FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended March 31, 1996
Commission File Number: 0-13559
LDP-III
(Exact name of registrant as specified in its governing instruments)
California 94-2911983
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P. O. Box 130, Carbondale, Colorado 81623
(Address of principal executive offices)
(970) 963-8007
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes: [X] No: [ ]
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LDP-III
CONSOLIDATED BALANCE SHEET, MARCH 31, 1996 AND DECEMBER 31, 1995 (Unaudited)
(Dollars in thousands)
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
INVESTMENTS IN REAL ESTATE:
Rental properties $12,307 12,306
Accumulated depreciation (4,360) (4,264)
Rental properties - net 7,947 8,042
CASH AND CASH EQUIVALENTS (including interest bearing
deposits of $124 in 1996 and $104 in 1995) 138 212
OTHER ASSETS:
Short-term investment 198 198
Accounts receivable 83 24
Prepaid expenses and deposits 24 8
Deferred organization costs, loan costs and leasing commissions
(net of accumulated amortization of $554 in 1996 and
$536 in 1995) 139 152
Total other assets 444 382
TOTAL $8,529 $8,636
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Notes payable $7,858 $7,871
Accounts payable 6 5
Other liabilities 78 81
Total liabilities 7,942 7,957
PARTNERS' EQUITY 587 679
TOTAL $8,529 $8,636
See Financial Notes.
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LDP-III
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
(In thousands except per share amounts)
<CAPTION>
1996 1995
<S> <C> <C>
REVENUE:
Rental $ 346 $ 302
Interest 5 10
Total revenue 351 312
EXPENSE:
Interest 170 185
Operating 119 108
Depreciation and amortization 114 107
General and administrative 40 38
Total expense 443 438
NET INCOME (LOSS) $ (92) $ (126)
NET INCOME (LOSS) PER PARTNERSHIP UNIT $ (2) $ (3)
See Financial Notes.
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LDP-III
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND
THE YEAR ENDED DECEMBER 31, 1995
(Unaudited)
(Dollars in thousands)
<CAPTION>
...LIMITED PARTNERS....
NUMBER OF GENERAL TOTAL
PARTNERSHIP PARTNER PARTNERS'
UNITS AMOUNT AMOUNT EQUITY
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995 37,141 $1,013 $1,013
Net loss - 1995 (334) (334)
Abandonments (5)
BALANCE, DECEMBER 31, 1995 37,136 679 679
Net loss (92) (92)
BALANCE, MARCH 31, 1996 37,136 $ 587 $ 587
Financial Notes.
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LDP-III
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
(In thousands)
<CAPTION>
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) $ (92) $ (126)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation 96 92
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable (59) 4
Increase in prepaid expenses and deposits (16) (4)
(Dncrease) increase in accounts payable 1 (26)
(Decrease) increase in other liabilities (3) 44
Net cash used in operating activities (73) (16)
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in deferred expenses 13 11
Net cash provided by (used in) investing
activities 13 11
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable (14) (251)
Net cash provided by (used in) by financing
activities (14) 251
Increase (decrease) in cash and cash
equivalents (74) (256)
Cash and cash equivalents at beginning of
period 410 859
Cash and cash equivalents at end of period $ 336 $ 603
See Financial Notes.
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LDP-III
FINANCIAL NOTES
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements should be
read in conjunction with the Partnership's 1995 Annual Report. These
consolidated statements have been prepared in accordance with the
instructions to the Securities and Exchange Commission Form 10-Q and do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of the general partner, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation
have been included. The consolidated results of operations for the
three months ended March 31, 1996 and 1995, are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1996.
For purposes of the consolidated statement of cash flows, the
Partnership considers all highly liquid investments with a maturity of
three months or less from the date of purchase to be cash equivalents.
The Partnership paid interest of $170 and $185 for the three months
ended March 31, 1996, and 1995, respectively.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
LDP-III is a California limited partnership formed in August 1983. The
Partnership's business consists of a single segment -- equity investments in
leveraged income-producing real estate. The Partnership currently has an
investment in LDP-III Realty Service Corporation which owns one property, the
391 Forbes Building in South San Francisco, California. For financial
reporting purposes, the Partnership's investment in LDP-III Realty Service
Corporation is presented on a consolidated basis.
The Partnership's current portfolio consists of fee title ownership of three
properties located in two geographic areas. The Partnership's property
investments are: Jefferson Place Office Building, Boise, Idaho; 391 Forbes
Building (Pacific International Industrial Park), South San Francisco,
California; and 1201 Cadillac Court Building, Milpitas, California.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1996, the Partnership's consolidated cash balance totaled
$138,000. Cash not required for current operations is placed in federally
insured financial instruments and money market funds which can be liquidated
as needed.
The Partnership has invested $198,000 in short-term federally insured
certificates of deposit which mature on a date in excess of 90 days or 3
months from the date of purchase. Due to this characteristic, these deposits
are classified as "short-term investments" rather than as "cash and cash
equivalents."
During the first quarter of 1996, the Partnership experienced a net decrease
in cash of $74,000. Short-term investments did not change during the first
quarter of 1996. As of March 31, 1996, cash plus short-term investments
totaled $336,000 versus a balance of $410,000 at December 31, 1995.
The Partnership does not plan any cash distributions to its limited partners
in 1996. All sale and loan proceeds realized by the Partnership will be used
primarily to make cash distributions.
RESULTS OF OPERATIONS
The following represents the operations of those properties held continuously
during the first three months of 1996 and 1995:
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<CATPION>
1996 1995 % Change
<S> <C> <C> <C>
Rental Revenue $ 351 $ 312 + 13%
Operating Expense 119 109 + 9%
Net Operating Income 232 203 + 14%
Interest Expense 170 185 - 8%
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Overall, revenues increased for the three months ended March 31, 1996
relative to the same period in 1995. The increase in commercial properties
was due to higher occupancy and normal increases in current lease amounts
due.
The Partnership's real estate assets in the Boise and San Francisco Bay Area
marketplace have experienced a significant imbalance between supply and
demand. A combination of historic high building activity and recessionary
economic activity caused severe market pressures on rental rates and
occupancy levels. Market conditions in these markets appear to be stabilizing.
The Jefferson Place Office Building is currently 92% occupied, while the 391
Forbes Building and the 1201 Cadillac Court Building are 100% occupied.
Property operating expenses increased 9% for the three months ended March 31,
1996 relative to the same period in 1995.
The Partnership general and administrative expense was unchanged in 1996
relative to the same period in 1995. The General Partner continues to
exercise general and administrative expense control.
INFLATION
The Partnership's rental revenues in certain overbuilt real estate markets,
including Boise and the San Francisco Bay Area, have not followed the overall
inflationary trends of the economy. In the future, the General Partner
believes market rate rents in those areas will more closely follow or exceed
inflation. Operating costs for properties in most of the Partnership's
markets have continued to follow inflationary trends. It is not expected
that the Partnership will be materially impacted by inflationary forces in
the near term.
PART II. OTHER INFORMATION
All items in Part II have been omitted since they are inapplicable or the
answer is negative.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LDP-III
Date: May 10, 1996 /s/ Gary K. Barr
Gary K. Barr, President
Landsing Equities Corporation
Managing Partner of the General Partner
Landsing Partners-III
<TABLE> <S> <C>
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<CIK> 0000727745
<NAME> LDP-III
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 336
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<RECEIVABLES> 83
<ALLOWANCES> 0
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0
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<NET-INCOME> (92)
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</TABLE>
