SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
Securities Exchange Act of 1934
For the year ended December 31, 1995 Commission File
Number 2-81033
WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Maryland 04-2782016
(State of Organization) (I.R.S. Employer I.D. No.)
One International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code: (617) 330-8600
--------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
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. [ X ]
No market exists for the limited partnership interests of the Registrant,
and therefore, no aggregate market value can be computed.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Part of the Document
Form 10-K Incorporated by Reference
I The Prospectus of the Registrant dated March 11,
1983 as supplemented on July 20, 1983 (the
"Prospectus")
Pages 17-20 of the Property Report of the
Partnership dated September 30, 1983
Pages 7-27 of the Partnership's Annual Report on Form
10-K for the fiscal year ended December 31, 1983
III The Prospectus
<PAGE>
PART I
Item 1. Business.
Development
Winthrop Residential Associates III ("WRA III"), a limited partnership,
was originally organized under the Uniform Limited Partnership Act of the State
of Maryland on June 28, 1982, for the purpose of investing, as a limited
partner, in other limited partnerships which would develop, manage, own, operate
and otherwise deal with apartment complexes which would be assisted by federal,
state and local government agencies ("Local Limited Partnerships") pursuant to
programs which would not significantly restrict distributions to owners or the
rates of return on investments in such complexes. On December 15, 1982, WRA III
elected to comply with and be governed by the Maryland Revised Uniform Limited
Partnership Act (the "Act") and filed its Agreement and Certificate of Limited
Partnership (the "Partner ship Agreement") with the Maryland State Department of
Assess ments and Taxation. In accordance with, and upon filing its certificate
of Limited Partnership pursuant to, the Act, WRA III changed its name to
Winthrop Residential Associates III, A Limited Partnership (the "Partnership").
The General Partners of the Partnership are Two Winthrop Properties, Inc.
("Two Winthrop") and Linnaeus-Oxford Associates Limited Partnership
("Linnaeus-Oxford"). The Initial Limited Partner is WFC Realty Co., Inc.
("WFC"). Two Winthrop and WFC are Massachusetts corporations which are wholly
owned subsidiaries of First Winthrop Corporation ("First Winthrop"), a Delaware
corporation, which in turn is wholly-owned by Winthrop Financial Associates, A
Limited Partnership ("WFA"), a Maryland public limited partnership.
Linnaeus-Oxford is a Massachusetts limited partnership. Two Winthrop is the
Partnership's Managing General Partner. See "Change in Control".
The Partnership was initially capitalized with contributions totaling
$2,000 from its General Partners and $5,000 from WFC.
In late 1982, the Partnership filed a Registration Statement on Form S-11
with the Securities and Exchange Commission with re spect to a public offering
of 25,000 Units of limited partnership interest ("Units") at a purchase price of
$1,000 per Unit (an aggregate of $25,000,000). The Registration Statement was
<PAGE>
declared effective on March 8, 1983. The offering terminated in July 1983, at
which time subscriptions for 25,000 Units, repre senting capital contributions
from Investor Limited Partners of $25,000,000, had been accepted. Capital
contributions net of selling commissions, sales and registration costs, were
utilized to purchase investments in Local Limited Partnerships and temporary
short-term investments.
Description of Business
The only business of the Partnership is investing as a limited partner in
other limited partnerships that own, operate and otherwise deal with apartment
properties with financing in sured by the U.S. Department of Housing and Urban
Development ("HUD"). The Partnership's investment objectives and policies are
described at pages 21-26 of its Prospectus dated March 11, 1983 (the
"Prospectus") under the caption "Investment Objectives and Policies," which
description is attached hereto as an exhibit and incorporated herein by this
reference. The Prospectus was previously filed with the Commission pursuant to
Rule 424(b).
Change in Control
On December 22, 1994, Arthur J. Halleran, Jr., the sole general partner
of Linnaeus Associates Limited Partnership ("Linnaeus"), the sole general
partner of WFA, pursuant to an Investment Agreement entered into among Nomura
Asset Capital Corporation ("NACC"), Mr. Halleran and certain other individuals
who comprised the senior management of WFA, transferred the general partnership
interest in Linnaeus to W.L. Realty, L.P. ("W.L. Realty"). W.L. Realty is a
Delaware limited partnership, the general partner of which was, until July 18,
1995, A.I. Realty Company, LLC ("Realtyco"), an entity owned by certain
employees of NACC. On July 18, 1995 Londonderry Acquisition II Limited
Partnership (Londonderry II"), a Delaware limited partnership, and affiliate of
Apollo Real Estate Advisors, L.P. ("Apollo"), acquired, among other things,
Realtyco's general partner interest in W.L. Realty and a sixty four percent
(64%) limited partnership interest in W.L. Realty, and WFA acquired the sole
general partnership interest in Linneaus-Oxford.
As a result of the foregoing acquisitions, Londonderry II is the sole
general partner of W.L. Realty which is the sole general partner of Linnaeus,
and which in turn is the sole general partner of WFA. As a result of the
foregoing, effective July 18, 1995,
<PAGE>
Londonderry II, an affiliate of Apollo, became the controlling entity of the
General Partners. In connection with the transfer of control, the officers and
directors of Two Winthrop resigned and Londonderry II appointed new officers and
directors. See Item 10, "Directors and Executive Officers of Registrant.
Local Limited Partnerships
The Partnership initially acquired equity interests in the form of limited
partnership interests in 12 Local Limited Partnerships owning and operating
apartment properties. The Partnership sold its interests in four Local Limited
Partnerships owning the following properties: Fairfax Towers (October 1988);
Harborside Apartments Phase II (February 1989); and Hunter's Ridge Apartments
Phase I and Hunter's Ridge Apartments Phase II (October 1991). The Partnership
lost its ownership interest in a fifth property, Liberty Square Townhomes, when
HUD foreclosed on the Local Limited Partnership owning that property in February
1992. In addition, the Partnership reduced its interest in two Local Limited
Partnerships, those owning Maple Manor and The Groves, during 1988 to 50%.
The following table sets forth certain information regarding the
properties owned by the seven Local Limited Partnerships in which the
Partnership has retained an interest and which continue to own apartment
properties as of March 15, 1996:
<TABLE>
Mortgage Amortization
No. of Equity Amount of Interest Period(Years
Property Units Payments Mortgage(1) Rate Remaining)(2)
<S> <C> <C> <C> <C> <C>
1) Clear Creek Landing
Apartments(3)(4)
Houston, TX 200 $ 1,970,173 $ 3,042,8567 7.5% 36 Years
2) Village Square
Apartments(5)
Manassas, VA 285 1,072,923 7,907,1707 7.5% 38 Years
3) Dunhaven Apartments,
Section 2, Phase 1
Baltimore, MD 72 576,000 2,426,8007 7.5% 36 Years
4) Dunhaven Apartments,
Section 2, Phase 2
Baltimore, MD(6) 72 671,560 2,718,700 7.5% 40 Years
5) The Groves
Apartments
North Augusta, SC 132 1,150,576 2,278,600 7.5% 36 Years
6) Autumn Chase
Apartments(3)
Mobil, AL 120 895,000 3,129,8007 7.5% 40 Years
7) Maple Manor
Apartments
Fayetteville, AR 128 1,197,982 1,641,791 7.0% 31 Years
------ -------------- --------------- ----- --------
1,009 $ 7,534,214 $ 23,145,717
</TABLE>
(1) Represents the mortgage amount or mortgage commitment as of the time the
Partnership acquired its interest in the Local Limited Partnership.
(2) Represents the full term or the remaining term of the mortgage, as the case
may be, at the time the Partnership acquired its interest in the Local
Limited Partnership.
(3) This Local Limited Partnership's mortgage is held by HUD.
(4) This Local Limited Partnership is operating under a Provisional Workout
Arrangement with HUD which expires May 31, 1998.
(5) This property is managed by Winthrop Management, an affiliate of WFA.
(6) This Local Limited Partnership is currently in default on its mortgage
obligation.
Descriptions of the properties and the terms upon which the Partnership
acquired them are set forth at pages 32-45 of the Prospectus under the caption
"Initial Investment"; pages 1-10 of the Supplement to the Prospectus dated July
20, 1983 (the "July 20, 1983 Supplement"), under the caption "Investments in
Local Limited Partnerships"; pages 17-20 of the Property Report of the
Partnership dated September 30, 1983, and pages 7-27 of the Partnership's Annual
Report on Form 10-K filed March 31, 1984 under the caption "Item 1. Business,"
all of which descriptions are attached hereto as an Exhibit and incorporated
herein by this reference. The July 20, 1983 Supplement was filed with the
Commission as Post Effective Amendment No. 2 to the Partnership's Registration
Statement on Form S-11 (Registration No. 2-81033). See also Note 4 of Notes to
Financial Statements included as a part of this Annual Report for additional
information concerning the properties.
<PAGE>
Defaults
The Partnership holds limited partnership interests in Local Limited
Partnerships which own apartment properties, all of which were originally
financed with HUD-insured first mortgages. If a Local Limited Partnership
defaults on a HUD-insured mortgage, the mortgagee can assign the defaulted
mortgage to HUD and recover the principal owed on its first mortgage from HUD.
HUD, in its discretion, may then either (i) negotiate a workout agreement with
the Local Limited Partnership, (ii) sell the mortgage to another lender, or
(iii) pursue its right to transfer the own ership of the property from the Local
Limited Partnership to HUD or a new lender if HUD sells its mortgage
(collectively, the "Lender") through a foreclosure action. The objective of a
workout agreement between an owner and the Lender is to secure the Lender's
sanction of a plan which, over time, will cure any mortgage delinquencies. While
a workout agreement is effective and its terms are being met, the Lender agrees
not to pursue any remedies available to it as a result of the default. If the
owner does default under the terms of the workout agreement or if the Lender
concludes that a property in default lacks the ability to generate sufficient
revenue to cure its default, it may pursue its right to assume ownership of the
property through foreclosure.
Two Local Limited Partnerships (owning Autumn Chase and Clear Creek),
which were previously in default, currently have Provisional Workout
Arrangements in effect with HUD, which expires in April 2000 and May 1988,
respectively. The Partnership also holds an ownership interest in a Local
Limited Partnership (owning Dunhaven Apartments, Section 2, Phase 2) which is
currently in default on its mortgage obligation. This mortgage was assigned to
HUD on March 23, 1995. The Partnership is working with the Local Limited
Partnership to bring this debt current. See Item 7 "Management's Discussion and
Analysis of Financial Condition - Results of Operation".
Employees
The Partnership does not have any employees. Services are performed for
the Partnership by the Managing General Partner, and agents retained by it.
<PAGE>
Item 2. Properties.
Other than the limited partnership interests set forth in Item 1 above,
the Partnership does not own any property.
Item 3. Legal Proceedings. None.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the period
covered by this report.
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholders Matters.
The Registrant is a partnership and thus has no common stock. There is no
active market for the Units. Trading in the Units is sporadic and occurs solely
through private transactions.
As of December 31, 1995, there were 2,220 holders of the Units.
The Partnership Agreement requires that if the Partnership has Cash
Available for Distribution it be distributed quarterly to the Partners in
specified proportions. The Partnership Agreement defines Cash Available for
Distribution as Cash Flow less cash designated by the Managing General Partner
to be held for restoration or creation of reserves. Cash Flow, in turn, is
defined as cash derived from the Local Limited Partnerships (but excluding sale
or refinancing proceeds) and all cash derived from Partnership operations, less
cash used to pay operating expenses of the Partnership. During the years ended
December 31, 1995 and 1994, Registrant has made the following cash distributions
with respect to the Units to holders thereof as of the dates set forth below in
the amounts set forth opposite such dates:
Distribution with Amount of Distribution
Respect to Quarter Ended Per Unit
1995 1994
---- ----
March 31 10.00 10.00
June 30 10.00 10.00
September 30 7.00 10.00
December 31 7.00 10.00
<PAGE>
Item 6. Selected Financial Data.
The following represents selected financial data for Registrant for the
years ended December 31, 1995, 1994, 1993, 1992 and 1991. The data should be
read in conjunction with the financial statements included elsewhere herein.
This data is not covered by the independent auditors' report.
<TABLE>
For the Year Ended or as of December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Income from Local Limited
Partnership Cash
Distributions $ 186,573 $ 263,298 $ 246,843 $ -- $ --
Income from Short-term
Investment 110,654 107,868 102,927 192,875 343,091
Other Income 9,297 -- -- -- --
Operating Expenses (43,486) (47,258) (81,395) (66,385) (74,078)
Equity in gain from sale of real
estate -- -- -- -- 1,986,616
Equity in income (loss) of Local
Limited Partnerships 9,422 (19,668) (92,661) (231,237) (44,124)
--------------- --------------- ------------- ------------- ---------------
Net income (loss) $ 272,460 $ 304,240 $ (175,714) $ (104,747) $ (2,211,505)
------------ -------------- ------------ ------------ -------------
Net income (loss) per weighted
average Unit of Investor
Limited Partnership Inter-
est Outstanding $ 10.08 $ 11.25 $ 6.50 $ (3.87) $ (87.77)
Total Assets $ 2,026,501 $ 2,754,241 $ 3,531,298 $ 9,623,559 $ 8,493,514
----------- -------------- ------------- ------------- -------------
Investments in Local Limited
Partnerships $ 410,447 $ 404,805 $ 428,253 $ 524,695 $ 818,648
Equity payments due to Local
Limited Partnerships -- -- -- -- --
Total Cash Distributions per Unit
of Investor Limited Partnership
Interest, including amounts
distributed or to be distribu-
ted after year end with respect
to 1991, 1992, 1993,
1994 and 1995 $ 34(3) 40(1) $ 40(1) 40(1) $ 210(2)
</TABLE>
(1) Includes $20.00 per Unit from reserves.
(2) Includes $160 per Unit from the sale
proceeds from Hunter's Ridge Phases I and II and reserves.
(3) Includes $26 per Unit from reserves.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Liquidity and Capital Reserves
As of March 15, 1996, the Partnership retained an equity interest in seven
Local Limited Partnerships. The Partnership follows the equity method of
accounting for these interests and recognizes its proportionate share of income
and losses incurred by the Local Limited Partnerships. Generally, the
Partnership's equity in losses in the Local Limited Partnerships decrease over
time. Losses attributable to a Local Limited Partnership are not recognized if
those losses would cause the Partnership's investment account for that Local
Limited Partnership to become negative since the Partnership has no obligation
to fund them. In 1993, the equity in losses decreased because The Groves'
remaining investment account was not sufficient to recognize all 1993 losses
from the Local Limited Partnership. In 1994, the equity in losses decreased
since the only losses recognized by the Partnership were from Maple Manor. For
fiscal 1995, $192,352 of the Partnership's share of losses from the Local
Limited Partnerships were not recognized since the related investments had been
fully written off. Cumulatively through 1995, a total of $4,672,335 of the
Partnership's equity in losses from the Local Limited Partnerships has been
deferred.
The equity method of accounting is used solely for financial reporting
purposes; all losses continue to be recognized for tax purposes. The tax losses
of the Partnership will decrease over time because the advantages of accelerated
depreciation taken by the Local Limited Partnerships are greatest in the earlier
years.
Also, the deductions for mortgage interest expense will steadily decrease as
the mortgage principals are amortized.
The Partnership requires cash to pay its general and administrative
expenses or to make advances to any of the Local Limited Partnerships the
Managing General Partner deems to be in the Partnership's best interest to
preserve its ownership interest. To date, all cash requirements have been
satisfied by interest income earned on short-term investments and cash
distributed to the Partnership by the Local Limited Partnerships.
If the Partnership funds any operating deficits, it will use monies from its
operating reserves. As of December 31, 1995, the Partnership held operating
reserves (after satisfaction of liabilities) of approximately $1,419,000 which
is expected to be
<PAGE>
sufficient to fund any anticipated deficits. Reserves of $652,285 were used in
1995 to fund distributions to Investor Limited Partners. The Managing General
Partner's current policy is to maintain a reserve balance sufficient to provide,
at a minimum, interest income in an amount equal to the Partnership's annual
general and administrative expenses. Therefore, a lack of cash distributed by
the Local Limited Partnerships to the Partnership in the future will not deplete
the reserves, though it may restrict the Partnership from making distributions
to the Investor Limited Partners.
The Partnership has reserves which, in principal, could be used to make
advances to the Local Limited Partnerships. However, the Partnership does not
intend to make advances to fund any future operating deficits incurred by the
Local Limited Partnerships, but retains its prerogative to exercise a business
judgment to reverse this position if circumstances warrant a change in this
policy. Moreover, the Partnership is not obligated to provide any additional
funds to the Local Limited Partnerships to fund operating deficits. If a Local
Limited Partnership sustains continuing operating deficits and had no other
source of funding, it is likely that the Local Limited Partnership will
eventually default on its mortgage obligation and risk a foreclosure on its
property by the lender. If a foreclosure were to occur, the Local Limited
Partnership would lose its investment in the property and would incur a tax
liability due to the recapture of tax benefits taken in prior years. The
Partnership as an owner of the Local Limited Partnership, would share these
consequences in proportion to its ownership interest in the Local Limited
Partnership.
Results of Operations
A number of the properties owned by the Local Limited Partnerships in
which the Partnership has invested have operated at a deficit for many years due
to their location in areas with weak economies or overbuilt rental markets.
Economic and competitive forces also impede properties operating at break even
or better to improve their financial operating results, that is, to generate
increasing net cash flow in each subsequent year after operating expenses and
financial obligations. As markets deteriorated during the mid-1980's, the Local
Limited Partnerships experiencing financial difficulties sought alternative
sources of funding to cover operating deficits. In some cases, these Local
Limited Partnerships secured additional
<PAGE>
funding from their general partners. From 1985 through 1988, the Partnership did
provide some funding to five Local Limited Partnerships to preserve its
ownership interest in those properties. However, as it became apparent that the
recovery of these markets would be prolonged and that the Partnership's
resources were limited, funding was discontinued. Consequently, some Local
Limited Partnerships incurring continuing deficits ceased making full debt
service payments, putting the mortgages into default, and instead began
negotiating with lenders for mortgage modifications to reduce debt service
payments to a level property operations could support.
Three Local Limited Partnerships, owning Autumn Chase, Clear Creek and
Dunhaven Apartments, Section 2, Phase 2, were in default during 1995 on their
mortgage obligations.
On October 1, 1995, the mortgage encumbering Autumn Chase was modified
such that the Local Limited Partnership is no longer in default. Prior to
October 1, 1995, the mortgage was in default and the property operated under a
Provisional Workout Agreement which required minimum payments of $24,428 per
month. Pursuant to a mortgage modification agreement effective October 1, 1995,
the outstanding principal balance on the note was increased to $3,181,513 by
adding to the existing note an amount equal to the existing accrued and unpaid
interest of $108,057. Beginning on November 1, 1995, monthly installments of
$22,435 including interest at 7.5% are required under this note. The modified
loan matures on November 1, 2024.
Clear Creek is currently operating under a Provisional Workout Arrangement
which is effective from December 1, 1995 through May 31, 1998. The terms of the
agreement require minimum monthly payments equal to approximately 130% of
accruing interest as well as payments for a service charge and real estate
taxes. The two previous workout agreements which expired in July 1995 and July
1994 required minimum monthly debt service payments equal to 130% and 110%,
respectively, of the accruing interest as well as a service charge and real
estate tax payments. Clear Creek has met the minimum debt service requirements
in 1993 and 1994 and 1995. Due to the financial condition of Clear Creek,
however, no cash distributions have been made to the Partnership in 1993, 1994
or 1995 and no cash distribution is expected to be made to the Partnership in
1996.
<PAGE>
The Local Limited Partnership owning Dunhaven Apartments, Section 2, Phase
2 defaulted on its mortgage obligation in June 1994. The mortgage was assigned
to HUD on March 23, 1995. Due to Dunhaven's financial situation, no cash
distribution will be made to the Partnership in 1996 from 1995 operations. While
Dunhaven Apartments, Section 2, Phase 2 was able to meet its debt service
payments in 1993 through funding by the local general partner and Dunhaven
Apartments, Section 2, Phase 1, no cash was distributed to the Partnership from
1993 operations.
Dunhaven Apartments, Section 2, Phase 1 operated at breakeven in 1995 and
incurred a slight deficit in 1994 which was funded by cash reserves.
Accordingly, no cash distribution was made to the Partnership in 1995 and none
is expected in 1996. While Dunhaven Apartments, Section 2, Phase 1 was able to
generate a small amount of cash flow in 1993, no cash distributions was made to
the Partnership.
Village Square generated substantial operating cash flow in 1995 and it is
anticipated that a cash distribution will be made to the Partnership in 1996
from the 1995 cash flow. The Partnership received cash distributions from
Village Square of $186,573 in 1995, $263,298 in 1994 and $246,843 in 1993 from
cash flow generated by Village Square in 1994, 1993 and 1992, respectively.
Maple Manor generated positive cash flow in 1995. However, the cash flow
is being retained by the Local Limited Partnership for working capital and,
therefore, it is not expected that a cash distribution will be made to the
Partnership in 1996. In 1994, Maple Manor operated at breakeven. In 1993, Maple
Manor generated positive cash flow, a portion of which was used to make a
capital contribution to The Groves.
The Groves operated at breakeven in 1995 and will not be making a cash
distribution to the Partnership. The Groves generated positive cash flow in
1994, however, the cash flow was retained as working capital by the Local
Limited Partnership. In 1993, The Groves operated at a deficit. The improved
operations are due, in part, to a reduction in repair and maintenance
expenditures. An aggressive repair and maintenance program which began in 1992
and was completed in 1993. As a result, lower repair and maintenance
expenditures were incurred in 1994 as compared to 1993.
<PAGE>
The Local Limited Partnerships' objectives are to improve operating
results for all properties and to continue to operate under Lender-sanctioned
workout agreements for those properties that are in default on their mortgage
obligations until any delinquencies are cured. The Partnership believes that as
long as the Local Limited Partnerships which own properties in default continue
to negotiate with the Lender to work out their financial difficulties, the
threat of foreclosure is mitigated. Moreover, any workout agreement entered into
between the Lender and the Local Limited Partnerships will have no affect on the
Partnership's ability to deduct mortgage interest expense unless the Lender
agrees to forgive such interest indebtedness. As of March 15, 1996, none of the
Local Limited Partnerships had agreements with their respective Lender which
would forgive accrued interest.
The results of operations for future years may differ from those in 1995
as a result of many factors. One will be the ability of the Local Limited
Partnership which currently has a provisional workout agreements with HUD to
extend the agreement until all mortgage delinquencies have been cured. Another
factor will be the ability of the Local Limited Partnership owning Dunhaven
Apartments, Section 2 Phase 1 to operate at break even or better. Another factor
will be the ability of each Local Limited Partnership to deal with the
consequences of changing economic conditions that affect property operations.
The Partnership's investment in Local Limited Partnerships owning rental real
estate is subject to the risk involved with the management and ownership of
rental real estate. Vacancy levels, rental payment defaults and operating
expenses are all dependent on general and local economic conditions. Shifts in
the economy could result in differing operating results for each individual
Local Limited Partnership. In these markets, operating results in future years
may depend on the properties' ability to maintain competitive rental rates while
using its available resources to fund necessary repairs and replacements.
The Partnership's plan is to work with the Local Limited Partnerships to
maintain ownership of and seek workout agreements with the Lenders for those
properties in default on their mortgages. Although the Partnership has no
ability to force a sale of properties owned by the Local Limited Partnerships,
the Partnership will also work with the Local Limited Partnerships to
investigate sale opportunities and will continue to work with the
<PAGE>
Local Limited Partnerships to improve the financial performance of all the
properties.
<PAGE>
Item 8. Financial Statements and Supplementary Data.
WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
FINANCIAL STATEMENTS AND SCHEDULE
INDEX
FINANCIAL STATEMENTS
Reports of Independent Public Accountants
Statements of Operations for the Years Ended
December 31, 1995, 1994 and 1993
Balance Sheets as of December 31, 1995 and 1994
Statements of Changes in Partners' Capital
for the Years Ended December 31, 1995, and 1994 and 1993
Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993
Notes to Financial Statements
SCHEDULE
III - Real Estate and Accumulated Depreciation of
Property Held by Local Limited Partnerships
as of December 31, 1995
All schedules prescribed by Regulations S-X other than the one indicated above
have been omitted as the required information is inapplicable or the information
is presented elsewhere in the financial statements or related notes.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP:
We have audited the accompanying balance sheets of WINTHROP RESIDENTIAL
ASSOCIATES III, A LIMITED PARTNERSHIP (a Maryland limited partnership) as of
December 31, 1995 and 1994, and the related statements of operations, changes in
partners' capital and cash flows for each of the three years in the period ended
December 31, 1995. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the financial
statements of certain Local Limited Partnerships, the investments in which are
reflected in the accompanying financial statements using the equity method of
accounting and have been written down to zero (see Note 2). Those statements
were audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to the amounts included for those Local Limited
Partnerships, is based solely on the reports of the other auditors.
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 and the reports of other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED
PARTNERSHIP as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
March 20, 1996
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS
----------------------------------------------------------------------------------------
For the Years Ended
December 31, 1995, 1994 and 1993 1995 1994 1993
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income from Local Limited Partnership cash
distributions........................... $ 186,573 $ 263,298 $ 246,843
Interest income........................... 110,654 107,868 102,927
Other income.............................. 9,297 - -
-------------------------------------------------------
306,524 371,166 349,770
----------------------------------------------------------
Expenses:
Amortization............................. 3,780 3,780 3,780
General and administrative................. 39,706 43,478 77,615
------------------------------------------------------------------------------
43,486 47,258 81,395
----------------------------------------------------------
Income from operations..................... 263,038 323,908 268,375
Equity in income (loss) of Local
Limited Partnerships..................... 9,422 (19,668) (92,661)
--------------------------------------------------
Net income ................................ $ 272,460 $ 304,240 $ 175,714
==========================================================
Net income allocated to General
Partners................................. $ 20,434 $ 22,818 $ 13,179
==========================================================
Net income allocated to Limited
Partners................................. $ 252,026 $ 281,422 $ 162,535
==========================================================
Net income per Unit of Limited
Partnership Interest..................... $ 10.08 $ 11.25 $ 6.50
==========================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BALANCE SHEETS
<TABLE>
- ---------------------------------------------------------------------------------------
December 31, 1995 and 1994 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Investments in Local Limited Partnerships (Note 4)....... $ 410,447 $ 404,805
Other Assets:
Cash and cash equivalents.............................. 1,608,657 2,338,714
Interest receivable.................................... 7,397 10,722
-----------------------------------
Total assets........................................... $ 2,026,501 $ 2,754,241
===================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Distributions payable.................................. $ 189,227 $ 270,324
-----------------------------------
Commitments and Contingencies (Note 6)
Partners' Capital:
Limited Partners
Units of Limited Partnership Interest, $1,000 stated
value per Unit; authorized, issued and
outstanding - 25,005 Units......................... 3,096,558 3,694,702
General Partners....................................... (1,259,284) (1,210,785)
-----------------------------------
Total Partners' Capital............................ 1,837,274 2,483,917
-----------------------------------
Total liabilities and partners' capital.................. $ 2,026,501 $ 2,754,241
===================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
- -------------------------------------------------------------------------------------------
UNITS OF
LIMITED GENERAL LIMITED
For the Years Ended PARTNERSHIP PARTNERS' PARTNERS' TOTAL
December 31, 1995, 1994 and 1993 INTEREST CAPITAL CAPITAL CAPITAL
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, December 31, 1992....................................... 25,005 $(1,084,589) $5,251,145 $4,166,556
Cash distributions paid or accrued............................... (81,096) (1,000,200) (1,081,296)
Net income....................................................... 13,179 162,535 175,714
-------------------------------------------------------------------
Balance, December 31, 1993....................................... 25,005 (1,152,506) 4,413,480 3,260,974
Cash distributions paid or accrued............................... (81,097) (1,000,200) (1,081,297)
Net income....................................................... 22,818 281,422 304,240
------------------------------------------------------------------
Balance, December 31, 1994....................................... 25,005 (1,210,785) 3,694,702 2,483,917
Cash distributions paid or accrued............................... (68,933) (850,170) (919,103)
Net income....................................................... 20,434 252,026 272,460
---------------------------------------------------------------
Balance, December 31, 1995....................................... 25,005 $(1,259,284) $3,096,558 $1,837,274
===============================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------------------
For the Years Ended
December 31, 1995, 1994 and 1993 1995 1994 1993
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income ............................... $ 272,460 $ 304,240 $ 175,714
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization.............................. 3,780 3,780 3,780
Equity in net (income) loss of Local
Limited Partnerships.................... (9,422) 19,668 92,661
Income from Local Limited Partnership
cash distributions...................... (186,573) (263,298) (246,843)
Changes in assets and liabilities:
Decrease (increase) in receivables and
other assets........................ 3,325 (2,963) 33,103
----------------------------------------
Net cash provided by operating activities 83,570 61,427 58,415
----------------------------------------
Cash flows from investing activities:
Cash distributions from Local Limited
Partnerships............................. 186,573 263,298 263,343
-----------------------------------------
Net cash provided by investing activities 186,573 263,298 263,343
-----------------------------------------
Cash flows from financing activities:
Cash distributions to Partners.............. (1,000,200) (1,081,297) (1,081,296)
Capital contributions to Local Limited
Partnerships............................... - - (16,500)
-----------------------------------------
Net cash used by financing activities... (1,000,200) (1,081,297) (1,097,796)
-----------------------------------------
Net decrease in cash and cash
equivalents.................................. (730,057) (756,572) (776,038)
Cash and cash equivalents, beginning of year.. 2,338,714 3,095,286 3,871,324
-----------------------------------------
Cash and cash equivalents, end of year........ $1,608,657 $ 2,338,714 $3,095,286
=========================================
</TABLE>
Supplemental disclosure of noncash activities: The Managing General Partner
declared a fourth quarter distribution of $189,227, which was distributed on
February 14, 1996.
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
1. ORGANIZATION
Winthrop Residential Associates III, a Limited Partnership (the "Partnership")
was organized on June 28, 1982 under the Uniform Limited Partnership Act of the
State of Maryland to invest in limited partnerships (the "Local Limited
Partnerships") which develop, manage, operate and otherwise deal in
government-assisted apartment complexes that do not significantly restrict
distributions to owners or the rate of return on investments in such properties.
On December 15, l982, the Partnership elected to comply with and be governed by
the Maryland Revised Uniform Limited Partnership Act. The Partnership will
terminate on December 31, 2003, or sooner, in accordance with the terms of the
Partnership Agreement.
2. SIGNIFICANT ACCOUNTING POLICIES
Financial Statements - The financial statements of the Partnership are prepared
on the accrual basis of accounting.
Cash and Cash Equivalents - Cash and cash equivalents consist of money market
mutual funds that invest in treasury bills and repurchase agreements with
original maturities of three months or less. Cash equivalents are valued at
cost, which approximates market value.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Income Taxes - No provision has been made for federal, state or local income
taxes in the financial statements of the Partnership. The Partners are required
to report on their individual tax returns their allocable share of income,
gains, losses, deductions and credits of the Partnership. The Partnership files
its tax returns on the accrual basis. On May 6, l983, the Internal Revenue
Service issued a ruling that the Partnership should be classified as a
partnership for federal income tax purposes.
Investments in Local Limited Partnerships - The Partnership accounts for its
investment in each Local Limited Partnership using the equity method. Under the
equity method of accounting, the investment cost (including amounts paid or
accrued) is subsequently adjusted by the Partnership's share of the Local
Limited Partnership's results of operations and by distributions received or
accrued. Equity in the loss of Local Limited Partnerships is not recognized to
the extent that the investment balance would become negative because the
Partnership has no obligation to fund these losses.
<PAGE>
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Distributions to Partners - Cash distributions from the Local Limited
Partnerships (Cash Flow) are included in the computation of the Partnership's
Cash Available for Distribution in the quarter received. As provided for in the
Partnership Agreement, quarterly distributions are payable to the Partners
within 60 days after the end of the quarter, exclusive of sales proceeds. The
total amount distributed or accrued was approximately $919,100 in 1995 and
$1,081,300 in 1994 and 1993.
3. TRANSACTIONS WITH RELATED PARTIES
Two Winthrop Properties, Inc. ("Two Winthrop"), the Managing General Partner, is
a wholly owned subsidiary of First Winthrop Corporation ("First Winthrop"),
which, in turn, is wholly owned by Winthrop Financial Associates, A Limited
Partnership ("WFA").
At December 31, 1995, a subsidiary of First Winthrop remains a comanaging
general partner in a Local Limited Partnership.
The General Partners are entitled to 7.5% of Cash Available for Distribution.
The General Partners had been accrued or received cash distributions of
approximately $68,900 in 1995 and $81,100 in 1994 and in 1993.
During the liquidation stage of the Partnership, the General Partners and their
affiliates are entitled to receive certain distributions, subordinated to
specified minimum returns to the Limited Partners as described in the
Partnership Agreement.
4. INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
As of December 31, 1995, the Partnership has limited partnership equity
interests in seven Local Limited Partnerships that own fully operating apartment
complexes. These Local Limited Partnerships have outstanding mortgages totaling
$21,261,070, which are secured by the Local Limited Partnerships' real property,
security interests, liens and endorsements common to first mortgage loans.
Since inception, the Partnership has made additional investments of $291,489 in
several Local Limited Partnerships, $154,382 of which was accounted for as
operating deficit advances and $137,107 as capital contributions by the Local
Limited Partnerships. Additional investments in 1993 were $16,500. There were no
additional investments in 1994 or 1995.
<PAGE>
4. INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS (Continued)
During 1988, the Partnership entered into agreements with the local General
Partner of the Savannah River Associates Limited Partnership and Fayetteville
Apartments. The agreement stipulates that the local General Partner will
contribute additional capital in the aggregate of $250,000 to avoid an
assignment of the mortgages by the mortgage lender to HUD. There is no
obligation on the part of the General Partner to make any contribution when, in
the exercise of reasonable business judgment, it is determined that it is not
reasonably likely that the partners will realize a return on their investment
sufficient to justify making such contribution. In exchange for this agreement
to fund additional capital, the Partnership's interest in the sharing
arrangements of profit, losses, cash flow and residuals has been reduced.
The investments in Local Limited Partnerships as of December 31, 1995 and 1994
are as follows:
- ------------------------------------------------------------
<TABLE>
1995
1994 Activity 1995
<S> <C> <C> <C>
Equity Payments made (including equity
payments to partners of Local Limited
Partnerships totaling $1,683,895)................ $19,619,971 -- $19,619,971
Additional investments made in and
recognized as operating deficit advances
by Local Limited Partnerships.................... 154,382 -- 154,382
Capitalized costs.................................. 758,350 -- 758,350
Cash distributions from Local Limited Partnership (23,305,946) (186,573) (23,492,519)
Amortization of the capitalized costs
and the costs in excess of the Partnership's
initial basis in the net assets of the
Local Limited Partnerships....................... (540,014) (3,780) (543,794)
Equity in income of Local Limited
Partnerships...................................... 3,207,921 9,422 3,217,343
Income from Local Limited Partnership cash
distributions..................................... 510,141 186,573 696,714
------------------------------------------- ------------
Investment per balance sheet....................... 404,805 -- 410,447
Difference in basis (including equity payments paid
to partners of Local Limited Partnerships
totaling $1,683,895).............................. (393,272) -- (393,272)
Additional investments made in and recognized
as operating deficit advances by Local
Limited Partnerships.............................. (39,482) -- (39,482)
Capitalized costs.................................. (758,350) -- (758,350)
Amortization of the capitalized costs and the costs
in excess of the Partnership's initial basis in
the net assets of the Local Limited Partnerships.. 540,014 3,780 543,794
Equity in loss of Local Limited Partnerships not
recognizable under the equity method of accounting
(Note 2).......................................... (4,479,983) (192,352) (4,672,335)
Capital contributions not recognized by the
Partnership....................................... 81,000 -- 81,000
Distributions not recognized by the Partnership..... (29,776) (49,066) (78,842)
Income from Local Limited Partnership cash
distributions..................................... (510,141) (186,573) (696,714)
Sale of interest in Local Limited Partnership...... 2,213,406 -- 2,213,406
----------- -----------
Equity per Local Limited Partnerships' combined
financial statements.............................. $(2,971,779) -- $(3,390,348)
=========== ===========
</TABLE>
<PAGE>
4. INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS (Continued)
The combined balance sheets of the Local Limited Partnerships at December 31,
1995 and 1994 are as follows:
<TABLE>
- ---------------------------------------------------------------------------------------
1995 1994
- -----------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C>
Real Estate, at cost:
Land.................................................. $ 1,864,526 $ 1,864,526
Buildings, net of accumulated depreciation of
$15,157,598 and $14,194,342 in 1995 and 1994,
respectively........................................ 11,082,169 11,985,885
Cash and cash equivalents............................... 772,387 624,056
Other assets, net of accumulated amortization of
$318,330 and $300,547 in 1995 and 1994,
respectively.......................................... 1,636,702 1,666,070
----------------------------------
Total Assets............................................ $15,355,784 $16,140,537
==================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Due to Winthrop Residential Associates III............ $ 33,407 $ 33,407
Notes payable......................................... 527,713 452,952
Mortgage notes payable................................ 21,261,070 21,363,052
Accounts payable and accrued expenses................. 962,328 1,296,663
----------------------------------
22,784,518 23,146,074
----------------------------------
Partners' Capital:
Winthrop Residential Associates III .................. (3,390,348) (2,971,779)
Other partners........................................ (4,038,386) (4,033,758)
----------------------------------
(7,428,734) (7,005,537)
----------------------------------
Total Liabilities and Partners' Capital................. $15,355,784 $16,140,537
==================================
</TABLE>
The combined statements of operations of the Local Limited Partnerships for the
years ended December 31, 1995, 1994 and 1993 are as follows:
<TABLE>
- ----------------------------------------------------------------------------------------
1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Rental income........................... $ 5,560,948 $ 5,304,688 $ 5,262,935
Other income............................ 229,772 145,854 183,019
--------------------------------------------------------
5,790,720 5,450,542 5,445,954
--------------------------------------------------------
Expenses:
Interest................................ 1,737,786 1,724,394 1,770,170
Depreciation and amortization........... 982,303 1,041,824 1,072,079
Taxes and insurance..................... 571,491 542,983 517,270
Development and management fees......... 313,052 282,787 278,528
Maintenance and service fees............ 952,156 910,475 1,060,232
General and administrative.............. 1,250,099 1,272,307 1,284,505
--------------------------------------------------------
5,806,887 5,774,770 5,982,784
--------------------------------------------------------
Net loss.................................. $ (16,167) $ (324,228) $ (536,830)
========================================================
Net loss allocated to Winthrop
Residential Associates III.............. $ (182,930) $ (377,316) $ (583,223)
========================================================
Net income allocated to other
partners................................ $ 166,763 $ 53,088 $ 46,393
========================================================
</TABLE>
<PAGE>
5. TAX LOSS
The Partnership's tax loss for 1995 differs from net income for financial
reporting purposes primarily due to accounting differences in the recognition of
construction period costs, calculation of depreciation incurred by the Local
Limited Partnerships, and losses not recognizable under the equity method. The
tax loss for 1995 is as follows:
<TABLE>
<S> <C>
Net income for financial reporting purposes.................. $ 272,460
Plus: Amortization of the capitalized costs and the costs
in excess of the Partnership's initial basis in the
net assets of the Local Limited Partnerships....... 3,780
Less: Tax losses in excess of Equity in Local Limited
Partnerships' losses (due primarily to accelerated
depreciation)...................................... (159,961)
Income from Local Limited Partnership cash
distributions...................................... (186,573)
Equity in Local Limited Partnerships' losses for
financial statement purposes not recognizable
under the equity method of accounting (Note 2)..... (192,352)
----------
Tax loss..................................................... $ (262,646)
==========
</TABLE>
6. LOCAL LIMITED PARTNERSHIPS
The Local Limited Partnership owning Autumn Chase, which had been in default
since 1989, secured a Provisional Workout Arrangement with the Department of
Housing and Urban Development (HUD) during 1994. Effective October 1, 1995, the
Local Limited Partnership entered into a mortgage modification agreement which
has satisfied the requirements of HUD.
During 1994, the Local Limited Partnership owning Clear Creek secured a
Provisional Workout Arrangement with HUD which expired in July of 1995. The
Local Limited Partnership secured an amended agreement which covers the period
beginning December 1, 1995 and expires May 31, 1998.
The Local Limited Partnership owning Dunhaven Apartments, Section 2, Phase 2,
defaulted on its mortgage obligation in June 1994. The mortgage was assigned to
HUD on March 23, 1995. Management makes payments as funds become available, and
they were delinquent as of December 31, 1995.
The Partnership is unable to determine at this time if these Local Limited
Partnerships will be able to meet their financing requirements during the coming
year. The Partnership is not obligated to fund operating deficits or mortgage
loans of these Local Limited Partnerships. The Partnership's investment balance
in these Local Limited Partnerships is zero at December 31, 1995.
<PAGE>
SUPPLEMENTARY INFORMATION
REQUIRED PURSUANT TO SECTION 9.4 OF THE PARTNERSHIP AGREEMENT
<TABLE>
- ----------------------------------------------------------------------------------------------
December 31, 1995 Three Months Ended Year Ended
(unaudited) December 31, 1995 December 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
1. Statement of Cash Available for Distribution:
<S> <C> <C>
Net (loss) income...................................... $ (17,484) $ 272,460
Add: Charges to income not affecting cash
available for distribution:
Amortization expense..................... 945 3,780
Cash distributions from Local Limited
Partnerships.............................. - 186,573
Equity in loss (gain) of Local Limited
Partnerships............................. 44,663 (9,422)
Income from Local Limited Partnership cash
distribution............................. - (186,573)
Cash from reserves........................ 161,103 652,285
---------- ----------
Cash Available for Distribution........................ $ 189,227 $ 919,103
========== ==========
Distributions allocated to General Partners ........... $ 14,192 $ 68,933
========== ==========
Distributions allocated to Limited Partners............ $ 175,035 $ 850,170
========== ==========
</TABLE>
2. Fees or other compensation were paid or accrued to the General Partners or
their affiliates during the three months ended December 31, 1995:
Entity Receiving Form of
Compensation Compensation Amount
General Partners Interest in Cash
Available for Distribution $14,192
WFC Realty Co. Interest in Cash $ 35
Available for Distribution
All other information required pursuant to Section 9.4 of the Partnership
Agreement is set forth in the attached financial statements and related notes or
Annual Partnership Report.
<PAGE>
<PAGE>
Item 9. Changes in and Disagreements on Accounting and
Financial Disclosure.
None.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
(a) and (b) Identification of Directors and Executive Officers.
Registrant has no officers or directors. The Managing General Partner manages
and controls substantially all of Registrant's affairs and has general
responsibility and ultimate authority in all matters effective its business. As
of March 1, 1996, the names of the directors and executive officers of the
Managing General Partner and the position held by each of them, are as follows:
Has Served as
Position Held with the a Director or
Name and Age Managing General Partner Officer Since
Michael L. Ashner Chief Executive Officer 1-96
and Director
Ronald J. Kravit Director 7-95
W. Edward Scheetz Director 7-95
Richard J. McCready President and
Chief Operating Officer 7-95
Jeffrey D. Furber Executive Vice President 1-96
and Clerk
Anthony R. Page Chief Financial Officer 8-95
Vice President and
Treasurer
Peter Braverman Senior Vice President 1-96
(c) Identification of Certain Significant Employees. None.
(d) Family Relationships. None.
(e) Business Experience. The Managing General Partner was
incorporated in Massachusetts in October 1978. The background
and experience of the executive officers and directors of the
<PAGE>
Managing General Partner, described above in Items 10(a) and (b), are as
follows:
Michael L. Ashner, age 44, has been the Chief Executive Officer of
Winthrop Financial Associates, A Limited Partnership ("WFA") since January 15,
1996. From June 1994 until January 1996, Mr. Ashner was a Director, President
and Co-chairman of National Property Investors, Inc., a real estate investment
company ("NPI"). Mr. Ashner was also a Director and executive officer of NPI
Property Management Corporation ("NPI Management") from April 1984 until January
1996. In addition, since 1981 Mr. Ashner has been President of Exeter Capital
Corporation, a firm which has organized and administered real estate limited
partnerships.
W. Edward Scheetz, age 31, has been a Director of WFA since July 1995.
Mr. Scheetz was a director of NPI from October 1994 until January 1996. Since
May 1993, Mr. Scheetz has been a limited partner of Apollo Real Estate Advisors,
L.P. ("Apollo"), the managing general partner of Apollo Real Estate Investment
Fund, L.P., a private investment fund. Mr. Scheetz has also served as a Director
of Roland International, Inc., a real estate investment company since January
1994, and as a Director of Capital Apartment Properties, Inc., a multi-family
residential real estate investment trust, since January 1994. From 1989 to May
1993, Mr. Scheetz was a principal of Trammel Crow Ventures, a national real
estate investment firm.
Ronald Kravit, age 39, has been a Director of WFA since July 1995. Mr.
Kravit has been associated with Apollo since August 1995. From October 1993 to
August 1995, Mr. Kravit was a Senior Vice President with G. Soros Realty
Advisors/Reichman International. Mr. Kravit was a Vice President and Chief
Financial Officer of MAXXAM Property Company from July 1991 to October 1993.
Richard J. McCready, age 37, is the President and Chief Operating Officer
of WFA and its subsidiaries. Mr. McCready previously served as a Managing
Director, Vice President and Clerk of WFA and a Director, Vice President and
Clerk of the Managing General Partner and all other subsidiaries of WFA. Mr.
McCready joined the Winthrop organization in 1990.
Jeffrey Furber, age 36, has been the Executive Vice President of WFA and
the President of Winthrop Management since January 1996. Mr. Furber served as a
Managing Director of WFA from January 1991 to December 1995 and as a Vice
President from June 1984 until December 1990.
Anthony R. Page, age 32, has been the Chief Financial Officer for WFA since
August 1995. From July, 1994 to August 1995, Mr. Page was a Vice President with
Victor Capital Group, L.P. and from 1990 to July 1994, Mr. Page was a Managing
Director with Principal Venture Group. Victor Capital and Principal Venture are
investment banks emphasizing on real estate securities, mergers and
acquisitions.
Peter Braverman, age 44, has been a Senior Vice President of WFA since
January 1996. From June 1995 until January 1996, Mr. Braverman was a Vice
President of NPI and NPI Management. From June 1991 until March 1994, Mr.
Braverman was President of the Braverman Group, a firm specializing in
management consulting for the real estate and construction industries. From 1988
to 1991, Mr. Braverman was a Vice President and Assistant Secretary of Fischbach
Corporation, a publicly traded, international real estate and construction firm.
One or more of the above persons are also directors or officers of a
general partner (or general partner of a general partner) of the following
limited partnerships which either have a class of securities registered pursuant
to Section 12(g) of the Securities and Exchange Act of 1934, or are subject to
the reporting requirements of Section 15(d) of such Act: Winthrop Partners 79
Limited Partnership; Winthrop Partners 80 Limited Partnership; Winthrop Partners
81 Limited Partnership; Winthrop Residential Associates I, A Limited
Partnership; Winthrop Residential Associates II, A Limited Partnership; 1626 New
York Associates Limited Partnership; 1999 Broadway Associates Limited
Partnership; Indian River Citrus Investors Limited Partnership; Nantucket Island
Associates Limited Partnership; One Financial Place Limited Partnership;
Presidential Associates I Limited Partnership; Riverside Park Associates Limited
Partnership; Sixty-Six Associates Limited Partnership; Springhill Lake Investors
Limited Partnership; Twelve AMH Associates Limited Partnership; Winthrop
California Investors Limited Partnership; Winthrop Growth Investors I Limited
Partnership; Winthrop Interim Partners I, A Limited Partnership; Winthrop
Financial Associates, A Limited Partnership; Southeastern Income Properties
Limited Partnership; Southeastern Income Properties II Limited
<PAGE>
Partnership; Winthrop Miami Associates Limited Partnership; and
Winthrop Apartment Investors Limited Partnership.
(f) Involvement in certain legal proceedings. None.
Item 11. Executive Compensation.
The Partnership is not required to and did not pay any compensation to the
officers or directors of the Managing General Partner. The Managing General
Partner does not presently pay any compensation to any of its officers or
directors. (See Item 13, "Certain Relationships and Related Transactions.")
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
(a) Security ownership of certain beneficial owners.
The General Partners own all the outstanding general partnership
interests. No person or group is known by the Partnership to be the beneficial
owner of more than 5% of the outstanding Units at March 15, 1996. Under the
Partnership Agreement, the voting rights of the Limited Partners are limited.
Under the Partnership Agreement, the right to manage the business of the
Partnership is vested in the General Partners and is generally to be exercised
only by the Managing General Partners, although approval of Linnaeus-Oxford is
required as to all investments in Local Limited Partnerships and in connection
with any votes or consents arising out of the ownership of a Local Limited
Partnership interest.
(b) Security ownership of management.
As of March 15, 1996, one Partner of WFA owns five Units in the
Partnership and WFC Realty Co., Inc. owns 100 Units, which together is less than
1%. None of the officers, directors or the general partner of the General
Partners own any Units.
(c) Changes in control.
There exists no arrangement known to the Partnership the operation of
which may at a subsequent date result in a change in control of the Partnership.
<PAGE>
Item 13. Certain Relationships and Related Transactions.
The General Partners and their affiliates are entitled to receive various
fees, commissions, cash distributions, alloca tions of taxable income, or loss
and expense reimbursements from the Partnership. The amounts of these items and
the times at which they are payable to the General Partners and their affiliates
are described at pages 16-18 and 30-32 of the Prospectus under the captions
"Management Compensation" and "Profits or Losses for Tax Purposes and Cash
Distributions," which descriptions are incorporated herein by this reference.
For the years ended December 31, 1995, 1994 and 1993, the Partnership
allocated taxable in the General Partners of $20,434, $22,818 and $13,179,
respectively. For the years ended December 31, 1995, 1994 and 1993, the
Partnership paid or accrued cash distributions to the General Partners of
$68,933, $81,097, and $81,096, respectively. For the year ended December 31,
1995, Village Square paid $103,484 of property management fees to Winthrop
Management, an affiliate of WFA.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements - The Financial Statements listed
on the accompanying Index to Financial Statements and Schedule
are filed as a part of this Annual Report.
2. Financial Statement - Schedule. The Financial
Statement Schedule listed on the accompanying Index to Financial
Statements and Schedule is filed as a part of this Annual Report.
3. Exhibits - The exhibits listed in the accompanying Index to
Exhibits are filed as part of this Annual Report.
(b) Reports on Form 8-K - None
<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, there unto duly authorized as of this 29th day of
March 1996.
WINTHROP RESIDENTIAL ASSOCIATES III,
A LIMITED PARTNERSHIP
By: ONE WINTHROP PROPERTIES, INC.
By: /s/ Michael L. Ashner
Michael L. Ashner
Chief Executive Officer
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 and on the dates indicated.
Signature/Name Title Date
/s/ Michael L. Ashner Chief Executive March 29, 1996
Michael L. Ashner Officer and Director
/s/ Ronald J. Kravit Director March 29, 1996
Ronald J. Kravit
/s/ Anthony R. Page Chief Financial Officer March 29, 1996
Anthony R. Page
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Title of Document
3.A. Agreement and Certificate of Limited
Partnership of Winthrop Residential
Associates III, A Limited Partnership,
dated as of June 28, 1982 (incorporated
herein by reference to the Fund's
Registration Statement on Form S-11, File No. 2-81033).
3.B. Twelfth Amendment dated as of January 24,
1984 to the Agreement and Certificate of
Limited Partnership (incorporated herein by
reference to the Partnership's Annual Report on
Form 10-K filed March 30, 1984, File No. 2-81033).
4. Agreement and Certificate of Limited Partnership of Winthrop
Residential Associates III, A Limited Partnership, dated as of June
28, 1982 (incorporated herein by reference to Exhibit 3A hereto).
10.A. Sales Agency Agreement between Winthrop Residential
Associates III, A Limited Partnership and
Winthrop Securities Co., Inc. (incorporated herein
by reference to the Registrant's Registration
Statement on Form S-11, File No. 2-81033).
10.B. Escrow Deposit Agreement among Winthrop
Residential Associates III, A Limited
Partnership, Winthrop Securities Co., Inc. and
United States Trust Company (incorporated
herein by reference to the Registrant's
Registration Statement on Form S-11, File
No. 2-81033).
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial
information extracted from audited financial
statements for the one year period ending
December 31, 1995 and is qualified in its
entirety by reference to such
financial statements.
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