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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the year ended December 31, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______to ______.
Commission File Number 0-7798
FIRST WILKOW VENTURE, A LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
Illinois 36-6169280
------------------------ ------------------------------------
(State of Organization) (I.R.S. Employer Identification No.)
180 North Michigan Avenue, Chicago, Illinois 60601
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(Address of Principal Executive Offices)
Registrant's Telephone Number, including area code: (312) 726-9622
Securities Registered Pursuant to Section 12(h) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Units of Partnership Interest, Exchange Value $130
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(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
The Registrant's units of limited partnership interest are not traded in a
regulated market. The restrictions on the sale, transfer, assignment or pledge
of partnership units are described in the Agreement of Limited Partnership of
the Registrant.
PART I
ITEM 1 - BUSINESS
ORGANIZATION
First Wilkow Venture (the "Registrant") is a limited partnership composed of 398
limited partners and two general partners who are Marc R. Wilkow and Clifton J.
Wilkow.
Marc R. Wilkow and Clifton J. Wilkow have been engaged in real estate activities
for over 20 years as officers of M&J Wilkow, Ltd., a closely held corporation,
and certain affiliated companies which have been involved (through their
predecessors in interest) in the acquisition, sale, development, leasing,
operation, brokerage and management of real estate since 1939.
Marc R. Wilkow is also president and sole director and stockholder of the law
firm of Wilkow & Wilkow, P.C., which is the general counsel for the Registrant.
All of the above entities, including the Registrant, have their principal
offices at 180 North Michigan Avenue in Chicago, Illinois 60601. M&J Wilkow,
Ltd. and its affiliated companies have a combined administrative staff of
approximately 46 and ancillary clerical, office and maintenance staff of
approximately 44.
DESCRIPTION OF BUSINESS
The Registrant owns outright or otherwise has participatory ownership interests
in real property for investment purposes. As of December 31, 2003, there are 19
properties in which the Registrant has interests, divided among residential,
commercial and industrial buildings and shopping centers. Seventeen of the
properties are neither owned nor leased by the Registrant directly, but are
owned by the Registrant in participation with other partnerships, some of which
the Registrant has contracted for a priority position with respect to the
receipt of cash distributions. These properties break down into the following
categories: one is a residential project; ten are shopping centers; five are
office buildings; and one is a real estate investment trust. The remaining two
properties are owned and operated by the Registrant as office buildings.
CHANGES IN PROPERTIES
During the calendar year ended December 31, 2003, certain of the property
investments held by the Registrant underwent the changes described below:
(a) Purchases:
On May 28, 2003, the Registrant invested $250,000 to obtain an 11.26% interest
in M&J/Louisville, LLC, which has a 33% interest in NW Acquisition Company, LLC,
which has a 90% interest in CMJ/NCT Louisville LLC, which has a 50% interest in
NCT Louisville LLC, which owns National City Tower, an office building located
in Louisville, Kentucky.
(b) Sales:
On July 8, 2003, a property owned by M&J/Retail Limited Partnership, Evergreen
Commons, was sold for $660,000, resulting in net cash proceeds of $212,395 after
satisfaction of the outstanding mortgage obligation. The transaction netted a
gain on sale of $94,002.
On September 29, 2003, Bayfair Mall was sold for $37,000,000. M&J/Retail Limited
Partnership received a distribution related to the sale in October 2003.
-2-
PART I
ITEM 1 - BUSINESS (Continued)
(c) Proposed Purchases and Sales:
None
(d) Declined Purchases:
None
COMPETITIVE POSITION
In general, none of the Registrant's properties are immune from the pressures of
competition. There are competing properties serving the geographical areas in
which each of the Registrant's properties are located. The amount of revenue
generated annually from these properties is very much dependent upon national
economic conditions generally and upon local economic conditions specifically,
among the latter of which are the availability and demand for office space,
commercial space and apartment units, as the case may be. In general, the
Registrant may incur substantial costs, from time to time, at its commercial
properties, in connection with either the renewal of existing leases or the
marketing of vacant space to new tenants. These costs may include the costs of
improving and upgrading space to be competitive, as well as the payment of
brokerage commissions.
-3-
PART I
ITEM 2 - PROPERTY
The Registrant has an ownership interest in the following properties as of
December 31, 2003:
PROPERTIES INVOLVING PARTICIPATIONS
DUKE REALTY LIMITED PARTNERSHIP
On December 2, 1994, the Registrant's interests in three partnerships were
redeemed for 50,251 partnership units in Duke Realty Limited Partnership, the
operating partnership ("UPREIT") of more than 108 million square feet of
property. The UPREIT's sole general partner is Duke Realty Corporation (formerly
Duke Realty Investments, Inc.), a real estate investment trust ("REIT") listed
on the New York Stock Exchange. The partnership units in the UPREIT are
convertible, on a one-for-one basis, to shares of common stock to the REIT.
The Registrant on April 15, 1997, converted 25,000 units in Duke Realty Limited
Partnership to 25,000 shares of common stock of Duke Realty Corporation. The
stock was sold in two blocks of 12,500 shares on June 12, 1997, and July 21,
1997, for total proceeds of $1,028,212, resulting in a gain of $794,962.
On August 18, 1997, a 2-for-1 stock and unit split occurred, resulting in an
additional 25,251 units of Duke Realty Limited Partnership being issued to the
Registrant. The Registrant thus held 50,502 units in Duke Realty Limited
Partnership at December 31, 2003.
M&J/GROVE LIMITED PARTNERSHIP (THE GROVE OFFICE PARK)
The Grove Office Park consists of three two-story office buildings lying on six
acres of land located in Wheaton, Illinois. The complex contains 105,454 square
feet of prime office space with parking available for 343 cars.
Through December 31, 1995, the Registrant had invested a total of $931,000 to
acquire 981 limited partnership units (a 23.08% interest) in M&J/Grove Limited
Partnership ("M&J/Grove"), the partnership that was formed to acquire the
subject property. In addition, the Registrant owns seven units (a 3.02%
interest) in Wilkow/Grove Partners Limited Partnership, which has a 5.87%
interest in M&J/Grove. As a Class A limited partner, the Registrant is entitled
to a cumulative cash flow priority of 8% per annum.
On July 1, 1996, the Registrant invested an additional $98,100 in M&J/Grove in
connection with the purchase of 981 Call Units, increasing its interest in the
investment to 27.34%. The Call Unit holders are entitled to a cumulative cash
flow priority of 12% per annum. Upon sale or refinancing, the Call Unit holders
will receive the first $367,500 of available net proceeds pro rata. Any proceeds
remaining thereafter will be split 25% to the holders of the Call Units and 75%
to the General and Class A Limited Partners. The proceeds of the M&J/Grove
capital call were primarily used for a mortgage debt restructuring of the Grove
Office Park. The original $8,000,000 mortgage was paid off at a discounted
amount of $5,600,000 and replaced with a new first mortgage loan in the amount
of $5,500,000, bearing interest at the fixed rate of 8.55% per annum for five
years. In March 2001, the loan was refinanced. The property is encumbered with a
mortgage loan of $6,500,000, bearing interest at 6.6875% and maturing in April
2011.
L-C OFFICE PARTNERSHIP IV (DOVER FARMS APARTMENTS)
The Registrant holds a 74.92% interest in L-C Office Partnership IV, which,
through two investment partnerships, has a 53.9% effective interest in M&J/Dover
Limited Partnership,
-4-
PART I
ITEM 2 - PROPERTY (Continued)
which owns Dover Farms Apartments, a 300 unfurnished one- and two-bedroom
apartment complex located in North Royalton, Ohio.
On December 18, 2002, M&J/Dover Limited Partnership admitted CAPREIT of Dover
Farms, LLP as a partner. At this time, the partnership's name was changed to
Dover Farms LP. As a result of the admittance, L-C Office Partnership IV's
effective interest in Dover Farms LP was reduced to 5.4%, with the explicit
proviso that, through its interest in DFA, LLC, L-C Office Partnership IV will
benefit from a cash flow and residual proceeds preference.
The Registrant owned limited partnership interests in several partnerships whose
sole asset was an interest in Lake Cook Office Development Building IV Limited
Partnership, one of the investment partnerships referred to above. On December
31, 1999, the Registrant received an interest in Lake Cook Office Development
Building IV Limited Partnership in liquidation of these partnerships, with the
exception of TOP Investors Limited Partnership. The result of this transaction
was that the Registrant now owns a direct ownership interest in Lake Cook Office
Development Building IV Limited Partnership of .64%.
FIRST CANDLEWICK ASSOCIATES
The Registrant owns an 11.96% interest (55 units) in First Candlewick
Associates, which holds multiple partnership investments.
SECOND WILKOW VENTURE
The Registrant owns a 4.89% interest (197 units) in Second Wilkow Venture, which
holds multiple partnership investments.
M&J/MID OAK LIMITED PARTNERSHIP
On August 26, 1997, the Registrant invested $70,000 to obtain a 35% interest in
M&J/Mid Oak Limited Partnership, which has a 9% interest in Mid Oak Plaza LLC,
which owned Mid Oak Plaza Shopping Center located in Midlothian, Illinois. Mid
Oak Plaza Shopping Center was sold on November 26, 2002, for a purchase price of
$6,025,000. M&J/Mid Oak Limited Partnership received a distribution in the
amount of $192,000, resulting in a gain on disposition of $77,284 in 2003.
M&J/EDEN PRAIRIE LIMITED PARTNERSHIP
On April 10, 1998, the Registrant invested $64,000 to obtain a 26.44% ownership
in M&J/Eden Prairie Limited Partnership, which has a 10% interest in Eden
Prairie LLC, which acquired a 70,689 square foot shopping center in Eden
Prairie, Minnesota. On September 27, 1999, an additional investment of $76,174
was made, increasing the Registrant's ownership to 42.98%.
The property was acquired with a $6,950,000 mortgage bearing interest at 7.2%
per annum. The term of the loan is ten years.
M&J/NCT LOUISVILLE LP
On September 29, 1999, the Registrant invested $300,000 to obtain a 23.47%
interest in M&J/NCT Louisville LP, which has a 10% interest in CMJ/NCT
Louisville LLC. CMJ/NCT Louisville LLC is a 50% owner of NCT Louisville LLC,
which was formed to acquire National City Tower, a 712,533 square foot office
tower located in Louisville, Kentucky.
-5-
PART I
ITEM 2 - PROPERTY (Continued)
The property was acquired with a $45,775,000 note bearing interest at 7.43% per
annum and an additional note of $7,500,000 bearing interest at 7.66% per annum.
The term of each note is five years.
M&J/LOUISVILLE, LLC
On May 28, 2003, the Registrant invested $250,000 to obtain an 11.26% interest
in M&J/Louisville, LLC, which has a 33% interest in NW Acquisition Company, LLC,
which has a 90% interest in CMJ/NCT Louisville LLC, which has a 50% interest in
NCT Louisville LLC, which owns National City Tower, an office building located
in Louisville, Kentucky.
ARLINGTON LLC (ANNEX OF ARLINGTON HEIGHTS)
On September 29, 1999, the Registrant converted its loan receivable of
$1,226,000 to a 30.65% interest in Arlington LLC, which owns Annex of Arlington
Heights, a 197,110 square foot community center located in Arlington Heights,
Illinois.
In addition, the Registrant posted a letter of credit in the amount of $280,000
with the mortgagee as credit enhancement in exchange for an additional 7%
interest in Arlington LLC. On April 26, 2001, the Registrant invested $280,000
to release the letter of credit held by the mortgagee as credit enhancement for
no additional interest in Arlington LLC. In March 2002, the property was
refinanced. The property is encumbered with a mortgage of $18,250,000, bearing
interest at 7.85% and maturing in April 2012.
M&J/Retail Limited Partnership also holds an 8.75% interest in Arlington LLC
(see Page 8).
M&J/PROSPECT CROSSING LIMITED PARTNERSHIP
On February 24, 2000, the Registrant invested $530,000 to obtain an 11.21%
interest in M&J/Prospect Crossing Limited Partnership, which owns Centre at Lake
in the Hills, a shopping center located in Lake in the Hills, Illinois. The
property is encumbered with two mortgages. The first mortgage of $10,350,000
bears interest at 7.25% and matures in January 2008. The second mortgage of
$1,500,000 bears interest at 8% and matures in March 2008.
M&J/Retail Limited Partnership also holds a 10.58% interest in M&J/Prospect
Crossing Limited Partnership (see Page 8).
M&J/CLARK STREET, LLC
On August 14, 2000, the Registrant invested $577,000 to obtain a 17.48% interest
in M&J/Clark Street, LLC, which has a 20.00% interest in 20 South Clark Street,
LLC, which owns 20 South Clark, an office building located in Chicago, Illinois.
The property is encumbered with a mortgage of $24,831,000, bearing interest at
9.00% and maturing August 2010.
M&J/BATTERY, LLC
On May 31, 2001, the Registrant invested $300,000 to obtain a 15.79% interest in
M&J/Battery, LLC, which has a 14.50% interest in 600 Battery Street, LLC, which
owns 600 Battery Street, an office building in San Francisco, California. The
property is encumbered with a mortgage of $26,100,000, bearing interest at
7.625% and maturing May 2011.
-6-
PART I
ITEM 2 - PROPERTY (Continued)
CENTENNIAL FWV, LLC
On December 17, 2002, the Registrant invested $635,000 to obtain a 100% interest
in Centennial FWV, LLC, which has a 21.17% undivided interest in Centennial
Village Phase II, a shopping center in Roswell, Georgia. The property is
encumbered with a mortgage of $13,000,000, bearing interest at 5.90% and
maturing January 2013.
PROPERTIES INVOLVING PROMISSORY NOTES
RAMADA INN & SUITES, ORLANDO, FLORIDA
In 2001, The Villas at Monterey Limited Partnership and Tango Bay of Orlando,
L.C. sold the property for $5,985,000 on the installment basis with a promissory
note secured by the property. On October 1, 2002, the maker of the note failed
to make a scheduled payment, thereby defaulting on the note, and legal action
was pursued. In April 2003, a foreclosure action was completed that facilitated
the liquidation of the asset through a sale to an unrelated third party. The net
proceeds of this sale allowed for the full repayment of the loan receivable that
had been outstanding from The Villas at Monterey Limited Partnership and Tango
Bay of Orlando, L.C.
PROPERTIES OWNED AND OPERATED BY REGISTRANT OR CONSOLIDATED SUBSIDIARIES
180 NORTH MICHIGAN, CHICAGO, ILLINOIS
The leasehold estate to this commercial office building on Chicago's prestigious
Michigan Avenue was acquired in 1968 at a price of $6,550,000, of which
$5,250,000 comprised mortgage financing. The property was constructed in 1926
and completely renovated in 1967 at a cost in excess of $3,000,000. In 1973, the
Registrant acquired the fee simple estate of 18,649 square feet of land for
$1,600,000. In November 1986, the leasehold and fee simple estates were merged
and the property was refinanced.
In July 1998, the property was refinanced. The property is encumbered with a
first mortgage loan of $7,300,000 bearing interest at an annual rate of 7.13%.
The loan is to be amortized over a 30-year schedule, with a balloon payment of
the unpaid principal balance due on September 1, 2008.
M&J/RETAIL LIMITED PARTNERSHIP
The Registrant originally invested a total of $3,995,000 to obtain a 56.97%
interest in M&J/Retail Limited Partnership ("M&J/Retail"). The Registrant also
owns three limited partnership units (.75% interest) in Wilkow/Retail Partners
Limited Partnership, which has a 5.63% interest in M&J/Retail. On July 1, 1995,
the Registrant sold 300 Class A units of M&J/Retail for a total of $314,800,
resulting in a gain of $137,245 and reducing its ownership in this partnership
from 56.97% to 52.75%.
The Registrant is entitled to a cumulative cash flow priority in the amount of
9% per annum on its investment.
M&J/Crossroads Limited Partnership
On October 27, 1995, M&J/Retail invested a total of $297,000 to acquire a 46.41%
interest in M&J/Crossroads Limited Partnership ("M&J/Crossroads").
M&J/Crossroads purchased a
-7-
PART I
ITEM 2 - PROPERTY (Continued)
330,505 square foot shopping center known as Crossroads of Roseville for
$19,250,000. The property is currently encumbered with a mortgage of
$16,722,960, bearing interest at 7.23% and maturing in January 2008. The center
is located on 19.9 acres of land in Roseville, Minnesota. As a result of a
refinancing of the first mortgage loan on December 31, 1997, M&J/Retail received
a distribution on January 10, 1998, of $501,065.
M&J/Clarkfair Limited Partnership
In 1998, M&J/Retail invested $415,000 to acquire a 70.90% investment in
M&J/Clarkfair Limited Partnership, which has a 9% interest in Clarkfair LLC.
Clarkfair LLC was the sole owner of two limited liability companies, namely
Marketfair North LLC and Shops at Clark's Pond LLC, which were formed to acquire
the following described properties:
Marketfair North - a 136,989 square foot shopping center in
Clay, New York
Shops at Clark's Pond - a 208,325 square foot shopping center in South
Portland, Maine
In addition to the above cash contributions, M&J/Retail has posted two letters
of credit totaling $500,000 as additional collateral with the mortgagee of
Marketfair North. These letters of credit, which expire on March 15, 2005, renew
automatically until the underlying obligations are satisfied. The general
partner of M&J/Clarkfair Limited Partnership has indemnified M&J/Retail for 10%,
or $50,000, of these letters of credit. In the event that the mortgagee is
entitled to liquidate the letters of credit, M&J/Retail will be required to fund
$450,000 of the obligation. At that time, M&J/Retail's interest in M&J/Clarkfair
Limited Partnership will increase from 70.9% to 79.72%.
On May 31, 2000, Clarkfair LLC distributed to its members its interest in Shops
at Clark's Pond LLC, leaving only an investment in Marketfair North LLC. As a
result of this transaction, M&J/Clarkfair Limited Partnership received a 33.50%
interest in Shops at Clark's Pond LLC.
Fulcrum, LLC
On May 31, 2000, M&J/Retail invested $1,133,750 to obtain a 53.13% interest in
Fulcrum, LLC, which has a 65.65% interest in Shops at Clark's Pond LLC.
Arlington LLC
On September 29, 1999, M&J/Retail invested a total of $350,000 to obtain an
8.75% interest in Arlington LLC, which owns Annex of Arlington Heights, a
197,110 square foot community center located in Arlington Heights, Illinois.
The property was acquired with an $11,616,888 mortgage bearing interest at 9.65%
per annum. In March 2002, the property was refinanced. The property is
encumbered with a mortgage of $18,250,000, bearing interest at 7.85% and
maturing in April 2012.
The Registrant also holds a 37.65% interest in Arlington LLC (see Page 6).
M&J/Prospect Crossing Limited Partnership
On February 24, 2000, M&J/Retail invested $500,000 to obtain a 10.58% interest
in M&J/Prospect Crossing Limited Partnership, which owns Centre at Lake in the
Hills, a shopping center located in Lake in the Hills, Illinois. The property is
encumbered with two mortgages.
-8-
PART I
ITEM 2 - PROPERTY (Continued)
The first mortgage of $10,350,000 bears interest at 7.25% and matures in January
2008. The second mortgage of $1,500,000 bears interest at 8% and matures in
March 2008.
The Registrant also holds an 11.21% interest in M&J/Prospect Crossing Limited
Partnership (see Page 6).
Yorkshire Plaza Investors, LLC
On April 10, 2000, M&J/Retail invested $243,000 to obtain a 26.01% interest in
Yorkshire Plaza Investors, LLC, which has a 20.00% interest in Yorkshire LLC,
which owns Yorkshire Plaza, a shopping center located in Aurora, Illinois. The
property is encumbered with a mortgage of $18,680,000, bearing interest at 8.31%
and maturing May 2005.
M&J/Bayfair 580, LLC
On June 6, 2001, M&J/Retail invested a total of $371,000 to obtain an 11.24%
interest in M&J/Bayfair 580, LLC, which had a 99.00% interest in Bayfair 580,
LLC, which owned Bayfair Mall, a shopping center located in San Leandro,
California.
On September 29, 2003, Bayfair Mall was sold for $37,000,000, resulting in net
cash proceeds of $16,293,000, after satisfaction of the outstanding mortgage
obligation. The transaction netted a gain on sale of $11,360,000. M&J/Retail
received a distribution related to the sale in October 2003.
NAPERVILLE OFFICE COURT, NAPERVILLE, ILLINOIS
In August 1986, pursuant to the terms of an exchange agreement, the Registrant
acquired the Naperville Office Court for $4,830,000.
On April 6, 1988, the Registrant procured a $3,000,000 first mortgage loan on
the property which bears interest at the rate of 9.75% per annum and was due in
May 1998. During 1993, the Registrant exercised an option to adjust the interest
rate to 8.875%.
On June 8, 1998, the property was refinanced. The principal amount of the new
first mortgage loan is $4,500,000 bearing interest at an annual rate of 7.13%.
The loan is to be amortized over a 30-year schedule, with a balloon payment of
the unpaid principal balance due on August 1, 2008. The existing mortgage loan
of $2,690,185 was paid off, resulting in net refinancing proceeds of $1,642,123.
Naperville Office Court is located at 1801 - 1813 Mill Street in Naperville,
Illinois. Consisting of four single-story office buildings, the property rests
on 5.5 acres, contains 66,405 net rentable square feet and provides parking
space for 300 automobiles.
209 WEST JACKSON, CHICAGO, ILLINOIS
On August 24, 1995, the Registrant acquired a 59.44% undivided interest in 209
West Jackson, a 142,996 square foot office building located in downtown Chicago,
in exchange for its 57.67% undivided interest in another asset. The 209 West
Jackson building was subject to a first mortgage of $10,000,000 and an
additional $5,661,000 note secured by the first mortgage, both interest only at
General Electric Capital Corporation's commercial paper rate plus 3.25% per
annum.
-9-
PART I
ITEM 2 - PROPERTY (Continued)
On October 22, 1999, both the ownership and the debt were restructured. The
Registrant and its tenants in common rolled up their interests into a new
limited liability company, 209 West Jackson LLC. In addition to the interest,
each cotenant was responsible for a capital infusion, of which the Registrant's
share was $710,000, to obtain a 71% interest in the newly formed 209 West
Jackson LLC. The Registrant was responsible for additional equity contributions
of $852,000, which have been fully funded. Through a partial pay down of the
principal balance and approximately $5,000,000 of debt forgiveness by the
property's lender, General Electric Capital Corporation, the property's debt was
reduced to $10,000,000 and separated into two notes. The first note is for
$8,600,000, and the second note, a line of credit, is for $1,400,000. Funds in
the amount of $804,588 have been drawn on the second note as of December 31,
2003. The first note matures on November 1, 2004, and bears interest at 8.95%
per annum, payable monthly. The second note also matures on November 1, 2004,
but bears interest at a variable rate.
-10-
PART I
ITEM 3 - LEGAL PROCEEDINGS
Legal proceedings pending involve either suits which have been instituted by the
Registrant or its agents against tenants who are in default of their lease
obligations or the defense of alleged personal injury claims incidental to the
operation of properties accessible to the general public. All of the personal
injury claims are covered by insurance. It is not anticipated that the outcome
of any of these proceedings, if unfavorable to the Registrant, will have a
materially adverse impact on the Registrant.
-11-
PART I
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
-12-
PART II
ITEM 5 - MARKET FOR REGISTRANT'S CAPITAL UNITS AND RELATED SECURITY HOLDER
MATTERS
The number of holders of record of equity securities of the Registrant as of
December 31, 2003, was approximately:
Title of Class Number of Record Holders
- ------------------------------------ ------------------------
Unit of Limited Partnership Interest 398
The Registrant's units of limited partnership interest are not actively traded
in a regulated market. The restrictions on the sale, transfer, assignment or
pledge of partnership units are described in the Agreement of Limited
Partnership of the Registrant as amended.
-13-
PART II
ITEM 6 - SELECTED FINANCIAL DATA
YEARS ENDED DECEMBER 31,
---------------------------------------------------
2003 2002 2001 2000
---------- ---------- ---------- ----------
OPERATING RESULTS
(IN THOUSANDS)
Total revenue $ 8,728 $ 8,588 $ 10,687 $ 16,119
Net income (loss)* $ 1,099 $ (389) $ (216) $ 2,284
PARTNERSHIP UNIT DATA
(PER PARTNERSHIP UNIT)
Net income (loss):
General partner* $ 6.43 $ (2.28) $ (1.26) $ 13.36
Limited partner* $ 6.43 $ (2.28) $ (1.26) $ 13.36
Cash distributions paid:
General partner $ 4.40 $ 6.30 $ 6.75 $ 4.00
Limited partner $ 4.40 $ 6.30 $ 6.75 $ 4.00
* Includes gain (loss) on sale of real estate properties
YEARS ENDED DECEMBER 31,
-------------------------------------------------
2003 2002 2001 2000
---------- ---------- ---------- ----------
FINANCIAL POSITION DATA
Total assets (in thousands) $ 39,306 $ 38,692 $ 41,361 $ 49,725
Net book value per unit $ 77.90 $ 75.87 $ 84.44 $ 92.45
-14-
PART II
ITEM 7 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS - 2003 COMPARED TO 2002
For the year ended December 31, 2003, the net income was $1,099,159 compared to
a net loss of $388,901 for the comparative period of 2002.
The Registrant made distributions to its partners this year as follows:
DATE AMOUNT PER UNIT
- ---------- -------- --------
January 10 $188,007 $ 1.10
April 10 188,008 1.10
July 10 188,007 1.10
October 10 188,008 1.10
In March of 2003, the Registrant received a payment of $123,638 on the
indebtedness from M&J/Dover Limited Partnership.
On May 28, 2003, the Registrant invested $250,000 to obtain an 11.26% interest
in M&J/Louisville, LLC, which has a 33.33% interest in NW Acquisition Company,
LLC, which has a 90% interest in CMJ/NCT Louisville LLC, which has a 50%
interest in NCT Louisville LLC, which owns National City Tower, an office
building located in Louisville, Kentucky.
In May of 2003, the Registrant received a payment of $1,373,038, including
$641,914 of accrued interest, to satisfy the indebtedness from The Villas at
Monterey Limited Partnership and Tango Bay of Orlando L.C.
On July 8, 2003, a property owned by M&J/Retail Limited Partnership, Evergreen
Commons, was sold for $660,000, resulting in net cash proceeds of $212,395 after
satisfaction of the outstanding mortgage obligation. The transaction netted a
gain on sale of $94,002.
On September 29, 2003, Bayfair Mall was sold for $37,000,000, resulting in net
cash proceeds of $16,293,000, after satisfaction of the outstanding mortgage
obligation. The transaction netted a gain on sale of $11,360,000. M&J/Retail
received a distribution related to the sale in October 2003.
-15-
PART II
ITEM 7 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS - 2002 COMPARED TO 2001
For the year ended December 31, 2002, the net loss was $388,901 compared to a
net loss of $215,523 for the comparative period of 2001.
The Registrant made distributions to its partners this year as follows:
DATE AMOUNT PER UNIT
- ---------- -------- --------
January 10 $170,916 $ 1.00
April 10 529,841 3.10
July 10 188,007 1.10
October 10 188,007 1.10
On April 10, 2002, M&J/Retail Limited Partnership received a liquidating
distribution from Northlake Tower Limited Partnership in the amount of $645,986,
resulting in a loss on disposition of investment in partnership of $104,014.
This loss was offset by over $600,000 in gains taken as a result of the 1997
refinancing.
On August 6, 2002, the underlying unimproved land held by Rosemont 28 Limited
Partnership was sold for $475,000. The Registrant received cash proceeds of
$93,455, resulting in a loss to Registrant of $407,062.
On November 26, 2002, Mid Oak Plaza Shopping Center was sold for $6,025,000.
M&J/Mid Oak Limited Partnership received a liquidating distribution in 2003 for
the amount of $192,000, which resulted in a gain on disposition of $77,284 in
2003.
On December 17, 2002, the Registrant invested $635,000 to obtain a 100% interest
in Centennial FWV, LLC, which has a 21.17% undivided interest in Centennial
Village Phase II, a shopping center in Roswell, Georgia.
On December 18, 2002, M&J/Dover Limited Partnership admitted CAPREIT of Dover
Farms, LLP as a partner. At this time, the partnership's name was changed to
Dover Farms LP. As a result of the admittance, L-C Office Partnership IV's
effective interest in Dover Farms LP was reduced to 5.4%, with the explicit
proviso that, through its interest in DFA, LLC, L-C Office Partnership IV will
benefit from a cash flow and residual proceeds preference.
-16-
PART II
ITEM 7 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS - 2001 COMPARED TO 2000
For the year ended December 31, 2001, the net loss was $215,523 compared to net
income of $2,283,969 for the comparative period of 2000.
The Registrant made distributions to its partners this year as follows:
DATE AMOUNT PER UNIT
- ---------- -------- --------
January 10 $128,187 $ 0.75
April 10 683,664 4.00
July 10 170,916 1.00
October 5 170,916 1.00
On April 26, 2001, the Registrant invested $280,000 to release the letter of
credit held by the mortgagee as credit enhancement for no additional interest in
Arlington LLC.
On May 31, 2001, the Registrant invested $300,000 to obtain a 15.79% interest in
M&J/Battery, LLC, which has a 14.50% interest in 600 Battery Street, LLC, which
owns 600 Battery Street, an office building in San Francisco, California.
On June 6, 2001, M&J/Retail Limited Partnership invested a total of $371,000 to
obtain an 11.24% interest in M&J/Bayfair 580, LLC, which has a 99.00% interest
in Bayfair 580, LLC, which owns Bayfair Mall, a shopping center located in San
Leandro, California.
On July 31, 2001, Waterfall Plaza was sold for $1,800,000, resulting in no cash
proceeds after satisfaction of the outstanding mortgage loan. The transaction
created a gain on sale of $115,675.
On July 31, 2001, the Highland Park Professional Building was sold for
$2,375,000, resulting in net cash proceeds of $909,134 after satisfaction of the
outstanding mortgage loan. The transaction netted a loss on sale of $293,182.
The Registrant had an 89.286% interest in M&J/Sheridan Limited Partnership,
which owned the building.
On September 13, 2001, a property owned by M&J/Retail Limited Partnership,
Archer and Central, was sold for $2,817,500, resulting in net cash proceeds of
$492,175 after satisfaction of the outstanding mortgage loan. The transaction
created a gain on sale of $726,593.
On September 18, 2001, a property owned by M&J/Retail Limited Partnership, Oak
Lawn Square, was sold for $1,450,000, resulting in net cash proceeds of $480,811
after satisfaction of the outstanding mortgage loan. The transaction created a
gain on sale of $264,847.
-17-
PART II
ITEM 7 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On January 20, 1995, the Registrant entered into a revolving credit facility
with the LaSalle National Bank. The facility, due August 31, 2004, pays interest
at the prime rate. Maximum borrowings under the facility agreement are the
lesser of $675,000 or 80% of the fair market value of the Registrant's
investment in Duke Realty Limited Partnership (see Item 2). Borrowings under the
facility agreement are secured by the partnership units of Duke Realty Limited
Partnership owned by the Registrant. As of December 31, 2003, no amounts are
outstanding under this facility.
The liquid assets of the Registrant increased as of December 31, 2003, when
compared to December 31, 2002, due to partnership investment draws and
collection of loans receivable.
The general partners currently believe that the amount of working capital
reserves, when considered with the Registrant's projected cash flows from
operations in 2004 and borrowings under the revolving credit facility, will be
sufficient to cover any normal cash or liquidity requirements which may be
reasonably foreseen.
-18-
PART II
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
----
Independent Auditors' Report 20
First Wilkow Venture:
Consolidated Balance Sheets, December 31, 2003 and 2002 21
Consolidated Statements of Operations,
Years Ended December 31, 2003, 2002 and 2001 22
Consolidated Statements of Partners' Capital,
Years Ended December 31, 2003, 2002 and 2001 23
Consolidated Statements of Cash Flows,
Years Ended December 31, 2003, 2002 and 2001 24
Notes to Financial Statements,
December 31, 2003, 2002 and 2001 25
-19-
INDEPENDENT AUDITORS' REPORT
To the Partners
FIRST WILKOW VENTURE
We have audited the consolidated financial statements of First Wilkow Venture
(the "Partnership") listed in the index to the consolidated financial statements
set forth on Page 19 as of and for the year ended December 31, 2003. Our audit
also includes the financial statement schedules listed in the index at Item 15
on Page 52 for the year ended December 31, 2003. These consolidated financial
statements and financial statement schedules are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit. The consolidated financial
statements and schedules of First Wilkow Venture as of December 31, 2002 and
2001, were audited by other auditors whose report dated February 7, 2003,
expressed an unqualified opinion on those statements.
We conducted our audit in accordance with U.S. 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
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of First Wilkow Venture
and its subsidiaries as of December 31, 2003, and the results of their
operations, changes in partners' capital and their cash flows for the year then
ended in conformity with U.S. generally accepted accounting principles.
Also, in our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
Chicago, Illinois
February 18, 2004
-20-
FIRST WILKOW VENTURE
CONSOLIDATED BALANCE SHEETS
December 31, 2003 and 2002
2003 2002
----------- -----------
ASSETS
REAL ESTATE
Land $ 4,030,069 $ 4,100,376
Buildings and improvements 31,659,299 31,458,038
Fixtures and equipment 46,999 41,670
----------- -----------
TOTAL REAL ESTATE 35,736,367 35,600,084
Accumulated depreciation 13,709,271 13,070,307
----------- -----------
NET REAL ESTATE 22,027,096 22,529,777
----------- -----------
INVESTMENTS IN REAL ESTATE PARTNERSHIPS 7,241,842 7,181,237
----------- -----------
LOANS RECEIVABLE 86,963 941,725
----------- -----------
OTHER ASSETS
Cash and cash equivalents 6,602,360 4,562,781
Certificates of deposit - restricted 250,000 250,000
Receivables and prepaid expenses 881,089 1,238,092
Deposits 1,020,331 832,105
Deferred charges 1,196,706 1,155,828
----------- -----------
TOTAL OTHER ASSETS 9,950,486 8,038,806
----------- -----------
TOTAL ASSETS $39,306,387 $38,691,545
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
MORTGAGE NOTES PAYABLE $20,516,241 $20,870,507
----------- -----------
OTHER LIABILITIES
Accounts payable and accrued expenses 345,792 191,688
Accrued property taxes 1,301,996 1,329,662
Deferred state income taxes 170,000 170,000
Security deposits and prepaid rent 506,740 584,447
----------- -----------
TOTAL OTHER LIABILITIES 2,324,528 2,275,797
----------- -----------
MINORITY INTEREST 3,151,441 2,578,193
----------- -----------
PARTNERS' CAPITAL (170,916 units authorized
and issued) 13,314,177 12,967,048
----------- -----------
TOTAL LIABILITIES AND PARTNERS'
CAPITAL $39,306,387 $38,691,545
=========== ===========
See Notes to Financial Statements
-21-
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2003, 2002 and 2001
2003 2002 2001
------------ ------------ ------------
REVENUE
Rental $ 8,299,619 $ 8,387,447 $ 9,360,624
Interest 85,272 172,154 290,427
Gain on disposal of real estate and other revenue 343,605 28,617 1,035,560
------------ ------------ ------------
TOTAL REVENUE 8,728,496 8,588,218 10,686,611
------------ ------------ ------------
PARTNERSHIP INVESTMENTS' INCOME (LOSS) 1,586,062 (105,735) 101,498
------------ ------------ ------------
EXPENSES
Operating 4,044,172 4,321,962 4,294,856
Real estate taxes 1,271,941 1,319,208 1,335,161
Depreciation and amortization 1,267,932 1,287,174 1,691,684
Interest 1,631,888 1,656,185 2,049,983
General and administrative 104,477 110,521 140,648
------------ ------------ ------------
TOTAL EXPENSES 8,320,410 8,695,050 9,512,332
------------ ------------ ------------
LOSS ON DISPOSITION OF TENANT
IMPROVEMENTS 148,175 65,700 825,678
------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS 1,845,973 (278,267) 450,099
MINORITY INTEREST IN SUBSIDIARIES'
NET INCOME (746,814) (110,634) (665,622)
------------ ------------ ------------
NET INCOME (LOSS) $ 1,099,159 $ (388,901) $ (215,523)
============ ============ ============
UNITS - AUTHORIZED AND ISSUED
General partner 9,329 9,199 8,614
Limited partner 161,587 161,717 162,302
NET INCOME (LOSS) PER UNIT
General partner $ 6.43 $ (2.28) $ (1.26)
Limited partner 6.43 (2.28) (1.26)
BOOK VALUE PER UNIT
General partner $ 77.90 $ 75.87 $ 84.44
Limited partner 77.90 75.87 84.44
CASH DISTRIBUTIONS PAID
General partner $ 4.40 $ 6.30 $ 6.75
Limited partner 4.40 6.30 6.75
See Notes to Financial Statements
-22-
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
Years Ended December 31, 2003, 2002 and 2001
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
---------- ------------ ------------
BALANCE - DECEMBER 31, 2000 $ 749,941 $ 15,051,985 $ 15,801,926
ADD (DEDUCT)
Loss for year ended
December 31, 2001 (10,544) (204,979) (215,523)
To reflect changes in partnership capital
between general and limited partners - net 95,568 (95,568) -
Cash distributions for the year ended
December 31, 2001 (54,623) (1,099,060) (1,153,683)
---------- ------------ ------------
BALANCE - DECEMBER 31, 2001 780,342 13,652,378 14,432,720
ADD (DEDUCT)
Loss for year ended
December 31, 2002 (20,599) (368,302) (388,901)
To reflect changes in partnership capital
between general and limited partners - net 77,220 (77,220) -
Cash distributions for the year ended
December 31, 2002 (55,555) (1,021,216) (1,076,771)
---------- ------------ ------------
BALANCE - DECEMBER 31, 2002 781,408 12,185,640 12,967,048
ADD (DEDUCT)
Income for year ended
December 31, 2003 59,369 1,039,790 1,099,159
To reflect changes in partnership capital
between general and limited partners - net 16,770 (16,770) -
Cash distributions for the year ended
December 31, 2003 (40,620) (711,410) (752,030)
---------- ------------ ------------
BALANCE - DECEMBER 31, 2003 $ 816,927 $ 12,497,250 $ 13,314,177
========== ============ ============
See Notes to Financial Statements
-23-
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2003, 2002 and 2001
2003 2002 2001
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 1,099,159 $ (388,901) $ (215,523)
Adjustments to reconcile net income (loss) to net cash
flows from operating activities:
Depreciation and amortization 1,267,932 1,287,174 1,691,684
Net gain on disposal of land, building and
improvements (94,002) - (813,933)
Net loss on disposal of tenant improvements 148,175 65,700 825,678
(Income) loss from partnerships (1,586,062) 105,735 (101,498)
Decrease (increase) in operating assets:
Receivables and prepaid expenses - net 357,003 (368,581) 89,502
Deposits (215,502) 487,131 (214,690)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses 174,419 64,877 (60,247)
Accrued property taxes 6,274 39,447 (60,755)
Deferred state income tax provision - (6,000) (24,000)
Security deposits and prepaid rent (77,707) (263,901) 317,197
Accrued interest - - (14,992)
----------- ----------- -----------
NET CASH FLOWS FROM OPERATING ACTIVITIES 1,079,689 1,022,681 1,418,423
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in land, building and furniture and equipment (1,156,932) (667,844) (1,151,114)
Investment in partnerships (378,601) (883,293) (953,590)
Collections of loans receivable 854,762 - -
Investments in loans receivable - (36,038) (87,600)
Investment in deferred charges (primarily unamortized
broker commissions) (328,113) (415,734) (296,545)
Proceeds from sale of real estate, net of selling expenses 212,396 - 1,882,120
Partnership investment draws 1,904,058 1,667,101 747,401
Increase (decrease) in minority interest 573,248 (810,623) (611,258)
----------- ----------- -----------
NET CASH FLOWS FROM INVESTING ACTIVITIES 1,680,818 (1,146,431) (470,586)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of mortgage notes and notes payable (235,988) (227,090) (457,562)
Proceeds from mortgage note financing 267,090 - 460,797
Distributions to partners (752,030) (1,076,771) (1,153,683)
----------- ----------- -----------
NET CASH FLOWS FROM FINANCING ACTIVITIES (720,928) (1,303,861) (1,150,448)
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 2,039,579 (1,427,611) (202,611)
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR 4,562,781 5,990,392 6,193,003
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 6,602,360 $ 4,562,781 $ 5,990,392
=========== =========== ===========
See Notes to Financial Statements
-24-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION - The financial statements include the
accounts of all entities in which First Wilkow Venture (the
"Partnership") owns fifty percent or more and maintains effective
control. Investments in entities in which ownership interests are less
than fifty percent and the Partnership exercises significant influence
over operating and financial policies are accounted for on the equity
method. Other investments are accounted for on the cost method.
Intercompany accounts and transactions between consolidated entities
have been eliminated in consolidation.
NATURE OF OPERATIONS The Partnership owns outright or has participatory
ownership interests in real property located throughout the United
States for investment purposes. Rental income is derived from leasing
to lessees (under operating leases) various types of real estate owned
by the Partnership.
USE OF ESTIMATES - The preparation of financial statements in
conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of financial statements, and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
DEPRECIATION - Depreciation on buildings, improvements, furniture and
equipment is computed using the straight-line and accelerated methods
based on the estimated useful lives of the respective assets as
follows:
PROPERTY PRINCIPAL METHODS USEFUL LIVES
- ------------------------------ ---------------------- ------------------------------
180 North Michigan
a. Building Straight-line 35 years
b. Building improvements Straight-line Various
c. Tenant improvements Straight-line Terms of related tenant leases
d. Furniture and equipment 150% Declining balance 12 years
Naperville Office Court
a. Building Straight-line 25 years
b. Building improvements Straight-line Various
c. Tenant improvements Straight-line Terms of related tenant leases
d. Furniture and equipment 150% Declining balance Various
M&J/Retail Limited Partnership
(one retail center)
a. Building Straight-line 40 years
b. Building improvements Straight-line 40 years
c. Tenant improvements Straight-line Terms of related tenant leases
209 West Jackson
a. Building Straight-line 40 years
b. Building improvements Straight-line Various
c. Tenant improvements Straight-line Terms of related tenant leases
-25-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
AMORTIZATION - Deferred charges are being amortized using the
straight-line method over lives ranging from 1 to 40 years. These costs
represent real estate acquisition costs, deferred broker commissions
and mortgage financing costs.
INCOME TAXES - There is no provision for Federal income taxes as the
partners report their share of the Partnership's net income or loss in
their individual income tax returns.
Deferred state income taxes are provided on certain real estate sales
that are taxable to the Partnership which are being reported on an
installment or tax free exchange basis for income tax purposes.
BASIS OF ACCOUNTING - For purposes of the consolidated statements of
cash flows, the Partnership considers certificates of deposit with a
maturity of three months or less to be cash equivalents. Certain
Partnership deposits at LaSalle National Bank and Bank One are in
excess of the amount insured by the Federal Deposit Insurance
Corporation and are, therefore, considered a concentration of credit
risk.
Investments are reported using either the cost or equity methods of
accounting. Under the equity method, the cost of these investments is
reduced by a pro rata share of net losses and drawings and increased by
a pro rata share of net income of the investee. Under the cost method,
income is reported as draws are received.
Land, buildings and improvements are carried at cost. Major additions
and betterments are charged to the property accounts; maintenance and
repairs which do not improve or extend the life of the respective
assets are charged to expense as incurred. When assets are sold or
retired, the cost and accumulated depreciation are removed from the
accounts, and any gain or loss is recognized.
The assets of the Partnership are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying value may
not be recoverable. An asset is considered to be impaired when the
estimated future undiscounted operating income is less than its
carrying value. To the extent impairment has occurred, the excess of
carrying value of the asset over its estimated fair value will be
charged to income.
RECEIVABLES - The Partnership carries its receivables at cost. On a
periodic basis, the Partnership evaluates its receivables and
determines if an allowance for doubtful accounts is necessary. This
determination is based on a history of past write-offs and collections
and current credit conditions. If the Partnership determines an account
is uncollectible, the account is written off to bad debt expense.
RECLASSIFICATION - Certain items in the 2002 financial statements have
been reclassified to conform to the 2003 presentation.
-26-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES
A summary of the income or loss from partnership investments included
in the accompanying consolidated statements of operations on the equity
method of accounting, unless otherwise indicated, is as follows:
2003 2002 2001
----------- --------- ---------
L-C Office Partnership IV (d) $ (46,441) $(172,302) $ (56,919)
M&J/Grove Limited Partnership (43,049) 6,328 20,491
Rosemont 28 Limited Partnership - (471,697)(b) (2,180)
M&J/Eden Prairie Limited Partnership -(a) -(a) 17,129(a)
Duke Realty Limited Partnership 88,694(a) 87,375(a) 85,525(a)
First Candlewick Associates 15,400(a) 23,650(a) 28,380(a)
Second Wilkow Venture 5,122(a) 4,728(a) 7,092(a)
Wilkow/Retail Partners Limited Partnership 189(a) 1,105(a) 1,493(a)
Lake Cook Office Development IV -(a) -(a) -(a)
M&J/Hotel Investors Limited Partnership -(a) -(a) (200,000)(a)(c)
M&J/Mid Oak Limited Partnership 7,284(a) 1,050(a) 4,725(a)
Northlake Tower Limited Partnership - (62,399)(a)(b) 71,331(a)
Arlington LLC 7,064 130,123 (69,372)
M&J/NCT Louisville LP -(a) 6,750(a) 27,000(a)
M&J/Prospect Crossing Limited Partnership 114,706 50,915 31,573
Fulcrum, LLC 1,536 15,658 27,204
M&J/Clark Street, LLC -(a) 30,582(a) 54,238(a)
Yorkshire Plaza Investors, LLC 13,972(a) 29,159(a) 26,730(a)
Wilkow/Grove Partners Limited Partnership 81(a) 322(a) 161(a)
M&J/Battery, LLC 29,813(a) 29,255(a) 8,569(a)
M&J/Clarkfair Limited Partnership 33,891 80,857 18,328
M&J/Crossroads Limited Partnership - 10,365 -
M&J/Bayfair 580, LLC (a) 1,244,014(a) 92,441(a) -
Centennial FWV, LLC 113,786 - -
----------- --------- ---------
$ 1,586,062 $(105,735) $ 101,498
=========== ========= =========
(a) Income recognized under the cost method.
(b) Includes loss on disposition of investment.
(c) Includes provision for loss in book value.
(d) Income will be recognized under the cost method in future years.
-27-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
The following is a summary of financial position and results of
operations of the properties in which the Partnership has an equity
partnership interest. The following schedule has been prepared from
unaudited financial information provided by these partnerships as of
their calendar year ends.
Year ended December 31, 2003:
M&J/
PROSPECT
M&J/ CROSSING M&J/GROVE SHOPS AT
CENTENNIAL, LIMITED LIMITED CLARK'S
ARLINGTON LLC LLC PARTNERSHIP PARTNERSHIP POND LLC
------------- ------------ ------------ ------------ ------------
BALANCE SHEET
Real estate - net of
accumulated depreciation $ 17,299,046 $ 12,180,603 $ 10,899,835 $ 8,675,906 $ 16,481,481
Current assets 1,092,684 167,842 823,286 384,366 458,724
Other assets 359,591 113,096 10,255 194,782 605,384
------------- ------------ ------------ ------------ ------------
TOTAL ASSETS $ 18,751,321 $ 12,461,541 $ 11,733,376 $ 9,255,054 $ 17,545,589
============= ============ ============ ============ ============
Mortgages payable $ 18,019,168 $ 10,128,072 $ 11,141,446 $ 6,314,874 $ 15,615,291
Other liabilities 699,460 13,856 341,372 378,442 15,782
Partners' capital 32,693 2,319,613 250,558 2,561,738 1,914,516
------------- ------------ ------------ ------------ ------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 18,751,321 $ 12,461,541 $ 11,733,376 $ 9,255,054 $ 17,545,589
============= ============ ============ ============ ============
STATEMENT OF OPERATIONS
Revenue $ 3,866,476 $ 1,248,594 $ 1,917,374 $ 1,555,574 $ 2,849,836
Less:
Operating expenses 2,052,979 202,638 518,112 955,073 986,203
Other expenses 1,442,898 609,642 834,012 430,734 1,379,791
Depreciation 371,805 255,314 277,065 331,990 410,141
------------- ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (1,206) $ 181,000 $ 288,185 $ (162,223) $ 73,701
============= ============ ============ ============ ============
-28-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
Year ended December 31, 2002:
M&J/
PROSPECT
M&J/ CROSSING M&J/GROVE SHOPS AT
CENTENNIAL, LIMITED LIMITED CLARK'S
ARLINGTON LLC LLC PARTNERSHIP PARTNERSHIP POND LLC
------------- ------------ ------------ ------------ ------------
BALANCE SHEET
Real estate - net of
accumulated depreciation $ 17,682,422 $ 12,435,917 $ 11,176,171 $ 8,828,460 $ 16,892,675
Current assets 1,172,251 50,222 754,887 553,489 282,775
Other assets 384,374 125,780 6,505 168,957 611,076
------------- ------------ ------------ ------------ ------------
TOTAL ASSETS $ 19,239,047 $ 12,611,919 $ 11,937,563 $ 9,550,906 $ 17,786,526
============= ============ ============ ============ ============
Mortgages payable $ 18,162,923 $ 10,247,800 $ 11,286,775 $ 6,386,785 $ 15,736,376
Other liabilities 661,294 6,144 390,426 364,949 15,782
Partners' capital 414,830 2,357,975 260,362 2,799,172 2,034,368
------------- ------------ ------------ ------------ ------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 19,239,047 $ 12,611,919 $ 11,937,563 $ 9,550,906 $ 17,786,526
============= ============ ============ ============ ============
STATEMENT OF OPERATIONS
Revenue $ 4,114,839 $ 44,978 $ 2,126,486 $ 1,778,593 $ 2,802,933
Less:
Operating expenses 2,052,844 1,057 704,448 921,362 951,416
Other expenses 1,478,704 40,308 861,986 435,435 1,389,956
Depreciation 371,488 10,638 276,748 327,668 411,775
------------- ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 211,803 $ (7,025) $ 283,304 $ 94,128 $ 49,786
============= ============ ============ ============ ============
-29-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
Year ended December 31, 2001:
M&J/
PROSPECT
ROSEMONT 28 CROSSING DOVER M&J/GROVE SHOPS AT
LIMITED LIMITED FARMS LIMITED CLARK'S
ARLINGTON LLC PARTNERSHIP PARTNERSHIP APARTMENTS PARTNERSHIP POND LLC
------------- ------------ ------------ ------------ ------------ ------------
BALANCE SHEET
Real estate - net of
accumulated depreciation $ 18,057,775 $ 1,909,955 $ 11,438,324 $ 12,939,076 $ 8,966,951 $ 17,249,060
Current assets 691,905 10,673 549,532 135,092 525,626 198,141
Other assets 368,777 556 - 48,843 232,189 684,714
------------- ------------ ------------ ------------ ------------ ------------
TOTAL ASSETS $ 19,118,457 $ 1,921,184 $ 11,987,856 $ 13,123,011 $ 9,724,766 $ 18,131,915
============= ============ ============ ============ ============ ============
Mortgages payable $ 17,314,508 $ - $ 11,404,130 $ 11,317,471 $ 6,453,994 $ 15,847,296
Other liabilities 1,113,667 27,515 309,212 617,830 375,659 23,640
Partners' capital 690,282 1,893,669 274,514 1,187,710 2,895,113 2,260,979
------------- ------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 19,118,457 $ 1,921,184 $ 11,987,856 $ 13,123,011 $ 9,724,766 $ 18,131,915
============= ============ ============ ============ ============ ============
STATEMENT OF OPERATIONS
Revenue $ 3,912,284 $ 307 $ 1,946,722 $ 2,616,809 $ 1,818,637 $ 2,771,556
Less:
Operating expenses 1,681,225 - 633,308 1,400,771 926,617 924,325
Other expenses 1,583,664 12,446 854,019 906,482 656,322 1,399,268
Depreciation 369,752 - 276,687 342,522 325,985 400,954
------------- ------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 277,643 $ (12,139) $ 182,708 $ (32,966) $ (90,287) $ 47,009
============= ============ ============ ============ ============ ============
-30-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
M&J/WESTWOOD LIMITED PARTNERSHIP
In December 1986, the Partnership invested $517,000 to obtain an 18.52%
interest in M&J/Westwood Limited Partnership, which owns 48% of The
Villas at Monterey Limited Partnership, which owns a 145-unit all
suites hotel and corporate rental project in Orlando, Florida, known as
Tango Bay Suites Resort (Tango Bay Suites Resort is now Ramada Inn &
Suites). On December 31, 1993, the Partnership acquired an additional
2.19% interest in M&J/Westwood Limited Partnership.
In March 1993, the Partnership acquired a 63.64% undivided interest in
Ramada Inn & Suites pursuant to an exchange for an ownership interest
in a similar property. The Villas at Monterey Limited Partnership
retained the remaining 36.36% interest. In November 1993, the
Partnership sold a 5.98% undivided interest in Ramada Inn & Suites to
an unrelated party for a relative proportion of the debt, recognizing a
gain of $53,231 on the disposition. The Partnership exchanged its
interest in Ramada Inn & Suites for an undivided interest in the 209
West Jackson building effective June 30, 1995. The Partnership also had
a loan receivable of $731,124 from The Villas at Monterey Limited
Partnership and Tango Bay of Orlando, L.C. (see Note 3). The loan was
repaid in May 2003.
In 2001, The Villas at Monterey Limited Partnership and Tango Bay of
Orlando, L.C. sold the property for $5,985,000 on the installment basis
with a promissory note secured by the property. On October 1, 2002, the
maker of the note failed to make a scheduled payment, thereby
defaulting on the note, and legal action was pursued. In April 2003, a
foreclosure action was completed that facilitated the liquidation of
the asset through a sale to an unrelated third party. The net proceeds
of this sale allowed for the full repayment of the loan receivable that
had been outstanding from The Villas at Monterey Limited Partnership
and Tango Bay of Orlando, L.C.
DUKE REALTY LIMITED PARTNERSHIP
On December 2, 1994, the Partnership redeemed its interest in three
partnerships for a direct ownership in an operating partnership, Duke
Realty Limited Partnership (the "UPREIT"), the sole general partner of
which is Duke Realty Corporation (formerly Duke Realty Investments,
Inc.), a real estate investment trust ("REIT") listed on the New York
Stock Exchange. The redemption resulted in the Partnership owning
50,251 partnership units in the UPREIT, which are convertible on a
one-for-one basis to shares of common stock of the REIT. The
Partnership's limited partner units are currently pledged as collateral
for a revolving credit facility with LaSalle National Bank (see Note
11).
On April 15, 1997, the Partnership converted 25,000 units in Duke
Realty Limited Partnership to 25,000 shares of common stock of Duke
Realty Corporation. On June 12, 1997, 12,500 shares were sold for
$500,044, resulting in a gain of $383,419. On July 21, 1997, the
remaining 12,500 shares were sold for $528,168, resulting in a gain of
$411,543.
On August 18, 1997, a 2-for-1 stock and unit split occurred, resulting
in an additional 25,251 units of Duke Realty Limited Partnership being
issued to the Partnership. The
-31-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
Partnership thus held 50,502 units in Duke Realty Limited Partnership
at December 31, 2003.
ROSEMONT 28 LIMITED PARTNERSHIP
The Partnership has invested a total of $760,618 to obtain a 22.92%
interest in Rosemont 28 Limited Partnership, which owns 11.25 acres of
land held for development in Orlando, Florida. On August 6, 2002, the
underlying unimproved land held by Rosemont 28 Limited Partnership was
sold for $475,000. The Partnership received cash proceeds of $93,455,
resulting in a loss to the Partnership of $407,062.
M&J/GROVE LIMITED PARTNERSHIP
The Partnership had invested a total of $931,000 to obtain a 21.91%
interest in M&J/Grove Limited Partnership ("M&J/Grove"), which owns an
office complex in Wheaton, Illinois. As a Class A limited partner, the
Partnership is entitled to a cumulative cash flow priority of 8% per
annum. On December 31, 1993, the Partnership acquired an additional
1.17% interest in M&J/Grove.
On July 1, 1996, the Partnership invested an additional $98,100 in
M&J/Grove in connection with the purchase of 981 Call Units, increasing
its interest in this investment to 27.34%. The Call Unit holders are
entitled to a cumulative cash flow priority of 12% per annum. Upon sale
or refinancing, the Call Unit holders will receive the first $367,500
of available proceeds. Any proceeds remaining thereafter will be split
25% to the holders of the Call Units and 75% to the General and Class A
Limited Partners. The proceeds of the M&J/Grove capital call were
primarily used for a mortgage debt restructuring of the Grove Office
Park. The original $8,000,000 mortgage was paid off at a discounted
amount of $5,600,000 and replaced with a new first mortgage loan in the
amount of $5,500,000, bearing interest at the fixed rate of 8.55% per
annum for five years. In March 2001, the loan was refinanced. The
property is encumbered with a mortgage loan of $6,500,000, bearing
interest at 6.6875% and maturing in April 2011. The property was also
encumbered by unsecured debentures of $1,000,000, which matured on May
1, 2001, and bore interest at 9% per annum, payable quarterly. The
debentures were repaid in 2001.
L-C OFFICE PARTNERSHIP IV
Prior to December 31, 1993, the Partnership had a 73.34% ownership
interest in L-C Office Partnership IV Limited Partnership ("L-C Office
Partnership IV"), which holds a 94% interest in Lake Cook Office
Development - Building Four Limited Partnership ("Lake-Cook IV"), which
has a 57.915% interest in DFA Limited Partnership, which has a 99%
interest in M&J/Dover Limited Partnership, which owns Dover Farms
Apartments, a 300-unit apartment complex located in a suburb of
Cleveland, Ohio.
On December 31, 1993, the Partnership acquired an additional 1.35%
interest in L-C Office Partnership IV. On January 1, 1994, the
Partnership acquired a 0.4906% interest in Lake Cook Office Development
- Building Four Limited Partnership. In addition to the investment, the
Partnership has notes receivable of $15,091, $71,872 and $123,638 from
Lake Cook Office Development - Building Four Limited Partnership, L-C
Office Partnership
-32-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
IV and M&J/Dover Limited Partnership, respectively. The Partnership
contributed an additional $175,097 in 1997, $60,379 in 1998 and
$242,983 in 2002 to maintain its 74.69% interest in L-C Office
Partnership IV.
On December 18, 2002, M&J/Dover Limited Partnership admitted CAPREIT of
Dover Farms, LLP as a partner. At this time, the partnership's name was
changed to Dover Farms LP. As a result of the admittance, L-C Office
Partnership IV's effective interest in Dover Farms LP was reduced to
5.4%, with the explicit proviso that, through its interest in DFA, LLC,
L-C Office Partnership IV will benefit from a cash flow and residual
proceeds preference.
M&J/HOTEL INVESTORS LIMITED PARTNERSHIP
On October 8, 1997, the Partnership invested $200,000 to obtain a
14.81% interest in M&J/Hotel Investors Limited Partnership, which owns
a 164-room hotel in Kissimmee, Florida. At the time of purchase, the
property was operating as the EconoLodge Maingate Central Hotel, but
immediately following the closing, the property was converted to a
Howard Johnson franchise. As of December 31, 2001, the investment in
this property was deemed to have no liquidating value. The value of the
assets of the property was less than the first mortgage loan that
secures the property. As such, the Partnership's equity position was
deemed worthless and written off in 2001. The mortgage on the property
was foreclosed in 2002.
M&J/MID OAK LIMITED PARTNERSHIP
On August 26, 1997, the Partnership invested $70,000 to obtain a 35%
interest in M&J/Mid Oak Limited Partnership, which has a 9% interest in
Mid Oak Plaza LLC, which owned Mid Oak Plaza Shopping Center located in
Midlothian, Illinois. Mid Oak Plaza Shopping Center was sold on
November 26, 2002, for a purchase price of $6,025,000. M&J/Mid Oak
Limited Partnership received a liquidating distribution for the amount
of $192,000, which resulted in a gain on disposition of $77,284 in
2003.
M&J/EDEN PRAIRIE LIMITED PARTNERSHIP
On April 10, 1998, the Partnership invested $64,000 to obtain a 26.44%
ownership in M&J/Eden Prairie Limited Partnership, which has a 10%
interest in Eden Prairie LLC, which acquired a 70,689 square foot
shopping center in Eden Prairie, Minnesota. On September 27, 1999, an
additional investment of $76,174 was made, increasing the Partnership's
interest to 42.98%.
M&J/NCT LOUISVILLE LP
On September 29, 1999, the Partnership invested $300,000 to obtain a
23.47% interest in M&J/NCT Louisville LP, which has a 10% interest in
CMJ/NCT Louisville LLC. CMJ/NCT Louisville LLC is a 50% owner of NCT
Louisville LLC, which was formed to acquire National City Tower, a
712,533 square foot office tower located in Louisville, Kentucky.
-33-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
M&J/LOUISVILLE, LLC
On May 28, 2003, the Registrant invested $250,000 to obtain an 11.26%
interest in M&J/Louisville LLC, which has a 33% interest in NW
Acquisition Company LLC, which has a 90% interest in CMJ/NCT Louisville
LLC, which has a 50% interest in NCT Louisville LLC, which owns
National City Tower, an office building located in Louisville,
Kentucky.
ARLINGTON LLC
On September 29, 1999, the Partnership converted its loan receivable of
$1,226,000 to a 30.65% interest in Arlington LLC, which owns Annex of
Arlington Heights, a 197,110 square foot community center located in
Arlington Heights, Illinois.
In addition, the Partnership posted a letter of credit in the amount of
$280,000 with the mortgagee as credit enhancement in exchange for an
additional 7% interest in Arlington LLC. On April 26, 2001, the
Partnership invested $280,000 to release the letter of credit held by
the mortgagee as credit enhancement for no additional interest in
Arlington LLC.
The Partnership also has a non-interest-bearing unsecured loan payable
to Arlington LLC in the amount of $11,027 at December 31, 2001 and
2000.
M&J/PROSPECT CROSSING LIMITED PARTNERSHIP
On February 24, 2000, the Partnership invested $530,000 to obtain an
11.21% interest in M&J/Prospect Crossing Limited Partnership, which
owns Centre at Lake in the Hills, a shopping center located in Lake in
the Hills, Illinois. The property is encumbered with two mortgages. The
first mortgage of $10,350,000 bears interest at 7.25% and matures in
January 2008. The second mortgage of $1,500,000 bears interest at 8%
and matures in March 2008.
M&J/Retail Limited Partnership also holds a 10.58% interest in
M&J/Prospect Crossing Limited Partnership (see Page 37).
M&J/CLARK STREET, LLC
On August 14, 2000, the Partnership invested $577,000 to obtain a
17.48% interest in M&J/Clark Street, LLC, which has a 20.00% interest
in 20 South Clark Street, LLC, which owns 20 South Clark, an office
building located in Chicago, Illinois. The property is encumbered with
a mortgage of $24,831,000, bearing interest at 9.00% and maturing
August 2010.
M&J/BATTERY, LLC
On May 31, 2001, the Partnership invested $300,000 to obtain a 15.79%
interest in M&J/Battery, LLC, which has a 14.50% interest in 600
Battery Street, LLC, which owns 600 Battery Street, an office building
in San Francisco, California. The property is
-34-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
encumbered with a mortgage of $26,100,000, bearing interest at 7.625%
and maturing May 2011.
CENTENNIAL FWC, LLC
On December 17, 2002, the Partnership invested $635,000 to obtain a
100% interest in Centennial FWV, LLC, which has a 21.17% undivided
interest in Centennial Village Phase II, a shopping center in Roswell,
Georgia. The property is encumbered with a mortgage of $13,000,000,
bearing interest at 5.90% and maturing January 2013.
CONSOLIDATED PARTNERSHIPS
M&J/SHERIDAN LIMITED PARTNERSHIP
During 1988, the Partnership invested $2,500,000 to obtain an 89.29%
interest in M&J/Sheridan Limited Partnership, which owns a 22,523
square foot office building in Highland Park, Illinois. The property
was sold on July 31, 2001, resulting in a loss of $293,182.
The financial position and results of operations of this partnership
are included in the accompanying consolidated financial statements.
209 WEST JACKSON LLC
On August 24, 1995, the Partnership acquired a 59.44% undivided
interest in 209 West Jackson, a 142,996 square foot office building
located in downtown Chicago, in exchange for its 57.67% undivided
interest in Tango Bay Suites Resort (Tango Bay Suites Resort is now
Ramada Inn & Suites). The 209 West Jackson building was subject to a
first mortgage of $10,000,000 and an additional $5,661,000 note secured
by the first mortgage, both interest only at General Electric Capital
Corporation's commercial paper rate plus 3.25% per annum.
On October 22, 1999, both the ownership and the debt were restructured.
The Partnership and its tenants in common rolled up their interests
into a new limited liability company, 209 West Jackson LLC. In addition
to the interest, each cotenant was responsible for a capital infusion,
of which the Partnership's share was $710,000, to obtain a 71% interest
in the newly formed 209 West Jackson LLC. The Partnership was
responsible for additional equity contributions of $852,000, which have
been fully funded. Through a partial pay down of the principal balance
and approximately $5,000,000 of debt forgiveness by the property's
lender, General Electric Capital Corporation, the property's debt was
reduced to $10,000,000 and separated into two notes. The first note is
for $8,600,000, and the second note, an unfunded line of credit, is for
$1,400,000. Funds in the amount of $804,588 have been drawn on the
second note as of December 31, 2003.
The financial position and results of operations of this company are
included in the accompanying consolidated financial statements.
-35-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
M&J/RETAIL LIMITED PARTNERSHIP
The Partnership had invested a total of $3,995,000 to obtain a 56.27%
limited partnership interest in M&J/Retail Limited Partnership
("M&J/Retail"), which owns seven partnership interests. The Partnership
is entitled to a 9% cumulative cash flow priority on invested capital.
On December 31, 1993, the Partnership acquired an additional 0.70%
interest in M&J/Retail. On July 1, 1995, the Partnership sold 4.22% of
its limited partnership interest in M&J/Retail to an unrelated party
for $314,800 and recognized a gain of $137,245.
On July 28, 1995, M&J/Retail acquired a majority interest in Northlake
Tower Limited Partnership ("Tower"), contributing $1,112,667 of initial
capital. Additional contributions of $116,837 were made through
December 31, 1997, increasing the total capital investment to
$1,229,514. Tower owns a 17.08% share of BSRT/M&J Northlake Limited
Partnership ("BSRT/M&J"), which purchased a leasehold interest in the
Northlake Tower Festival Shopping Center for $16,989,000 on July 28,
1995. The purchase of this property was made subject to a $10,350,000
first mortgage loan bearing interest only at the fixed rate of 8.5% per
annum for ten years. On November 18, 1997, this loan was refinanced
with a first mortgage of $17,600,000 with principal and interest
payments based on a 30-year amortization and an interest rate of 7.64%.
A portion of the refinancing proceeds were used to make distributions
to the partners of BSRT/M&J, with M&J/Retail ultimately receiving a
distribution of $1,166,745. On April 10, 2002, M&J/Retail received a
liquidating distribution from Northlake Tower Limited Partnership in
the amount of $654,986, resulting in a loss on disposition of
investment in partnership of $104,014.
On October 27, 1995, M&J/Retail invested a total of $297,000 to acquire
a 46.41% Class A interest in M&J/Crossroads Limited Partnership. The
balance of $303,000 of the total $600,000 required capital for Class A
investors was also financed by M&J/Retail, resulting in a receivable
from the other investors for their respective share of capital
contributions as of December 31, 1995. These receivables were repaid in
full during 1996. As a result of a refinancing of the first mortgage
loan on December 31, 1997, M&J/Retail received a distribution on
January 10, 1998, of $501,065.
In 1998, M&J/Retail invested $415,000 to acquire a 70.90% investment in
M&J/Clarkfair Limited Partnership, which has a 9% interest in Clarkfair
LLC. Clarkfair LLC was the sole owner of two limited liability
companies, namely Marketfair North LLC and Shops at Clark's Pond LLC,
which were formed to acquire the following described properties:
Marketfair North - a 136,989 square foot shopping center in Clay, New
York Shops at Clark's Pond - a 208,325 square foot shopping center in
South Portland, Maine
On May 31, 2000, Clarkfair LLC distributed to its members its interest
in Shops at Clark's Pond LLC, leaving only an investment in Marketfair
North LLC. As a result of this transaction, M&J/Clarkfair Limited
Partnership received a 33.50% interest in Shops at Clark's Pond LLC.
M&J/Retail also invested $1,133,750 to obtain a 53.13% interest in
Fulcrum, LLC, which has a 65.65% interest in Shops at Clark's Pond LLC.
-36-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
On September 29, 1999, M&J/Retail invested a total of $350,000 to
obtain an 8.75% interest in Arlington LLC, which owns Annex of
Arlington Heights, a 197,110 square foot community center located in
Arlington Heights, Illinois.
The property was acquired with an $11,616,888 mortgage bearing interest
at 9.65% per annum. In March 2002, the property was refinanced. The
property is encumbered with a mortgage of $18,250,000, bearing interest
at 7.85% and maturing in April 2012. (See also Page 34.)
On February 24, 2000, M&J/Retail invested $500,000 to obtain a 10.58%
interest in M&J/Prospect Crossing Limited Partnership, which owns
Centre at Lake in the Hills, a shopping center located in Lake in the
Hills, Illinois. The property is encumbered with two mortgages. The
first mortgage of $10,350,000 bears interest at 7.25% and matures in
January 2008. The second mortgage of $1,500,000 bears interest at 8%
and matures in March 2008.
On April 10, 2000, M&J/Retail invested $243,000 to obtain a 26.01%
interest in Yorkshire Plaza Investors, LLC, which has a 20.00% interest
in Yorkshire LLC, which owns Yorkshire Plaza, a shopping center located
in Aurora, Illinois. The property is encumbered with a mortgage of
$18,680,000, bearing interest at 8.31% and maturing May 2005.
On June 6, 2001, M&J/Retail invested $371,000 to obtain an 11.24%
interest in M&J/Bayfair 580, LLC, which has a 99.00% interest in
Bayfair 580, LLC, which owns Bayfair Mall, a shopping center located in
San Leandro, California. On September 29, 2003, Bayfair Mall was sold
for $37,000,000. M&J/Retail received a distribution related to the sale
in October 2003.
The financial position and results of operations of this partnership
are included in the accompanying consolidated financial statements.
-37-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
The following is a summary of the financial positions and results of
operations of the entities included in consolidation as of December 31,
2003:
M&J/
209 WEST RETAIL LIMITED
JACKSON LLC PARTNERSHIP
----------- --------------
BALANCE SHEET
Real estate - net of
accumulated depreciation $11,767,932 $ -
Current assets 28,688 23,452
Other assets 996,011 2,142,672
----------- -----------
TOTAL ASSETS $12,792,631 $ 2,166,124
=========== ===========
Mortgages payable $ 8,313,451 $ -
Other long-term payables - -
Current liabilities 1,821,114 121,972
Minority interest 770,839 2,380,602
Partners' capital (deficit) 1,887,227 (336,450)
----------- -----------
TOTAL LIABILITIES AND PARTNERS'
CAPITAL (DEFICIT) $12,792,631 $ 2,166,124
=========== ===========
STATEMENT OF OPERATIONS
Revenue $ 3,377,494 $ 1,595,496
Less:
Operating expenses 1,626,808 60,241
Other expenses 1,242,119 21,841
Depreciation and amortization 360,716 23,742
Minority interest 42,877 703,937
----------- -----------
NET INCOME $ 104,974 $ 785,735
=========== ===========
-38-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
The following is a summary of the financial positions and results of
operations of the entities included in consolidation as of December 31,
2002:
M&J/
209 WEST RETAIL LIMITED
JACKSON LLC PARTNERSHIP
----------- --------------
BALANCE SHEET
Real estate - net of
accumulated depreciation $11,736,697 $ 538,738
Current assets 26,004 10,670
Other assets 1,241,721 1,043,338
----------- -----------
TOTAL ASSETS $13,004,422 $ 1,592,746
=========== ===========
Mortgages payable $ 8,392,344 $ 398,229
Other long-term payables 1,304,588 -
Current liabilities 797,274 175,394
Minority interest 727,963 1,850,230
Partners' capital (deficit) 1,782,253 (831,107)
----------- -----------
TOTAL LIABILITIES AND PARTNERS'
CAPITAL (DEFICIT) $13,004,422 $ 1,592,746
=========== ===========
STATEMENT OF OPERATIONS
Revenue $ 3,301,066 $ 309,783
Less:
Operating expenses 1,953,890 127,352
Other expenses 883,531 32,273
Depreciation and amortization 325,847 20,913
Minority interest 39,961 70,672
----------- -----------
NET INCOME $ 97,837 $ 58,573
=========== ===========
-39-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN REAL ESTATE PARTNERSHIPS AND COTENANCIES (CONTINUED)
The following is a summary of the financial positions and results of
operations of the entities included in consolidation as of December 31,
2001:
M&J/
SHERIDAN M&J/
209 WEST LIMITED RETAIL LIMITED
JACKSON LLC PARTNERSHIP PARTNERSHIP
----------- ----------- --------------
BALANCE SHEET
Real estate - net of
accumulated depreciation $11,962,190 $ - $ 538,577
Current assets 26,228 9,012 35,968
Other assets 1,192,425 - 2,474,807
----------- --------- -----------
TOTAL ASSETS $13,180,843 $ 9,012 $ 3,049,352
=========== ========= ===========
Mortgages payable $ 9,269,094 $ - $ 418,952
Other long-term payables 900,000 - -
Current liabilities 1,039,331 9,012 109,102
Minority interest 572,001 - 2,816,814
Partners' capital (deficit) 1,400,417 - (295,516)
----------- --------- -----------
TOTAL LIABILITIES AND PARTNERS'
CAPITAL (DEFICIT) $13,180,843 $ 9,012 $ 3,049,352
=========== ========= ===========
STATEMENT OF OPERATIONS
Revenue $ 3,289,267 $ (55,810) $ 1,780,200
Less:
Operating expenses 1,965,681 160,452 256,643
Other expenses 937,777 89,195 202,864
Depreciation and amortization 324,895 109,557 237,779
Minority interest 17,665 136,241 511,715
----------- --------- -----------
NET INCOME (LOSS) $ 43,249 $(551,255) $ 571,199
=========== ========= ===========
-40-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(3) LOANS RECEIVABLE
DECEMBER 31,
-----------------------------
2003 2002
--------- -----------
THE VILLAS AT MONTEREY LIMITED PARTNERSHIP
AND TANGO BAY OF ORLANDO, L.C. - Unsecured
promissory note bearing interest at 3% over
prime issued in connection with Ramada Inn &
Suites located in Orlando, Florida. The note
was repaid in May 2003. $ - $ 731,124
L-C OFFICE PARTNERSHIP IV - Unsecured
promissory note bearing interest at 2% over
prime issued in connection with the Dover
Farms Apartments located in North Royalton,
Ohio. The note is due on demand or, if
demand is not sooner made, on December 31,
2005. 71,872 71,872
LAKE COOK OFFICE DEVELOPMENT - BUILDING FOUR
LIMITED PARTNERSHIP - Unsecured promissory
note bearing interest at 2% over prime
issued in connection with the Dover Farms
Apartments located in North Royalton, Ohio.
The note is due on demand or, if demand is
not sooner made, on December 31, 2005. 15,091 15,091
M&J/DOVER LIMITED PARTNERSHIP - Unsecured
promissory note bearing interest at prime
issued in connection with the Dover Farms
Apartments located in North Royalton, Ohio.
The note was repaid in March 2003. - 123,638
--------- -----------
$ 86,963 $ 941,725
========= ===========
(4) RECENT ACCOUNTING PRONOUNCEMENTS
In January 2003, the Financial Accounting Standards Board ("FASB")
issued FASB Interpretation No. 46 ("FIN No. 46"), "Consolidation of
Variable Interest Entities." The objective of this interpretation is to
provide guidance on how to identify a variable interest entity ("VIE")
and determine whether the assets, liabilities, non-controlling
interests, and results of operations of a VIE need to be included in a
company's consolidated financial statements. A company that holds
variable interests in an entity will need to consolidate the entity if
the company's interest in the VIE is such that the company will absorb
a majority of the VIE's expected losses and/or receive a majority of
the entity's expected residual returns, if they occur. FIN No. 46 also
requires additional disclosures by primary beneficiaries and other
significant variable interest holders. In connection with any of the
Registrant's unconsolidated real estate investments that may qualify as
a VIE, provisions of this interpretation are effective at the end of
the Registrant's fiscal year beginning January 1, 2004. The Registrant
is currently assessing its unconsolidated real estate investments to
determine the impact of any potential consolidation requirements in
applying FIN No. 46.
-41-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(5) MORTGAGE NOTES PAYABLE
The mortgage notes payable as of December 31, 2003, consist of:
OUTSTANDING
ORIGINAL BALANCE AS OF PRINCIPAL PAYMENTS DURING YEAR ENDED DECEMBER 31,
PRINCIPAL MONTHLY DECEMBER 31, -----------------------------------------------------
AMOUNT PAYMENTS 2003 2004 2005 2006 2007 2008
----------- -------- ------------- ---------- -------- -------- -------- -----------
180 North Michigan,
7.13% due monthly
to August 1, 2008 (a) $ 7,300,000 $ 49,206 $ 6,888,669 $ 93,690 $102,131 $109,764 $118,691 $ 6,464,393
Naperville Office Court,
7.13% due monthly
to July 1, 2008 (b) 4,500,000 30,337 4,242,443 58,052 63,276 68,005 73,088 3,980,022
209 West Jackson,
8.95% due
October 1, 2004 (c) 10,000,000 68,888 9,385,129 9,385,129 - - - -
------------- ---------- -------- -------- -------- -----------
Total outstanding mortgage note balance $ 20,516,241 $9,536,871 $165,407 $177,769 $191,779 $10,444,415
============= ========== ======== ======== ======== ===========
(a) A balloon payment of $6,283,329 will be due August 1, 2008.
(b) A balloon payment of $3,946,123 will be due July 1, 2008.
(c) A balloon payment of $8,823,280 will be due October 1, 2004. The original
principal amount of $10,000,000 is divided into two notes. The first note
is for $8,600,000, and the second note, an unfunded line of credit, is for
$1,400,000. As of December 31, 2003, $1,071,678 has been drawn on the
second note.
-42-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(6) RELATED PARTY TRANSACTIONS
MANAGEMENT AND OTHER FEES - Management, leasing and consulting fees
paid to M&J Wilkow, Ltd. and M&J Wilkow Brokerage Corp. (companies
whose principal shareholders are general partners of the Partnership)
for the years ended December 31, 2003, 2002 and 2001, were $1,316,276,
$1,120,178 and $1,245,523, respectively. These fees related to a
portfolio encompassing approximately 435,000 square feet.
As of December 31, 2003 and 2002, $0 and $20,462, respectively, are
owed to M&J Wilkow, Ltd. for management, leasing and consulting fees.
PROFESSIONAL FEES - Professional fees paid during the years ended
December 31, 2003, 2002 and 2001, to Wilkow & Wilkow, P.C. (a company
owned by a general partner of the Partnership) for services in the
ordinary course of business were $41,000, $38,600 and $44,417,
respectively. For the years ended December 31, 2003, 2002 and 2001,
$91,275, $90,184 and $98,256, respectively, were paid to M&J Wilkow,
Ltd. for professional services.
INVESTMENTS IN PARTNERSHIPS - The general partners and/or entities
controlled or managed by one or more of such partners have ownership
interests in a majority of the real estate projects in which the
Partnership also has ownership interests.
RENTAL INCOME - Rental income received from M&J Wilkow, Ltd. (a company
whose principal shareholders are partners of the Partnership) was
$283,870, $283,857 and $257,519 for the years ended December 31, 2003,
2002 and 2001, respectively, under a lease for office space.
(7) RENTALS RECEIVABLE UNDER OPERATING LEASES
Future minimum rentals receivable by the Partnership on noncancelable
operating leases as of December 31, 2003, are as follows:
Years Ending December 31,
2004 $ 6,275,761
2005 6,067,229
2006 4,179,085
2007 3,419,169
2008 2,955,366
Thereafter 5,471,197
-----------
Total future minimum rentals receivable $28,367,807
===========
-43-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(8) DEFERRED CHARGES
Deferred mortgage costs were incurred in connection with obtaining the
mortgages payable and are amortized over the lives of the loans.
Deferred leasing commissions are amortized over the terms of related
tenant leases ranging from 1 to 10 years. Syndication costs were
incurred in connection with the formation of M&J/Retail Limited
Partnership and are carried at cost.
Deferred charges as of December 31, 2003, consist of the following:
DEFERRED DEFERRED
MORTGAGE LEASING SYNDICATION
COSTS COMMISSIONS COSTS TOTAL
----------- ----------- ---------- -----------
Original cost $ 267,994 $ 2,061,598 $ 25,000 $ 2,354,592
Accumulated amortization (152,656) (1,005,230) - (1,157,886)
----------- ----------- ---------- -----------
$ 115,338 $ 1,056,368 $ 25,000 $ 1,196,706
=========== =========== ========== ===========
Deferred charges as of December 31, 2002, consist of the following:
DEFERRED DEFERRED
MORTGAGE LEASING SYNDICATION
COSTS COMMISSIONS COSTS TOTAL
---------- ----------- ---------- -----------
Original cost $ 270,494 $ 1,798,434 $ 25,000 $ 2,093,928
Accumulated amortization (124,073) (814,027) - (938,100)
--------- ----------- ---------- -----------
$ 146,421 $ 984,407 $ 25,000 $ 1,155,828
========= =========== ========== ===========
The total amortization expense recognized for the years ended December
31, 2003, 2002 and 2001, is $287,235, $227,411 and $440,460,
respectively. Estimated amortization expense for the next five years
will vary depending on the amount of deferred charges outstanding but
is expected to be similar to the 2003 amount.
(9) PARTNERS' CAPITAL
As of December 31, 2003, general partner units totaled 9,329 units and
the general partners also beneficially owned 4,340 limited partner
units.
As of December 31, 2002, general partner units totaled 9,199 units and
the general partners also beneficially owned 4,340 limited partner
units.
As of December 31, 2001, general partner units totaled 8,614 units and
the general partners also beneficially owned 4,160 limited partner
units.
-44-
FIRST WILKOW VENTURE
NOTES TO FINANCIAL STATEMENTS
(10) CASH FLOW DISCLOSURES
The following is a summary of supplemental cash flow information:
YEARS ENDED DECEMBER 31,
----------------------------------------------
2003 2002 2001
---------- ---------- ----------
Interest paid during the year $1,631,888 $1,656,185 $2,064,975
========== ========== ==========
Noncash investing and financing activities:
Proceeds from the sale of real estate
and escrow deposits used to retire
debt $ 385,368 $ - $6,169,101
========== ========== ==========
Write-off of fully depreciated fixed
assets $ - $ 52,964 $ 59,640
========== ========== ==========
(11) COMMITMENTS AND CONTINGENCIES
As of December 31, 2003, the Partnership has a revolving credit
facility with LaSalle National Bank which is secured by the
Partnership's limited partnership units in Duke Realty Limited
Partnership (see Note 2). The facility, due September 1, 2004, pays
interest at the prime rate. Maximum borrowings under the agreement are
the lesser of $675,000 or 80% of the fair market value of the
Partnership's 50,502 units in Duke Realty Limited Partnership (see Note
2). As of December 31, 2003, there are no amounts outstanding under
this facility.
As of December 31, 2003 and 2002, the Partnership, through its
investment in M&J/Retail Limited Partnership, is required to maintain a
certificate of deposit of $250,000 with LaSalle National Bank. The
certificate of deposit is maintained as collateral for two $250,000
letters of credit relating to Marketfair North, of which M&J/Retail
Limited Partnership is an equity holder.
(12) SUBSEQUENT EVENTS
In January 2004, the Partnership made a distribution in the amount of
$188,008, or $1.10 per unit.
In February 2004, NCT Louisville LLC refinanced the mortgage on
National City Tower.
On February 24, 2004, the property owned by M&J/Eden Prairie Limited
Partnership was sold for $13,000,000, resulting in net cash proceeds of
$4,983,000, after satisfaction of the outstanding mortgage obligation.
The transaction netted a gain on sale of $4,285,000.
-45-
PART II
ITEM 9 - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None
-46-
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following sets forth certain information with respect to each general
partner of the Registrant:
NAME POSITION
---- --------
Marc R. Wilkow General Partner
Clifton J. Wilkow General Partner
Marc R. Wilkow has been in the real estate management and investment business
since 1977. He is also a lawyer and the sole stockholder of the law firm of
Wilkow & Wilkow, P.C. Clifton J. Wilkow has been involved in the business of the
Registrant since 1976. Also see "ITEM 1: Business Organization" for further
information.
There have been no proceedings of any kind involving bankruptcy, criminality or
restraint in the area of financial dealings against or otherwise affecting any
general partner during the last ten years.
The executive officers of the Registrant are its general partners. Their names,
ages, positions and relationships are listed below:
NAME POSITION AGE OTHER POSITIONS RELATION TO OTHER OFFICER
---- -------- --- --------------- -------------------------
Marc R. Wilkow General Partner 54 General Counsel Brother of Clifton J. Wilkow
Clifton J. Wilkow General Partner 51 None Brother of Marc R. Wilkow
AUDIT COMMITTEE
The Registrant's units are not traded on a major stock exchange, and therefore,
there is no requirement for the Registrant to maintain an audit committee.
CODE OF ETHICS
The Registrant has not adopted a written code of ethics, primarily because
management believes and understands its officers and employees adhere to and
follow ethical standards without the necessity of a written policy.
-47-
PART III
ITEM 11 - EXECUTIVE COMPENSATION
The general partners do not receive any remuneration or other special benefit
directly from the Registrant; however, Marc R. and Clifton J. Wilkow are owners
and shareholders of M&J Wilkow, Ltd., which receives management, leasing,
consulting and brokerage fees from each of the operating properties and/or
partnerships. In addition, the Registrant pays M&J Wilkow, Ltd. an asset
management fee. M&J Wilkow, Ltd. receives accounting and tax return preparation
fees based upon hourly service. Wilkow & Wilkow, P.C. also receives a retainer
for services rendered as general counsel to the Registrant and legal fees on an
hourly rate basis for professional services rendered beyond the scope of the
services contemplated by the retainer fee. Also see "ITEM 1: Business
Organization" for further information.
OPTIONS GRANTED TO MANAGEMENT TO PURCHASE SECURITIES
There have been no options granted to management to purchase securities from the
Registrant.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
For transactions to date, and those anticipated, reference is made to "ITEM 1:
Business."
-48-
PART III
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) No general partner holds 5% or more of any of the securities.
The following limited partners hold 5% or more of the Registrant's
total units:
UNITS OWNED % OF TOTAL UNITS
----------- ----------------
William W. Wilkow Marital Trust 18,427 10.78%
Gisa W. Slonim Irrevocable Trust 11,779 6.89%
The following table sets forth the equity securities of the Registrant
beneficially owned directly or indirectly by the general partners and
their spouses as a group (three persons) as of December 31, 2003:
AMOUNT BENEFICIALLY OWNED % OF OWNED
------------------------- ----------
General Partnership Units 9,329 5.46%
Units of Limited Partnership Interest 4,340 2.54%
(b) There are no contractual arrangements known to the Registrant including
any pledge of securities of the Registrant, the operation of the terms
of which may at a subsequent date result in a change of control of the
Registrant.
Wilkow & Wilkow, P.C., a professional corporation owned by one of the
general partners, acting in its capacity as attorney and general
counsel for the Registrant, was involved with the Registrant in certain
transactions.
-49-
PART III
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Management, leasing and consulting fees paid to M&J Wilkow, Ltd. and M&J Wilkow
Brokerage Corp. (companies whose principal shareholders are general partners of
the Registrant) for the years ended December 31, 2003, 2002 and 2001, were
$1,316,276, $1,120,178 and $1,245,523, respectively (see Note 6 to Consolidated
Financial Statements).
Professional fees paid during the years ended December 31, 2003, 2002 and 2001,
to Wilkow & Wilkow, P.C. for services in the ordinary course of business were
$41,000, $38,600 and $44,417, respectively.
Professional fees paid during the years ended December 31, 2003, 2002 and 2001,
to M&J Wilkow, Ltd. were $91,275, $90,184 and $98,256, respectively.
The general partners and/or entities controlled or managed by one or more of
such partners have ownership interests in a majority of the real estate projects
in which the Registrant also has ownership interests.
-50-
PART IV
ITEM 15- PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT FEES
Audit fees paid to Philip Rootberg & Company, LLP, whose name changed to Mayer
Hoffman McCann P.C. on October 1, 2003, for 2003 and 2002 were $68,813 and
$69,004, respectively, including fees associated with the reviews of the
Registrant's quarterly reports on Form 10-Q.
AUDIT-RELATED FEES
There were no audit-related fees paid to the Registrant's principal accountants
during 2003 and 2002.
TAX FEES
Tax fees paid to CBIZ Rootberg Business Services, Inc., whose name changed to
CBIZ Accounting, Tax & Advisory Services of Chicago, Inc. on October 1, 2003, in
2003 and 2002 were $38,317 and $40,250, respectively. Tax services rendered to
the Registrant primarily include federal and state tax return preparation
services and consultations on tax matters.
ALL OTHER FEES
Fees related to the evaluation of software of $3,770 were paid to CBIZ Rootberg
Business Services, Inc. in 2002. There were no other fees paid to the
Registrant's principal accountants in 2003 and 2002.
-51-
PART IV
ITEM 16- EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. The Index to Consolidated Financial Statements is set forth on
Page 19
2. Financial Statement Schedules:
Page
Independent Auditors' Report 20
Schedule VIII - Valuation and Qualifying Accounts and Reserves,
Years Ended December 31, 2003, 2002 and 2001 53
Schedule X - Supplementary Profit and Loss Information,
Years Ended December 31, 2003, 2002 and 2001 54
Schedule XI - Real Estate and Accumulated Depreciation,
Year Ended December 31, 2003 55
Notes to Schedule XI 57
Schedule XIII - Investments in, Equity in Earnings of,
and Drawings Received From Affiliates and Other Persons,
Years Ended December 31, 2003, 2002 and 2001 64
Schedules other than those listed above have been omitted
since they are either not applicable or not required or the
information is included elsewhere herein.
3. Exhibits: See Index to Exhibits on Page 71
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant during the year
ended December 31, 2003.
-52-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Years Ended December 31, 2003, 2002 and 2001
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
BALANCE AS OF CHARGED TO ADDITIONS
BEGINNING PROFIT OR BALANCE AS OF
OF YEAR INCOME OTHER DEDUCTIONS CLOSE OF YEAR
------------- ---------- -------- ---------- -------------
YEAR ENDED DECEMBER 31, 2003
Reserve for bad debts $ - $ - $ - $ - $ -
============= ========== ======== ========== =============
Reserve for losses on loans $ - $ - $ - $ - $ -
============= ========== ======== ========== =============
Reserve for valuation of investments $ - $ - $ - $ - $ -
============= ========== ======== ========== =============
YEAR ENDED DECEMBER 31, 2002
Reserve for bad debts $ - $ - $ - $ - $ -
============= ========== ======== ========== =============
Reserve for losses on loans $ - $ - $ - $ - $ -
============= ========== ======== ========== =============
Reserve for valuation of investments $ - $ - $ - $ - $ -
============= ========== ======== ========== =============
YEAR ENDED DECEMBER 31, 2001
Reserve for bad debts $ - $ - $ - $ - $ -
============= ========== ======== ========== =============
Reserve for losses on loans $ - $ - $ - $ - $ -
============= ========== ======== ========== =============
Reserve for valuation of investments $ - $ - $ - $ - $ -
============= ========== ======== ========== =============
-53-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE X - SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Years Ended December 31, 2003 2002 2001
---------- ---------- ----------
1. Repairs and maintenance:
Name of property:
180 North Michigan $ 461,376 $ 704,391 $ 483,482
Naperville Office Court 75,149 122,368 87,088
209 West Jackson 408,487 394,003 385,815
Highland Park Professional Building - - 36,487
Waterfall Plaza - - 9,026
Retail Centers 742 11,523 4,189
---------- ---------- ----------
Total $ 945,754 $1,232,285 $1,006,087
========== ========== ==========
2. Depreciation, depletion and amortization
of fixed and intangible assets:
Depreciation expense $ 980,697 $1,059,763 $1,251,224
Amortization expense 287,235 227,411 440,460
---------- ---------- ----------
Total $1,267,932 $1,287,174 $1,691,684
========== ========== ==========
3. Taxes, other than income taxes:
Real estate taxes:
180 North Michigan $ 640,006 $ 655,715 $ 546,379
Naperville Office Court 125,686 125,258 106,929
209 West Jackson 503,347 504,995 535,663
Highland Park Professional Building - - 14,398
Waterfall Plaza - - 77,390
Retail Centers 2,902 33,240 54,402
---------- ---------- ----------
Total $1,271,941 $1,319,208 $1,335,161
========== ========== ==========
4. Management fees $ 614,849 $ 602,856 $ 678,759
========== ========== ==========
5. Rents:
Ground rent - 180 North Michigan $ 16,597 $ 33,194 $ 11,855
========== ========== ==========
-54-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
Year Ended December 31, 2003
COST CAPITALIZED
INITIAL COST TO COMPANY SUBSEQUENT TO ACQUISITION
------------------------- -------------------------
BUILDINGS AND CARRYING
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS IMPROVEMENTS COST
------------------- ------------ ---------- ------------- ------------ ---------
Naperville Office Court,
Naperville, Illinois Office Building $ 4,242,443 $1,796,459 $ 3,321,535 $ 2,173,070 $ -
180 North Michigan,
Chicago, Illinois Office Building 6,888,669 1,061,120 6,550,000 7,805,420 -
209 W est Jackson,
Chicago, Illinois Office Building (B) 9,385,129 1,172,490 10,552,406 1,256,868 -
One Strip Shopping Center:
Evergreen Commons,
Evergreen Park, Illinois Shopping Center (A) - - 632,760 (632,760) -
------------ ---------- ------------- ------------ ---------
Total $ 20,516,241 $4,030,069 $ 21,056,701 $ 10,602,598 $ -
============ ========== ============= ============ =========
See Notes 1, 2 and 3 accompanying Schedule XI.
(A) Owned by M&J/Retail Limited Partnership; 53%-owned subsidiary of First
Wilkow Venture.
(B) Owned by 209 W est Jackson LLC; 71%-owned subsidiary of First Wilkow
Venture.
-55-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
Year Ended December 31, 2003
GROSS AMOUNT AT WHICH CARRIED AS OF
DECEMBER 31, 2003
-------------------------------------- LIFE ON WHICH
BUILDINGS AND ACCUMULATED DATE OF DATE DEPRECIATION
LAND IMPROVEMENTS TOTAL DEPRECIATION CONSTRUCTION ACQUIRED IS COMPUTED
---------- ------------- ----------- ------------ ----------------- -------- -------------
Naperville Office Court,
Naperville, Illinois $1,796,459 $ 5,494,605 $ 7,291,064 $ 2,953,490 1980 1980 25 Years
180 North Michigan,
Chicago, Illinois 1,061,120 14,355,420 15,416,540 9,501,024 1926 1968 35 Years
Renovated in 1967
209 West Jackson,
Chicago, Illinois 1,172,490 11,809,274 12,981,764 1,213,832 1898 1999 40 Years
Renovated in 1989
---------- ------------- ----------- ------------
Total $4,030,069 $ 31,659,299 $35,689,368 $ 13,668,346
========== ============= =========== ============
-56-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
Years Ended December 31, 2003, 2002 and 2001
1. Reconciliation of Cost of Real Estate During Each of the Years Ended
December 31, 2003, 2002 and 2001
BALANCE AS OF ADDITIONS BALANCE AS OF
DECEMBER 31, 2002 AT COST RETIREMENTS DECEMBER 31, 2003
----------------- ----------- ----------- -----------------
Naperville Office Court,
Naperville, Illinois $ 5,462,164 $ 32,441 $ - $ 5,494,605
180 North Michigan,
Chicago, Illinois 13,822,176 533,244 - 14,355,420
209 West Jackson,
Chicago, Illinois 11,462,796 346,478 - 11,809,274
One Strip Shopping Center:
Evergreen Commons,
Evergreen Park, Illinois 710,902 - (710,902) -
----------------- ----------- ----------- -----------------
Total $ 31,458,038 $ 912,163 $ (710,902) $ 31,659,299
================= =========== =========== =================
-57-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
Years Ended December 31, 2003, 2002 and 2001
1. Reconciliation of Cost of Real Estate During Each of the Years Ended
December 31, 2003, 2002 and 2001
BALANCE AS OF ADDITIONS BALANCE AS OF
DECEMBER 31, 2001 AT COST RETIREMENTS DECEMBER 31, 2002
----------------- ----------- ----------- -----------------
Naperville Office Court,
Naperville, Illinois $ 5,392,533 $ 135,905 $ 66,274 $ 5,462,164
180 North Michigan,
Chicago, Illinois 13,529,782 450,361 157,967 13,822,176
209 West Jackson,
Chicago, Illinois 11,399,152 63,644 - 11,462,796
One Strip Shopping Center:
Evergreen Commons,
Evergreen Park, Illinois 692,968 17,934 - 710,902
----------------- ----------- ----------- -----------------
Total $ 31,014,435 $ 667,844 $ 224,241 $ 31,458,038
================= =========== =========== =================
-58-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
Years Ended December 31, 2003, 2002 and 2001
1. Reconciliation of Cost of Real Estate During Each of the Years Ended
December 31, 2003, 2002 and 2001
BALANCE AS OF ADDITIONS BALANCE AS OF
DECEMBER 31, 2000 AT COST RETIREMENTS DECEMBER 31, 2001
----------------- ----------- ----------- -----------------
Naperville Office Court,
Naperville, Illinois $ 5,696,152 $ 460,510 $ 764,129 $ 5,392,533
180 North Michigan,
Chicago, Illinois 13,757,515 404,970 632,703 13,529,782
209 West Jackson,
Chicago, Illinois 11,136,999 262,153 - 11,399,152
Highland Park Professional Building,
Highland Park, Illinois 3,815,053 15,662 3,830,715 -
Waterfall Plaza
Orland Park, Illinois 1,728,583 7,776 1,736,359 -
Three Strip Shopping Centers:
Oak Lawn Square,
Oak Lawn, Illinois 1,451,382 - 1,451,382 -
Archer and Central,
Chicago, Illinois 2,617,546 - 2,617,546 -
Evergreen Commons,
Evergreen Park, Illinois 692,968 - - 692,968
----------------- ----------- ----------- -----------------
Total $ 40,896,198 $ 1,151,071 $11,032,834 $ 31,014,435
================= =========== =========== =================
-59-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
Years Ended December 31, 2003, 2002 and 2001
2. Reconciliation of Accumulated Depreciation of Real Estate During Each of
the Years Ended December 31, 2003, 2002 and 2001
BALANCE AS OF ADDITIONS BALANCE AS OF
DECEMBER 31, 2002 AT COST RETIREMENTS DECEMBER 31, 2003
----------------- ---------- ----------- -----------------
Naperville Office Court,
Naperville, Illinois $ 2,724,141 $ 237,383 $ 8,034 $ 2,953,490
180 North Michigan,
Chicago, Illinois 9,165,386 419,162 83,524 9,501,024
209 West Jackson,
Chicago, Illinois 898,590 315,258 16 1,213,832
One Strip Shopping Center:
Evergreen Commons,
Evergreen Park, Illinois 242,470 8,894 251,364 -
----------------- ---------- ----------- -----------------
Total $ 13,030,587 $ 980,697 $ 342,938 $ 13,668,346
================= ========== =========== =================
-60-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
Years Ended December 31, 2003, 2002 and 2001
2. Reconciliation of Accumulated Depreciation of Real Estate During Each of
the Years Ended December 31, 2003, 2002 and 2001
BALANCE AS OF ADDITIONS BALANCE AS OF
DECEMBER 31, 2001 AT COST RETIREMENTS DECEMBER 31, 2002
----------------- ----------- ----------- -----------------
Naperville Office Court,
Naperville, Illinois $ 2,549,015 $ 231,547 $ 56,421 $ 2,724,141
180 North Michigan,
Chicago, Illinois 8,747,907 519,598 102,119 9,165,386
209 West Jackson,
Chicago, Illinois 609,451 289,139 - 898,590
One Strip Shopping Center:
Evergreen Commons,
Evergreen Park, Illinois 224,698 17,772 - 242,470
----------------- ----------- ----------- -----------------
Total $ 12,131,071 $ 1,058,056 $ 158,540 $ 13,030,587
================= =========== =========== =================
-61-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
Years Ended December 31, 2003, 2002 and 2001
2. Reconciliation of Accumulated Depreciation of Real Estate During Each of
the Years Ended December 31, 2003, 2002 and 2001
BALANCE AS OF ADDITIONS BALANCE AS OF
DECEMBER 31, 2000 AT COST RETIREMENTS DECEMBER 31, 2001
----------------- ----------- ----------- -----------------
Naperville Office Court,
Naperville, Illinois $ 2,596,206 $ 238,103 $ 285,294 $ 2,549,015
180 North Michigan,
Chicago, Illinois 8,507,943 525,823 285,859 8,747,907
209 West Jackson,
Chicago, Illinois 326,029 283,422 - 609,451
Highland Park Professional Building,
Highland Park, Illinois 1,406,648 80,741 1,487,389 -
Waterfall Plaza
Orland Park, Illinois 312,263 25,278 337,541 -
Three Strip Shopping Centers:
Oak Lawn Square,
Oak Lawn, Illinois 449,659 27,213 476,872 -
Archer and Central,
Chicago, Illinois 813,205 49,078 862,283 -
Evergreen Commons,
Evergreen Park, Illinois 207,373 17,325 - 224,698
----------------- ----------- ----------- -----------------
Total $ 14,619,326 $ 1,246,983 $ 3,735,238 $ 12,131,071
================= =========== =========== =================
-62-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
Years Ended December 31, 2003, 2002 and 2001
BASIS OF REAL ESTATE FOR FEDERAL INCOME TAX PURPOSES
BUILDINGS AND
LAND IMPROVEMENTS (A)
----------- ---------------
FIRST WILKOW VENTURE
180 North Michigan $ 1,080,374 $ 5,166,337
Naperville Office Court 301,349 1,770,384
----------- ---------------
SUBTOTAL 1,381,723 6,936,721
SUBSIDIARIES
209 West Jackson 1,581,844 7,505,057
----------- ---------------
TOTAL CONSOLIDATED $ 2,963,567 $ 14,441,778
=========== ===============
(A) Net of accumulated depreciation
-63-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND DRAWINGS
RECEIVED FROM AFFILIATES AND OTHER PERSONS
Years Ended December 31, 2003, 2002 and 2001
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------------------------------------------- ----------------- ------------------ ------------------------- -----------------
BALANCE AS OF ADDITIONS DEDUCTIONS BALANCE AS OF
DECEMBER 31, 2002 INCOME OTHER LOSS DRAWS OTHER DECEMBER 31, 2003
----------------- -------- -------- -------- ---------- ----- -----------------
INVESTMENTS IN PARTNERSHIPS
ACCOUNTED FOR BY THE EQUITY
METHOD
Registrant:
L-C Office Partnership IV (D) $ 228,177 $ - $ - $ 46,441 $ - $ - $ 181,736
M&J/Grove Limited Partnership 480,079 - - 43,049 35,296 - 401,734
Arlington LLC (B) 1,263,802 7,064 - - 167,040 - 1,103,826
M&J/Prospect Crossing Limited
Partnership 483,444 59,023 - - 34,381 - 508,086
Centennial FWV, LLC 635,000 113,786 - - 59,541 - 689,245
----------------- -------- -------- -------- -------- ----- -----------------
Total Registrant 3,090,502 179,873 - 89,490 296,258 - 2,884,627
M&J/Clarkfair Limited Partnership (A)(C) 329,035 33,891 - - 41,500 - 321,426
M&J/Prospect Crossing Limited
Partnership (A) 456,078 55,683 - - 32,435 - 479,326
Fulcrum, LLC (A) 864,467 1,536 - - 59,296 - 806,707
M&J/Crossroads Limited Partnership (A) - - 128,601 - - - 128,601
----------------- -------- -------- -------- -------- ----- -----------------
Total Investments - Equity Method $ 4,740,082 $270,983 $128,601 $ 89,490 $429,489 $ - $ 4,620,687
================= ======== ======== ======== ======== ===== =================
(A) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
(B) Includes investments by the Registrant and M&J/Retail Limited Partnership.
(C) Investment was accounted for under the cost method prior to 2000.
(D) Investment will be accounted for by the cost method in future years.
Note: Any partnership investments in which the Registrant's investment basis has
been reduced to zero have been omitted from the above schedule.
-64-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND DRAWINGS
RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
Years Ended December 31, 2003, 2002 and 2001
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ------------------------------------------- ----------------- -------------------- ------------------------ ------------------
BALANCE AS OF ADDITIONS DEDUCTIONS BALANCE AS OF
DECEMBER 31, 2002 INCOME OTHER LOSS DRAWS OTHER DECEMBER 31, 2003
----------------- ---------- -------- ---- ---------- ----- ------------------
INVESTMENTS IN PARTNERSHIPS
ACCOUNTED FOR BY THE COST
METHOD
Registrant:
M&J/Eden Prairie Limited Partnership $ 140,174 $ - $ - $ - $ - $ - $ 140,174
Duke Realty Limited Partnership 235,654 88,694 - - 88,694 - 235,654
First Candlewick Associates 125,950 15,400 - - 15,400 - 125,950
Second Wilkow Venture 64,813 5,122 - - 5,122 - 64,813
Wilkow/Retail Partners Limited
Partnership 2,809 189 - - 189 - 2,809
Lake Cook Office Development IV 4,274 - - - - - 4,274
M&J/Mid Oak Limited Partnership 70,000 7,284 - - 77,284 - -
M&J/NCT Louisville LP 300,000 - - - - - 300,000
M&J/LaSalle Limited Partnership 6,480 - - - - - 6,480
Wilkow/Grove Limited Partnership - 81 - - 81 - -
M&J/Clark Street, LLC 577,001 - - - - - 577,001
M&J/Battery, LLC 300,000 29,813 - - 29,813 - 300,000
M&J/Louisville (B) - - 250,000 - - - 250,000
----------------- ---------- -------- ---- ---------- ----- ------------------
Total Registrant 1,827,155 146,583 250,000 - 216,583 - 2,007,155
Yorkshire Plaza Investors, LLC (A) 243,000 13,972 - - 13,972 - 243,000
M&J/Bayfair 580, LLC (A) 371,000 1,244,014 - - 1,244,014 - 371,000
----------------- ---------- -------- ---- ---------- ----- ------------------
Total Investments - Cost Method $ 2,441,155 $1,404,569 $250,000 $ - $1,474,569 $ - $ 2,621,155
================= ========== ======== ==== ========== ===== ==================
(A) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
(B) New investment.
Note: Any partnership investments in which the Registrant's investment basis has
been reduced to zero have been omitted from the above schedule.
-65-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND DRAWINGS
RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
Years Ended December 31, 2003, 2002 and 2001
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------------------------------------------- ----------------- ------------------- ---------------------------- ------------
BALANCE AS OF ADDITIONS DEDUCTIONS BALANCE AS
DECEMBER 31, 2001 INCOME OTHER LOSS DRAWS OTHER DECEMBER 31,
----------------- -------- --------- -------- -------- -------- ------------
INVESTMENTS IN PARTNERSHIPS
ACCOUNTED FOR BY THE EQUITY
METHOD
Registrant:
L-C Office Partnership IV (F) $ 157,496 $ - $ 242,983 $172,302 $ - $ - $ 228,177
M&J/Grove Limited Partnership 545,720 6,328 - - 71,969 - 480,079
Rosemont 28 Limited Partnership (E) 562,058 - 3,094 1,635 93,455 470,062(E) -
Arlington LLC (B) 1,425,999 130,123 - - 292,320 - 1,263,802
M&J/Prospect Crossing Limited
Partnership 493,721 24,104 - - 34,381 - 483,444
Centennial FWV, LLC (D) - - 635,000(D) - - - 635,000
----------------- -------- --------- -------- -------- -------- ------------
Total Registrant 3,184,994 160,555 881,077 173,937 492,125 470,062 3,090,502
M&J/Clarkfair Limited Partnership (A)(C) 289,678 80,857 - - 41,500 - 329,035
M&J/Prospect Crossing Limited
Partnership (A) 461,702 26,811 - - 32,435 - 456,078
Fulcrum, LLC (A) 945,458 15,658 - - 96,649 - 864,467
M&J/Crossroads Limited Partnership (A) - 10,365 - - 10,365 - -
----------------- -------- --------- -------- -------- -------- ------------
Total Investments - Equity Method $ 4,881,832 $294,246 $ 881,077 $173,937 $673,074 $470,062 $ 4,740,082
================= ======== ========= ======== ======== ======== ============
(A) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
(B) Includes investments by the Registrant and M&J/Retail Limited Partnership.
(C) Investment was accounted for under the cost method prior to 2000.
(D) New investment.
(E) Loss on disposition.
(F) Investment will be accounted for by the cost method in future years.
Note: Any partnership investments in which the Registrant's investment basis has
been reduced to zero have been omitted from the above schedule.
-66-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND DRAWINGS
RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
Years Ended December 31, 2003, 2002 and 2001
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------------------------------------------- ----------------- ------------------ ------------------------- -----------------
BALANCE AS OF ADDITIONS DEDUCTIONS BALANCE AS OF
DECEMBER 31, 2001 INCOME OTHER LOSS DRAWS OTHER DECEMBER 31, 2002
----------------- -------- -------- ------ -------- ------- -----------------
INVESTMENTS IN PARTNERSHIPS
ACCOUNTED FOR BY THE COST
METHOD
Registrant:
M&J/Eden Prairie Limited Partnership $ 140,174 $ - $ - $ - $ - $ - $ 140,174
Duke Realty Limited Partnership 235,654 87,375 - - 87,375 - 235,654
First Candlewick Associates 125,950 23,650 - - 23,650 - 125,950
Second Wilkow Venture 64,813 4,728 - - 4,728 - 64,814
Wilkow/Retail Partners Limited
Partnership 2,799 1,105 10 - 1,105 - 2,809
Lake Cook Office Development IV 2,068 - 2,206 - - - 4,274
M&J/Mid Oak Limited Partnership 70,000 1,050 - - 1,050 - 70,000
Mid Oak Plaza LLC 10 - - - 10 - -
M&J/NCT Louisville LP 300,000 6,750 - - 6,750 - 300,000
M&J/LaSalle Limited Partnership 6,480 - - - - - 6,480
Wilkow/Grove Limited Partnership - 322 - - 322 - -
M&J/Clark Street, LLC 577,000 30,582 - - 30,581 - 577,001
M&J/Battery, LLC 300,000 29,255 - - 29,255 - 300,000
----------------- -------- -------- ------ -------- ------- ----------------
Total Registrant 1,824,948 184,817 2,216 - 184,826 - 1,827,155
Northlake Tower Limited
Partnership (A)(B) 750,000 - - - 687,601 62,399(B) -
Yorkshire Plaza Investors, LLC (A) 243,000 29,159 - - 29,159 - 243,000
M&J/Bayfair 580, LLC (A) 371,000 92,441 - - 92,441 - 371,000
----------------- -------- -------- ------ -------- ------- ----------------
Total Investments - Cost Method $ 3,188,948 $306,417 $ 2,216 $ - $994,027 $62,399 $ 2,441,155
================= ======== ======== ====== ======== ======= ================
(A) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
(B) Loss on disposition.
Note: Any partnership investments in which the Registrant's investment basis has
been reduced to zero have been omitted from the above schedule.
-67-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND DRAWINGS
RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
Years Ended December 31, 2003, 2002 and 2001
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
ADDITIONS DEDUCTIONS
BALANCE AS OF ----------------- ----------------------- BALANCE AS OF
DECEMBER 31, 2000 INCOME OTHER LOSS DRAWS OTHER DECEMBER 31, 2001
----------------- ------ ----- ---- ----- ----- -----------------
INVESTMENTS IN PARTNERSHIPS
ACCOUNTED FOR BY THE EQUITY
METHOD
Registrant:
L-C Office Partnership IV $ 214,415 $ - $ - $ 56,919 $ - $ - $ 157,496
M&J/Grove Limited Partnership 567,112 20,491 - - 41,883 - 545,720
Rosemont 28 Limited Partnership 561,648 - 2,590 2,180 - - 562,058
Arlington LLC (B) 1,340,651 - 280,000 (D) 69,372 125,280 - 1,425,999
M&J/Prospect Crossing Limited
Partnership 502,644 18,340 - - 27,263 - 493,721
------------ ---------- -------- -------- ---------- ----- -----------------
Total Registrant 3,186,470 38,831 282,590 128,471 194,426 - 3,184,994
M&J/Clarkfair Limited Partnership (A)(C) 323,225 18,328 - - 51,875 - 289,678
M&J/Prospect Crossing Limited
Partnership (A) 474,189 13,233 - - 25,720 - 461,702
Fulcrum, LLC (A) 1,061,261 27,204 - - 143,007 - 945,458
------------ ---------- -------- -------- ---------- ----- -----------------
Total Investments - Equity Method $ 5,045,145 $ 97,596 $282,590 $128,471 $ 415,028 $ - $ 4,881,832
============ ========== ======== ======== ========== ===== =================
(A) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
(B) Includes investments by the Registrant and M&J/Retail Limited Partnership.
(C) Investment was accounted for under the cost method prior to 2000.
(D) Investment to release letter of credit held by mortgagee.
Note: Any partnership investments in which the Registrant's investment basis has
been reduced to zero have been omitted from the above schedule.
-68-
FIRST WILKOW VENTURE
(A Limited Partnership)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND DRAWINGS
RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
Years Ended December 31, 2003, 2002 and 2001
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
ADDITIONS DEDUCTIONS
BALANCE AS OF ---------------- -------------------- BALANCE AS OF
DECEMBER 31, 2000 INCOME OTHER LOSS DRAWS OTHER DECEMBER 31, 2001
----------------- ------ ----- ---- ----- ----- -----------------
INVESTMENTS IN PARTNERSHIPS
ACCOUNTED FOR BY THE COST
METHOD
Registrant:
M&J/Eden Prairie Limited Partnership $ 140,174 $ 17,129 $ - $ - $ 17,129 $ - $ 140,174
Duke Realty Limited Partnership 235,654 85,525 - - 85,525 - 235,654
First Candlewick Associates 125,950 28,380 - - 28,380 - 125,950
Second Wilkow Venture 64,813 7,092 - - 7,092 - 64,813
Wilkow/Retail Partners Limited
Partnership 2,799 1,493 - - 1,493 - 2,799
Lake Cook Office Development IV 2,068 - - - - - 2,068
M&J/Hotel Investors Limited
Partnership 200,000 - - - - 200,000 (C) -
M&J/Mid Oak Limited Partnership 70,000 4,725 - - 4,725 - 70,000
Mid Oak Plaza LLC 10 - - - - - 10
M&J/NCT Louisville LP 300,000 27,000 - - 27,000 - 300,000
M&J/LaSalle Limited Partnership 6,480 - - - - - 6,480
Wilkow/Grove Limited Partnership - 161 - - 161 - -
M&J/Clark Street, LLC 577,000 54,238 - - 54,238 - 577,000
M&J/Battery, LLC (B) - 8,569 300,000 (B) - 8,569 - 300,000
----------------- ---------- -------- ---- -------- -------- -----------------
Total Registrant 1,724,948 234,312 300,000 - 234,312 200,000 1,824,948
Northlake Tower Limited Partnership (A) 750,000 71,331 - - 71,331 - 750,000
Yorkshire Plaza Investors, LLC (A) 243,000 26,730 - - 26,730 - 243,000
M&J/Bayfair 580, LLC (A)(B) - - 371,000 (B) - - - 371,000
----------------- ---------- -------- ---- -------- -------- -----------------
Total Investments - Cost Method $ 2,717,948 $ 332,373 $671,000 $ - $332,373 $200,000 $ 3,188,948
================= ========== ======== ==== ======== ======== =================
(A) Investment is owned by M&J/Retail Limited Partnership, which is consolidated
with the Registrant.
(B) New investment.
(C) Provision for loss in book value.
Note: Any partnership investments in which the Registrant's investment basis has
been reduced to zero have been omitted from the above schedule.
-69-
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.
FIRST WILKOW VENTURE
By: Marc R. Wilkow
---------------------------------------
Marc R. Wilkow, General Partner and
President of M&J Wilkow, Ltd., its
Managing Agent
DATED: March 26, 2004
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, in
the capacities indicated, on March 26, 2004.
By: Clifton J. Wilkow
----------------------------------------
Clifton J. Wilkow, General Partner and
Executive Vice President of
M&J Wilkow, Ltd.
By: Thomas Harrigan
-----------------------------------------
Thomas Harrigan, Senior Vice President of
M&J Wilkow, Ltd.
-70-
INDEX TO EXHIBITS
Exhibit No. Description
(A) Agreement of Limited Partnership of First Wilkow Venture (filed as
Exhibit A or Prospectus for Exchange Offer of First Wilkow Venture
dated July 2, 1973).
(B) Amendments to Certificate of Limited Partnership filed as an Exhibit to
Annual Report on Form 10-K for 1983 which is hereby incorporated by
reference.
(C) Proxy Statement issued October 20, 1986, filed as Exhibit D to the
Annual Report on 10-K for 1986 which is hereby incorporated by
reference.
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the
Sarbanes - Oxley Act of 2002.
31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the
Sarbanes - Oxley Act of 2002.
32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
1350.
32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
1350.
71