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Hi Everyone:
Catching up on business, wanted to provide financial details and brief commentary on Clarameda 2015 results.
Profit & Loss
Rental Revenue: $119,095
Cash Expenses:
Repairs & Maintenance: $14,152
Insurance: $4,745
Interest:$2,554
Utilities:$2,628
Mgmt Fees:$16,936
Licenses and Permits:$800
Other: $222
Cash Flow: $66,660
Less Depreciation: $27,410
Net Income: $38,250
For a review on the operational details please refer to my Quarterly Updates. It was a good year as we had a low vacancy rate, and we raised rents as the year progressed. We had a few expense issues, notably on the Cove Landing property where we made some long-term improvements and had to deal with an extremely problematic tenant who we removed in Q1 2016.
Please read the Q1 2016 Quarterly Report which will be posted after this one.
Balance Sheet
Assets
Cash $3,941
Other Current Assets: $2,837
Book Value of Buildings: $737,677
Book Value of Land: $156,700
Total Assets: $786,092
Liabilities:
Current Liabilities
Accounts Payable:$1,232
Partner Debt: $60,000
Line of Credit Drawings: $12,000
Security Deposits: $1,749
Equity
Partner Equity: $837,000
Less Change in Cost Basis: $125,889
Total Liabilities & Equity:
Current Market Balance Sheet (as of May 9, 2016):
Assets
Cash $3,941
Other Current Assets: $2,837
Market Value of Properties: $1,726,000 (Zillow)
Total Assets: $1,729,000
Liabilities:
Current Liabilities
Accounts Payable:$1,232
Partner Debt: $60,000
Line of Credit Drawings: $12,000
Security Deposits: $1,749
Equity
Partner Equity: $831,000
Unrealized Gain: $818,000
Total Liabilities &Equity: ;$1,729,000
As a reminder last year we returned Partner Capital to one of the Clarameda investors who needed the cash. It was done at Par meaning the Partner received back the value of their initial investment without any increase in value. This was a highly favorable transaction for the Partnership.
While the Partnership didn't issue a Special Distribution to all Partners, - in 2015 we returned $13,000 to one Partner - this amounts to 1.5% additional capital returned. We continued returning capital to this Partner in 2016 and will finalize paying out the remainder of this Partner's stake this year. While that will affect the amount of the Special Distribution, management believes that in both 2015 and 2016 this form of payout (increased share in the Partnership) will be more beneficlal to Partners than an additional cash distribution.
In total we distributed $63,250 to Partners (including $13,000 to that one Partner) and we had Cash Flow of about $66,600 from Operations. And we took down a bit of the credit line debt, so we are tracking well to our expectations.
If you look at the Market Balance Sheet you will notice the rather large unrealized gain - almost the same as the Partner Equity which means that we have doubled the value of the Company on an equity basis (and with low debt, almost doubled Enterprise value as well).
Another reminder of a Partner benefit: THE NOTE program, and I may decide to open this up to get rid of the Line of Credit from Bay Commercial : For those of you with excess cash sitting in Zero or VERY low Deposit products - you should consider this as an alternate. We raised the rate to 3.375%, so there is a built in escalator clause. We have returned money when asked, so let me know if interested and I will let you know when we have openings - based on interest we may have an opening for $20,000 - as we would rather pay Partners.
Partners were allocated about 40% of their Distributions as Net Income - so we continue to do well on the tax front. Please read the Q1 2016 Report (and other Quarterly Reports) to keep up with Company performance and of course feel free to correspond at any time.
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