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
For the fiscal year ended December 31, 1994
Commission file number 0-14466
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Connecticut 06-1115374
(State of Organization) (I.R.S. Employer Identification No.)
900 Cottage Grove Road, South Building
Bloomfield, Connecticut 06002
(Address of principal executive offices)
Registrant's telephone number, including area code:(203) 726-6000
Securities registered pursuant to Section 12(b) of the Act:
None
(Title of Each Class)
Securities registered pursuant to Section 12(g) of the Act:
(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
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. Not applicable.
<PAGE>
TABLE OF CONTENTS
PART I Page
Item 1. Business 3
Item 2. Properties 6
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders 8
PART II
Item 5. Market for the Registrant's Common Equity and Related
Security Holder Matters 8
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
Item 8. Financial Statements and Supplementary Data 16
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 31
PART III
Item 10. Directors and Executive Officers of the Registrant 31
Item 11. Executive Compensation 33
Item 12. Security Ownership of Certain Beneficial Owners and
Management 33
Item 13. Certain Relationships and Related Transactions 34
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 35
SIGNATURES 39
<PAGE>
PART I
Item 1. Business
The registrant, Connecticut General Realty Investors III Limited
Partnership (the "Partnership"), was formed on April 12, 1984, under the
Uniform Limited Partnership Act of the State of Connecticut to invest in
primarily residential and, to a lesser extent, commercial real properties.
On July 2, 1984, the Partnership commenced an offering of $25,000,000
(subject to increase up to $50,000,000) of Limited Partnership Interests
(the "Units") at $1,000 per Unit, pursuant to a Registration Statement on
Form S-11 under the Securities Act of 1933 (Registration No. 2-90944).
A total of 24,856 Units was sold to the public prior to the
offering's termination on July 1, 1986. The holders of 6,480 Units were
admitted to the Partnership in 1984; the holders of 11,519 Units were
admitted to the Partnership in 1985; the holders of the remaining 6,857
Units were admitted to the Partnership in 1986. From the 24,856 Units
sold, the Partnership received net proceeds of $22,408,052. The Limited
Partners of the Partnership will share in the ownership of the
Partnership's real property investments according to the number of Units
held. The Partnership is engaged solely in the business of real estate
investment. A presentation of information about industry segments is not
applicable.
The General Partner of the Partnership is CIGNA Realty Resources,
Inc.- Fifth (the "General Partner"), which is a wholly owned subsidiary of
CIGNA Financial Partners, Inc. ("CFP", formerly Connecticut General
Management Resources, Inc.), which is in turn a wholly owned subsidiary of
Connecticut General Corporation, which is in turn a wholly owned subsidiary
of CIGNA Holdings, Inc. which is a wholly owned subsidiary of CIGNA
Corporation ("CIGNA"), a publicly held corporation whose stock is traded on
the New York Stock Exchange.
The Partnership has acquired four residential complexes and one
shopping center located respectively in Ohio, Oklahoma, Louisiana, Illinois
and Florida. In order to acquire these properties, the Partnership
invested $16,372,438 in cash, took or assumed $35,684,061 in mortgages,
incurred $3,673,982 in acquisition fees and expenses, established reserves
for improvements of $720,000 and established working capital reserves of
$1,242,800.
In December 1993, the Partnership refinanced the first and second
mortgages encumbering the Waterford Apartments property. The first
mortgage, funded with multifamily housing revenue bonds issued by the Tulsa
County Home Finance Authority, and the second mortgage were replaced with a
new first mortgage. The replacement financing was also funded with newly
issued multifamily housing revenue bonds issued by the Tulsa County Home
Finance Authority. As a requirement of the new financing, the Waterford
property had to be classified as single asset ownership. Since the
Partnership owns multiple properties, a new partnership was created to
house the Waterford property as its sole real estate asset. Waterford
Partnership, a general partnership, was organized in the State of
Connecticut with the Partnership as its managing general partner (99.9%
interest) and the General Partner (0.1% interest) as the other general
partner. The interest of the General Partner in the new partnership is
is held in trust for the benefit of The Tulsa Corporation, a newly organized
Delaware corporation, the stock of which is 100% owned by the Partnership.
The Tulsa Corporation was created with the sole purpose of acting as the
beneficiary of the General Partner's ownership interest in the Waterford
Partnership. The new structure has no economic effect on the Partners nor
does it require any changes in financial reporting for the Partnership.
<PAGE>
<TABLE>
The Partnership has made the real property investments set forth in the
following table:
<CAPTION>
Initial Acquisition
Name, Type of Property Purchase Cash Mortgage Fees and Date of Type of
and Location Price (a) Investment Financing(b) Expenses Size Purchase Ownership
<S> <C> <C> <C> <C> <C> <C> <C>
1. Versailles Village Apts. 180 Fee ownership
Forest Park, Ohio $5,920,000 $2,120,000 $3,800,000 $433,986 Units 02/06/85 subject to
Mortgage
2. Promenades Plaza
Shopping Center 230,268 Fee ownership
Port Charlotte, Florida(c) 10,486,000 5,463,052 5,022,948 1,194,469 Sq. Ft. 04/15/85 subject to
(sold Mortgage(and add-
09/22/94)itional unsecured
promissory note
guaranteed by an
affiliate of the
General Partner)
3. Waterford Apartments 344 Fee ownership
Tulsa, Oklahoma 17,130,000 3,441,666 13,688,334 806,350 Units 10/31/85 subject to
Mortgage
4. Stonebridge Manor Apts. 264 Fee ownership
New Orleans, Louisiana 11,326,014 3,278,235 8,047,779 742,782 Units 11/26/85 subject to
Mortgage(and add-
itional unsecured
promissory note
guaranteed by an
affiliate of the
General Partner)
5. Stewart's Glen Apts.
Phase III 104 Fee ownership
Willowbrook, Illinois(d) 7,194,485 2,069,485 5,125,000 496,395 Units 07/24/87 subject to
Mortgage
<FN>
(a) Excludes all broker fees paid at closing. Amounts shown do not reflect reductions for discounts
on related debtor sellers'guarantees which are adjustments to the recorded purchase price.
<FN>
(b) Reference is made to the Notes to Financial Statements included in this annual report for details
on debt modifications, the current outstanding principal balances and a description of the long-term
indebtedness secured by the Partnership's real property investments and to Schedule III for additional
information.
<FN>
(c) Promenades Plaza added 14,624 square feet subsequent to acquisition, see Item 7. This property was
sold September 22, 1994. Reference is made to the Notes to Financial Statements for a description of the sale.
<FN>
(d) In July 1987, the Partnership acquired a 33% interest in the Phase III Apartment Venture, a joint
venture with the General Partner, which was established as a temporary vehicle for providing the
Partnership with the means to acquire the property without finalized mortgage arrangements, and,
thereby, avoid being in default under the terms of the purchase agreement. On December 10, 1987 the
Partnership received a commitment for permanent mortgage financing which was acceptable to CIGNA Realty
Resources, Inc.- Fifth. At that time, in accordance with the terms of the joint venture agreement, the
General Partner exercised its right to require the Partnership to purchase General Partner's entire
interest in the joint venture. Funding of the purchase took place in January 1988. The information shown
represents the Partnership's 100% ownership of the property.
</TABLE>
<PAGE>
Versailles Village Apartments is located in Forest Park, Ohio, part of
Hamilton County in the northwest section of Greater Cincinnati.
Cincinnati unemployment for 1994 is 3.8% versus state wide unemployment of
4.2%. The northwest apartment market contains approximately 12,000 units,
144 of which came "on line" in 1994. Limited new multifamily construction
is planned for 1995. The northwest Cincinnati apartment market continues
to be stable. Market occupancy has consistently been in the low to mid
nineties during the year. The property is able to achieve high occupancy,
averaging 96% for 1994, by offering slightly lower monthly rents, currently
averaging $503. As an older property, Versailles competes by offering a
well-maintained complex which has amenities similar to the competition, but
with larger floor plans and slightly lower monthly rents. While the market
for apartments in Greater Cincinnati has stabilized, the supply of
available units will impede any upward movement in rental rates.
Conditions are not expected to change significantly during 1995.
Waterford Apartments is located in South Tulsa. Increases in
employment and personal income growth percentages in Tulsa grew ahead of
the national average with expansion in the services and government sectors
accounting for much of the growth. Multifamily construction had been at a
virtual standstill since 1990 but in 1994 a new 288-unit complex came into
the market in anticipation of an increased demand. There are approximately
18,000 units in the southeast submarket where Waterford is located.
Occupancy in the market has been in the low nineties for 1994 with
Waterford averaging physical occupancy of 93%. Waterford is located only
five miles outside the central business district in a well-maintained and
vintage neighborhood. The property is a Class "A" luxury apartment complex
which benefits not only from its prime location but excellent on-site
service, mature landscaping and a variety of amenities. Rents at the
property in late 1994 averaged $478 per month versus $486 per month for the
market. The property not only competes with other luxury apartments in the
market, but with single family home purchases, as apartment rents are
comparable to monthly mortgage payments. Rents at the property are
expected to increase slowly in 1995.
Stonebridge Manor Apartments is in the Parish of Jefferson, in an
area known as the Westbank, just south of the Mississippi River across from
New Orleans. This area is in the midst of an economic recovery. The New
Orleans employment base has been shifting from an over reliance on the oil
and gas industry to the service and tourism sectors, as well as an
expansion of the casino/gaming industry. A sports multiplex facility, the
New Orleans Sports Arena, is scheduled to open in phases through 1997 and
will bring additional jobs and capital into the area. Physical occupancy
at Stonebridge averaged 96% for 1994 while the market averaged 94%. The
property was also able to collect rents that exceeded the market average
($468 per month for the property versus $376 per month for the market).
Stonebridge is able to perform well in the market due to its location with
easy access to downtown New Orleans, the airport, and major highway
arteries.
Stewarts Glen III is the third phase (104 units) of a three phase,
488 unit apartment complex, located in Willowbrook, Illinois, a township
in Dupage County. Despite rising interest rates, home ownership remains a
viable option for residents in the County and represents some additional
competition for Stewarts Glen. The submarket contains approximately 3,600
units. Dupage County has seen strong population and employment growth over
the last five years and this trend is expected to continue. The county's
unemployment percentage for 1994 was 3.7%, one of the lowest in the state.
The median income of Willowbrook, an affluent and professional township, is
$50,000, one of the highest in the state. Multifamily construction has
remained at very low levels due to a lack of approved/zoned land and the
demand for apartment units has remained steady. Rents at the property
averaged $774 per month, ahead of the market average of $767 per month.
Stewarts Glen is typically ahead of the market in terms of physical
occupancy with a 98% average for 1994. Rents have stabilized to the point
where concessions are no longer necessary at the property or within its
competitive market. In addition, rents at the property are expected to
rise slightly in 1995.
Approximate occupancy levels for the properties on a quarterly
basis are set forth in the table in Item 2.
The Partnership itself has no employees; however, the unaffiliated
property managers engaged by CIGNA Investments, Inc. ("CII", formerly CIGNA
Capital Advisers, Inc.) on behalf of the Partnership maintain on-site
staff. For a description of asset management services provided by CII and
the terms of transactions between the Partnership
<PAGE>
and affiliates of the General Partner, see Item 13 and the Notes to
Financial Statements.
The following list details gross revenues from operations for each
of the Partnership's investment properties as a percentage of the
Partnership's total gross revenues during 1992, 1993, and 1994. In each
year, interest income accounted for the balance of gross revenues from
operations.
1992 1993 1994
1.Versailles Village Apartments
Forest Park, OH 16% 16% 18%
2.Promenades Plaza Shopping Center
Port Charlotte, FL (a) 22% 20% 14%
3.Waterford Apartments
Tulsa, OK 25% 26% 27%
4.Stonebridge Manor Apartments
New Orleans, LA 21% 22% 24%
5.Stewart's Glen Apartments Phase III
Willowbrook, IL 15% 15% 16%
(a) Promenades Plaza was sold on September 22, 1994.
Losses from "passive activities" (which include any rental activity) may only
offset income from "passive activities". The Partnership is engaged in passive
activities and therefore investors are subject to these rules.Investors' passive
losses in excess of passive income from all sources are suspended and are
carried over to future years when they may be deducted against passive income
generated by the Partnership in such year(including gain recognized on the sale
of the Partnership's assets) or against passive income derived by investors
from other sources. Any suspended losses remaining subsequent to Partnership
dissolution may be used by investors to offset ordinary income.
Item 2. Properties
The Partnership owns directly (subject to existing first mortgage loans and
purchase money notes)the properties described in Item 1 herein.Promenades Plaza,
the Partnership's commercial property, was sold September 22, 1994. Residential
properties generally have lease terms of one year or less. In the opinion of the
General Partner, the Partnership's properties continue to be adequately insured.
<PAGE>
The following list compares approximate occupancy levels by quarter for the
Partnership's investment properties during 1990, 1991, 1992, 1993 and 1994:
<TABLE>
<CAPTION>
Versailles Promenades Waterford Stonebridge Stewart's Glen
Village Plaza Shopping Apartments Manor Apts. Phase III
Apartments Center Tulsa, OK Apartments Willowbrook, IL
Forest Park, Port Charlotte, New Orleans,
OH FL (a) LA
<S> <C> <C> <C> <C>
1990
At 96% 92% 97% 91% 87%
03/31
At 93% 96% 97% 95% 95%
06/30
At 98% 92% 98% 94% 96%
09/30
At 98% 90% 95% 98% 98%
12/31
1991
At 96% 91% 95% 95% 98%
03/31
At 98% 91% 94% 93% 95%
06/30
At 97% 91% 98% 97% 93%
09/30
At 95% 91% 92% 96% 98%
12/31
1992
At 98% 97% 96% 95% 94%
03/31
At 98% 96% 92% 95% 99%
06/30
At 93% 96% 98% 98% 97%
09/30
At 96% 95% 95% 97% 95%
12/31
1993
At 94% 85% 96% 94% 99%
03/31
At 97% 84% 95% 95% 99%
06/30
At 94% 84% 95% 96% 97%
09/30
At 96% 82% 95% 95% 98%
12/31
1994
At 94% 82% 88% 96% 100%
03/31
At 97% 82% 93% 97% 99%
06/30
At 99% N/A% 94% 95% 93%
09/30
At 96% N/A% 83% 97% 98%
12/31
<FN>
(a) Promenades Plaza was sold on September 22, 1994.
</TABLE>
<PAGE>
Item 3. Legal Proceedings
Neither the Partnership nor its properties are party to or the
subject of any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.
PART II
Item 5. Market for Registrant's Common Equity and Related Security Holder
Matters
As of December 31, 1994, there were approximately 1,252 record
holders of Units. There is no established public trading market for Units.
The General Partner will not redeem or repurchase the Units.
The Revenue Act of 1987 adopted provisions which have an adverse
impact on investors in a "publicly traded partnership" ("PTP"). A PTP is a
partnership whose interests are traded on an established securities market
or readily tradable on a secondary market (or the substantial equivalent
thereof). If Registrant were classified as a PTP, (i) Registrant may be
taxed as a corporation, or (ii) income derived from an investment in
Registrant would be treated as non-passive income. In Notice 88-75, the
IRS established alternative safe harbors that allow interests in a
partnership to be transferred or redeemed in certain circumstances without
causing the partnership to be characterized as a PTP. Units of Registrant
are not listed or quoted for trading on an established securities exchange.
However, CFP will, upon request, provide a Limited Partner desiring to sell
or transfer Units with a list of secondary market firms which may provide a
means for matching potential sellers with potential buyers of Units, if
any. Frequent sales of Units utilizing these services could cause the
Registrant to be deemed a PTP. The Registrant has adopted a policy
prohibiting transfers of Units in secondary market transactions unless,
notwithstanding such transfers, Registrant will satisfy at least one of the
safe harbors. Although such a restriction could impair the ability of an
investor to liquidate its investment, the service provided by CFP described
above should allow a certain number of transfers to be made in compliance
with the safe harbor. It is anticipated that such policy will remain in
effect until such time, if ever, as further clarification of the Revenue
Act of 1987 permits Registrant to lessen the scope of these restrictions.
The Partnership made no cash distributions to its Partners in 1994
or 1993. The Partnership suspended quarterly distributions to Partners as
of the fourth quarter of 1988 to enable it to fund operating deficits from
certain of its properties. Reference is made to the Notes to Financial
Statements for a description of payments to the State of Connecticut on
behalf of limited partners that were charged to limited partner capital
accounts.
There are no material legal restrictions upon the Partnership's
ability to make distributions in accordance with the provisions of the
Partnership Agreement. The Partnership intends to renew its policy of
making quarterly distributions of distributable cash from operations once
the Partnership cash reserves exclusive of working capital reserves have
sufficient funds to retire the Partnership's $3,400,000 recourse promissory
note.
<PAGE>
Item 6. Selected Financial Data (a)
<TABLE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
December 31, 1994, 1993, 1992, 1991 and 1990
(not covered by Reports of Independent Accountants)
<CAPTION>
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Total income $6,392,361 $6,629,216 $6,649,929 $6,339,690 $6,078,643
Net loss (b) (706,274) (5,783,253)(625,366) (2,275,638)(128,207)
Net loss per Unit (b) (29.12) (233.39) (24.91) (90.64) (5.11)
Total assets 31,005,057 37,830,318 45,600,754 46,558,357 48,660,052
Notes and mortgages payable 29,487,591 35,334,863 37,221,143 37,622,020 37,498,177
<FN>
(a) The above selected financial data should be read in conjunction with the
financial statements and the related notes appearing herein. Reference is
made to the Notes to Financial Statements for a description of payments to
the State of Connecticut on behalf of limited partners. These amounts are
charged to limited partner capital accounts and have not been included in the
above data.
<FN>
(b) Included in 1994 is a $24,837 gain on sale of property (100% to the General
Partner); included in 1993 is a $5,000,000 loss due to permanent impairment
of assets ($199.15 per Unit) and $76,417 gain on sale of property (100% to
the General Partner); included in 1991 is a $700,000 loss due to permanent
impairment of assets ($27.88 per Unit); included in 1990, is $1,463,635 gain
on refinance ($58.30 per Unit).
</TABLE>
<PAGE>
Item
7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
From the $24,856,000 of Gross Proceeds of the offering, after
deduction of selling expenses and other offering costs, the Partnership had
$22,408,052 with which to make investments in real properties, to pay legal
fees and other costs (including acquisition fees related to such
investments), for working capital reserves and for capital expenditure
reserves. From the proceeds of the offering, the Partnership set aside
reserves of $370,000 and $350,000 to fund capital improvement programs at
Versailles Village and Promenades Plaza, respectively. In addition, a
development reserve of $750,000 was set aside from the balance of the
proceeds from the refinancing of Promenades Plaza in 1986. These reserves
were exhausted during 1989.
In early 1989, the Partnership decided to undertake an additional
$2.5 million development program at Promenades Plaza Shopping Center and
the Partnership secured the necessary construction financing that year.
The renovation program at the Promenades Plaza Shopping Center was
essentially completed during 1990, adding total new space of 14,624 square
feet. The Partnership secured permanent financing to replace the
construction loan on April 1, 1991. The difference between the payoff
amount on the construction loan and the amount of the permanent financing
of $160,634 was used to partially fund continuing capital expenditures at
the center. Capital expenditures totalled $725,000 in 1991 and $223,000 in
1992, including $125,000 relating to the roof repair project. Capital
improvements for 1993 totalled $217,400, including $198,700 for the roof
repair project.
In 1989, the Partnership sold an outparcel which was developed in
conjunction with the access improvements at the Promenades Plaza Shopping
Center for a sales price of $403,000. The proceeds from the sale were used
to augment the funding of the development program. A second outparcel was
under contract at December 31, 1992, and the sale was completed on January
27, 1993. The outparcel was sold for $500,000 netting the Partnership
$452,500 after commissions and closing costs. The outparcel, developed in
conjunction with the $2.5 million development program, had a net book value
of $376,083. The Partnership recognized a gain of $76,417 in 1993. The
proceeds were used to supplement Partnership reserves for Promenades'
operating deficits after debt service and capital improvements.
As a result of Promenades' continual cash flow deficits, the
ongoing need for capital improvements, (including reworking space vacated
by one of the anchors and a required $525,000 contribution to the expansion
of the supermarket tenant), and the debt maturity, the General Partner
determined that it was in the best interest of the Partnership to sell
Promenades Plaza. Based on the overbuilt retail market in which the
property operates, the poor visibility from main routes, the property's
operating results, and the commitment to fund a portion of the
supermarket's expansion, the General Partner expected that the net proceeds
realized from a sale would be significantly less than the carrying value of
the property. Accordingly, the Partnership recorded a loss of $5,000,000
due to permanent impairment of assets as of December 31, 1993.
The Promenades Plaza first mortgage loan and recourse promissory
note matured on January 1, 1994. The first mortgage note was extended
until May 1, 1994 at existing terms to allow time for a sale. The
promissory note was extended until March 25, 1994 at a 4.38% interest rate.
The extension date was set to coincide with the maturity of the Stonebridge
Manor recourse promissory note. On March 25, 1994, the two recourse
promissory notes, totalling $3,400,000 were refinanced for a period of
three years. The interest only payments are at a fixed rate of 6.6% for
the first two years with no prepayment of principal. The interest only
payment for the third year is a floating rate equal to Mellon Bank's prime
rate. During the third year, the note is prepayable in full at any time.
The note will continue to carry a corporate guarantee from CIGNA.
On May 1, 1994, the Partnership's extension on Promenades' first
mortgage loan expired. As an alternative to payment of the entire loan
balance on May 1, 1994, the Partnership agreed with the first mortgage
lender to pay an additional debt service payment to extend the maturity to
June 1, 1994 while negotiations continued on the sale of the property. The
lender requested an additional debt service payment due June 1, 1994 to
extend the loan an additional
<PAGE>
month to July 1, 1994. Effective with the extension payment due June 1,
1994 (May interest due June 1), the Partnership defaulted. During June,
the Partnership executed a contract with a potential buyer subject to a
number of contingencies, including the buyer's ability to obtain financing
and the performance of due diligence. As a result of the default, the
first mortgage lender commenced foreclosure proceedings. The foreclosure
was stayed by the Court due to the pending sale of the property and the
Partnership and the first mortgage lender entered into a cash collateral
agreement. The Court required the Partnership to complete its sale of the
property by October 17, 1994.
On September 22, 1994, the Partnership completed the sale of
Promenades Plaza to Sterling Promenades Limited Partnership for a gross
sales price of $6,572,000. After closing costs and payment of the first
mortgage loan obligations, the Partnership netted approximately $261,000
which was added to Partnership reserves. For book purposes, the property
had a carrying value of approximately $6,240,000 (net of permanent
impairment losses aggregating $5,700,000 recorded in 1991 and 1993) and the
Partnership recorded a gain of approximately $25,000. For tax purposes,
the Partnership has not recorded impairment losses previously and recorded
a loss of approximately $4,504,000 on the sale.
Operations at Promenades for 1994 generated a cash flow deficit,
(inclusive of capital improvements, leasing commissions and debt service on
both the first mortgage and promissory note), of approximately $183,000
through the date of sale. Repayment of the $2,500,000 promissory note was
not able to be made from the sale of Promenades, but will be repaid from
the Partnership's remaining assets. The promissory note is not secured by
the Promenades' property but is a general recourse obligation of the
Partnership.
In August 1988, the Partnership refinanced the three mortgage loans
incurred in connection with the acquisition of the Versailles Village
Apartments. After repayment of the loans and paying other costs associated
with the refinance, $235,000 remained. By the end of 1991, the excess
proceeds had been used to fund a program of capital improvements. As an
older complex, Versailles' rental rates are set below the market average to
enable it to compete with the newer facilities, which have more amenities.
A significant amount of maintenance expense and continued capital
improvements is required to maintain the competitiveness of the property.
The Versailles Village first mortgage was scheduled to mature in
September 1993. The Partnership received extensions until March 30, 1994,
while documents were finalized on the property's refinance with the
existing first mortgage lender. The Versailles Village debt refinance was
completed on March 30, 1994 with the property's first mortgage lender. The
terms include a principal balance of $4,200,000 for seven years at 8% based
on a 25 year amortization schedule. The loan will be assumable with
approval and payment of a 1% transfer fee. The loan will be pre-payable
over the term of the loan at the greater of yield maintenance, tied to
treasuries, or 1% of the outstanding loan balance. The difference between
the loan at maturity and the net refinance proceeds of $138,505 was added
to the Partnership's reserves. As a requirement of the refinance, the
Partnership set up a tax escrow account with the mortgage lender and
deposited four months of the estimated tax bill, $32,275, on March 30,
1994.
The Partnership's plans call for a two year hold.
After the expiration date of the seller's guarantee in November
1987, the Stonebridge Manor Apartments operated at a deficit. As a result,
in March 1990, the Partnership refinanced the mortgage note incurred in the
acquisition of the property which included a payoff of the existing balance
at a reduced amount. Beginning with the third quarter of 1990, the quarter
subsequent to the refinance, the property has been experiencing positive
cash flow. On March 25, 1994, the Stonebridge $900,000 promissory note was
refinanced along with the Promenades $2,500,000 promissory note. The
property's first mortgage note matures April 1, 1995. The Partnership is
in the process of securing a refinance with Hibernia National Bank for
$5,300,000 for a period of three years at 10.15% with twenty year
amortization. Prepayment is closed for the first year, open at 1% during
the second year and open without penalty during the third year.
Origination fees and closing costs are expected at approximately $100,000.
The Partnership expects that the property will be sold in late 1997 or
early 1998 prior to debt maturity.
During 1994, the Partnership refinanced the debt for Stewarts Glen
III with the existing lender. The maturity date has been extended from
February 1995 to April 1996 and the interest rate was lowered to 8.55%.
The cost of
<PAGE>
the refinance was minimal. The Partnership's current strategy assumes a
sale in early 1996 at debt maturity.
During 1991, the Partnership benefitted from a reduction in debt
service requirements for the Waterford first mortgage note. The
Partnership had been receiving quarterly returns from an interest
equalization account established at the time of the property's original
bond financing. This escrow account was established to fund shortfalls in
debt service requirements, if necessary. If debt service payments on the
mortgage were made at the minimum 9% pay rate, and a positive balance
remained once bond obligations were met, the difference was deposited into
this account until the balance reached the required minimum of $652,457.
Once the minimum was attained, the difference was available to the
Partnership. The net reduction in debt service payments was $277,000 for
1992 and $322,246 in 1993. In December 1993, the Waterford bond-related
debt was replaced with new bond financing. The replacement financing has a
fixed rate and does not have an interest equalization feature.
During the third quarter of 1993, the Partnership utilized reserves
of $770,000 to resolve a dispute with the holder of Waterford's purchase
money note regarding outstanding payments due. In December 1993, the
remaining balance on the note was paid in full from the proceeds of the new
bond-related first mortgage refinancing.
The Waterford property's first mortgage and purchase money note
were refinanced on December 17, 1993 with $11,755,000 in industrial revenue
bonds issued by the Tulsa County Home Finance Authority and credit enhanced
by AXA Reassurance, SA. The new financing is similar to the bond financing
which it replaced and was issued by the same county housing authority. The
bond issue consists of $11,355,000 of tax exempt bonds (Series A Bonds)
which mature on December 1, 2018, and $400,000 in taxable bonds (Series B
Bonds) which mature December 1, 1998. The interest rates on both series
are fixed at 5.355% and 5.9455% (inclusive of Trustee fees and
administrative costs) for the Series A and Series B bonds, respectively.
The AXA insurance policy expires on December 1, 2004, however, the
Partnership is required to obtain a new credit enhancer by December 1,
2003. The bonds can be prepaid in 2001 at 102% and at par in 2002 and
thereafter.
In order to facilitate the low-interest bond backed financing, the
Partnership set up a new ownership structure for the property, with no
financial statement impact on the Partnership. Reference is made to Item
1. Business for a description.
The Partnership utilized the proceeds from the new bond financing
along with Partnership reserves to payoff the existing first and second
mortgage loans, fund the cost of the refinance, set-up a $100,000 cash
collateral account, and set up a maintenance escrow account. The
Partnership's contribution totalled $817,648 which included $165,191 from
Partnership reserves and the $652,457 interest equalization account
recorded on the Partnership's balance sheet as a debt escrow fund. Total
cost of issuance was $1,473,272, which included a surety fee for the credit
enhancer of $963,910 and other issuance costs of $509,362.
The credit enhancer on the new financing required a maintenance
escrow agreement which the Partnership entered into as of December 1, 1993.
The purpose of the agreement was to allow an escrow agent to control a
reserve set aside by the Partnership for payment of necessary property
repairs as determined by a consultant hired by the credit enhancer. The
Partnership deposited $28,500 at closing which will be released to pay for
repairs as completed. In addition, the bond documents call for additional
contributions to the maintenance escrow account in an amount equivalent to
1% of gross revenues monthly. Funds are to be released as repairs are
made.
The Series A issue has been designed with a cash collateral account
rather than a sinking fund. Upon closing, a $100,000 contribution was made
to the cash collateral account representing a quasi debt service reserve.
The cash collateral account was created to meet lender guidelines which
required that 10% of the bond issue be amortized by the end of the ten year
credit enhancement period. By utilizing a cash collateral account, the
Partnership is able to retain the full amount of the tax-exempt bond issue
which may increase the value of a premium if the property is sold prior to
the bonds maturity. Contributions to the cash collateral account are
scheduled to begin on December 1, 1998.
<PAGE>
Under the new bond structure, interest only payments of $52,541 are
to be made monthly to the trustee to service the semi-annual payments due
on the bonds. The Series B bonds interest payment will change in December
1995 when principal payments begin. The $400,000 principal amortizes based
on a schedule of bond maturities by December 1998.
The Partnership plans to sell the Waterford property late in 1998
prior to required contributions to the Series A cash collateral account.
Each of the apartment properties continue to produce positive
results for the Partnership. Cash generated from property operations will
be used to fund Partnership expenses and supplement reserves.
Distributions to partners will not resume until the Partnership retires the
$3,400,000 recourse note obligation.
At December 31, 1994, the Partnership had $1,662,708 in cash and
cash equivalents which will be used to fund working capital requirements
and the Partnership's reserves. Overall, the portfolio generated positive
adjusted cash from operations after debt service, capital improvements and
partnership expenses for the year ended December 31, 1994. The Partnership
expects that overall, the operations for 1995 after debt service, capital
improvements, and partnership expenses will provide positive cash flow to
the Partnership's reserves.
Results of Operations
Partnership net operating income (total revenue less property
operating expenses, general and administrative expenses, fees and
reimbursements to affiliates and provision for doubtful accounts) decreased
in 1994 to approximately $3,631,000 from approximately $3,733,000 in 1993.
At Versailles Village, net operating income increased approximately
$69,000 in 1994 compared with 1993. The increase was the result of a
slight increase in average occupancy and rent increases coupled with
decreased repairs and maintenance expenses as 1993 included a painting
project.
Net operating income at Stonebridge Manor increased approximately
$46,000 in 1994 from 1993, due to an increase in rental rates. The
increase in income was partially offset by an increase in expenses.
Increased expenses in 1994 at Waterford Apartments attributed to
repairs and maintenance, utilities and bad debt, coupled with a slight
decrease in average occupancy, decreased net operating income approximately
$52,000 in 1994 compared with 1993.
At Stewarts Glen, modest rental rate increases in 1994 resulted in
increased net operating income of approximately $23,000 versus 1993.
Net operating income at Promenades Plaza decreased approximately
$226,000 in 1994 due primarily to the sale of the property on September 22,
1994.
The balance of the change in the Partnership's 1994 net operating
income compared with 1993 was increased interest income earned on trust
accounts associated with Waterford's bond financing.
Results - 1994 Compared with 1993
Generally, decreases in the income statement accounts are the
result of the sale of Promenades Plaza on September 22, 1994. For the
fourth quarter of 1993, Promenades Plaza accounted for approximately
$258,000 of rental income, $47,000 of other income, $99,000 of property
operating expenses, $45,000 of general and administrative expenses,
$143,000 of interest expense and $123,000 of depreciation and amortization.
Excluding the loss of fourth quarter 1994 rental income from the
sale of Promenades Plaza, rental income
<PAGE>
increased approximately $23,000 for the year ended December 31, 1994, as
compared with 1993. Rental rate increases implemented in 1993 and 1994 at
Stonebridge Manor increased rental income approximately $80,000 for the
year ended December 31, 1994, as compared with 1993. Decreased average
occupancy at Promenades Plaza for the six months ended June 30, 1994, as
compared with the same period of 1993, coupled with the loss of rental
income from the sale date through September 30, 1994, decreased rental
income approximately $92,000 for the applicable periods. Rental rate
increases in 1994 at Versailles Village and Stewarts Glen, coupled with a
slight increase in average occupancy at Versailles, resulted in increased
rental income at each property for 1994 of approximately $23,000 and
$16,000 respectively. A slight decrease in average occupancy at Waterford
for 1994 resulted in an approximately $4,000 decrease in rental income
compared with 1993.
The increase in interest income for the year ended December 31,
1994, as compared with 1993, was the result of interest earned on trust
accounts associated with Waterford's bond financing.
Property operating expenses increased at Stonebridge for the year
ended December 31, 1994, as compared with 1993, due to increased carpet and
tile replacements and exterior painting. At Waterford Apartments, property
operating expenses increased as a result of higher utility and insurance
costs and parking lot repairs. Expense savings in 1994 at Versailles due
to a 1993 painting project, partially offset the 1994 increases at
Stonebridge and Waterford.
The decrease in general and administrative expense for the year
ended December 31, 1994, as compared with 1993, was the result of payroll
savings in 1994 at Waterford and Stewarts Glen due to staffing changes and
the absence of non-recurring legal fees recorded in the second and third
quarters of 1993 at Promenades. The decrease was partially offset by
increased advertising expenditures at Waterford in 1994.
The provision for doubtful accounts was primarily the result of
collectibility problems at Promenades Plaza.
Mortgage litigation fees incurred in 1993 were related to the
resolution of Waterford's second mortgage litigation.
The increase in interest expense for the year ended December 31,
1994, as compared with 1993, was the result of a default rate of interest
on the Promenades first mortgage between the June 1, 1994 default and the
September 22, 1994 property sale. In addition, a low effective interest
rate in 1993 on Waterford's variable rate bond financing versus 1994's
fixed rate bond financing contributed to the increase. Offsetting a
portion of the increase were: savings from the lower rates on the
Promenades Stonebridge promissory notes refinanced during the first quarter
of 1994; the Versailles Village first mortgage March 30, 1994 refinance,
lowering the interest rate from 10% to 8%; and the Stewarts Glen November
1, 1994 refinance, decreasing the interest rate from 9.94% to 8.55%.
The decrease in depreciation and amortization for the year ended
December 31, 1994, as compared with 1993, was the result of the permanent
impairment loss for Promenades and the amortization of the surety fee
related to Waterford's variable rate bond financing in the fourth quarter
of 1993. The decrease was partially offset by the write-off of the
unamortized leasing commissions relating to vacated tenants at Promenades.
The 1994 gain on sale of property was the result of the sale at
Promenades Plaza in September 1994. The 1993 gain on sale of property was
the result of an outparcel sale at Promenades Plaza in January 1993.
Results - 1993 Compared with 1992
Rental income rose approximately $40,000 for the year ended
December 31, 1993, as compared with 1992, as a result of increases at each
of the Partnership's properties except Promenades Plaza. Rental rate
increases implemented during 1992 and improved occupancy in 1993 increased
rental income at Waterford by approximately $42,000. Rental rate increases
implemented in 1993 at Versailles, and in 1992 and 1993 at Stonebridge,
increased rental income approximately $12,000 and $68,000, respectively.
Higher average occupancy percentages at the Stewarts Glen Apartments in
1993 versus 1992 contributed approximately $23,000 to the increase.
Promenades Plaza's base rent was down with the loss of one of its anchors
in March 1993, and its percentage rent was down as
<PAGE>
the supermarket tenant's sales volume was affected by the oversupply of
retail space in the immediate area.
Other income decreased for the year ended December 31, 1993, as
compared with 1992, due to decreased corporate rentals at Stewarts Glen and
Stonebridge Manor, and decreased recapture of operating expenses at
Promenades Plaza. Operating expense recapture at Promenades Plaza was
recorded as income in 1992 based on estimated expense amounts. Actual
expenses were lower and an adjustment was posted to reduce income in 1993.
In addition, 1992 included a one-time laundry redecorating fee at Stewarts
Glen from a new laundry contract.
Property operating expenses increased for the year ended December
31, 1993, as compared with 1992, due to planned increases in non-routine
maintenance at Versailles Village and planned increases in routine
maintenance at Stonebridge Manor due to the age of the properties. At
Versailles Village, non-routine maintenance consisted of carpet
replacements, air conditioning and roof repairs, and exterior painting. In
addition, due to rate hikes and additional usage from the colder winter,
Versailles Village had substantial increases to utilities. An increase in
the assessed value coupled with an increase in the mill rate produced
higher real estate taxes at Promenades Plaza. Planned decreases in non-
routine maintenance at Waterford partially offset the increases.
General and administrative expenses, inclusive of mortgage
litigation fees, were up for the year ended December 31, 1993, as compared
with 1992, due to increased payroll costs at Stewarts Glen, Stonebridge,
Waterford and Versailles Village slightly offset by decreased payroll at
Promenades Plaza. Planned decreases in advertising at Waterford coupled
with decreases at Stonebridge more than offset the increased advertising at
Versailles Village. In addition, included in 1993 are legal costs incurred
relative to the Waterford purchase money note settlement agreement.
The provision for doubtful accounts for both years was the result
of continuing collectibility problems at Promenades Plaza.
The decrease in interest expense for the year ended December 31,
1993, as compared with 1992, was the result of increased returns from
Waterford's interest equalization account from lower interest rates and
final adjustments to debt balances recorded in the fourth quarter of 1993
relative to the Waterford debt refinance.
The increase in depreciation and amortization for the year ended
December 31, 1993, as compared with 1992, was due mainly to the additional
deferred charge amortization for the Waterford mortgage refinance. The
unamortized balance of the surety fee capitalized from old debt was
expensed.
The gain on sale of property was the result of an outparcel sale at
Promenades Plaza in January 1993.
Inflation
With inflation at a low rate during 1994, 1993 and 1992, the effect
of inflation and changing prices on current revenue and income from
operations has been minimal.
Any significant inflation in future periods is likely to increase
rental rates (from leases to new tenants or renewals of leases to existing
tenants) assuming no major changes in market conditions. At the same time,
it is anticipated that property operating expenses will be similarly
affected. Assuming no major changes in occupancy levels, increases in
rental income are expected to cover inflation driven increases in the cost
of operating the properties and in property taxes. Inflation may also
result in capital appreciation of the Partnership's investment properties
over a period of time as rental rates and replacement costs of properties
increase.
<PAGE>
Item 8. Financial Statements and Supplementary Data
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Index
Page
Report of Independent Accountants 17
Financial Statements:
Balance Sheets, December 31, 1994 and 1993 18
Statements of Operations, For the Years Ended December 31, 1994,
1993 and 1992 19
Statements of Partners' Capital (Deficit), For the Years Ended
December 31, 1994, 1993 and 1992 20
Statements of Cash Flows, For the Years Ended December 31, 1994,
1993 and 1992 21
Notes to Financial Statements 22
Schedules:
III - Real Estate and Accumulated Depreciation, December 31, 1994 30
Schedules not filed:
All schedules other than those indicated in the index have been
omitted as the required information is inapplicable or the information is
presented in the financial statements or related notes.
<PAGE>
Report of Independent Accountants
To the Partners of
Connecticut General Realty Investors III
Limited Partnership
In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of
Connecticut General Realty Investors III Limited Partnership at December
31, 1994 and 1993, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 1994, in
conformity with generally accepted accounting principles. 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 conducted our audits of these statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Hartford, Connecticut
February 13, 1995
<PAGE>
<TABLE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Balance Sheets
December 31, 1994 and 1993
<CAPTION>
Assets 1994 1993
<S> <C> <C>
Property and improvements, at cost:
Land and land improvements $6,029,006 $9,076,180
Buildings 30,507,857 36,171,902
Furniture and fixtures 2,113,119 2,070,072
Tenant improvements -- 211,803
38,649,982 47,529,957
Less accumulated depreciation 11,629,808 13,252,478
Net property and improvements 27,020,174 34,277,479
Cash and cash equivalents 1,662,708 1,150,033
Accounts receivable (net of allowance of $10,353
in 1994 and $79,511 in 1993) 87,264 206,298
Escrow deposits 171,265 65,430
Prepaid insurance 44,265 --
Other asset 97,371 --
Deferred charges, net 1,415,350 1,624,418
Escrowed debt service funds 506,660 506,660
Total $31,005,057 $37,830,318
</TABLE>
<TABLE>
<CAPTION>
Liabilities and Partners' Capital (Deficit)
Liabilities:
<S> <C> <C>
Notes and mortgages payable $29,487,591 $35,334,863
Accounts payable and accrued expenses
(including $8,067 in 1994 and $7,916
in 1993 due to affiliates) 270,002 431,395
Accrued interest payable
(including $17,000 in 1994 and
$15,312 in 1993 due to affiliates) 72,946 138,523
Tenant security deposits 169,144 219,023
Unearned income 25,693 16,887
Total liabilities 30,025,376 36,140,691
Partners' capital (deficit):
General Partner:
Capital contributions 1,000 1,000
Cumulative net loss (100,657) (118,183)
Cumulative cash distributions (13,355) (13,355)
(113,012) (130,538)
Limited partners (24,856 Units):
Capital contributions, net of
offering costs 22,408,052 22,408,052
Cumulative net loss (19,989,199) (19,265,399)
Cumulative cash distributions (1,326,160) (1,322,488)
1,092,693 1,820,165
Total partners' capital 979,681 1,689,627
Total $31,005,057 $37,830,318
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Statements of Operations
For the Years Ended December 31, 1994, 1993 and 1992
<CAPTIONS>
1994 1993 1992
<S> <C> <C> <C>
Income:
Rental income $6,057,080 $6,291,623 $6,251,731
Other income 252,860 299,690 360,925
Interest income 82,421 37,903 37,273
6,392,361 6,629,216 6,649,929
Expenses:
Property operating expenses 1,792,651 1,856,855 1,757,738
General and administrative 824,771 908,046 939,576
Fees and reimbursements to
affiliates 93,147 87,747 100,957
Provision for doubtful accounts 50,347 43,444 103,072
Mortgage litigation fees -- 175,129 --
Interest expense (includes $66,313
for 1994 and $61,250 for 1993 and
1992 to affiliates) 2,833,940 2,520,418 2,688,088
Depreciation and amortization 1,528,616 1,897,247 1,685,864
Loss due to permanent impairment
of assets -- 5,000,000 --
7,123,472 12,488,886 7,275,295
Loss from operations (731,111) (5,859,670) (625,366)
Gain on sale of property 24,837 76,417 --
Net loss $(706,274) $(5,783,253) $(625,366)
Net income (loss):
General Partner $17,526 $17,820$ (6,254)
Limited partners (723,800) (5,801,073) (619,112)
$(706,274) $(5,783,253) $(625,366)
Net loss per Unit $(29.12) $(233.39) $(24.91)
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Statements of Partners' Capital (Deficit)
For the Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
General Limited
Partner Partners Total
<S> <C> <C> <C>
Balance (deficit) at December 31, 1991 $(142,104) $8,244,798 $8,102,694
Distributions -- (2,765) (2,765)
Net loss (6,254) (619,112) (625,366)
Balance (deficit) at December 31, 1992 (148,358) 7,622,921 7,474,563
Distributions -- (1,683) (1,683)
Net income (loss) 17,820 (5,801,073) (5,783,253)
Balance (deficit) at December 31, 1993 (130,538) 1,820,165 1,689,627
Distributions -- (3,672) (3,672)
Net income (loss) 17,526 (723,800) (706,274)
Balance (deficit) at December 31, 1994 $(113,012) $1,092,693 $979,681
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Statements of Cash Flows
For the Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(706,274) $(5,783,253) $(625,366)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Loss due to impairment of assets -- 5,000,000 --
Gain on sale of property (24,837) (76,417) --
Depreciation and amortization 1,528,616 1,897,247 1,685,864
Provision for doubtful accounts 50,347 43,444 103,072
Deferred interest payable -- 61,026 181,527
Accounts receivable 68,687 (109,354) (98,066)
Accounts payable (170,032) 9,415 74,449
Accrued interest payable (65,577) (51,369) (84,873)
Contribution to property
maintenance fund (17,455) (28,500) --
Other, net (271,089) 25,224 (129,115)
Net cash provided by
operating activities 392,386 987,463 1,107,492
Cash flows from investing activities:
Purchases of property and
improvements (198,797) (295,231) (324,264)
Payment of leasing commissions (72,502) (13,009) (19,921)
Proceeds from sale of property 6,572,000 452,500 --
Payment of closing costs related to sale
of property (307,206) -- --
Net cash provided by (used in) investing
activities 5,993,495 144,260 (344,185)
Cash flows from financing activities:
Proceeds from notes and
mortgage loans 4,200,000 11,755,000 --
Repayment of notes and
mortgage loans (10,047,272)(13,702,306) (422,201)
Proceeds from debt service escrow funds -- 2,552,457 --
Contributions to debt escrow
service funds -- (506,660) --
Payment of financing costs (24,251) (1,534,083) --
Distribution for limited partners (1,683) (1,592) (1,173)
Net cash used in financing activities (5,873,206) (1,437,184) (423,374)
Net increase (decrease) in cash and cash
equivalents 512,675 (305,461) 339,933
Cash and cash equivalents,beginning of year 1,150,033 1,455,494 1,115,561
Cash and cash equivalents,end of year $1,662,708 $1,150,033 $1,455,494
Supplemental disclosure of cash information:
Interest paid during period $2,899,517 $2,470,605 $2,693,200
Supplemental disclosure of non-cash information:
Accrued purchases of property
and improvements $6,650 $-- $61,254
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Notes to Financial Statements
1. Organization and Basis of Accounting
The general partner of Connecticut General Realty Investors III
Limited Partnership (the "Partnership") is CIGNA Realty Resources, Inc. -
Fifth (the "General Partner"), an indirect, wholly owned subsidiary of
CIGNA Corporation.
In December 1993, the Partnership refinanced the first and second
mortgages encumbering the Waterford Apartments property. The first
mortgage, funded with multifamily housing revenue bonds issued by the Tulsa
County Home Finance Authority, and the second mortgage were replaced with a
new first mortgage. The replacement financing was also funded with newly
issued multifamily housing revenue bonds issued by the Tulsa County Home
Finance Authority. As a requirement of the new financing, the Waterford
property had to be classified as single asset ownership. Since the
Partnership owns multiple properties, a new partnership was created for the
Waterford property as its sole real estate asset. Waterford Partnership, a
general partnership, was organized in the State of Connecticut with the
Partnership as its managing general partner (99.9% interest) and the
General Partner (0.1% interest) as the other general partner. The interest
of the General Partner in the new partnership is held in trust for the
benefit of The Tulsa Corporation, a newly organized Delaware corporation,
the stock of which is 100% owned by the Partnership. The Tulsa Corporation
was created with the sole purpose of acting as the beneficiary of the
General Partner's ownership interest in Waterford Partnership. The new
structure has no economic effect on the Partners nor does it require any
changes in financial reporting for the Partnership.
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting purposes and are adjusted for federal
income tax reporting. The net effects of the adjustments as of December
31, 1994, 1993 and 1992, principally relating to the accounting for
property impairment, and differences in depreciation methods, are
summarized as follows:
<TABLE>
<CAPTION>
1994 1993 1992
Financial Tax Financial Tax Financial Tax
Reporting Reporting Reporting Reporting Reporting Reporting
<S> <C> <C> <C> <C> <C> <C>
Total assets $31,005,057 $26,055,282 $37,830,318 $37,931,007 $45,600,754 $41,255,002
Partners' capital
(deficit):
General Partner (113,012) (172,937) (130,538) (114,881) (148,358) (217,106)
Limited partners 1,092,693 (3,771,899) 1,820,165 1,979,274 7,622,921 3,364,590
Net income (loss) (a):
General Partner 17,526 (58,056) 17,820 102,225 (6,254) (11,973)
Limited partners (723,800) (5,747,501) (5,801,073) (1,383,633) (619,112) (1,185,281)
Net loss per Unit(a)(29.12) (231.23) (233.39) (55.67) (24.91) (47.69)
<FN>
(a) Included in 1994 is a $24,837 gain on sale of property (100% to the
General Partner) for financial reporting and a loss on sale of
$4,503,525 ($179.37 per Unit) for tax reporting; included in 1993 is a
$5,000,000 loss due to permanent impairment of assets ($199.15 per
Unit) for financial reporting only, and a gain on sale of property of
$76,417 (100% to General Partner) for financial reporting purposes and
$116,201 (100% to General Partner) for tax reporting.
</TABLE>
<PAGE>
2. Summary of Significant Accounting Policies
a) Property and Improvements: Property and improvements are carried at
cost less accumulated depreciation. The cost represents the initial
purchase price and subsequent capitalized costs and adjustments,
including certain acquisition expenses and additionally for 1993,
permanent impairment losses. Depreciation of property and
improvements is calculated on the straight-line method based on the
estimated useful lives of the various components (5 to 30 years).
Maintenance and repair expenses are charged to operations as incurred.
Amounts received under the guarantee agreements from the sellers of
the Waterford Apartments, Stonebridge Manor and Stewart's Glen
Apartments Phase III were treated as a reduction of property purchase
price.
As a result of inherent changes in market values of real estate
property and improvements, the Partnership reviews potential
impairment annually. The undiscounted future cash flows for each
property, as estimated by the Partnership, is compared to the net book
value. If the carrying value is greater than the sum of the estimated
future undiscounted cash flows, and deemed permanent, an impairment
loss is recorded.
In November 1993, the Financial Accounting Standards Board issued a
Proposed Statement of Financial Accounting Standards, "Accounting for
the Impairment of Long-Lived Assets". Under the Proposed Statement,
entities should continue to compare the sum of the expected
undiscounted future net cash flows to the carrying value of the asset.
If an impairment exists, the loss shall be measured as the amount by
which the carrying value of the asset exceeds the fair value of the
asset. Fair value of the asset shall be measured by its market value
if an active market for that asset exists. If no market price is
available, a forecast of expected discounted future net cash flows
should be used. The discount rate applied should be commensurate with
the risk involved. The effective date of a final statement is fiscal
years beginning after June 15, 1995. Since the Partnership had no
impairment losses in 1994, the statement, if it had been effective at
December 31, 1994, would have had no effect on the Partnership's
assets or results. The effect of the Proposed Statement on the financial
position and results of operations of the Partnership in the year of
adoption can not be reasonably estimated.
b) Cash and Cash Equivalents: Short-term investments with a maturity of
three months or less at the time of purchase are generally reported as
cash equivalents.
c) Escrow Deposits and Escrowed Debt Service Funds: Escrow deposits
consist of funds held to pay property taxes and insurance, as required
by the first mortgage lender for Stewart's Glen and Waterford, a
maintenance escrow, as required by the Waterford mortgage lender, and
a utility deposit for Stonebridge Manor. Escrowed debt service funds
relate to Waterford and include a debt service reserve and cash
collateral reserve.
d) Other Asset: The other asset was a standby cash deposit related to
the debt refinancing of Stewart's Glen Apartments in 1994. The cash
deposit was returned to the Partnership in January 1995.
e) Deferred Charges: Deferred charges consist of costs incurred in
obtaining financing for certain of the Partnership's properties which
are amortized over the lives of the respective loans, and in 1993, the
balance also consisted of leasing commissions, which were amortized
using the straight-line method over the respective lease terms.
f) Partners Capital: Offering costs comprised of sales commissions and
other issuance expenses have been charged to the partners' capital
accounts as incurred.
<PAGE>
g) Income Taxes: No provision for income taxes has been made as the
liability for such taxes is that of the partners rather than the
Partnership.
h) Basis of Presentation: Certain amounts in the 1993 and 1992 financial
statements have been reclassified to conform to the 1994 presentation.
3. Investment Properties
The Partnership purchased four apartment complexes located in Ohio,
Oklahoma, Louisiana and Illinois and one shopping center located in
Florida. At December 31, 1994, the Partnership owned four residential
properties which were operating with leases in effect generally for a term
of one year or less. On September 22, 1994, the Partnership completed the
sale of Promenades Plaza to Sterling Promenades Limited Partnership. Each
investment property is pledged as security for its respective non-recourse
long-term debt.
On January 27, 1993, the Partnership sold an outparcel at the
Promenades Plaza Shopping with a $452,665 historic cost and a net book
value of $376,083 for a sales price of $500,000, netting the Partnership
$452,500 after commission and closing costs. The Partnership recognized a
gain on the sale of $76,417 in 1993.
The credit enhancer on the Waterford financing required a maintenance
escrow agreement which the Partnership entered into as of December 1, 1993.
The purpose of the agreement was to allow an escrow agent to control a
reserve set aside by the Partnership for payment of necessary property
repairs as determined by a consultant hired by the credit enhancer. The
Partnership deposited an initial amount of $28,500 on December 17, 1993
which will be released to pay for repairs as completed. In addition, the
bond documents call for additional contributions to the maintenance escrow
account in an amount equivalent to 1% of gross revenues monthly. Funds are
to be released as repairs are made.
4. Deferred Charges
Deferred charges at December 31, 1994 and 1993 consist of the
following:
1994 1993
Surety fee - Waterford financing $963,910 $963,910
Costs of obtaining financing 740,117 893,359
Deferred leasing commissions -- 282,346
1,704,027 2,139,615
Accumulated amortization (288,677) (515,197)
$1,415,350 $1,624,418
5. Leases
The Promenades Plaza Shopping Center, which was sold on September
22, 1994 (see Note 9), was leased under leases which were accounted for as
operating leases and had lease terms ranging from less than one year to
nine years.
<PAGE>
Certain of the commercial leases provided for additional rents
based upon a percentage of tenant sales over a specified amount. Amounts
earned by the Partnership for such rents in 1994, 1993 and 1992 were
$71,669, $60,505 and $89,793, respectively. Certain of these leases also
contained escalation and expense recapture clauses which provided that
tenants pay their pro rata share of any increases in common area
maintenance, taxes and operating expenses over base period amounts. The
Partnership earned $113,031 in 1994, $175,060 in 1993 and $208,790 in 1992
as a result of such provisions.
6. Notes and Mortgages Payable
Except as noted, the Partnership's debt is non-recourse to the
Partnership and is secured by the investment properties. Notes and
mortgages payable at December 31, 1994 and 1993 consist of the following:
December 31
1994 1993
8% mortgage note for Versailles Village
Apartments. Principal and interest of
$32,416 payable monthly from May 1, 1994 $4,159,177 $--
until April 1, 2001, when the balance of
$3,704,876 will be due.
10% mortgage note for Versailles Village
Apartments. Principal and interest of
$36,890 payable monthly from October 1,
1988, until September 1, 1993, when the
balance was due. The loan was extended -- 4,041,049
at existing terms until March 31, 1994,
and refinanced on March 30, 1994.
8.875% mortgage note for Promenades Plaza
Shopping Center. Interest only payable
monthly until January 1, 1992. Principal
and interest of $49,850 were payable
monthly from February 1, 1992, until
January 1, 1994 when the balance was due. -- 5,856,794
The loan was extended until May 1, 1994
at existing terms. The property was sold
on September 22, 1994.
9.08% promissory recourse note for
Promenades Plaza Shopping Center.
Interest payments were due quarterly
until January 1, 1994 when the balance
was due. The loan was extended until
March 25, 1994 at 4.38%. The loan was
consolidated, extended and modified with
the Stonebridge Manor Apartments -- 2,500,000
promissory note as the Partnership
promissory recourse note dated March 25,
1994. The loan is not secured by the
property but is guaranteed by an
affiliate of the General Partner.
Mortgage notes for Waterford Apartments
at interest rates as stated on bonds
issued by lender to fund loan. Series
1993 A Bonds; $11,355,000; 5.35%;
interest only payments of $50,624 12/1/93
to 12/1/2018 due monthly; 10% of bond
principal required in cash collateral
account by the end of the surety period,
12/1/2003; cash
<PAGE>
collateral set up at closing with
$100,000; contributions to collateral
begin 12/1/98; bond maturity, 12/1/2018. 11,755,000 11,755,000
Series 1993 B Bonds; $400,000; 5.75%;
interest only payments of $1,917 due
monthly 12/1/93 to 12/1/95, principal and
interest of $12,750 due monthly 12/1/95
to 6/1/96, $11,605 6/1/96 to 12/1/96,
$12,984 12/1/96 to 6/1/97, $11,816 6/1/97
to 12/1/97, $12,338 12/1/97 to 6/1/98,
$12,002 6/1/98 to 12/1/98; fully
amortized by 12/1/98.
10.12% mortgage note for Stonebridge
Manor Apartments. Interest only payable
monthly until April 1, 1992. Principal
and interest of $47,868 payable monthly 5,311,831 5,346,751
from May 1, 1992 until April 1, 1995 when
the balance of $5,305,661 will be due.
10.5% promissory recourse note for
Stonebridge Manor Apartments. Interest
only payable semiannually commencing on
September 25, 1990, until March 25, 1994,
when the principal was due. The loan was
consolidated, extended and modified with
the Promenades Plaza Shopping Center
promissory note as the Partnership -- 900,000
promissory recourse note dated March 25,
1994. This loan is not secured by the
property but is guaranteed by an
affiliate of the General Partner.
8.55% mortgage note for Stewart's Glen
Apartments Phase III. Interest only at
9.94% payable monthly until February 1,
1991. Principal and interest of $47,306
payable monthly from March 1, 1991, until
November 1, 1994, when the note was 4,861,583 4,935,269
modified to 8.55% interest only payments
of $34,639 payable monthly from December
1, 1994 until April 1, 1996, the extended
maturity date.
Partnership recourse promissory note
dated March 25, 1994 and due March 25,
1997. Interest only payments at 6.6% for
the first two years with no prepayment
provision. The interest only payments
for the third year will be at a floating 3,400,000 --
rate equal to Mellon Bank's prime rate.
During the third year, the note can be
prepaid in full at any time. The note is
guaranteed by an affiliate of the General
Partner.
Total notes and mortgages payable $29,487,591 $35,334,863
<PAGE>
On May 1, 1994, the Partnership's extension on Promenades' first
mortgage loan expired. As an alternative to payment of the entire loan
balance on May 1, 1994, the Partnership agreed with the first mortgage
lender to pay an additional debt service payment to extend the maturity to
June 1, 1994 while negotiations continued on the sale of the property. The
lender requested an additional debt service payment due June 1, 1994 to
extend the loan an additional month to July 1, 1994. Effective with the
extension payment due June 1, 1994 (May interest due June 1), the
Partnership defaulted. During June, the Partnership executed a contract
with a potential buyer subject to a number of contingencies, including the
buyer's ability to obtain financing and the performance of due diligence.
As a result of the default, the first mortgage lender commenced foreclosure
proceedings. The foreclosure was stayed by the Court due to the pending
sale of the property and the Partnership and the first mortgage lender
entered into a cash collateral agreement. The Court required the
Partnership to complete its sale of the property by October 17, 1994. On
September 22, 1994, the Partnership completed the sale of Promenades Plaza.
The Waterford property's first and second mortgage debt was
refinanced on December 17, 1993, with $11,755,000 in industrial revenue
bonds issued by the Tulsa County Home Finance Authority and credit enhanced
by AXA Reassurance, SA. The new financing is similar to the bond financing
which it replaces and has been issued by the same county housing authority.
The bond issue consists of $11,355,000 of tax exempt bonds (Series A Bonds)
which matures on December 1, 2018, and $400,000 in taxable bonds (Series B
Bonds) which mature December 1, 1998. The interest rate on both series are
fixed at 5.35% and 5.75% for the Series A and Series B bonds, respectively.
The AXA insurance policy expires on December 1, 2004. The bonds can be
prepaid in 2001 at 102% and at par in 2002 and thereafter.
The Series A issue has been designed with a cash collateral account
rather than a sinking fund. Upon closing a $100,000 contribution was made
to the cash collateral account representing a quasi debt service reserve.
The cash collateral account was created to meet surety guidelines which
required that 10% of the bond issue be amortized by the end of the ten year
credit enhancement period. Contributions to the cash collateral account
are scheduled to begin on December 1, 1998.
Under the new bonds, interest only payments of $52,541 are made
monthly to the trustee to service the semi-annual payments due on the
bonds. The Series B bonds interest payment will change in December 1995
when principal payments begin. The $400,000 principal amortizes by
December 1998 based on a schedule of bond maturities.
The Partnership is in the process of securing a refinance of
Stonebridge Manor Apartment's first mortgage note with a scheduled maturity
of April 1, 1995, for $5,300,000 for a period of three years at 10.15% with
twenty year amortization. Prepayment is closed for the first year, open at
1% during the second year and open without penalty during the third year.
Five year maturities of long-term debt are summarized as follows:
1995 $5,381,035
1996 5,050,630
1997 3,603,462
1998 202,480
1999 80,299
Thereafter 15,169,685
<PAGE>
7. Transactions with Affiliates
Fees and other expenses incurred by the Partnership related to the
General Partner or its affiliates during the periods ended December 31,
1994, 1993 and 1992 are as follows:
1994 1993 1992
Property management fees(a) $335,978 $335,157 $339,603
Printing 6,150 5,622 7,562
Reimbursement (at cost) for
out-of-pocket expenses 41,366 44,774 46,793
(a) In 1994, 1993 and 1992, $290,347, $297,806 and $293,001, respectively,
of these fees were for services contracted by CIGNA Investments, Inc.,
an affiliate of the General Partner, on behalf of the Partnership but
paid directly by the Partnership to independent third party property
management companies.
In addition, the recourse promissory notes for Promenades Plaza
Shopping Center and Stonebridge Manor were guaranteed by an affiliate of
the General Partner for an annual fee of 2% and 1.25% on the outstanding
balance, respectively, prior to consolidation, modification and extension
effective on March 25, 1994. After consolidation, the note guarantee
carries an annual fee of 2% of the outstanding balance.
8. Partners' Capital
During 1991, the State of Connecticut enacted new income tax
legislation, a part of which affects partnerships. The portfolio income
allocations made by the Partnership to the limited partners are considered
Connecticut based income and subject to Connecticut tax. On April 13,
1994, the Partnership paid the tax due on its 1993 Form CT-G State of
Connecticut Group Income Tax Return. The Partnership has elected to pay
the tax due on the limited partners' share of portfolio income and,
therefore, paid tax due of $1,683 directly to the State of Connecticut.
The Partnership also accrued the 1994 estimated payment of $3,672 as of
December 31, 1994. These amounts were treated as reductions of partners'
capital and reported as distributions in the accompanying financial
statements.
9. Sale of Property
As a result of Promenades' continual cash flow deficits, the ongoing
need for capital improvements, and the debt maturity, the General Partner
determined that it was in the best interest of the Partnership to sell
Promenades Plaza. The General Partner expected that the net proceeds
realized from a sale would be significantly less than the carrying value of
the property and accordingly, the Partnership recorded a loss of $5,000,000
due to permanent impairment of assets as of December 31, 1993.
On September 22, 1994, the Partnership completed the sale of
Promenades Plaza to Sterling Promenades Limited Partnership for a gross
sales price of $6,572,000. The property had a carrying value of $6,239,957
(net of permanent impairment losses of $5,000,000 in 1993 and $700,000 in
1991). After deducting closing costs of $307,206, the Partnership recorded
a gain of $24,837.
<PAGE>
10. Partnership Agreement
Pursuant to the terms of the Partnership Agreement as amended
January 1, 1988, net income or loss and cash distributions from operations,
as well as any net losses arising from the sale or disposition of
investment properties, are to be allocated 1% to the General Partner and
99% to the Limited Partners. Cash distributions are allocated to the
Partners following the receipt by an affiliate of the General Partner of a
partnership management fee of 9% of "Adjusted Cash From Operations", as
defined in the Partnership Agreement.
Distributable cash from the sale or disposition of investment
properties is to be generally allocated in the following order:
To the Limited Partners up to the amount of their Original
Invested Capital;
To the General Partner, an additional amount depending upon
the percentage of Gross Proceeds committed to investment in
properties;
To the Limited Partners in an amount, which when added to
prior distributions from operations, equals an 8% cumulative
noncompounded return on their adjusted invested capital;
To an affiliate of the General Partner as a subordinated
disposition fee; and
With respect to the remainder, 85% to the Limited Partners and
15% to the General Partner.
Generally, income from the sale or disposition of investment
property is allocated as follows:
To each Partner having a deficit balance in the same ratio of
such balance to the aggregate balance of all Partners;
To each Partner to the extent of cash distributed from the
sale; and
Any remaining gain 1% to the General Partner and 99% to the
Limited Partners.
<PAGE>
<TABLE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP SCHEDULE III
(a Connecticut limited partnership)
Real Estate and Accumulated Depreciation
December 31, 1994
<CAPTION>
Initial Cost to Partnership (B)(C) Costs
Capitalized
Subsequent to
Acquisition
Life on Which
Land Depreciation
and Land, Building in Latest
Description of Land Furniture Improvements Date of Statement of
Apartment Complexes Encumbr- Improv- and and Furniture constr- Date Operations is
by Property Location ances(A) ments Building Fixtures and Fixtures uction Acquired Computed
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Versailles $4,159,177 $562,000 $4,857,554 $406,800 $717,943 1970 02/06/85 5-30 years
Village Apts.
Forest Park, OH
Waterford Apts. 11,755,000 2,085,826 11,343,875 492,765 23,250 1984 10/31/85 5-30 years
Tulsa, OK
Stonebridge 5,311,831 1,145,579 8,639,666 624,600 237,849 1985 11/26/85 5-30 years
Manor Apts.
New Orleans, LA
Stewart's Glen Apts. 4,861,583 1,888,214 5,307,646 220,993 95,422 1987 07/24/87 7-27.5 years
Phase III
Willowbrook, IL
Totals $26,087,591 $5,681,619 $30,148,741 $1,745,158 $1,074,464
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at Which Carried at Close of Period (D)(E)
Land and Land Building and Furniture and Accumulated
Description Improvements Improvements Fixtures Total Depreciation (F)
<S> <C> <C> <C> <C> <C>
Versailles $759,141 $5,096,984 $688,172 $ 6,544,297 $2,309,171
Village Apts.
Forest Park, OH
Waterford Apts. 2,085,826 11,362,697 497,193 13,945,716 3,988,710
Tulsa, OK
Stonebridge 1,221,825 8,731,188 694,681 10,647,694 3,314,531
Manor Apts.
New Orleans, LA
Stewart's Glen Apts. 1,962,214 5,316,988 233,073 7,512,275 2,017,396
Phase III
Willowbrook, IL
Totals $6,029,006 $30,507,857 $2,113,119 $38,649,982 $11,629,808
<FN>
(A) Encumbrances, which are secured by the Partnership's property are net of discounts and include accrued
interest payable at maturity (See Notes to Financial Statements).
<FN>
(B) The cost to the Partnership represents the initial purchase price of the properties including certain
acquisition fees and expenses, net of discounts on related debt.
<FN>
(C) The Partnership recorded $774,493, $1,172,310 and $108,912 under the guarantee agreements from the
sellers of the Waterford, Stonebridge Manor and Stewart's Glen Apartments Phase III, respectively,
which were treated as a reduction of initial cost.
<FN>
(D) The aggregate cost of real estate owned at December 31, 1994 for federal income tax purposes is $38,965,186.
</TABLE>
<TABLE>
<CAPTION>
(E) Reconciliation of real estate owned:
Description 1994 1993 1992
<S> <C> <C> <C>
Balance at beginning of period $47,529,957 $52,748,645 $52,363,127
Additions during period 205,447 233,977 385,518
Reductions during period(G) (9,085,422) (5,452,665) --
Balance at end of period $38,649,982 $47,529,957 $52,748,645
</TABLE>
<TABLE>
<CAPTION>
(F) Reconciliation of accumulated depreciation:
Description 1994 1993 1992
<S> <C> <C> <C>
Balance at beginning of period $13,252,478 $11,786,429 $10,246,052
Additions during period 1,328,700 1,542,631 1,540,377
Reductions during period (H) (2,951,370) (76,582) --
Balance at end of period $11,629,808 $13,252,478 $11,786,429
<FN>
(G) Includes sale of Promenades Plaza in 1994 and sale of an outparcel at Promenades Plaza and $5,000,000
permanent impairment of assets in 1993.
<FN>
(H) Includes sale of Promenades Plaza in 1994 and sale of an outparcel at Promenades Plaza in 1993.
</TABLE>
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
Item 10. Directors and Executive Officers of the Registrant
The General Partner of the Partnership, CIGNA Realty Resources, Inc.- Fifth, a
Delaware corporation, is an indirectly, wholly owned subsidiary of CIGNA
Corporation, a publicly held corporation whose stock is traded on the New
York Stock Exchange. The General Partner has responsibility for and
control over the affairs of the Partnership.
The directors and executive officers of the
General Partner as of February 28, 1995 are as follows:
Name Office Served Since
R. Bruce Albro Director May 2, 1988
Philip J. Ward Director May 2, 1988
John Wilkinson Director September 7, 1993
John D. Carey President, Controller September 7, 1993
September 4, 1990
Verne E. Blodgett Vice President, Counsel April 2, 1990
Joseph W. Springman Vice President, Assistant September 7, 1993
Secretary
David C. Kopp Secretary September 29, 1989
Marcy F. Blender Treasurer August 1, 1994
There is no family relationship among any of the foregoing directors or
officers. There are no arrangements or understandings between or among
said officers or directors and any other person pursuant to which any
officer or director was selected as such.
The foregoing directors and officers are also officers and/or directors
of various affiliated companies of CIGNA Realty Resources, Inc. - Fifth,
including CIGNA Financial Partners, Inc. (the parent of CIGNA Realty
Resources, Inc. - Fifth), CIGNA Investments, Inc., CIGNA Corporation (the
parent of CIGNA Investments, Inc.), Connecticut General Corporation (the
parent of CIGNA Financial Partners, Inc.).
<PAGE>
The business experience of each of the directors and executive officers
of the General Partner of the Partnership is as follows:
R. BRUCE ALBRO - DIRECTOR
Mr. Albro, age 52, a Senior Managing Director of CIM, joined Connecticut
General's Investment Operations in 1971 as a Securities Analyst in Paper,
Forest Products, Building and Machinery. Subsequently, he served as a
Research Department Unit Head, as an Assistant Portfolio Manager, then as
Director of Equity Research and a member of the senior staff of CIGNA
Investment Management Company and as a Portfolio Manager in the Fixed
Income area. He then headed the Marketing and Merchant Banking area for
CII. Prior to his current assignment of Division Head, Portfolio
Management Division, he was an insurance portfolio manager, and prior to
that, he was responsible for Individual Investment Product Marketing. In
addition, Mr. Albro currently serves as President of the CIGNA Funds Group
and other CIGNA affiliated mutual funds. Mr. Albro received a Master of
Arts degree in Economics from the University of California at Berkeley and
a Bachelor of Arts degree in Economics from the University of Massachusetts
at Amherst.
PHILIP J. WARD - DIRECTOR
Mr. Ward, age 46, is Senior Managing Director and Division Head of CIGNA
Investment Management (CIM), in charge of the Real Estate Investment
Division of CIM. He was appointed to that position in December 1985. Mr.
Ward joined Connecticut General's Mortgage and Real Estate Department in
1971 and became an officer in 1976. Since joining the company he has held
real estate investment assignments in Mortgage and Real Estate Production
and in Portfolio Management. Prior to his current position, Mr. Ward held
assignments in CIGNA Investments Inc., responsible for the Real Estate
Production area, CIGNA Realty Advisors, Inc. and Congen Realty Advisory
Company, all wholly-owned subsidiaries of CIGNA Corporation and/or
Connecticut General. Mr. Ward has held various positions with the General
Partner. His experience includes all forms of real estate investments,
with recent emphasis on acquisitions and joint ventures. Mr. Ward is a
1970 graduate of Amherst College with a Bachelor of Arts degree in
Economics. He is a member of the Society of Industrial and Office
Realtors, the National Association of Industrial and Office Parks, the
Urban Land Institute and the International Council of Shopping Centers. He
is a member of the Board of Directors of DeBartolo Realty Corporation and
Cadillac Fairview, Inc.
JOHN WILKINSON - DIRECTOR
Mr. Wilkinson, age 51, is Senior Vice President and Chief Financial
Officer of the CIGNA Individual Insurance Division. He was appointed to
that position in January 1992. Mr. Wilkinson joined the company in 1970
and became an officer in 1978. In 1981 he joined CIGNA Individual
Financial Services Division (now CIGNA Individual Insurance) and was
appointed Vice President in 1988 in that Division. Mr. Wilkinson continued
to work in the Insurance Marketing area as Vice President until he was
appointed to his current position. Mr. Wilkinson is a 1965 graduate of the
U.S. Naval Academy. He is a Registered Principal of CIGNA Financial
Advisors, Inc., a Fellow of the Society of Actuaries, a member of the
American Academy of Actuaries, a Chartered Life Underwriter and Chartered
Financial Counsellor.
JOHN D. CAREY - PRESIDENT, CONTROLLER
Mr. Carey, age 31, joined CIGNA in 1990. Prior to joining CIGNA, he
held the position of manager at KPMG Peat Marwick in the audit department
and was a member of the Real Estate Focus Group. His experience includes
accounting and financial reporting for public and private real estate
limited partnership syndications. Mr. Carey is a graduate of Central
Connecticut State University with a Bachelor of Science Degree and is a
Certified Public Accountant.
<PAGE>
VERNE E. BLODGETT - VICE PRESIDENT, COUNSEL
Mr. Blodgett, age 57, is an Assistant General Counsel of CIGNA
Corporation. He joined Connecticut General Life Insurance Company in 1975
as an investment attorney and has held various positions in the Legal
Division of Connecticut General Life Insurance Company prior to his
appointment as Assistant General Counsel in 1981. Mr. Blodgett received a
Bachelor of Arts degree from Yale University and graduated with honors from
the University of Connecticut School of Law. He is a member of the
Connecticut and the American Bar Associations.
JOSEPH W. SPRINGMAN - VICE PRESIDENT, ASSISTANT SECRETARY
Mr. Springman, age 53, is Managing Director and department head
responsible for asset management. He joined CIGNA's Real Estate operations
in 1970. He has held positions as an officer or director of several real
estate affiliates of CIGNA. His past real estate assignments have included
Development and Engineering, Property Management, Director, Real Estate
Operations, Portfolio Management and Vice President, Real Estate
Production. Prior to assuming his asset management post, Mr. Springman was
responsible for production of real estate and mortgage investments. He
received a Bachelor of Science degree from the U.S. Naval Academy.
DAVID C. KOPP - SECRETARY
Mr. Kopp, age 49, is Secretary of CII, Corporate Secretary of
Connecticut General Life Insurance Company and Assistant Corporate
Secretary and Assistant General Counsel, Insurance and Investment Law of
CIGNA Corporation. He also serves as an officer of various other CIGNA
Companies. He joined Connecticut General Life Insurance Company in 1974 as
a commercial real estate attorney and held various positions in the Legal
Department of Connecticut General Life Insurance Company prior to his
appointment as Corporate Secretary in 1977. Mr. Kopp is an honors graduate
of Northern Illinois University and served on the law review at the
University of Illinois College of Law. He is a member of the Connecticut
Bar Association and is Past President of the Hartford Chapter, American
Society of Corporate Secretaries.
MARCY F. BLENDER - TREASURER
Marcy F. Blender, age 38, is Assistant Vice President, Bank Resources
of CIGNA Corporation. In this capacity she is responsible for bank
relationship management, bank products and services, bank compensation and
control, and bank exposure management. Marcy joined Insurance Company of
North America (INA) in 1979. She has held a variety of financial and
investment positions with INA and later with the merged CIGNA Corporation
before assuming her current responsibilities in 1992. She received a B.A.
degree from Rutgers University and an M.B.A. from Drexel University. She
is a Certified Public Accountant.
Item 11. Executive Compensation
Officers and directors of the General Partner receive no current or
proposed direct compensation from the Partnership in such capacities.
However, certain officers and directors of the General Partner received
compensation from the General Partner and/or its affiliates (but not from
the Partnership) for services performed for various affiliated entities,
which may include services performed for the Partnership, but such
compensation was not material in the aggregate.
Item 12. Security Ownership of Certain Beneficial Owners and Management
No person or group is known by the Partnership to own beneficially more
than 5% of the outstanding Units of interest of the Partnership.
<PAGE>
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.
As of February 28, 1995, the individual directors and the directors and
officers, as a group, of the General Partner beneficially owned Partnership
Units and shares of the common stock of CIGNA, parent of the General
Partner, as set forth in the following table:
Units Shares
Beneficially Beneficially Percent
Name Owned(a) Owned(b) of Class
R. Bruce Albro (c) 0 6,076 *
Philip J. Ward (d) 0 17,680 *
John Wilkinson (e) 0 13,753 *
All directors and officers
Group (8) (f) 0 44,069 *
* Less than 1% of class
(a) No officer or director of the General Partner possesses a right to
acquire beneficial ownership of additional Units of interest of the
Partnership.
(b) The directors and officers have sole voting and investment power over
all the shares of CIGNA common stock they own beneficially.
(c) Shares beneficially owned includes options to acquire 3,920 shares and
2,156 shares which are restricted as to disposition.
(d) Shares beneficially owned includes options to acquire 10,985 shares
and 2,274 shares which are restricted as to disposition.
(e) Shares beneficially owned includes options to acquire 11,251 shares
and 2,027 shares which are restricted as to disposition.
(f) Shares beneficially owned by directors and officers include 28,511
shares of CIGNA common stock which may be acquired upon exercise of
stock options and 10,111 shares which are restricted as to
disposition.
Item 13. Certain Relationships and Related Transactions
The General Partner of the Partnership is generally entitled to receive
1% of cash distributions, when and as cash distributions are made to the
limited partners, and is generally allocated 1% of profits or losses. In
1994, the Partnership distributed no cash from operations. The General
Partner was allocated a share of Partnership income in 1994 of $17,526
which includes the entire gain on sale of Promenades of $24,837. Reference
is also made to the Notes to Financial Statements included in this annual
report for a description of such distributions and allocations. The
relationship of the General Partner (and its directors and officers) to its
affiliates is set forth in Item 10 above.
CII provided asset management services to the Partnership during 1994 at
fees calculated at 5% of gross revenues from the Versailles Village
Apartments, Waterford Apartments, Stonebridge Manor Apartments and
Stewart's Glen Apartments and 6% of gross revenues from the Promenades
Plaza Shopping Center less amounts earned by independent third party
property management companies contracted by CII on behalf of the
Partnership. In 1994, such affiliate earned asset management fees
amounting to $45,631 for such services, of which $7,117 was unpaid as of
December 31, 1994. Non-affiliated third party independent property
managers contracted by CII earned $290,347 of management fees, of which
$8,858 was unpaid as of December 31, 1994.
<PAGE>
CFP provided partnership management services for the Partnership at fees
calculated at 9% of adjusted cash from operations in any one year. CFP did
not earn or receive partnership management fees in 1994.
The recourse promissory notes for Promenades Plaza Shopping Center and
Stonebridge Manor, which were modified, extended and consolidated March 25,
1994, carry a corporate guarantee by CIGNA Corporation. The Partnership
incurred a guarantee fee of $66,313 for 1994, of which $17,000 was unpaid
at December 31, 1994.
The General Partner and its affiliates may be reimbursed for their
direct expenses incurred in the administration of the Partnership. In
1994, the General Partner and its affiliates were entitled to reimbursement
for such out of pocket expenses in the amount of $47,516, of which $950 was
unpaid as of December 31, 1994.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements. See Index to Financial Statements in
Item 8.
2. Financial Statement Schedules
(a)
Real Estate and Accumulated Depreciation. See Index to Financial
Statements in Item 8.
3. Exhibits
3 Partnership Agreement, incorporated by reference to Exhibit A
to the Prospectus of Registrant, dated July 2, 1984, filed
pursuant to Rule 424(b) under the Securities Act of 1933, File
No. 2-90944.
3(a)
Amendment to Partnership Agreement, dated as of July 1, 1985,
incorporated by reference to Exhibit 3(a) to Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1984.
4 Certificate of Limited Partnership, dated April 16, 1984,
incorporated by reference to Exhibit 4 to Form S-11
Registration Statement under the Securities Act of 1933, File
No. 2-90944.
10(a)
Acquisition and Disposition Services Agreement, dated July 2, 1984,
between Connecticut General Realty Investors III Limited Partnership and
CIGNA Capital Advisers, Inc., incorporated by reference to exhibit 10(a)
to Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1987.
(b)
Supervisory Property Management Agreement, dated July 2, 1984, between
Connecticut General Realty Investors III Limited Partnership and CIGNA
Capital Advisers, Inc., incorporated by reference to exhibit 10(b) to
Registrants Annual Report on Form 10-K for the fiscal year ended
December 31, 1987.
(c)
Agreements concerning Certain Capital Contributions, between Connecticut
General Management Resources, Inc. and CIGNA Realty Resources,
Inc.-Fifth, incorporated by reference to exhibit 10(c) to Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1987.
(d)
Purchase and Sale Agreement, dated as of January 17, 1985, relating to
the Acquisition of Versailles Village Apartments, incorporated by
reference to Exhibit 10(d) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1984.
<PAGE>
(e)
Bill of Sale and Assignment between Stonebridge Manor, a Louisiana
Partnership in Commendam, and Connecticut General Realty Investors III
Limited Partnership, dated November 26, 1985, relating to the
acquisition of the Stonebridge Manor Apartments, incorporated by
reference to Exhibit 10(h) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1985.
(f)
Act of Credit Sale and Assumption of Mortgage between Stonebridge Manor,
a Louisiana Partnership in Commendam, and Connecticut General Realty
Investors III Limited Partnership dated November 26, 1985, relating to
the acquisition of the Stonebridge Manor Apartments, incorporated by
reference to Exhibit 10(i) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1985.
(g)
Purchase and Sale Agreement between Waterford, LTD. and Connecticut
General Realty Investors III Limited Partnership, dated October 31,
1985, relating to the acquisition of the Waterford Apartments,
incorporated by reference to Exhibit 10(k) to Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1985.
(h)
Promissory Note between Connecticut General Realty Investors III Limited
Partnership, as Maker, and Waterford, LTD., as Payee, dated October 31,
1985, relating to the acquisition of the Waterford Apartments,
incorporated by reference to Exhibit 10(l) to Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1985.
(i)
Purchase and Sale Agreement between First Capital Income Properties
Limited, Series V, and Connecticut General Realty Investors III Limited
Partnership, relating to the acquisition of the Promenades Plaza
Shopping Center, incorporated by reference to Exhibit 10(m) to
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1985.
(j)
Mortgage Consolidation and Modification Agreement between Connecticut
General Realty Investors III Limited Partnership and The Equitable Life
Assurance Society of the United States, dated as of December 10, 1986,
relating to the Promenades Plaza Shopping Center, incorporated by
reference to Exhibit 10(n) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1986.
(k)
Real Estate Purchase Agreement between Willowbrook Associates II and
CIGNA Financial Partners, Inc., relating to Stewart's Glen Apartments
Phase III, dated as of April 14, 1987, incorporated by reference to
Exhibit 10(p) to Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1987.
(l)
Amendment to Real Estate Purchase Agreement, dated July 20, 1987,
between Willowbrook Associates II and Phase III Apartment Venture,
relating to the acquisition of Stewart's Glen Apartments Phase III,
incorporated by reference to Exhibit 10(s) to Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1987.
(m)
Management and Leasing Agreement between Phase III Apartment Venture and
Chasewood Properties, effective as of July 24, 1987, incorporated by
reference to Exhibit 10(t) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987.
(n)
Mortgage, Security Agreement and Financing Statement and Promissory Note
between Connecticut General Realty Investors III Limited Partnership and
Massachusetts Mutual Life Insurance Company, dated January 25, 1988,
relating to Stewart's Glen Apartments Phase III, incorporated by
reference to Exhibit 10(v) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987.
<PAGE>
(o)
Mortgage Note between Connecticut General Realty Investors III Limited
Partnership and the John Hancock Mutual Life Insurance Co., dated as of
August 12, 1988, relating to Versailles Village Apartments, incorporated
by reference to Exhibit 10(w) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1988.
(p)
Promissory Note between Connecticut General Realty Investors III Limited
Partnership and Aetna Life Insurance Company, dated March 28, 1990,
relating to Stonebridge Manor Apartments incorporated by reference to
Exhibit 10 (p) to Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989.
(q)
Promissory Note between Connecticut General Realty Investors III Limited
Partnership and Mellon Bank National Association, dated March 28, 1990,
relating to Stonebridge Manor Apartments incorporated by reference to
Exhibit 10 (q) to Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989.
(r)
Mortgage and Note Modification Agreement between Connecticut General
Realty Investors III Limited Partnership and The Equitable Life
Assurance Society of the United States, dated June 30, 1989, relating to
Promenades Plaza Shopping Center incorporated by reference to Exhibit 10
(r) to Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989.
(s)
Promissory Note between Connecticut General Realty Investors III Limited
Partnership and Barnett Bank of Southwest Florida, dated June 30, 1989,
relating to Promenades Plaza Shopping Center incorporated by reference
to Exhibit 10 (s) to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989.
(t)
Promissory Note between Registrant and John Hancock Mutual Life
Insurance Company, dated March 24, 1994, relating to Versailles Village
Apartments incorporated by reference to Form 10-Q for the quarter ended
March 31, 1994.
(u)
Documents and Agreements concerning the December 17, 1993 debt refinance
of the Registrant's Waterford Apartments property with industrial
revenue bonds issued by the Tulsa County Home Finance Authority and
credit enhanced by AXA Reassurance, SA incorporated by reference to Form
10-Q for the quarter ended March 31, 1994.
(v)
Consolidation, Extension, Modification, and Restatement of Promissory
Notes between Registrant and Mellon Bank, N.A., dated March 25, 1994
relating to Stonebridge Manor Apartments and Promenades Plaza Shopping
Center incorporated by reference to Form 10-Q for the quarter ended
March 31, 1994.
(w)
Contract for Purchase and Sale dated July 19, 1994, First Amendment to
Contract for Purchase and Sale dated August 18, 1994, and Second
Amendment to Contract for Purchase and Sale dated September 21, 1994
between the Registrant and Sterling Promenades Limited Partnership, a
Florida limited partnership incorporated by reference to Form 8-K dated
September 22, 1994.
(x)
Loan Modification Agreement between Connecticut General Realty Investors
III Limited Partnership and Massachusetts Mutual Life Insurance Company,
dated November 1, 1994, relating to Stewart's Glen Apartments.
27 Financial Data Schedules.
<PAGE>
(b) Reports on Form 8-K:
In a report filed on Form 8K dated September 22, 1994, the Partnership
reported the sale of Promenades Plaza to Sterling Promenades Limited
Partnership.
<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.
CONNECTICUT GENERAL REALTY INVESTORS III
LIMITED PARTNERSHIP
By: CIGNA Realty Resources, Inc. - Fifth
General Partner
Date: March 28, 1995 By: /s/ John D. Carey
John D. Carey, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant and in the capacities (with respect to the General Partner) and
on the date indicated.
/s/ Philip J. Ward Date: March 28, 1995
Philip J. Ward, Director
/s/ R. Bruce Albro Date: March 28, 1995
R. Bruce Albro, Director
/s/ John Wilkinson Date: March 28, 1995
John Wilkinson, Director
/s/ John D. Carey Date: March 28, 1995
John D. Carey, President, Controller
(Principal Executive Officer)
(Principal Accounting Officer)
/s/ Marcy F. Blender Date: March 28, 1995
March F. Blender, Treasurer
(Principal Financial Officer)
EXHIBIT 10(x)
LOAN MODIFICATION AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of November,
1994, by and among CONNECTICUT GENERAL REALTY INVESTORS III LIMITED
PARTNERSHIP, a Connecticut limited partnership, having its principal office
and place of business c/o CIGNA INVESTMENTS, INC., Hartford, Connecticut
06152 ("Borrower"), and MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, a
Massachusetts corporation, having its principal office and place of
business at 1295 State Street, Springfield, Massachusetts 01111 ("Lender").
R E C I T A L S
A.To evidence indebtedness (the "Loan") in the original principal amount
of Five Million, One Hundred Twenty-Five Thousand Dollars and 00/100
($5,125,000.00), Borrower has executed and delivered to Lender a Promissory
Note (the "Note") dated January 25, 1988. Payment of the Loan is secured
by, inter alia, a Mortgage, Security Agreement and Financing Statement (the
"Mortgage") dated January 25, 1988 and recorded in DuPage County, Illinois
as document R88-9511. The Mortgage is a lien on certain real property (the
"Property") commonly known as Stewart's Glen Apartments in Willowbrook,
Illinois and legally described in Exhibit A attached hereto and
incorporated herein by this reference.
B.The Loan is identified in Lender's records as Loan No. 16486. Lender
is also the owner and holder of the following loans:
(1)Loan No. 16357. A first mortgage loan in the original principal
amount of $9,000,000.00, evidenced by a Promissory Note dated March 27,
1986 made by CIGNA/Willowbrook Associates Limited Partnership, a Delaware
limited partnership, and secured by, inter alia, a Mortgage, Security
Agreement and Financing Statement (the "Loan No. 16357 Mortgage") dated
March 27, 1986 and recorded in DuPage County, Illinois as document #R86-
29495. This loan was increased by the principal amount of $700,000
pursuant to the terms and provisions of a second Promissory Note in that
amount dated August 12, 1987 and a Mortgage and Assignment Modification
Agreement dated August 12, 1987 and recorded in DuPage County, Illinois as
document #R87-122268; and
(2)Loan No. 16485. A first mortgage loan in the original principal
amount of $7,750,000.00, evidenced by a Promissory Note dated January 25,
1988 made by CIGNA/Willowbrook II Associates Limited Partnership, a
Delaware limited partnership, and secured by, inter alia, a Mortgage,
Security Agreement and Financing Statement (the "Loan No. 16485 Mortgage")
dated January 25, 1988 and recorded in Dupage County, Illinois as document
#R88-9507, as amended by a Loan Modification Agreement dated as of December
1, 1992 and recorded in DuPage County, Illinois as document #R93-028883,
and as further amended by a Loan Modification Agreement No. 2 dated as of
the date hereof.
The Property, and the real estate encumbered by the Loan No. 16357
Mortgage and the Loan No. 16485 Mortgage, are contiguous parcels and
together form a development known as Stewart's Glen Apartments in
Willowbrook, Illinois.
C.Borrower has requested that the Note and the Mortgage be amended in
certain respects, and Lender has agreed to such amendments.<PAGE>
NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and sufficiency whereof are
hereby acknowledged, Borrower and Lender hereby covenant and agree that:
1.Incorporation of Recitals. The foregoing Recitals are hereby
incorporated in this Agreement.
2.Capitalized Terms. All capitalized terms used in this Agreement,
unless otherwise defined herein, have the same definitions as are set forth
in the Note and the Mortgage.
<PAGE>
3.Principal Balance. Following payment of the installment of principal
and interest due November 1, 1994, the principal balance outstanding of the
Loan was Four Million, Eight Hundred Sixty-one Thousand, Five Hundred
Eighty-Two and 66/100 Dollars ($4,861,582.66).
4.Borrower's Warranties. Borrower represents and warrants that:
(a)Borrower has entered into no contracts or agreements for the
transfer of title to the Property;
(b)CIGNA Realty Resources, Inc. - Fifth, a Delaware corporation, is
the sole general partner of Borrower; and
(c)To the best of Borrower's knowledge, there is currently no Event of
Default on the part of Borrower under the Note or the Mortgage or under any
other instrument or agreement evidencing or securing the Loan, and no event
has occurred and is continuing which with notice or lapse of time or both
would constitute an Event of Default under such documents.
5.Extension of Maturity Date. The Maturity Date stated in the Note and
the Mortgage is hereby extended from February 1, 1995 to April 1, 1996, at
which time the entire principal balance of the Loan then outstanding,
together with accrued interest thereon, shall be due and payable.
6.Interest Rate. Effective as of the date hereof, interest shall be
payable upon the principal balance from time to time outstanding of the
Loan at the rate of eight and 55/100 percent (8.55%) per annum. Monthly
installments of principal and interest commencing with the payment due
December 1, 1994 and continuing through March 1, 1996 shall be in the
amount of Thirty-Four Thousand, Six Hundred Thirty-Eight and 78/100 Dollars
($34,638.78), and the final installment due and payable on April 1, 1996
shall be in the full amount of principal and interest then remaining
unpaid.
7.Prepayment Premium. Part II.1 of the Note is hereby amended to
provide that the principal balance of the loan may be prepaid in full at
any time after December 31, 1995 without premium or penalty. A premium in
accordance with the provisions of said Part II.1. of the Note shall be
payable upon any prepayment occurring prior to January 1, 1996.
8.General.
(a)Borrower acknowledges and agrees that the Note and the Mortgage,
and any and all other documents and agreements evidencing or securing the
Loan, are unmodified (except as provided herein) and in full force and
effect;
(b)All costs and expenses incurred in connection with the preparation,
execution and recording of this Agreement shall be paid by Borrower,
including, without limitation, all recording charges; title and escrow
fees; and the fees and expenses of Lender's attorney;
(c)In the event of any conflict between the terms and provisions of
this Agreement and the terms and provisions of any other document
evidencing, securing or referring to the Loan, including, without
limitation, the terms and provisions of a letter agreement between Lender
and Borrower dated January 21, 1988, the terms and provisions of this
Agreement shall control; and
(d)Except as hereby expressly amended, all terms and provisions of the
Note, the Mortgage and any other document or agreement evidencing or
securing the Loan are hereby ratified and confirmed.
<PAGE>
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement as
of the day and year first above written.
CONNECTICUT GENERAL REALTY
INVESTORS III LIMITED PARTNERSHIP,
a Connecticut limited partnership
By: CIGNA Realty Resources, Inc. -
Fifth, a Delaware corporation
and the Sole General Partner
of Connecticut General Realty
Investors III Limited
Partnership
By:
Pamela S. Peck
Authorized Agent
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, a Massachusetts
corporation
By:
This instrument prepared by
(and return after recording to):
James A. Winkler, Esq.
Foley & Lardner
One IBM Plaza
330 N. Wabash
Suite 3300
Chicago, Illinois 60611
(312) 755-1900
<PAGE>
ACKNOWLEDGEMENTS
STATE OF CONNECTICUT )
) SS
COUNTY OF HARTFORD )
The foregoing instrument was acknowledged before me this _______
day of ______________________, 1995 by _____________________________,
authorized agent of CIGNA Realty Resources, Inc. - Fifth, a Delaware
corporation , on behalf of the corporation and on behalf of Connecticut
General Realty Investors III Limited Partnership, a Connecticut limited
partnership of which CIGNA Realty Resources, Inc. - Fifth is the sole
general partner.
Notary Public
My Commission expires:
<PAGE>
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
The foregoing instrument was acknowledged before me this _______
day of _____________________, 1995 by ______________________________,
Second Vice President, of Massachusetts Mutual Life Insurance Company, a
Massachusetts corporation, on behalf of said corporation.
Notary Public
My Commission expires:
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<PERIOD-TYPE> Year
<CASH> 1662708
<SECURITIES> 0
<RECEIVABLES> 87264
<ALLOWANCES> 10353
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 38649982
<DEPRECIATION> 11629808
<TOTAL-ASSETS> 31005057
<CURRENT-LIABILITIES> 0
<BONDS> 29487591
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 31005057
<SALES> 0
<TOTAL-REVENUES> 6392361
<CGS> 0
<TOTAL-COSTS> 2710569
<OTHER-EXPENSES> 4337719
<LOSS-PROVISION> 50347
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (706274)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (706274)
<EPS-PRIMARY> 0
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</TABLE>
