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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) September 21, 1999
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REAL ESTATE INCOME PARTNERS III
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
0-14633 13-33294820
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(Commission file Number) (I.R.S. Employer Identification No.)
27611 La Paz Road, P.O. Box 30009, Laguna Niguel, California 92607-0009
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(Address of principal executive offices) (Zip Code)
(949) 643-7700
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year, if
changed since last report.)
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REAL ESTATE INCOME PARTNERS III
LIMITED PARTNERSHIP
ITEM 2. DISPOSITION OF ASSETS
Real Estate Income Partners III (the "Partnership") recently sold two of
its three properties in two separate transactions, as set forth below:
Cooper Village
On September 21, 1999, the Partnership sold its 42% interest in Cooper
Village Shopping Center (co-owned with an affiliated partnership), in Mesa,
Arizona to Old Vine Corporation ("Old Vine"), a local shopping center operator
that is not affiliated in any way with the Partnership, its General Partner or
any of its principals or affiliates. The sale price for the Partnership's 42%
interest was $2,593,500.
The buyer was represented by a third-party broker in the transaction.
The broker was paid $33,252 from the sale proceeds. The General Partner was not
paid any property disposition fee in connection with the sale. Old Vine has
hired an affiliate of Birtcher to perform certain onsite property management
services (not accounting or asset management), pursuant to a contract that is
cancelable at any time upon 30 days notice.
The Forum
On September 23, 1999, the Partnership sold The Forum, in Wauwatosa,
Wisconsin to Rubin Pachulsky Dew Properties, LLC ("Rubin Pachulsky Dew") for
$5,350,000. Rubin Pachulsky Dew is a third-party real estate investment entity
that is not affiliated in any way with the Partnership, its General Partner or
any of its principals or affiliates.
Rubin Pachulsky Dew was represented by a third-party broker in the
transaction. The broker was paid $53,500 from the sale proceeds. Since the sale
price of The Forum exceeded the January 1, 1993 appraised value ($4,440,000),
pursuant to the 1993 Amendment of the Partnership Agreement, the General Partner
earned and was paid a property disposition fee of $133,750 in connection with
the sale.
Rubin Pachulsky Dew has hired an affiliate of Birtcher as property
manager for The Forum for a fee that is approximately the same as the fee that
the Partnership previously paid to the General Partner for property management.
In addition, Rubin Pachulsky Dew has hired an affiliate of Birtcher to provide
certain asset management services for The Forum, and will pay an incentive fee
approximately equal to 10% of the profits, if any, after Rubin Pachulsky Dew has
received a 15% cumulative annual, return on its investment. The incentive fee,
if earned, is not payable until the property is sold or four years from date of
purchase, whichever comes first. The property management agreement is cancelable
at any time upon 60 days notice, but the incentive fee
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REAL ESTATE INCOME PARTNERS III
LIMITED PARTNERSHIP
will survive termination of the contract.
Summary
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The Partnership realized approximately $7,438,000, or approximately
$117 per $1,000 originally invested in the Partnership, in distributable cash
proceeds from the sale of the two properties, after deducting for holdbacks
(approximately $148,000), closing costs and prorations totaling approximately
$358,000.
Currently, two lawsuits are pending against the Partnership and its
General Partner and certain of its affiliates that seek, among things,
unspecified monetary damages. These lawsuits are discussed in the Partnership's
quarterly and annual reports. Since these cases are in the preliminary discovery
phase, there is unavoidable uncertainty regarding their ultimate resolution. The
Partnership Agreement mandates that the General Partner provide for all of the
Partnership's liabilities and obligations, including contingent liabilities,
before distributing liquidation proceeds to its partners. Therefore, the
Partnership will not distribute liquidation proceeds until the uncertainty
surrounding these lawsuits is sufficiently resolved. The amount and timing of
any distribution of liquidation proceeds will be determined by the General
Partner in light of these and other relevant considerations.
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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, LIMITED
PARTNERSHIP
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: October 15, 1999 By: /s/Robert M. Anderson
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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: October 15, 1999 By: /s/ Brent R. Donaldson
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Brent R. Donaldson
President
Liquidity Fund Asset Management,
Inc.
