UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended September 30, 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, CO 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 [ ]
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LDP-III
BALANCE SHEET, SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(Unaudited)
(In thousands)
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
INVESTMENTS IN REAL ESTATE:
Rental properties $10,505 $12,306
Accumulated depreciation (4,040) (4,264)
Rental properties - net 6,465 8,042
CASH AND CASH EQUIVALENTS (including interest bearing
deposits of $545 in 1996 and $104 in 1995) 550 212
OTHER ASSETS:
Short term investment $ 397 198
Accounts receivable 51 24
Prepaid expenses and deposits 9 8
Deferred loan costs and leasing commissions
(net of accumulated amortization of $542
in 1996 and $536 in 1995) 128 152
Total other assets 585 382
TOTAL $7,600 $ 8,636
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Notes payable $6,902 $ 7,871
Accounts payable 5 5
Other liabilities 93 81
Total liabilities 7,000 7,957
PARTNERS' EQUITY 600 679
TOTAL $7,600 $ 8,636
<FN>
See Financial Notes.
</TABLE>
<PAGE>
<TABLE>
LDP-III
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except per share amounts)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
REVENUE:
Rental $ 317 $ 242 $ 970 $ 880
Interest 6 7 15 25
Total revenue 323 249 985 905
EXPENSE:
Interest 167 185 518 555
Operating 104 49 340 282
Depreciation and amortization 75 96 276 307
General and administrative 60 41 153 144
Total expense 406 371 1,287 1,288
LOSS BEFORE GAIN FROM SALE
OF REAL PROPERTY (83) (122) (302) (383)
GAIN FROM SALE OF
REAL PROPERTY 223 0 223 0
NET INCOME (LOSS) 140 (122) (79) (383)
NET GAIN (LOSS) PER
PARTNERSHIP UNIT $ 4 $ (3) $ (2) $ (10)
<FN>
See Financial Notes.
</TABLE>
<PAGE>
<TABLE>
LDP-III
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
AND THE YEAR ENDED DECEMBER 31, 1995
(Unaudited)
(In thousands except unit amounts)
<CAPTION>
LIMITED PARTNERS
NUMBER OF GENERAL TOTAL
PARTNERSHIP PARTNER PARTNERS'
UNITS AMOUNT AMOUNT AMOUNT
EQUITY
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995 37,141 $1,013 0 $ 1,013
Net Loss - 1995 (334) (334)
Abandonments - 1995 (5)
BALANCE, DECEMBER 31, 1995 37,136 679 0 679
Net loss (79) (79)
BALANCE, SEPTEMBER 30, 1996 37,136 $ 600 $ 0 $ 600
<FN>
See Financial Notes.
</TABLE>
<PAGE>
<TABLE>
LDP-III
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
(In thousands)
<CAPTION>
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ (280) $ (383)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation and amortization 276 265
Change in operating assets and liabilities:
Increase (decrease) in other liabilities 12 52
Decrease (increase) in accounts receivable (27) 39
Decrease (increase) in prepaid expenses
and deposit (1) (2)
Decrease in accounts payable 0 (35)
Net cash used by operating activities (20) (64)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of rental property 660 0
Capital expenditures (46) (109)
Increase in deferred expenses (38) (22)
Net cash provided (used) in investing activities 576 (131)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable (19) (266)
Net cash provided (used) by financing activities (19) (266)
Increase (decrease) in cash and cash equivalents 537 (461)
Cash and cash equivalents at beginning of period 410 859
Cash and cash equivalents at end of period $ 947 $ 398
<FN>
See Financial Notes.
</TABLE>
<PAGE>
LDP-III
FINANCIAL NOTES
(In Thousands)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements should be
read in conjunction with the Partnership's 1995 Annual
Report. These 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
results of operations for the nine months ended September
30, 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 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 $518 and $555
for the nine months ended September 30, 1996, and 1995,
respectively.
<PAGE>
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.
At September 30, 1996, the Partnership's portfolio consisted of
fee title ownership of two properties located in two geographic
areas. The Partnership's property investments are: Jefferson
Place Office Building, Boise, Idaho and 1201 Cadillac Court
Building, Milpitas, California.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1996, the Partnership had a cash balance
totaling approximately $550,000. Cash reserves not needed for
current operations are placed in temporary high-grade investments
which can be readily liquidated.
The Partnership has invested $397,000 in short-term federally
insured certificates of deposit which mature on a date in excess
of 90 days 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 nine months of 1996, the Partnership experienced
an increase in cash and short term investments of $537,000.
Primary uses of cash were: $84,000 for capital expenditures,
leasing commissions and loan costs, $19,000 for principal
payments on notes payable, and $20,000 for operations. In
addition to rental revenues, a primary source of cash was the
sale of the 391 Forbes Building which resulted in increased cash
of $660,000. As of September 30, 1996, cash and cash equivalents
totaled $550,000 versus a balance of $212,000 at December 31,
1995, while short term investments at September 30, 1996 totaled
$397,000 versus a balance of $198,000 on December 31, 1995.
RESULTS OF OPERATIONS
The results of operations for 1996 are not comparable to 1995.
Variables between years such as number of properties operated and
number of properties sold cause comparisons of operations overall
to be misleading. It is meaningful however to compare the
operations of those properties operated continuously during the
first nine months of 1996 and 1995.
<PAGE>
<TABLE>
The following represents the operations of those properties held
continuously during the first nine months of 1996 and 1995:
<CAPTION>
1996 1995 % Change
<S> <C> <C> <C>
Rental Revenue $ 970 $ 880 + 10%
Operating Expense 340 282 + 20%
Net Operating Income 630 598 + 5%
Interest Expense $ 518 $ 555 - 7%
</TABLE>
Overall, revenues increased 10% for the nine months ended
September 30, 1996 relative to the same period in 1995. The
revenue for the commercial properties remained stable.
Market Conditions in Boise and the San Francisco Bay Area have
stabilized.
Property operating expenses increased 20% for the nine months
ended September 30, 1996 relative to the same period in 1995.
This was primarily due to increased operating costs.
On August 16, 1996, the Partnership sold its real property
investment in the 391 Forbes Building located in South San
Francisco, California. The property consisted of a 30,400 square
foot commercial building. The sale price received by the
Partnership was $1,730,000 which resulted in a gain of $223,000
and cash proceeds of $660,000.
Leased occupancy remained stable during the nine months ended
September 30, 1996. The Jefferson Place Office Building is
currently 93% leased, while the 1201 Cadillac property remains
fully leased.
The Partnership declared a cash dividend of $15 per unit, payable
to unit holders as of November 1, 1996.
INFLATION
In past years, the Partnership's rental revenues in certain over
built 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.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) None
(b) The Partnership filed a report on Form 8-K on
August 16, 1996, to report the disposition of its asset
known as the 391 Forbes Commercial Building.
<PAGE>
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: November 15, 1996 /s/ Gary K. Barr
Gary K. Barr, President
Landsing Equities Corporation
Managing General Partner
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000727745
<NAME> LDP-III
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 550
<SECURITIES> 0
<RECEIVABLES> 51
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 585
<PP&E> 10505
<DEPRECIATION> 4040
<TOTAL-ASSETS> 7600
<CURRENT-LIABILITIES> 98
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 600
<TOTAL-LIABILITY-AND-EQUITY> 7600
<SALES> 0
<TOTAL-REVENUES> 985
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 769
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 518
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (79)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
