May 11, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: JMB Mortgage Partners, Ltd.-III
Commission File No. 0-16253
Form 10-Q
Gentlemen:
Transmitted, for the above-captioned registrant, is the
electronically filed executed copy of registrant's current
report on Form 10-Q for the quarter ended March 31, 1995.
Thank you.
Very truly yours,
JMB MORTGAGE PARTNERS, LTD.- III
By: JMB Realty Corporation
Corporate General Partner
By:
_______________________________
C. Scott Nelson, Vice President
Accounting Officer
CSN:gd
Enclosures<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter Commission file number 0-16253
ended March 31, 1995
JMB MORTGAGE PARTNERS, LTD. - III
(Exact name of registrant as specified in its charter)
Illinois 36-3346551
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
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
--- ---
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
operations . . . . . . . . . . . . . . . . . . . 13
PART II OTHER INFORMATION
Item 5. Other Information. . . . . . . . . . . . . . . . 15
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 16
<TABLE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
ASSETS
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . .$ 8,925,189 10,278,236
Short-term investments (note 1). . . . . . . . . . . . . . . . . . 1,442,052 393,123
Interest and other receivables . . . . . . . . . . . . . . . . . . 332,223 329,057
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . 11,508 28,769
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . 10,710,972 11,029,185
Investment properties (notes 2)
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,434,411 10,434,411
Building and improvements. . . . . . . . . . . . . . . . . . . . . 14,952,527 14,933,079
------------ ------------
25,386,938 25,367,490
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . (1,845,013) (1,683,840)
------------ ------------
Total investment property, net of depreciation. . . . . . . . . 23,541,925 23,683,650
Mortgage notes receivable (net of allowance for loan loss of
$0 in 1995 and $99,000 in 1994 (note 5)) . . . . . . . . . . . . . 29,397,026 32,518,098
Deferred interest receivable (net of allowances for
loan loss of $1,691,218 in 1995 and $2,125,761 in 1994
(note 5)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 970,000 935,250
Investment in unconsolidated ventures, at equity (note 5(a)) . . . . 3,186,237 --
Deferred costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 199,340 220,533
------------ ------------
$ 68,005,500 63,386,716
============ ============
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
MARCH 31, DECEMBER 31,
1995 1994
------------ ------------
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . .$ 17,503 59,349
Due to affiliates. . . . . . . . . . . . . . . . . . . . . . . . . 94,348 411,464
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . 88,345 143,943
Other current liabilities. . . . . . . . . . . . . . . . . . . . . 49,022 139,349
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . 249,218 754,105
------------ ------------
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . 21,298 37,638
------------ ------------
Commitments and contingencies (notes 2, 4 and 5)
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 270,516 791,743
------------ ------------
Venture partner's equity in ventures (note 2). . . . . . . . . . . . 10,620,754 10,437,237
Partners' capital accounts:
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings . . . . . . . . . . . . . . . . . . . . 2,513,505 2,404,776
Cumulative cash distributions . . . . . . . . . . . . . . . . . (2,636,529) (2,527,800)
------------ ------------
(122,024) (122,024)
------------ ------------
Limited partners (65,237.69 interests):
Capital contributions, net of offering costs. . . . . . . . . . 57,758,561 57,758,561
Cumulative net earnings . . . . . . . . . . . . . . . . . . . . 31,099,986 30,164,926
Cumulative cash distributions . . . . . . . . . . . . . . . . . (31,622,293) (30,643,727)
------------ ------------
57,236,254 57,279,760
------------ ------------
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONCLUDED
MARCH 31, DECEMBER 31,
1995 1994
------------ ------------
Total partners' capital accounts . . . . . . . . . . . . . . . . . . 57,114,230 57,157,736
------------ ------------
$ 68,005,500 68,386,716
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Income:
Interest income. . . . . . . . . . . . . . . . . . . . $ 851,652 740,181
Rental income. . . . . . . . . . . . . . . . . . . . . . 923,753 876,777
------------ ------------
1,775,405 1,616,958
------------ ------------
Expenses:
Depreciation . . . . . . . . . . . . . . . . . . . . . . 161,173 157,120
Property operating expenses. . . . . . . . . . . . . . . 329,097 281,379
Mortgage investment servicing fees . . . . . . . . . . . 20,134 20,064
Professional services. . . . . . . . . . . . . . . . . . 31,409 25,001
Amortization of deferred expenses. . . . . . . . . . . . 18,757 11,330
General and administrative . . . . . . . . . . . . . . . 49,087 50,251
------------ ------------
609,657 545,145
------------ ------------
Operating earnings . . . . . . . . . . . . . . . . . . . 1,165,748 1,071,813
Partnerships share of operations of unconsolidated
ventures (notes 2 and 5(a)) . . . . . . . . . . . . . . . 61,558 --
Venture partner's share of
ventures' operations (note 2) . . . . . . . . . . . . . . (183,517) (156,634)
------------ ------------
Net earnings . . . . . . . . . . . . . . . . . . . . . $ 1,043,789 915,179
============ ============
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONCLUDED
1994 1993
------------ ------------
Net earnings per limited
partnership interest (notes 1 and 3). . . . . . . . . $ 14.33 12.64
============ ============
Cash distributions per limited
partnership interest (note 1) . . . . . . . . . . . . $ 15.00 12.50
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings . . . . . . . . . . . . . . . . . . . . . . $ 1,043,789 915,179
Items not requiring cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . 161,173 157,120
Amortization of deferred expenses. . . . . . . . . . . . 18,757 11,330
Partnerships share of operations of unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . . . . . (61,558) --
Venture partners' share of ventures' operations. . . . . 183,517 156,634
Changes in:
Interest and other receivables . . . . . . . . . . . . . (3,166) (46,621)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 17,261 6,077
Deferred interest receivable . . . . . . . . . . . . . . (34,750) (35,802)
Accounts payable . . . . . . . . . . . . . . . . . . . . (41,846) (17,846)
Due to affiliates. . . . . . . . . . . . . . . . . . . . (317,116) 6,905
Accrued real estate taxes. . . . . . . . . . . . . . . . (55,598) 74,820
Other current liabilities. . . . . . . . . . . . . . . . (90,327) (85,294)
Tenant security deposits . . . . . . . . . . . . . . . . (16,340) 3,519
------------ ------------
Net cash provided by operating activities . . . . . . 803,798 1,146,021
------------ ------------
Cash flows from investing activities:
Net sales and maturities (purchases) of
short-term investments. . . . . . . . . . . . . . . . . (1,048,929) 3,756
Additions to investment property . . . . . . . . . . . . (19,448) (22,242)
Partnership's contributions to unconsolidated
venture . . . . . . . . . . . . . . . . . . . . . . . . (3,607) --
Refunds of deferred costs. . . . . . . . . . . . . . . . 2,436 --
------------ ------------
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONCLUDED
1995 1994
------------ ------------
Net cash used in investing activities . . . . . . . . (1,069,548) (18,486)
------------ ------------
Cash flows from financing activities:
Distributions to limited partners. . . . . . . . . . . . (978,566) (815,473)
Distributions to general partners. . . . . . . . . . . . (108,729) (90,608)
------------ ------------
Net cash used in financing activities . . . . . . . . (1,087,295) (906,081)
------------ ------------
Net increase (decrease) in cash and cash
equivalents. . . . . . . . . . . . . . . . . . . . . (1,353,047) 221,454
Cash and cash equivalents, beginning of period. . . . 10,278,236 793,190
------------ ------------
Cash and cash equivalents, end of period. . . . . . $ 8,925,189 1,014,644
============ ============
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . $ -- --
============ ============
Non-cash investing and financing activities:
Balance due on mortgage note receivable (net
of allowance for loan loss of $99,000)
(note 5(a)). . . . . . . . . . . . . . . . . . . . . $ 3,121,072 --
Partnership contribution to unconsolidated
venture. . . . . . . . . . . . . . . . . . . . . . . . 3,607 --
------------ ------------
Net carrying value of investment property
(reflected as investment in unconsolidated
venture (note 2(e)). . . . . . . . . . . . . . . . . $ 3,124,679 --
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995 AND 1994
(UNAUDITED)
Readers of this quarterly report should refer to the
Partnership's audited financial statements for the fiscal year
ended December 31, 1994, which are included in the Partnership's
1994 Annual Report, as certain footnote disclosures which would
substantially duplicate those contained in such audited
financial statements have been omitted from this report.
(1) BASIS OF ACCOUNTING
The accompanying consolidated financial statements include the
accounts of the Partnership and its ventures, Calibre Pointe
Associates and North Rivers Market Associates (note 2). The
effect of all the transactions between the Partnership and its
ventures has been eliminated in the consolidated financial
statements. The equity method of accounting has been applied in
the accompanying financial statements in 1995 with respect to
the Partnership's interest in Spring Hill Fashion Center (Note
5(a)). Accordingly, the accompanying financial statements do
not include the accounts of Spring Hill Fashion Center.
The Partnership records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting
purposes. The accompanying consolidated financial statements
have been prepared from such records after making appropriate
adjustments to present the Partnership's accounts in accordance
with generally accepted accounting principles (GAAP) and to
consolidate the accounts of the ventures as described above.
Such adjustments are not recorded in the records of the
Partnership.
<TABLE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The net effect of these items is summarized as follows for the three months ended March 31:
<CAPTION>
1995 1994
-------------------------- -------------------------
GAAP Basis Tax Basis GAAP Basis Tax Basis
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net earnings . . . . . . . . . . . . . $ 1,043,789 1,290,184 915,179 1,284,627
Net earnings per limited
partnership interest. . . . . . . . . $ 14.33 18.11 12.64 18.30
=========== =========== =========== ===========
<FN>
</TABLE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The net earnings per limited partnership interest is based
upon the number of Interests outstanding at the end of the
period (65,237.69).
Certain reclassifications have been made to the 1994 financial
statements in order to confirm with the 1995 presentation.
Statement of Financial Accounting Standards No. 95 requires
the Partnership to present a statement which classifies receipts
and payments according to whether they stem from operating,
investing or financing activities. The required information has
been segregated and accumulated according to the classifications
specified in the pronouncement. Partnership distributions from
unconsolidated ventures are considered cash flow from operating
activities only to the extent of the Partnership's cumulative
share of net earnings. The Partnership records amounts held in
U.S. Government obligations at cost which approximates market.
For the purposes of these statements, the Partnership's policy
is to consider all such amounts held with original maturities of
three months or less ($8,456,158 and $10,077,022 at March 31,
1995 and 1994, respectively) as cash equivalents with any
remaining amounts (generally with original maturities of one
year or less) reflected as short-term investments being held to
maturity.
Basic and simple interest income on mortgage notes receivable
is being recognized using the effective interest method which
results in a level effective yield on the outstanding principal
balance. The Partnership is recognizing interest income only as
collected on two of its mortgage loans (Notes 5(b), and 5(d)).
Statement of Financial Accounting Standards No. 114,
"Accounting by Creditors for Impairment of a Loan" ("SFAS #114")
became effective in January, 1994. SFAS #114 provides that the
impairment of a collateralized loan that is considered impaired
(as defined) will be recognized by creating a valuation
allowance to the recorded balance of the loan to yield a net
carrying amount of the loan which is equal to the fair value of
the loan collateral. The Partnership has elected to recognize
subsequent changes in the fair value of the collateral as
adjustments to this valuation allowance.
(2) VENTURE AGREEMENTS
(a) Calibre Pointe Associates
Reference is made to Note 2(a) of Notes to Financial
Statements included in the Partnership's 1994 Annual Report for
a description of the former $13,250,000 loan funded 62.264% by
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
the Partnership and 37.736% by JMB Mortgage Partners, Ltd. - IV
("Mortgage Partners - IV"), a partnership affiliated with the
General Partners (jointly, the "Lenders") and secured by the
Calibre Pointe Apartments located in Atlanta, Georgia.
Due to competitive market conditions, the borrower did not
make all of its required 1991 monthly interest payments under
the terms of the mortgage note. Accordingly, the Lenders
provided the borrower with a notice of default. After lengthy
unsuccessful negotiations with the borrower regarding a possible
loan modification, the Lenders obtained legal title to the
property on December 3, 1991 and an affiliate of the General
Partners of the Partnership assumed management of the property
(until December, 1994 when the affiliate sold certain of its
assets and assigned its interest in its contract to an
unaffiliated third party) under an agreement which provided for
a fee computed as a percentage of gross income of the property.
The Lenders contributed the property to a newly formed joint
venture (Calibre Pointe Associates) to own and operate the
complex. The terms of the venture agreement provide, in
general, that the benefits of ownership, including tax effects,
net cash receipts, sale proceeds and future contribution
obligations are allocated or distributed, as the case may be,
between the Partnership and Mortgage Partners - IV in proportion
to their respective capital contributions to the venture
(62.264% by the Partnership). The Partnership recorded its net
carrying value (including liabilities of the property assumed at
acquisition) in the property contributed to the venture in an
amount not in excess of its estimated fair value.
As previously reported, the Partnership along with its joint
venture partner, through the Calibre Pointe Associates, had, in
1994, entered into a non-binding letter of intent to sell its
entire interest in the Calibre Pointe Apartments. The
prospective purchaser and the Partnership failed to negotiate
and execute a sales agreement and terminated further
discussions. However, given the favorable market conditions,
the Partnership continues to examine a potential sale of the
property.
(b) North Rivers Market Associates
Reference is made to Notes 2(b) and 5(c) of Notes to Financial
Statements included in the Partnership's 1994 Annual Report for
a description of the former $17,350,000 loan funded 66.4935% by
the Partnership and 33.5065% by Mortgage Partners - IV (jointly,
the "Lenders") and secured by the North Rivers Market investment
property. Due to the significant vacancy level at the property,
the borrower had made only a portion of the required interest
payments for the years 1991 and 1992. In addition, in July
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
1992, the Lenders became aware that the borrower had not paid
both the 1990 and 1991 real estate taxes when they were due, but
rather had made certain arrangements with the taxing authority
to make monthly installments into an escrow account held by the
taxing authority until such taxes were paid in full. However,
in July 1992, the county overruled the taxing authority and
accelerated all amounts owed by the borrower, which made the
property eligible for auction if the taxes were not paid in
full. As a result, in July 1992, the Lenders exercised their
rights under the mortgage document and paid the past due real
estate tax payments (including interest and penalties) of
approximately $390,000 (of which $259,000 represented the
Partnership's share). Such amount was added to the mortgage
balance. Accordingly, the Lenders accelerated all amounts owed
by the borrower and commenced proceedings to realize upon their
security. For income tax reporting purposes, this investment
continued to be accounted for as a loan until May 17, 1993 as
discussed below. Further, effective September 1, 1992, the
Partnership commenced accounting for the operations of the
property as if the Partnership, through a joint venture, owned
the property.
On May 17, 1993, the borrower, pursuant to a deed in lieu of
foreclosure, transferred legal title of the property to North
Rivers Market Associates ("NRMA") to own and operate the
complex. NRMA is a joint venture in which the Partnership and
Mortgage Partners- IV own 66.4935% and 33.5065% each
respectively. The terms of the venture agreement provide in
general that the benefits of ownership, including tax effects,
net cash receipts, sale proceeds, and future contribution
obligations are allocated or distributed, as the case may be,
between the Partnership and the venture partner in proportion to
their respective capital accounts. An affiliate assumed
management of the property under an agreement which provides for
a fee computed as 6% of gross income of the property.
(3) PARTNERSHIP AGREEMENT
Net profits of the Partnership from operations are generally
allocated to the General Partners in an amount equal to the
greater of 1% of net profits or the amount of net cash flow
actually distributed to the General Partners (as described
below), with the remaining net profits allocated to the Limited
Partners. Any net losses from Partnership operations will be
allocated 90% to the Limited Partners and 10% to the General
Partners. Net profits from the repayment or other disposition
of mortgage investments will generally be allocated first to the
General Partners in an amount equal to the greater of 1% of such
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
net profits or the cash distributions to the General Partners
from the proceeds of such repayment or other disposition (as
described below). The remaining net profits from the repayment
or other disposition of mortgage investments will be allocated
to the Limited Partners. Net losses from any disposition of
mortgage investments will be allocated 97% to the Limited
Partners and 3% to the General Partners.
The General Partners are not required to make any capital
contributions except under certain limited circumstances upon
dissolution and termination of the Partnership. Distributions
of "net cash flow" of the Partnership will be made 90% to the
Limited Partners and 10% to the General Partners, with one-half
of such net cash flow distributable to the General Partners in
the first twelve fiscal quarters following the close of the
offering, subordinated to the receipt by the Limited Partners of
a stipulated return on their "current capital accounts".
Distributions of "repayment proceeds" will be made 97% to the
Limited Partners until the Limited Partners have received
repayment proceeds equal to their contributed capital plus a
stipulated return thereon, with the remainder of such 97%
distribution, subject to the General Partners' receipt of any
deferred share of net cash flow, to be distributed 85% to the
Limited Partners and 15% to the General Partners, with one-
quarter of such repayment proceeds distributable to the General
Partners subordinated to the receipt by the Limited Partners of
a stipulated return on their current capital accounts. The
remaining 3% of all distributions of repayment proceeds will be
distributed to the General Partners, subject to certain
limitations. Of the cumulative distributions of $31,622,293
paid to the Limited Partners through March 31, 1995,
$1,780,738 represents a 7% return to certain Limited Partners
through February 4, 1986 (the date of the first admittance of
the Limited Partners) and a 6.25% return to certain Limited
Partners from February 5, 1986 through August 31, 1986 (the date
of the final admittance of the Limited Partners) during which
periods the Limited Partners subscription proceeds were held in
escrow.
(4) MANAGEMENT AGREEMENT
Certain of the Partnership's properties are managed by
affiliates of the General Partners or their assignees for fees
computed as a percentage of gross income received by the
properties. In December 1994, one of the affiliated property
managers sold certain of its assets and assigned its interest in
its management contracts to an unaffiliated third party. In
addition, certain management personnel of the property manager
became management personnel of the purchaser and its affiliates.
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The successor to the affiliated property manager's assets is
acting as the property manager of the Calibre Pointe Apartments
after the sale on the same terms that existed prior to the sale.
An affiliate of the General Partners currently is acting as the
manager of North Rivers Market Shopping Center for a fee
computed as six percent of gross income of the property.
(5) MORTGAGE NOTES RECEIVABLE
The Partnership has participated in the funding of six
participating first mortgage loans, for five shopping center
properties (Spring Hill Fashion Center, Shoppes at Rivergate,
North Rivers Market, Riverpoint Center, and Franklin Farm
Village Center) and one apartment complex (Calibre Pointe
Apartments). The Partnership has taken title to the underlying
collateral for North Rivers Market and the Calibre Pointe
Apartments (Note 2). Additionally, on January 1, 1995 the
Partnership, Mortgage Partners, Ltd. ("Mortgage Partners"), and
Mortgage Partners, Ltd. - II ("Mortgage Partners - II"),
partnerships affiliated with the General Partner, and jointly
called the "lenders" in-substance foreclosed on the mortgage
loan secured by the Spring Hill Fashion Center (Note 5(a)).
Generally, the remaining mortgage agreements provide for basic
interest payable monthly at certain specified interest rates
along with annual simple accrued interest (deferred until
maturity) at rates ranging from 2% to 3% per annum and for
additional interest in an amount equal to a percentage of the
gross receipts of the properties in excess of certain specified
levels and an amount equal to a percentage of the subsequent
increases in the value of the underlying properties in excess of
certain specified levels. Any payments of additional interest
made by the borrowers will be used to offset, on a dollar-for-
dollar basis, the borrowers' obligations to pay simple accrued
interest.
(a) Spring Hill Fashion Center, West Dundee, Illinois
Reference is made to Note 5(a) of Notes to Financial
Statements contained in the Partnership's 1994 Annual Report for
a description of the terms of the loan. Through October 1988,
the total amount funded under this loan was $10,030,000 (of
which the Partnership's share was $3,264,765 (32.55%)). The
other two participating lenders are JMB Mortgage Partners, Ltd.-
I and JMB Mortgage Partners, Ltd.-II (jointly the "Lenders"),
both of which are affiliates of the General Partners of the
Partnership. As additional security for the first mortgage
loan, the borrower delivered to the lenders, in January 1988,
two $250,000 irrevocable and unconditional letters of credit
(which were currently to expire December 31, 1994 and January
15, 1995, respectively), upon which the lenders could draw in
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
the event a default occurred under the loan. The aforementioned
letters of credit had been subject to yearly renewal if certain
specified net operating income levels at the property were not
achieved by the borrower.
Due to the uncertainty of the realization of the simple
accrued interest recognized through November 30, 1991
(approximately $485,800) and the principal balance of the loan
($3,264,765), the Partnership, as a matter of prudent accounting
practice and to reflect the estimated fair value of the
collateral, has, for financial reporting purposes, suspended the
accrual of the simple accrued interest (which is payable at
maturity) effective December 1, 1991 and made provisions for
loan loss of $281,000 in 1992, $154,000 in 1993 and $99,000 in
1994, bringing the total provision for loan loss to $534,000,
which is reflected in the accompanying consolidated balance
sheet at December 31, 1994.
The borrower defaulted in its scheduled basis interest
payments due under this loan during the fourth quarter of 1994.
Consequently, the lenders (including the Partnership) drew on
the above-mentioned letters of credit totaling $500,000 in late
December, 1994. An affiliate of the lenders took control of the
property's funds on January 1, 1995 and is currently managing
the property under an agreement which provides for a fee equal
to 4% of the property's gross receipts (such fee excluding
compensation for leasing activity). In early May 1995, the
lenders obtained legal title to the property in lieu of
foreclosure. Effective as of the management takeover date
(January 1, 1995), the Partnership considered the mortgage loan
to be in-substance foreclosed and has accounted for its
investment as an investment in an unconsolidated joint venture.
For financial reporting purposes, the Partnership will not
recognize any material gain or loss from this transaction as a
result of the Partnership's previously recorded provisions for
loan loss. For federal income tax reporting purposes, the
Partnership expects to recognize a loss of approximately
$757,000 in 1995 as a result of this transaction. The
operations of this property are expected to provide a current
return which would be less than the scheduled interest payments
due under the original mortgage loan.
Occupancy at the shopping center was 94% at March 31, 1995,
unchanged from December 31, 1994. However, a major tenant,
which occupies approximately 24% of the leasable space at the
property and who is currently operating under Chapter 11
bankruptcy protection has informed the Partnership that it does
not intend to exercise its renewal option when its current lease
expires in October 1995. Due to the competitive conditions in
this market, re-leasing time and expense could be substantial
when this tenant vacates, which will further reduce cash flow
from this investment to the Partnership in the short-term.
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(b) Shoppes at Rivergate, Goodlettsville (Nashville),
Tennessee
The Partnership funded a $12,000,000 non-recourse
participating first mortgage loan secured by a portion of a
shopping center in Goodlettsville, Tennessee. The loan bears
basic interest at the rate of 9.0% per annum through September
1992 and 9.5% per annum through maturity in September 1997, and
provides for monthly payments of interest only. The Partnership
is also entitled to participation in annual gross receipts (as
defined) in excess of $1,337,000.
Due to the uncertainty of the realization of the simple
accrued interest recognized through December 31, 1993
(approximately $1,920,000) and the principal balance of the loan
($12,000,000), the Partnership, as a matter of prudent
accounting practice, made a provision for loan loss as of
December 31, 1993 in the amount of $1,260,152. No additional
provision for loan loss has been deemed necessary for 1994 or
1995. In addition, effective December 1, 1993, the Partnership
is recognizing interest income only as collected. As of the
date of this report, no amounts currently due from the borrower
of this loan are in arrears.
(c) Riverpoint Center, Chicago, Illinois
In August, 1989, the Partnership participated in the funding
of a non-recourse participating first mortgage loan in the
maximum principal amount of $29,250,000. The Partnership had
committed to fund a maximum of $13,050,000 or approximately
44.6% of this loan. The remaining portion of the loan was
funded by Mortgage Partners-IV, and IDS Life Account RE, the
latter an entity advised by an affiliate of the General Partners
(jointly the "Lenders"). The loan is secured by a first
mortgage on a shopping center known as Riverpoint Center,
located in Chicago, Illinois. The Lenders' initial funding was
$26,000,000 and additional fundings were made in 1990 and 1991.
The Lenders do not intend to fund any additional amounts beyond
the $28,039,630 ($12,509,989 by the Partnership) now funded.
The ten-year loan currently bears basic interest at the rate of
8.884% per annum for the first loan year, 8.75% per annum for
loan years two and three, increasing .50% per annum in the
fourth and .25% per annum in the seventh loan year to a maximum
rate of 9.50% per annum, payable monthly in advance.
Due to the uncertainty of the realization of the simple
accrued interest recognized through December 31, 1991 ($431,065)
and the principal balance of the loan ($12,509,989), the
Partnership had, as a matter of prudent accounting practice,
made a provision for loan loss on the deferred interest
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
receivable as of December 31, 1991 in the amount of $431,065.
In addition, effective January 1, 1992, the Partnership is
recognizing interest income only as collected.
(d) Franklin Farm Village Center, Fairfax County, Virginia
In December 1991, the Partnership participated in the funding
of a non-recourse participating first mortgage loan in the
maximum principal amount of $16,600,000. The Partnership has
committed to fund a maximum of $5,600,000 or approximately 33.7%
of the loan. The other lender is Mortgage Partners-IV, (jointly
the "Lenders"). The loan is secured by a first mortgage on a
shopping center known as Franklin Farm Village Center (the
"Center") located in Fairfax County, Virginia. The Lenders
funded $13,463,144 on December 19, 1991 of which the
Partnership's share was $4,541,769. Up to an additional
$3,136,856 (of which the Partnership's share is $1,058,215) may
be funded if the borrower elects to pursue certain
expansion/purchase options with respect to the land surrounding
the existing center and its parking lot. The borrower
subsequently exercised its option to acquire an outparcel which
is located immediately in front of the center subject to a long-
term ground lease with First Virginia Bank. The Lenders
provided the permanent financing of approximately $687,000 (of
which the Partnership's share was approximately $232,000) on
this acquisition, in November 1993, pursuant to the terms for
subsequent fundings in the loan documents. The loan bears basic
interest payable monthly at the rate of 8.5% per annum during
the first five loan years and 10% per annum thereafter to
maturity.
In November 1994, the Lenders finalized an agreement with the
borrower to fund the acquisition of an outparcel adjacent to the
center. The Lenders provided permanent financing of
approximately $659,000 (of which the Partnership's share was
approximately $222,000) including 90% of the closing costs,
toward the acquisition by the borrower of the outparcel land and
improvements. The loan bears basic interest payable monthly at
the rate of 9% per annum during the first four loan years of
this funding and 10% per annum thereafter through maturity in
November, 2001. This represented the second subsequent funding
on this mortgage loan, which leaves approximately $1,791,000 (of
which the Partnerships' share is approximately $604,000)
available to the borrower to fund future expansion or purchase
options. There can be no assurance, however, that terms and
conditions for additional subsequent fundings will be met and,
therefore, it is possible that further additional subsequent
fundings will not be made or will be less than the maximum
principal amount committed to this loan.
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
In June, 1994, the Lenders received a partial return in the
amount of $322,907 of the original principal funding (of which
the Partnership's share was $108,933). These funds relate to an
"earn down" provision in the original purchase agreement between
the borrower and the seller. Due to a major tenant not
generating a certain level of sales last year, the seller was
required to return a portion of the sale price it had received
in 1991 at closing. The borrower subsequently remitted the
proceeds back to the Lenders as required by the terms of the
loan agreement. The Lenders will retain these proceeds due to
the possibility of the borrower requesting future additional
fundings per the original loan agreement as discussed above.
In late 1993, the Lenders were informed by the borrower that
an underground gasoline tank experienced a gasoline leak at the
property. The tenant, which has a ground lease with the
borrower, informed the borrower and the appropriate state
agencies that gasoline was discharged into the ground. The
tenant, which operates a gasoline station at the site, is
cooperating fully with all government agencies in order to
rectify this problem in a expeditious manner. In addition, the
Lenders were informed that no nearby underground water supplies
were affected nor does it appear likely that any will be
affected in the future. The tenant (an affiliate of a national
gasoline marketer) appears to have the financial resources to
fully pay for the clean up at the property. At this time, it is
undeterminable what the cost of the clean up will be. In
addition, at this time, the Lenders believe the value of the
borrower's property has not been materially affected.
Therefore, no provision for loan loss has been established at
this time. However, there can be no assurances that the
gasoline leak, as reported, will not have a material impact on
the value of the Lender's security in the future.
The Corporate General Partner received $130,164 from the
borrower as fees for JMB's services in processing, reviewing and
arranging the loan and is entitled to receive additional fees in
the event there are subsequent fundings to this loan. The
portions of such fees which are attributable to the
Partnership's participation in the loan constitutes Mortgage
Investment Application Fees (see Note 6).
(6) TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by
the Partnership to the General Partners and their affiliates as
of March 31, 1995 and for the three months ended March 31, 1995
and 1994, are as follows:
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Unpaid at
March 31,
1995 1994 1995
--------- --------- ---------
Mortgage investment
servicing fees. . . . . . $ 20,134 20,064 61,075
Property management
fees. . . . . . . . . . . . 22,575 44,130 4,745
Reimbursement (at cost)
for out-of-pocket
expenses. . . . . . . . . . 58 35 --
--------- --------- ---------
$ 42,767 64,229 65,820
========= ========= =========
The Corporate General Partner and its affiliates are entitled
to reimbursement for salaries and direct expenses of certain
officers and employees of the Corporate General Partner and its
affiliates while directly engaged in the administration of the
Partnership and the operation of the Partnership's real property
investments. In 1994, and through the first quarter of 1995
such reimbursable costs aggregated $77,513 and $37,446
respectively, of which $28,528 was unpaid at March 31, 1995.
The Corporate General Partner is entitled to receive mortgage
investment servicing fees from the Partnership at an annual rate
of 1/4 of 1% of the maximum amount advanced by the Partnership
and outstanding from time to time with respect to mortgage
investments. The cumulative amount of such fees at March 31,
1995 aggregated $735,254, of which $61,075 was unpaid at March
31, 1995.
JMB is entitled to receive application and commitment fees in
connection with the receipt of loan applications and issuance of
commitments to make mortgage loans and to enter into land
purchase leasebacks. Such application and commitment fees shall
not exceed 3% of the gross proceeds of the offering. To the
extent they are paid by actual or prospective borrowers or
sellers of land, the fees otherwise payable by the Partnership
will be reduced. In January 1992, the Partnership paid $130,164
which represented the remaining application fees due to JMB as
a result of the funding of the Franklin Farm mortgage loan
(Note 5(d)).
The General Partners have deferred payment of certain of their
distributions of net cash flow from the Partnership. During
February 1993, the Partnership paid previously deferred
distributions of approximately $317,000 to the General Partners.
The remaining cumulative amount of such deferred distributions
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
aggregated $679,727 at March 31, 1995, all of which is being
deferred in accordance with the subordination requirements of
the Partnership Agreement. The aggregate amount deferred,
including the above-noted subordinated distributions, is
approximately $10 per Interest. All amounts deferred or
currently payable do not bear interest.
(7) SELECTED FINANCIAL INFORMATION
Pursuant to the requirements of the Securities and Exchange
Commission, the following is a summary of historical income
statement information for Shoppes at Rivergate, Riverpoint
Center and Franklin Farm Village Center shopping centers for the
three months ended March 31, 1995 and 1994. Such properties
secure the participating first mortgage investments made by the
Partnership.
1995 1994
------------ ------------
Total revenues . . . . . . . . . .$ 2,186,266 2,005,818
============ ============
Net income (loss). . . . . . . . .$ 232,128 (3,529)
============ ============
(8) ADJUSTMENTS
In the opinion of the Corporate General Partner, all
adjustments (consisting solely of normal recurring adjustments)
necessary for a fair presentation have been made to the
accompanying figures as of March 31, 1995 and for the three
months ended March 31, 1995 and 1994.
PART I. FINANCIAL INFORMATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At March 31, 1995, the Partnership had cash and cash
equivalents of approximately $8,925,000. Of such amounts,
approximately $5,617,000 represents undistributed operating cash
flow related to the Partnership's consolidated ventures, Calibre
Pointe Associates and the North Rivers Market Associates. Such
funds are distributable to the Partnership and to Mortgage
Partners-IV, the affiliated joint venture partner, in the
amounts of $3,744,000 and $2,094,000, respectively and were
distributed in the second quarter of 1995. Such remaining funds
and short-term investments of approximately $393,000 will be
utilized for future distributions to partners, for working
capital reserves and for additional amounts expected to be
funded under the participating first mortgage loan secured by
Franklin Farm Village Center, located in Fairfax County,
Virginia as described in Note 5(d). The Partnership and its
consolidated ventures have currently budgeted in 1995
approximately $276,000 for capital expenditures. The
Partnership's share of such items is currently budgeted to be
approximately $179,000. The capital expenditures for its
unconsolidated venture (the Partnership's mortgage investment in
Spring Hill Fashion Center, is deemed to be in-substance
foreclosed as of January 1, 1995, as discussed below) is
currently budgeted to be approximately $315,000 in 1995. The
Partnerships share of such items is currently budgeted to be
approximately $102,000. Actual amounts expended in 1995 may
vary depending on a number of factors including actual leasing
activity, results of property operations, liquidity
considerations and other market conditions over the course of
the year. The sources of capital for such items and for future
short-term and long-term liquidity and distributions to the
Limited and General Partners are expected to be from the
collection of interest and repayment of principal of the
Partnership's participating first mortgage loan investments.
However, reference is made to Notes 5(a), 5(b) and 5(c)
concerning the suspension of certain interest accruals and the
provision for loan losses on the loans secured by Spring Hill
Fashion Center, Shoppes at Rivergate and Riverpoint Shopping
Center, located in West Dundee, Illinois, Goodlettsville,
Tennessee and Chicago, Illinois respectively and Note 5(a)
regarding the in-substance foreclosure on the loan secured by
Spring Hill Fashion Center in 1995.
Additional sources of both short-term and long-term liquidity
and distributions are expected to be from net cash generated by
the Partnership's investment properties, the Calibre Pointe
Apartments and the North Rivers Market Shopping Center, and from
the sale of such investments. Reference is made to Note 2 for
a description of the events resulting in the Partnership,
through a joint venture, obtaining legal title to these
properties. Additionally reference is made to Note 5(a)
regarding the in-substance foreclosure on the loan secured by
the Spring Hill Fashion Center. The operations of the
properties are expected to provide a current return which is
significantly less than the interest payments due under the
original mortgage loans.
Based upon the determination of the Corporate General Partner,
the Partnership has, commencing with the fourth quarter of 1994,
increased the distribution to $15.00 per $1,000 Interest per
quarter from its previous level of $12.50 per $1,000 Interest.
Reference is made to Note 5(a) regarding the suspension of
certain interest accruals and the provisions for loan loss on
the loan secured by the Spring Hill Fashion Center located in
West Dundee, Illinois. Due to the uncertainty of the
realization of the simple accrued interest recognized through
November 30, 1991 (approximately $485,800) and the principal
balance of this loan ($3,264,765), the Partnership, as a matter
of prudent accounting practice and to reflect the estimated fair
value of the collateral, has, for financial reporting purposes,
suspended the accrual of the simple accrued interest (which is
payable at maturity) effective December 1, 1991 and made
provisions for loan loss of $281,000 in 1992, $154,000 in 1993
and $99,000 in 1994, bringing the total provision for loan loss
to $534,000, which is reflected in the accompanying financial
statements. Reference is also made to Note 5(a) regarding the
default by the borrower of the loan secured by Spring Hill
Fashion Center, the drawing by the lenders (including the
Partnership) of the two $250,000 letters of credit additionally
securing this loan, and the January 1, 1995 assumption of
property management at the Spring Hill Fashion Center by an
affiliate of the General Partners of the lenders. Effective as
of the management takeover date (January 1, 1995), the
Partnership has considered the mortgage loan to be in-substance
foreclosed and has accounted for its investment as an investment
in an unconsolidated joint venture. In early May 1995, the
lenders obtained legal title to the property in lieu of
foreclosure. For financial reporting purposes, the Partnership
will not recognize any material gain or loss from this
transaction as a result of the Partnership's previously recorded
provisions for loan loss. For federal income tax reporting
purposes, the Partnership expects to recognize a loss of
approximately $757,000 in 1995 as a result of this transaction.
The operations of this property are expected to provide a
current return which would be less than the scheduled interest
payments due under the original mortgage loan. Occupancy at the
Spring Hill Fashion Center was 94% at March 31, 1995, unchanged
from December 31, 1994. However, a major tenant, which occupies
approximately 24% of the leasable space at the property and who
is currently operating under Chapter 11 bankruptcy protection,
has informed the lenders (including the Partnership) that it
does not intend to exercise its renewal options when its current
lease expires in October 1995. Due to the competitive
conditions in this market, releasing time and expense could be
substantial when this tenant vacates, which will further reduce
cash flow from this investment to the Partnership in the short
term.
An additional source of both future short-term and long-term
liquidity and distributions is expected to be from net cash
generated by the Spring Hill Fashion Center investment property
and from the sale of such investment.
As previously reported, the Partnership along with its joint
venture partner, through Calibre Pointe Associates, had entered,
in 1994, into a non-binding letter of intent to sell its entire
interest in the Calibre Pointe Apartments. The prospective
purchaser and the Partnership failed to negotiate and execute a
sales agreement and terminated further discussions. However,
given the favorable market conditions, the Partnership continues
to examine a potential sale of the property.
In June, 1994 the Lenders (including the Partnership) received
a partial return in the amount of $322,907 of the original
principal funding (of which the Partnership's share was
$108,933) of the mortgage loan at Franklin Farm Village Center.
These funds relate to an "earn down" provision in the original
purchase agreement between the borrower and the seller. Due to
a major tenant not generating a certain level of sales last
year, the seller was required to return a portion of the sale
price it had received in 1991 at closing. The borrower
subsequently remitted the proceeds back to the Lenders as
required by the terms of the loan agreement. The Lenders will
retain these proceeds due to the possibility of the borrower
requesting future additional fundings per the original loan
agreement as discussed in Note 5(d). In November 1994, the
Lenders finalized an agreement with the borrower to fund the
acquisition of an outparcel and improvements adjacent to the
center. The Lenders provided permanent financing of
approximately $659,000 (of which the Partnership's share was
approximately $222,000), including 90% of the closing costs,
toward the acquisition by the borrower of the outparcel land and
improvements. The loan bears basic interest payable monthly at
the rate of 9% per annum for the first four loan years of this
funding and 10% per annum thereafter through maturity in
November, 2001. This represented the second subsequent funding
on this mortgage loan, which leaves approximately $1,791,000 (of
which the Partnership's share is approximately $604,000)
available to the Borrower to fund future expansion or purchase
options. One of the center's tenants, a major oil company,
continues to explore the extent of the possible damage caused by
a leak at one of its gasoline pumps in late 1993. The borrower
is monitoring the situation closely and does not believe it will
have a material impact on the value of the center.
Occupancy of North Rivers Market Shopping Center in North
Charleston, South Carolina was 80% at March 31, 1995, down from
88% at December 31, 1994 due to the expiration of a tenant's
lease who occupied approximately 6,000 square feet. Phar Mor,
a major tenant at the center filed for protection under Chapter
11 of the bankruptcy code. The Phar Mor store at the center has
continued to operate since its bankruptcy filing and has been
current on all rent payments due subsequent to filing. The
manager is aggressively attempting to lease the vacant space in
the center. However, the competitiveness of the market given the
Naval facility closings in the nearby area is expected to make
it difficult to lease space in the center, thereby extending the
period of time it will take to complete the lease- up of the
center and result in a decrease in cash flow from operations
over the near term. Hechinger's, who vacated its store, which
it owns, in 1989 continues to attempt to lease the remaining
vacancy in its store to other suitable retailers. However, in
early 1995, a tenant (Sportstown) that occupied part of the
vacated Hechinger's space filed for protection under Chapter 11
of the bankruptcy code. This event is not expected to have a
material impact on future income generated from the property.
As a result of its filing for protection under Chapter 11 of
the bankruptcy code, the Herman's Sporting Goods store at
Riverpoint Center vacated its space in the third quarter of
1993. The borrower has re-leased the space to a restaurant
which opened in September 1993. In addition, Herman's Sporting
Goods closed its stores at North Rivers Market Shopping Center
and at the Shoppes at Rivergate during the second quarter of
1993. The borrower at the Shoppes at Rivergate has re-leased
this space to several smaller tenants in 1994 while, the space
at the North Rivers Market Shopping Center remains vacant as of
the date of this report.
RESULTS OF OPERATIONS
The combined decrease in cash and cash equivalents and short-
term investments, and the related decrease in due to affiliates
at March 31, 1995 as compared to December 31, 1995 is the result
of the distribution of the proceeds from the drawn letters of
credit secured by the Spring Hill Fashion Center to the other
two participating lenders (Note 5(a)). Additionally, the
increase in short-term investments and corresponding decrease in
cash and cash equivalents at March 31, 1995 as compared to
December 31, 1994 is due to an increase of the Partnership's
U.S. Government obligations classified as short-term investments
at March 31, 1995, rather than cash equivalents at December 31,
1994.
The decrease in mortgage notes receivable and corresponding
increases in investment in unconsolidated ventures, at equity
and Partnerships share of operations of unconsolidated ventures
at March 31, 1995 as compared to December 31, 1994 is a result
of the in-substance foreclosure of the mortgage loan secured by
the Spring Hill Fashion Center as fully described in notes (2(c)
and 5(a)).
The increase in deferred interest receivable at March 31, 1995
as compared to December 31, 1994 is due to the continuing
deferral of additional interest earned under the terms of the
mortgage loan receivable secured by the Franklin Farms Village
Center(Note 5(d)).
The decrease in accounts payable at March 31, 1995 as compared
to December 31, 1994 is primarily due to the timing of a payment
for recycling fees attributable to North Rivers Market.
The decrease in accrued real estate taxes at March 31, 1995 as
compared to December 31, 1994 is due to the timing of payment of
real estate taxes at the North Rivers Market.
The decrease in other liabilities at March 31, 1995 as
compared to December 31, 1994 is due to a payment made from
deposits held for real estate taxes for the Shoppes at
Rivergate.
The increase in interest income for the three months ended
March 31, 1995 as compared to the same period in 1994 is
primarily due to the additional funding of approximately
$222,000 in November 1994 to the loan secured by Franklin Farm
Village Center (Note 5(d)).
The increase in rental income and venture partners' share of
ventures' operations for the three months ended March 31, 1995
as compared to the same period in 1994 is primarily due an
increase in effective rents and occupancy at the Calibre Pointe
Apartments. The increase is also due to higher recovery income
that resulted from the increase in property operating expenses
and real estate taxes as discussed below.
The increase in property operating expenses for the three
months ended March 31, 1995 as compared to the same period in
1994 is primarily due to increased real estate taxes incurred at
the North Rivers market and higher administrative expenses
(partially recoverable from tenants) being incurred by both
North Rivers Market and the Calibre Point Apartments.
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
The following is a listing of approximate occupancy levels by quarter for the Partnership's
investment properties.
<CAPTION>
1994 1995
------------------------ -----------------------
AT AT AT AT AT AT AT AT
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Calibre Pointe Apartments
Atlanta, Georgia. . . . . . . . . . . 96% 97% 99% 97% 98%
2. North Rivers Market
Shopping Center
North Charleston,
South Carolina. . . . . . . . . . . . 88% 88% 87% 88% 80%
3. Spring Hill Fashion Center
Shopping Center
West Dundee, Illinois . . . . . . . . N/A N/A N/A N/A 94%
- - - - -----------------
<FN>
An "N/A" indicated that the property was not owned or reflected as owned by the Partnership at the
end of the quarter.
</TABLE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
10-A. Loan documents related to the Partnership's
participation in the funding of a non-recourse
first mortgage loan on Calibre Pointe Apartments
located in Atlanta, Georgia is hereby incorporated
herein by reference to the Partnership's Form 8-K
(File No. 2-95948) dated March 25, 1987.
10-B. Loan documents related to the Partnership's
participation in the funding of a first mortgage
loan secured by a first mortgage loan on North
Rivers Market Shopping Center located in North
Charleston, South Carolina, is hereby incorporated
herein by reference to the Partnership's Form 8-K
(File No. 2-95948) dated September 15, 1987.
10-C. Loan documents related to the Partnership's
participation in the funding of a first mortgage
loan secured by a first mortgage loan on Riverpoint
Center Shopping Center located in Chicago,
Illinois, is hereby incorporated herein by
reference to the Partnership's Form 8-K (File No.
0-16253) dated September 5, 1989.
10-D. Loan document related to the Partnership's
participation in the funding of a first mortgage
secured by a first mortgage on Shoppes at Rivergate
Shopping Center located in Goodlettsville,
Tennessee, dated August 24, 1987 is hereby
incorporated herein by reference to Exhibit 10-D of
the Partnership's Report for December 31, 1992 on
Form 10-K (File No. 0-16253) dated March 19, 1993.
10-E. Loan documents related to the Partnership's
participation in the funding of a participating
first mortgage loan secured by Franklin Farm
Village Center located in Fairfax County, Virginia,
are hereby incorporated by reference to the
Partnership's Report for December 31, 1994 on Form
10-K (File No. 0-16253) dated March 27, 1995.
10-F. First and Second Amendments to the Loan Documents
dated September 28, 1993 and November 23, 1994,
respectively, between Rosenfeld/Franklin Farm
Village Center L.P. and Mortgage Partners, Ltd.-IV,
relating to additional loan amounts, are hereby
incorporated by reference to the Partnership's
Report for December 31, 1994 on Form 10-K (File No.
0-16253) dated March 27, 1995.
27. Financial Data Schedule
(b) No reports on Form 8-K have been filed for the quarter
covered by this report.
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.
JMB MORTGAGE PARTNERS, LTD. - III
BY: JMB Realty Corporation
(Corporate General Partner)
By: Gailen J. Hull,
Senior Vice President
Date: May 11, 1995
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
person in the capacity and on the date indicated.
Gailen J. Hull
Principal Accounting Officer
Dated: May 11, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE REGISTRANT'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS INCLUDED IN SUCH REPORT.
</LEGEND>
<CIK> 0000763820
<NAME> MORTGAGE PARTNERS LTD. - III
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> $ 8,925,189
<SECURITIES> 1,442,052
<RECEIVABLES> 343,731
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,710,972
<PP&E> 25,386,938
<DEPRECIATION> 1,845,013
<TOTAL-ASSETS> 68,005,500
<CURRENT-LIABILITIES> 249,218
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 57,114,230
<TOTAL-LIABILITY-AND-EQUITY> 68,005,500
<SALES> 923,753
<TOTAL-REVENUES> 1,775,405
<CGS> 0
<TOTAL-COSTS> 509,027
<OTHER-EXPENSES> 100,630
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,165,748
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,043,789
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,043,789
<EPS-PRIMARY> 14.33
<EPS-DILUTED> 0
</TABLE>
