SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1996
------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the transition period from to
------------ ------------
Commission file number 0-14348
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BALCOR EQUITY PENSION INVESTORS-III
A REAL ESTATE LIMITED PARTNERSHIP
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3354308
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
--------------
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>
BALCOR EQUITY PENSION INVESTORS - III
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
BALANCE SHEETS
September 30, 1996 and December 31, 1995
(Unaudited)
ASSETS
1996 1995
--------------- --------------
Cash and cash equivalents $ 53,038,351 $ 11,280,395
Accounts and accrued interest receivable 1,233,804 1,775,121
Prepaid expenses, principally real
estate taxes and insurance 488,783 531,549
Deferred expenses, net of accumulated
amortization of $366,650 in 1996 and
$311,855 in 1995 149,641 204,436
--------------- --------------
54,910,579 13,791,501
--------------- --------------
Investment in real estate:
Land 8,802,727 14,394,281
Buildings and improvements 52,409,154 81,277,182
--------------- --------------
61,211,881 95,671,463
Less accumulated depreciation 25,092,964 29,238,934
--------------- --------------
Investment in real estate, net of
accumulated depreciation 36,118,917 66,432,529
--------------- --------------
Investment in joint ventures with
affiliates 22,946,732 23,017,239
--------------- --------------
$ 113,976,228 $ 103,241,269
=============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 217,787 $ 289,191
Due to affiliates 84,734 29,973
Accrued liabilities, principally real
estate taxes 107,530 519,233
Security deposits 159,645 329,099
--------------- --------------
Total liabilities 569,696 1,167,496
--------------- --------------
Limited Partners' capital (683,204
Interests issued and outstanding) 113,012,645 101,720,792
General Partner's capital 393,887 352,981
--------------- --------------
Total partners' capital 113,406,532 102,073,773
--------------- --------------
$ 113,976,228 $ 103,241,269
=============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS - III
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the nine months ended September 30, 1996 and 1995
(Unaudited)
1996 1995
--------------- --------------
Income:
Rental $ 8,342,326 $ 9,667,032
Service 1,701,716 1,967,152
Participation in income of joint
ventures with affiliates 1,508,207 1,354,407
Interest on short-term investments 960,208 463,076
--------------- --------------
Total income 12,512,457 13,451,667
--------------- --------------
Expenses:
Depreciation 1,979,370 2,228,722
Amortization of deferred expenses 54,795 54,795
Property operating 4,029,526 3,739,739
Real estate taxes 1,135,656 1,250,734
Property management fees 478,822 535,653
Administrative 825,915 588,985
--------------- --------------
Total expenses 8,504,084 8,398,628
--------------- --------------
Income before gain on sale of
properties 4,008,373 5,053,039
Gain on sale of properties 14,608,840
--------------- --------------
Net income $ 18,617,213 $ 5,053,039
=============== ==============
Net income allocated to General Partner $ 769,352 $ 747,198
=============== ==============
Net income allocated to Limited Partners $ 17,847,861 $ 4,305,841
=============== ==============
Net income per Limited Partnership Interest
(683,204 issued and outstanding) $ 26.12 $ 6.30
=============== ==============
Distributions to General Partner $ 728,446 $ 609,876
=============== ==============
Distributions to Limited Partners $ 6,556,008 $ 5,488,876
=============== ==============
Distributions per Limited Partnership
Interest:
Taxable $ 7.35 $ 6.15
=============== ==============
Tax Exempt $ 9.77 $ 8.18
=============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS - III
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended September 30, 1996 and 1995
(Unaudited)
1996 1995
--------------- --------------
Income:
Rental $ 1,922,302 $ 3,269,756
Service 502,212 626,654
Participation in income of joint
ventures with affiliates 526,699 354,541
Interest on short-term investments 687,657 158,100
--------------- --------------
Total income 3,638,870 4,409,051
--------------- --------------
Expenses:
Depreciation 498,887 742,907
Amortization of deferred expenses 18,265 18,265
Property operating 1,197,134 1,245,981
Real estate taxes 300,938 395,764
Property management fees 127,535 185,228
Administrative 320,528 167,449
--------------- --------------
Total expenses 2,463,287 2,755,594
--------------- --------------
Income before gain on sale of
properties 1,175,583 1,653,457
Gain on sale of properties 9,760,837
--------------- --------------
Net income $ 10,936,420 $ 1,653,457
=============== ==============
Net income allocated to General Partner $ 274,140 $ 246,137
=============== ==============
Net income allocated to Limited Partners $ 10,662,280 $ 1,407,320
=============== ==============
Net income per Limited Partnership Interest
(683,204 issued and outstanding) $ 15.60 $ 2.06
=============== ==============
Distribution to General Partner $ 277,369 $ 262,460
=============== ==============
Distribution to Limited Partners $ 2,496,319 $ 2,362,136
=============== ==============
Distribution per Limited Partnership
Interest:
Taxable $ 2.80 $ 2.65
=============== ==============
Tax Exempt $ 3.72 $ 3.52
=============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS - III
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the nine months ended September 30, 1996 and 1995
(Unaudited)
1996 1995
--------------- --------------
Operating activities:
Net income $ 18,617,213 $ 5,053,039
Adjustments to reconcile net income to
net cash provided by operating
activities:
Gain on sale of properties (14,608,840)
Participation in income of joint
ventures with affiliates (1,508,207) (1,354,407)
Depreciation of properties 1,979,370 2,228,722
Amortization of deferred expenses 54,795 54,795
Net change in:
Accounts and accrued interest
receivable 541,317 593,500
Prepaid expenses 42,766 (80,787)
Accounts payable (71,404) (362,104)
Due to affiliates 54,761 (72,413)
Accrued liabilities 3,979 (57,436)
Security deposits (169,454) 23,602
--------------- --------------
Net cash provided by operating activities 4,936,296 6,026,511
--------------- --------------
Investing activities:
Distributions from joint ventures
with affiliates 1,578,714 1,611,801
Improvements to property (120,070) (232,255)
Proceeds from sale of properties 43,850,000
Payment of selling costs (1,202,530)
--------------- --------------
Net cash provided by investing activities 44,106,114 1,379,546
--------------- --------------
Financing activities:
Distributions to Limited Partners (6,556,008) (5,488,876)
Distributions to General Partner (728,446) (609,876)
--------------- --------------
Cash used in financing activities (7,284,454) (6,098,752)
--------------- --------------
Net change in cash and cash equivalents 41,757,956 1,307,305
Cash and cash equivalents at beginning
of period 11,280,395 9,862,343
--------------- --------------
Cash and cash equivalents at end of period $ 53,038,351 $ 11,169,648
=============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-III
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the nine months and quarter
ended September 30, 1996, and all such adjustments are of a normal and
recurring nature.
2. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
nine months and quarter ended September 30, 1996 are:
Paid
-----------------------
Nine Months Quarter Payable
------------ --------- ----------
Reimbursement of expenses to
the General Partner, at cost $116,639 $25,718 $84,734
3. Investment in Joint Venture with Affiliates:
The Partnership owns a 39.48% joint venture interest in the 1275 K Street
Office Building, a 43.3% joint venture interest in the Westech 360 Office
Building and a 21.95% joint venture interest in the Perimeter 400 Center Office
Building. The following information has been summarized from the financial
statements of the joint ventures:
1996
------------
Net investment in real estate
as of September 30 $66,262,466
Total liabilities as of September 30 900,859
Total income 11,536,315
Net income 2,560,931
4. Property Sales:
In June 1996, the Partnership sold the Westlake Meadows Apartments in an all
cash sale for $10,800,000. From the proceeds of the sale, the Partnership paid
$344,963 in selling costs. The basis of the property was $5,607,034 which is
net of accumulated depreciation of $2,884,709. For financial statement
purposes, the Partnership recognized a gain of $4,848,003 from the sale of this
property.
<PAGE>
In July 1996, the Partnership sold the Green Trails Apartments in an all cash
sale for $33,050,000. In addition, the buyer assumed a $415,682 liability for
accrued real estate taxes. From the proceeds of the sale, the Partnership paid
$857,567 in selling costs. The basis of the property was $22,847,278 which is
net of accumulated depreciation of $3,240,631. For financial statement
purposes, the Partnership recognized a gain of $9,760,837 from the sale of this
property.
5. Subsequent Event:
In October 1996, the Partnership made a distribution of $43,857,235 ($9.00 per
Taxable Interest and $68.47 per Tax-exempt Interest) to the holders of Limited
Partnership Interests for the third quarter of 1996. This distribution
includes a regular quarterly distribution of $2.80 per Taxable Interest and
$3.72 per Tax-exempt Interest, a special distribution of Net Cash Receipts of
$6.20 per Taxable Interest and $8.25 per Tax-exempt Interest received in
connection with the sale of Green Trails Apartments, and a special distribution
of $56.50 per Tax-exempt Interest from Net Cash Proceeds from the sales of the
Westlake Meadows and Green Trails apartment complexes.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-III
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Equity Pension Investors-III A Real Estate Limited Partnership (the
"Partnership") is a limited partnership formed in 1985 to make first mortgage
loans and to invest in and operate income-producing real property. The
Partnership raised $170,801,000 through the sale of Limited Partnership
Interests. The Partnership funded four first mortgage loans, two of which were
jointly funded with affiliates, and acquired five real property investments and
a minority joint venture interest with an affiliate in another real property
investment. All four properties collateralized by the Partnership's mortgage
loans were acquired through foreclosure, including the loans funded jointly
with affiliates, which were reclassified to investment in joint ventures with
affiliates. During 1996, the Partnership sold two properties, one in June and
one in July. The Partnership currently has five properties and three
investments in joint ventures with affiliates in its portfolio.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1995 for a more complete understanding of
the Partnership's financial position.
Operations
- ----------
The Partnership recognized gains related to the sales of Westlake Meadows and
Green Trails apartment complexes during 1996 which was the primary reason for
the increase in net income for the nine months and quarter ended September 30,
1996 as compared to the same periods in 1995. Further discussion of the
Partnership's operations is summarized below.
1996 Compared to 1995
- ---------------------
Unless otherwise noted, discussions of fluctuations between 1996 and 1995 refer
to both the nine months and quarters ended September 30, 1996 and 1995.
The Partnership sold Westlake Meadows and Green Trails apartment complexes in
June and July 1996, respectively. As a result, the Partnership recognized
gains totaling $14,608,840 during 1996. These sales also resulted in decreases
in rental and service income, depreciation, property operating, real estate
taxes, and property management fees during 1996 as compared to 1995. These
decreases were partially or fully offset by the events described below.
<PAGE>
Participation in income of joint ventures with affiliates represents the
Partnership's share of operations of the 1275 K Street, Westech 360 and
Perimeter 400 office buildings. Operations at the 1275 K Street Office
Building remained relatively unchanged during the nine months and quarter ended
September 30, 1996, and operations at the Perimeter 400 Center Office Building
remained relatively unchanged during the nine months ended September 30, 1996
as compared to the same period in 1995. However, lower broker commissions and
repair and maintenance expenses at the Perimeter 400 Center Office Building
during 1995 caused net income at this property to increase during the quarter
ended September 30, 1996 as compared to the same period in 1995. An increase
in rental income due to higher rental rates caused net income to increase at
the Westech 360 Office Building during the quarter and nine months ended
September 30, 1996. The combined effect of these events caused participation
in income of joint ventures with affiliates to increase during 1996 as compared
to 1995.
Higher average cash balances due to the investment of the proceeds from the
property sales prior to distribution to Limited Partners, resulted in an
increase in interest income on short-term investments during 1996 as compared
to 1995.
Leasing expenses incurred in 1996 related to tenants at the Arborland Consumer
Mall and the Erindale Shopping Centre resulted in increased property operating
expenses and offset the decreases from the two property sales during the nine
months ended September 30, 1996 as compared to the same period in 1995.
The Partnership incurred higher consulting, legal, printing and postage costs
in connection with its response to a tender offer and certain related
litigation during 1996, which was partially offset by legal fees incurred
during 1995 relating to lawsuits involving the Partnership. As a result,
administrative expenses increased during 1996 as compared to 1995.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership increased by approximately $41,758,000 as
of September 30, 1996 when compared to December 31, 1995 primarily due to the
proceeds received from the property sales. The Partnership generated cash flow
totaling approximately $4,936,000 from its operating activities which represent
the operations of the Partnership's properties and interest income on
short-term investments, which were partially offset by the payment of
administrative expenses. Investing activities consisted of net proceeds
received from the sales of the Westlake Meadows and Green Trails apartment
complexes of approximately $42,647,000, improvements to property of
approximately $120,000, and distributions received from joint ventures with
affiliates of approximately $1,579,000. Financing activities consisted of
quarterly distributions to Partners of approximately $7,284,000. The
Partnership made a special distribution of proceeds received from the property
sales to Limited Partners in October 1996, as discussed below.
<PAGE>
The Partnership defines cash flow generated from its properties as an amount
equal to the property's revenue receipts less property related expenditures.
During the nine months ended September 30, 1996 and 1995, all five properties
owned by the Partnership at September 30, 1996 and the three properties in
which the Partnership holds minority joint venture interests generated positive
cash flow. The Westlake Meadows and Green Trails apartment complexes, which
were sold in June and July 1996, respectively, generated positive cash flow
during 1995 and prior to their sales in 1996.
As of September 30, 1996, the occupancy rate of the Partnership's remaining
residential property was 95% and the occupancy rates of the commercial
properties ranged from 87% to 95% except for the Arborland Consumer Mall which
had an occupancy of 78%. Many rental markets continue to remain extremely
competitive; therefore the General Partner's goals are to maintain high
occupancy levels while increasing rents where possible, and to monitor and
control operating expenses and capital improvement requirements at the
properties.
The General Partner believes that the market for multifamily housing and office
properties has become increasingly favorable to sellers of these properties.
During June 1996 and July 1996, the Partnership sold the Westlake Meadows and
Green Trails apartment complexes, respectively. The Partnership is actively
marketing five additional properties in its portfolio. The three joint venture
properties are also being actively marketed. The General Partner examines each
property individually by property type and market in determining the optimal
time to sell each property.
In June 1996, the Partnership sold the Westlake Meadows Apartments in an all
cash sale for $10,800,000. From the proceeds of the sale, the Partnership paid
$344,963 in selling costs. In accordance with the Partnership Agreement, the
Partnership distributed the Net Cash Proceeds to the Tax-exempt Limited
Partners in October 1996. See Note 4 of Notes to Financial Statements for
additional information.
In July 1996, the Partnership sold the Green Trails Apartments in an all cash
sale for $33,050,000. In addition, the buyer assumed a $415,682 liability for
the real estate taxes. From the proceeds of the sale, the Partnership incurred
$857,567 in selling costs. Pursuant to the terms of the sale, $250,000 of the
proceeds will be retained by the Partnership until December 1996. In accordance
with the Partnership Agreement, the Partnership distributed a majority of the
Net Cash Proceeds to the Tax-exempt Limited Partners in October 1996. See Note
4 of Notes to Financial Statements for additional information.
<PAGE>
In October 1996, the Partnership made a distribution of $43,857,235 ($9.00 per
Taxable Interest and $68.47 per Tax-exempt Interest) to the holders of Limited
Partnership Interests for the third quarter of 1996. This distribution
includes a regular quarterly distribution of $2.80 per Taxable Interest and
$3.72 per Tax-exempt Interest, a special distribution of Net Cash Receipts of
$6.20 per Taxable Interest and $8.25 per Tax-exempt Interest received in
connection with the sale of Green Trails Apartments, and a special distribution
of $56.50 per Tax-exempt Interest from Net Cash Proceeds to Tax-exempt Limited
Partners pursuant to the Partnership Agreement from the sales of the Westlake
Meadows and Green Trails apartment complexes. Including the October 1996
distribution, Limited Partners have received Net Cash Receipts distributions of
$97.80 per $250 Taxable Interest and $130.14 per Tax-exempt Interest, and Net
Cash Proceeds of $56.50 per $250 Tax-exempt Interest. In October 1996, the
Partnership also paid $669,337 to the General Partner as its distributive share
of Net Cash Receipts distributed for the third quarter of 1996 and made a
contribution to the Repurchase Fund of $223,112. The General Partner expects
that the cash flow from property operations should enable the Partnership to
continue making quarterly distributions. However, the level of future
distributions will be dependent on the amount of cash flow generated from
property operations and property sales as to which there can be no assurances.
During the nine months ended September 30, 1996, the General Partner, on behalf
of the Partnership, used amounts placed in the Repurchase Fund to repurchase
2,081 Interests from Limited Partners at a total cost of $370,443.
Changing interest rates can impact real estate values in several ways.
Generally, declining interest rates may lower the cost of capital allowing
buyers to pay more for a property whereas rising interest rates may increase
the cost of capital and lower the price of real estate.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-III
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
Klein Proposed Class Action
- ---------------------------
On August 30, 1996, a proposed class action complaint was filed, Lenore Klein
vs. Lehman Brothers, Inc., et al. (Superior Court of New Jersey, Law Division,
Union County, Docket No. Unn-L-5162-96). The Partnership, additional limited
partnerships which were sponsored by The Balcor Company (together with the
Partnership, the "Affiliated Partnerships"), American Express Company, Lehman
Brothers, Inc., additional limited partnerships sponsored by the predecessor of
Lehman Brothers, Inc. (together with the Partnership and the Affiliated
Partnerships, the "Defendant Partnerships") and Smith Barney Holdings, Inc. are
the named defendants in the action. The complaint was amended on October 18,
1996 to add additional plaintiffs. The amended complaint alleges, among other
things, common law fraud and deceit, negligent misrepresentation, breach of
contract, breach of fiduciary duty and violation of certain New Jersey statutes
relating to the disclosure of information in the offering of limited
partnership interests in the Defendant Partnerships. The amended complaint
seeks judgment for compensatory damages equal to the amount invested in the
Defendant Partnerships by the proposed class plus interest accrued thereon;
general damages for injuries arising from the defendants' actions; equitable
relief, including rescission, on certain counts; punitive damages; treble
damages on certain counts; recovery from the defendants of all profits received
by them as a result of their actions relating to the Defendant Partnerships;
attorneys' fees and other costs.
The defendants intend to vigorously contest this action. No class has been
certified as of this date. Management of each of the defendants believes they
have meritorious defenses to contest the claims. It is not determinable at this
time whether or not an unfavorable decision in this action would have a
material adverse impact on the Partnership.
Proposed Class and Derivative Action Lawsuits
- ---------------------------------------------
On June 14, 1996, a proposed class and derivative action complaint was filed,
Dee vs. Walton Street Capital Acquisition II, LLC (Circuit Court of Cook
County, Illinois, County Department, Chancery Division ("Chancery Court"), Case
No. 96 CH 06283) (the "Dee Case"), naming the General Partner and the general
partners (the "Balcor Defendants") of nine other limited partnerships sponsored
by The Balcor Company (together with the Partnership, the "Affiliated
Partnerships"), as well as the Affiliated Partnerships, as defendants.
Additional defendants were Insignia Management Group ("Insignia") and Walton
Street Capital Acquisition II, LLC ("Walton") and certain of their affiliates
and principals (collectively, the "Walton and Insignia Defendants"). The
complaint alleged, among other things, that the tender offers for the purchase
of limited partnership interests in the Affiliated Partnerships made by a joint
<PAGE>
venture consisting of affiliates of Insignia and Walton were coercive and
unfair.
On July 1, 1996, another proposed class action complaint was filed in the same
court, Anderson vs. Balcor Mortgage Advisors (Case No. 96 CH 06884) (the
"Anderson Case"). An amended complaint consolidating the Dee and Anderson
Cases (the "Dee/Anderson Case") was filed on July 25, 1996.
The complaint seeks to assert class and derivative claims again the Walton and
Insignia Defendants and alleges that, in connection with the tender offers, the
Walton and Insignia Defendants misused the Balcor Defendants' and Insignia's
fiduciary positions and knowledge in breach of the Walton and Insignia
Defendants' fiduciary duty and in violation of the Illinois Securities and
Consumer Fraud Acts. The plaintiffs amended their complaint on October 8, 1996,
adding additional claims. The plaintiffs request certification as a class and
derivative action, unspecified compensatory damages and rescission of the
tender offers. Each of the defendants have filed motions to dismiss the
complaint. The court has not yet ruled on these motions.
The Balcor Defendants intend to vigorously contest this action. No class has
been certified as of this date. Management of each of the Balcor Defendants
believes they have meritorious defenses to contest the claims. It is not
determinable at this time whether or not an unfavorable decision in this action
would have a material adverse impact on the Partnership.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Form of Subscription Agreement set forth as Exhibit 4.1 to Amendment No. 3
to the Registrant's Registration Statement on Form S-11 dated September 25,
1985 (Registration Statement No. 2-97579) and Form of Confirmation regarding
Interests in the Registrant set forth as Exhibit 4.2 to the Registrant's Report
on Form 10-Q for the quarter ended June 30, 1992 (Commission File No. 0-14348)
are incorporated herein by reference.
(10) Material Contracts:
Agreement of Sale and attachment thereto relating to the sale of the Green
Trails Apartments located in Lisle, Illinois previously filed as Exhibit 2 to
the Registrant's Report on Form 8-K dated June 28, 1996 is incorporated herein
by reference.
(27) Financial Data Schedule of the Registrant for the nine month period ending
September 30, 1996 is attached hereto.
(b) Reports on Form 8-K: No Reports on Form 8-K were filed during the quarter
ended September 30, 1996.
<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.
BALCOR EQUITY PENSION INVESTORS-III
A REAL ESTATE LIMITED PARTNERSHIP
By: /s/Thomas E. Meador
---------------------------------
Thomas E. Meador
President and Chief Executive Officer (Principal
Executive Officer) of Balcor
Equity Partners-III, the General Partner
By: /s/Jayne A. Kosik
-----------------------------------
Jayne A. Kosik
Vice President, and Chief
Financial Officer (Principal Accounting
Officer) of Balcor Equity Partners-III, the
General Partner
Date: November 14, 1996
----------------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 53038
<SECURITIES> 0
<RECEIVABLES> 1234
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 54761
<PP&E> 61212
<DEPRECIATION> 25093
<TOTAL-ASSETS> 113976
<CURRENT-LIABILITIES> 570
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 113406
<TOTAL-LIABILITY-AND-EQUITY> 113976
<SALES> 0
<TOTAL-REVENUES> 27121
<CGS> 0
<TOTAL-COSTS> 5644
<OTHER-EXPENSES> 2860
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 18617
<INCOME-TAX> 0
<INCOME-CONTINUING> 18617
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18617
<EPS-PRIMARY> 26.12
<EPS-DILUTED> 26.12
</TABLE>
