FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period to
Commission File Number 33-24235
SECURED INVESTMENT RESOURCES FUND, L.P. III
(Exact name of registrant as specified in its charter)
Missouri 48-6291172
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5453 W. 61st Place, Mission, Kansas 66205
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, (913) 384-5700
including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests ("Units")
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 such shorter periods 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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
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PART I
Item 1. Business
Secured Investment Resources Fund, L.P. III ("Partnership") is a
Missouri limited partnership formed pursuant to the Missouri
Revised Uniform Limited Partnership Act on April 20, 1988. James
R. Hoyt is the Individual General Partner. SIR Partners III,
L.P., a Missouri limited partnership, and Nichols Resources Ltd.,
a Missouri corporation, are the General Partners. James R. Hoyt
is the managing General Partner. The Partnership has no
predecessors or subsidiaries. The Partnership was formed to
engage in the business of acquiring, improving, developing,
operating and holding for investment, income-producing real
properties with the objectives of (i) preserving and protecting
the Partnership's capital; (ii) providing cash distributions from
operations; (iii) providing capital growth through property
appreciation of Partnership properties; and (iv) increasing
equity in property ownership by the reduction of mortgage loans
on Partnership properties.
On December 7, 1990, the Partnership closed its offering having
received gross proceeds of $4,842,500 from the sale of 9,685
units of limited partnership interests.
The Partnership acquired two apartment communities in 1989. The
General Partners feel that these properties met the Partnership's
investment criteria and objectives. Because of many factors, the
Partnership did not raise the level of capital anticipated.
Accordingly, the General Partners were unable to obtain the
targeted leveraged ratio and a residential/commercial property
mix.
As of December 31, 1995, the Partnership has made cash
distributions to Limited Partners of $363,928 for the period
April 1, 1989 through December 31, 1995. No distributions have
been made since July 1990. Future distributions will only be
made from excess cash flow not needed for working capital
reserves.
As of December 31, 1995, the Partnership had no employees.
Employees of SPECS, Inc. provide services to the Partnership.
The individual General Partner is a minority shareholder in
SPECS, Inc.
Competition
The real estate business is highly competitive and the
Partnership competes with numerous entities engaged in real
estate activities, some of which may have greater financial
resources than those of the Partnership. The Partnership's
management believes that success against
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Item 1. Business--Cont'd.
such competition is dependent upon the geographic location of the
property, the performance of property managers, the amount of new
construction in the area and the maintenance and appearance of
the property. With respect to residential property, competition
is also based upon the design and mix of the units and the
ability to provide a community atmosphere for the tenants. The
Partnership's management believes that general economic
circumstances and trends and new properties in the vicinity of
each of the Partnership's properties will also be competitive
factors.
Inflation
The effects of inflation on the Partnership's operations or
investments are not quantifiable. Revenues from property
operations fluctuate proportionately with increases and decreases
in housing costs. Fluctuations in the rate of inflation also
affect the sales values of properties and, correspondingly, the
ultimate gains to be realized by the Partnership from property
sales.
Item 2. Properties.
The following table sets forth the investment portfolio of the
Partnership at December 31, 1995:
Average
Properties at Occupancy(*)
Property Description Initial Cost Date Acquired Percentage
1995 1994
KC Club
Apartments
Kansas City, MO 200 units $ 5,070,992 June 14, 1989 89% 82%
Greenhills Bicycle
Club Apartments
Kansas City, MO 312 units $11,251,613 Oct. 27, 1989 93% 92%
(*) Based upon vacancy amount (in dollars) as a
percent of gross possible rents.
<PAGE>
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for Registrant's Common Equity and Related Security Holder
Matters.
(A) There is no established public trading market for the Units
of the Partnership.
(B) There have been no distributions the last three years.
(C) As of December 31, 1995, the Partnership had admitted 539
Limited Partners who purchased 9,685 units.
Item 6. Selected Financial Data.
Years Ended December 31,
OPERATING DATA 1995 1994 1993 1992 1991
(In Thousands)
Rents $ 2,697 $ 2,299 $ 2,261 $ 2,297 $2,233
Interest on short-
term investments 128 106 103 69 91
Property operating
expense 1,560 1,454 1,260 1,293 1,374
Interest expense 930 931 974 1,033 1,176
Depreciation/
Amortization 507 648 711 712 717
Partnership loss (172) (628) (581) (672) (943)
PER LIMITED PARTNERSHIP UNIT
Partnership Loss (1) $( 17.54) $( 64.23) $ (59.39) $ (68.68) $(96.45)
Cash distributions (2)$ --- $ --- $ --- $ --- $ ---
BALANCE SHEET DATA 1995 1994 1993 1992 1991
(In Thousands)
Total assets 13,223 14,227 14,779 15,305 15,774
Mortgage debt 12,851 13,737 13,770 13,820 13,852
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(1) Partnership loss per limited partnership unit is computed by
dividing loss allocated to the Limited Partners by the weighted
average number of limited partnership units outstanding (see
following table).
(2) Cash distributions per limited partnership unit has been computed
by dividing distributions paid to the Limited Partners by the
weighted average limited partnership units outstanding (see
following table).
Year Number of Units
1995 9,685
1994 9,685
1993 9,685
1992 9,685
1991 9,685
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Revenue for the partnership achieved an all time high in 1995 of
$2,825,000 compared to $2,404,000 (17.5%) in 1994. This increased
revenue was the result of a marketing plan implemented by management
in early 1991 that was designed to simultaneously increase gross
possible rental rates and increase occupancy levels. During 1995
the operating costs increased only slightly, $20,000 (1.7%) primarily
in the areas of repairs, payroll, and utilities.
Interest expense declined slightly from $931,000 in 1994 to $930,000
(.1%) in 1995. Depreciation and amortization declined 21.6% from
$648,000 to $507,000. The 1995 net loss decreased by $457,000 or
72.7% primarily due to the increase in revenues.
Total expenses increased $106,000 (7.3%) for 1995 operations compared
to 1994 results. The increase in expenses was primarily due to an
increase in professional services of $64,000.
Revenue for the partnership achieved an increase in 1994 of
$2,404,000 compared to $2,364,000 in 1993. This increased revenue
was the result of a marketing plan mentioned previously. During 1994
this marketing plan caused a rapid turnover of resident at KC Club
Apartments
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations--Cont'd.
Results of Operations--Cont'd.
This turnover, while resulting in higher rents, also resulted in
higher vacancies and operating costs. The operating costs increased
$172,000 (16.7%) primarily in the areas of repairs, payroll, and
utilities.
Interest expense declined from $974,000 in 1993 to $930,000 (4.4%)
in 1994 due to the payment of delinquent real estate taxes.
Depreciation and amortization declined 8.8% from $711,000 to
$648,000.
The increased rental revenues in 1994 were not enough to offset the
increased operating costs and as a result the 1994 net loss increased
$47,300 or 8.1%.
The partnership anticipates that 1996 operations will continue to
improve as the result of planned increases in rental rates and
decreased promotional rental incentives. This planned increase in
net rental income will be coupled with a closer monitoring of costs.
The partnership anticipates that interest expense for 1996 will
decrease due to the second mortgage on Greenhills Bicycle Club being
retired.
Liquidity and Sources of Capital
During 1995, the primary source of working capital was provided by
existing cash balances and net cash provided by operating activities.
Operations generated $666,000, investing activities consumed $230,000
and financing activities used $94,000. During the year accounts
payable and accrued expenses decreased $12,000 and accrued interest
payable increased by $240,000. The partnership entered into an
agreement with the taxing authorities which allows it to reduce past
due real estate taxes on Greenhills Bicycle Club by making monthly
installments of $13,472 until February, 1996.
The second mortgage note on Greenhills Bicycle Club Apartments
matured in October, 1994. Through December 28, 1995 the outstanding
principal and interest of that mortgage totaled $1,073,330. On
December 28, 1995 the Partnership entered into an assumption
agreement with the
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations--Cont'd.
Liquidity and Sources of Capital--Cont'd.
General Partners, James R. Hoyt and Hoyt Partners III L.P., in which
the total balance due on the second mortgage became the
responsibility of James R. Hoyt, the individual General Partner. By
assuming that note, Hoyt paid the excess syndication costs, excess
acquisition fees, and miscellaneous note payable as well as accrued
interest on those notes payable through December 31, 1995, thereby
retiring all of the related party receivables except $21,751 in
excess syndication costs paid by the Partnership. As part of the
agreement, Mr. Hoyt delivered to the Partnership a full release of
the note and second deed of trust and a promissory note marked
cancelled on February 15, 1996. Retirement of the second mortgage
will decrease annual interest expense and enable the Partnership to
refinance the first mortgage of $8,400,000 on Greenhills Apartments
in 1996.
KC Club Apartments' mortgage is past due by $385,380 as of December
31, 1995. The cash generated from operations for that property is
insufficient to service the mortgage under the current payment
requirements. The General Partner has had ongoing negotiations with
the lender concerning a complete restructure of the mortgage and
related debt service.
The funds due from Secured Investment Resources Fund, L.P. began to
be repaid at a rate of $3,000 per month including 9% interest,
beginning in May, 1995.
During 1994, the primary source of working capital was provided by
existing cash balances and net cash provided by operating activities.
Operations generated $132,700 investing activities consumed $151,000
and financing activities consumed $31,000. During the year accounts
payable and accrued expenses increased $67,000 and accrued interest
increased by $37,000.
<PAGE>
Item 8. Financial Statements and Supplementary Data.
SECURED INVESTMENT RESOURCES FUND, L.P. III
Index
Page
Independent Auditors' Report 9
Financial Statements:
Consolidated Balance Sheets - December 31,
1995 and 1994 10-11
Consolidated Statements of Operations -
Years ended December 31, 1995, 1994
and 1993 12
Consolidated Statements of Partnership Capital -
Years ended December 31, 1995, 1994
and 1993 13
Consolidated Statements of Cash Flows -
Years ended December 31, 1995,
1994 and 1993 14-15
Notes to Consolidated Financial Statements 16-24
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Secured Investment Resources Fund, L.P. III
Mission, KS
We have audited the accompanying consolidated balance sheets of Secured
Investment Resources Fund, L.P. III and affiliated companies as of December
31, 1995 and 1994, and the related consolidated statements of operations,
partnership (deficit) capital and cash flows for each of the three years in the
period ended December 31, 1995. We have also audited the schedules listed in
the accompanying index. These financial statements and schedules are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements and schedules based upon our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
schedules are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements and schedules. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements and schedules.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note C, the Partnership has mortgage loans that mature
during the next fiscal year or that are delinquent on scheduled payments. The
Partnership is in current negotiations with these mortgage holders to extend
or refinance these obligations.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Secured
Investment Resources Fund, L.P. III at December 31, 1995 and 1994, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1995 in conformity with generally accepted
accounting principles.
Also in our opinion, the schedules present fairly, in all material
respects, the information set forth therein.
s/ BDO Seidman LLP
St. Louis, Missouri
April 10, 1996
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED BALANCE SHEETS
December 31,
1995 1994
ASSETS
INVESTMENT PROPERTIES (Notes B and C)
Land and buildings $14,561,536 $14,539,780
Furniture, fixtures and equipment 1,377,961 1,235,233
15,939,497 15,775,013
Less accumulated depreciation 4,202,665 3,695,423
11,736,832 12,079,590
RESTRICTED DEPOSIT
Certificate of Accrual on
Treasury Security (Note D) 827,509 762,531
Cash 486,886 144,737
Rents and other receivables, less
allowance of $7,150 in 1995 and
$7,814 in 1994 3,785 51,184
Prepaid expenses and deposits 27,169 49,317
Due from related parties (Notes F and G)
Notes receivable 74,643 607,104
Syndication costs 21,751 483,419
Debt issuance costs, net of
accumulated amortization of
$31,042 in 1995 and $26,042
in 1994 44,193 48,958
658,427 1,384,719
$13,222,768 $14,226,840
See note to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED BALANCE SHEETS--CONT'D.
December 31,
1995 1994
LIABILITIES AND PARTNERSHIP DEFICIT
Mortgage debt (Note C) $ 12,851,382 $ 13,737,201
Accounts payable and accrued expenses--
(Note H) 583,739 595,909
Accrued interest 385,380 347,175
Unearned revenue 27,479 9,959
Tenant security deposits 82,210 72,459
TOTAL LIABILITIES 13,930,190 14,762,703
PARTNERSHIP DEFICIT
General Partners
Capital contributions 2,000 2,000
Partnership deficit (46,229) (44,514)
(44,229) (42,514)
Limited Partners
Capital contributions 3,915,084 3,915,084
Partnership deficit (4,578,277) (4,408,433)
(663,193) (493,349)
TOTAL PARTNERSHIP DEFICIT (707,422) (535,863)
$ 13,222,768 $ 14,226,840
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31,
1995 1994 1993
REVENUES
Rents $ 2,697,035 $ 2,298,739 $ 2,260,762
Interest (Note F) 128,763 105,581 102,787
2,825,798 2,404,320 2,363,549
OPERATING AND ADMINISTRATIVE
EXPENSES
Property operating
expenses 1,222,240 1,202,660 1,030,612
General and
administrative
expenses 70,672 62,742 41,348
Professional services (Note E) 136,955 73,200 78,636
Management fees (Note E) 130,229 115,393 109,513
1,560,096 1,453,995 1,260,109
NET OPERATING INCOME 1,265,702 950,325 1,103,440
NON-OPERATING EXPENSES
Interest 930,019 930,606 973,597
Depreciation and
amortization 507,242 648,093 710,883
1,437,261 1,578,699 1,684,480
PARTNERSHIP LOSS $ (171,559) $ (628,374) $ (581,040)
Allocation of loss
General Partners $ (1,715) $ (6,284) $ (5,810)
Limited Partners (169,844) (622,090) (575,230)
$ (171,559) $ (628,374) $ (581,040)
Partnership loss per
limited partnership
unit (Note A) $ (17.54) $ (64.23) $ (59.39)
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF PARTNERSHIP (DEFICIT) CAPITAL
Years Ended December 31, 1995, 1994 and 1993
General Limited
Partners Partners Total
Balances at January 1, 1993 (30,420) 703,971 673,551
Partnership loss (5,810) (575,230) (581,040)
Balances at December 31, 1993 (36,230) 128,741 92,511
Partnership loss (6,284) (622,090) (628,374)
Balances at December 31, 1994 (42,514) (493,349) (535,863)
Partnership loss (1,715) (169,844) (171,559)
Balances at January 1, 1995 $(44,229) $(663,193) $(707,422)
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
1995 1994 1993
OPERATING ACTIVITIES
Partnership loss $ (171,559) $ (628,374) $(581,040)
Adjustments to reconcile
partnership loss to net
cash provided by operating
activities:
Depreciation and
amortization 512,242 653,093 715,883
Provision for losses on rents
and other receivables ( 664) (13,186) (12,363)
Changes in assets
and liabilities:
Rent and other receivables 48,063 24,686 (44,813)
Prepaid expenses and deposits 22,148 (11,996) 18,861
Accounts payable and
accrued expenses (12,170) 66,919 105,622
Accrued interest 240,385 37,037 15,330
Unearned revenue 17,520 4,414 (11,609)
Tenant security deposits 9,751 107 (3,358)
NET CASH PROVIDED BY OPERATING
ACTIVITIES 665,716 132,700 202,513
INVESTING ACTIVITIES
Improvements to investment
properties (164,484) (87,282) (50,818)
Interest earned on certificate
of accrual on Treasury Security (64,978) (63,864) (51,185)
NET CASH USED IN INVESTING
ACTIVITIES (229,462) (151,146) (102,003)
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF CASH FLOWS--CONT'D.
Years Ended December 31,
1995 1994 1993
FINANCING ACTIVITIES
Debt issuance costs $ (235) $ --- $ ---
Principal payments on debt (14,669) (32,582) (50,423)
Received from related parties 18,879 1,661 ---
Note receivable from related
parties (98,080) --- (85,100)
NET CASH USED IN
FINANCING ACTIVITIES (94,105) (30,921) (135,523)
DECREASE IN CASH 342,149 (49,367) (35,013)
CASH BEGINNING OF PERIOD 144,737 194,104 229,117
CASH END OF PERIOD $ 486,886 $ 144,737 $ 194,104
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
Organization and Business--Secured Investment Resources Fund, L.P. III
("Partnership") is a Missouri limited partnership formed pursuant to the
Missouri Revised Uniform Limited Partnership Act on April 20, 1988. The
General Partners' and Limited Partners' interest in Partnership earnings or
loss initially amounts to 1% and 99%, respectively. The allocation of the 1%
interest between the General Partners is discretionary. At such point in time
cash distributions to the Limited Partners amount to their original invested
capital plus interest at a rate of the greater of 12% (14% for those investors
who subscribed for units on or before 90 days after December 7, 1988) or the
increase in the consumer price index per annum, cumulative non-compounded on
their adjusted invested capital, net income or loss will be allocated 15% to
the General Partners and 85% to the Limited Partners.
Consolidated Limited Partnerships
In order to satisfy current real estate lending requirements that real estate
assets be in single asset partnerships, the Partnership has formed a new
single asset partnership by the name of Bicycle Club Joint Venture, L.P.
The partnership retained the same partnership structure as Secured Investment
Resources Fund,L.P. III, with Secured Investment Resources Fund, L.P. III
being the sole Limited Partner. The result of operations of this single
asset partnership have been consolidated with the Partnership.
Depreciation--Investment property is depreciated on a straight-line basis over
the estimated useful life of the property (30 years for buildings and 5 years
for furniture, fixtures and equipment). Improvements are capitalized and
depreciated over their estimated useful lives. Maintenance and repair
expenses are charged to operations as incurred.
Income Taxes--Any tax liabilities or benefits arising from the Partnership
operations are recognized individually by the respective partners and,
consequently, no provision will be made by the Partnership for income taxes or
income tax benefits.
Partnership Loss Per Limited Partnership Unit--Partnership loss per limited
partnership unit is computed by dividing the loss allocated to the Limited
Partners by the weighted average number of limited partnership units sold. The
per unit information has been computed based on 9,685 weighted average limited
partnership units outstanding.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE A--SIGNIFICANT ACCOUNTING POLICIES--CONT'D.
Debt Issuance Costs--Loan costs, when incurred, are capitalized by the
Partnership. These costs are amortized over the term of the related loans.
Restricted Deposits--Certificates of Accrual on Treasury Security are
anticipated to be held to maturity as they are pledged as collateral as
described in Note D. These instruments are reported at cost, adjusted for
accretion of discounts which are recognized in interest income using the
interest method over the period to maturity.
Accounting Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statement and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
New Accounting Standards--In March 1995, the FASB issued its 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").
SFAS 121 requires that long-lived assets and certain intangibles to be held and
used by an entity be reviewed for impairment when events or changes in
circumstances indicate that the carrying amount may not be recoverable. In
addition, SFAS 121 requires long-lived assets and certain intangibles to be
disposed of to be reported at the lower of carrying amount or fair value less
costs to sell. SFAS121 is effective for fiscal years beginning after December
15, 1995. Management does not expect the application of this pronouncement to
have a material effect on the financial statements of the Partnership.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE B--INVESTMENT PROPERTIES
Investment properties consists
of the following: December 31,
1995 1994
Cost (including capital improvements
subsequent to acquisition):
Greenhills Bicycle
Club Apartments $ 10,937,724 $ 10,846,115
KC Club Apartments 4,989,593 4,916,718
Office Equipment 12,180 12,180
15,939,497 15,775,013
Less:
Accumulated depreciation 4,202,665 3,695,423
$ 11,736,832 $ 12,079,590
The Partnership has mortgage debt due within the next year as well as a past
due mortgage as described in Note C. Combined mortgage debt for the
properties total $12,851,000 with accrued interest of $385,380 at December 31,
1995 as well as delinquent real estate taxes of $291,000. The combined net
book value of these properties at December 31, 1995 was $11,737,000.
Depreciation expense was $507,242, $647,836, and $707,801 for the years ended
December 31, 1995, 1994 and 1993 respectively.
NOTE C--NON-RECOURSE MORTGAGE DEBT
Mortgage debt consists
of the following: December 31,
1995 1994
Collateralized by Investment Property:
Greenhills Bicycle
Club Apartments $ 8,400,000 $ 9,271,150
KC Club Apartments 4,451,382 4,466,051
$12,851,382 $13,737,201
KC Club Apartments
The KC Club Apartments' mortgage note payable is collateralized by the
apartment buildings, personal property and assignment of its leases and rents.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE C--NON-RECOURSE MORTGAGE DEBT--CONT'D.
The terms of the promissory note require the Partnership to pay interest only
for the first three years on a monthly basis. Commencing on May 1, 1992, the
Partnership began making principal payments in an amount sufficient to
amortize the indebtedness over the next 30 years. The loan matures on May 31,
2004, at which time the Partnership is required to make a balloon payment
in an amount equal to the outstanding principal balance.
The interest rate is determined by adding 150 basis points to the one year
advance fund rate established by the Federal Home Loan Bank Board. Commencing
in June 1996, the interest rate through maturity is determined by adding 175
basis points to the one year advance fund rate established by the Federal Home
Loan Bank Board. However, the terms of the promissory note provide that in
no event during the entire term of the loan, will the minimum rate of interest
be below 8% per annum nor the maximum rate of interest be above 10% per annum.
The interest rate assessed as of December 31, 1995 was 8%.
As of December 31, 1995, the mortgage for KC Club Apartments is past due by
$385,380 due to the negative cash flow status of the apartment complex. The
General Partner and the lender are engaged in ongoing negotiations related to
a restructure of this debt and it is anticipated that a restructure will be
completed in 1996.
Greenhills Bicycle Club Apartments
Greenhills Bicycle Club Apartments' financing package is in the form of an
$8,400,000 first mortgage. At acquisition, the first mortgage interest rate
was 64% of prime (as set by the financial institution) plus 1.25% per annum,
adjusted semi-annually. On November 30, 1989, the Partnership participated in
refunding the outstanding multi-family housing revenue bond. At that time, a
letter of credit in the initial amount of $8,619,334 was established by the
financial institution to secure the bonds. Due to this credit enhancement,
the tax exempt bonds were reissued at a reduced rate. As a result, the
interest rate assessed the Partnership was modified to reflect the reduced tax
exempt bond (base) rate plus 1.00% per annum, adjusted semi-annually. From
March 1, 1992 to November 30, 1995, the interest rate assessed on this loan
was 5.5%.
At December 31, 1995, the outstanding balance on the first mortgage was
$8,400,000. Subsequent to year end, the Partnership entered into an agreement
with the lender which changed the terms of the note to monthly interest-only
payments at a rate of 8.0% through September 25, 1996 at which time the entire
note becomes due. The General Partners are currently working with numerous
lenders to refinance the bonds and expect to complete the transaction prior
to that date.
<PAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE C--NON-RECOURSE MORTGAGE DEBT--CONT'D.
The second mortgage note on Greenhills Bicycle Club Apartments matured in
October, 1994. Through December 31, 1995 the outstanding principal and
interest of that mortgage totaled $1,073,330. On December 28, 1995 the
Partnership entered into an assumption agreement with the General Partners,
James R. Hoyt and Hoyt Partners III L.P., in which the total balance due on
the second mortgage became the responsibility of James R. Hoyt, the individual
General Partner (Notes F and G). Subsequent to year end, the Partnership
received a full release of the note and second deed of trust pertaining to the
mortgage.
Cash paid for interest totaled $886,813, $888,570, and $953,267 during 1995,
1994, and 1993, respectively.
Maturities of mortgage debt are as follows:
1996 $ 8,444,871
1997 48,813
1998 53,102
1999 57,767
2000 62,872
Thereafter 4,183,957
$12,851,382
NOTE D-LEASES
The Partnership entered into a land lease agreement for the land underlying
the KC Club Apartments for a term of twenty years. The lease payments for
years 1 to 15 are calculated at 50% of that year's net operating income in
excess of an ascending scale from $650,000 to $800,000. During years 16 to 20,
the annual lease payments are 10% of the land's then appraised value. For
the years ended December 31, 1995, 1994 and 1993, the net operating income did
not exceed the land lease requirements which resulted in no lease payments. In
addition, the Partnership is obligated to pay real estate taxes assessed on
the land value.
At all times during the term of the lease, the Partnership (or its assignee)
has the right to purchase the land at a price equal to the greater of
$2,000,000 or fair market value at the time the option is exercised. Should
the buildings and improvements be sold prior to the end of the land lease
agreement (20 years), the Partnership is under no obligation for payment of
the land rental assessments for the remaining portion of the land lease
agreement.
The Partnership invested $500,000 (currently held as a Certificate of Accrual
with a market value of $794,000 as of December 31, 1995)
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE D-LEASES--CONT'D.
which is pledged as collateral until the property's net operating income
achieves the level of 120% of the debt service on the first mortgages for a
consecutive 24-month period or May 31, 2004, whichever is earlier.
NOTE E--RELATED PARTY--MANAGEMENT FEES
Through December 31, 1994, property management services were provided by The
Hoyt Group, a Kansas Corporation in which the individual General Partner had
a majority interest. As of January 1, 1995, SPECS, Inc., a Kansas Corporation
in which the individual General Partner has a minority interest, receives
property management fees for providing property management services. SPECS,
Inc. also performs various professional services for the Partnership, primarily
tax accounting, audit preparation, SEC 10Q and 10K preparation, and investor
services. Amounts paid by the Partnership to The Hoyt Group and SPECS, Inc.
are as follows:
Years Ended December 31,
1995 1994 1993
Property management fees $ 130,229 $ 115,393 $ 109,513
Professional services 44,000 -0- -0-
$ 174,229 $ 115,393 $ 109,513
These professional services were provided by an unrelated entity previous to
January 1, 1995.
The General Partners are entitled to receive a Partnership Management Fee equal
to 5% of Cash Flow From Operations (as defined) for managing the normal
operations of the Partnership. There was no management fee due for years
ending December 31, 1995, 1994 and 1993.
NOTE F--RELATED PARTY--NOTE RECEIVABLE
On April 12, 1995, the Hoyt Partners III, L.P. executed a note in the amount
of $522,004. The interest rates on the notes for 1993 and 1994 ranged from
6.5% to 8.5%. Interest during 1995 was 9%. Interest earnings for the
combined notes were $50,509 in 1995 and $44,821 in 1994.
On December 28, 1995, the note principal and all accrued interest through that
date was retired in full pursuant to an assumption agreement between the
Partnership, Hoyt Partners III, and James R. Hoyt. In exchange for payment of
the note (and excess costs/fees described in Note G), the General Partner
assumed full responsibility for the matured second mortgage on Greenhills
Apartments. Subsequent to year end, the Partnership was provided with an
executed release of the note and second deed of trust relating to the
Greenhills mortgage.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE F--RELATED PARTY--NOTE RECEIVABLE--CONT'D.
Funds advanced to Secured Investment Resources Fund, L.P. is being repaid at
the rate of $3,000 per month beginning May 1, 1995 including 9% interest.
Amounts due from related parties consist of the following:
December 31,
1995 1994
Hoyt Partners III, L.P. $ --- $ 522,004
Secured Investment Resources
Fund, L.P. 74,643 85,100
$ 74,643 $ 607,104
NOTE G--SYNDICATION COSTS AND ACQUISITION FEES
Because of many factors, the Partnership did not raise the level of capital
anticipated during the offering period. As a result, syndication and
acquisition costs and the Related Party Note Receivable, outlined in Note F,
exceeded the amount allowed under the Partnership Agreement. The General
Partners are obligated to reimburse these excess costs/fees.
Hoyt Partners III, L.P., a General Partner of the Partnership (or its assignee),
has been paid an acquisition fee of $680,000. This fee was for selecting,
evaluating, negotiating, and closing services on the acquisition of KC Club
Apartments and Greenhills Bicycle Club Apartments. As stated in the Prospectus,
acquisition fees may not exceed 11.5% of the gross proceeds of limited
partnership interests issued ($556,888). The General Partners are obligated
to reimburse these excess costs/fees.
On December 28, 1995, the excess costs and fees were reduced to $21,751
pursuant to an assumption agreement between the Partnership, Hoyt Partner III,
and James R. Hoyt. In exchange for payment of the excess costs and fees, (as
well as the note receivable described in Note F) the General Partner assumed
full responsibility for the matured second mortgage on Greenhills Apartments.
Subsequent to year end, the Partnership was provided with an executed release
of the note and second deed of trust relating to the Greenhills mortgage.
December 31,
1995 1994
General Partners--Excess
Syndication Costs:
Paid by the Partnership 21,751 365,057
Excess acquisition fees --- 118,362
Total $ 21,751 $ 483,419
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE H--ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following:
December 31,
1995 1994
Vendor accounts payable $ 34,648 $ 83,997
Property taxes 465,872 449,997
Professional fees 29,562 22,476
Utilities 25,618 18,792
Insurance 14,145 9,833
Payroll reimbursement 13,894 10,814
$ 583,739 $ 595,909
Delinquent real estate taxes for the Partnership include $58,710 of 1995 taxes
on KC Club Apartments. Bicycle Club real estate taxes consist of $245,941 and
$152,446 for the County and City respectively.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE I--INCOME TAXES
The Partners' capital accounts differ for financial reporting purposes and
federal income tax purposes. The primary differences result from depreciation.
The effect of these items is summarized as follows:
December 31,
1995 1994
Financial reporting basis:
Total assets $ 13,222,768 $ 14,226,840
Total liabilities (13,930,190) (14,762,703)
Total Partners' (deficit) capital $ (707,422) $ (535,863)
Tax basis:
Total assets $ 13,645,396 $ 14,707,435
Total liabilities (12,808,552) (13,668,766)
Total Partners' capital $ 836,844 $ 1,038,669
Years Ended December 31,
1995 1994 1993
Partnership loss-financial
reporting purposes $ (171,559) $ (628,374) $ (581,040)
Book versus tax differences
due to:
Depreciation and
amortization (57,303) 100,745 166,417
Other 27,037 (12,681) (12,363)
(30,266) 88,064 154,054
Partnership loss-federal
income tax purposes $ (201,825) $ (540,310) $ (426,986)
NOTE J--CASH DISTRIBUTIONS
No distributions have been made since July 1990. Future distributions will
only be made from excess cash flow not needed for working capital
reserves.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE K--PARTNERSHIP LIQUIDITY
The Partnership operates within the real estate industry and is subject to
its economic forces, which contributes additional liquidity risk to the
Partnership's investment portfolio. These risks include, but are not limited
to, changes in general or local economic conditions, changes in interest rates
and the availability of permanent mortgage financing which may render the
acquisition, sale or refinancing of the property difficult or unattractive,
changes in real estate and zoning laws, increases in real estate taxes, federal
or local economic or rent controls, floods, earthquakes and other acts of God
and other factors beyond the control of the Partnership's management. The
illiquidity of real estate investments generally may impair the ability of the
Partnership to respond promptly to changing economic conditions.
The General Partners believe that sufficient working capital will be available
to fund known, ongoing operating and capital expenditure requirements of the
Partnership during 1996. The anticipated working capital sources are payments
received on notes and miscellaneous receivables and cash flow from operations
during 1996, which is expected to improve over that of the previous year.
Several factors which could positively affect 1996 operations are the
implementation of rental rate increases at both properties and decreases in the
amount of promotional rent discounts allowed for the leasing of apartment
units.
Accomplishment of these objectives is partially predicated on the real estate
economic conditions discussed above, which are beyond the control of the
Partnership, and will influence the achieved results. Retirement of the
second mortgage on Greenhills should enable the Partnership to refinance the
remaining first mortgage debt in 1996. Due to the tax exempt status of those
bonds, the resulting loan should be at favorable interest rates to the
Partnership.
The Partnership is currently in negotiations with the mortgage holder on KC
Club Apartments concerning a restructure of that debt. More favorable interest
rates and possible principal write downs are under consideration. Completion
of a restructure would positively impact the Partnership.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE L--DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each class of financial instrument for which it is practicable to estimate
that value:
Long-Term Investments. The fair value of some investments are estimated based
on quoted market prices for those or similar investments.
Long-Term Debt. The fair value of the Partnership's long-term debt is
estimated based on the quoted market prices for the same or similar issues
or on the current rates offered to the Partnership for debt of the same
remaining maturities.
The estimated fair values of the Partnership's financial instruments are as
follows:
Carrying Fair
1995 Amount Value
Long-term investment $ 827,500 $ 1,034,000
Long-term debt $12,851,400 $12,229,000
NOTE M--SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Non cash activity for the year ended December 31, 1995 is as follows:
Assumption agreement with General Partners,
James R. Hoyt and Hoyt Partners III
Mortgage debt assumed by General Partner $871,150
Accrued interest assumed by General Partner $202,180
Notes receivable retired $611,662
Syndication costs refunded $461,668
<PAGE>
Item 9. Changes in and Disagreements with Registrant's
Certifying Accountants on Accounting and Financial
Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The General Partners of the Partnership are James R. Hoyt
(individual), Hoyt Partners III, L.P. (partnership) and Nichols
Resources, Ltd. (corporation).
Nichols Resources, Ltd. (the Corporate General Partner) is a
Missouri corporation formed on August 22, 1988 for the purpose of
acting as a general partner of public real estate programs and
otherwise investing in and dealing with limited partnerships,
property management and the real estate syndication business.
The Corporate General Partner is a wholly-owned subsidiary of the
J.C. Nichols Company. Nichols Resources, Ltd issued 15,000 shares
of common stock for $1,500,000 on August 22, 1988.
James R. Hoyt (the Individual General Partner), age 58, holds a
Bachelor's Degree in Business Administration and is a licensed real
estate broker in two states. Mr. Hoyt has been actively involved for
more than the past twenty years in various real estate endeavors
including development, syndication, property management and
brokerage.
Mr. Hoyt is the Individual General Partner and sponsor of Secured
Investment Resources Fund, L.P. (S.I.R.) and Secured Investment
Resources Fund, L.P. II, (S.I.R. II). Since 1983, Mr. Hoyt has been
involved as the Individual General Partner in ten specified real
estate private placement offerings. As of December 31, 1995, these
partnerships, including Secured Investment Resources Fund, L.P. III,
have raised a total of $60,709,750.
SIR Partners III, L.P. f/k/a Hoyt Partners III, L.P., (the
Partnership General Partner) is a limited partnership organized on
February 23, 1988 under the statutes of the State of Missouri.
James R. Hoyt is the General Partner. The Partnership was formed for
the purpose of acting as a general partner and acquisition agent of
Secured Investment Resources Fund, L.P. III.
<PAGE>
Item 11. Management Compensation
During 1995, The partnership paid $130,229 in fees to related parties
for property management services.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
(a) Security Ownership of certain beneficial owners.
No individual or group as defined by Section 13(b)(3) of the
Securities Exchange Act of 1934, known to the registrant is the
beneficial owner of more than 5 percent of the registrant's
securities.
(b) Security ownership of Management.
The General Partners own less than 1%.
(c) Change in Control.
None.
Item 13. Certain Relationships and Related Transactions.
See Notes to Financial Statements, Notes F and G
appearing in Item 8.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K.
(a)(1) The following Financial Statements of Secured
Investment Resources Fund, L.P. III, are
included in Item 8:
SECURED INVESTMENT RESOURCES FUND, L.P.III Page
(i) Independent Auditors' Report 9
(ii) Consolidated Balance Sheets -
December 31, 1995 and 1994 10-11
(iii) Consolidated Statements of Operations -
Years Ended December 31, 1995,
1994, and 1993 12
(iv) Consolidated Statements of Partnership
Capital - Years Ended December 31,
1995, 1994, and 1993 13
(v) Consolidated Statements of Cash Flows -
Years Ended December 31, 1995,
1994, and 1993 14-15
(vi) Notes to Consolidated Financial
Statements 16-24
(a)(2) The following Financial Statement Schedules as
part of this report:
(i) Schedule II - Allowance For Doubtful
Accounts Information 32
(ii) Schedule III - Real Estate and
Accumulated Depreciation 33-34
All schedules other than those indicated in the index have been omitted
as the required information is presented in the financial statements,
related notes or is inapplicable.
<PAGE>
(a)(3) The following Exhibits are Incorporated by Reference
and are an integral part of this Form 10-K.
Exhibit Number Description
(3) (a) Amended and Restated Agreement
of Limited Partnership. (iii)
(b) Certificate of Limited
Partnership. (i)
(4) (a) Form of Subscription Agreement. (iii)
(b) Form of Certificate evidencing
units. (i)
(10) (a) Property Management Agreement
between Partnership and The
Hoyt Group Limited Partnership
(formerly En-Com Properties,
Ltd.). (ii)
(b) Escrow Agreement between the
Partnership and The Mission
Bank. (i)
(c) Real Estate Contract of Sale
for the Brywood Hills
Apartments. (iv)
(d) Real Estate Contract of Sale
for The Greenhills Bicycle
Club (formerly Candlewyck
Apartments). (v)
(e) Deed of Trust and Promissory
Note for Brywood Hills
Apartments. (vii)
(f) Deed of Trust and Promissory
Notes for Greenhills Bicycle
Club (formerly Candlewyck
Apartments). (vii)
(16) (a) Letter regarding change in
certifying accountant. (vi)
(25) (a) Power of Attorney. (i)
(28) (b) Guarantee of General Partners. (i)
<PAGE>
(i) Previously filed on September 13, 1988 as an Exhibit to
the Registration Statement on Form S-11 (file no. 33-
24235) such Exhibit and Registration Statement
incorporated herein by reference.
(ii) Previously filed on December 7, 1988 as an Exhibit to
Amendment #1 to registration Statement of Form S-11
such Exhibit and Registration Statement incorporated
herein by reference.
(iii) Previously filed on December 7, 1988 as part of
Amendment #1 to Registration Statement and incorporated
herein by reference.
(iv) Previously filed as an exhibit to a current report on
Form 8-K dated June 12, 1989 which exhibit and Form is
incorporated herein by reference.
(v) Previously filed as an exhibit to a current report on
Form 8-K dated October 30, 1989 which exhibit and Form
is incorporated herein by reference.
(vi) Previously filed as an exhibit to a current report on
Form 8-K dated December 4, 1989 which exhibit and Form
incorporated herein by reference.
(vii) Filed herewith.
(b) Report of Form 8-K filed during the fourth quarter.
None.
(The remainder of this page intentionally left blank.)
<PAGE>
Secured Investment Resources Fund L.P. III
Schedule II - Allowance for Doubtful Accounts
December 31, 1995
Balance at Bad Debt Write Balance at
Beginning of Charged to Offs Deducted End
Period Operations From Allowance of Period
For Years Ended December 31,
1993 $33,363 $(12,363) $ --- $21,000
1994 21,000 (13,186) --- 7,814
1995 7,814 ( 664) --- 7,150
<PAGE>
<TABLE>
Secured Investment Resources Fund, L.P. III
Schedule III - Real Estate & Accumulated Depreciation
December 31, 1995
<CAPTION>
Initial Cost to Partnership (a) Subsequent to Acquisition
Buildings & Furniture Reduction
Encumbrances Land Improvements Equipment Improvements of Basis (B)
<S> <C> <C> <C> <C> <C> <C>
Garden Apartments:
KC Club Apartments $4,451,382 $ --- $ 4,775,465 $ 295,527 $ 134,622 (216,021)
Kansas City, MO
Green Hills Bike Club 8,400,000 430,937 9,988,057 832,619 262,953 (576,842)
Kansas City, MO
Other Equipment --- --- --- --- 12,180 ---
TOTALS $12,851,382 $ 430,937 $14,763,522 $ 1,128,146 $ 409,755 $(792,863)
</TABLE>
<TABLE>
Gross Amount at Which
Carried at Close of Period
<CAPTION>
Buildings & Furniture Accumulated Date Depreciation
Land Improvements Equipment Total Depreciation Acquired Life
<S> <C> <C> <C> <C> <C> <C> <C>
Garden Apartments:
KC Club Apartments $ 4,635,598 $ 353,995 $ 4,989,593 $1,300,548 30-Jun-89 30 Yrs (1)
Kansas City, MO 5 Yrs (2)
Greenhills Bike Club 407,226 9,518,712 1,011,786 10,937,724 2,890,104 27-Oct-89 30 Yrs (1)
Kansas City, MO 5 Yrs (2)
Other Equipment --- --- 12,180 12,180 12,013 5 Yrs (2)
$407,226 $14,154,310 $1,377,961 $15,939,497 $4,202,665
</TABLE>
<PAGE>
(1) Estimated useful life of buildings.
(2) Estimated useful life of furniture and fixtures.
NOTES:
(a) The initial cost to the Partnership represents the original purchase
price of the properties, including $205,562 and $145,578 of improvements
incurred in 1988 and 1987, respectively, which were contemplated at the
time the property was acquired.
(b) Receipts received under the terms of certain guarantee agreements are
recorded by the Partnership as a reduction of the basis of the property
to which the guaranteed income relates.
<PAGE>
(c) Reconciliation of Real Estate Owned:
<TABLE>
<CAPTION>
Buildings & Furniture &
Total Land Improvements Equipment
<S> <C> <C> <C> <C>
Balance at January 1, 1993 $15,636,913 $ 407,226 $14,068,736 $1,160,951
Additions during year:
Reclassifications --- --- 6,931 (6,931)
Improvements 50,818 19,315 31,503
Balance at December 31, 1993 15,687,731 407,226 14,094,982 1,185,523
Additions during year:
Reclassifications - - - -
Improvements 87,282 37,572 49,710
Balance at December 31, 1994 15,775,013 407,226 14,132,554 1,235,233
Additions during year:
Improvements 164,484 --- 21,756 142,728
Balance at December 31, 1995 $15,939,497 $ 407,226 $14,154,310 $1,377,961
(d) Reconciliation of Accumulated
Depreciation:
Balance at January 1, 1993 $2,339,786 $ --- $1,588,533 $751,253
Additions during year:
Depreciation Expense 707,801 --- 474,283 233,518
Reclassifications 34,087 (34,087)
Balance at December 31, 1993 3,047,587 --- 2,096,903 950,684
Additions during year:
Depreciation Expense 647,836 --- 477,883 169,953
Balance at December 31, 1994 3,695,423 --- 2,574,786 1,120,637
Additions during year:
Depreciation Expense 507,242 --- 437,578 69,664
Balance at December 31, 1995 $4,202,665 $ --- $3,012,364 $1,190,301
</TABLE>
<PAGE>
(e) The total gross amount of real estate at December 31, 1995 includes
$566,888 of acquisition fees paid to affiliates.
April 15, 1996<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SECURED INVESTMENT RESOURCES FUND, L.P. III
A Missouri Limited Partnership
(Registrant)
By: /s/ James R. Hoyt
James R. Hoyt
as Individual General Partner
Date: April 10, 1995
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
By: Hoyt Partners III, L.P.
as General Partners
By: /s/ James R. Hoyt
James R. Hoyt
as Individual General Partner
Date: April 10, 1995
Supplemental Information to be Furnished With Reports Filed
Pursuant to Section 15(d) of the Act by Registrants Which have
not Registered Securities Pursuant to Section 12 of the Act.
No annual report or proxy material has been sent to security
holders.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 486,886
<SECURITIES> 827,509
<RECEIVABLES> 10,935
<ALLOWANCES> 7,150
<INVENTORY> 0
<CURRENT-ASSETS> 658,427
<PP&E> 15,939,497
<DEPRECIATION> 4,202,665
<TOTAL-ASSETS> 13,222,768
<CURRENT-LIABILITIES> 1,078,808
<BONDS> 12,851,382
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 13,222,768
<SALES> 0
<TOTAL-REVENUES> 2,825,798
<CGS> 0
<TOTAL-COSTS> 1,560,096
<OTHER-EXPENSES> 507,242
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 930,019
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (171,559)
<EPS-PRIMARY> (17.54)
<EPS-DILUTED> 0
</TABLE>
