
Inland Mortgage Investors Fund, L.P. (the "Partnership") was organized on December 5, 1985, pursuant to the Delaware Revised Uniform Limited Partnership Act, to make or acquire loans collateralized by mortgages on improved, income- producing multi-family residential properties in or near the Chicago metropolitan area. On February 12, 1986, the Partnership commenced an Offering of 40,000 Limited Partnership Units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on February 12, 1987, with total sales of 20,129.24 Units at $500 per Unit resulting in $10,064,620 of gross offering proceeds, not including the General Partner's contribution of $500. Inland Real Estate Investment Corporation was the General Partner. On June 25, 1999, the Partnership terminated. In connection with the liquidation and termination of the Partnership, funds of $19,900 were transferred to the General Partner on June 17, 1999, representing the estimated potential remaining obligation (including administrative costs) of the Partnership. On June 25, 1999, the Partnership paid a final liquidating cash distribution to the Limited Partners in the aggregate amount of $1,160,924, which includes net sales proceeds from the sale of investment property.
The preparation of financial statements in conformity with generally accepted accounting principles required 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 and the reported amounts of revenues and expenses during the reporting periods. Actual results could have differed from those estimates.
Offering costs have been offset against the Limited Partners' capital accounts.
The Partnership considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
The investment property consisted of a 62-unit apartment building located in Aurora, Illinois. Apartment complex leases are generally for a term of one year or less. The Partnership had determined that all leases relating to this property were properly classified as operating leases; therefore rental income was recorded when earned. The investment property was sold on March 30, 1999. See Note 4 of the Notes to Financial Statements.
Statement of Financial Accounting Standards No. 128 "Earnings per Share" was adopted by the Partnership and has been applied to all prior earnings periods presented in the financial statements. The Partnership has no dilutive securities.
INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership)
Notes to Financial Statements (continued)
No provision for Federal income taxes has been made as the liability for such taxes is that of the Partners rather than the Partnership.
The Partnership records are maintained on the accrual basis of accounting in accordance with generally accepted accounting principles ("GAAP"). The Federal income tax return has been prepared from such records after making appropriate adjustments to reflect the Partnership's accounts as adjusted for Federal income tax reporting purposes. Such adjustments are not recorded on the records of the Partnership. The net effect of these items is summarized as follows:
1999 1998 ----------------------- ----------------------- GAAP Tax GAAP Tax Basis Basis Basis Basis ----------- ----------- ----------- ----------- Total assets................ $ - - 1,151,562 1,151,562
Partners' capital: General Partner........... - - 1,815 1,056 Limited Partners.......... - - 1,103,561 1,102,505
Net income (loss): General Partner........... (1,815) (1,056) (559) (559) Limited Partners.......... 59,179 58,421 (55,347) (55,347)
Net income (loss) per Limited Partnership Unit, basic and diluted............... 2.94 2.90 (2.75) (2.75)
(2) Partnership Agreement
The Partnership Agreement defines the distribution of Operating Cash Flow. Such Operating Cash Flow will be distributed 90% to the Limited Partners and 10% to the General Partner. Of the 10% of Operating Cash Flow allocated to the General Partner, one-half shall be subordinated to the Limited Partners' receipt of a Non-compounded Cumulative Preferred Return of 14% per annum. Distributions of Loan Repayment Proceeds will be distributed first to Limited Partners in proportion to their participating percentages until they have received an amount equal to their Invested Capital plus any deficiency in the Cumulative Preferred Return. Thereafter, any remaining Repayment Proceeds which are available for distribution will be distributed 90% to the Limited Partners and 10% to the General Partner.
INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership)
Notes to Financial Statements (continued)
The General Partner will be allocated net operating profits of the Partnership in an amount equal to the greater of 1% of net operating profits or the amount of the General Partner's distributive share of Operating Cash Flow, with the balance of such net operating profits allocated to the Limited Partners. The General Partner will be allocated net operating profits from repayments in an amount equal to the General Partner's distributive share of Repayment Proceeds, with the balance of such net operating profits allocated to the Limited Partners. Net operating losses will be allocated 1% to the General Partner and 99% to the Limited Partners.
(3) Transactions with Affiliates
The General Partner and its Affiliates were entitled to reimbursement for salaries and expenses of employees of the General Partner and its Affiliates relating to the administration of the Partnership. Such costs are included in professional services to Affiliates and general and administrative expenses to Affiliates, of which $472 was unpaid as of December 31, 1998.
Inland Mortgage Servicing Corporation, a subsidiary of the General Partner, serviced the Partnership's mortgage loans receivable. Its services included processing mortgage loan collections and escrow deposits and maintaining related records. For these services, the Partnership was obligated to pay fees at an annual rate equal to 1/4 of 1% of the outstanding mortgage loans receivable balance of the Partnership. Such fees of $2,312 in 1997 have been incurred and paid to the subsidiary and are included in the Partnership's general and administrative expenses to Affiliates. No such fees were incurred in 1998 or 1999.
The Partnership's investment property was managed by an Affiliate of the General Partner which earns annual fees not to exceed 5% of gross rental receipts. The Affiliate earned Property Management Fees of $3,250, $13,049 and $9,060 for the period from January 1, 1999 to June 25, 1999, and the years ended December 31, 1998 and 1997, respectively, which are included in property operating expenses to Affiliates. In addition, an Affiliate of the General Partner performed professional services relating to the Partnership's investment property and was reimbursed (as set forth under terms of the Partnership Agreement) for direct costs. Such costs of $4,477 for the year ended December 31, 1998 are included in property operating expenses to Affiliates, all of which have been paid as of December 31, 1998. No such costs were incurred in 1997 or 1999.
(4) Sale of Investment Property
On March 30, 1999, the Partnership sold its remaining asset, a 62-unit apartment building located at Indian Trail Road in Aurora, Illinois, to two unaffiliated individuals for $1,275,000 on an all cash basis. The Partnership had acquired title to this property on April 4, 1997 and had been accounting for it as an investment property held for sale. The property had a basis of $1,131,639, resulting in a gain of $138,788, net of closing costs. Net sales proceeds were included in the final liquidating cash distribution to the Limited Partners on June 25, 1999.
INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership)
Notes to Financial Statements (continued)
(5) Investments in Mortgage Loans Receivable
Mortgage loans receivable and mortgage loans in substantive foreclosure were collateralized by first mortgages and wrap mortgages on multi-family residential properties located in Chicago, Illinois or its surrounding metropolitan area. As additional collateral, the Partnership held assignments of rents and leases or personal guarantees of the borrowers. Generally, the mortgage notes were payable in equal monthly installments based on 20 or 30 year amortization periods.
On January 28, 1997, the loan collateralized by the property located at 288, 294-298 Pennsylvania/Kenilworth, Glen Ellyn, Illinois matured. The loan had an interest rate of 8.9%. The total proceeds received at maturity were $1,023,078, which represented the loan balance, accrued interest, accrued additional interest of $700 and 50% of the appreciated value of the property totaling $52,500 which is included in other income. The appreciated value is defined as the difference between the appraised value of the property at maturity and the appraised value at the time of the loan origination. The proceeds were distributed to the Limited Partners in July 1997.
In January 1997, the loan collateralized by the property located at 5830 West 87th Street, Burbank, Illinois, with an original maturity of January 1997, was extended for three months until March 1997, with an option to extend to June 1999. The interest rate of 8.9% remained the same. On February 13, 1997, the loan was prepaid. The total proceeds received were $447,191, which represented the loan balance, accrued interest, accrued additional interest of $850 and 50% of the appreciated value of the property totaling $15,000 which is included in other income. The appreciated value is defined as the difference between the appraised value of the property at maturity and the appraised value at the time of the loan origination. The proceeds were distributed to the Limited Partners in July 1997.
On March 31, 1997, the loan collateralized by the property located at 7428 West Washington, Forest Park, Illinois matured. The loan had an interest rate of 6.975%. The total proceeds received at maturity were $828,658, which represented the loan balance, accrued interest and accrued late charges. The proceeds were distributed to the Limited Partners in July 1997.
The loan on the property, located on Indian Trail Road in Aurora, Illinois, previously accounted for as a mortgage loan in substantive foreclosure, is being accounted for as an investment property held for sale as of April 4, 1997. See Note 4.
The mortgage loan collateralized by 6910 North Sheridan, Chicago, Illinois, was a property which the Partnership previously owned through foreclosure. The property was sold to unaffiliated third party and financing was provided by the Partnership. On April 3, 1997, the loan was prepaid. The total proceeds received were $505,325, which represented the loan balance, accrued interest and a 2% prepayment penalty. The proceeds were distributed to the Limited Partners in July 1997.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There were no disagreements on accounting or financial disclosure during 1999.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
The General Partner of the Partnership, Inland Real Estate Investment Corporation, was organized in 1984 for the purpose of acting as general partner of limited partnerships formed to acquire, own and operate real property, and make and acquire loans collateralized by mortgages on improved, income producing multi-family residential properties. The General Partner is a wholly-owned subsidiary of The Inland Group, Inc. In 1990, Inland Real Estate Investment Corporation became the replacement General Partner for an additional 301 privately-offered real estate limited partnerships syndicated by Affiliates. The General Partner has responsibility for all aspects of the Partnership's operations. The relationship of the General Partner to its Affiliates is described under the caption "Conflicts of Interest" at pages 10 and 11 of the Prospectus, incorporated herein by reference.
Officers and Directors
The officers, directors and key employees of The Inland Group, Inc. and its Affiliates ("Inland") that are likely to provide services to the Partnership are as follows:
Functional Title
Daniel L. Goodwin.......... Chairman and Chief Executive Officer Robert H. Baum............. Executive Vice President-General Counsel G. Joseph Cosenza.......... Senior Vice President-Acquisitions Robert D. Parks............ Senior Vice President-Investments Brenda G. Gujral........... President and Chief Operating Officer-IREIC Catherine L. Lynch......... Treasurer Roberta S. Matlin.......... Assistant Vice President-Investments Mark Zalatoris............. Assistant Vice President-Due Diligence Patricia A. DelRosso....... Vice President-Asset Management Frances C. Panico.......... Vice President-Mortgage Corporation Raymond E. Petersen........ Vice President-Mortgage Corporation Paul J. Wheeler............ Vice President-Personal Financial Services Group Kelly Tucek................ Assistant Vice President-Partnership Accounting Venton J. Carlston......... Assistant Controller
DANIEL L. GOODWIN (age 55) is Chairman of the Board of Directors of The Inland Group, Inc., a billion-dollar real estate and financial organization located in Oak Brook, Illinois. Among Inland's subsidiaries is the largest property management firm in Illinois and one of the largest commercial real estate and mortgage banking firms in the Midwest.
Mr. Goodwin has served as Director of the Avenue Bank of Oak Park and as a director of the Continental Bank of Oakbrook Terrace. He was Chairman of the Bank Holding Company of American National Bank of DuPage. Currently he is the Chairman of the Board of Inland Mortgage Investment Corporation.
Mr. Goodwin has been in the housing industry for more than 28 years, and has demonstrated a lifelong interest in housing-related issues. He is a licensed real estate broker and a member of the National Association of Realtors. Mr. Goodwin has developed thousands of housing units in the Midwest, New England, Florida, and the Southwest. He is also the author of a nationally recognized real estate reference book for the management of residential properties.
Mr. Goodwin has served on the Board of the Illinois State Affordable Housing Trust Fund for the past six years. He is an advisor for the Office of Housing Coordination Services of the State of Illinois, and a member of the Seniors Housing Committee of the National Multi-Housing Council. Recently, Governor Edgar appointed Mr. Goodwin as Chairman of the Housing Production Committee for the Illinois State Affordable Housing Conference. He also served as a member of the Cook County Commissioner's Economic Housing Development Committee, and he was the Chairman of the DuPage County Affordable Housing Task Force. The 1992 Catholic Charities Award was presented to Mr. Goodwin for his work in addressing affordable housing needs. The City of Hope designated him as the Man of the Year for the Illinois construction industry. In 1989, the Chicago Metropolitan Coalition on Aging presented Mr. Goodwin with an award in recognition of his efforts in making housing more affordable to Chicago's Senior Citizens. On May 4, 1995, PADS, Inc. (Public Action to Deliver Shelter) presented Mr. Goodwin with an award, recognizing The Inland Group as the leading corporate provider of transitional housing for the homeless people of DuPage County. Mr. Goodwin also serves as Chairman of New Directions Housing Corporation, a leading provider of affordable housing in northern Illinois.
Mr. Goodwin is a product of Chicago-area schools, and obtained his Bachelor's and Master's Degrees from Illinois Universities. Following graduation, he taught for five years in the Chicago Public Schools. His commitment to education has continued through his work with the BBF Family Services' Pilot Elementary School in Chicago, and the development of the Inland Vocational Training Center for the Handicapped located at Little City in Palatine, Illinois. He personally established an endowment which funds a perpetual scholarship program for inner-city disadvantaged youth. In 1990 he received the Northeastern Illinois University President's Meritorious Service Award. Mr. Goodwin holds a Master's Degree in Education from Northern Illinois University, and in 1986, he was awarded an Honorary Doctorate from Northeastern Illinois University College of Education. More than 12 years ago, under Mr. Goodwin's direction, Inland instituted a program to educate disabled students about the workplace. Most of these original students are still employed at Inland today, and Inland continues as one of the largest employers of the disabled in DuPage County. Mr. Goodwin has served as a member of the Board of Governors of Illinois State Colleges and Universities, and he is currently a trustee of Benedictine University. He was elected Chairman of the Northeastern Illinois University Board of Trustees in January 1996.
In 1988 he received the Outstanding Business Leader Award from the Oak Brook Jaycees and in March 1994, he won the Excellence in Business Award from the DuPage Area Association of Business and Industry. Additionally, he was honored with a dinner sponsored by Little Friends on May 17, 1995 for rescuing their Parent-Handicapped Infant Program when they lost their lease. He was the recipient of the 1995 March of Dimes Life Achievement Award and was recently recognized as the 1998 Corporate Leader of the Year by the Oak Brook Area Association of Commerce and Industry. The Ray Graham Association for People with Disabilities honored Mr. Goodwin as the 1999 Employer of the Year. For many years, he has been Chairman of the National Football League Players Association Mackey Awards for the benefit of inner-city youth and he served as the recent Chairman of the Speakers Club of the Illinois House of Representatives.
ROBERT H. BAUM (age 55) has been with The Inland Group, Inc. and its affiliates since 1968 and is one of the four original principals. Mr. Baum is Vice Chairman and Executive Vice President-General Counsel of The Inland Group, Inc. In his capacity as General Counsel, Mr. Baum is responsible for the supervision of the legal activities of The Inland Group, Inc. and its affiliates. This responsibility includes the supervision of The Inland Law Department and serving as liaison with outside counsel. Mr. Baum has served as a member of the North American Securities Administrators Association Real Estate Advisory Committee and as a member of the Securities Advisory Committee to the Secretary of State of Illinois. He is a member of the American Corporation Counsel Association and has also been a guest lecturer for the Illinois State Bar Association. Mr. Baum has been admitted to practice before the Supreme Court of the United States, as well as the bars of several federal courts of appeals and federal district courts and the State of Illinois. He received his B.S. Degree from the University of Wisconsin and his J.D. Degree from Northwestern University School of Law. Mr. Baum has served as a director of American National Bank of DuPage and currently serves as a director of Westbank. Mr. Baum also is a member of the Governing Council of Wellness House, a charitable organization that provides emotional support for cancer patients and their families.
G. JOSEPH COSENZA (age 55) has been with The Inland Group, Inc. and its affiliates since 1968 and is one of the four original principals. Mr. Cosenza is a Director and Vice Chairman of The Inland Group, Inc. and oversees, coordinates and directs Inland's many enterprises. In addition, Mr. Cosenza immediately supervises a staff of nine persons who engage in property acquisition. Mr. Cosenza has been a consultant to other real estate entities and lending institutions on property appraisal methods.
Mr. Cosenza received his B.A. Degree from Northeastern Illinois University and his M.S. Degree from Northern Illinois University. From 1967 to 1968, he taught at the LaGrange School District in Hodgkins, Illinois and from 1968 to 1972, he served as Assistant Principal and taught in the Wheeling, Illinois School District. Mr. Cosenza has been a licensed real estate broker since 1968 and an active member of various national and local real estate associations, including the National Association of Realtors and the Urban Land Institute.
Mr. Cosenza has also been Chairman of the Board of American National Bank of DuPage, and has served on the Board of Directors of Continental Bank of Oakbrook Terrace. He is presently a Director on the Board of Westbank in Westchester and Hillside, Illinois.
ROBERT D. PARKS (age 55) is a Director of The Inland Group, Inc., President, Chairman and Chief Executive Officer of Inland Real Estate Investment Corporation and President, Chief Executive Officer, Chief Operating Officer and Affiliated Director of Inland Real Estate Corporation.
Mr. Parks is responsible for the ongoing administration of existing investment programs, corporate budgeting and administration for Inland Real Estate Investment Corporation. He oversees and coordinates the marketing of all investments and investor relations.
Prior to joining Inland, Mr. Parks was a school teacher in Chicago's public schools. He received his B.A. degree from Northeastern Illinois University and his M.A. degree from the University of Chicago. He is a member of the Real Estate Investment Association and a member of NAREIT.
BRENDA G. GUJRAL (age 56) is President and Chief Operating Officer of Inland Real Estate Investment Corporation (IREIC), the parent company of the Advisor. She is also President and Chief Operating Officer of the Dealer- Manager, Inland Securities Corporation (ISC), a member firm of the National Association of Securities Dealers (NASD).
Mrs. Gujral has overall responsibility for the operations of IREIC, including the distribution of checks to over 50,000 investors, review of periodic communications to those investors, the filing of quarterly and annual reports for Inland's publicly registered investment programs with the Securities and Exchange Commission, compliance with other SEC and NASD securities regulations both for IREIC and ISC, review of asset management activities, and marketing and communications with the independent broker/dealer firms selling Inland's current and prior programs. Mrs. Gujral works with internal and outside legal counsel in structuring and registering the prospectuses for IREIC's investment programs.
Mrs. Gujral has been with Inland for 18 years, becoming an officer in 1982. Prior to joining Inland, she worked for the Land Use Planning Commission establishing an office in Portland, Oregon, to implement land use legislation for that state.
She is a graduate of California State University. She holds Series 7, 22, 39 and 63 licenses from the NASD and is a member of the National Association of Real Estate Investment Trusts (NAREIT) and the National Association of Female Executives.
CATHERINE L. LYNCH (age 41) joined Inland in 1989 and is the Treasurer of Inland Real Estate Investment Corporation. Ms. Lynch is responsible for managing the Corporate Accounting Department. Prior to joining Inland, Ms. Lynch worked in the field of public accounting for KPMG Peat Marwick since 1980. She received her B.S. degree in Accounting from Illinois State University. Ms. Lynch is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and the Illinois CPA Society. She is registered with the National Association of Securities Dealers as a Financial Operations Principal.
ROBERTA S. MATLIN (age 54) joined Inland in 1984 as Director of Investor Administration and currently serves as Senior Vice President-Investments. Prior to that, Ms. Matlin spent 11 years with the Chicago Region of the Social Security Administration of the United States Department of Health and Human Services. She is a Director of Inland Real Estate Investment Corporation, Inland Securities Corporation, and Inland Real Estate Advisory Services, Inc. As Senior Vice President-Investments, she directs the day-to-day internal operations of the General Partner. Ms. Matlin received her B.A. degree from the University of Illinois. She is registered with the National Association of Securities Dealers, Inc. as a General Securities Principal.
MARK ZALATORIS (age 41) joined Inland in 1985 and currently serves as Vice President of Inland Real Estate Investment Corporation. His responsibilities include the coordination of due diligence activities by selling broker/dealers and is also involved with limited partnership asset management including the mortgage funds. Mr. Zalatoris is a graduate of the University of Illinois where he received a Bachelors degree in Finance and a Masters degree in Accounting and Taxation. He is a Certified Public Accountant and holds a General Securities License with Inland Securities Corporation.
PATRICIA A. DELROSSO (age 47) joined Inland in 1985. Mrs. DelRosso serves as Senior Vice President of Inland Real Estate Investment Corporation in the area of Asset Management. As head of the Asset Management Department, she develops operating and disposition strategies for all investment-owned properties. Mrs. DelRosso received her Bachelor's degree from George Washington University and her Master's from Virginia Tech University. Mrs. DelRosso was selected and served from 1980-1984 as Presidential Management Intern, where she was part of a special government-wide task force to eliminate waste, fraud and abuse in government contracting and also served as Senior Contract Specialist responsible for capital improvements in 109 government properties. Mrs. DelRosso is a licensed real estate broker, NASD registered securities sales representative and is a member of the Urban Land Institute.
FRANCES C. PANICO (age 49) joined Inland in 1972 after earning a B.A. degree from Northern Illinois University in Business and Communication. She is currently President of Inland Mortgage Servicing Corporation, Sr. Vice President of Inland Mortgage Investment Corporation and Sr. Vice President of Inland Mortgage Corporation. Ms. Panico oversees the operation of loan services, which has a loan portfolio in excess of $430 million. She is a member of the loan committee which approves loans funded by IMIC and IMC. She monitors IMIC's assets, and is the business person in charge of loans in foreclosure. She previously served on the Board of Directors for Burbank State Bank and supervised the origination, processing and underwriting of single- family mortgages. Ms. Panico also packaged and sold loans to Freddie Mac.
RAYMOND E. PETERSEN (age 59) joined Inland in 1981. Mr. Petersen is responsible for the selection and approval of all corporate and limited partnership financing, as well as for the daily supervision of the commercial lending activity of Inland Mortgage Corporation where he is President. For the six years prior to joining Inland, Mr. Petersen was affiliated with the mortgage banking firm of Downs, Mohl Mortgage Corporation, serving as President and Chief Executive Officer. Previously he was also associated with the mortgage banking houses of B.B. Cohen & Company and Percy Wilson Mortgage and Finance Corporation. Mr. Petersen's professional credentials include a B.A. degree from DePaul University, senior membership in the National Association of Review Appraisers, state licensed as a real estate broker and licensed securities representative. Mr. Petersen was also a Director and Chairman of the Asset and Liability Committee of American National Bank of Downers Grove and is currently a Director of Westbank of Westchester, Illinois.
PAUL J. WHEELER (age 46) joined Inland in 1982 and is currently the President of Inland Real Estate Equities, Inc., the entity responsible for all corporately owned real estate. Mr. Wheeler received his B.A. degree in Economics from DePauw University and an M.B.A. in Finance/Accounting from Northwestern University. Mr. Wheeler is a Certified Public Accountant and licensed real estate broker. For three years prior to joining Inland, Mr. Wheeler was Vice President/Finance at the real estate brokerage firm of Quinlan & Tyson, Inc.
KELLY TUCEK (age 37) joined Inland in 1989 and is an Assistant Vice President of Inland Real Estate Investment Corporation. As of August 1996, Ms. Tucek is responsible for the Investment Accounting Department which includes all public partnership accounting functions along with quarterly and annual SEC filings. Prior to joining Inland, Ms. Tucek was on the audit staff of Coopers and Lybrand since 1984. She received her B.A. Degree in Accounting and Computer Science from North Central College.
VENTON J. CARLSTON (age 42) joined Inland in 1985 and is the Assistant Controller of Inland Real Estate Investment Corporation where he supervises the corporate bookkeeping staff and is responsible for financial statement preparation and budgeting for Inland Real Estate Investment Corporation and its subsidiaries. Prior to joining Inland, Mr. Carlston was a partnership accountant with JMB Realty. He received his B.S. degree in Accounting from Southern Illinois University. Mr. Carlston is a Certified Public Accountant and a member of the Illinois CPA Society. He is registered with the National Association of Securities Dealers, Inc. as a Financial Operations Principal.
Item 11.
Item 11. Executive Compensation
The General Partner is entitled to receive a share of cash distributions, when and as cash distributions are made to the Limited Partners, as described under the caption "Cash Distributions" and a share of profit and losses as described under the caption "Allocation of Profits or Losses" of the Prospectus.
The Partnership is permitted to engage in various transactions involving Affiliates of the General Partner of the Partnership, as described under the captions "Compensation and Fees" at pages 8 and 9, "Conflicts of Interest" at pages 10 and 11 of the Prospectus and at pages A-9 through A-17 of the Partnership Agreement, which is incorporated herein by reference. The relationship of the General Partner (and its directors and officers) to its Affiliates is set forth above in Item 10.
The General Partner may be reimbursed for salaries and direct expenses of employees of the General Partner and its Affiliates for the administration of the Partnership. In 1999, costs relating to such services were $14,060, all of which has been paid.
An Affiliate of the General Partner earned management fees in 1999 totaling $3,905 in connection with managing the Partnership's investment property.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) The Liquidity Plan (page 18 of the Prospectus of the Partnership dated February 12, 1986, which is incorporated herein by reference) owns the following Units of the Partnership as of December 31, 1998:
Amount and Nature of Beneficial Percent Title of Class Ownership of Class -------------- ----------------- -------- Limited Partnership 6,370.22 Units directly 31.65% Units
(b) The officers and directors of the General Partner of the Partnership own as a group the following Units of the Partnership:
Amount and Nature of Beneficial Percent Title of Class Ownership of Class -------------- ----------------- -------- Limited Partnership 246.88 Units directly 1.23% Units
No officer or director of the General Partner of the Partnership possesses a right to acquire beneficial ownership of Units of the Partnership.
All of the outstanding shares of the General Partner of the Partnership are owned by an Affiliate or its officers and directors as set forth above in Item 10.
(c) There exists no arrangement, known to the Partnership, the operation of which may, at a subsequent date, result in a change in control of the Partnership.
Item 13.
Item 13. Certain Relationships and Related Transactions
There were no significant transactions or business relationships with the General Partner, Affiliates or their management other than those described in Items 10 and 11 above. Reference is made to Note 3 of the Notes to Financial Statements (Item 8 of this Annual Report) for information regarding related party transactions.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The financial statements listed in the index on page 8 of this Annual Report are filed as part of this Annual Report.
(b) Exhibits. The following documents are filed as part of this Report:
3 Amended and Restated Agreement of Limited Partnership and Certificate of Limited Partnership, included as Exhibits A and B to the Prospectus dated February 12, 1986, as supplemented, are incorporated herein by reference thereto.
28 Prospectus dated February 12, 1986, as supplemented, included in Post- Effective Amendment No. 2 to Form S-11 Registration Statement, File No. 33- 2377, is incorporated herein by reference thereto.
(c) Financial Statement Schedules:
All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.
(d) Reports on Form 8-K
(1) Report on Form 8-K dated March 30, 1999 Item 2. Acquisition or Disposition of Assets
No Annual Report or proxy material for the period from January 1, 1999 to June 25, 1999 (Termination Date) 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.
INLAND MORTGAGE INVESTORS FUND, L.P. Inland Real Estate Investment Corporation General Partner
/s/ Robert D. Parks
By: Robert D. Parks Chairman of the Board and Chief Executive Officer Date: September 22, 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: Inland Real Estate Investment Corporation General Partner
/s/ Robert D. Parks
By: Robert D. Parks Chairman of the Board and Chief Executive Officer Date: September 22, 1999
/s/ Mark Zalatoris
By: Mark Zalatoris Vice President Date: September 22, 1999
/s/ Kelly Tucek
By: Kelly Tucek Principal Financial Officer and Principal Accounting Officer Date: September 22, 1999
/s/ Daniel L. Goodwin
By: Daniel L. Goodwin Director Date: September 22, 1999
/s/ Robert H. Baum
By: Robert H. Baum Director Date: September 22, 1999