FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] 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 0-10260
SHELTER PROPERTIES III
(Exact name of small business issuer as specified in its charter)
South Carolina 57-0718508
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No____
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
SHELTER PROPERTIES III
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except per unit data)
March 31, 2000
Assets
Cash and cash equivalents $ 866
Receivables and deposits 141
Restricted escrows 738
Other assets 224
Investment properties:
Land $ 1,281
Buildings and related personal property 26,258
27,539
Less accumulated depreciation (16,352) 11,187
$ 13,156
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 95
Tenant security deposit liabilities 105
Accrued property taxes 98
Other liabilities 399
Mortgage notes payable 7,843
Partners' (Deficit) Capital
General partners $ (86)
Limited partners (55,000 units issued and
outstanding) 4,702 4,616
$ 13,156
See Accompanying Notes to Consolidated Financial Statements
b)
SHELTER PROPERTIES III
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
2000 1999
Revenues:
Rental income $1,317 $1,279
Other income 104 85
Total revenues 1,421 1,364
Expenses:
Operating 606 561
General and administrative 60 55
Depreciation 260 230
Interest 156 185
Property taxes 83 95
Total expenses 1,165 1,126
Net income $ 256 $ 238
Net income allocated to general partners (1%) $ 3 $ 2
Net income allocated to limited partners (99%) 253 236
$ 256 $ 238
Net income per limited partnership unit $ 4.60 $ 4.29
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
c)
SHELTER PROPERTIES III
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 55,000 $ 2 $27,500 $27,502
Partners' (deficit) capital at
December 31, 1999 55,000 $ (89) $ 4,449 $ 4,360
Net income for the three months
ended March 31, 2000 -- 3 253 256
Partners' (deficit) capital at
March 31, 2000 55,000 $ (86) $ 4,702 $ 4,616
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d)
SHELTER PROPERTIES III
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 256 $ 238
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 260 230
Amortization of discounts and loan costs 26 25
Change in accounts:
Receivables and deposits 296 166
Other assets (53) (47)
Accounts payable (19) 12
Tenant security deposit liabilities (1) (7)
Accrued property taxes (59) (159)
Other liabilities (57) 20
Net cash provided by operating activities 649 478
Cash flows from investing activities:
Property improvements and replacements (202) (67)
Net (deposits to) withdrawals from restricted escrows (168) 86
Net cash (used in) provided by investing
activities (370) 19
Cash flows from financing activities:
Payments on mortgage notes payable (68) (62)
Net cash used in financing activities (68) (62)
Net increase in cash and cash equivalents 211 435
Cash and cash equivalents at beginning of period 655 630
Cash and cash equivalents at end of period $ 866 $ 1,065
Supplemental disclosure of cash flow information:
Cash paid for interest $ 154 $ 160
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e)
SHELTER PROPERTIES III
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Shelter
Properties III (the "Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310 (b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of Shelter Realty III Corporation (the
"Corporate General Partner"), all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 2000, are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 2000. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Partnership's Annual
Report on Form 10-KSB for the year ended December 31, 1999.
Principles of Consolidation
The financial statements include all of the accounts of the Partnership and its
99.99% owned partnership. The Corporate General Partner of the consolidated
partnership is Shelter Realty III Corporation. Shelter Realty III Corporation
may be removed as the general partner of the consolidated partnership by the
Registrant; therefore, the consolidated partnership is controlled and
consolidated by the Registrant. All significant interpartnership balances have
been eliminated.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company ("AIMCO"), a publicly
traded real estate investment trust, with AIMCO being the surviving corporation
(the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in
the Corporate General Partner. The Corporate General Partner does not believe
that this transaction has had or will have a material effect on the affairs and
operations of the Partnership.
Note C - Reconciliation of Cash Flows
The following is a reconciliation of the subtotal on the accompanying
consolidated statements of cash flows captioned "net cash provided by operating
activities" to "net cash used in operations", as defined in the Partnership
Agreement. However, "net cash used in operations" should not be considered an
alternative to net income as an indicator of the Partnership's operating
performance or to cash flows as a measure of liquidity.
For the Three Months Ended
March 31,
2000 1999
(in thousands)
Net cash provided by operating activities $ 649 $ 478
Payments on mortgage notes payable (68) (62)
Property improvements and replacements (202) (67)
Change in restricted escrows, net (168) 86
Changes in reserves for net operating
liabilities (107) 15
Additional reserves (104) (450)
Net cash provided by operations $ -- $ --
The Corporate General Partner reserved approximately $104,000 and $450,000 at
March 31, 2000 and 1999, respectively to fund capital improvements and repairs
at the Partnership's four investment properties.
Note D - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Corporate General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for (i) payments to
affiliates for services and (ii) reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following amounts were paid or
accrued to the Corporate General Partner and affiliates during the three months
ended March 31, 2000 and 1999.
2000 1999
(in thousands)
Property management fees (included in
operating expenses) $ 72 $ 70
Reimbursement for services of affiliates
(included in operating and general and
administrative expenses and investment properties) 27 27
Due to general partners 185 185
Due from general partners 11 11
During the three months ended March 31, 2000 and 1999, affiliates of the
Corporate General Partner were entitled to receive 5% of gross receipts from all
of the Registrant's properties for providing property management services. The
Registrant paid to such affiliates approximately $72,000 and $70,000 for the
three months ended March 31, 2000 and 1999, respectively.
An affiliate of the Corporate General Partner received reimbursement of
accountable administrative expenses amounting to approximately $27,000 for both
the three months ended March 31, 2000 and 1999.
During 1986 a liability of approximately $185,000 was incurred to the general
partners for sales commissions earned. Pursuant to the Partnership Agreement,
this liability cannot be paid until certain levels of returns are received by
the limited partners. As of March 31, 2000, the level of return to the limited
partners has not been met.
On September 26, 1997, an affiliate of the General Partner purchased Lehman
Brothers Class "D" subordinated bonds of SASCO, 1992-M1. These bonds are secured
by 55 multi-family apartment mortgage loan pairs held in Trust, including Essex
Park Apartments, Colony House Apartments, and Willowick Apartments owned by the
Partnership.
AIMCO and its affiliates currently own 30,244 limited partnership units in the
Partnership representing 54.989% of the outstanding units. A number of these
units were acquired pursuant to tender offers made by AIMCO or its affiliates.
It is possible that AIMCO or its affiliates will make one or more additional
offers to acquire additional limited partnership interests in the Partnership
for cash or in exchange for units in the operating partnership of AIMCO. Under
the Partnership Agreement, unitholders holding a majority of the Units are
entitled to take action with respect to a variety of matters. As a result of its
ownership of 54.989% of the outstanding units, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the Corporate General Partner because of their
affiliation with the Corporate General Partner.
Note E - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenue:
The Partnership has one reportable segment: residential properties. The
Partnership's residential property segment consists of four apartment complexes
located in Georgia, South Carolina (2), and Tennessee. The Partnership rents
apartment units to tenants for terms that are typically twelve months or less.
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segment are the same as
those described in the Partnership's Annual Report on Form 10-KSB for the year
ended December 31, 1999.
Factors management used to identify the enterprise's reportable segment:
The Partnership's reportable segment consists of investment properties that
offer similar products and services. Although each of the investment properties
is managed separately, they have been aggregated into one segment as they
provide similar types of products and customers.
Segment information for the three months ended March 31, 2000 and 1999 is shown
in the tables below. The "Other" column includes partnership administration
related items and income and expense not allocated to the reportable segment.
2000 Residential Other Totals
(in thousands)
Rental income $ 1,317 $ -- $ 1,317
Other income 102 2 104
Interest expense 156 -- 156
Depreciation 260 -- 260
General and administrative expense -- 60 60
Segment profit (loss) 314 (58) 256
Total assets 12,979 177 13,156
Capital expenditures for investment
properties 202 -- 202
1999 Residential Other Totals
(in thousands)
Rental income $ 1,279 $ -- $ 1,279
Other income 81 4 85
Interest expense 185 -- 185
Depreciation 230 -- 230
General and administrative expense -- 55 55
Segment profit (loss) 289 (51) 238
Total assets 12,785 537 13,322
Capital expenditures for investment
properties 67 -- 67
Note F - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Corporate General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Note B - Transfer of Control"). The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998, the Corporate General Partner filed a motion seeking dismissal of the
action. In lieu of responding to the motion, the plaintiffs have filed an
amended complaint. The Corporate General Partner filed demurrers to the amended
complaint which were heard February 1999. Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a Stipulation of Settlement settling claims, subject to final court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999. Preliminary approval of the settlement was obtained on
November 3, 1999 from the Superior Court of the State of California, County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999. Prior to the December 10, 1999 hearing the Court received various
objections to the settlement, including a challenge to the Court's preliminary
approval based upon the alleged lack of authority of class plaintiffs' counsel
to enter the settlement. On December 14, 1999, the Corporate General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to disqualify some of the plaintiffs' counsel in the action. The
Corporate General Partner does not anticipate that costs associated with this
case will be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
Item 2. Management's Discussion and Analysis or Plan of Operation
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussions of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operations. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
The Partnership's investment properties consist of four apartment complexes. The
following table sets forth the average occupancy of the properties for each of
the three months ended March 31, 2000 and 1999
Average
Occupancy
Property 2000 1999
Essex Park Apartments
Columbia, South Carolina 91% 93%
Colony House Apartments
Mufreesboro, Tennessee 94% 85%
North River Village Apartments
Atlanta, Georgia 92% 94%
Willowick Apartments
Greenville, South Carolina 95% 94%
The Corporate General Partner attributes the increase in occupancy at Colony
House Apartments to the management's intensified marketing and promotion
efforts.
Results of Operations
The Registrant's net income for the three months ended March 31, 2000 was
approximately $256,000 as compared to approximately $238,000 for the three
months ended March 31, 1999. The increase in net income was due to an increase
in total revenues which were partially offset by an increase in total expenses.
The increase in total revenues was primarily due to an increase in rental income
and, to a lesser extent, an increase in other income. Rental income increased
due to an increase in average annual rental rates at all four of the
Registrant's investment properties. Rental income also increased due to an
increase in occupancy at two of the Registrant's investment properties which was
slightly offset by a decrease in occupancy at the Registrant's two remaining
investment properties. Other income increased due to an increase in
miscellaneous income at North River Village Apartments.
Total expenses increased as a result of increases in operating and depreciation
expense, which was slightly offset by a decrease in interest expense and
property tax expense. The increase in operating expenses was due to increases in
administrative and maintenance expenses. Administrative expense increased due to
small increases in business licenses and permits, tax service and office expense
at all four investment properties. Maintenance expense increased due to interior
painting projects at Colony House Apartments and Essex Park Apartments.
Depreciation expense increased due to increased property improvements and
replacements at all four investment properties. These increases were slightly
offset by a decrease in interest expense due to the reduction in principal
balances on the properties mortgages. Property tax expense decreased due to the
timing of the receipt of property tax billings.
General and administrative expense remained relatively constant for the three
months ended March 31, 2000. Included in general and administrative expenses for
the three months ended March 31, 2000 and 1999 are management reimbursements to
the Corporate General Partner allowed under the Partnership Agreement. Also
included in general and administrative expenses were costs associated with the
quarterly and annual communications with investors and regulatory agencies and
the annual audit and appraisals required by the Partnership Agreement.
As part of the ongoing business plan of the Registrant, the Corporate General
Partner monitors the rental market environments of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the Corporate General Partner attempts to protect the Partnership
from the burden of inflation-related increases in expenses by increasing rents
and maintaining a high overall occupancy level. However, due to changing market
conditions which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
Corporate General Partner will be able to sustain such a plan.
Liquidity and Capital Resources
At March 31, 2000, the Registrant had cash and cash equivalents of approximately
$866,000 as compared to approximately $1,065,000 at March 31, 1999. Cash and
cash equivalents increased approximately $211,000 for the three months ended
March 31, 2000 from the Registrant's year end, primarily due to approximately
$649,000 of cash provided by operating activities, which was partially offset by
approximately $370,000 of cash used in investing activities and approximately
$68,000 of cash used in financing activities. Cash used in investing activities
consisted of property improvements and replacements at all four of the
Partnership's investment properties and net deposits to the restricted escrow
accounts maintained by the mortgage lender. Cash used in financing activities
consisted of payments of principal made on the mortgages encumbering the
Registrant's properties. The Registrant invests its working capital reserves in
money market accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the investment properties to adequately maintain the
physical assets and other operating needs of the Registrant and to comply with
Federal, state, local, legal, and regulatory requirements. Capital improvements
completed at each of the Registrant's properties are detailed below.
Essex Park Apartments
The Partnership has budgeted approximately $223,000 for capital improvements
during 2000 at Essex Park Apartments, consisting primarily of appliances, floor
coverings, plumbing improvements, and other building improvements. The
Partnership has completed approximately $29,000 in capital expenditures as of
March 31, 2000, consisting primarily of floor covering and appliance
replacements. These improvements were funded primarily from replacement
reserves.
Colony House Apartments
The Partnership has budgeted approximately $117,000 for capital improvements
during 2000 at Colony House Apartments consisting primarily of appliances, floor
coverings, swimming pool improvements, and air conditioning improvements. The
Partnership has completed approximately $71,000 in capital expenditures as of
March 31, 2000, consisting primarily of floor covering, appliance replacement,
and major sewer replacements. These improvements were funded primarily from
replacement reserves and operations.
North River Village Apartments
The Partnership has budgeted approximately $164,000 for capital improvements
during 2000 at North River Village Apartments, consisting primarily of
appliances, floor coverings and plumbing improvements. The Partnership has
completed approximately $67,000 in capital expenditures as of March 31, 2000,
consisting primarily of floor covering, appliances, and HVAC replacements and
parking lot improvements. These improvements were funded primarily from
operations.
Willowick Apartments
The Partnership has budgeted approximately $70,000 for capital improvements
during 2000 at Willowick Apartments, consisting primarily of appliances, floor
coverings, major landscaping and clubhouse renovations. The Partnership has
completed approximately $35,000 in capital expenditures as of March 31, 2000,
consisting primarily of floor covering, lighting and appliance replacements.
These improvements were funded primarily from replacement reserves.
The additional capital expenditures will be incurred only if cash is available
from operations and Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.
The Registrant's current assets are thought to be sufficient for any near term
needs (exclusive of capital improvements) of the Registrant. The mortgage
indebtedness of approximately $7,843,000, net of discount, is amortized over
varying periods with balloon payments due from November 15, 2002 to October 15,
2003. The Corporate General Partner will attempt to refinance such indebtedness
and/or sell the properties prior to such maturity date. If the properties cannot
be refinanced or sold for a sufficient amount, the Registrant will risk losing
such properties through foreclosure.
There were no cash distributions made for either of the three months ended March
31, 2000 or 1999. Future cash distributions will depend on the levels of net
cash generated from operations, the availability of cash reserves, and the
timing of debt maturities, refinancings, and/or property sales. The
Partnership's distribution policy is reviewed on a semi-annual basis. There can
be no assurance, however, that the Partnership will generate sufficient funds
from operations, after planned capital improvement expenditures, to permit any
additional distributions to its partners in 2000 or subsequent periods. In
addition, the Partnership may be restricted from making distributions if the
amount in the reserve account for each property maintained by the mortgage
lender is less than $400 per apartment unit at Colony House Apartments, Essex
Park Apartments, and Willowick Apartments and $200 per apartment unit at North
River Village Apartments. As of March 31, 2000 the reserve account was fully
funded with approximately $661,000 on deposit with the mortgage lender.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Corporate General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Part 1 - Financial Information, Item 1. Financial Statements, Note B - Transfer
of Control"). The plaintiffs seek monetary damages and equitable relief,
including judicial dissolution of the Partnership. On June 25, 1998, the
Corporate General Partner filed a motion seeking dismissal of the action. In
lieu of responding to the motion, the plaintiffs have filed an amended
complaint. The Corporate General Partner filed demurrers to the amended
complaint which were heard February 1999. Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a Stipulation of Settlement, settling claims, subject to final court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999. Preliminary approval of the settlement was obtained on
November 3, 1999 from the Superior Court of the State of California, County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999. Prior to the December 10, 1999 hearing the Court received various
objections to the settlement, including a challenge to the Court's preliminary
approval based upon the alleged lack of authority of class plaintiffs' counsel
to enter the settlement. On December 14, 1999, the Corporate General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to disqualify some of the plaintiffs' counsel in the action. The
Corporate General Partner does not anticipate that costs associated with this
case will be material to the Partnership's overall operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K filed during the quarter ended March 31,
2000:
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SHELTER PROPERTIES III
By: Shelter Realty III Corporation
Corporate General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller
Date: May 4, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Shelter
Properties III 2000 First Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000353282
<NAME> Shelter PropertiesIII
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 866
<SECURITIES> 0
<RECEIVABLES> 141
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 27,539
<DEPRECIATION> 16,352
<TOTAL-ASSETS> 13,156
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 7,843
0
0
<COMMON> 0
<OTHER-SE> 4,616
<TOTAL-LIABILITY-AND-EQUITY> 13,156
<SALES> 0
<TOTAL-REVENUES> 1,421
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,165
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 156
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 256
<EPS-BASIC> 4.60 <F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
