**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

**[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

Forthe quarterly period ended September30, 2009          

or

**[ ] 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: 0-11909                    

REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - II

(Exact name of registrant as specified in its charter)

                                  Delaware                                                  16-1212761                

                 (State of organization)                         (IRS Employer Identification No.)

2350 North Forest Road, Getzville, New York 14068

(Address of principal executive offices)          

(716) 636-0280

(Registrant’s telephone number) 

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 [  ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).   Yes  [  ]     No [X]

 

| Part I – FINANCIAL INFORMATION                |             |
|-----------------------------------------------------|-------------|
| Item 1. Financial Statements                        |             |
| Condensed Balance Sheets                            |
|                                                |        | (Unaudited) |   |
|                                                |        | September30, | December 31, |
|                                                |        | 2009 |  | 2008 |
| Assets                                              |        |   |  |   |
| Property and equipment, all held for sale           | $ 4,863,356 |  | 4,863,356 |
| Less accumulated depreciation                       |        | 2,531,480 |  | 2,531,480 |
|                                                |        | 2,331,876 |  | 2,331,876 |
| Equity interest (loss) in unconsolidated            |        |   |  |   |
| joint ventures in excess of investment              |        | 1,122,597 |  | 1,091,255 |
| Cash and equivalents                                |        | 294,348 |  | 347,423 |
| Accounts receivable                                 |        | 18,646 |  | 10,402 |
| Receivable from affiliates                          |        | 604,589 |  | 604,589 |
| Other assets                                        |        | 75,025 |  | 37,373 |
|   Total assets                                 |        | $ 4,447,081 |  | 4,422,918 |
|                                                |        |   |  |   |
| Liabilities and Partners’ Equity              |        |   |  |   |
| Accounts payable and accrued expenses               | 59,461      |  | 11,632 |
| Other liabilities                                   | 73,623      |  | 77,428 |
| Partners’ equity                              |        | 4,313,997 |  | 4,333,858 |
|   Total liabilities and partners’ equity |        | $ 4,447,081 |  | 4,422,918 |
|                                                |        |   |  |   |

 

 

 

2

|                         Condensed Statements of Operations |                            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|
| (Unaudited)                                                                                                                                                                   |
|                                                                                                                                                                          |             |
|                                                                                                                                                                          | Threemonths ended Sept.30, |  | Nine months ended Sept.30, |
|                                                                                                                                                                          | 2009                       |   | 2008 | 2009 |  | 2008 |
| Rental income                                                                                                                                                                 | $ 160,057                  |   | 219,420 |   | 485,208 |   | 644,882 |
| Other income                                                                                                                                                                  | 1,975                      |   | 393 |   | 6,824 |   | 1,259 |
|   Total income                                                                                                                                                           | 162,032                    |   | 219,813 |   | 492,032 |   | 646,141 |
| Property operating costs                                                                                                                                                      | 133,210                    |   | 143,347 |   | 397,219 |   | 453,015 |
| Administrative expense - affiliates                                                                                                                                           | 22,434                     |   | 29,761 |   | 70,072 |   | 92,052 |
| Other administrative expense                                                                                                                                                  | 24,389                     |   | 18,984 |   | 75,944 |   | 89,425 |
|   Total expenses                                                                                                                                                         | 180,033                    |   | 192,092 |   | 543,235 |   | 634,492 |
| Income before equity in earnings of                      joint ventures                                                                                                  | (18,001)                   |   | 27,731 |   | (51,203) |   | 11,649 |
| Equity in earnings of joint ventures                                                                                                                                          | 10,451                     |   | (207,359) |   | 31,342 |   | (274,453) |
| Net income                                                                                                                                                                    | $ (7,550)                  |   | (179,638) |   | (19,861) |   | (262,804) |
|   Net income per limited partnership unit                                                                                                                                | $ (0.73)                   |   | (17.42) |   | (1.93) |   | (25.49) |
|   Weighted average limited partnership units                                                                                                                             |                       |   |   |   |   |   |   |
|      outstanding                                                                                                                                          | 10,000                     |   | 10,000 |   | 10,000 |   | 10,000 |
|                                                                                                                                                                               |
| Condensed Statements of Cash Flows                                                                                                                                            |
| (Unaudited)                                                                                                                                                                   |
|                                                                                                                                                                          | Nine months ended Sept.30, |
|                                                                                                                                                                          | 2009                       |  | 2008 |
| Cash used in:                                                                                                                                                                 |                       |  |   |
| Operating activities:                                                                                                                                                         |                       |  |   |
|   Net income                                                                                                                                                             | $ (19,861)                 |  | (262,804) |
|   Adjustments:                                                                                                                                                           |                       |  |   |
|     Equity in earnings of joint ventures                                                                                                                       | (31,342)                   |  | 274,453 |
|     Other, principally changes in other assets and liabilities                                                                                                 | (1,872)                    |  | (317,886) |
|       Net cash used in operating activities                                                                                                          | (53,075)                   |  | (306,237) |
| Net decrease in cash and equivalents                                                                                                                                          | (53,075)                   |  | (306,237) |
| Cash and equivalents at beginning of period                                                                                                                                   | 347,423                    |  | 752,241 |
| Cash and equivalents at end of period                                                                                                                                         | $ 294,348                  |  | 446,004 |

 

 

 

3

Notes to Financial Statements        Ninemonths ended September30, 2009 and 2008        (Unaudited)

Organization

Realmark Property Investors Limited Partnership - II (the Partnership), a Delaware Limited Partnership was formed on March 25, 1982, to invest in a diversified portfolio of income producing real estate investments. The general partners are Realmark Properties, Inc. (the corporate general partner) and Joseph M. Jayson (the individual general partner). Joseph M. Jayson is        the sole stockholder of J.M. Jayson & Company Inc. Realmark Properties, Inc. is a wholly-owned subsidiary of J.M. Jayson & Company, Inc. Under the partnership agreement, the general partners and their affiliates receive compensation for services rendered and reimbursement for expenses incurred on behalf of the Partnership.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of        America for complete financial statements. The balance sheet at December 31, 2008 has been derived from the audited financial statements at that date. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation, have been included. The Partnership’s significant accounting policies are set forth in its December 31, 2008 Form 10-K. The interim financial statements should be read in conjunction with the        financial statements included therein. The interim results should not be considered indicative of the annual results. 

 

 

 

4

Notes to Financial Statements        Ninemonths ended September30, 2009 and 2008        (Unaudited)

Property and Equipment

At September 30, 2009, the Partnership owned and operated an office complex in Michigan (Northwind Office Park), and was a partner in two joint ventures. It has a 50% interest in Research Triangle Industrial Park Joint Venture with the other 50% owned by Realmark Property Investors Limited Partnership - VI A (RPILP - VI A), an entity affiliated through common general        partners.        All of the Partnership and venture properties are being actively marketed for sale and therefore, are not being depreciated. Depreciation expense not recorded during the three and nine month periods ended September 30, 2009 was approximately $43,000 and $129,000 respectively.

Investment in Research Triangle Industrial Park Joint Venture

The Partnership has a 50% interest in Research Triangle Industrial Park Joint Venture (the Venture) with Realmark Property Investors Limited Partnership - VIA (RPILP - VIA), an entity affiliated through common general partners. The joint venture owned and operated the Research Triangle Industrial Park West, an office/warehouse facility in Durham, North Carolina, which was        sold in December 2006. The joint venture agreement provides that any income, loss, gain, cash flow, or sale proceeds be allocated 50% to the Partnership and 50% to RPILP - VIA. Summary financial information of the Venture follows:

| Balance Sheet Information |
|---------------------------|
|                      |   | September30, |   | December 31, |
|                      |   | 2009 |   | 2008 |
|                      | Assets: |   |   |   |
|                      |   Cash and equivalents | $ 1,344,644 |   | 1,471,582 |
|                      |   Receivable from affiliates | 1,012,490 |   | 912,490 |
|                      |   Accrued interest receivable | 232,388 |   | 169,008 |
|                      | Total assets | $ 2,589,522 |   | 2,553,080 |
|                      |   |   |   |   |
|                      | Liabilities: |   |   |   |
|                      |   Accounts payable and accrued expenses | - |   | 25,030 |
|                      |   Payable to affiliates | 556,436 |   | 557,648 |
|                      | Total liabilities | 556,436 |   | 582,678 |
|                      | Partners’ equity: |   |   |   |
|                      |   The Partnership | 1,016,543 |   | 985,201 |
|                      |   RPILP - VI A | 1,016,543 |   | 985,201 |
|                      |                              Total partners’ equity | 2,033,086 |   | 1,970,402 |
|                      | Total liabilities and partners’ equity | $ 2,589,522 |   | 2,553,080 |

 

 

 

5

| Notes to Financial StatementsNinemonths ended September30, 2009 and 2008                    (Unaudited)

 

 

Operating Information |
|------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                           |   |   |   |   |
|                                                                                                                                           |   | Threemonths ended Sept.30, |   | Nine months ended Sept30, |
|                                                                                                                                           |   | 2009 |   | 2008 |   | 2009 |   | 2008 |
|                                                                                                                                           | Income: |   |   |   |   |   |   |   |
|                                                                                                                                           | Interest income | $ 21,126 |   | 21,126 |   | 63,378 |   | 63,378 |
|                                                                                                                                           | Expenses: |   |   |  |   |   |   |   |
|                                                                                                                                           | Interest | 224 |   | 275 |   | 660 |   | 790 |
|                                                                                                                                           | Administrative | - |   | 435,569 |   | 34 |   | 611,494 |
|                                                                                                                                           |   Total expenses | 224 |   | 137,180 |   | 694 |   | 612,284 |
|                                                                                                                                           |   Net income (loss) | $ 20,902 |   | (417,718) |   | 62,684 |   | (548,906) |
|                                                                                                                                           | Allocation of net income: |   |   |   |   |   |   |   |
|                                                                                                                                           |   The Partnership | 10,451 |   | (207,359) |   | 31,342 |   | (274,453) |
|                                                                                                                                           |   RPILP - VI A | 10,451 |   | (207,359) |   | 31,342 |   | (274,453) |
|                                                                                                                                           |   | $ 20,902 |   | (414,718) |   | 62,684 |   | (548,906 |

Subsequent events were evaluated through November 15, 2009, the date the financial statements were issued.

6

 

PART I - Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

Effective January 1, 2001, management began formally marketing all remaining properties in the Partnership for sale. The Partnership continues to maintain a cash position adequate to fund capital improvements. Cash decreased approximately $53,000 and $306,000 during the first nine month period ended September 30, 2009 and 2008, respectively. The Partnership made no        distributions to limited partners in the first nine months of 2009 and 2008. In accordance with the settlement of the lawsuit (Part II, Item 1), it is anticipated that with the sale of the remaining property and joint ventures, the Partnership may be in a position to make distributions to the limited partners.

Results of Operations

As compared to the first ninemonths of 2008, the Partnership's income, excluding equity in earnings from joint ventures, decreased approximately $63,000 from a net gain of $12,000 in 2008 to a net loss of $51,000 in 2009. 

Total income decreased approximately $154,000. Increased vacancies resulted in an a decrease in rental income of approximately $160,000 while other income increased approximately $6,000. Total expenses decreased approximately $91,000. Property operations decreased approximately $56,000 due to overall reduced costs related to the increased in vacancies during the nine        months ended September 30, 2009. Other administrative expense decreased approximately $12,000 due to a decrease in payroll expense and contracted services. Administrative expense to affiliates decrease approximately $23,000 due to a decrease in management fees and portfolio reimbursed expenses.         

PART I - Item 3.     Quantitative and Qualitative Disclosures About Market Risk

The Partnership’s cash equivalents are short-term, interest-bearing bank accounts. 

PART I - Item 4.     Controls and Procedures

Disclosure Controls and Procedures: The Partnership’s management, with the participation of the Partnership’s Individual General Partner and Principal Financial Officer, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities        Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon such evaluation, the Partnership’s Individual General Partner and Principal Financial Officer have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective. This Quarterly Report does not include an attestation report of the Company’s registered public accounting        firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Quarterly Report.

Internal Control Over Financial Reporting: There have been no significant changes in the Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended) during the fiscal quarter to which this report relates that have materially affected, or are reasonably        likely to materially affect, the Partnership’s internal control over financial reporting. Management assessed the effectiveness of our internal control over financial reporting as of September30, 2009. In making this assessment, our management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the        Treadway Commission (COSO).

        7

PART II - OTHER INFORMATION

Item 1.     Legal Proceedings

As previously reported, the Partnership, as a nominal defendant, the General Partners of the Partnership and of affiliated public partnerships (the “Realmark Partnerships”) and the officers and directors of the Corporate General Partner, as defendants, had been involved in a class action litigation in New York State court. The        Partnership’s settlement of this litigation was described in its Annual Report on Form 10-K for the year ended December 31, 2008.

Item 5.     Other Information

     Reports on Form 8-K

             None.

Item 6.     Exhibits

|  | 31.      | Certification Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|--|-----------------------------------|-----------------------------------------------------------------------------------------------------------------|

|  | 32.      | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|--|-----------------------------------|-------------------------------------------------------------------------------------------------------------------------|

        8

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.                            REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP - II                    

      

| November 15, 2009                                                             |  | /s/ Joseph M. Jayson           |
|-------------------------------------------------------------------------------|--|--------------------------------|
|              Date |  | Joseph M. Jayson,         |
|                                                                               |  | Individual General Partner and |
|                                                                               |  | Principal Financial Officer    |

                                                  

                                                      

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