SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period Ended June 30, 1997
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 ___
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<PAGE>
DEVELOPMENT PARTNERS III
(A Massachusetts Limited Partnership)
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
---------------
<TABLE>
June 30
1997 December 31,
(Unaudited) 1996
ASSETS
Property, at cost
<S> <C> <C>
Land $2,976,101 $2,976,101
Buildings and improvements 7,648,060 7,648,060
Equipment, furnishings and fixtures 1,065,643 995,909
-------------- --------------
11,689,804 11,620,070
Less accumulated depreciation (2,118,660) (1,996,504)
-------------- --------------
9,571,144 9,623,566
Cash and cash equivalents 345,533 531,778
Real estate tax escrow 73,204 24,268
Deposits 1,950 1,950
Deferred expenses, net of accumulated
amortization of $117,735 and $100,918 - 11,212
============== ==============
Total assets $9,991,831 $10,192,774
============== ==============
LIABILITIES AND PARTNERS' EQUITY
<S> <C> <C>
Mortgage note payable 6,827,410 $6,885,673
Accrued expenses 170,194 208,425
Due to affiliates (Note 7) - 3,012
Tenant security deposits 26,299 24,834
Rents received in advance - 3,507
Minority Interest 1,235,891 1,252,041
-------------- --------------
Total liabilities 8,259,794 8,377,492
General Partner's equity (47,684) (47,185)
Limited Partner's equity 1,779,721 1,862,467
-------------- --------------
Total liabilities and partners' equity $9,991,831 $10,192,774
============== ==============
<PAGE>
DEVELOPMENT PARTNERS III
(A Massachusetts Limited Partnership)
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
-------------
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
---- ---- ---- ----
Revenue:
<S> <C> <C> <C> <C>
Rental income $374,129 $345,544 $761,958 $768,600
Interest Income $5,027 $16,648 $10,949 $25,527
------------- -------------- -------------- --------------
$379,156 $362,192 $772,907 $794,127
Expenses:
Operating Expenses $169,001 $125,330 $351,749 $277,953
Interest 156,199 158,760 313,061 318,124
Depreciation and amortization 66,684 37,765 133,368 130,778
General and administrative 22,942 71,946 40,819 98,175
------------- -------------- -------------- --------------
414,826 393,801 838,997 825,030
------------- -------------- -------------- --------------
Net loss before minority interest (35,670) (31,609) (66,090) (30,903)
Minority interests' equity in
subsidiary net (income) loss 8,154 (15,671) 16,149 (27,980)
------------- -------------- -------------- --------------
Net loss ($27,516) ($47,280) ($49,941) ($58,883)
============= ============== ============== ==============
Net loss allocated to:
General Partners ($275) ($473) ($499) ($589)
Per unit of Investor Limited
Partner interest:
7,401 Units issued (3.68) (6.32) (6.68) (7.88)
<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, 1995 (33,305) 2,222,947 2,189,642
Cash distributions (11,584) (133,218) (144,802)
Net loss (2,296) (227,262) (229,558)
-------------- -------------- --------------
Balance at December 31, 1996 (47,185) 1,862,467 1,815,282
Cash distributions - (33,305) (33,305)
Net loss (499) (49,442) (49,941)
-------------- -------------- --------------
Balance at June 30, 1997 ($47,684) $1,779,721 $1,732,036
============== ============== ==============
<PAGE>
DEVELOPMENT PARTNERS III
(A Massachusetts Limited Partnership)
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (decrease) in cash and cash equivalents
-------------
Six Months Ended
June 30
1997 1996
---- ----
Cash flows from operating activities:
<S> <C> <C>
Interest received $10,949 $38,533
Cash received from rents 759,916 760,575
Administrative expenses (57,560) (122,957)
Rental operations expenses (425,185) (277,953)
Interest paid (313,061) (318,124)
-------------- --------------
Net cash provided by operating (24,941) 80,074
activities
Cash flows from investing activities:
Purchase of fixed assets (69,737) (3,869)
Cash (paid for) received from short-term investments - 207,404
-------------- --------------
Net cash provided (used) by investing activities (69,737) 203,535
Cash flows from financing activities:
Distributions to partners (33,305) (66,609)
Payments on mortgage note payable (58,263) (53,201)
Distributions paid to minority interest - (77,591)
Cash paid for deposits - (1,950)
-------------- --------------
Net cash provided (used) by financing activities (91,568) (199,351)
-------------- --------------
Net increase (decrease) in cash and cash equivalents (186,245) 84,258
Cash and cash equivalents at beginning of year 531,778 367,213
-------------- --------------
Cash and cash equivalents at end of year $345,533 $451,471
===============================
<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:
Six Months Ended
June 30
1997 1996
---- ----
<S> <C> <C>
Net loss ($49,941) ($58,883)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 133,368 130,778
Minority interests' equity in subsidiary income (loss) (16,149) 27,980
Change in assets and liabilities net of effects
from investing and financing activities:
(Increase) decrease in interest receivable - 13,006
Decrease (increase) in real estate tax escrow (48,936) (47,362)
Increase (decrease) in accounts payable and accrued expenses (38,230) 36,005
(Decrease) increase in due to affiliates (3,011) (13,425)
(Decrease) increase in rents received in advance (4,062) -
(Decrease) increase in tenant security deposits 2,020 (8,025)
-------------- --------------
Net cash provided by operating activities ($24,941) $80,074
============== ==============
</TABLE>
<PAGE>
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 six months ended June 30, 1997 and 1996.
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. 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.
D. 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
E. 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.
F. 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.
G. Rental Income
Leases require the payment of rent in advance, however, rental income
is recorded as earned.
H. Reclassification
I. Long-Lived Assets
The Partnership's long-lived assets include property and equipment and
deferred expenses. The Partnership evaluates rental properties for
impairment when conditions exist which may indicate that it is probable
that the sum of expected future cash flows (undiscounted) from rental
properties is less than its carrying value. Upon determination that a
permanent impairment has occurred, rental properties are reduced to
fair value. For the year ended December 31, 1996, and the quarter ended
June 30, 1997, permanent impairment conditions did not exist at any of
the Partnership's properties.
3. Cash and cash equivalents
Cash and cash equivalents at June 30, 1997, and December 31, 1996, consisted of
the following:
1997 1996
-------- --------
Cash on hand (Sweep Account) $187,406 $213,574
Certificates of deposit .... 318,204
Money market accounts ...... 158,127
-------- --------
$345,533 $531,778
======== ========
<PAGE>
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 controls and 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
the Partnership.
The co-venture partner was an affiliate of Evans Withycombe, Inc. ("EWI"), a
Phoenix based residential development, construction and management firm. EWI
also developed the property known as Casabella.
At June 30, 1997, the Partnership, DPI and DPII had contributed $2,500,000,
$400,000 and $1,800,000, respectively to Casabella Associates. Of the total
contributions, $3,845,154 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 $280,930 of acquisition costs which have been
recorded as additional capital contributions to Casabella Associates.
The Partnership has invested in a single property located in Scottsdale,
Arizona. The success of the Partnership will depend 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.
JANUARY 1, 1996, THROUGH MAY 13, 1996:
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 were
allocated 99.5% to Associates and 0.5% to the property developer.
All profits from operations of the Casabella Joint Venture were allocated in
accordance with distributions of net cash from operations; provided, however,
that if any fiscal year has no distributable net cash from operations, profits
will be allocated 99.5% to Associates and 0.5% to the property developer.
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.
MAY 14, 1996, THROUGH JUNE 30, 1997:
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.
The Partnership, DPI, and DPII paid $109,741 to EWI ($38,345 of which was the
partnership's portion) and delivered 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), which resulted in the dissolution of the Casabella Joint
Venture. EWI may still share in the cash flow distributions or the proceeds from
sale of the properties if certain performance levels are met.
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. Under the terms of the 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 maturity date of the note has been
extended from July 15, 1997 to July 15, 1998 with the same terms and interest
rate.
Accrued interest at June 30, 1997, and December 31, 1996, consisted of $26,180
and $26,180, respectively, all pertaining to Casabella.
The $6,827,410 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 June 30, 1997, and December 31, 1996, consisted of $-0-
and $3,012 of reimbursable costs payable to L'Auberge Communities, Inc.,
formerly Berry and Boyle Inc.
In 1997 and 1996 general and administrative expenses included $12,651 and
$14,745, 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 June 30, 1997 and 1996, $30,400 and $44,896,
respectively, of property management fees were paid.
<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 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 were 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.
In addition to the proceeds generated from the public offering, the Partnership
has utilized external sources of financing at the joint venture level to
purchase Casabella. The Partnership Agreement limits the aggregate mortgage
indebtedness which may be incurred in connection with the acquisition of
Partnership properties to 80% of the purchase price of such properties.
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. In 1997, the aggregate net decrease in
working capital reserves was $186,245. This decrease resulted primarily from
cash contributed to the operations of $24,941, fixed asset purchases of $69,737,
distributions to partners of $33,305, and $58,263 of principal payments on
mortgage notes payable.
The Partnership's future ability to generate cash adequate to meet its needs is
dependent primarily on the successful operations of Casabella. Such ability may
also be dependent upon the future availability of bank borrowings, and upon the
future refinancing or sale of Casabella and the collection of any mortgage
receivable which may result from such sale. These sources of liquidity will be
used by the Partnership for payment of expenses related to real estate
operations, debt service and professional and management fees and expenses. Net
Cash From Operations and Net Proceeds, if any, as defined in the Partnership
Agreement, will then be available for distribution to the Partners in accordance
with Section 10 of the Partnership Agreement. The General Partners believe that
the current working capital reserves together with projected cash flows for 1997
are adequate to meet the Partnership's operating cash needs in the coming year.
With regard to the existing first mortgage debt on the Partnership's property,
the lender has extended the maturity of the note from July 15, 1997 to July 15,
1998 with the same terms and interest rate.
Property Status
Casabella
As of June 30, 1997, the property was 86% occupied, compared to 73%
approximately one year ago. At June 30, 1997 and 1996, the average monthly rents
collected for the various unit types were as follows:
Unit Type ......... 1997 1996
- -------------------------- ------ ------
One bedroom two bath w/den 820 $ 820
Two bedroom two bath ..... 940 940
Two bedroom two bath w/den 1,160 1,160
Results of Operations
The Partnership's operating results for the three months ended June 30, 1997,
consisted of interest earned on short-term investments, general and
administrative expenses, amortization expense and its share of the income (loss)
from Casabella Associates and Casabella. A summary of these operating results
appears below:
<TABLE>
Casabella Partnership Consolidated
Casabella Associates Level Totals
<S> <C> <C> <C> <C>
Revenue $374,129 $2,773 $2,254 $379,156
Expenses:
General and administrative - 2,442 20,500 22,942
Operations 169,001 - - 169,001
Depreciation and amortization 66,684 - - 66,684
Interest 156,199 - - 156,199
----------- ------------- --------------- ----------------
391,884 2,442 20,500 414,826
----------- ------------- --------------- ----------------
Net loss before minority interest (17,755) 331 (18,246) (35,670)
Minority Interests' share of
net (income) loss - 8,154 - 8,154
----------- ------------- --------------- ----------------
Net income (loss) ($17,755) $8,485 ($18,246) ($27,516)
=========== ============= =============== ================
The Partnership's operating results for the three months ended June 30, 1996,
consisted of interest earned on short-term investments, general and
administrative expenses, amortization expense and its share of the income (loss)
from Casabella Associates and Casabella. A summary of these operating results
appears below:
Casabella Partnership Consolidated
Casabella Associates Level Totals
<S> <C> <C> <C> <C>
Revenue $346,035 $12,013 $4,144 $362,192
Expenses:
General and administrative 383 2,850 68,713 71,946
Operations 124,580 - 750 125,330
Depreciation and amortization 37,765 - - 37,765
Interest 158,760 - - 158,760
----------- -------------- --------------- ----------------
321,488 2,850 69,463 393,801
----------- -------------- --------------- ----------------
Net loss before minority 24,547 9,163 (65,319) (31,609)
interest
Minority Interests' share of
net (income) loss - (15,671) - (15,671)
----------- -------------- --------------- ----------------
Net income (loss) $24,547 ($6,508) ($65,319) ($47,280)
=========== ============== =============== ================
<PAGE>
The Partnership's operating results for the six months ended June 30, 1997,
consisted of interest earned on short-term investments, general and
administrative expenses, amortization expense and its share of the income (loss)
from Casabella Associates and Casabella. A summary of these operating results
appears below:
Casabella Partnership Consolidated
Casabella Associates Level Totals
<S> <C> <C> <C> <C>
Revenue $761,958 $5,620 $5,329 $772,907
Expenses:
General and administrative - 3,908 36,911 40,819
Operations 351,672 77 - 351,749
Depreciation and amortization 133,368 - - 133,368
Interest 313,061 - - 313,061
----------- -------------- --------------- ----------------
798,101 3,985 36,911 838,997
----------- -------------- --------------- ----------------
Net loss before minority (36,143) 1,635 (31,582) (66,090)
interest
Minority Interests' share of
net (income) loss - 16,149 - 16,149
----------- -------------- --------------- ----------------
Net income (loss) ($36,143) $17,784 ($31,582) ($49,941)
=========== ============== =============== ================
The Partnership's operating results for the six months ended June 30, 1996,
consisted of interest earned on short-term investments, general and
administrative expenses, amortization expense and its share of the income (loss)
from Casabella Associates and Casabella. A summary of these operating results
appears below:
Casabella Partnership Consolidated
Casabella Associates Level Totals
<S> <C> <C> <C> <C>
Revenue $769,617 $17,484 $7,026 $794,127
Expenses:
General and administrative 383 2,850 94,942 98,175
Operations 274,953 - 3,000 277,953
Depreciation and amortization 130,778 - - 130,778
Interest 318,124 - - 318,124
----------- -------------- --------------- ----------------
724,238 2,850 94,942 825,030
----------- -------------- --------------- ----------------
Net loss before minority 45,379 14,634 (87,916) (30,903)
interest
Minority Interests' share of
net (income) loss - (27,980) - (30,980)
----------- -------------- --------------- ----------------
Net income (loss) $45,379 ($13,346) ($87,916) ($58,883)
=========== ============== =============== ================
</TABLE>
<PAGE>
Comparison of Operating Results for the Six Months Ended June 30, 1997 and 1996:
Total revenue decreased by $21,220 or 3%, primarily due to a decrease of $13,561
interest income due to lower working capital balances and a $7,659 decrease in
rental income. Operating expenses increased by $73,796 or 27% primarily due to
one-time costs of preparing Casabella Apartments for disposition, including an
increase of $18,973 in advertising and promotion expense and an increase of
$34,882 in repairs and maintenance. General and administrative expenses
decreased by $34,882 primarily due to the one time costs associated with the
Evans Withycombe termination fee in 1996.
Thus far in 1997, the Partnership has made the following cash distributions to
its Partners:
Total
Limited Partners .......... $33,305
General Partners -
$33,305
<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
August 15, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Jun-30-1997
<CASH> 345,533
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11,689,804
<DEPRECIATION> (2,118,660)
<TOTAL-ASSETS> 9,571,144
<CURRENT-LIABILITIES> 196,493
<BONDS> 6,827,410
0
0
<COMMON> 0
<OTHER-SE> 1,732,037
<TOTAL-LIABILITY-AND-EQUITY> 9,991,831
<SALES> 0
<TOTAL-REVENUES> 772,907
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 525,936
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 313,061
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (49,941)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
