SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ 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 No. 0-18531
Development Partners III
(A Massachusetts Limited Partnership)
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3017036
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S.
Employer incorporation or organization)
Identification No.)
5110 Langdale Way, Colorado Springs, CO 80906
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(719) 576-5122
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 and 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>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<PAGE>
<TABLE>
DEVELOPMENT PARTNERS III
(A Massachusetts Limited Partnership)
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
---------------
ASSETS
September 30
1996 December 31,
(Unaudited) 1995
Property, at cost (Notes 2, 3, and 4):
<S> <C> <C>
Land .................................... $ 2,976,100 $ 2,976,100
Buildings and improvements .............. 7,648,060 7,648,060
Equipment, furnishings and fixtures ..... 887,984 839,894
------------ ------------
11,512,144 11,464,054
Less accumulated depreciation ........... (1,931,546) (1,752,197)
------------ ------------
9,580,598 9,711,857
Cash and cash equivalents (Notes 2 and 3).. 212,382 367,213
Short-term investments (Note 2) ........... 566,072 746,532
Due from affiliates ....................... 4,926 --
Real estate tax escrow .................... 96,034 23,685
Deposits .................................. 1,950 --
Deferred expenses, net of accumulated
amortization of $89,705 and $72,888 (Note 2) 16,817 33,638
============ ============
Total assets ..................... $ 10,478,779 $ 10,882,925
============ ============
LIABILITIES AND PARTNERS' EQUITY
Mortgage note payable (Note 5) 6,913,827 6,994,549
Accrued expenses ............. 178,575 103,070
Due to affiliates (Note 7) ... 5,318
Tenant security deposits ..... 25,308 33,860
Total liabilities ... 7,117,710 7,136,797
Minority Interest (Note 4) ... 1,395,413 1,556,486
Partners' equity (Note 6) .... 1,965,655 2,189,642
-----------
Total liabilities and $10,478,779 $10,882,925
partners' equity
=========== ===========
<PAGE>
DEVELOPMENT PARTNERS III
(A Massachusetts Limited Partnership)
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
-------------
Nine Months Ended Three Months Ended
September 30 September 30
1996 1995 1996 1995
---- ---- ---- ----
Revenue:
<S> <C> <C> <C> <C>
Rental income ...................... $ 1,045,915 $ 1,153,245 $ 277,315 $ 344,767
Interest Income .................... $ 35,061 $ 48,355 $ 9,534 $ 14,358
----------- ----------- ----------- -----------
$ 1,080,976 $ 1,201,600 $ 286,849 $ 359,125
Expenses:
Operating Expenses ................. $ 425,575 $ 444,416 $ 146,241 $ 148,682
Interest ........................... 476,265 482,999 158,141 160,437
Depreciation and amortization ...... 196,167 279,038 65,389 93,012
General and administrative (Note 7) 120,323 46,966 22,148 17,123
----------- ----------- ----------- -----------
1,218,330 1,253,419 391,919 419,254
----------- ----------- ----------- -----------
Net loss before minority interest ..... (137,354) (51,819) (105,070) (60,129)
Minority interests' equity in
subsidiary net (income) loss (Note 4) 13,281 12,221 (15,671) 23,064
----------- ----------- ----------- -----------
Net loss .............................. ($ 124,073) ($ 39,598) ($ 120,741) ($ 37,065)
=========== =========== =========== ===========
Net loss allocated to:
General Partners .................... ($ 1,241) ($ 396) ($ 1,207) ($ 371)
Per unit of Investor Limited
Partner interest:
7,401 Units issued ............. (16.60) (5.30) (16.15) (4.96)
<PAGE>
DEVELOPMENT PARTNERS III
(A Massachusetts Limited Partnership)
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
-------------
Investor Total
General Limited Partners'
Partners Partners Equity
<S> <C> <C> <C>
Balance at December 31, 1994 (20,915) 2,391,510 2,370,595
Cash distributions .......... (12,115) (141,359) (153,474)
Net loss .................... (275) (27,204) (27,479)
----------- ----------- -----------
Balance at December 31, 1995 (33,305) 2,222,947 2,189,642
Cash distributions .......... (99,914) (99,914)
Net loss .................... (1,241) (122,832) (124,073)
----------- ----------- -----------
Balance at September 30, 1996 ($ 34,546) $ 2,000,202 $ 1,965,655
=========== =========== ===========
<PAGE>
DEVELOPMENT PARTNERS III
(A Massachusetts Limited Partnership)
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (decrease) in cash and cash equivalents
-------------
Nine Months Ended
September 30
1996 1995
---- ----
Cash flows from operating activities:
<S> <C> <C>
Interest received ................................. $ 44,868 $ 37,565
Cash received from rents .......................... 1,037,363 1,151,969
Administrative expenses ........................... (136,367) (59,713)
Rental operations expenses ........................ (416,614) (426,193)
Interest paid ..................................... (476,265) (483,279)
----------- -----------
Net cash provided by operating ...................... 52,985 220,349
activities
Cash flows from investing activities:
Purchase of fixed assets .......................... (48,092) (8,943)
Purchase of short-term investments ................ -- --
Cash (paid for) received from short-term investments 170,653 436,466
----------- -----------
Net cash provided (used) by investing ............... 122,561 427,523
activities
Cash flows from financing activities:
Distributions to partners ......................... (99,914) (117,452)
Payments on mortgage note payable ................. (80,722) (73,707)
Distributions paid to minority .................... (147,791) (76,752)
interest
----------- -----------
Net cash provided (used) by financing ............... (330,377) (267,911)
activities
----------- -----------
Net increase (decrease) in cash and cash equivalents (154,831) 379,961
Cash and cash equivalents at beginning of ........... 367,213 112,235
year
----------- -----------
Cash and cash equivalents at end of ................. $ 212,382 $ 492,196
year
=========== ===========
<PAGE>
DEVELOPMENT PARTNERS III
(A Massachusetts Limited Partnership)
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (decrease) in cash and cash
equivalents
-------------
Reconciliation of net loss to net cash provided by operating activities:
Nine Months Ended
September 30
1996 1995
--------- ---------
<S> <C> <C>
Net loss ............................................. ($124,073) ($ 39,598)
Adjustments to reconcile net loss to net
cash
provided by operating activities:
Depreciation and amortization ........................ 196,167 279,038
Minority interests' equity in subsidiary income (loss) (13,281) (12,221)
Change in assets and liabilities net of
effects
from investing and financing
activities:
(Increase) decrease in interest .................. 9,807 (10,790)
receivable
Decrease (increase) in real estate tax ........... (72,349) (11,948)
escrow
Increase (decrease) in accounts
payable and accrued expenses ................... 75,510 26,872
(Decrease) increase in due to .................... (10,244) (9,728)
affiliates
(Decrease) increase in rents received in advance . (101)
(Decrease) increase in tenant security deposits .. (8,552) (1,175)
-------- ---------
Net cash provided by operating ....................... $ 52,985 $ 220,349 0
activities
========= =========
<PAGE>
</TABLE>
================================================================================
DEVELOPMENT PARTNERS III
(A Massachusetts Limited Partnership)
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------
================================================================================
DEVELOPMENT PARTNERS III
(A Massachusetts Limited Partnership)
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------
1. Organization of Partnership
Development Partners III (A Massachusetts Limited Partnership) (the
"Partnership"), formerly Berry and Boyle Development Partners III, was formed on
July 11, 1988. GP L'Auberge Communities, L.P., a California Limited Partnership
(formerly Berry and Boyle Management) and Stephen B. Boyle are the General
Partners. In September, 1995, with the consent of Limited Partners holding a
majority of the outstanding Units, as well as the consent of the mortgage
lenders for the Partnership's three properties, Richard G. Berry resigned as a
general partner of the Partnership. Except under certain limited circumstances
upon termination of the Partnership, the General Partners are not required to
make any additional capital contributions. The General Partners or their
affiliates will receive various fees for services and reimbursement for various
organizational and selling costs incurred on behalf of the Partnership.
On January 13, 1989 the Securities and Exchange Commission declared the
Partnership's public offering (the "Prospectus") of up to 80,000 units of
Limited Partnership Interests at $500 per unit (the "Units") effective and the
marketing and sale of the Units commenced shortly thereafter. The initial
closing of the offering took place on December 28, 1989 at which time the
holders of 3,048 Units were admitted into the Partnership. The Partnership
continued to admit subscribers monthly thereafter until December 27, 1991, its
last closing date. The Partnership terminated the offering on January 13, 1992
having admitted 289 investors acquiring 7,401 Units totaling $3,700,500.
The accompanying consolidated financial statements present the activity of the
Partnership for the years ended September 30, 1996, and 1995.
The Partnership will continue until December 31, 2018, unless earlier terminated
by the sale of all, or substantially all, of the assets of the Partnership, by
the dissolution and liquidation of the joint ventures or as otherwise provided
in the Partnership Agreement.
2. Significant Accounting Policies
A. Basis of Presentation
The consolidated financial statements include the accounts of the
Partnership and its subsidiary Casabella Associates. All intercompany
accounts and transactions have been eliminated in consolidation. The
Partnership follows the accrual basis of accounting.
B. Cash and Cash Equivalents
The Partnership considers all highly liquid debt instruments purchased
with a maturity of three months or less to be cash equivalents. The
carrying value of cash and cash equivalents approximates fair value. It
is the Partnership's policy to invest cash in income-producing
temporary cash investments. The Partnership mitigates any potential
risk from such concentration of credit by placing investments with high
quality financial institutions.
C. Short-term Investments
At September 30, 1996, short term investments consist solely of various
forms of U. S. Government backed securities, with an aggregate par
value of $566,072, which mature in March 1997. In 1994, the
Partnership adopted Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities"
The Partnership has the intent and ability to hold its short term
investments to maturity. Accordingly, these securities have been
recorded at amortized cost, which approximates market value.
There was no cumulative effect recorded as a result of this accounting
change.
D. Significant Risks and Uncertainties
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 statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
E. Depreciation
Depreciation is provided for by the use of the straight-line method
over the estimated useful lives as follows:
Buildings and improvements 39-40 years
Equipment, furnishings and fixtures 5-15 years
F. Deferred Expenses
Costs of obtaining the mortgage on Casabella are being amortized over
the term of the related mortgage note payable using the straight-line
method. Any unamortized costs remaining at the date of refinancing are
expensed in the year of refinancing.
G. Income Taxes
The Partnership is not liable for Federal or state income taxes because
Partnership income or loss is allocated to the Partners for income tax
purposes. If the Partnership's tax returns are examined by the Internal
Revenue Service or state taxing authority and such an examination
results in a change in Partnership taxable income (loss), such change
will be reported to the Partners.
H. Rental Income
Leases require the payment of rent in advance, however, rental income
is recorded as earned.
I. Reclassification
J. Long-Lived Assets
The Partnership's long-lived assets include property and equipment and
deferred expenses. The Partnership will evaluate the possible
impairment of long-lived assets whenever events or circumstances
indicate that the carrying value of the assets may not be recoverable.
<PAGE>
3. Cash and cash equivalents
Cash and cash equivalents at September 30, 1996 and 1995 consisted of the
following:
1996 1995
---- ----
Cash on hand (Sweep Account) $ 212,382 $ 35,935
Certificates of deposit 200,000
Money market accounts _ 131,278
------- -------
$212,382 $367,213
======= =======
4. Joint Venture and Partnership Acquisitions
On September 28, 1990, the Partnership acquired a majority interest in Casabella
Associates, a general partnership comprised of the Partnership, Development
Partners (A Massachusetts Limited Partnership) ("DPI"), formerly Berry and Boyle
Development Partners, and Development Partners II (A Massachusetts Limited
Partnership) ("DPII"), formerly Berry and Boyle Development Partners II.
Casabella Associates was formed to acquire a majority interest in the Casabella
Joint Venture which owns Casabella, a 154-unit residential property located in
Scottsdale, Arizona. Since the Partnership owns a majority interest in Casabella
Associates, the accounts and operations of Casabella Associates (including the
accounts and operations relating to Casabella Associates' majority interest in
the Casabella Joint Venture) have been consolidated into those of the
Partnership.
At September 30, 1996, the Partnership, DPI and DPII had contributed $2,500,000,
$400,000 and $1,800,000, respectively to Casabella Associates. $3,845,154 of
this amount was used to purchase the majority interest in the Casabella Joint
Venture referred to in the preceding paragraph and $500,000 was used to fund an
escrow account maintained by the permanent lender. In addition to the $4,700,000
of cash contributions referred to above, the Partnership, DPI and DPII
collectively incurred $215,564 of acquisition costs which have been recorded as
additional capital contributions to Casabella Associates.
Cash distributions and allocations of income and loss from Casabella Associates
are governed by the partnership agreement and are generally based on the ratio
of capital contributed by each of the joint venture partners.
Net cash from operations of the Casabella Joint Venture, to the extent
available, shall be distributed not less often than quarterly with respect to
each fiscal year, as follows:
(A) First, to Associates, an amount equal to a 10.6% per annum
(computed on a simple noncompounded daily basis from the date
of the closing) of their capital investment;
(B) Second, the balance 70% to Associates and 30% to the property
developer.
All losses from operation and depreciation for the Casabella Joint Venture are
allocated 99.5% to Associates and 0.5% to the property developer.
All profits from operations of the Casabella Joint Venture are allocated in
accordance with distributions of net cash from operations with respect to such
fiscal year; provided, however, that if with respect to any fiscal year there is
no net cash from operations distributable, profits will be allocated 99.5% to
Associates and 0.5% to the property developer.
The minority interest joint venture partner had insufficient basis to absorb its
respective share of losses, therefore, for financial statement purposes the
excess of losses over basis has been charged against the majority interest.
Future minority interest income, if any, from the Casabella Joint venture will
be credited against minority interest losses previously absorbed by the majority
interest. At September 30, 1996 the minority interest losses absorbed by the
majority interest totaled $10,526.
In the case of certain capital transactions and distributions as defined in the
Casabella joint venture agreement, the allocation of related profits, losses and
cash distributions, if any, would be different than as described above and would
be effected by the relative balance in the individual partners' capital
accounts.
The Partnership has invested in a single property located in Scottsdale,
Arizona. The success of the Partnership will depend upon factors which are
difficult to predict including general economic and real estate market
conditions, both on a national basis and in the area where the Partnership's
investment is located.
5. Mortgage Note Payable
All of the property owned by the Partnership is pledged as collateral for the
nonrecourse mortgage note payable pertaining to Casabella in the original
principal amount of $7,320,000. On June 30, 1992, Casabella Joint Venture
refinanced its original $7,320,000 permanent loan using the proceeds of a new
first mortgage loan in the amount of $7,300,000. Under the terms of the new
note, monthly principal and interest payments of $61,887, based on a fixed
interest rate of 9.125%, are required over the term of the loan. The balance of
the note will be due on July 15, 1997.
Accrued interest at September 30, 1996 and December 31, 1995 consisted of
$26,594 and $26,594, respectively, all pertaining to Casabella.
The aggregate principal amounts of long term borrowings due during the calendar
years 1996 and 1997 are $108,875 and $6,885,674, respectively.
The $6,913,827 principal balance of the mortgage note payable appearing on the
consolidated balance sheet approximates the fair value of such note.
6. Partners' Equity
Under the terms of the Partnership Agreement, as amended, profits are allocated
92% to the Limited Partners and 8% to the General Partners; losses are allocated
99% to the Limited Partners and 1% to the General Partners.
Cash distributions to the partners are governed by the Partnership Agreement and
are made, to the extent available, 92% to the Limited Partners and 8% to the
General Partners.
In the case of certain events as defined in the Partnership Agreement, such as
the sale of an investment property or an interest in a joint venture
partnership, the allocation of the related profits, losses, and distributions,
if any, would be different than described above.
7. Related Party Transactions
Due to affiliates at September 30, 1996 and December 31, 1995 consisted of
$1,074 and $5,318 of reimbursable costs payable to L'Auberge Communities, Inc.,
formerly Berry and Boyle Inc.
In 1996, and 1995, general and administrative expenses included $27,550 and
$20,921, respectively, of salary reimbursements paid to the General Partners for
certain administrative and accounting personnel who performed services for the
Partnership.
The officers and principal shareholders of Evans Withycombe, Inc., the developer
of Casabella, together hold a two and one half percent cumulative profit or
partnership voting interest in LP L'Auberge Communities, formerly Berry and
Boyle.
During the years ended September 30, 1996, and 1995, $58,365 and $58,538,
respectively, of property management fees were paid.
8. Subsequent Event:
On May 14, 1996, the Partnership and certain affiliates consummated an agreement
with Evans Withycombe Management, Inc. and certain of its affiliates ("EWI")
which separated the interests of EWI and the Partnership, thus affording the
Partnership greater flexibility in the operation and disposition of Casabella.
In consideration of a payment by the Partnership, DPII AND DPIII to EWI totaling
$71,009 ($5,681 of which was the partnership's portion) and the delivery of
certain mutual releases, EWI (I) relinquished its contract to manage Casabella
and its option to exercise its rights to first refusal with regard to the sale
of the property and (ii) assigned all of its interest in the Casabella Joint
Venture to the Partnership, DPII and DPIII (while preserving the economic
interest of the venture in these Joint Ventures), resulting in the dissolution
of the Casabella Joint Venture.
<PAGE>
================================================================================
================================================================================
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity; Capital Resources
The Partnership admitted 289 investors who purchased a total of 7,401 Units
aggregating $3,700,500. These offering proceeds, net of organizational and
offering costs of $555,075, provided $3,145,425 of net proceeds to be used for
the purchase of income-producing residential properties, including related fees
and expenses, and working capital reserves. The Partnership has expended (1)
$2,780,930 to acquire its interest in Casabella Associates and to pay
acquisition expenses, including an acquisition fee to the General Partners and
(2) $52,768 to cover costs associated with discontinued acquisitions . The
remaining net proceeds of $311,727 have been used to establish working capital
reserves sufficient to meet the needs of the Partnership, including
contributions that may be required at the joint venture level, as determined by
the General Partners.
The working capital reserves of the Partnership consist of cash and cash
equivalents and short-term investments. These reserves provide the Partnership
with the necessary liquidity to carry on its day-to-day operations and to make
necessary contributions to Casabella. Thus far in 1996, the aggregate net
decrease in working capital reserves was $335,291. This decrease resulted
primarily from cash provided by operations of $52,985, offset by distributions
to partners of $99,914, distributions paid to DPI and DPII of $147,791,
purchases of fixed assets in the amount of $48,092 and $80,722 of principal
payments on mortgage notes payable.
Property Status
Casabella
As of September 30, 1996, the property was 73% occupied, compared to 90%
approximately one year ago. At September 30, 1996 and 1995, the average monthly
rents collected for the various unit types were as follows:
Unit Type 1996 1995
--------- ---- ----
One bedroom two bath w/den 820 $805
Two bedroom two bath 940 930
Two bedroom two bath w/den 1,185 1,136
Results of Operations
The Partnership's operating results for the nine months ended September 30, 1996
consisted of interest earned on short-term investments of $35,061, general and
administrative expenses of $119,940, and the income (loss) allocated from
Casabella consisting of the following:
Revenue $1,046,970
Expenses:
General & Administrative 383
Operations 421,558
Depreciation and amortization 196,167
Interest 476,265
----------------
1,094,373
----------------
Net income (loss) $(47,403)
================
<PAGE>
The Partnership's operating results for the nine months ended September 30, 1995
consisted of interest earned on short-term investments of $47,292, general and
administrative expenses of $41,566, and the income (loss) allocated from
Casabella consisting of the following:
Revenue $1,154,308
Expenses:
General and administrative 5,400
Operations 444,416
Depreciation and amortization 279,038
Interest 482,999
---------------
1,211,853
---------------
Net income (loss) ($57,545)
===============
The Partnership's operating results for the three months ended September 30,
1996 consisted of interest earned on short-term investments of $9,534, general
and administrative expenses of $22,148, and the income (loss) allocated from
Casabella consisting of the following:
Revenue 277,353
Expenses:
General and administrative 0
Operations 145,224
Depreciation and amortization 65,389
Interest 158,141
-----------------
368,754
-----------------
Net income (loss) $(91,401)
=================
The Partnership's operating results for the three months ended September 30,
1995 consisted of interest earned on short-term investments of $14,079, general
and administrative expenses of $15,323, and the income (loss) allocated from
Casabella consisting of the following:
Revenue $345,046
Expenses:
General and administrative 1,800
Operations 148,682
Depreciation and amortization 93,012
Interest 160,437
---------------
403,931
---------------
Net income (loss) ($58,885)
===============
Comparison of Operating Results for the Nine Months Ended September 30, 1996 and
1995:
Interest income decreased by 26% as a result of lower amount of working capital
invested in the Partnership's short term investments. Transition costs
associated with the outsourcing of much of the Partnership's administration work
to an administration agent and the relocation of the remaining administration,
financial and investor services functions to a more cost efficient location in
Colorado Springs, Colorado has temporarily increased first half 1996 operating
expenses. Furthermore, consistent with the Partnership's disposition strategy,
annual audit fees were moved from the property level to the investment
partnership level to more accurately present on-site operational costs of the
properties. Consequently, the total general and administrative expenses of the
Partnership increased $84,879 (99%)in the first nine months of 1996 as compared
with the same period in 1995, but are expected to decline. In addition, the
one-time cost of the Evans Withycombe termination ($40,845) and its related
legal cost were incurred in May and June of 1996. The overall operating expenses
for the Property decreased by $24,383 (5%).
Thus far in 1996, the Partnership has made the following cash distributions to
its Partners:
Total
Limited Partners $99,914
General Partners
$99,914
<PAGE>
PART II - OTHER INFORMATION
-----------------
ITEM 1. Legal Proceedings
Response: None
ITEM 2. Changes in Securities
Response: None
ITEM 3. Defaults Upon Senior Securities
Response: None
ITEM 4. Submission of Matters to a Vote of Security Holders
Response: None
ITEM 5. Other Information
ITEM 6. Exhibits and Reports on Form 8-K
Response: None
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.
DEVELOPMENT PARTNERS III
(A Massachusetts Limited Partnership)
By: GP L'Auberge Communities, L.P., A California Limited Partnership,
General Partner
By: L'Auberge Communities, Inc., its General Partner
By: ____/s/ Stephen B. Boyle________________
Stephen B. Boyle, President
Date:____________________________, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Sep-30-1996
<CASH> 212,382
<SECURITIES> 566,072
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11,512,144
<DEPRECIATION> (1,931,546)
<TOTAL-ASSETS> 10,478,779
<CURRENT-LIABILITIES> 203,883
<BONDS> 6,913,827
0
0
<COMMON> 0
<OTHER-SE> 3,361,068
<TOTAL-LIABILITY-AND-EQUITY> 10,478,779
<SALES> 0
<TOTAL-REVENUES> 1,080,976
<CGS> 0
<TOTAL-COSTS> 425,575
<OTHER-EXPENSES> 316,490
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 476,265
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (124,073)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
