<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1997
--------------
Commission file number 0-16027
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REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3341425
- ----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
27611 La Paz Road, P.O. Box A-1, Laguna Niguel, California 92677-0100
- ----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(714) 643-7700
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(Registrant's telephone number, including area code)
N/A
- ----------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12(g), 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve 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
--- ---
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REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
QUARTERLY REPORT ON FORM 10-Q
FOR THE THREE MONTHS ENDED MARCH 31, 1997
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statement of Net Assets in Liquidation -
March 31, 1997 (Unaudited) . . . . . . . . . . . . . 3
Balance Sheet -
December 31, 1996 . . . . . . . . . . . . . . . . . 4
Statements of Operations (Unaudited) -
Three Months Ended March 31, 1997 and 1996 . . . . . 5
Statements of Cash Flows (Unaudited) -
Three Months Ended March 31, 1997 and 1996 . . . . . 6
Notes to Financial Statements (Unaudited) . . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . 11
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . 14
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
STATEMENT OF NET ASSETS IN LIQUIDATION
MARCH 31, 1997
(UNAUDITED)
ASSETS (Liquidation Basis):
- ---------------------------
Properties held for sale $14,217,000
Investment in Cooper Village Partners 2,742,000
Cash and cash equivalents 1,804,000
Accounts receivable 18,000
Other assets 35,000
-----------
Total Assets 18,816,000
-----------
LIABILITIES (Liquidation Basis):
- --------------------------------
Accounts payable and accrued liabilities 356,000
Accrued expenses for liquidation 318,000
-----------
Total Liabilities 674,000
-----------
Net Assets in Liquidation $18,142,000
===========
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
BALANCE SHEET
DECEMBER 31, 1996
ASSETS
- ------
Properties held for sale (net of valuation
allowance of $2,135,000) $26,654,000
Investment in Cooper Village Partners 2,727,000
Cash and cash equivalents 807,000
Accounts receivable (net of allowance for
doubtful accounts of $8,000) 42,000
Accrued rent receivable 799,000
Prepaid expenses and other assets 582,000
-----------
$31,611,000
===========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Accounts payable and accrued liabilities $ 574,000
-----------
Partners' capital (deficit):
Limited Partners 31,254,000
General Partner (217,000)
-----------
31,037,000
Commitments and contingencies
-----------
$31,611,000
===========
Note: The balance sheet at December 31, 1996 has been prepared from the
audited financial statements as of that date.
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
-----------------------------
1997 1996
---------- -----------
REVENUES
- --------
Rental income $ 270,000 $1,220,000
Interest income 61,000 13,000
Loss on sale of property (109,000) -
--------- ----------
Total revenues 222,000 1,233,000
--------- ----------
EXPENSES
- --------
Operating expenses 227,000 300,000
Real estate taxes 124,000 176,000
Depreciation and amortization 247,000 33,000
General and administrative 321,000 192,000
Adjustment to carrying value of
real estate - 166,000
--------- ----------
Total expenses 919,000 867,000
--------- ----------
(Loss) income before equity in
earnings (697,000) 366,000
Equity in earnings of Cooper
Village Partners 66,000 113,000
--------- ----------
NET (LOSS) INCOME $(631,000) $ 479,000
========== ==========
NET (LOSS) INCOME ALLOCABLE TO:
General Partner $ (6,000) $ 5,000
========== ==========
Limited Partners $(625,000) $ 474,000
========== ==========
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------
1997 1996
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (631,000) $ 479,000
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 247,000 33,000
Equity in earnings of Cooper Village
Partners (66,000) (113,000)
Adjustment to carrying value of real estate - 166,000
Loss on sale of property 109,000 -
Changes in:
Accounts receivable 24,000 37,000
Prepaid expenses and other assets 106,000 26,000
Accrued rent receivable 575,000 20,000
Accounts payable and accrued liabilities (218,000) (15,000)
------------ ----------
Net cash provided by operating activities 146,000 633,000
Cash flows from investing activities:
Investments in real estate (114,000) (4,000)
Proceeds from sale of property 12,860,000 -
Distributions received from
Cooper Village Partners 51,000 59,000
------------ ----------
Net cash provided by investing activities 12,797,000 55,000
Cash flows from financing activities:
Distributions (11,946,000) (637,000)
------------ ----------
Net cash used in financing activities (11,946,000) (637,000)
Net increase in cash and cash equivalents 997,000 51,000
Cash and cash equivalents, beginning of period 807,000 980,000
------------ ----------
Cash and cash equivalents, end of period $ 1,804,000 $1,031,000
============ ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - UNAUDITED
(1) Accounting Policies
-------------------
The financial statements of Real Estate Income Partners III, Limited
Partnership (the "Partnership") included herein have been prepared by
the General Partner, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. These
financial statements include all adjustments which are of a normal
recurring nature and, in the opinion of the General Partner, are
necessary for a fair presentation. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted, pursuant to the rules and regulations of the
Securities and Exchange Commission. These financial statements should
be read in conjunction with the financial statements and notes thereto
included in the Partnership's annual report on Form 10-K for the year
ended December 31, 1996.
Liquidation Basis of Accounting
On February 18, 1997, the Partnership mailed a Consent Solicitation to
the Limited Partners which sought their consent to dissolve the
Partnership and sell and liquidate all of its remaining properties as
soon as practicable, consistent with selling the Partnership's
properties to the best advantage under the circumstances. A majority
in interest of the Limited Partners consented by March 13, 1997. As a
result, the Partnership has adopted the liquidation basis of
accounting as of March 31, 1997. The difference between the adoption
of the liquidation basis of accounting as of March 13, 1997 and March
31, 1997 was not material.
Under the liquidation basis of accounting, assets are stated at their
estimated net realizable values and liabilities are stated at their
anticipated settlement amounts. The valuation of assets and
liabilities necessarily requires many estimates and assumptions, and
there are substantial uncertainties in carrying out the dissolution of
the Partnership. The actual values upon dissolution and costs
associated therewith could be higher or lower than the amounts
recorded.
Earnings Per Unit
The Partnership Agreement does not designate investment interests in
units. All investment interests are calculated on a "percent of
Partnership" basis, in part to accommodate reduced rates on sales
commissions for subscriptions in excess of certain specified amounts.
A Limited Partner who was charged a reduced sales commission or no
sales commission was credited with proportionately larger Invested
Capital and therefore had a disproportionately greater interest in the
capital and revenues of the Partnership than a Limited Partner who
paid commissions at a higher rate. As a result, the Partnership has
no set unit value as all accounting, investor reporting and tax
information is based upon each investor's relative percentage of
Invested Capital. Accordingly, earnings or loss per unit is not
presented in the accompanying financial statements.
7
<PAGE> 8
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - UNAUDITED (Cont'd.)
(1) Accounting Policies (Cont'd.)
-------------------
Carrying Value of Real Estate (Prior to the Adoption of Liquidation
Basis of Accounting)
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121 "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of," ("FAS 121"). This Statement requires that if the
General Partner believes factors are present that may indicate
long-lived assets are impaired, the undiscounted cash flows, before
debt service, related to the assets should be estimated. If these
estimated cash flows are less than the carrying value of the asset,
then impairment is deemed to exist. If impairment exists, the asset
should be written down to the estimated fair value.
Further, assets held for sale, including any unrecoverable accrued
rent receivable or capitalized leasing commissions, were carried at
the lower of carrying value or fair value less estimated selling
costs. Any adjustment to carrying value was recorded as a valuation
allowance against property held for sale. Each reporting period, the
General Partner reviewed its estimates of fair value, which were
decreased or increased up to the original carrying value. Finally,
assets held for sale are no longer depreciated. The General Partner
adopted FAS 121 at December 31, 1995 and the adoption did not have a
material impact on the Partnership's operations or financial position,
as prior to December 31, 1995, the Partnership had not had any
properties held for sale.
As noted above, as of December 31, 1995, the General Partner decided
to account for the Partnership's properties as assets held for sale,
assuming an average 12 month holding period, instead of for
investment. Accordingly, the General Partner compared the carrying
value of each property to its appraised value as of January 1, 1996.
If the carrying value of the property and certain related assets was
greater than its appraised value, less selling costs, the General
Partner reduced the carrying value of the property by the difference.
Using this methodology, the General Partner determined that Creek Edge
Business Center, Flaircentre and NorthTech had carrying values greater
than they had appraised values, and therefore reduced their carrying
values by $50,000, $600,000 and $350,000 to $3,802,000, $2,155,000 and
$13,933,000, respectively.
Utilizing the same methodology, assuming a 12 month holding period,
for the year ended December 31, 1996, the General Partner determined
that Creek Edge, Northtech and Martinazzi Square had carrying values
greater than their respective appraised values (or in the case of
Northtech, its sales price). As a result, the carrying value was
adjusted by $548,000, $1,068,000 and $119,000, respectively to
$4,160,000, $12,968,000 and $5,500,000, respectively, as of December
31, 1996.
(2) Transactions with Affiliates
----------------------------
The Partnership has no employees and, accordingly, the General Partner
and its affiliates perform services on behalf of the Partnership in
connection with administering the affairs of the Partnership. The
General Partner and affiliates are reimbursed for their general and
administrative costs actually incurred and associated with services
performed on behalf of the Partnership.
8
<PAGE> 9
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - UNAUDITED(Cont'd.)
(2) Transactions with Affiliates (Cont'd.)
----------------------------
For the three months ended March 31, 1997 and 1996, the Partnership
incurred approximately $25,000 and $35,000, respectively, of such
expenses.
An affiliate of the General Partner provides property management
services with respect to the Partnership's properties and receives a
fee for such services not to exceed 6% of the gross receipts from the
properties under management provided leasing services are performed,
otherwise not to exceed 3%. Such fees amounted to approximately
$29,000 and $49,000, respectively, for the three months ended March
31, 1997 and 1996. In addition, an affiliate of the General Partner
received $13,000 and $17,000 for the three months ended March 31, 1997
and 1996, respectively, as reimbursement of costs of on-site property
management personnel and other reimbursable costs.
As previously reported, on June 24, 1993, the Partnership completed
its solicitation of written consents from its Limited Partners. A
majority in interest of the Partnership's Limited Partners approved
each of the proposals contained in the Information Statement dated May
5, 1993. Those proposals were implemented by the Partnership as
contemplated by the Information Statement as amendments to the
Partnership Agreement, and are reflected in these financial statements
as such.
The amended Partnership Agreement provides for the Partnership's
payment to the General Partner of an annual asset management fee equal
to .65% for 1997 and .75% for 1996 of the aggregate appraised value of
the Partnership's properties as determined by independent appraisal
undertaken in January of each year. Such fees for the three months
ended March 31, 1997 and 1996, amounted to $30,000 and $58,000,
respectively. In addition, the amended Partnership Agreement provides
for payment to the General Partner of a leasing fee for services
rendered in connection with leasing space in a Partnership property
after the expiration or termination of leases. Fees for leasing
services for the three months ended March 31, 1997 and 1996, amounted
to $5,000 and $26,000, respectively.
In addition to the aforementioned, the General Partner was also paid
$13,000 and $16,000 related to the Partnership's portion (42%) of
asset management fees, property management fees, leasing fees and
reimbursement of on-site personnel and other reimbursable expenses for
Cooper Village Partners for the three months ended March 31, 1997 and
1996, respectively.
On January 24, 1997 the Partnership sold Northtech for a sales price
of $13,600,000. The Partnership realized approximately $13,079,000
from the sale, after accounting for closing costs and prorations of
approximately $521,000. The purchaser of Northtech has for three
years had a preexisting relationship with an affiliate of Birtcher
Investors, pursuant to which the purchaser had contracted with
Birtcher to locate, acquire and manage real property for the
purchaser's account. No broker was paid a commission as part of the
transaction. Since the sale price exceeded the January 1, 1993
appraised value ($12,900,000), pursuant to the 1993 amendment of the
Partnership Agreement, the General Partner earned and was paid a
property disposition fee of approximately $340,000 in connection with
the sale. The purchaser paid a net investment advisory fee of
approximately $52,000 to the affiliate of Birtcher Investors and has
retained Birtcher Property Services to manage the property.
9
<PAGE> 10
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - UNAUDITED (Cont'd.)
(3) Commitments and Contingencies
-----------------------------
The Partnership is not a party to any pending legal proceedings other
than ordinary routine litigation incidental to its business. It is
the General Partner's belief that the outcome of these proceedings
will not be material to the business or financial condition of the
Partnership.
(4) Accrued Expenses for Liquidation
--------------------------------
Accrued expenses for liquidation as of March 31, 1997, includes
estimates of costs to be incurred in carrying out the dissolution and
liquidation of the Partnership. These costs include estimates of
legal fees, accounting fees, tax preparation and filing fees,
professional services and the general partner's liability insurance.
The actual costs could vary significantly from the related provisions
due to the uncertainty related to the length of time required to
complete the liquidation and dissolution and the complexities which
may arise in disposing of the Partnership's remaining assets.
10
<PAGE> 11
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
-------------------------------
The Partnership completed its acquisition program in December 1988 and
is principally engaged in the operation of its properties. The
Partnership's original objective had been to hold its properties as
long-term investments. However, an Information Statement, dated May 5,
1993, mandated that the General Partner seek a vote of the Limited
Partners no later than December 31, 1996, regarding prompt liquidation
of the Partnership in the event that properties with appraised values
as of January 1993, which constituted at least one-half of the
aggregate appraised values of all Partnership properties as of that
date were not sold or under contract for sale by the end of 1996.
Given the mandate of the May 5, 1993 Information Statement, at
December 31, 1995, the General Partner decided to account for the
Partnership's properties as assets held for sale instead of for
investment. In a Consent Solicitation dated February 18, 1997, the
Partnership solicited and received the consent of the Limited Partners
as of March 13, 1997, to dissolve the Partnership and gradually settle
and close the Partnership's business and dispose of and convey the
Partnership's property as soon as practicable, consistent with
obtaining reasonable value for the properties. The Partnership's
properties were held for sale throughout 1996 and are currently held
for sale.
Certain of the Partnership's properties are not fully leased. The
Partnership is actively marketing the vacant space in these
properties, subject to the competitive environment in each of the
market areas. To the extent the Partnership is not successful in
maintaining or increasing occupancy levels at these properties, the
Partnership's future cash flow and distributions may be reduced.
Regular distributions through March 31, 1996 represent cash flow
generated from operations of the Partnership's properties and interest
earned on the Partnership's working capital, net of capital reserve
requirements. In June 1996, the Partnership made a special
distribution of $2,159,000 representing 100% of the proceeds from the
sale of Flaircentre. In addition, on February 28, 1997, the
partnership made a special distribution of approximately $11,700,000
representing net proceeds from the sale of Northtech after $1,000,000
held back for Partnership reserve and payment of $340,000 disposition
fees to the General Partner. Future cash distributions will be made
principally to the extent of cash flow attributable to operations and
sales of the Partnership's properties and interest earned on the
investment by capital reserves, after payment for capital improvements
to the Partnership's properties and providing for capital reserves.
On January 24, 1997 the Partnership sold Northtech for a sales price
of $13,600,000. The Partnership realized approximately $13,079,000
from the sale, after accounting for closing costs and prorations of
approximately $521,000. The purchaser of Northtech has for three
years had a preexisting relationship with an affiliate of Birtcher
Investors, pursuant to which the purchaser had contracted with
Birtcher to locate, acquire and manage real property for the
purchaser's account. No broker was paid a commission as part of the
transaction. Since the sale price exceeded the January 1, 1993
appraised value ($12,900,000), pursuant to the 1993 amendment of the
Partnership Agreement, the
11
<PAGE> 12
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Cont'd.)
Liquidity and Capital Resources (Cont'd.)
-------------------------------
General Partner earned and was paid a property disposition fee of
approximately $340,000 in connection with the sale. The purchaser
paid a net investment advisory fee of approximately $52,000 to the
affiliate of Birtcher Investors and has retained Birtcher Property
Services to manage the property.
The Partnership distributed proceeds of the sale of Northtech to the
Limited Partners on February 28, 1997, together with the Partnership's
normal quarterly distribution. After paying the property disposition
fee and holding back approximately $1,000,000 to replenish and
increase the Partnership's reserves, the Partnership distributed
approximately $11,700,000 to the Limited Partners.
The large reserve fund is prudent because after the sale of
Flaircentre and Northtech, the Partnership's asset base is effectively
half its former size. The Partnership's remaining assets will
generate less cash flow, necessitating a larger reserve fund to cover
potential emergencies or demands for capital expenditures. Since
Northtech generated approximately 68% of the cash flow that funded the
Partnership's regular operations and distributions for the year ended
December 31, 1996, future distributions to Limited Partners of net
cash from operations are expected to be significantly reduced.
Results of Operations Prior to Adoption of the Liquidation Basis of
Accounting for the Three Months Ended March 31, 1997 Compared With the
Three Months Ended March 31, 1996
----------------------------------------------------------------------
The decrease in rental income for the three months ended March 31,
1997, as compared to the corresponding period in 1996, was primarily
attributable to the sale of Flaircentre in June 1996 and Northtech in
January 1997.
The increase in interest income for the three months ended March 31,
1997, as compared to the corresponding period in 1996, was
attributable to the increase in Partnership's working capital
available for short term investment.
The decrease in operating expense for the three months ended March 31,
1997, as compared to the corresponding period in 1996, was
attributable to the sale of Flaircentre in June 1996, and Northtech in
January 1997.
The decrease in real estate taxes for the three months ended March 31,
1997, as compared to the corresponding period was attributable to the
sale of Flaircentre in June 1996, and Northtech in January 1997.
The decrease in equity in earnings of Cooper Village Partners for the
three months ended March 31, 1997, as compared to the corresponding
period in 1996, was primarily attributable to the Partnership's
portion (42%) of a $127,000 lease termination settlement fee collected
from Boston Store in March 1996.
General and administrative expenses for the three months ended March
31, 1997 and 1996, included charges of $60,000 and $119,000,
respectively, from the General Partner and its affiliates for services
rendered in connection with administering the affairs of the
Partnership and operating the Partnership's properties. Also included
in general and administrative expenses for the three
12
<PAGE> 13
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd.)
Results of Operations Prior to Adoption of the Liquidation Basis of
Accounting for the Three Months Ended March 31, 1997 Compared With the
Three Months Ended March 31, 1996 (Cont'd.)
-----------------------------------------------------------------------
months ended March 31, 1997 and 1996, are direct charges of $261,000
and $73,000, respectively, relating to audit fees, tax preparation
fees, legal and professional fees, insurance expenses, costs incurred
in providing information to the Limited Partners and other
miscellaneous costs.
The increase in general and administrative expenses for the three
months ended March 31, 1997, as compared to the corresponding period
in 1996, was primarily attributable to the increase in legal and
professional services associated with the February 1997 Consent
Solicitation.
Accrued expenses for liquidation, as reflected in the Statement of Net
Assets in Liquidation as of March 31, 1997, are not included in
results of operations for the three month period ended March 31, 1997.
The liquidation basis of accounting was adopted on March 31, 1997
therefore, it was not appropriate to include such adjustments in the
results of operations for prior periods.
13
<PAGE> 14
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
So far as is known to the General Partner, neither the Partnership nor
its properties are subject to any material pending legal proceedings.
On March 25, 1997, a limited partner named Bigelow/Diversified
Secondary Partnership Fund 1990 filed a purported class action lawsuit
in the Court of Common Pleas of Philadelphia County against
Damson/Birtcher Partners, Birtcher Investors, Birtcher Liquidity
Properties, Birtcher Investments, L.F. Special Fund II, L.P., L.F.
Special Fund I, L.P., Arthur Birtcher, Ronald Birtcher, Robert
Anderson, Richard G. Wollack and Brent R. Donaldson alleging breach of
fiduciary duty and breach of contract and seeking to enjoin the
Consent Solicitation dated February 18, 1997. On April 18, 1997, the
court denied the plaintiff's motion for a preliminary injunction.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
27 - Financial Data Schedule
b) Reports on Form 8-K:
The Partnership filed Form 8-K on January 31, 1997 to report
that on January 24, 1997, it had sold Northtech, a research
and development complex consisting of three two-story
buildings encompassing 73,166 rental square feet located on
10.2 acres of land in Gaithersburg, Maryland for $13,600,000.
Such report is incorporated herein by reference.
14
<PAGE> 15
REAL ESTATE INCOME PARTNERS III, LIMITED PARTNERSHIP
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.
REAL ESTATE INCOME PARTNERS III
By: BIRTCHER/LIQUIDITY By: BIRTCHER INVESTORS,
PROPERTIES a California limited partnership
(General Partner)
By: BIRTCHER INVESTMENTS,
a California general partnership,
General Partner of Birtcher
Investors
By: BIRTCHER LIMITED,
a California limited
partnership, General Partner
of Birtcher Investments
By: BREICORP,
a California corporation,
formerly known as Birtcher
Real Estate Inc., General
Partner of Birtcher
Limited
Date: May 12, 1997 By: /s/ Robert M. Anderson
----------------------
Robert M. Anderson
Executive Director
BREICORP
By: LF Special Fund I, L.P.,
a California limited partnership
By: Liquidity Fund Asset Management,
Inc., a California corporation,
General Partner of
LF Special Fund I, L.P.
Date: May 12, 1997 By: /s/ Brent R. Donaldson
------------------------------
Brent R. Donaldson
President, Liquidity Fund
Asset Management, Inc.
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STATEMENT
OF NET ASSET IN LIQUIDATION REAL ESTATE INCOME PARTNERS III AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,804,000
<SECURITIES> 0
<RECEIVABLES> 18,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,857,000
<PP&E> 14,217,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 18,816,000
<CURRENT-LIABILITIES> 356,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 18,142,000
<TOTAL-LIABILITY-AND-EQUITY> 18,816,000
<SALES> 0
<TOTAL-REVENUES> 288,000
<CGS> 0
<TOTAL-COSTS> 919,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (631,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (631,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
