<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended September 30, 1994
---------------------------------------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ___________________
Commission File Number: 0-14122
----------------------------------------------------
FIRST CAPITAL INSTITUTIONAL REAL ESTATE, LTD. - 3
- - --------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 36-3330657
- - ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two North Riverside Plaza, Suite 950, Chicago, Illinois 60606-2607
- - ------------------------------------------------------- ---------------------
(Address of principal executive offices) (Zip Code)
(312) 207-0020
- - -----------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- - -----------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
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
----- -----
DOCUMENTS INCORPORATED BY REFERENCE:
The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the definitive Prospectus dated October 25, 1982, included
in the Registrant's Registration Statement on Form S-11 (Registration No.
2-79092), is incorporated herein by reference in Part I of this report.
<PAGE>
BALANCE SHEETS
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
September 30,
1994 December 31,
(Unaudited) 1993
- - -----------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in commercial rental properties:
Land $ 1,908,600 $ 2,538,600
Buildings and improvements 20,136,300 21,487,500
- - -----------------------------------------------------------------------------
22,044,900 24,026,100
Accumulated depreciation and amortization (4,801,800) (4,448,800)
- - -----------------------------------------------------------------------------
Total investment properties, net of accumulated
depreciation and amortization 17,243,100 19,577,300
Cash and cash equivalents 8,382,900 5,831,100
Restricted certificates of deposit 62,500 62,500
Investment in joint venture 5,997,700 6,022,300
Rents receivable 16,700 52,700
Other assets (including amounts due from joint
venture of $730,700 and $790,300, respectively) 758,100 863,700
- - -----------------------------------------------------------------------------
$32,461,000 $32,409,600
- - -----------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 365,900 $ 473,000
Due to Affiliates 88,100 66,300
Security deposits 49,900 67,300
Distributions payable 444,700 134,700
Other liabilities 8,600 51,800
- - -----------------------------------------------------------------------------
957,200 793,100
- - -----------------------------------------------------------------------------
Partners' (deficit) capital:
General Partner (148,300) (147,800)
Limited Partners (45,737 Units authorized, issued
and outstanding) 31,652,100 31,764,300
- - -----------------------------------------------------------------------------
31,503,800 31,616,500
- - -----------------------------------------------------------------------------
$32,461,000 $32,409,600
- - -----------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the nine months ended September 30, 1994
and the year ended December 31, 1993
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
- - -------------------------------------------------------------------------------
<S> <C> <C> <C>
Partners' (deficit) capital, January 1,
1993 $(148,100) $32,115,100 $31,967,000
Net income for the year ended
December 31, 1993 54,100 977,900 1,032,000
Distributions for the year ended
December 31, 1993 (53,800) (1,328,700) (1,382,500)
- - -------------------------------------------------------------------------------
Partners' (deficit) capital, December 31,
1993 (147,800) 31,764,300 31,616,500
Net income for the nine months ended
September 30, 1994 99,500 787,500 887,000
Distributions for the nine months ended
September 30, 1994 (100,000) (899,700) (999,700)
- - -------------------------------------------------------------------------------
Partners' (deficit) capital, September
30, 1994 $(148,300) $31,652,100 $31,503,800
- - -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended September 30, 1994 and 1993
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1994 1993
- - -----------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $805,200 $916,100
Interest 99,700 50,100
- - -----------------------------------------------------------------------------
904,900 966,200
- - -----------------------------------------------------------------------------
Expenses:
Depreciation and amortization 219,000 210,000
Property operating 192,500 257,900
Real estate taxes and insurance 79,000 104,900
Repairs and maintenance 96,900 137,000
General and administrative 50,400 57,800
- - -----------------------------------------------------------------------------
637,800 767,600
- - -----------------------------------------------------------------------------
Income before income from participation in joint venture
and (loss) on sale of property 267,100 198,600
Income from participation in joint venture 159,400 57,000
- - -----------------------------------------------------------------------------
Income before (loss) on sale of property 426,500 255,600
(Loss) on sale of property (19,300)
- - -----------------------------------------------------------------------------
Net income $426,500 $236,300
- - -----------------------------------------------------------------------------
Net income allocated to General Partner $ 44,500 $ 13,300
- - -----------------------------------------------------------------------------
Net income allocated to Limited Partners $382,000 $223,000
- - -----------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit (45,737
Units authorized, issued and outstanding) $ 8.35 $ 4.88
- - -----------------------------------------------------------------------------
</TABLE>
STATEMENTS OF INCOME AND EXPENSES
For the nine months ended September 30, 1994 and 1993
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1994 1993
- - ------------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $2,566,200 $2,797,300
Interest 235,400 160,800
- - ------------------------------------------------------------------------------
2,801,600 2,958,100
- - ------------------------------------------------------------------------------
Expenses:
Depreciation and amortization 710,600 595,600
Property operating 637,400 786,400
Real estate taxes and insurance 281,800 292,400
Repairs and maintenance 347,600 437,000
General and administrative 161,400 160,400
- - ------------------------------------------------------------------------------
2,138,800 2,271,800
- - ------------------------------------------------------------------------------
Income before income from participation in joint
venture, (loss) on sale or disposition of properties
and extraordinary gain on extinguishment of debt 662,800 686,300
Income from participation in joint venture 272,900 82,900
- - ------------------------------------------------------------------------------
Income before (loss) on sale or disposition of
properties and extraordinary gain on extinguishment
of debt 935,700 769,200
(Loss) on sale or disposition of properties (48,700) (1,428,400)
- - ------------------------------------------------------------------------------
Net income (loss) before extraordinary gain on
extinguishment of debt 887,000 (659,200)
Extraordinary gain on extinguishment of debt 1,464,000
- - ------------------------------------------------------------------------------
Net income $ 887,000 $ 804,800
- - ------------------------------------------------------------------------------
Net income allocated to General Partner $ 99,500 $ 40,700
- - ------------------------------------------------------------------------------
Net income allocated to Limited Partners $ 787,500 $ 764,100
- - ------------------------------------------------------------------------------
Net income (loss) before extraordinary gain on
extinguishment of debt allocated to Limited Partners
per Unit (45,737 Units authorized, issued and
outstanding) $ 17.22 $ (14.98)
- - ------------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
(45,737 Units authorized, issued and outstanding) $ 17.22 $ 16.71
- - ------------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1994 and 1993
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1994 1993
- - ------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 887,000 $ 804,800
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 710,600 595,600
Loss on sale or disposition of properties 48,700 1,428,400
Extraordinary gain on extinguishment of debt (1,464,000)
Changes in assets and liabilities:
Decrease in rents receivable 36,000 87,000
Decrease in other assets 46,000 18,000
(Decrease) increase in accounts payable and accrued
expenses (107,100) 38,300
Increase (decrease) in due to Affiliates 21,800 (28,400)
(Decrease) increase in other liabilities (43,200) 55,200
- - ------------------------------------------------------------------------------
Net cash provided by operating activities 1,599,800 1,534,900
- - ------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from the sale or disposition of property 2,168,500 844,400
Payments for capital and tenant improvements (593,600) (736,100)
Distributions received from joint venture in excess
of income allocated 24,600 136,300
Collection of (funding of) loans to joint venture 59,600 (76,700)
- - ------------------------------------------------------------------------------
Net cash provided by investing activities 1,659,100 167,900
- - ------------------------------------------------------------------------------
Cash flows from financing activities:
Distributions paid to Partners (689,700) (1,113,100)
(Decrease) increase in security deposits (17,400) 3,500
- - ------------------------------------------------------------------------------
Net cash (used for) financing activities (707,100) (1,109,600)
- - ------------------------------------------------------------------------------
Net increase in cash and cash equivalents 2,551,800 593,200
Cash and cash equivalents at the beginning of the
period 5,831,100 5,154,900
- - ------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period $8,382,900 $5,748,100
- - ------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
DEFINITION OF SPECIAL TERMS:
Capitalized terms used in this report have the same meaning as those terms have
in the Partnership's Registration Statement on Form S-11, filed with the
Securities and Exchange Commission. Definitions of these terms are contained in
Article III of the First Amended and Restated Certificate and Agreement of
Limited Partnership, which is incorporated herein by reference.
ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with generally
accepted accounting principles. Under this method of accounting, revenues are
recorded when earned and expenses are recorded when incurred.
The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the quarter and nine months ended September 30, 1994 are not necessarily
indicative of the operating results for the year ending
December 31, 1994.
The financial statements include the Partnership's interest in four joint
ventures. The joint ventures were formed for the purpose of acquiring a 100%
interest in certain real properties. These joint ventures are operated under
the control of the General Partner. Accordingly, the Partnership's pro rata
share of such ventures' revenues, expenses, assets and liabilities is included
in the financial statements.
Investment in joint venture represents the recording of the Partnership's
interest, under the equity method of accounting, in a joint venture with an
Affiliated partnership. The joint venture acquired a majority preferred
interest in a joint venture with the seller of the Lansing, Michigan property.
Under the equity method of accounting, the Partnership records its initial
interest at cost and adjusts its investment account for its share of joint
venture income or loss and its distribution of cash flow.
Property sales are recorded when title transfers and sufficient consideration
has been received by the Partnership. Upon disposition, the related costs and
accumulated depreciation are removed from the respective accounts. Any gain or
loss on sale is recognized in accordance with generally accepted accounting
principles.
Cash equivalents are considered all highly liquid investments purchased with a
maturity of three months or less.
Certain reclassifications have been made to the previously reported 1993
financial statements in order to provide comparability with the 1994 financial
statements. These reclassifications have no effect on income or Partners'
capital.
Reference is made to the Partnership's annual report for the year ended
December 31, 1993, for a description of other accounting policies and
additional details of the Partnership's financial condition, results of
operations, changes in Partners' capital and changes in cash balances for the
year then ended. The details provided in the notes thereto have not changed
except as a result of normal transactions in the interim or as disclosed
herein.
2. RELATED PARTY TRANSACTIONS:
Subsequent to May 16, 1986, the Termination of the Offering, the General
Partner is entitled to 10% of distributable Cash Flow as its Partnership
Management Fee. For the quarter and nine months ended September 30, 1994, the
General Partner was allocated a Partnership Management Fee of approximately
$44,500 and $100,000, respectively, in conjunction with the declaration of cash
distributions to the Limited Partners.
In accordance with the Partnership Agreement, Net Profits are generally
allocated first to the General Partner in an amount equal to the greater of the
General Partner's Partnership Management Fee or 1% of Net Profits. The balance
of Net Profits, if any, is allocated to the Limited Partners. Net Losses
(exclusive of Net Losses from the sale or disposition of a Partnership
property) are allocated 1% to the General Partner and 99% to the Limited
Partners. Net Losses from the sale or disposition of a Partnership property are
allocated first, to the General Partner and Limited Partners pro rata, in
proportion to the positive balance in their capital accounts until the positive
balance is reduced to zero and second, the balance, if any, ninety-nine percent
(99%) to the Limited Partners and one percent (1%) to the General Partner.
Notwithstanding anything to the contrary, the General Partner shall be
allocated not less than one percent (1%) of Net Losses from the sale or
disposition of a Partnership property. For the quarter and nine months ended
September 30, 1994 the General Partner was allocated Net Profits of
approximately $44,500 and $100,000, respectively. For the nine months ended
September 30, 1994, the General Partner was allocated Net Losses from the sale
of a Partnership property of approximately $500.
Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter and nine months ended September 30, 1994 were as follows:
<TABLE>
<CAPTION>
Paid
----------------
Nine
Quarter Months Payable
- - -------------------------------------------------------------------------------
<S> <C> <C> <C>
Property management and leasing fees $38,000 $101,500 $45,100
Reimbursement of property insurance premiums, at cost 6,100 21,500 None
Real estate commission (a) None None 40,200
Reimbursement of expenses, at cost:
(1) Accounting 4,900 16,900 1,400
(2) Investor communication 3,500 11,400 1,400
(3) Legal 4,600 11,700 None
- - -------------------------------------------------------------------------------
$57,100 $163,000 $88,100
- - -------------------------------------------------------------------------------
</TABLE>
(a) As of September 30, 1994, $40,200 was due to the General Partner for real
estate commissions earned in connection with the sale and disposition of
Partnership properties. These commissions have been accrued but not paid.
Under the terms of the Partnership Agreement, these commissions will not be
paid until such time as the Limited Partners have received cumulative
distributions of Sale or Financing Proceeds equal to 100% of their Original
Capital Contribution plus a cumulative return (including all Cash Flow
which has been distributed to the Limited Partners) of 6% simple interest
per annum on their Capital Investment from the initial date of investment.
<PAGE>
3. RESTRICTED CERTIFICATES OF DEPOSIT:
Restricted certificates of deposit include negotiable certificates of deposit
in the amounts of $25,000 and $12,500 which have been pledged as collateral for
security deposits to the Houston Lighting & Power Company and $25,000 which has
been pledged as collateral for security deposits to the Florida Lighting &
Power Company.
4. PROPERTY SALE:
On June 8, 1994, Farmington Hills Associates, a joint venture in which the
Partnership and an Affiliated partnership each have a 50% interest, sold
Wellington C in the Wellington North Office Complex for a total sale price of
approximately $4,500,000. The Partnership's share of selling expenses were
approximately $81,500. The Partnership's share of the net proceeds from this
sale approximated $2,168,500. The Partnership recorded a loss on the sale of
this property of approximately $2,048,700 for financial statement purposes of
which $2,000,000 was recorded as of December 31, 1992 as a provision for value
impairment. For tax purposes, the Partnership will record a total loss in 1994
of approximately $1,980,000 on this sale.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the Partnership's annual report for the year ended
December 31, 1993, for a discussion of the Partnership's business.
OPERATIONS
One of the primary objectives of the Partnership is to provide cash
distributions to Limited Partners from Cash Flow generated by Partnership
operations. To the extent cash distributions exceed net income, such excess
distributions will be treated as a return of capital. The statements of cash
flows presented in the financial statements represent a reconciliation of the
changes in cash balances. Cash Flow, as defined by the Partnership Agreement,
is generally not equal to Partnership net income or cash flows as determined
under generally accepted accounting principles, since certain items are treated
differently under the Partnership Agreement than under generally accepted
accounting principles. Management believes that in order to facilitate a clear
understanding of the Partnership's operations, an analysis of Cash Flow (as
defined by the Partnership Agreement) should be examined in conjunction with an
analysis of net income or cash flows, as defined by generally accepted
accounting principles. The amount of Cash Flow and the return on Capital
Investment are not indicative of actual distributions and actual returns on
Capital Investment.
<TABLE>
<CAPTION>
Comparative Cash Flow Results
For the Nine Months
For the Quarters Ended Ended
9/30/94 9/30/93 9/30/94 9/30/93
- - -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Amount of Cash Flow (as
defined in the Partnership
Agreement) $ 681,500 $ 565,100 $ 1,813,500 $ 1,725,900
Average Capital Investment $44,893,000 $44,893,000 $44,893,000 $45,361,900
Annualized return on average
Capital Investment
(Annualized Cash Flow/
average Capital Investment) 6.07% 5.04% 5.39% 5.07%
- - -----------------------------------------------------------------------------
</TABLE>
As the Partnership enters the disposition phase of its life cycle, comparisons
of Cash Flow results between the periods are complicated. Partnership Cash Flow
is generally expected to change as real property interests are sold since the
Partnership no longer receives Cash Flow generated from such real property
interests. Accordingly, rental income, property operating expenses, repairs and
maintenance and real estate taxes are expected to decline, but will continue to
comprise the significant components of Cash Flow and operating results until
the final property sale. Sale proceeds are excluded from the determination of
Cash Flow. The disposition of Wellington A in March 1993 and sales of
Wellington B in March 1993 and Wellington C in June 1994 at the Wellington
North Office Complex ("Wellington") caused Cash Flow results at Wellington to
decrease during the quarter and nine months ended September 30, 1994 when
compared to the quarter and nine months ended September 30, 1993 by
approximately $13,300 and $83,600, respectively.
Excluding the effect of the disposition and sales at Wellington, Cash Flow
results for the quarter and nine months ended September 30, 1994 increased when
compared to the quarter and nine months ended September 30, 1993 by
approximately $129,700 and $171,200, respectively. Factors which contributed to
the increase in Cash Flow results were: 1) decreased property operating
expenses at the Ellis Building ("Ellis") of approximately $15,800 and $48,400
and the Park Plaza Professional Building ("Park Plaza") of approximately
$11,600 and $20,800, respectively; 2) increased interest income earned on
short-term investments of approximately $49,600 and $74,600, respectively, due
to an increase in funds available for such investments and 3) decreased repairs
and maintenance at Ellis of approximately $10,400 for the nine months ended
September 30, 1994. Partially offsetting the increases in Cash Flow results
were: 1) decreased rental revenues at Park Plaza, partially offset by an
increase in rental revenues at Ellis and 3120 Southwest Freeway.
Rental revenues at Park Plaza for the nine months ended September 30, 1994 and
1993 were approximately $1,346,300 and $1,404,600, respectively, and for the
quarters ended September 30, 1994 and 1993 were $451,600 and $486,900,
respectively. The decrease in 1994 rental revenues was due to decreased tenant
expense reimbursements and lower quarterly and nine-month average occupancy
rates from 92% and 93%, respectively, in 1993 to 88% for the comparable periods
in 1994.
Rental revenues at 3120 Southwest Freeway for the nine months ended September
30, 1994 and 1993 were approximately $177,500 and $149,500, respectively, and
for the quarters ended September 30, 1994 and 1993 were approximately $62,900
and $51,500, respectively. The increase in the 1994 nine-month rental revenues
was due to: 1) the recovery of certain tenant receivables which were previously
deemed uncollectible; 2) an increase in the real estate tax reimbursements
billed to tenants in 1994 for 1993 real estate taxes; 3) an increase in the
average occupancy rate from 85% in 1993 to 88% in 1994 and 4) an increase in
the average effective base rental rate. Although the average quarterly
occupancy rate decreased from 91% in 1993 to 85% in 1994, quarterly rental
revenues increased in 1994 due to the recovery of certain tenant receivables
previously written off and an increase in the average effective base rental
rate.
Rental revenues at Ellis for the nine months ended September 30, 1994 and 1993
were approximately $827,000 and $802,700, respectively, and for the quarters
ended September 30, 1994 and 1993 were approximately $291,800 and $277,500,
respectively. The increase in rental revenues was primarily due to an increase
in occupancy during the quarter and nine months ended September 30, 1994. The
quarterly and nine-month average occupancy rates were 98% and 93%,
respectively, in 1994 and 89% and 91%, respectively, in 1993.
Rental revenues at Wellington for the nine months ended September 30, 1994 and
1993 were approximately $215,400 and $440,500, respectively. The decrease in
1994 rental revenues was due to the disposition and sale of two of the three
buildings at the office complex (Wellington A and Wellington B) on March 17 and
March 23, 1993, respectively, and the sale of Wellington C on June 8, 1994.
To further increase occupancy levels at the Partnership's properties, the
General Partner, through its Affiliated asset and property management groups,
continues to take the necessary actions deemed appropriate for the properties
discussed above. Some of these actions include: 1) implementation of marketing
programs, including hiring of third-party leasing agents or providing on-site
leasing personnel, advertising, direct mail campaigns and development of
building brochures; 2) early renewal of existing tenants and addressing any
expansion needs these tenants may have; 3) promotion of local broker events and
networking with local brokers; 4) cold-calling other businesses and tenants in
the market area; and 5) providing rental concessions or competitively pricing
rental rates depending on market conditions.
LIQUIDITY AND CAPITAL RESOURCES
The increase in the Partnership's cash position of approximately $2,551,800 as
of September 30, 1994 when compared to December 31, 1993 was the result of the
receipt of Net Sale Proceeds on the sale of Wellington C and net cash provided
by operating activities exceeding expenditures for capital and tenant
improvements and distributions paid to Partners. Liquid assets of the
Partnership as of September 30, 1994 were comprised of amounts held for working
capital purposes and undistributed Sale Proceeds.
Net cash provided by operating activities increased from $1,534,900 for the
nine months ended September 30, 1993 to $1,599,800 for the nine months ended
September 30, 1994. This increase was primarily due to the increases in Cash
Flow as discussed above, partially offset by the effects of the disposition and
sale of Wellington A and B, respectively in 1993, as well as the sale of
Wellington C in June 1994.
Net cash provided by investing activities increased from approximately $167,900
for the nine months ended September 30, 1993 to $1,659,100 for the nine months
ended September 30, 1994. This increase was primarily the result of proceeds
received from the sale of Wellington C in 1994 being greater than the proceeds
received on the disposition of Wellington A and the sale of Wellington B in
1993 as well as the decrease in payments made in 1994 for capital and tenant
improvements as compared to 1993.
On June 8, 1994, Farmington Hills Associates, a joint venture in which the
Partnership and an Affiliated partnership each have a 50% interest, sold
Wellington C in the Wellington North Office Complex for the sale price of
$4,500,000. The Partnership's share of the net proceeds from this sale
approximated $2,168,500. The proceeds from this sale were added to the
Partnership's working capital.
During the nine months ended September 30, 1994, the Partnership spent
approximately $593,600 for capital and tenant improvements and has budgeted to
spend approximately $100,000 during the remainder of 1994. Of the remaining
budgeted amount, approximately $70,000 relates to anticipated capital and
tenant improvements and leasing costs expected to be incurred at Holiday Office
Park North and South. The General Partner believes these improvements are
necessary in order to maintain occupancy levels in a very competitive market,
as well as to maximize rental rates charged to new and renewing tenants.
Net cash used for financing activities decreased from $1,109,600 for the nine
months ended September 30, 1993 to $707,100 for the nine months ended September
30, 1994, primarily due to a decrease in the payment of cash distributions to
Partners.
The General Partner continues to take a conservative approach to projections of
future rental income and to maintain higher levels of cash reserves for the
Partnership. The higher levels of cash reserves are needed due to the
anticipated capital and tenant improvements necessary to be made to the
Partnership's properties during the next several years. As a result of this,
the Partnership continues to reserve amounts from Cash Flow to supplement
working capital reserves. For the quarter and nine months ended September 30,
1994, Cash Flow retained to supplement working capital reserves approximated
$236,700 and $813,800, respectively. The General Partner believes that the
Partnership's current cash position along with any additional amounts retained
from future Cash Flow will be sufficient to cover budgeted expenditures as well
as any other requirements which may be reasonably foreseen.
Distributions to Limited Partners for the quarter ended September 30, 1994 were
made at an annualized rate of 3.57% on total Capital Investment. Cash
distributions are made 60 days after the quarter-end. The amount of future
distributions to the Limited Partners will ultimately be dependent upon the
performance of the Partnership's investments as well as the amount of future
Cash Flow retained for future cash requirements. Therefore, there can be no
assurance of the availability or the amount of Cash Flow for distribution to
Partners.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
- - ------- ---------------------------------
(a) Exhibits: None
(b) Reports on Form 8-K:
There were no reports filed on Form 8-K during the quarter ended
September 30, 1994.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
FIRST CAPITAL INSTITUTIONAL REAL ESTATE, LTD. - 3
BY: FIRST CAPITAL FINANCIAL CORPORATION
GENERAL PARTNER
Date: November 11, 1994 By: /s/ DOUGLAS CROCKER II
----------------- ---------------------------------------
DOUGLAS CROCKER II
President and Chief Executive Officer
Date: November 11, 1994 By: /s/ NORMAN M. FIELD
----------------- ---------------------------------------
NORMAN M. FIELD
Vice President - Finance and Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000757528
<NAME> FIRST CAPITAL INSTITUTIONAL REAL ESTATE, LTD.-3
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 8,445,400
<SECURITIES> 0
<RECEIVABLES> 16,700
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,462,100
<PP&E> 22,044,900
<DEPRECIATION> 4,801,800
<TOTAL-ASSETS> 32,461,000
<CURRENT-LIABILITIES> 810,600
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 31,503,800
<TOTAL-LIABILITY-AND-EQUITY> 32,461,000
<SALES> 0
<TOTAL-REVENUES> 2,801,600
<CGS> 0
<TOTAL-COSTS> 1,266,800
<OTHER-EXPENSES> 161,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 662,800
<INCOME-TAX> 0
<INCOME-CONTINUING> 887,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 887,000
<EPS-PRIMARY> 17.22
<EPS-DILUTED> 17.22
</TABLE>
