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
September 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
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,182,196 28,588,948
Interest, rents and other receivables. . . . . . . . . . . . . . . . . . . . 204,014 238,252
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,120 16,290
Mortgage note receivable (net of allowance for loan
loss of $967,269) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 11,032,731
Deferred interest receivable (net of allowance for
loan loss of $1,260,152). . . . . . . . . . . . . . . . . . . . . . . . . . -- 567,269
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . 19,411,330 40,443,490
Investment property held for sale. . . . . . . . . . . . . . . . . . . . . . . 9,499,479 9,303,871
------------ ------------
Deferred costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,811 10,345
------------ ------------
$ 28,954,620 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)
-----------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -----------
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 92,079 91,185
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 115,042 148,139
Other current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 3,942 143,426
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . 211,063 382,750
------------ ------------
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 16,277 14,000
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227,340 396,750
------------ ------------
Venture partner's equity in ventures . . . . . . . . . . . . . . . . . . . . . 3,532,179 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 . . . . . . . . . . . . . . . . . . . . . . . . . 37,053,099 35,613,888
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . . . . (69,510,748) (47,982,311)
------------ ------------
25,300,912 45,390,138
------------ ------------
Total partners' capital accounts (deficits). . . . . . . . . . . . . . 25,195,101 45,284,327
------------ ------------
$ 28,954,620 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 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Interest income. . . . . . . . . . . . . . . . . . $ 451,821 706,968 1,350,235 2,501,426
Rental income. . . . . . . . . . . . . . . . . . . 429,034 412,546 1,222,288 2,202,259
----------- ---------- ---------- ----------
880,855 1,119,514 2,572,523 4,703,685
----------- ---------- ---------- ----------
Expenses:
Depreciation . . . . . . . . . . . . . . . . . . . -- 58,714 -- 175,180
Property operating expenses. . . . . . . . . . . . 164,872 168,443 412,490 799,649
Mortgage investment servicing fees . . . . . . . . 1,192 18,525 16,192 55,170
Professional services. . . . . . . . . . . . . . . 5,265 29,752 53,543 73,373
Amortization of deferred expenses. . . . . . . . . 680 8,512 5,018 25,536
General and administrative . . . . . . . . . . . . 66,620 69,925 252,734 270,564
Provision for loan loss. . . . . . . . . . . . . . -- 111,000 -- 111,000
----------- ---------- ---------- ----------
238,629 464,871 739,977 1,510,472
----------- ---------- ---------- ----------
Operating earnings (loss). . . . . . . . . 642,226 654,643 1,832,546 3,193,213
Partnership's share of operations
of unconsolidated venture. . . . . . . . . . . . . -- (195,414) -- (121,766)
Venture partners' share of
ventures' operations . . . . . . . . . . . . . . . (133,797) (71,768) (322,154) (466,643)
----------- ---------- ---------- ----------
Net operating earnings (loss). . . . . . . 508,429 387,461 1,510,392 2,604,804
<PAGE>
JMB MORTGAGE PARTNERS, LTD. - III
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 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
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . . . . . $ 508,429 387,461 1,510,392 4,225,188
=========== ========== ========== ==========
Net earnings (loss) per
limited partnership
interest:
Net operating earnings (loss) . . . . . $ 7.79 5.96 22.06 36.62
Net gain on sale of
investment property . . . . . . . . . -- -- -- 24.59
----------- ---------- ---------- ----------
$ 7.79 5.96 22.06 61.21
=========== ========== ========== ==========
Cash distributions per
limited partnership
interest. . . . . . . . . . . . . . . . . $ -- 130.00 330.00 160.78
=========== ========== ========== ==========
<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
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,510,392 4,225,188
Items not requiring cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 175,180
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 5,018 25,536
Provision for loan loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 111,000
Partnership's share of operations of unconsolidated venture,
net of distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 121,766
Venture partner's share of ventures' operations and gain on sale
of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . 322,154 1,447,022
Total gain on sale of investment property. . . . . . . . . . . . . . . . . . . -- (2,600,763)
Changes in:
Interest, rents and other receivables. . . . . . . . . . . . . . . . . . . . . 34,238 164,108
Due from affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (61,072)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,830) --
Deferred interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . -- (74,352)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 894 57,686
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . (33,097) (37,035)
Other current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . (139,484) (54,871)
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,277 (20,662)
------------ ------------
Net cash provided by (used in) operating activities. . . . . . . . . . . 1,693,562 3,478,731
------------ ------------
Cash flows from investing activities:
Cash proceeds from repayment of mortgage loan. . . . . . . . . . . . . . . . . . 11,600,000 --
Cash proceeds from sale of investment property,
net of selling expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 14,175,511
Additions to investment properties . . . . . . . . . . . . . . . . . . . . . . . (195,608) (204,727)
Payment of deferred costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . (38,484) --
------------ ------------
Net cash provided in (used in) investing activities. . . . . . . . . . . 11,365,908 13,970,784
------------ ------------
Cash flows from financing activities:
Distributions to venture partner . . . . . . . . . . . . . . . . . . . . . . . . (866,604) (5,922,051)
Distributions to limited partners. . . . . . . . . . . . . . . . . . . . . . . . (21,528,437) (10,488,625)
Distributions to general partners. . . . . . . . . . . . . . . . . . . . . . . . (71,181) (217,459)
------------ ------------
Net cash used in financing activities. . . . . . . . . . . . . . . . . . (22,466,222) (16,628,135)
------------ ------------
<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 . . . . . . . . . . . . . . . . . (9,406,752) 821,380
Cash and cash equivalents,
beginning of year. . . . . . . . . . . . . . . . . . . 28,588,948 7,538,476
------------ ------------
Cash and cash equivalents,
end of period. . . . . . . . . . . . . . . . . . . . . $ 19,182,196 8,359,856
============ ============
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
SEPTEMBER 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 $639,214 and
$853,053, respectively, for the nine months ended September 30, 1997 and
1996. In addition, the accompanying financial statements include $121,766
of the Partnership's share of total operations of $374,089 for the nine
months ended September 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 September 30, 1997 and for the nine months ended
September 30, 1997 and 1996 were as follows:
<PAGE>
Unpaid at
September 30,
1997 1996 1997
-------- ------ -------------
Mortgage investment
servicing fees . . . . . . . . $ 16,192 55,170 --
Property management fees . . . . 80,875 73,544 --
Reimbursement (at cost) for
salary and salary-related
expenses related to the
on-site and other costs
for the Partnership and
its investment properties . . . 29,691 19,671 16,480
-------- ------- ------
$126,758 148,385 16,480
======== ======= ======
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 September 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 increased to 88% at September 30, 1997, from 87% at June 30,
1997. The property manager has been attempting to lease the remaining
vacant space in the center and as a result, the center is currently 94%
leased. 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. In such
regard, the venture has reached an agreement in principle to sell the
property by the end of 1997 to an independent third party. However, the
sale is subject to various contingencies including final documentation and
therefore there can be no assurance that a sale transaction will be
completed in the near term with this or any other purchaser. If the sale
is completed on the proposed terms, the venture would recognize a gain in
1997 for financial reporting purposes (due in part to the $2,300,000 value
impairment provision recorded by the venture in 1995) and a gain in 1997
for Federal income tax purposes, approximately 33.5% of which would be
allocated to the affiliated venture partner.
SHOPPES AT RIVERGATE
In March 1997, the Partnership issued a payoff letter to the borrower
of the loan secured by this property 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. The payment of the mortgage loan resulted in no gain or
loss for financial reporting purposes in 1997 (as a result of loan loss
provisions totaling approximately $2,227,000 previously recorded by the
Partnership), and will 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 period
ending July 16, 1997 and for the nine months ended September 30, 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.
<PAGE>
1997 1996
---------- ---------
Total revenues. . . . . . . . . . . . . $ 984,000 1,434,365
========== =========
Net income (loss) . . . . . . . . . . . $ 166,000 10,443
========== =========
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 September 30,
1997 and for the three and nine months ended September 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 consolidated
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
4.7% 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.
During 1997 two other unaffiliated third parties made unsolicited
tender offers to some of the Holders of Interests. These offers sought to
purchase up to 4.9% of the Interests in the Partnership at prices ranging
between $200 and $480 per Interest. Two of such offers have expired and a
third offer is scheduled to expire in late December, 1997. The Special
Committee recommended against acceptance of these offers on the basis that,
among other things, the offer prices were inadequate. As of the date of
this report, the Partnership is aware that 4.14% of the outstanding
Interests have been purchased in 1996 and 1997 by all 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 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 Interests over the entire term of the Partnership are expected
to be less than their original investment.
It is currently anticipated that the Partnership will distribute
approximately $15.66 million ($240 per Interest) to the Holders of
Interests in late November, 1997, which includes approximately $11.4
million ($175 per Interest) from the proceeds of the Shoppes at Rivergate
loan payoff.
RESULTS OF OPERATIONS
The decrease in cash and cash equivalents at September 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). Such
<PAGE>
decrease has been partially offset by the temporary investment of the
approximately $11,600,000 of proceeds from the July, 1997 payoff of the
Shoppes at Rivergate mortgage loan, substantially all of which are expected
to be distributed to the Limited Partners in November, 1997.
The decrease in interest and other receivables at September 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 September 30, 1997.
The decrease in accrued real estate taxes at September 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 mortgage note receivable, deferred interest receivable
and other current liabilities at September 30, 1997 as compared to December
31, 1996 is due to the July, 1997 repayment of the mortgage loan secured by
the Shoppes at Rivergate.
The decrease in venture partner's equity in ventures at September 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 nine months ended September 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 nine months ended September 30, 1997 as compared to the same
periods 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, partially offset by the repayment of the Shoppes at Rivergate
mortgage loan in July, 1997.
<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% 88%
</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 hereby incorporated herein by reference to the
Partnership's report for June 30, 1997 on Form 10-Q (File No. 0-16253)
dated August 8, 1997.
10-C. Loan document related to the repayment of the first
mortgage loan secured by the Shoppes at Rivergate Shopping Center located
in Goodlettsville, Tennessee, dated July 15, 1997 is filed herewith.
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: November 12, 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
By: Gailen J. Hull
Principal Accounting Officer
Date: November 12, 1997
EXHIBIT 10-C.
- -------------
JMB MORTGAGE PARTNERS, LTD. - III
900 North Michigan Avenue
Chicago, IL 60611
July 15, 1997
Rivergate Properties, Ltd.
c/o A.C. Masingill, Jr.
7215 Canmore Lane
Knoxville, Tennessee 37919
Re: THE SHOPPES AT RIVERGATE
Ladies and Gentlemen:
Please refer to that certain instrument caption "DEED OF TRUST,
ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT
("Deed of Trust") dated as of August 24, 1987, by and between Rivergate
Properties, Ltd. ("Grantor"), Robert M. Berger ("Trustee") and JMB Mortgage
Partners, Ltd. - III ("Beneficiary"), recorded in the Office of the
Register of Davidson County, Tennessee in Book 7349, Page 21 as Number
64001, encumbering the land and improvements ("Property") described in the
Deed of Trust, located in Davidson County, Tennessee and popularly known as
"The Shoppes at Rivergate," and securing, among other things, repayment of
a note ("Note") captioned "PROMISSORY NOTE," dated August 24, 1987, in the
original principal amount of Twelve Million Seven Hundred Fifty Thousand
Dollars ($12,750,000), made by Grantor and payable to Beneficiary, and
pursuant to which Beneficiary made a loan ("Loan") to Grantor. Beneficiary
and Grantor entered into a letter agreement (the "Agreement") dated June
23, 1997 pertaining to the repayment of the Loan. The Deed of Trust, the
Note, the Agreement and all other documents evidencing, securing or
governing the Loan executed prior to the date hereof shall sometimes
hereinafter collectively be referred to as the "Loan Documents".
On the date hereof, Beneficiary will accept a payment of
$11,618,123.29 as repayment in full of the Loan, including all principal,
interest and charges which may be due and owing under the Loan Documents.
This sum consists of (a) a principal payment of the Loan in the amount of
$11,600,000.00, (b) $15,000.00 pursuant to the Agreement (which provides
for a payment by Grantor of $1,000.00 for each day that elapses between
June 30, 1997 and the date the repayment of the Loan is received by
Beneficiary) and (c) Basic Interest (as defined in the Note) in the amount
of $3,123.29. For each day after July 15, 1997 that the Loan remains
outstanding, the Loan may be repaid by payment of an amount (the "Repayment
Amount") equal to (a) $11,618,123.29 plus (b) one day's Basic Interest in
the amount of $3,123.29 for each day through the repayment date that the
Loan remains outstanding plus (c) pursuant to the Agreement, $1,000,00 for
each day through the repayment date that the Loan remains outstanding.
The Repayment Amount must be delivered, if at all, by wire transfer
to the account of JMB Mortgage Partners, Ltd. - III at Bank of America
Illinois, Chicago, Illinois, ABA Number 071000039, Account Number 7487630.
<PAGE>
Beneficiary acknowledges that it is currently holding the amount of
$55,696.88 in escrow for the payment of real estate taxes and that, in lieu
of returning such amounts to Grantor, Beneficiary shall apply such amount
toward the Repayment Amount.
In order for Beneficiary to accept a repayment of the Loan in
accordance with the terms of this letter, Beneficiary must receive the
Repayment Amount by the close of business on July 18, 1997. If Beneficiary
does not receive the Repayment Amount by the close of business on July 18,
1997, then this letter shall be null and void, and any repayment of the
Loan must be made in accordance with the terms of the Loan Documents.
Except for the agreement of Beneficiary to accept a repayment of the
Loan in accordance with the terms of this letter, the Loan Documents are
and shall remain in full force and effect in accordance with their terms.
No party to this letter will be bound by, and no rights or liabilities will
arise from, any statements, oral agreements, draft documents, term sheets,
letters or any other communications. This letter may only be amended by a
written amendment, fully executed and delivered by the parties.
This letter replaces and supersedes our letter to you dated July 7,
1997.
Thank you very much,
JMB MORTGAGE PARTNERS, LTD., - III
an Illinois limited partnership
By: JMB Realty Corporation,
a Delaware corporation,
General Partner
JULIE H. WALNER
By: Julie H. Walner
Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 19,182,196
<SECURITIES> 0
<RECEIVABLES> 229,134
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,411,330
<PP&E> 9,499,479
<DEPRECIATION> 0
<TOTAL-ASSETS> 28,954,620
<CURRENT-LIABILITIES> 211,063
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 25,195,101
<TOTAL-LIABILITY-AND-EQUITY> 28,954,620
<SALES> 1,222,288
<TOTAL-REVENUES> 2,572,523
<CGS> 0
<TOTAL-COSTS> 417,508
<OTHER-EXPENSES> 322,469
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,832,546
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,510,392
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,510,392
<EPS-PRIMARY> 22.06
<EPS-DILUTED> 22.06
</TABLE>
