SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): June 10, 1997
USAA Income Properties III Limited Partnership
(Exact name of registrant as specified in its charter)
Delaware 0-13772 74-2356253
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
8000 Robert F. McDermott Fwy., IH 10 West, Suite 600,
San Antonio, Texas 78230-3884
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(210) 498-7391
N/A
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On June 10, 1997, American Industrial Properties REIT
[NYSE:IND] (the "Trust") announced that an agreement had been
signed contemplating the merger of four real estate limited
partnerships into the Trust. The four real estate limited
partnerships are USAA Real Estate Income Investments I Limited
Partnership, USAA Real Estate Income Investments II Limited
Partnership, USAA Income Properties III Limited Partnership, and
USAA Income Properties IV Limited Partnership (collectively, the
"RELPs"). Each of the RELPs is affiliated with USAA Real Estate
Company ("USAA REALCO"), which currently owns 31.8% of the
outstanding shares of the Trust. Among other things, the
agreement is subject to negotiation of the financial terms of the
merger including the respective exchange ratios for each of the
RELPs, obtaining fairness opinions with respect to the
transactions, completion of definitive merger agreements,
approval by the Board of Directors of each of the general
partners of the RELPs and the Board of Trust Managers of the
Trust, approval by the partners of the RELPs and the shareholders
of the Trust, and completion of satisfactory due diligence.
Accordingly, there can be no assurance that definitive merger
agreements will be reached or that the mergers will be ultimately
consummated.
The merger will be subject to the completion of a joint
proxy statement/prospectus filed on Form S-4 with the Securities
and Exchange Commission. If the merger moves forward, the Trust
anticipates that shareholder and limited partner meetings will be
held in the fourth quarter of 1997 to vote on the merger
agreement.
The RELPs own a total of eleven properties with an
aggregate of 1,601,000 square feet, comprised of office
properties (34%), office/R&D properties (28%), industrial
properties (20%) and retail properties (18%). Net book value of
real estate held by the RELPs at March 31, 1997 was approximately
$105 million. USAA REALCO owns approximately 9.9% of the limited
partner units of the RELPs, which have a total of approximately
18,700 limited partners.
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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 hereunto duly authorized.
USAA INCOME PROPERTIES III
LIMITED PARTNERSHIP (Registrant)
BY: USAA Properties III, INC.,
General Partner
June 13, 1997 BY:/s/Martha J. Barrow
Martha J. Barrow
Vice President -
Administration and
Finance/Treasurer
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