SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1997
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-11128
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BALCOR PENSION INVESTORS-III
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(Exact name of registrant as specified in its charter)
Illinois 36-3164211
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
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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
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<PAGE>
BALCOR PENSION INVESTORS-III
(AN ILLINOIS LIMITED PARTNERSHIP)
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
ASSETS
1997 1996
-------------- --------------
Cash and cash equivalents $ 8,604,813 $ 19,044,458
Cash and cash equivalents - Early
Investment Incentive Fund 2,138,364 1,156,294
Escrow deposits 88,649 126,507
Accounts and accrued interest receivable 53,627 98,863
Prepaid expenses 13,894 33,582
Deferred expenses, net of accumulated
amortization of $56,239 in 1997 and
$53,115 in 1996 6,249 9,373
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10,905,596 20,469,077
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Real estate held for sale 14,214,705 14,214,705
Investment in joint ventures with affiliates 3,266,109 3,251,208
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17,480,814 17,465,913
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$ 28,386,410 $ 37,934,990
============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 111,611 $ 310,198
Due to affiliates 73,062 74,164
Other liablilities, principally real
estate taxes and escrow deposits 170,000 384,433
Security deposits 88,718 83,571
Mortgage notes payable 1,611,025 1,622,593
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Total liabilities 2,054,416 2,474,959
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Commitments and contingencies
Limited Partners' capital (237,476
Interests issued) 32,454,365 41,613,648
Less Interests held by Early Investment
Incentive Fund (21,249 at March 31, 1997
and December 31, 1996) (7,024,362) (7,024,362)
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25,430,003 34,589,286
<PAGE>
BALCOR PENSION INVESTORS-III
(AN ILLINOIS LIMITED PARTNERSHIP)
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
(Continued)
General Partner's capital 901,991 870,745
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Total partners' capital 26,331,994 35,460,031
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$ 28,386,410 $ 37,934,990
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR PENSION INVESTORS-III
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1997 and 1996
(Unaudited)
1997 1996
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Income:
Interest on loans receivable $ 1,367,431
Less interest on loans
payable - underlying mortgages 819,181
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Net interest income on loans receivable 548,250
Income from operations of
real estate held for sale $ 385,262 380,734
Participation in (loss) income
of joint ventures with affiliates (7,934) 136,648
Interest on short-term investments 167,234 100,650
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Total income 544,562 1,166,282
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Expenses:
Administrative 127,947 89,558
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Total expenses 127,947 89,558
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Net income $ 416,615 $ 1,076,724
============== ==============
Net income allocated to General Partner $ 31,246 $ 80,754
============== ==============
Net income allocated to Limited Partners $ 385,369 $ 995,970
============== ==============
Net income per average number of Limited
Partnership Interests outstanding
(216,227 in 1997 and 221,386 in 1996) $ 1.78 $ 4.50
============== ==============
Distribution to General Partner $ 79,159 $ 79,159
============== ==============
Settlement Distribution to Limited Partners $ 30,670 None
============== ==============
Distribution to Limited Partners $ 9,513,982 $ 5,968,540
============== ==============
Distribution per Limited Partnership
Interests outstanding $ 44.00 $ 26.96
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR PENSION INVESTORS-III
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1997 and 1996
(Unaudited)
1997 1996
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Operating activities:
Net income $ 416,615 $ 1,076,724
Adjustments to reconcile net income to net
cash provided by operating activities:
Participation in loss (income) of
joint ventures with affiliates 7,934 (136,648)
Amortization of deferred expenses 3,124 3,124
Net change in:
Escrow deposits 37,858 34,312
Accounts and accrued
interest receivable 45,236 98,394
Prepaid expenses 19,688 24,174
Accounts payable (198,587) 79,324
Due to affiliates (1,102) 7,269
Other liabilities (214,433) (51,342)
Security deposits 5,147 (2,231)
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Net cash provided by operating activities 121,480 1,133,100
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Investing activities:
Distribution from joint venture
partners - affiliates 44,756 16,501
Capital contribution to joint venture
partners - affiliates (67,591)
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Net cash (used in) provided by investing
activities (22,835) 16,501
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Financing activities:
Distribution to Limited Partners (9,544,652) (5,968,540)
Distribution to General Partner (79,159) (79,159)
Contribution by General Partner 79,159
Increase in cash and cash equivalents -
Early Investment Incentive Fund (982,070) (470,311)
Principal payments on underlying
loans payable (210,167)
Principal payments on mortgage
notes payable (11,568) (10,550)
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Net cash used in financing activities (10,538,290) (6,738,727)
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<PAGE>
BALCOR PENSION INVESTORS-III
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1997 and 1996
(Unaudited)
(Continued)
Net change in cash and cash equivalents (10,439,645) (5,589,126)
Cash and cash equivalents at beginning
of period 19,044,458 11,344,948
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Cash and cash equivalents at end of period $ 8,604,813 $ 5,755,822
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR PENSION INVESTORS-III
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1997 and all such adjustments are of a normal and recurring nature.
2. Partnership Termination:
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1996, the Partnership received a repayment of the Pepper
Square Apartments loan receivable, a discounted prepayment of the Corporate
Campus I Office Building loan receivable and sold its interest in the Seafirst
Financial Center, Bannockburn Executive Plaza and Carmel on Providence
Apartments loans receivable. In addition, during December 1996, the general
partner sold the Perimeter 400 Center Office Building, a property in which the
Partnership held a minority joint venture interest. During April 1997, the
Partnership sold the Woods Apartments and the general partner sold the
Brookhollow/Stemmons Office Building, a property in which the Partnership held
a minority joint venture interest. Currently, the Partnership has entered into
a contract to sell the Orchards Shopping Center, the remaining property in its
portfolio. The timing of the termination of the Partnership and final
distribution of cash will depend upon the nature and extent of liabilities and
contingencies which exist or may arise. Such contingencies may include legal
and other fees stemming from litigation involving the Partnership including,
but not limited to, the lawsuit discussed in Note 7 of Notes to Financial
Statements. In the absence of any contingency, the reserves will be paid within
twelve months of the last property being sold. In the event a contingency
exists, reserves may be held by the Partnership for a longer period of time.
3. Interest Expense:
During the quarters ended March 31, 1997 and 1996, the Partnership incurred and
paid interest expense on mortgage notes payable on properties owned by the
Partnership of $37,434 and $38,452, respectively.
4. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1997 are:
Paid Payable
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Mortgage servicing fees $192 None
Reimbursement of expenses to
the General Partner, at cost 22,977 $73,062
The General Partner made a contribution of $79,159 to the Partnership in
connection with the settlement of certain litigation as further discussed in
Note 6 of Notes to Financial Statements.
<PAGE>
5. Investment in Joint Ventures with Affiliates:
The Partnership owned a 27.5% joint venture interest in the
Brookhollow/Stemmons Office Building. The following information has been
summarized from the financial statements of the joint venture for the quarter
ended March 31, 1997:
Net investment in real estate $11,074,128
Total liabilities 111,057
Total income 533,199
Net income 157,276
6. Settlement of Litigation:
A settlement received final approval by the court in November 1996 in the class
action, Paul Williams and Beverly Kennedy et. al. v. Balcor Pension Investors,
et. al. upon the terms described in the notice to class members in September
1996. The General Partner made a contribution of $79,159 to the Partnership, of
which the plaintiffs' counsel received $7,916 pursuant to the settlement
agreement. In February 1997, the General Partner made a settlement payment of
$71,243 ($.33 per Interest) to members of the class pursuant to the settlement.
Of the total settlement amount, $30,670 was paid to original investors who held
their Limited Partnership Interests at the date of the settlement and was
recorded as a distribution to Limited Partners in the Financial Statements. The
remaining portion of the settlement of $40,573 was paid to original investors
who previously sold their Interests in the Partnership. This amount was
recorded as an administrative expense in the Financial Statements. The
settlement had no material financial impact on the Partnership.
7. Contingency:
The Partnership is currently involved in a lawsuit whereby the Partnership, the
General Partner and certain third parties have been named as defendants seeking
damages relating to tender offers to purchase interests in the Partnership and
nine affiliated partnerships initiated by the third party defendants in 1996.
The defendants continue to vigorously contest this action. The action has been
dismissed with prejudice and plaintiffs have filed an appeal. It is not
determinable at this time whether or not an unfavorable decision in this action
would have a material adverse impact on the financial position, operations and
liquidity of the Partnership. The Partnership believes it has meritorious
defenses to contest the claims.
8. Subsequent Events:
(a) In April 1997, the Partnership paid $4,797,016 ($20.20 per Interest)
representing the regular quarterly distribution of available Cash Flow of $4.00
per Interest, and a special distribution of $7.00 per Interest from Cash Flow
from the sale of the Carmel on Providence loan and $9.20 per Interest from
proceeds received in connection with the sale of this loan as well as cash
reserves.
<PAGE>
(b) In April 1997, the Partnership sold the Woods Apartments in an all cash
sale for $10,000,000. From the proceeds of the sale, the Partnership paid
$230,158 in selling costs. For financial statement purposes, the Partnership
will recognize a gain of approximately $2,246,000 from the sale of this
property during the second quarter of 1997.
(c) The Brookhollow/Stemmons Office Building was owned by a joint venture
consisting of the Partnership and an affiliate owning percentages of 27.5% and
72.5%, respectively. In April 1997, the joint venture sold the property in an
all cash sale for $12,724,000. From the proceeds of the sale, the joint venture
paid $340,293 in selling costs. The joint venture will recognize a gain of
approximately $1,310,000 from the sale of this property during the second
quarter of 1997, of which approximately $360,000 is the Partnership's share.
<PAGE>
BALCOR PENSION INVESTORS-III
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Pension Investors-III (the "Partnership") is a limited partnership
formed in 1982 to invest in wrap-around mortgage loans and, to a lesser extent,
other junior mortgage loans and first mortgage loans. The Partnership raised
$118,738,000 through the sale of Limited Partnership Interests and utilized
these proceeds to fund thirty-two loans. In addition, proceeds from prior loan
repayments were used to fund five additional loans. The Partnership received
repayments on two loans and sold its interest in three loans during 1996. In
addition, in April 1997 the Partnership sold the Woods Apartments and the
general partner sold the Brookhollow/Stemmons Office Building, a property in
which the Partnership held a minority joint venture interest. The Partnership
continues to own and operate the Orchards Shopping Center; however, the
Partnership has entered into a contract to sell this property.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1996 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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During 1996, the Partnership received repayments on two loans and sold three
loans, which resulted in the cessation of net interest income on loans
receivable. This was the primary reason for the decrease in net income during
the quarter ended March 31, 1997 as compared to the same period in 1996.
Further discussion of the Partnership's operations is summarized below.
1997 Compared to 1996
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Discussions of fluctuations between 1997 and 1996 refer to the quarters ended
March 31, 1997 and 1996.
The repayments and sales of five loans during 1996 caused net interest income
on loans receivable to cease during 1996.
Operations of real estate held for sale represent the net operations of the
properties acquired by the Partnership through foreclosure. At March 31, 1997,
the Partnership was operating the Woods Apartments and the Orchards Shopping
Center. Original funds advanced by the Partnership total approximately
$6,678,000 for these two properties, representing approximately 6% of original
funds advanced. Operations at the Orchards Shopping Center and the Woods
Apartments were relatively unchanged during 1997 as compared to 1996.
<PAGE>
Participation in (loss) income of joint ventures with affiliates represents the
Partnership's 27.5% and 12.68% shares of income from the Brookhollow/Stemmons
and Perimeter 400 office buildings, respectively. In December 1996, the joint
venture sold the Perimeter 400 Center Office Building. As a result of the
payment of expenses in 1997 related to the Perimeter 400 Center Office
Building, the Partnership recognized participation in loss of joint ventures
with affiliates during 1997 as compared to income during 1996.
Higher average cash balances during 1997 primarily as a result of the proceeds
received in connection with the 1996 sale of the Carmel on Providence loan
resulted in an increase in interest income on short-term investments during
1997 as compared to 1996. The loan proceeds were subsequently distributed to
Partners in April 1997.
Provisions are charged to income when the General Partner believes an
impairment has occurred to the value of its properties or in a borrower's
ability to repay a loan or in the value of the collateral property.
Determinations of fair value are made periodically on the basis of performance
under the terms of the loan agreement and assessments of property operations.
Determinations of fair value represent estimations based on many variables
which affect the value of real estate, including economic and demographic
conditions. The Partnership did not recognize any provisions for potential
losses related to its loans or real estate held for sale during 1997 and 1996.
During 1997, the General Partner made a payment relating to the settlement of
certain litigation to original investors who previously sold their Interests in
the Partnership which was recognized as an administrative expense. See Note 6
of Notes to Financial Statements for additional information. This was the
primary reason for the increase in administrative expenses during 1997 as
compared to 1996.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased by approximately $10,440,000 as
of March 31, 1997 when compared to December 31, 1996 primarily due to the
special distribution made during January 1997 to Limited Partners from proceeds
received from the sales of the Bannockburn Executive Plaza loan and the
Perimeter 400 Office Building, in which the Partnership held a minority joint
venture interest. The Partnership generated cash flow totaling approximately
$121,000 from its operating activities primarily as a result of the income from
operations of real estate held for sale as well as interest income received on
its short-term investments, net of the payment of administrative expenses. The
Partnership used cash of approximately $23,000 for investing activities
consisting of net capital contributions to joint ventures with affiliates. The
Partnership's financing activities consisted primarily of the payment of net
distributions totaling approximately $9,545,000 to the Limited Partners and an
increase in restricted cash and cash equivalents of approximately $982,000 in
the Early Investment Incentive Fund.
The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit or a significant deficit, each after
<PAGE>
consideration of debt service payments unless otherwise indicated. A deficit is
considered to be significant if it exceeds $250,000 annually or 20% of the
property's rental and service income. The Partnership defines cash flow
generated from its properties as an amount equal to the properties' revenue
receipts less property related expenditures, which include debt service
payments. The Orchards Shopping Center is the only property that has underlying
debt. During 1997 and 1996, all of the Partnership's remaining properties,
including the Brookhollow/Stemmons Office Building, in which the Partnership
held a minority joint venture interest, generated positive cash flow. The
Perimeter 400 Center Office Building, in which the Partnership held a minority
joint venture interest, generated positive cash flow prior to its sale in 1996.
As of March 31, 1997, the Woods Apartments and the Orchards Shopping Center had
occupancy rates of 90% and 80%, respectively.
In April 1997, the Partnership sold the Woods Apartments in an all cash sale
for $10,000,000. From the proceeds of the sale, the Partnership paid $230,158
in selling costs. Pursuant to the terms of the sale, $200,000 of the proceeds
will be retained by the Partnership until June 1997. The remainder of the
available proceeds are expected to be distributed to the Limited Partners in
1997. See Note 8 of Notes to the Financial Statements for additional
information.
The Brookhollow/Stemmons Office Building was owned by a joint venture which
consisted of the Partnership and an affiliate. In April 1997, the joint venture
sold the property in all cash sale for $12,724,000. From the proceeds of the
sale, the joint venture paid $340,293 in selling costs. The net proceeds of the
sale were $12,383,707 of which $3,405,519 was the Partnership's share. Pursuant
to the terms of the sale, $250,000 of the proceeds has been placed in escrow
and will not be disbursed to the joint venture until the earlier of the
settlement of any claims presented by the purchaser or October 27, 1997. The
remaining proceeds received by the Partnership are expected to be distributed
to the Limited Partners in 1997. See Note 8 of Notes to Financial Statements
for additional information.
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1996, the Partnership received a repayment of the Pepper
Square Apartments loan receivable, a discounted prepayment of the Corporate
Campus I Office Building loan receivable and sold its interest in the Seafirst
Financial Center, Bannockburn Executive Plaza and Carmel on Providence
Apartments loans receivable. In addition, during December 1996, the general
partner sold the Perimeter 400 Center Office Building, a property in which the
Partnership held a minority joint venture interest. During April 1997, the
Partnership sold the Woods Apartments and the general partner sold the
Brookhollow/Stemmons Office Building, a property in which the Partnership held
a minority joint venture interest. Currently, the Partnership has entered into
a contract to sell the Orchards Shopping Center, the remaining property in its
portfolio for a sale price of $7,200,000. The timing of the termination of the
Partnership and final distribution of cash will depend upon the nature and
extent of liabilities and contingencies which exist or may arise. Such
contingencies may include legal and other fees stemming from litigation
<PAGE>
involving the Partnership including, but not limited to, the lawsuit discussed
in Note 7 of Notes to Financial Statements. In the absence of any contingency,
the reserves will be paid within twelve months of the last property being sold.
In the event a contingency exists, reserves may be held by the Partnership for
a longer period of time.
In February 1997, the General Partner made a settlement payment of $71,243
($.33 per Interest) to members of the class pursuant to the settlement approved
by the court in November 1996 in the Paul Williams and Beverly Kennedy et. al.
v. Balcor Pension Investors, et. al. class action lawsuit. The General Partner
made a contribution of $79,159 to the Partnership, of which the plaintiffs'
attorney received $7,916 pursuant to the settlement agreement. Of the total
settlement amount, $30,670 was paid to original investors who held their
Limited Partnership Interests at the date of the settlement and was recorded as
a distribution to Limited Partners in the Financial Statements. The remaining
portion of the settlement of $40,573 was paid to original investors who
previously had sold their Interests in the Partnership. This amount was
recorded as an administrative expense in the Financial Statements.
In April 1997, the Partnership paid a distribution of $4,797,016 ($20.20 per
Interest) to the holders of Limited Partnership Interests representing the
regular quarterly distribution for the first quarter of 1997 of $4.00 of Cash
Flow per Interest and a special distribution of $7.00 per Interest from Cash
Flow from the sale of the Carmel on Providence loan and $9.20 per Interest from
proceeds received in connection with the sale of this loan as well as cash
reserves. Including the April 1997 distribution, Limited Partners have received
cash distributions totaling $792.46 per $500 Interest. Of this amount, $490.30
represents Cash Flow from operations and $302.16 represents a return of
Original Capital. In April 1997, the Partnership also paid $217,687 to the
General Partner as its distributive share of Cash Flow distributed for the
first quarter of 1997 and made a contribution to the Early Investment Incentive
Fund in the amount of $72,562. Future distributions will be made from available
proceeds received from the sales of the Woods Apartments and the
Brookhollow/Stemmons Office Building and from the Partnership's remaining
property. In February 1997, the Partnership discontinued the repurchase of
Interests from Limited Partners.
Changing interest rates can impact real estate values in several ways.
Generally, declining interest rates may lower the cost of capital allowing
buyers to pay more for a property whereas rising interest rates may increase
the cost of capital and lower the price of real estate.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sale prices
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR PENSION INVESTORS - III
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 5. Other Information
- --------------------------
Brookhollow/Stemmons Center Office Building
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As previously reported, on March 27, 1997, the joint venture consisting of the
Partnership and an affiliate (the "Joint Venture") which owned the
Brookhollow/Stemmons Center Office Building, Dallas, Texas, contracted to sell
the property to an unaffiliated party, CMD Southwest, Inc., an Arizona
corporation, for a sale price of $13,000,000. The Joint Venture and the
Partnership subsequently agreed to reduce the sale price to $12,724,000. CMD
Southwest, Inc. assigned its rights under the agreement of sale to an
affiliate, CMD Realty Investment Fund III, L.P., an Illinois limited
partnership, and the sale closed on April 29, 1997. From the proceeds of the
sale, the Joint Venture paid $254,480 as a brokerage commission to an affiliate
of the third party providing property management services for the property and
$85,813 in closing costs. The Joint Venture received the remaining proceeds of
$12,383,707. Of such proceeds, $250,000 has been placed in escrow and will not
be disbursed to the Joint Venture until the earlier of the settlement of any
claims presented by the purchaser or October 27, 1997. The Partnership's share
of the net sale proceeds, including the escrowed funds, is $3,405,519.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Form of Subscription Agreement, previously filed as Exhibit 4(a) to
Amendment No. 2 to the Registrant's Registration Statement on Form S-11 dated
May 20, 1982 (Registration Statement No. 2-75938) and as previously filed as
Exhibit 4(a) to Registrant's Registration Statement on Form S-11 dated
November 2, 1982 (Registration No. 2-80123), and Form of Confirmation regarding
Interests in the Registrant set forth as Exhibit 4.2 to the Registrant's Report
on Form 10-Q for the quarter ended June 30, 1992 are incorporated herein by
reference.
(10)(i)(a) Purchase and Sale Agreement regarding the sale of the Registrant's
interest in the Bannockburn Executive Plaza loan, previously filed as Exhibit
(10)(i) to the Registrant's Report on Form 10-Q for the quarter ended June 30,
1996, is incorporated herein by reference.
(i)(b) First Amendment to Sale Agreement regarding the sale of the Registrant's
interest in the Bannockburn Executive Plaza loan previously reported as Exhibit
(10)(i)(b) to the Registrant's Report on Form 10-Q for the quarter ended
September 30, 1996, is hereby incorporated herein by reference.
<PAGE>
(ii) Purchase and Sale Agreement regarding the sale of the Registrant's
interest in the Seafirst Financial Center loan, previously filed as Exhibit
(10)(ii) to the Registrant's Report on Form 10-Q for the quarter ended June 30,
1996, is incorporated herein by reference.
(iii)(a) Agreement of Sale dated March 12, 1997 relating to the sale of the
Woods Apartments, Austin, Texas, previously filed as Exhibit (2)(b) to the
Registrant's Current Report on Form 8-K dated March 12, 1997 is incorporated
herein by reference.
(iii)(b) Letter Agreement dated March 20, 1997 relating to the sale of the
Woods Apartments, Austin, Texas, previously filed as Exhibit (2)(c) to the
Registrant's Current Report on Form 8-K dated December 18, 1996 is incorporated
herein by reference.
(iii)(c) Letter of Agreement dated March 14, 1997 relating to the sale of the
Woods Apartments, Austin, Texas, previously filed as Exhibit (99)(i) to the
Registrant's Current Report on Form 8-K dated March 14, 1997 is incorporated
herein by reference.
(iii)(d) Letter Agreement dated March 31, 1997 relating to the sale of the
Woods Apartments, Austin, Texas, previously filed as Exhibit (99)(ii) to the
Registrant's Current Report on Form 8-K dated March 14, 1997 is incorporated
herein by reference.
(iii)(e) Letter Agreement dated April 3, 1997 relating to the sale of the Woods
Apartments, Austin, Texas, previously filed as Exhibit (99)(iii) to the
Registrant's Current Report on Form 8-K dated March 14, 1997 is incorporated
herein by reference.
(iv)(a) Agreement of Sale relating to the sale of the Brookhollow/Stemmons
Center Office Building, Dallas, Texas previously filed as Exhibit (2) to the
Registrant's Current Report on Form 8-K dated March 14, 1997 is incorporated
herein by reference.
(iv)(b) Amendment No.1 to Agreement of Sale relating to the sale of
Brookhollow/Stemmons Center Office Building, Dallas, Texas, is attached hereto.
(v) Agreement of Sale relating to the sale of Orchards Shopping Center,
Loveland, Colorado, previously filed as Exhibit (2) to the Registrant's Current
Report on Form 8-K dated April 14, 1997 is incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the quarter ended March 31,
1997 is attached hereto.
(b) Reports on Form 8-K:
(i) A Current Report on Form 8-K dated January 9, 1997 and filed on January 24,
1997, reporting the sale of the Carmel on Providence Apartments loan and a
contract to sell The Woods Apartments, Austin, Texas, which contract was
subsequently terminated, was filed.
<PAGE>
(ii) A Current Report on Form 8-K dated December 18, 1996 and filed on March
25, 1997, reporting a new contract to sell The Woods Apartments, Austin, Texas,
was filed.
(iii) A Current Report on Form 8-K dated March 14, 1997 was filed on April 11,
1997 reporting the contract to sell the Brookhollow/Stemmons Center office
complex, Dallas, Texas and letter agreements relating to the contract to sell
The Woods Apartments, Austin, Texas.
<PAGE>
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.
BALCOR PENSION INVESTORS-III
By: /s/ Thomas E. Meador
------------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Mortgage Advisors-II, the General Partner
By: /s/ Jayne A. Kosik
------------------------------
Jayne A. Kosik
Managing Director and Chief Financial
Officer (Principal Accounting Officer) of
Balcor Mortgage Advisors-II, the General
Partner
Date: May 13, 1997
----------------
<PAGE>
AMENDMENT NO. 1 TO AGREEMENT OF SALE
AMENDMENT NO. 1 TO AGREEMENT OF SALE (this "Amendment"), dated as of April
17, 1997, by and between Stemmons Center Limited Partnership, an Illinois
limited partnership ("Seller") and CMD Southwest, Inc., an Arizona corporation
("Purchaser").
WITNESSETH:
WHEREAS, Seller and Purchaser have entered into that certain Agreement of
Sale (as amended, the "Agreement") dated March 27, 1997, relating to that
certain property commonly known as Stemmons Center, Dallas, Texas; and
WHEREAS, Seller and Purchaser have agreed in the manner hereinafter set
forth to modify the terms of the Agreement.
NOW THEREFORE, in consideration of the foregoing premises, and the
agreements and representations hereinafter set forth, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Purchaser and Seller hereby agree to amend the Agreement as follows:
1. Definitions. Any capitalized terms used herein but not defined shall
have that meaning ascribed to them in the Agreement.
2. Amendment.
2.1. Purchase Price. The Purchase Price shall be $12,724,000.
2.2. Printing Credit. Purchaser shall receive a credit at Closing
in the amount of $80,000 on account of certain painting obligations under
Leases with the United States Postal Service.
3. Modification. This Amendment and the provisions hereof may not be
changed, waived or modified orally, but only by written agreement, signed by
the party against whom enforcement of any waiver, change or modification is
sought.
4. Full Force and Effect. All of the terms and conditions set forth in
the Agreement shall remain in full force and effect, except to the extent
otherwise expressly set forth in the Amendment.
5. Conflicts. In the event that any of the provisions of the Agreement
conflict with any of the terms and provisions of this Amendment, the terms and
conditions of this Amendment shall prevail.
6. Counterparts. This Amendment may be executed in any number of
identical counterparts, any or all of which may contain the signatures of less
than all of the parties, and all of which shall be construed together as a
single instrument.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused its duly authorized
officers to sign this Amendment as of the date first above written.
SELLER:
STEMMONS CENTER LIMITED
PARTNERSHIP, an Illinois limited
partnership
By: Stemmons Center Partners, Inc., an
Illinois corporation, its general
partner
By: /s/ John K. Powell, Jr.
--------------------------------
Its: Senior Vice President
PURCHASER:
CMD SOUTHWEST, INC., an Arizona
corporation
By: /s/ Randall J. Selig
--------------------------------
Its: Executive Vice President
<PAGE>
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<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 10743
<SECURITIES> 0
<RECEIVABLES> 54
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10899
<PP&E> 14215
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<CURRENT-LIABILITIES> 443
<BONDS> 1611
0
0
<COMMON> 0
<OTHER-SE> 26332
<TOTAL-LIABILITY-AND-EQUITY> 28386
<SALES> 0
<TOTAL-REVENUES> 545
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 128
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 417
<INCOME-TAX> 0
<INCOME-CONTINUING> 417
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 417
<EPS-PRIMARY> 1.78
<EPS-DILUTED> 1.78
</TABLE>
