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 ended
June 30, 1997 Commission file number 0-16253
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
<PAGE>
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 . . . . . . . . . . . . . . . . . . . 12
PART II. OTHER INFORMATION
Item 5. Other Information. . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 15
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 7,106,830 28,588,948
Interest, rents and other receivables . . . . . . . . . . . . . . . 119,119 238,252
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 16,290 16,290
Mortgage note receivable (net of allowance for loan
loss of $1,077,478 in 1997 and 1996) . . . . . . . . . . . . . . . 11,032,731 11,032,731
Deferred interest receivable (net of allowance for
loan loss of $1,866,386 in 1997 and 1996). . . . . . . . . . . . . 567,269 567,269
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . 18,842,239 40,443,490
Investment property held for sale . . . . . . . . . . . . . . . . . . 9,452,351 9,303,871
------------ ------------
Deferred costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,349 10,345
------------ ------------
$ 28,321,939 49,757,706
============ ============
<PAGE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
JUNE 30, DECEMBER 31,
1997 1996
------------- -----------
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . $ 78,608 91,185
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . 76,292 148,139
Other current liabilities . . . . . . . . . . . . . . . . . . . . . 65,678 143,426
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . 220,578 382,750
------------ ------------
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . 16,307 14,000
------------ ------------
Commitments and contingencies
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . 236,885 396,750
------------ ------------
Venture partner's equity in ventures. . . . . . . . . . . . . . . . . 3,398,382 4,076,629
Partners' capital accounts:
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . 3,472,040 3,400,859
Cumulative cash distributions. . . . . . . . . . . . . . . . . . (3,578,851) (3,507,670)
------------ ------------
(105,811) (105,811)
------------ ------------
Limited partners (65,237.69 interests):
Capital contributions, net of offering costs . . . . . . . . . . 57,758,561 57,758,561
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . 36,544,670 35,613,888
Cumulative cash distributions. . . . . . . . . . . . . . . . . . (69,510,748) (47,982,311)
------------ ------------
24,792,483 45,390,138
------------ ------------
Total partners' capital accounts (deficits) . . . . . . . . . 24,686,672 45,284,327
------------ ------------
$ 28,321,939 49,757,706
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Interest income . . . . . . . . . . . . . . . $ 371,793 897,168 898,414 1,794,458
Rental income . . . . . . . . . . . . . . . . 401,078 906,235 793,254 1,789,713
----------- ---------- ---------- ----------
772,871 1,803,403 1,691,668 3,584,171
----------- ---------- ---------- ----------
Expenses:
Depreciation. . . . . . . . . . . . . . . . . -- 58,086 -- 116,466
Property operating expenses . . . . . . . . . 122,309 341,532 247,618 651,998
Mortgage investment servicing fees. . . . . . 7,500 18,632 15,000 36,645
Professional services . . . . . . . . . . . . 23,705 22,621 48,278 43,621
Amortization of deferred expenses . . . . . . 1,001 8,512 4,338 17,024
General and administrative. . . . . . . . . . 118,961 85,215 186,114 200,639
----------- ---------- ---------- ----------
273,476 534,598 501,348 1,066,393
----------- ---------- ---------- ----------
Operating earnings (loss) . . . . . . 499,395 1,268,805 1,190,320 2,517,778
Partnership's share of
operations of uncon-
solidated venture . . . . . . . . . . . -- 29,609 -- 73,648
Venture partners' share
of ventures' operations . . . . . . . . (94,738) (188,608) (188,357) (388,177)
----------- ---------- ---------- ----------
Net operating earnings (loss) . . . . 404,657 1,109,806 1,001,963 2,203,249
<PAGE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
Gain on sale of investment property,
net of venture partner's share of
gain of $980,379. . . . . . . . . . . . . . . -- 1,620,384 -- 1,620,384
----------- ---------- ---------- ----------
Net earnings (loss) . . . . . . . . . $ 404,657 2,730,190 1,001,963 3,823,633
=========== ========== ========== ==========
Net earnings (loss) per
limited partnership
interest:
Net operating earnings (loss). . . $ 5.21 13.68 14.27 30.44
Net gain on sale of
investment property. . . . . . . -- 24.59 -- 24.59
----------- ---------- ---------- ----------
$ 5.21 38.27 14.27 55.03
=========== ========== ========== ==========
Cash distributions per
limited partnership
interest . . . . . . . . . . . . . . $ 10.00 30.00 330.00 30.00
=========== ========== ========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,001,963 3,823,633
Items not requiring cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 116,466
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 4,338 17,024
Partnership's share of operations of unconsolidated venture,
net of distributions. . . . . . . . . . . . . . . . . . . . . . . . . -- (73,648)
Venture partner's share of ventures' operations and gain on sale
of investment property. . . . . . . . . . . . . . . . . . . . . . . . 188,357 1,368,556
Total gain on sale of investment property . . . . . . . . . . . . . . . -- (2,600,763)
Changes in:
Interest, rents and other receivables . . . . . . . . . . . . . . . . . 119,133 21,886
Due from affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . -- 24,477
Deferred interest receivable. . . . . . . . . . . . . . . . . . . . . . -- (86,124)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,577) 77,796
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . (71,847) (74,070)
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . (77,748) (91,700)
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 2,307 (20,661)
------------ ------------
Net cash provided by (used in) operating activities . . . . . . . 1,153,926 2,502,872
------------ ------------
Cash flows from investing activities:
Cash proceeds from sale of investment property,
net of selling expenses . . . . . . . . . . . . . . . . . . . . . . . . -- 14,175,511
Additions to investment properties. . . . . . . . . . . . . . . . . . . . (148,480) (99,204)
Payment of deferred costs . . . . . . . . . . . . . . . . . . . . . . . . (21,342) --
------------ ------------
Net cash provided in (used in) investing activities . . . . . . . (169,822) 14,076,307
------------ ------------
Cash flows from financing activities:
Distributions to venture partner. . . . . . . . . . . . . . . . . . . . . (866,604) (5,660,400)
Distributions to limited partners . . . . . . . . . . . . . . . . . . . . (21,528,437) (2,007,725)
Distributions to general partners . . . . . . . . . . . . . . . . . . . . (71,181) (217,459)
------------ ------------
Net cash used in financing activities. . . . . . . . . . . . . . . . . (22,466,222) (7,885,584)
------------ ------------
<PAGE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1997 1996
------------ -----------
Net increase (decrease) in cash and cash equivalents . (21,482,118) 8,693,595
Cash and cash equivalents, beginning of year . . . . . 28,588,948 7,538,476
------------ ------------
Cash and cash equivalents, end of period . . . . . . . $ 7,106,830 16,232,071
============ ============
Supplemental disclosure for cash flow information:
Cash paid for mortgage and other interest . . . . . . . . $ -- --
============ ============
Non-cash investing and financing activities . . . . . . . $ -- --
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1996,
which are included in the Partnership's 1996 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" ("SFAS 121") as required in the first
quarter of 1996. The Partnership's policy is to consider a property to be
held for sale or disposition when the Partnership has committed to a plan
to sell the such property and active marketing activity has commenced or is
expected to commence in the near term. In accordance with SFAS 121, any
properties identified as "held for sale or disposition" are no longer
depreciated. As of December 31, 1996, the Partnership has committed to a
plan to sell the North Rivers Market Shopping Center investment property.
Accordingly, this property has been classified as held for sale or
disposition in the accompanying consolidated financial statements. The
results of operations, net of venture partners' share, for such property
and for properties sold during the past two years were $373,735 and
$693,237, respectively, for the six months ended June 30, 1997 and 1996.
In addition, the accompanying financial statements include $73,649 of the
Partnership's share of total operations of $226,263 for the six months
ended June 30, 1996 for the Spring Hill Fashion Center, an unconsolidated
property sold in November, 1996.
During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued. As the Partnership's
capital structure only has general and limited partnership interests, the
Partnership does not expect any significant impact on its consolidated
financial statements upon adoption of these standards when required at the
end of 1997.
Certain amounts in the 1996 consolidated financial statements have
been reclassified to conform with the 1997 presentation.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of June 30, 1997 and for the six months ended June 30,
1997 and 1996 were as follows:
<PAGE>
Unpaid at
June 30,
1997 1996 1997
------- ------ ---------
Mortgage investment
servicing fees. . . . . . . $15,000 36,646 15,000
Property management fees. . . 51,731 51,311 --
Reimbursement (at cost) for
salary and salary-related
expenses related to the
on-site and other costs
for the Partnership and
its investment properties. . 18,362 13,114 26,433
------- ------- ------
$85,093 101,071 41,433
======= ======= ======
The General Partners have deferred payment of approximately $680,000
of their distributions of prior net cash flow from the Partnership and
approximately $908,000 of their subordinated portion of sales and repayment
proceeds at June 30, 1997, in accordance with the subordination
requirements of the Partnership Agreement. Such subordination requirements
are not expected to be attained over the remaining expected operating
period of the Partnership. All amounts deferred or currently payable do
not bear interest.
NORTH RIVERS MARKET SHOPPING CENTER
Occupancy remained at 87% at June 30, 1997. The property manager is
attempting to lease the vacant space in the center and in such regard has
recently reached tentative agreements with three additional tenants which,
if consummated, would increase occupancy to 92%. As the venture has
committed to a plan to sell the property, the property was classified as
held for sale or disposition as of December 31, 1996 and, therefore, is not
subject to continued depreciation. The venture's plan is to market this
property for sale in the third quarter of 1997. However, there can be no
assurance that a sale transaction on acceptable terms can be arranged
during 1997.
SHOPPES AT RIVERGATE
In March 1997, the Partnership issued a payoff letter to the borrower
regarding an early repayment of the mortgage loan at an amount less than
what was otherwise due under the terms of the original mortgage loan.
Pursuant to such agreement, on July 16, 1997, the Partnership received
$11,600,000 representing payment in full on the mortgage loan.
Accordingly, the Partnership has classified this mortgage note receivable
as a current asset in the accompanying consolidated financial statements.
The payment of the mortgage loan will result in no gain or loss for
financial reporting purposes in 1997 (as a result of loan loss provisions
totaling approximately $2,944,000 previously recorded by the Partnership),
and is expected to result in a loss of approximately $3,600,000 for Federal
income tax purposes in 1997.
SELECTED FINANCIAL INFORMATION
Pursuant to the requirements of the Securities and Exchange
Commission, the following is a summary of historical income statement
information for the Shoppes at Rivergate Shopping Center for the six months
ended June 30, 1997 and 1996. Such property secured the participating
first mortgage investment made by the Partnership which was retired at a
discount by the borrower (as discussed above) in July, 1997.
<PAGE>
1997 1996
---------- ---------
Total revenues . . . . . . . . . . $ 917,800 1,039,600
========== =========
Net income (loss). . . . . . . . . $ 163,100 (17,300)
========== =========
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 June 30, 1997
and for the three and six months ended June 30, 1997 and 1996.
<PAGE>
PART I.FINANCIAL INFORMATION
Item 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying financial
statements for additional information concerning the Partnership's
investments.
During 1996, some of the Limited Partners in the Partnership received
from unaffiliated third parties unsolicited tender offers to purchase up to
4.9% of the Interests in the Partnership at between $440 and $500 per
Interest. The Partnership recommended against acceptance of these offers
on the basis that, among other things, the offer prices were inadequate.
Such offers have expired. It is possible that other offers for Interests
may be made by unaffiliated third parties in the future, although there is
no assurance that any other third party will commence an offer for
Interests, the terms of any such offer or whether any such offer, if made,
will be consummated, amended or withdrawn. The board of directors of JMB
Realty Corporation ("JMB"), the corporate general partner of the
Partnership, has established a special committee (the "Special Committee")
consisting of certain directors of JMB to deal with all matters relating to
tender offers for Interests in the Partnership, including any and all
responses to such tender offers. The Special Committee has retained
independent counsel to advise it in connection with any potential tender
offers for Interests and has retained Lehman Brothers Inc. as financial
advisor to assist the Special Committee in evaluating and responding to any
additional potential tender offers for Interests.
The Partnership had been made aware that in mid-March of 1997 another
unaffiliated third party made an unsolicited tender offer to some of the
Holders of Interests. This offer sought to purchase up to 4.9% of the
Interests in the Partnership at $480 per Interest. The offer expired in
early April 1997. The Special Committee recommended against acceptance of
this offer on the basis that, among other things, the offer price was
inadequate. As of the date of this report, the Partnership is aware that
2.87% of the outstanding Interests have been purchased in 1996 and 1997 by
such unaffiliated third parties either pursuant to such tender offers or
through negotiated purchases.
The affairs of the Partnership are expected to be wound up in the
1997-1998 time frame, barring unforeseen economic developments. However,
the Partnership's goal of capital appreciation will not be achieved.
Although the Partnership expects to distribute the proceeds received in
July 1997 from the repayment of the Partnership's participating first
mortgage loan on the Shoppes at Rivergate and any sale proceeds from the
planned disposition of the Partnership's remaining investment in North
Rivers Market, aggregate sale and repayment distributions received by
Holders of Interest over the entire term of the Partnership are expected to
be less than their original investment.
RESULTS OF OPERATIONS
The decrease in cash and cash equivalents at June 30, 1997 as compared
to December 31, 1996 is due primarily to distributions of approximately
$20,876,000 ($320 per Interest) made to the Limited Partners in February
1997, representing substantially all of the proceeds from the repayment of
Franklin Farm Village Center and Riverpoint Shopping Center mortgage loans
and from the sale of Spring Hill Fashion Corner in 1996. The Partnership
also distributed approximately $726,000 of operating cash flow in May 1997
($71,181 of which was the General Partners' share).
The decrease in interest and other receivables at June 30, 1997 as
compared to December 31, 1996 is due primarily to the timing of tenants'
payments of real estate tax and expense recoveries at the North Rivers
Market property, and to a decrease in accrued interest as a result of a
decrease in cash and cash equivalents at June 30, 1997.
<PAGE>
The decrease in accrued real estate taxes at June 30, 1997 as compared
to December 31, 1996 is due to the timing of payment of real estate taxes
at the North Rivers Market property.
The decrease in other current liabilities at June 30, 1997 as compared
to December 31, 1996 is due primarily to a payment made from deposits held
for real estate taxes for the Shoppes at Rivergate.
The decrease in venture partner's equity in ventures at June 30, 1997
as compared to December 31, 1996 is due to distributions of approximately
$603,000 and $263,000, respectively, paid to the other participating lender
(Mortgage Partners-IV) from the North Rivers Market and Calibre Pointe
properties.
Gain on sale of investment property of approximately $1,620,000 for
the three and six months ended June 30, 1996 resulted from the May 1996
sale of the Calibre Pointe Apartments.
Other significant fluctuations in income and expense items for the
three and six months ended June 30, 1997 as compared to the same period in
1996 are due primarily to the repayments of the mortgage loans secured by
the Franklin Farm Village Center and Riverpoint Shopping Center and the
sales of Calibre Pointe Apartments and Spring Hill Fashion Corner in 1996.
<PAGE>
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
property owned during 1997.
<CAPTION>
1996 1997
------------------------------------- ------------------------------
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. North Rivers Market
Shopping Center
North Charleston,
South Carolina. . . . . 85% 83% 83% 81% 87% 87%
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
3-A. The Prospectus of the Partnership dated July 24,
1985, as supplemented January 27, 1986, April 29, 1986, June 11, 1986,
August 14, 1986, September 27, 1986 as filed with the Commission pursuant
to Rules 424(b) and 424(c), is hereby incorporated herein by reference to
the Partnership's Registration Statement on Form S-11 (File No. 2-95948)
dated July 24, 1985.
3-B. Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the Prospectus, which is hereby
incorporated herein by reference to the Partnership's Registration
Statement on Form S-11 (File No. 2-95948) dated July 24, 1985.
3-C. Acknowledgement of rights and duties of the General
Partners of the Partnership between AGPP Associates, L.P. (a successor
Associated General Partner of the Partnership) and JMB Realty Corporation
as of December 31, 1995 is hereby incorporated herein by reference to the
Partnership's report for June 30, 1996 on Form 10-Q (File No. 0-16253)
dated August 9, 1996.
10-A. Loan documents related to the Partnership's
participation in the funding of a first mortgage loan secured by the North
Rivers Market Shopping Center located in North Charleston, South Carolina,
are hereby incorporated herein by reference to the Partnership's Form 8-K
(File No. 2-95948) dated September 15, 1987.
10-B. Agreement of Partnership of North Rivers Market
Associates between the Partnership and JMB Mortgage Partners, Ltd. - IV,
dated April 26, 1993 is filed herewith.
10-C. Loan documents related to the Partnership's
participation in the funding of a first mortgage loan secured by the
Shoppes at Rivergate Shopping Center located in Goodlettsville, Tennessee,
dated August 24, 1987 are 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.
27. Financial Data Schedule
(b) No reports on Form 8-K have been filed during the last
quarter of the period covered by this report.
<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.
JMB MORTGAGE PARTNERS, LTD. - III
BY: JMB Realty Corporation
(Corporate General Partner)
GAILEN J. HULL
By: Gailen J. Hull,
Senior Vice President
Date: August 8, 1997
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
Gailen J. Hull
Principal Accounting Officer
Date: August 8, 1997
EXHIBIT 10-B
- ------------
(MP-III)
AGREEMENT OF PARTNERSHIP OF
NORTH RIVERS MARKET ASSOCIATES
This Agreement is made and entered into as of April 26, 1993, by and
between JMB MORTGAGE PARTNERS, LTD.-III, an Illinois limited partnership
and JMB MORTGAGE PARTNERS, LTD.-IV, an Illinois limited partnership (herein
the "General Partners", sometimes herein referred to as the "Partners").
WITNESSETH, THAT WHEREAS:
------------------------
THAT WHEREAS, the parties hereto desire to form a general partnership
pursuant to the provisions of the Uniform Partnership Act as in effect in
the State of Illinois, as amended (herein the "Act"), except as otherwise
provided herein, upon the terms and conditions as set forth herein.
NOW, THEREFORE, for and in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, with the intention of being
legally bound, do hereby agree as follows:
1. NAME OF THE PARTNERSHIP. The name of the Partnership hereby formed
is "North Rivers Market Associates."
2. CHARACTER OF THE BUSINESS. The character of the business of the
Partnership shall be to own and operate the North Rivers Market Shopping
Center in North Charleston, South Carolina and to engage in any and all
activities related or incidental thereto. Whenever the term "Property"
appears in this Agreement, such term shall mean any property, real or
personal, tangible or intangible, at any time owned by the Partnership or
their respective successors.
3. LOCATION OF THE PRINCIPAL PLACE OF BUSINESS. The location of the
principal place of business of the Partnership is 900 North Michigan
Avenue, Suite 2000, Chicago, Illinois 60611, or such other location as
shall be designated by the Partners.
4. NAMES AND PLACES OF RESIDENCE OF PARTNERSHIP. The address of each
of the Partners is 900 North Michigan Avenue, Suite 2000, Chicago, Illinois
60611, or such other location as may be agreed upon by the Partners. As
used herein, "Partnership" means the general partnership formed pursuant to
the Partnership Agreement as such general partnership may be constituted
from time to time, and "Partner" shall mean JMB Mortgage Partners, Ltd.-III
and JMB Mortgage Partners, Ltd.-IV and their respective successors and
assigns as a partner of the Partnership.
5. TERM OF THE PARTNERSHIP. The term for which the Partnership shall
exist shall continue until December 31, 2043, unless sooner terminated as
hereinafter provided.
<PAGE>
6. CONTRIBUTIONS OF THE MEMBERS OF THE PARTNERSHIP.
A. CONTRIBUTION. The Partners have contributed or have agreed to
contribute the sums set forth in EXHIBIT "A" attached hereto and made a
part hereof. The Partners may make such additional contributions as may be
agreed to from time to time by the Partners, provided that any such
additional capital shall be contributed to the Partnership by the Partners
pro-rata in the proportion of their "Partnership Shares" (as hereinafter
defined). In the event that any Partner makes an additional contribution
to the Partnership or receives a return of all or part of its contributions
to the Partnership, such fact shall promptly be recorded in the books and
records of the Partnership, and Exhibit "A" shall be promptly and
appropriately amended to reflect the same.
B. WITHDRAWALS OF CAPITAL. Except as otherwise herein provided,
no Partner shall be entitled to withdraw capital or to receive
distributions of or against capital without the prior written consent of,
and upon the terms and conditions specified by, the other Partners.
C. CAPITAL ACCOUNTS. The Partnership shall maintain for each of
the Partners a capital account, which shall be the aggregate amount of the
contributions to the Partnership made by such Partner, reduced by the
aggregate amount of any losses allocated, and any distributions of cash or
the fair market value or other assets of the Partnership made, to such
Partner and increased by the aggregate amount of any net profits allocated
to such Partner.
D. LOANS. All advances or payments to the Partnership by any
Partner, other than the contributions required or made under Section 6.A
hereof, shall be deemed to be loans by such Partner to the Partnership, and
the Partner making such loan shall be entitled to interest thereon at such
rates per annum as the Partners may agree, and such loan together with
interest as aforesaid, shall be repaid before any distribution shall be
made hereunder to the other Partner. No such loan to the Partnership shall
be made without the prior written consent of the Partners and shall be
required to be made by all Partners in proportion to their respective
Partnership Shares (as hereinafter defined). With respect to any
borrowings by the Partnership for which there is recourse to the Partners
or any of their respective assets, the Partners shall be liable for such
borrowing in proportion to their respective Partnership Shares (as
hereinafter defined) as determined from time to time.
7. PARTNERSHIP SHARES.
A. As used herein, "profits" shall include, without limitation,
each item of Partnership income and gain, and "losses" shall include,
without limitation, each item of loss, and deductions as determined for
Federal income tax purposes, and "Partnership Share" shall be as set forth
on EXHIBIT A attached hereto. All profits or losses from the operations of
the Partnership (including the sale or refinancing of the Property) for a
fiscal year or part thereof shall be allocated to the Partners based upon
their respective Partnership Shares.
B. All profits or losses from the sale or other disposition of
all or any substantial portion of the Property shall be allocated to the
Partners in accordance with the respective
2
<PAGE>
Partnership Shares on the date on which the Partnership recognized such
profits or losses for Federal income tax purposes. Notwithstanding
anything to the contrary in this Agreement, upon the ultimate liquidation
of the Partnership, if any Partner has a deficit balance in his capital
account (after giving effect to the allocation set forth in this Agreement,
including without limitation, the allocations set forth in this Section
7.B) then any such Partner will make a capital contribution to the
Partnership in an amount equal to such deficit balance, any such capital
contribution shall be distributed as proceeds from the liquidation of the
Partnership to the other Partner with a positive balance in his capital
account to the extent of such positive balance. Notwithstanding any
adjustment of the allocation of profits or losses provided in this
Agreement by any judicial body or governmental agency (or any amendment
hereto as a result of a change or proposed change in any law or regulation
or any interpretation thereof), the allocation of profits or losses
provided in this Agreement shall control for purposes of the determination
of the Partners' capital accounts for all purposes of this Agreement.
C. Each distribution to the Partners of cash or other assets of the
Partnership made prior to the dissolution of the Partnership, including,
but not limited to, each distribution of net cash flow from the operations
of the Partnership and net proceeds received by the Partnership from the
sale or refinancing of all or any substantial portion of the Property,
shall be made to the Partners in accordance with their respective
Partnership Shares owned on the date of such distribution. Each
distribution of cash or other assets of the Partnership made after
dissolution of the Partnership shall be made in accordance with Section
11.C hereof. Distributions of the Partnership will be made in such amount
and at such times as shall be determined by all of the Partners, or in the
event of the dissolution and liquidation of the Partnership, by the
Winding-Up-Party (as hereinafter defined).
8. MANAGEMENT OF THE PARTNERS. The ultimate responsibility for the
affairs of the Partnership shall be vested equally in both of the Partners.
9. BOOKS AND RECORDS OF THE PARTNERSHIP; FISCAL YEAR. The Partners
shall keep and maintain the books and records of the Partnership at the
principal place of business of the Partnership. The fiscal year of the
Partnership shall end on the 31st day of December in each year. The books
of the Partnership shall be kept on the cash or accrual basis, and the
Partnership shall be on the cash or accrual basis for tax purposes, as
determined by the Partners. The books and records of the Partnership shall
be audited at such times and by such accountants as shall be determined
from time to time by the Partners. The funds of the Partnership shall be
deposited in such bank accounts or invested in such interest-bearing or
non-interest bearing investments, as shall be determined by the Partners.
10. TRANSFER OF PARTNERSHIP INTERESTS.
A. No Partner may sell, assign, transfer, encumber or hypothecate
the whole or any part of its Partnership interest (including, but not
limited to, its interest in the capital or profits of the Partnership)
without the written consent of the other Partners.
3
<PAGE>
B. Any party or person admitted to the Partnership as a
substituted Partner shall be subject to and bound by all of the provisions
of this Agreement as if originally a party to this Agreement. Any party or
person admitted to the Partnership as a substituted Partner shall have all
of the rights as a partner in the Partnership conferred upon a general
partner pursuant to the Act. The admittance of a party or person to the
Partnership as a substituted Partner and the withdrawal of a party or
person as a partner in the Partnership shall continue to exist with the
then remaining parties or persons as Partners as if all the then existing
Partners were originally all of the Partners in the Partnership.
C. A Partner shall have no liability hereunder (including, but not
limited to, any liability as a surety but excluding liability for the
repayment of any outstanding principal and interest on loans made by the
Partnership to such Partner) for any obligations accruing under or in
connection with the Partnership and relating to events occurring after such
Partner shall have sold, assigned or transferred its entire Partnership
interest.
11. DISSOLUTION OF THE PARTNERSHIP.
A. No act, thing, occurrence, event or circumstance shall cause or
result in the dissolution of the Partnership, except the matters specified
in subsection B below.
B. The happening of any one of the following events shall work a
dissolution of the Partnership:
(1) The bankruptcy, legal incapacity, dissolution, termination
or expulsion of any then existing Partner; provided, however, that in such
event the remaining Partner shall have the right to elect to continue the
Partnership's business by depositing at the office of the Partnership a
writing evidencing such election. No other act shall be required to effect
such continuation;
(2) The reduction to cash or cash equivalents of all of the
assets of the Partnership;
(3) The unanimous agreement in writing by all of the Partners
of the Partnership;
(4) The termination of the term of the Partnership pursuant
to Section 5 hereof. Without limitation on the other provisions hereof,
the admission of a new Partner shall not work a dissolution of the
Partnership. Except as otherwise provided in this Agreement, each Partner
agrees that, without the consent of the other Partner, a Partner may not
withdraw from or cause a voluntary dissolution of the Partnership.
C. Upon the occurrence of any of the events specified in subsection
B above causing a dissolution of the Partnership and except as otherwise
provided in subsection B above, the remaining Partner or Partners shall
commence to wind up the affairs of the Partnership and to liquidate its
investments (and in this connection shall have full right and unlimited
discretion to
4
<PAGE>
determine in good faith the time, manner and terms of any sale of sales of
Partnership Property). The Partner or Partners obligated to wind up the
affairs of the Partnership as aforesaid are herein called the "Winding-Up
Party." The Partners and their legal representatives, successors and
assignees shall continue to share profits and losses during the period of
liquidation in the same manner and proportion as immediately before the
dissolution. Following the payment of all debts and liabilities of the
Partnership and all expenses of liquidation and subject to the right of the
Winding-Up Party to set up such cash reserves as, and for so long as, it
may deem reasonably necessary, the proceeds of the liquidation and any
other funds and assets of the Partnership shall be distributed to the
Partners (after deducting from the distributive share of a Partner any sum
such Partner owes the Partnership) in accordance with Capital Account
balances and Partnership Shares as provided in Section 7.C hereof. No
Partner shall have any right to demand or receive property other than cash
upon dissolution or termination of the Partnership. Upon the completion of
the liquidation of the Partnership and of the distribution of all
Partnership assets, the Partnership shall terminate and the Winding-Up
Party shall have the authority to execute any and all documents required in
its judgment to effectuate the dissolution and termination of the
Partnership. Each Partner shall look solely to the assets of the
Partnership for all distributions with respect to the Partnership and its
capital contribution thereto and share of profits or losses therefrom, and
shall have no recourse therefor against any Partner; provided that nothing
herein contained shall relieve any Partner of such Partner's obligation to
pay any liability or indebtedness owing the Partnership by such Partner.
12. NOTICES; AMENDMENT.
A. Any notice which a Partner is required or may desire to give any
other Partner shall be in writing, and may be given personal delivery or by
mailing same by United States registered or certified mail, return receipt
requested, to the Partner to whom such notice is directed at the address of
such Partner as hereinabove set forth, subject to the right of a Partner to
designate a different address for itself by notice similarly given. Any
notice so given by United States mail shall be deemed to have been given of
the second day after it is deposited in the United States mail as
registered or certified mail, addressed as above provided, with postage
thereon fully prepaid. Any such notice not given by registered or
certified mail as aforesaid shall be deemed to be given upon receipt by the
party to whom it is to be given.
B. This Agreement may be amended by written agreement of amendment
executed by all the Partners, but not otherwise.
13. MISCELLANEOUS. Each Partner hereby irrevocably waives any and
all rights that it may have to maintain any action for partition of any of
the Partnership Property. This Agreement constitutes the entire agreement
between the parties. This Agreement supersedes any prior agreement or
understanding between the parties. This Agreement and the rights of the
parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Illinois. Except as herein otherwise specifically
provided, this Agreement shall be binding upon and inure to the benefit of
the parties and their legal representatives, successors and
5
<PAGE>
assignees. Captions contained in the Agreement in no way define, limit or
extend the scope or intent of this Agreement. If any provision of this
Agreement, or the application of such provision to any person or
circumstance, shall be held invalid, the remainder of this Agreement, or
application of such provision to other persons or circumstances, shall not
be affected thereby. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument. The opinion of the
independent certified public accountants retained by the Partnership from
time to time shall be final and binding with respect to all computations
and determinations required to be made under Section 7 hereof (including
computations and determinations in connection with any distribution
following or in connection with the dissolution of the Partnership). If
the Partnership or any Partner obtains a judgment against any other party
by reason of breach of this Agreement or failure to comply with the
provisions hereof, a reasonable attorneys' fee as fixed by the court shall
be included in such judgment. Any Partner shall be entitled to maintain,
on its own behalf or on behalf of the Partnership, any action or proceeding
against any other Partner or the Partnership (including, without
limitation, any action for damages, specific performance or declaratory
relief) for or by reason of breach by such party of this Agreement,
notwithstanding the fact that any or all of the parties to such proceeding
may then be a partner in the Partnership, and without dissolving the
Partnership as a partnership. No remedy conferred upon the Partnership or
any Partner in this Agreement is intended to be exclusive or any other
remedy herein or by law provided or permitted, but each shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute (subject, however, to
the limitations expressly herein set forth). No waiver by a Partner or the
Partnership of any breach of this Agreement shall be deemed to be a waiver
of any other breach of any kind or nature and no acceptance of payment or
performance by a Partner or the Partnership after any such breach shall be
deemed to be a waiver of any breach of this Agreement whether or not such
Partner or the Partnership knows of such breach at the time it accepts such
payment or performance. No failure or delay on the part of a Partner or
the Partnership to exercise any right it may have shall prevent the
exercise thereof by such Partner or the Partnership at any time such other
Partner may continue to be in default hereunder, and no such failure or
delay shall operate as a waiver of any breach or default.
6
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
JMB MORTGAGE PARTNERS, LTD.-III
By: JMB Realty Corporation
By: /S/ NEIL G. BLUHM
Neil G. Bluhm
President
JMB MORTGAGE PARTNERS, LTD.-IV
By: JMB Mortgage Managers-IV, Inc.
By: /S/ NEIL G. BLUHM
Neil G. Bluhm
President
7
<PAGE>
EXHIBIT "A"
-----------
PARTNER CAPITAL CONTRIBUTIONS
- ------- ----------------------
JMB MORTGAGE PARTNERS, LTD.-III $ 664.90
JMB MORTGAGE PARTNERSHIP, LTD.-IV 335.10
---------
$1,000.00
==========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 7,106,830
<SECURITIES> 0
<RECEIVABLES> 11,735,409
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18,842,239
<PP&E> 9,452,351
<DEPRECIATION> 0
<TOTAL-ASSETS> 28,321,939
<CURRENT-LIABILITIES> 220,578
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 24,686,672
<TOTAL-LIABILITY-AND-EQUITY> 28,321,939
<SALES> 793,254
<TOTAL-REVENUES> 1,691,668
<CGS> 0
<TOTAL-COSTS> 251,956
<OTHER-EXPENSES> 249,392
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,190,320
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,001,963
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,001,963
<EPS-PRIMARY> 14.27
<EPS-DILUTED> 14.27
</TABLE>
