UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
for the fiscal year ended December 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-11210
Krupp Realty Fund, Ltd.-III
(Exact name of registrant as specified in its charter)
Massachusetts 04-2763323
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
470 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (617) 423-2233
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units of
Investor Limited Partner Interest
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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ].
Aggregate market value of voting securities held by non-affiliates: Not
applicable, since securities are non-voting.
Documents incorporated by reference: Part IV, Item 14.
The exhibit index is located on pages 9-11.
<PAGE>
PART I
ITEM 1. BUSINESS
Krupp Realty Fund, Ltd.-III (the "Partnership") is a limited partnership
formed on April 23, 1982 with The Krupp Company and The Krupp Corporation
as the General Partners. The Partnership issued all of the Original
Limited Partner Interests to The Krupp Company (See Note A to Consolidated
Financial Statements included in Item 8 (Appendix A) of this report for
additional information). The primary business of the Partnership is to
invest in, operate, refinance and ultimately dispose of properties and
related assets of the Partnership. The Partnership considers itself to be
engaged only in the industry segment of investment in real estate.
The Partnership's real estate investments are subject to some seasonal
fluctuations due to changes in utility consumption and seasonal
maintenance expenditures. However, the future performance of the
Partnership will depend upon factors which cannot be predicted. Such
factors include general economic and real estate market conditions, both
on a national basis and in those areas where the Partnership's investments
are located, real estate tax rates, operating expenses, energy costs,
government regulations, and federal and state income tax laws. The
requirements for compliance with federal, state and local regulations to
date have not had an adverse effect on the Partnership's operations, and
no adverse effect is anticipated in the future.
The Partnership's investments in real estate are also subject to such
risks as (i) competition from existing and future projects held by other
owners in the areas of the Partnership's properties, (ii) possible
reduction in rental income due to an inability to maintain high occupancy
levels, (iii) possible adverse changes in mortgage interest rates, (iv)
possible adverse changes in general economic and local conditions, such as
competitive over-building, increased unemployment or adverse changes in
real estate zoning laws, and the possible future adoption of rent control
legislation which would not permit the full amount of increased costs to
be passed on to tenants in the form of rent increases, and (v) other
circumstances over which the Partnership may have little or no control.
As of December 31, 1995, there were 26 full and part-time on-site
personnel employed by the Partnership.
ITEM 2. PROPERTIES
As of December 31, 1995, the Partnership had leveraged investments in
three apartment complexes having an aggregate of 990 units.
A summary of the Partnership's real estate investments is presented
below.
<PAGE>
<TABLE>
<CAPTION>
Average Occupancy
Year December 31,
Description Acquired Total Units 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C>
Brookeville Apartments
Columbus, Ohio 1983 424 Units 94% 94% 93% 95% 94%
Hannibal Grove Apartments
Columbia, Maryland 1983 316 Units 93% 94% 88% 86% 89%
Dorsey's Forge Apartments
and Oakland Meadows
Columbia, Maryland 1983 250 Units 94% 95% 92% 93% 89%
</TABLE>
In July 1993, in conjunction with the refinancing of Brookeville
Apartments with the Department of Housing and Urban Development ("HUD"),
the General Partners of the Partnership created Brookeville Apartments
Limited Partnership ("Brookeville L.P."). The property was subsequently
transferred to Brookeville L.P., with the Partnership retaining a 100%
interest in Brookeville L.P..
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the
Partnership is a party or of which any of its property is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The transfer of units of Limited Partner Interest (the "Units") is
subject to certain limitations contained in the Partnership Agreement.
There is no public market for the Units and it is not anticipated that any
such public market will develop.
The number of Investor Limited Partners as of December 31, 1995 was
approximately 1,700.
One of the objectives of the Partnership is to generate cash
available for distribution, however, there is no assurance that future
operations will generate cash available for distribution. The Partnership
discontinued distributions during 1990 because of insufficient operating
cash flow. Subsequently, property
operations improved and distributions were reinstituted and paid in
August, 1994. The Partnership anticipates that distributions will
continue and be paid semi-annually.
The Partnership made the following distributions to its Partners
during the years ended December 31, 1995 and 1994:
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994
Amount Per Unit Amount Per Unit
Limited Partners:
<S> <C> <C> <C> <C>
Investor Limited Partner
Interest (25,000 Units
outstanding) $297,495 $11.90 $ 99,132 $3.97
Original Limited Partner 12,526 4,174
General Partners 3,132 1,043
$313,153 $104,349
</TABLE>
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial information
regarding the Partnership's financial position and operating results.
This information should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations
and the Consolidated Financial Statements which are included in Items 7
and 8 of this report, respectively.
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Revenue from
Operations $ 6,352,337 $ 6,215,466 $ 5,757,960 $ 6,023,650 $10,689,462
Gain on sale of
property - - - 222,388 9,675,156
Total Revenue $ 6,352,337 $ 6,215,466 $ 5,757,960 $ 6,246,038 $20,364,618
Net income (loss) $ (547,893) $ (453,031) $(1,521,667) $ (898,682) $ 6,890,572
Net income (loss)
allocated to Partners:
Investor Limited
Partners (520,498) (430,380) (1,445,583) (853,748) 6,546,043
Per Unit (20.82) (17.22) (57.82) (34.15) 261.84
Original
Limited Partner - (18,121) (60,867) (35,947) 275,623
General
Partners (27,395) (4,530) (15,217) (8,987) 68,906
Total assets at
December 31 14,384,144 15,702,150 16,561,486 16,366,735 17,901,355
Long-term
obligations
at December 31 19,491,853 19,827,968 20,133,422 18,676,323 18,856,173
Distributions
to Partners:
Investor
Limited
Partners 297,495 99,132 - - -
Per Unit 11.90 3.97 - - -
Original
Limited
Partner 12,526 4,174 - - -
General
Partners 3,132 1,043 - - -
</TABLE>
Prior performance of the Partnership is not necessarily indicative of future
operations.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership's ability to generate cash adequate to meet its needs
is dependent primarily upon the operations of its real estate
investments. Such ability is also dependent upon the future availability
of bank borrowings and the potential refinancing and sale of the
Partnership's remaining real estate investments. These sources of
liquidity will be used by the Partnership for payment of expenses related
to real estate operations, capital expenditures, debt service and
expenses. Cash Flow, if any, as calculated under Section 8.2(a) of the
Partnership Agreement, will then be available for distribution to the
Partners. Due to improvements in the operations of the properties and
reduced debt service, the Partnership had sufficient cash flow in 1994 to
reinstate distributions at a rate of $3.97 per Unit. In 1995, the
distribution rate increased to $11.90 per Unit. In 1996, the
distribution rate is scheduled to increase to a rate of $15.86 per Unit.
Renovations at the Partnership's properties have resulted in higher
occupancies and increased rental revenue through 1994 and into 1995. The
Partnership is planning on spending approximately $467,000 on
improvements at Brookeville in 1996 including the replacement of
cabinets, countertops, carpeting and appliances, of which approximately
$125,000 will be funded from the replacement reserve escrow. Dorsey's
Forge and Oakland Meadows ("Dorsey's") and Hannibal Grove ("Hannibal")
are budgeting $260,000 and $435,000, respectively, in improvements in
1996.
Cash Flow
Shown below, as required by the Partnership Agreement, is the
calculation of Cash Flow of the Partnership for the year ended December
31, 1995. The General Partners provide certain of the information below
to meet requirements of the Partnership Agreement and because they
believe that it is an appropriate supplemental measure of operating
performance. However, Cash Flow should not be considered by the reader
as a substitute to net income(loss), as an indicator of the Partnership's
operating performance or to cash flows as a measure of liquidity.
<TABLE>
<CAPTION>
Rounded to $1,000
<S> <C>
Net loss for tax purposes $ (200,000)
Items not requiring or (requiring) the use
of operating funds:
Tax basis depreciation and amortization 1,391,000
Principal payments on mortgage notes payable (306,000)
Expenditures for capital improvements (1,064,000)
Amounts released from working capital reserves 544,000
Cash Flow $ 365,000
</TABLE>
<PAGE>
Operations
1995 Compared to 1994
In comparing 1995 to 1994, cash flow improved primarily as a result of
a reduction in capital expenditures. The increase in rental revenue
during 1995 as compared to 1994 is due to increases in rental rates at
all the Partnership's properties. The increase in rental rates is
related to the capital improvement programs undertaken at the properties.
Average occupancy at Hannibal and Dorsey's remained relatively stable
during 1995 at 93% and 94%, respectively. Occupancy remained stable at
Brookeville despite a fire during 1995.
Total expenses of the Partnership, net of depreciation, have decreased
slightly in 1995, as compared to 1994. Savings in operating expenses
were due to management's efforts in reducing reimbursable costs. These
savings were offset by an increase in maintenance expenses due to minor
fire damage at Brookeville. Depreciation increased in 1995, as compared
to 1994, as a result of capital improvement programs at the properties.
The Partnership expects occupancy to remain stable in 1996, with the
opportunity for a slight increase. Renovations at Brookeville will take
place throughout the year, and the improved physical condition should
increase the occupancy level and rental revenue at Brookeville.
1994 Compared to 1993
In comparing 1994 to 1993, the increase in cash flow was primarily due
to increased rental revenue and a reduction in interest expense. The
increase in rental revenue in 1994, as compared to 1993 is due primarily
to an increase in rents across the Partnership's properties. Following
the completion of renovations at Hannibal, the property was able to lower
concessions and increase occupancy and thereby increase revenues.
Average occupancy rates at Hannibal and Dorsey's during 1994 were 94% and
95%, respectively, a significant increase compared to 1993 occupancy of
88% and 92%, respectively. Vacancies have decreased during 1994 compared
to 1993 due to improved market conditions and absorption of excess market
supply where properties are located.
The refinancings of the Partnership's properties in 1993 decreased the
effective interest rates the properties were previously paying, thereby
decreasing interest expense for 1994 as compared to 1993.
General
In accordance with Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of", which is effective for fiscal years beginning after
December 15, 1995, the Partnership has implemented policies and practices
for assessing impairment of its real estate assets.
The investments in properties are carried at cost less accumulated
depreciation unless the General Partners believe there is a significant
impairment in value, in which case a provision to write down investments
in properties to fair value will be charged against income. At this
time, the
<PAGE>
General Partners do not believe that any assets of the Partnership are
significantly impaired.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Appendix A to this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership has no directors or executive officers. Information
as to the directors and executive officers of the Krupp Corporation,
which is a General Partner of both the Partnership and the Krupp Company,
the other General Partner of the Partnership, is as follows:
Position with
Name and Age The Krupp Corporation
Douglas Krupp (49) Co-Chairman of the Board
George Krupp (51) Co-Chairman of the Board
Laurence Gerber (39) President
Robert A. Barrows (38) Senior Vice President and
Corporate Controller
Douglas Krupp is Co-Chairman and Co-Founder of The Berkshire Group.
Established in 1969 as the Krupp Companies, this real estate-based firm
expanded over the years within its areas of expertise including
investment program sponsorship, property and asset management, mortgage
banking, healthcare facility ownership and the management of the Company.
Today, The Berkshire Group is an integrated real estate, mortgage and
healthcare company which is headquartered in Boston with regional offices
throughout the country. A staff of 3,400 are responsible for the more
than $4 billion under management for institutional and individual
clients. Mr. Krupp is a graduate of Bryant College. In 1989 he received
an honorary Doctor of Science in Business Administration from this
institution and was elected trustee in 1990. Mr. Krupp is Chairman of the
Board and a Director of Berkshire Realty Company, Inc. (NYSE-BRI).
George Krupp is Douglas Krupp's brother.
George Krupp is the Co-Chairman and Co-Founder of The Berkshire Group.
Established in 1969 as the Krupp Companies, this real estate-based firm
expanded over the years within its areas of expertise including
investment program sponsorship, property and asset management, mortgage
banking and healthcare facility ownership. Today, The Berkshire Group is
an integrated real estate, mortgage and healthcare company which is
headquartered in Boston with regional offices throughout the country. A
staff of 3,400 are responsible for more than $4 billion under management
for institutional and individual clients. Mr. Krupp attended the
University of Pennsylvania and Harvard University. Mr. Krupp also serves
as Chairman of the Board and Trustee of Krupp Government Income Trust and
as Chairman of the Board and Trustee of Krupp Government Income Trust II.
<PAGE>
Laurence Gerber is the President and Chief Executive Officer of The
Berkshire Group. Prior to becoming President and Chief Executive Officer
in 1991, Mr. Gerber held various positions with The Berkshire Group which
included overall responsibility at various times for: strategic planning
and product development, real estate acquisitions, corporate finance,
mortgage banking, syndication and marketing. Before joining The
Berkshire Group in 1984, he was a management consultant with Bain &
Company, a national consulting firm headquartered in Boston. Prior to
that, he was a senior tax accountant with Arthur Andersen & Co., an
international accounting and consulting firm. Mr. Gerber has a B.S.
degree in Economics from the University of Pennsylvania, Wharton School
and an M.B.A. degree with high distinction from Harvard Business School.
He is a Certified Public Accountant. Mr. Gerber also serves as President
and Director of Berkshire Realty Company, Inc. (NYSE-BRI) and President
and Trustee of Krupp Government Income Trust and President and Trustee
of Krupp Government Income Trust II.
Robert A. Barrows is the Corporate Controller of The Berkshire Group.
Mr. Barrows has held several positions within The Berkshire Group since
joining the company in 1983 and is currently responsible for accounting
and financial reporting, treasury, tax, payroll and office administrative
activities. Prior to joining The Berkshire Group, he was an audit
supervisor for Coopers & Lybrand L.L.P. in Boston. He received a B.S.
degree from Boston College and is a Certified Public Accountant.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no directors or executive officers.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of December 31, 1995, no person of record owned or was known by the
General Partners to own beneficially more than 5% of the 25,000 Units of
Investor Limited Partner Interests then outstanding. On that date, the
General Partners or their affiliates owned 80 Units (.3% of the total
outstanding) of the Partnership in addition to their General Partner and
Original Limited Partner interests.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership does not have any directors, executive officers or
nominees for election as director. Additionally, as of December 31,
1995, no person of record owned or was known by the General Partners to
own beneficially more than 5% of the Partnership's outstanding Units.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(a) 1. Consolidated Financial Statements - see Index to
Consolidated Financial Statements and Schedule included
under Item 8, Appendix A, on page F-2 to this Report.
<PAGE>
2. Consolidated Financial Statement Schedule - see Index to
Consolidated Financial Statements and Schedule included
under Item 8, Appendix A, on page F-2 to this Report.
All other schedules are omitted as they are not
applicable, not required or the information is provided
in the financial statements or the notes thereto.
(b) Exhibits:
Number and Description
Under Regulation S-K
(4) Instruments defining the rights of security holders
including indentures:
(4.1) Agreement of Limited Partnership dated as of
April 23, 1982 [Exhibit A to Prospectus included
in Registrant's Registration Statement on Form
S-11 (File 2-77155)].*
(4.2) Amended Certificate of Limited Partnership filed
with the Massachusetts Secretary of State on
September 29, 1982 [Exhibit 4.2 to Registrant's
Report on Form 10-K dated December 31, 1982 (File
No. 2-77155)].*
(10) Material Contracts:
Brookeville Apartments
(10.1) Contract of Limited Partnership and Certificate
of Limited Partnership of Brookeville Apartments
Limited Partnership [Exhibit 10.5 to Registrant's
Report on Form 10-Q for the quarter ended
September 30, 1993 (File No. 0-11210)]*
(10.2) Agreement to Hold Title dated July 20, 1993 by
and between Brookeville Apartments Limited
Partnership and Krupp Realty Fund, Ltd. - III.
[Exhibit 10.6 to Registrant's Report on Form 10-Q
for the quarter ended September 30, 1993 (File
No. 0-11210)]*
(10.3) Quitclaim deed dated July 20, 1993 between Krupp
Realty Fund, Ltd.-III and Brookeville Apartments
Limited Partnership. [Exhibit 10.7 to
Registrant's Report on Form 10-Q for the quarter
ended September 30, 1993 (File No. 0-11210)].*
(10.4) Open-End Mortgage Note dated July 20, 1993 by and
between Brookeville Apartments Limited
Partnership and Sussex Mortgage Company.
[Exhibit 10.8 to Registrant's Report on Form 10-Q
for the quarter ended September 30, 1993 (File
No. 0-11210)].*
<PAGE>
(10.5) Open-End Mortgage Deed dated July 20, 1993 by and
between Brookeville Apartments Limited
Partnership and Sussex Mortgage Company.
[Exhibit 10.9 to Registrant's Report on Form 10-Q
for the quarter ended September 30, 1993 (File
No. 0-11210)].*
Dorsey's Forge, Oakland Meadows, Hannibal Grove
(10.6) Agreements dated as of November 30, 1982, and
related supplemental Agreement dated as of
November 30, 1982 between George Krupp and
Douglas Krupp, on behalf of themselves and
others, and Shelter Corporation of Canada,
Limited and Metropolitan Properties Co. Limited
[Exhibit to Registrant's Report on Form 8-K dated
January 10, 1983 (File 2-77155)].*
(10.7) Deed dated April 25, 1983 between Dorsey's
Properties, Ltd. and D.O.H., Inc. relating to
Dorsey's Forge [Exhibit 1 to Registrant's
Amendment No. 1 to Form 8-K dated January 18,
1983 (File No. 2-77155)].*
(10.8) Deed dated April 25, 1983 between D.O.H., Inc.
and Krupp Realty Fund, Ltd.-III relating to
Dorsey's Forge [Exhibit 2 to Registrant's
Amendment No. 1 to Form 8-K dated January 18,
1983 (File No. 2-77155)].*
(10.9) Modification and Restatement of Promissory Note
dated April 28, 1993 by and between Krupp Realty
Fund - III, Ltd. and John Hancock Mutual Life
Insurance Company relating to Dorsey's Forge.
[Exhibit 10.1 to Registrant's Report on Form 10-Q
for the quarter ended September 30, 1993. (File
No. 0-11210)].*
(10.10) Modification and Restatement of Indemnity Deed of
Trust and Security Agreement dated April 28, 1993
between Krupp Realty Fund, Ltd.-III and John
Hancock Mutual Life Insurance Company relating to
Dorsey's Forge [Exhibit 10.2 to Registrant's
Report on Form 10-Q dated September 30, 1993.
(File No. 0-11210)].*
(10.11) Management Agreement dated December 19, 1986
between Krupp Realty Fund, Ltd.-III (as "Owner")
and Krupp Asset Management Company, now known as
Berkshire Property Management ("BPM"), as Agent,
relating to Dorsey's Forge [Exhibit 10.15 to
Registrant's Annual Report on Form 10-K dated
December 31, 1986 (File No. 0-11210)].*
<PAGE>
(10.12) Management Agreement dated December 19, 1986
between Krupp Realty Fund, Ltd.-III (as "Owner")
and Krupp Asset Management Company, now known as
Berkshire Property Management ("BPM"), as agent,
relating to Oakland Meadows [Exhibit 10.16 to
Registrant's Annual Report on Form 10-K dated
December 31, 1986 (File No. 0-11210)].*
(10.13) Deed dated April 25, 1983 between Dorsey
Properties Ltd., and D.O.H., Inc., relating to
Oakland Meadows [Exhibit 4 to Registrant's
Amendment No. 1 to Form 8-K dated January 18,
1983 (File No. 2-77155)].*
(10.14) Deed dated April 25, 1983 between D.O.H., Inc.,
and Krupp Realty Fund, Ltd.-III relating to
Oakland Meadows [Exhibit 5 to Registrant's
Amendment No. 1 to Form 8-K dated January 18,
1983 (File No. 2-77155)].*
(10.15) Modification and Restatement of Promissory Note
dated April 28, 1993 between Krupp Realty Fund,
Ltd.-III and John Hancock Mutual Life Insurance
Company relating to Hannibal Grove. [Exhibit
10.3 to Registrant's Report on Form 10-Q for the
quarter ended September 30, 1993 (File No. 0-
11210)].*
(10.16) Modification and Restatement of Indemnity Deed of
Trust and Security Agreement dated April 28, 1993
between Krupp Realty Fund, Ltd.-III and John
Hancock Mutual Life Insurance Company relating to
Hannibal Grove [Exhibit 10.4 to Registrant's
Report on Form 10-Q for the quarter ended
September 30, 1993. (File No. 0-11210)].*
(10.17) Management Agreement dated December 19, 1986
between Krupp Realty Fund, Ltd.-III (as "Owner")
and Krupp Asset Management Company, now known as
Berkshire Property Management ("BPM"), as Agent,
relating to Hannibal Grove [Exhibit 10.21 to
Registrant's Annual Report on Form 10-K dated
December 31, 1986 (File No. 0-11210)].*
(10.18) Deed dated April 25, 1983 between Dorsey
Properties, Ltd., and D.O.H., Inc., relating to
Hannibal Grove [Exhibit 7 to Registrant's
Amendment No. 1 to Form 8-K dated January 18,
1983 (File No. 2-77155)].*
(10.19) Deed dated April 25, 1983 between D.O.H., Inc.,
and Krupp Realty Fund, Ltd.-III relating to
Hannibal Grove [Exhibit 8 to Registrant's
Amendment No. 1 to Form 8-K dated January 18,
1983 (File No. 2-77155)].*
* Incorporated by reference.
<PAGE>
(b) Reports on Form 8-K
During the quarter ended December 31, 1995, the Partnership
did not file any reports on Form 8-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 21st day of March, 1996.
KRUPP REALTY FUND, LTD.-III
By:The Krupp Corporation, a General Partner
By: /s/ Douglas Krupp
Douglas Krupp, Co-Chairman
(Principal Executive Officer) and
Director of The Krupp Corporation
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated, on the 21st day
of March, 1996.
Signatures Titles
/s/ Douglas Krupp Co-Chairman (Principal Executive Officer)
Douglas Krupp and Director of The Krupp Corporation, a
General Partner.
/s/ George Krupp Co-Chairman (Principal Executive Officer)
George Krupp and Director of The Krupp Corporation, a
General Partner.
/s/ Laurence Gerber President of The Krupp Corporation, a
Laurence Gerber General Partner.
/s/Robert A. Barrows Senior Vice President and Corporate
Robert A. Barrows Controller of the Krupp Corporation,
a General Partner.
<PAGE>
APPENDIX A
KRUPP REALTY FUND, LTD.-III AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
ITEM 8 OF FORM 10-K
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
For the Year Ended December 31, 1995
<PAGE>
KRUPP REALTY FUND, LTD.-III AND SUBSIDIARY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
Report of Independent Accountants F-3
Consolidated Balance Sheets for December 31, 1995 and 1994 F-4
Consolidated Statements of Operations For the Years Ended
December 31, 1995, 1994 and 1993 F-5
Consolidated Statements of Changes in Partners' Deficit
For the Years Ended December 31, 1995, 1994 and 1993 F-6
Consolidated Statements of Cash Flows For the Years Ended
December 31, 1995, 1994 and 1993 F-7
Notes to Consolidated Financial Statements F-8 - F-12
Schedule III - Real Estate and Accumulated Depreciation F-13 - F-14
All other schedules are omitted as they are not applicable or not
required, or the information is provided in the consolidated financial
statements or the notes thereto.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Krupp Realty Fund, Ltd.-III:
We have audited the consolidated financial statements and
financial statement schedule of Krupp Realty Fund, Ltd.-III and
Subsidiary (the "Partnership") listed in the index on page F-2 of this
Form 10-K . These financial statements and financial statement schedule
are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Krupp Realty Fund, Ltd.-III and Subsidiary at December 31,
1995 and 1994, and the consolidated results of their operations and their
cash flows for each of the three years in the period ended December 31,
1995 in conformity with generally accepted accounting principles. In
addition, in our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements
taken as a whole, presents fairly, in all material respects, the
information required to be included therein.
Boston, Massachusetts COOPERS & LYBRAND, L.L.P.
February 1, 1996
<PAGE>
<TABLE>
<CAPTION>
KRUPP REALTY FUND, LTD.-III AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 1995 and 1994
ASSETS
1995 1994
<S> <C> <C>
Multi-family apartment complexes,
less accumulated depreciation of
$16,460,550 and $14,767,489,
respectively (Note C) $12,329,503 $12,958,461
Cash and cash equivalents 654,696 836,785
Required repair and
replacement reserves (Note C) 202,349 609,608
Cash restricted for tenant
security deposits 202,950 194,780
Prepaid expenses and other assets 596,254 658,234
Deferred expenses, net of accumulated
amortization of $121,192 and $75,302,
respectively (Note E) 398,392 444,282
Total assets $14,384,144 $15,702,150
LIABILITIES AND PARTNERS' DEFICIT
Mortgage notes payable (Note C) $19,826,061 $20,131,682
Accounts payable 54,170 244,082
Accrued expenses and other
liabilities 654,603 616,030
Total liabilities 20,534,834 20,991,794
Partners' deficit (Note D):
Investor Limited Partners
(25,000 units outstanding) (4,981,262) (4,163,269)
Original Limited Partner (871,828) (859,302)
General Partners (297,600) (267,073)
Total Partners' deficit (6,150,690) (5,289,644)
Total liabilities and Partners' deficit $14,384,144 $15,702,150
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
<PAGE>
KRUPP REALTY FUND, LTD.-III AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Revenue:
Rental $6,284,399 $ 6,142,098 $ 5,690,034
Other income 67,938 73,368 67,926
Total revenue 6,352,337 6,215,466 5,757,960
Expenses:
Operating (Note E) 1,747,005 1,922,068 1,910,804
Maintenance 672,020 567,972 599,103
Real estate taxes 517,945 506,420 503,602
Management fees to an affiliate
(Note E) 315,695 305,599 285,015
Depreciation and amortization 1,738,951 1,452,182 1,501,062
General and administrative
(Note E) 145,488 102,925 83,485
Interest (Note C) 1,763,126 1,811,331 2,396,556
Total expenses 6,900,230 6,668,497 7,279,627
Net loss (Note F) $ (547,893) $ (453,031) $(1,521,667)
Allocation of net loss (Note D):
Investor Limited Partner
Interest (25,000 Units outstanding) $ (520,498) $ (430,380) $(1,445,583)
Per Unit of Investor Limited Partner
Interest $ (20.82) $ (17.22) $ (57.82)
Original Limited Partner $ - $ (18,121) $ (60,867)
General Partners $ (27,395) $ (4,530) $ (15,217)
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
<PAGE>
KRUPP REALTY FUND, LTD.-III AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
For the Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
Investor Original Total
Limited Limited General Partners'
Partners Partner Partners Deficit
<S> <C> <C> <C> <C>
Balance at
December 31, 1992 $(2,188,174) $(776,140) $(246,283) $(3,210,597)
Net loss (1,445,583) (60,867) (15,217) (1,521,667)
Balance at
December 31, 1993 (3,633,757) (837,007) (261,500) (4,732,264)
Net loss (430,380) (18,121) (4,530) (453,031)
Distributions (Note D) (99,132) (4,174) (1,043) (104,349)
Balance at
December 31, 1994 (4,163,269) (859,302) (267,073) (5,289,644)
Net loss (Note D) (520,498) - (27,395) (547,893)
Distributions (Note D) (297,495) (12,526) (3,132) (313,153)
Balance at
December 31, 1995 $(4,981,262) $(871,828) $(297,600) $(6,150,690)
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
<PAGE>
KRUPP REALTY FUND, LTD.-III AND SUBSIDIARY
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1995, 1994 and 1993
1995 1994 1993
<S> <C> <C> <C>
Operating activities:
Net loss $ (547,893) $ (453,031) $(1,521,667)
Adjustments to reconcile net
loss to net cash provided by (used
in) operating activities:
Depreciation and amortization 1,738,951 1,452,182 1,501,062
Decrease (increase) in cash restricted
for tenant security deposits (8,170) (5,129) 2,044
Decrease in prepaid expenses and other
assets 61,980 92,566 4,593
Increase (decrease) in accounts payable (189,912) 84,807 4,769
Increase (decrease) in accrued expenses
and other liabilities 38,573 (107,275) (103,398)
Net cash provided by (used in)
operating activities 1,093,529 1,064,120 (112,597)
Investing activities:
Additions to fixed assets (1,064,103) (1,415,488) (869,565)
Decrease (increase) in cash reserved for
repair and replacement reserves 407,259 536,014 (1,145,622)
Net cash used in investing
activities (656,844) (879,474) (2,015,187)
Financing activities:
Proceeds from mortgage notes payable - - 20,555,000
Repayment of mortgage notes payable and
notes payable - - (18,545,646)
Deferred expenses - (8,088) (511,496)
Principal payments on mortgage
notes payable (305,621) (279,488) (194,307)
Distributions (313,153) (104,349) -
Net cash provided by (used in)
financing activities (618,774) (391,925) 1,303,551
Net decrease in cash and cash equivalents (182,089) (207,279) (824,233)
Cash and cash equivalents, beginning of
the year 836,785 1,044,064 1,868,297
Cash and cash equivalents, end of the year $ 654,696 $ 836,785 $ 1,044,064
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
<PAGE>
KRUPP REALTY FUND, LTD.-III AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Organization
Krupp Realty Fund, Ltd.-III (the "Partnership") was formed on April 23,
1982 by filing a Certificate of Limited Partnership in The Commonwealth
of Massachusetts. The Partnership terminates on December 31, 2020,
unless earlier terminated upon the sale of the last of the
Partnership's properties or the occurrence of certain other events as
set forth in the Partnership Agreement. The Partnership issued all of
the General Partner Interests to The Krupp Company and The Krupp
Corporation in exchange for capital contributions aggregating $1,000.
Except under certain limited circumstances upon termination of the
Partnership, the General Partners are not required to make any
additional capital contributions. The Partnership has also issued all
of the Original Limited Partner Interests to The Krupp Company in
exchange for a capital contribution of $4,000. The Original Limited
Partner is not required to make any additional capital contributions to
the Partnership. The purchasers of the 25,000 units of Investor
Limited Partner Interests ("Units"), at a price of $1,000 per Unit are
the Investor Limited Partners.
B. Significant Accounting Policies
The Partnership uses the following accounting policies for financial
reporting purposes, which may differ in certain respects from those
used for federal income tax purposes (see Note F).
Basis of Presentation
The consolidated financial statements present the consolidated
assets, liabilities and operations of the Partnership. All
intercompany balances and transactions have been eliminated.
Risks and Uncertainties
The Partnership invests its cash primarily in deposits and money
market funds with commercial banks. The Partnership has not
experienced any losses to date on its invested cash.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amount of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
<PAGE>
Cash Equivalents
The Partnership includes all short-term investments with maturities
of three months or less from the date of acquisition in cash and
cash equivalents. The cash investments are recorded at cost, which
approximates current market values.
Rental Revenues
Leases require the payment of rent monthly in advance. Rental
revenues are recorded on the accrual basis.
Depreciation
Depreciation is provided for by the use of the straight-line method
over estimated useful lives as follows:
Buildings and improvements 5 - 25 years
Appliances, carpeting and equipment 3-15 years
Impairment of Long-Lived Assets
In accordance with Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of", which is effective for fiscal years
beginning after December 15, 1995, the Partnership has implemented
policies and practices for assessing impairment of its real estate
assets.
The investments in properties are carried at cost less accumulated
depreciation unless the General Partners believe there is a
significant impairment in value, in which case a provision to write
down investments in properties to fair value will be charged against
income. At this time, the General Partners do not believe that any
assets of the Partnership are significantly impaired.
Deferred Expenses
The Partnership amortizes costs incurred in connection with
obtaining mortgages over the life of the related mortgage using the
straight-line method.
Income Taxes
The Partnership is not liable for federal or state income taxes as
Partnership income or loss is allocated to the Partners for income
tax purposes. In the event the Partnership's tax returns are
examined by the Internal Revenue Service or state taxing authority
and the examination results in a change in Partnership taxable
income or loss, such change will be reported to the Partners.
Reclassifications
Certain prior year balances have been reclassified to conform with
current year financial statement presentation.
<PAGE>
C. Mortgage Notes Payable
Mortgage notes payable collateralized by the properties of the
Partnership consist of the following at December 31:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Brookeville Apartments $ 8,626,055 $ 8,682,345
Dorsey's Forge Apartments and
Oakland Meadows 4,745,765 4,851,414
Hannibal Grove Apartments 6,454,241 6,597,923
$19,826,061 $20,131,682
</TABLE>
Brookeville
Non-recourse first mortgage note payable in the original amount
of $8,755,000 to the Department of Housing and Urban Development
("HUD"). The mortgage note requires monthly payments of $60,600
consisting of principal and interest at the rate of 7.75% per
annum. In addition, the Partnership is required to pay a
monthly deposit of $5,158 to an escrow account to be used for
future property replacements and improvements and a mortgage
insurance premium equal to .5% per annum of the outstanding
principal balance. The note matures on August 1, 2028. In
accordance with HUD regulations, distributions are limited to
the extent of Surplus Cash, as defined. The mortgage note
payable is collateralized by the property and may not be prepaid
for a period of five years and, thereafter, during the next five
years beginning August 1, 1998, may be prepaid subject to a
declining prepayment penalty of 5% to 1%, respectively. After
August 1, 2003, there is no prepayment penalty.
Based on the borrowing rates currently available to the
Partnership for bank loans with similar terms and average
maturities, the fair value of long-term debt is approximately
$8,400,000.
Hannibal and Dorsey's
Non-recourse mortgage notes payable for Hannibal and Dorsey's of
$6,800,000 and $5,000,000, respectively, at the rate of 9.25%
per annum. Monthly principal and interest payments are $62,333
for Hannibal and $45,833 for Dorsey's. The notes mature on May
3, 2000 at which time all unpaid principal, $5,653,175
(Hannibal) and $4,156,746 (Dorsey's), and any accrued interest
are due. The mortgage notes payable are collateralized by the
respective properties. The notes may not be prepaid prior to
June 1, 1998 and thereafter, may be prepaid subject to a
prepayment penalty. The prepayment penalty will be the greater
of 1) the principal balance multiplied by the difference between
9.4301% and the yield rate on publicly traded U.S. Treasury
Securities having the closest matching maturity date as reported
in the Wall Street Journal, or 2) ten percent of the then
outstanding principal.
<PAGE>
Based on the borrowing rates currently available to the
Partnership for bank loans with similar terms and average
maturities, the fair value of long-term debt for Hannibal and
Dorsey's is approximately $6,700,000 and $4,900,000,
respectively.
The annual required principal payments on the mortgage notes payable
due in the five years 1996 through 2000 are $334,208, $365,482,
$399,694, $437,124 and $10,020,473, respectively.
During 1995, 1994 and 1993, the Partnership paid $1,719,579, $1,745,712
and $1,819,273 of interest, respectively, on its mortgage notes.
D. Partners' Deficit
Under the terms of the Partnership Agreement, profits and losses from
operations are allocated 95% to the Investor Limited Partners, 4% to
the Original Limited Partner and 1% to the General Partners until such
time that the Investor Limited Partners have received a return of their
total invested capital plus a 9% per annum Cumulative Return on
Investment thereon and thereafter, 65% to the Investor Limited
Partners, 28% to the Original Limited Partner and 7% to the General
Partners.
Also, under the Partnership Agreement, cash distributions from
operations are generally made on the same basis as the allocations of
profits and losses described above. Net cash proceeds, as determined
by the General Partners, resulting from transactions such as
refinancing or sale of a property, are to be distributed as follows:
1) to the Investor Limited Partners until they have received a return
of their total Invested Capital; 2) to the Investor Limited Partners
until they have received an amount equal to their Cumulative Return on
Investment in respect of all fiscal years of the Partnership; 3) to the
Original Limited Partner and General Partners until they have received
a return of their total Invested Capital; 4) to an unaffiliated
brokerage firm (the "sales agent") to the extent of any subordinated
Financial Consulting Fee then due, and; 5) any remaining Cash Proceeds
shall be distributed 65% to the Investor Limited Partners, 28% to the
Original Limited Partner and 7% to the General Partners.
Notwithstanding anything above, the General Partners shall, under all
circumstances, receive at least 1% of all distributions of net cash
proceeds from a capital transaction.
In general, the allocation of profits and losses are calculated based
on the terms of the Partnership Agreement, as described above.
However, the Internal Revenue Code contains rules which govern the
allocation of tax losses among partners. For 1995, the allocation of
tax losses was calculated based on these rules. Under this code, tax
losses are not allocated to a limited partner if a general partner
bears the economic risk for that loss. Due to operating losses
incurred during 1995, the General Partners undertook additional
liabilities on behalf of the Partnership. As a result, the Partnership
allocated additional tax losses to the General Partners. In
conjunction with the tax election referred to above, the consolidated
financial statements presented herein reflect the allocation of net
loss in accordance with the rules of the Internal Revenue Code.
<PAGE>
As of December 31, 1995 the following cumulative partner contributions
and allocations have been made since the inception of the Partnership:
<TABLE>
<CAPTION>
Investor Original
Limited Limited General
Partners Partner Partners Total
<S> <C> <C> <C> <C>
Capital contributions $ 25,000,000 $ 4,000 $ 1,000 $ 25,005,000
Syndication costs (3,486,600) - - (3,486,600)
Cash distributions
from operations (9,319,121) (392,374) (98,092) (9,809,587)
Cash distributions from
refinancing proceeds (5,173,000) - (52,252) (5,225,252)
Net loss from
operations (21,405,208) (879,355) (247,232) (22,531,795)
Net income from capital
transaction 9,402,667 395,901 98,976 9,897,544
Total $ (4,981,262)$(871,828) $(297,600) $ (6,150,690)
</TABLE>
E. Related Party Transactions
Commencing with the date of acquisition of the Partnership's properties,
the Partnership entered into agreements under which property management
fees are paid to an affiliate of the General Partners for services as
management agent. Such agreements provide for management fees payable
monthly at a rate of 5% of the gross receipts from the properties under
management. The Partnership also reimburses affiliates of the General
Partners for certain expenses incurred in connection with the operation
of the Partnership and its properties including accounting, computer,
insurance, travel, legal and payroll; and with the preparation and
mailing of reports and other communications to the Limited Partners.
Amounts accrued or paid to the General Partners or their affiliates
during the years ended December 31, 1995, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Management fees $315,695 $305,599 $285,015
Expense reimbursements 156,319 280,198 285,943
Charged to operations $472,014 $585,797 $570,958
</TABLE>
Amounts accrued or paid to affiliates of the General Partners relating
to refinancing and disposition activities during the years ended
December 31, 1995, 1994 and 1993, were $0, $0 and $42,615,
respectively.
<PAGE>
F. Federal Income Taxes
For federal income tax purposes, the Partnership is depreciating
certain property under the Accelerated Cost Recovery System ("ACRS")
for all pre-1986 Tax
Reform Act of acquisitions and additions and depreciating all additions
subsequent to the act under the Modified Accelerated Cost Recovery System
("MACRS").
The reconciliation of the net loss reported in the accompanying
Consolidated Statement of Operations with the net loss reported in the
Partnership's 1995, 1994 and 1993 federal income tax returns follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net loss per Consoliddted Statement
of Operations $(547,893) $(453,031) $(1,521,667)
Add: Difference in book to tax
depreciation 347,827 114,104 80,334
Net loss for federal income
tax purposes $(200,066) $(338,927) $(1,441,333)
</TABLE>
The allocation of the net loss for federal income tax purposes for the
year ended December 31, 1995 is as follows:
<TABLE>
<CAPTION>
Portfolio Passive
Income Loss Total
<S> <C> <C> <C>
Investor Limited Partners $63,999 $(254,062) $(190,063)
Original Limited Partner - - -
General Partners 3,368 (13,371) (10,003)
$67,367 $(267,433) $(200,066)
</TABLE>
During the years ended December 31, 1995, 1994 and 1993 the per Unit net
loss to the Investor Limited Partners for federal income tax purposes was
$7.60, $12.88 and $54.77, respectively.
<PAGE>
KRUPP REALTY FUND, LTD.-III AND SUBSIDIARY
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
<TABLE>
<CAPTION>
December 31, 1995
Costs Capitalized
Subsequent to
Initial Costs to Partnership Acquisition
Buildings Buildings
and and
Description Encumbrances Land Improvements Improvements
<S> <C> <C> <C> <C>
Brookeville Apts.
Columbus, OH $ 8,626,055 $ 623,126 $ 8,312,134 $3,200,774
Hannibal Grove
Apartments
Columbia, MD 6,454,241 518,519 6,883,945 3,029,630
Dorsey's Forge &
Oakland Meadows
Apartments
Columbia, MD 4,745,765 340,956 4,521,895 1,359,074
TOTAL $19,826,061 $1,482,601 $19,717,974 $7,589,478
</TABLE>
<TABLE>
<CAPTION>
Gross Amounts Carried at
End of Year
Buildings
and Accumulated Year Year of
Description Land Improvements Total Depreciation Acquired Construction
<S> <C> <C> <C> <C> <C> <C>
Brookeville Apts
Columbus, OH $ 623,126 $11,512,908 $12,136,034 $ 6,511,259 1983 1975
Hannibal Grove
Apartments
Columbia, MD 518,519 9,913,575 10,432,094 6,264,770 1983 1970
Dorsey's Forge &
Oakland Meadows
Apartments
Columbia, MD 340,956 5,880,969 6,221,925 3,684,521 1983 1970
TOTAL $1,482,601 $27,307,452 $28,790,053 $16,460,550
</TABLE>
<PAGE>
KRUPP REALTY FUND, LTD.-III AND SUBSIDIARY
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION, Continued
December 31, 1995
Reconciliation of Real Estate and Accumulated Depreciation for each of
the three years in the period ended December 31, 1995:
1995 1994 1993
Real Estate
Balance at beginning of year $27,725,950 $26,310,462 $25,440,897
Acquisition and improvements 1,064,103 1,415,488 869,565
Balance at end of year $28,790,053 $27,725,950 $26,310,462
Accumulated Depreciation 1995 1994 1993
Balance at beginning of year $14,767,489 $13,361,312 $12,025,205
Depreciation expense 1,693,061 1,406,177 1,336,107
Balance at end of year $16,460,550 $14,767,489 $13,361,312
The Partnership uses the cost basis for property valuation for both income
tax and financial statement purposes. The aggregate cost for federal
income tax purposes at December 31, 1995 is $28,793,874.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Krupp Realty
Fund 3 financial statement for twelve months ended December 31, 1995 and is
qualified in it sentirety by references to funds financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,059,995
<SECURITIES> 0
<RECEIVABLES> 33,740
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 562,514
<PP&E> 29,309,637<F1>
<DEPRECIATION> 16,581,742<F2>
<TOTAL-ASSETS> 14,384,144
<CURRENT-LIABILITIES> 708,773
<BONDS> 19,826,601<F3>
0
0
<COMMON> (6,150,690)<F4>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14,384,144
<SALES> 6,352,337
<TOTAL-REVENUES> 6,352,337
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,137,104<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,763,126
<INCOME-PRETAX> (547,893)
<INCOME-TAX> 0
<INCOME-CONTINUING> (547,893)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (547,893)
<EPS-PRIMARY> 0<F6>
<EPS-DILUTED> 0<F6>
<FN>
<F1>Includes apartment complexes of $28,790,053 and deferred expenses of $519,584.
<F2>Includes depreciation of $16,460,550 and amortization of deferred expenses of
$121,192.
<F3>Represents mortgage note payable.
<F5>Includes operating expeses of $2,880,208, real estate taxes of $17,945 and
depreciation/amortization of $1,738,951.
<F4>Represents total equity of general partners ($297,600) and limited partners
($5,853,090).
<F6>Net loss allocated (27,395) to general partners (520,498) to limited parnters
for the nine months ended 12/31/95. Average net loss (20.82) per unit for
25,000 units outstanding.
</FN>
</TABLE>
