15
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 $250
For the fiscal year ended December 31, 1994
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 33-25729-01
IDS/SHURGARD INCOME GROWTH PARTNERS L.P.III
(Exact name of registrant as specified in its charter)
Washington 91-1435854
(State of organization) (IRS Employer Identification No.)
1201 Third Avenue, Suite 2200, Seattle, Washington 98101
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (206) 624-8100
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of class)
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 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____
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K ( 229.405 of this chapter) 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 ]
DOCUMENTS INCORPORATED BY REFERENCE
The Annual Report to Security Holders for the fiscal year ended
December 31, 1994 are incorporated by reference into Part II and III of
this Form 10-K.
PART I
ITEM 1. BUSINESS.
General
IDS/Shurgard Income Growth Partners L.P.III was organized under the
laws of the State of Washington on November 15, 1988. The General Partner
is Shurgard Associates L.P.III. The Partnership will terminate December
31, 2030, unless terminated at an earlier date.
The business of the Partnership is to acquire, develop and operate
storage centers. The principal investment objectives of the Partnership
are to provide the Limited Partners with regular quarterly cash
distributions which, for Taxable Limited Partners, are expected to be
partially tax-sheltered; to obtain long-term appreciation in the value of
its properties; and to preserve and protect the Limited Partners' capital.
The Partnership was authorized to issue a total of 160,000 units of limited
partnership interest, at a stated cost of $250 per unit. The offer was
completed in March 1992 with total proceeds raised through the sale of
limited partnership interest of $29.8 million which enabled the Partnership
to purchase four existing storage centers in 1991, six facilities in 1992,
four facilities during 1993, and three additional facilities during 1994.
For more information regarding the properties owned by the Partnership at
December 31, 1993, see Item 2 below.
Self-Service Storage
Self-service storage centers provide a low-cost alternative to
warehousing and other forms of storage. Storage customers vary from
individuals and professionals to small and large businesses. These
customers rent an enclosed space or "unit" to store various items,
including household goods, recreation vehicles, inventory and business
records. Individual units are secured by the customer's own lock and key
and the property's security is maintained through a computerized access
system. Storage space is rented on a month-to-month basis and the typical
rental period for storage tenants is less than two years. This short
rental period makes it necessary for management to continually re-lease
available space in order to maximize property revenues. The primary
technique for renting available space is through advertisements placed in
local Yellow Pages and through signage at the property site. In addition,
the Partnership may utilize various promotional programs to stimulate
rental activities at a particular facility or within specific market areas.
The Partnership's storage centers are designed to offer high-quality
storage space for personal and business use at a competitive price. Rental
rates reflect the comparative quality of the center (security,
accessibility and appearance), as well as the superior service provided by
on-site managers. Because storage leases are short term, any adjustments
in rental rates due to inflation or other market factors can become
effective promptly after they are announced by the Partnership.
While rental income from leased space constitutes the primary source
of revenue from the properties, additional revenue is generated from
incidental services and products available at the storage centers.
Management believes that providing such ancillary services will become
increasingly important as competition forces operators to seek to
differentiate their product. The Partnership currently receives additional
revenue from storage supplies sales as well as truck rental operations.
Property Management
The Partnership has entered into a Management Services Agreement with
Shurgard Incorporated, an affiliate of the General Partner, whereby
Shurgard Incorporated has agreed to manage the Partnership's properties for
a monthly fee of 6% of the gross revenues from operations of storage
centers, plus $75 per month per facility for rendering advertising
services. Since the management of the centers is supervised by Shurgard
Incorporated, all on-site managers and associate managers are employees of
the management company. As of February 6, 1995 there were 26 such
employees of the Partnership.
Under the Management Services Agreement, Shurgard Incorporated has
granted the Partnership the non-exclusive right to use the name, trademark
and service mark "Shurgard" in connection with the rental and operation of
its properties. The Management Services Agreement can be terminated
without cause by the Partnership with sixty days written notice. However,
if the agreement is so terminated, all rights to use the "Shurgard" name,
trademark and service mark are also terminated and any signs bearing the
name "Shurgard" are to be removed at the Partnership's expense. If the
agreement is terminated by Shurgard Incorporated for reasons other than the
Partnership's breach thereof, or Shurgard Incorporated is terminated for
cause, the Partnership will maintain the right to use the "Shurgard" name,
trademark, service mark and related items until the properties are sold or
otherwise disposed of. However, such rights may not be passed on to any
subsequent purchaser of a property.
On March 24, 1995, Shurgard Incorporated was merged into Shurgard
Storage Centers, Inc. As a result of the merger, SSCI assumed all of
Shurgard Incorporated's rights and obligations under the Management
Services Agreement and will manage the Partnership's properties on the
terms set forth in the Management Services Agreement.
Competition
Relatively low increases in storage supply and continued increases in
the industry demand have driven substantial occupancy gains over the last
several years. Management considers occupancy levels in the 90% range to
be "full", and as such they believe significant future occupancy gains will
be difficult to obtain. Management anticipates that future increases in
revenues from storage centers currently owned by the Partnership will be
primarily the result of rental rate increases. To the extent that the
existing properties continue to operate profitably, this will likely
stimulate further development and result in greater competition between the
newly developed and existing properties.
Entry into the self-storage business through acquisition of existing
facilities is relatively easy for persons or institutions with the required
initial capital. Development of new self-storage facilities is more
difficult, however, due to zoning, environmental and other regulatory
requirements. Management has seen recent increases in storage development,
but anticipates that this development will not begin to effect industry
occupancies until 1996 or 1997. The Partnership competes with, among
others, national and regional storage operators and developers.
Performance at any one location is generally most influenced by
competition within a three to five mile radius. The primary factors upon
which competition will be based are location, rental rates, suitability of
the property's design to prospective tenants' needs and the manner in which
the property is operated and marketed. The Partnership has established
itself within its markets as a quality operator, emphasizing customer
service and security.
Competition may be accentuated by any increase in availability of
funds for investment in real estate. Rising interest rates tend to
decrease the availability of funds and therefore can have a positive impact
on competition. The extent to which the Partnership is affected by
competition will depend in significant part on general market conditions.
Disposition of Assets
As originally stated, the Partnership plans to dispose of its interest
in its properties five to ten years after acquisition or completion of its
development, i.e., between 1997 and 2002. However, as originally
indicated, the actual time of the sale depends on a variety of factors not
capable of prediction, including future property values.
ITEM 2. PROPERTIES.
The following table lists each of the Partnership's storage centers at
December 31, 1994, the metropolitan area they serve, the acquisition or
completion date, and the square foot occupancy at the beginning and end of
the year.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Rentable
Metropolitan Square Acquisition/ Occupancy at Dec. 31,
Area Footage Completion Date 1992 1993 1994
--------------- ---------- --------------- ---- ---- ----
-
Shurgard of Phoenix, 64,235 4/91 <F1> <F1> <F1>
Gilbert Arizona
Shurgard of Miami, Florida 77,378 12/91 70% <F1> <F1>
Delray Beach
Shurgard of Portland, 42,182 1/91 <F1> <F1> <F1>
Allen Blvd. Oregon
Shurgard of San Antonio, 86,239 12/91 90% <F1> <F1>
Windcrest Texas
Shurgard of Phoenix, 54,850 2/92 94% <F1> <F1>
Dobson Ranch Arizona
Shurgard of Atlanta, 61,800 3/92 79% <F1> <F1>
Norcross Georgia
Shurgard of Atlanta, 61,150 3/92 83% <F1> <F1>
Stone Mountain Georgia
Shurgard of Atlanta, 60,200 3/92 69% <F1> <F1>
Tucker Georgia
Shurgard of Atlanta, 65,200 3/92 69% <F1> <F1>
Forest Park Georgia
Shurgard of Detroit, 56,920 3/92 <F1> <F1> <F1>
Rochester Michigan
Shurgard of San Francisco, 69,108 8/93 N/A 96% 95%
Castro Valley California
Shurgard of San Francisco, 61,905 8/93 N/A <F1> <F1>
Newark California
Shurgard of San San Francisco, 58,540 8/93 N/A <F1> <F1>
Leandro California
Shurgard of San Francisco, 69,217 8/93 N/A <F1> <F1>
Tracy California
Shurgard of San Francisco, 53,090 2/94 N/A N/A <F1>
Sacramento California
Shurgard of San San Francisco, 54,075 2/94 N/A N/A <F1>
Lorenzo California
Castro Valley San Francisco, 3,310 5/94 N/A N/A <F1>
Office Building California
<F1> These properties are individually less than 10% of historical cost. The
average occupancy of these projects was 87%, 93%, and 92% at December 31,
1992, 1993, and 1994 respectively.
</TABLE>
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 STOCKHOLDER
MATTERS.
(a) Market information.
There is no established public market for the Partnership's
units of limited partnership interest.
Transfers of limited partner interests are restricted in
certain circumstances. Transfers which would result in the
termination of the Partnership under Section 708 of the Internal
Revenue Code, transfers of fractional units, and transfers which
result in a limited partner owning less than the minimum number
of units are restricted. There is a fee charged for transfers.
(b) Holders.
As of February 6, 1995, there was one general partner and
approximately 4,000 limited partners in the Partnership.
(c) Distributions.
During the fiscal years ended December 31, 1993 and 1994,
the Partnership distributed $15.31 and $17.81 per weighted
average unit of limited partnership interest. In January 1994,
the Partnership distributed $4.22 per unit of limited partnership
interest. As of December 31, 1994, total distributions of
$6,597,379 are greater than total earnings on a basis consistent
with generally accepted accounting principles by $1,594,549.
Therefore, the partners' original investment has been reduced by
that amount for financial reporting purposes.
ITEM 6. SELECTED FINANCIAL DATA.
The information called for by this item is incorporated by reference
of the Annual Report to Security Holders for the fiscal year ended December
31, 1994, a copy of which is filed as Exhibit 13.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
THE RESULTS OF OPERATIONS.
The information called for by this item is incorporated by reference
of the Annual Report to Security Holders for the fiscal year ended December
31, 1994, a copy of which is filed as Exhibit 13.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information called for by this item is incorporated by reference
of the Annual Report to Security Holders for the fiscal year ended December
31, 1994, a copy of which is filed as Exhibit 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The Partnership's General Partner is Shurgard Associates L.P. III, a
Washington limited partnership. Shurgard Associates L.P. III is managed by
the directors and executive officers of Shurgard General Partner, Inc., the
Corporate General Partner, and by the Individual General Partners.
Shurgard Incorporated and IDS Partnership Services Corporation (IPSC), a
Minnesota corporation, are limited partners of Shurgard Associates L.P. III
and, as such, does not control the day-to-day affairs of the General
Partner or, through the General Partner, the Partnership. Management of
the operation of Partnership projects is performed by Shurgard Incorporated
pursuant to the Management Services Agreement.
The directors of Shurgard General Partner, Inc. have been elected to
serve until their successors are duly elected and qualified. As the sole
shareholder of Shurgard General Partner, Inc., Charles K. Barbo is in a
position to control the election of directors. Mr. Barbo is a party to a
business agreement whereby he shall use his best efforts to cause Donald B.
Daniels to be elected a vice president and director of Shurgard General
Partner, Inc., so long as Mr. Daniels is willing to serve in such
positions.
The directors and officers of Shurgard General Partner, Inc., are
required to devote only so much of their time to the Partnership's affairs
as is necessary or required for the effective conduct and operation of the
Partnership's business. The Individual General Partners devote their
individual time to the Partnership to the extent they deem advisable in
view of the participation of Shurgard Incorporated in Partnership affairs
and such other factors as they consider relevant.
The Individual General Partners of Shurgard Associates L.P. III and
the executive officers, directors and certain key personnel of Shurgard
General Partner, Inc., and Shurgard Incorporated are as follows:
Name Age Company Office and Date of Election
------------------ --- ---------------------------- ---------------------------
Charles K. Barbo 53 Shurgard Associates L.P. II Individual General Partner
(1988)
Shurgard Incorporated President (1992), Chairman
of the Board (1979)
Shurgard General Partner, President (1992), Chairman
Inc. of the Board (1983)
Arthur W. Buerk 58 Shurgard Associates L.P. II Individual General Partner
(1988)
Shurgard Incorporated Director (1982)
Shurgard General Partner, Director (1979)
Inc.
Donald B. Daniels 56 Shurgard Incorporated Vice President (1983),
Director (1972)
Shurgard General Partner, Vice President (1983),
Inc. Director (1979)
Kristin H. Stred 36 Shurgard Incorporated Secretary (1992)
Shurgard General Partner, Secretary (1992)
Inc.
Michael Rowe 38 Shurgard Incorporated Executive Vice President
(1993)
Harrell Beck 38 Shurgard Incorporated Treasurer (1992)
Shurgard General Partner, Treasurer (1992)
Inc.
David Grant 41 Shurgard Incorporated Executive Vice President
(1993)
On March 24, 1995, Shurgard Incorporated was merged into Shurgard
Storage Centers, Inc. ("SSCI"). Pursuant to this merger, Shurgard Storage
Centers, Inc. succeeds to rights and responsibilities of Shurgard
Incorporated and will perform all the duties previously performed by
Shurgard Incorporated, including supervision of the operation of the
Partnership projects. The directors, executive officers and key personnel
of Shurgard Storage Centers, Inc. are as follows:
<TABLE>
<S> <C> <C>
Name Age Positions and Offices With the Company
--------------- --- ------------------------------------------
Charles K. Barbo 53 Chairman of the Board, President and Chief Executive Officer
Harrell L. Beck 38 Director, Senior Vice President, Chief Financial Officer and Treasurer
Dan Kourkoumelis 43 Director
Donald W. Lusk 66 Director
Wendell J. Smith 61 Director
David K. Grant 41 Executive Vice President
Michael Rowe 38 Executive Vice President
Kristin H. Stred 36 Senior Vice President, Secretary and General Counsel
</TABLE>
Charles K. Barbo has been involved as a principal in the real estate
investment industry since 1969. Mr. Barbo is one of the co-founders of
Shurgard Incorporated, which was organized in 1972 to provide property
management services for self-service storage facilities and other real
estate and commercial ventures. Mr. Barbo was also a co-founder of
Shurgard General Partner, Inc. Upon Mr. Buerk's resignation on January 1,
1992, Mr. Barbo assumed the responsibilities of President of Shurgard
Incorporated until March 24, 1995 and Shurgard General Partner, Inc. Mr.
Barbo is also a general partner in a number of other public real estate
partnerships. On March 24, 1995 Mr. Barbo was named the Chairman of the
Board, President and Chief Executive Officer of Shurgard Storage Centers,
Inc.
Arthur W. Buerk joined Shurgard Incorporated in 1977. During the
ensuing years, Mr. Buerk shared with Messrs. Barbo and Daniels (see below)
the various executive management functions within Shurgard Incorporated.
Mr. Buerk served as President of Shurgard Incorporated from 1979 to 1991
and Shurgard General Partner, Inc. from 1983 to 1991. Effective January 1,
1992, Mr. Buerk resigned as President of both Shurgard Incorporated and
Shurgard General Partner, Inc. to pursue other avenues of interest. He
remains a director of Shurgard General, Inc. as well as a general partner
of Shurgard Associates L.P. III and, until March 24, 1995, remained a
director of Shurgard Incorporated. Mr. Buerk is also a general partner in
a number of other public real estate partnerships. Mr. Buerk holds no
office in Shurgard Storage Centers, Inc.
Donald B. Daniels has been involved in the real estate investment
industry since 1971 and in the self-service storage industry since 1974.
Mr. Daniels is one of the co-founders of Shurgard Incorporated. He is a
director of Shurgard General Partner, Inc. and was a director of Shurgard
Incorporated until March 24,1995. Mr. Daniels is also a general partner in
a number of other real estate partnerships. Mr. Daniels holds no office in
Shurgard Storage Centers, Inc.
Kristin H. Stred joined Shurgard Incorporated in 1992. She currently
serves as Corporate General Counsel and Secretary of both Shurgard
Incorporated unitl March 24, 1995 and currently serves as Shurgard General
Partner, Inc. Ms. Stred served as a corporate attorney in the broadcasting
and aerospace industries from 1987 to 1992. On March 24, 1995, Ms. Stred
was named Senior Vice President of Shurgard Storage Centers, Inc. She also
serves as Secretary an d General Counsel of Shurgard Storage Centers, Inc.
Michael Rowe came to Shurgard Incorporated as Controller in 1982. In
1983, he became a Vice President and, in 1987, was named Director of
Operations of Shurgard Incorporated. Mr. Rowe served as Treasurer of both
Shurgard Incorporated and Shurgard General Partner, Inc. from 1983 to
1992. He served as Executive Vice President of Shurgard Incorporated from
1993 until March 24, 1995. Mr. Rowe currently serves as Executive Vice
President of Shurgard Storage Centers, Inc.
Harrell Beck joined Shurgard Incorporated in April 1986 as the Eastern
Regional Operations Manager and, in 1990, he became the Chief Financial
Officer. Mr. Beck served as Treasurer of Shurgard Incorporated from 1992
until March 24, 1995. He currently serves as Director, Treasurer and CFO
of Shurgard Storage Centers, Inc. as well as Treasurer of Shurgard General
Partner, Inc. On March 24, 1995, Mr. Beck was named Senior Vice President
of Shurgard Storage Centers, Inc.
David K. Grant joined Shurgard Incorporated in November 1985 as
Director of Real Estate Investment. Mr. Grant was elected Vice President
of Shurgard Incorporated in 1992 and Executive Vice President in 1993. On
March 24, 1995, Mr. Grant was named Executive Vice President of Shurgard
Storage Centers, Inc.
Dan Kourkoumelis has served as a director of Shurgard Storage Centers,
Inc. since March 1994. He is the President, Chief Operating Officer and a
director of Quality Food Centers, Inc. ("QFC"), a publicly held corporation
that operates the largest independent supermarket chain in the Seattle
area. Mr. Kourkoumelis joined QFC in 1967 and has held a variety of
positions since then. He served as Executive Vice President from 1983 to
1987, when he also became Chief Operating Officer, and became President in
1989 and a director in 1991.
Donald W. Lusk has served as a director of Shurgard Storage Centers,
Inc. since March 1994. He is the President of Lusk Consulting Group, which
is engaged in general management consulting, as well as the formation and
delivery of management development programs in Western Canada. From 1974
to 1991, Mr. Lusk was Regional Managing Partner of Management Action
Programs in the Pacific Northwest.
Wendell J. Smith has served as a director of Shurgard Storage Centers,
Inc. since March 1994. He retired in 1991 from the State of California
Public Employees Retirement System ("Calpers") after 27 years of
employment, the last 21 in charge of all real estate equities and mortgage
acquisitions for Calpers. During those 21 years, Calpers invested over $8
billion in real estate and mortgages. In 1991, Mr. Smith established
W.J.S. & Associates, which provides advisory and consulting services for
pension funds and pension fund advisors.
Pursuant to Articles 16 and 17 of the Agreement of Limited
Partnership, a copy of which is filed as an exhibit to the Partnership's
Registration Statement, each of the general partners continues to serve
until (i) death, insanity, insolvency, bankruptcy or dissolution, (ii)
withdrawal with the consent of the other general partners (if any) and a
majority vote of the limited partners, or (iii) removal by a majority vote
of the limited partners.
ITEM 11. EXECUTIVE COMPENSATION.
Number of Capacities Cash
Persons in Group in which Serves Compensation
1 General Partner $112,000*
*The General Partner has a 5% interest in cash distributions made by
the Partnership, which is disproportionate to its share of the capital
of the Partnership, which is 0.007%. This amount represents that
portion of cash distributions made to the General Partner during the
fiscal year ended December 31, 1994 which is in excess of what a
proportionate share of distributions would have been.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) Security ownership of certain beneficial owners as of
February 6, 1995:
None owning more than 5% of the Partnership's voting securities.
(b) Security ownership of management as of February 6, 1995:
Shurgard Associates L.P.III owns 100% of the General Partner's
interest in IDS/Shurgard Income Growth Partners L.P.III Security
ownership is Shurgard Associates L.P.III as of February 6, 1995
was as follows:
Title of Name of Percent
Class Beneficial Owner of Class
------- ------------------------------------ --------
General Shurgard General Partner, Inc. 1,2 .2%
Partners' Charles Barbo 2 9.9%
Interest Arthur Buerk 2 9.9%
Shurgard Incorporated 3,4 40.0%
IDS Partnership Services Corporation3 40.0%
-------
100.0%
=======
1 Charles K. Barbo owns 100% of the stock of Shurgard General
Partner, Inc.
2 Owner is a General Partner of Shurgard Associates L.P. III
3 Owner is a Limited Partner of Shurgard Associates L.P. III
4 On March 24, 1995, these interests were transferred to
Shurgard Storage Centers, Inc. pursuant to the merger.
Although Shurgard Storage Centers, Inc. acquired through the
merger Shurgard Incorporated's interest in the General
Partner, substantially all of the appreciation in the value of
that interest during the next five years will inure to the
benefit of the shareholders of Shurgard Incorporated in the
form of additional shares of Shurgard Storage Centers, Inc.
As a consequence, the future benefits to be derived from the
interest in the General Partner (except current operating cash
flow and appreciation after five years), if any, will be
received by the shareholders of Shurgard Incorporated
(including members of management of Shurgard Storage Centers,
Inc.) and not by Shurgard Storage Centers, Inc. or its
shareholders."
(c) Changes in control: On March 24, 1995, Shurgard
Incorporated was acquired by Shurgard Storage Centers, Inc.
Pursuant to this merger, Shurgard Storage Centers, Inc. will
perform all the duties previously performed by Shurgard
Incorporated, including supervision of the operation of the
Partnership projects. For the directors, executive officers, key
personnel of Shurgard Storage Centers, Inc.and a description of the
circumstances under which the General Partner may be removed, see
Item 10 of this form 10K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Partnership agreement provides a fee payable to Shurgard
Incorporated for property management services equal to 6% of gross revenues
from self-service storage operations for day-to-day professional property
management services. The monthly fee for management services will be
reduced to 3% if leasing services are performed by a party other than
Shurgard Incorporated. Payments to Shurgard Incorporated for such
management totaled $393,684 for the year ended December 31, 1994.
Subsequent to March 24, 1995, the property management services will be
performed by Shurgard Storage Centers, Inc.
Note E at page 11 of the Annual Report to Security Holders for the
year ended December 31, 1994, a copy of which is included as Exhibit 13, is
incorporated by reference. In addition, Shurgard Incorporated will receive
fees from the Partnership as specified in the Agreement of Limited
Partnership, reference to which is made as Exhibit 3(a), and in the
Management Services Agreement, reference to which is made as Exhibit 10(a),
both of which documents are incorporated by reference. Shurgard Storage
Centers, Inc. will succeed Shurgard Incorporated with respect to these
agreements. On March 24, 1995 pursuant to the merger, the shareholders of
Shurgard Incorporated received shares of Shurgard Storage Centers, Inc.
The following persons owned approximately the designated percentages of the
named corporation's outstanding common stock as of December 31, 1994.
Ownership Ownership
of Shurgard of
Person Relationship to Partnership Inc. SSCI (1)
-------------- ------------------------------ ---------- ---------
Charles K. Barbo Individual General Partner
of Shurgard Associates L.P.
President and Chairman of the Board of
Shurgard General Partner, Inc. 48% 4%
Arthur W. Buerk Individual General Partner of
Shurgard Associates L.P. 25% *
Director of Shurgard General Partner, Inc.
Donald B. Daniels Director and Vice President of
Shurgard General Partner, Inc. 13% *
As shareholders of the named corporation these individuals may benefit
indirectly from the transactions disclosed in this item. Shurgard Realty
Advisors is owned 100% by Shurgard Incorporated.
(1) Pursuant to the terms of the merger, Shurgard Incorporated
shareholders will be entitled to receive additional Shurgard Storage
Centers, Inc. shares based on (i) the extent to which, during the five
years following the closing of the merger, Shurgard Storage Centers,
Inc. realized value as a result of certain transactions relating to,
among others, Shurgard Storage Centers, Inc.'s interest in the General
Partner and (ii) the value, at the end of five years or in the event of
a change of control, of any remaining interests in the General Partner
as determined by independent appraisal. The ownership percentages in
SSCI above do not reflect theses additional shares.
* Mr. Buerk and Mr. Daniels each own less than 1% of SSCI.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND
REPORTS ON FORM 8-K.
(a) 1. Financial statements:
The following financial statements of IDS/Shurgard Income Growth
Partners L.P. III and Shurgard Joint Partners II are incorporated
by reference in Part II and are filed as Exhibit 13:
Balance sheets - December 31, 1994 and 1993
Statements of earnings - Three years ended December 31, 1994
Statements of partners' equity (deficit) - Three years ended December
31, 1994
Statements of cash flows - Three years ended December 31, 1994
Notes to financial statements - Three years ended December 31, 1994
Independent auditors' report
2. All other schedules are omitted because either they are not
applicable or the required information is shown in the financial
statements or notes thereto.
3. Exhibits:
All exhibits to this report are listed in the Exhibit Index.
(b) Reports on Form 8-K:
None.
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.
Date: March 29, 1995 IDS/SHURGARD INCOME GROWTH PARTNERS L.P. III
By: Shurgard Associates L.P.III, General Partner
By: Shurgard General Partner, Inc. General Partner
By: HARRELL BECK
Harrell Beck, Treasurer
By: CHARLES K. BARBO
Charles K. Barbo, General Partner
By: ARTHUR W. BUERK
Arthur W. Buerk, General Partner
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:
Signature Title Date
------------------ ----------------------------------- -------------
CHARLES K. BARBO President, Chairman of the Board and March 29, 1995
Charles K. Barbo Director of Shurgard General Partner, Inc.
(principal executive officer)
ARTHUR W. BUERK Director of Shurgard General Partner, Inc. March 29, 1995
Arthur W. Buerk (principal executive officer)
HARRELL BECK Treasurer of Shurgard General Partner, Inc. March 29, 1995
Harrell Beck (principal financial officer and principal
accounting officer)
Exhibit Index
Exhibit Reference or Sequential Page Number
------------------------------------ ---------------------------------
3. Articles of incorporation and by- Filed as Exhibit 3 to Form S-11
laws (a) Agreement of Limited for Registration No. 33-25729
Partnership
4. Instruments defining the rights of See Exhibit 3(a), above
security holders, including
indentures
10.Material contracts: Filed as Exhibit 10(a) to Form S-
(a) Management Services Agreement 11 for Registration No. 33-25729
13.Annual Report to security holders Filed as Exhibit 13 to Form 10K
for Registration No. 33-25729
21.Subsidiaries of the registrant See Item 1 of this Form 10K
27.Financial Data Schedule Filed as Exhibit 27 to Form 10K
for Registration No. 33-25729
IDS3-EGR.DOC -- Page 7
MANAGEMENT'S DISCUSSION & ANALYSIS
RESULTS OF OPERATIONS
From 1992 to 1994 the Partnership's revenues and expenses increased
primarily due to the acquisition of new storage centers. The Partnership
acquired the following: in February 1994, Sacramento and San Lorenzo; in
May 1994, Castro Valley Office Building; in August 1993, Castro Valley,
Newark, San Leandro and Tracy; in February 1992, Dobson Ranch; in March
1992, Norcross, Stone Mountain, Tucker, Forest Park and Rochester. The
average occupancy of all the Partnership's centers was 90% at December 31,
1994.
The three facilities acquired in 1994 produced $852,000 in revenues
and $536,000 in earnings. Average occupancies for these facilities at
December 31, 1994 were 85%, 88% and 100% for Sacramento, San Lorenzo and
Castro Valley Office Building, respectively.
Revenues for the four storage centers purchased in 1993 increased 7%
in 1994 over their annualized 1993 results, while comparable operating
expenses rose by only 2%. These combined to provide a 9% increase in 1994
earnings for these centers compared to their annualized 1993 operating
results. Annual occupancies for these six centers, which averaged 91%
during 1993, rose slightly to an average of 92% during 1994.
Revenues for the ten properties purchased between 1991 and 1992 rose
18% from 1992 to 1993 and 14% from 1993 to 1994. Operating expenses only
rose 7% and 3%, respectively. This provided a 23% increase in 1994
earnings for these centers compared to 1993. Annual occupancies for these
ten centers, which averaged 74% during 1992 and 84% during 1993, rose to an
average of 93% during 1994.
LIQUIDITY AND CAPITAL RESOURCES
Cash From Operations: Cash from operating activities rose each year
from 1992 to 1994 as a result of increased earnings mainly due to the
acquisition of storage centers.
Investing Activities: In 1992, the Partnership purchased six storage
centers for a total of $10.7 million. These stores are located in the
Phoenix, Arizona; Atlanta, Georgia; and Detroit, Michigan metropolitan
areas. Also, the Partnership invested approximately $602,000 during 1992
improving those storage centers to maximize their property value and
revenue generating capability.
In 1993, the Partnership invested $237,000 in existing facilities,
including office remodeling at Norcross, Stone Mountain, Tucker and Forest
Park and new signage at Rochester. The Partnership also purchased four
storage centers during the third quarter of 1993 at a total cost of $13.3
million. The Partnership acquired a security interest in two additional
properties as part of a binding purchase agreement with the same seller.
These two centers were purchased on February 10, 1994, for $5.7 million.
All six California properties are subject to similar terms under the
purchase and sales agreements. These agreements provide the Partnership a
10% return on funds invested for the first three years. All of these
storage centers are located in northern California in the San Francisco Bay
and Sacramento areas and they range in size from 58,000 to 69,000 net
rentable square feet. Additionally, in March 1994, the Partnership
purchased an office building from the same seller at a total cost of
$500,000.
In 1994, the Partnership invested $157,000 in existing facilities.
These improvements included new signage at Castro Valley, Newark, San
Leandro and Tracy. Security improvements were also made at the Gilbert
Dobson Ranch, Castro Valley, Newark and Tracy facilities. As part of Stone
Mountain and Forest Park's original acquisitions, the Partnership acquired
undeveloped land adjacent to each storage center. The Partnership has
listed both parcels, with a local real estate broker in Atlanta, for
resale. Planned improvements for 1995 total approximately $123,700 and are
expected to be funded from operations and cash reserves.
Financing Activities: Financing activities for 1992 consisted of the
completion of fundraising for the Partnership, with total capital proceeds
totaling $7.3 million. The syndication costs associated with fundraising
(including the 1-1/4% investor servicing fee) were $726,000 in 1992.
During 1993, the Partnership acquired $10,821,000 of debt in
conjunction with the purchase of the six storage centers in the San
Francisco area. This debt was comprised of an $8 million bank note and
$2,821,000 in seller notes. Seller's notes require quarterly interest
payments to the extent any center's net operating income, as defined,
exceeds 10% of the Partnership's investment in the related center. Annual
payments are due under conditions provided in the note agreement based on
each center's performance.
During 1994, the Partnership consolidated existing outstanding notes
payable totaling $8 million and borrowed an additional $1.5 million. This
new note matures April 1, 2001 and bears an interest rate of 8.125% until
May 1, 1995, at which time it reprices and can be fixed for various periods
at the Partnership's option. The terms of this note provide the
Partnership the option to borrow up to an additional $3 million. It may be
necessary for the Partnership to borrow under this provision to meet the
future repayment obligations of the seller's notes to the extent they
cannot be funded from operating cash flow. Cash proceeds from the
additional borrowing under this note were used to make $580,000 in payments
on the seller's notes taken in 1993 and fund the $500,000 purchase price of
the Castro Valley office building. Additionally, the Partnership made the
final payments of $651,000 on the seller's notes that originated with the
purchase of the Tracy and San Leandro storage centers. Principal payments
on the seller's notes that originated with the purchase of the Castro
Valley and Newark storage centers are due March 31, 1995 and total
approximately, $378,900.
Distributions To Partners: Annualized distributions rates were
7.125%, 6.125% and 6.0% for 1994, 1993 and 1992, respectively.
Distributions are expected to continue on a quarterly basis and will
reflect the Partnership's future operating results and cash position.
SELECTED FINANCIAL INFORMATION
At or For the Year Ended December 31,
---------------------------------------------------------------
1994 1993 1992 1991 1990*
------------ ------------ ------------ ------------ -----------
Rental Revenue $ 6,608,932 $ 4,109,845 $ 2,572,560 $ 354,807 $ _
============ ============ ============ ============ ===========
Interest and Other
Income $ 56,948 $ 230,099 $ 333,318 $ 583,711 $ 207,398
============ ============ ============ ============ ===========
Earnings $ 1,655,334 $ 1,426,673 $ 1,065,304 $ 607,355 $ 198,114
============ ============ ============ ============ ===========
Earnings per Unit of
Limited Partnership
Interest $ 13.19 $ 11.37 $ 8.98 $ 9.76 $ 7.55
============ ============ ============ ============ ===========
Distributions to
Limited
Partners $ 2,123,512 $ 1,825,475 $ 1,555,516 $ 685,323 $ 77,686
============ ============ ============ ============ ============
Distributions per Unit of
Limited Partnership
Interest $ 17.81 $ 15.31 $ 13.80 $ 11.59 $ 3.12
============ ============ ============ ============ ===========
Total Assets $ 36,930,297 $ 36,726,054 $ 26,270,790 $ 20,319,832 $ 8,030,332
============ ============ ============ ============ ===========
Notes Payable $ 11,619,725 $ 10,821,000 $ _ $ _ $ _
============ ============ ============ ============ ===========
Partners'Equity $24,881,672 $ 25,461,614 $ 25,956,493 $ 19,956,835 $ 7,928,235
============ ============ ============ ============ ===========
* The Partnership had no operating activity prior to June 19, 1990.
BALANCE SHEETS
December 31,
------------------------------------
1994 1993
------------- --------------
Assets:
Cash and cash equivalents $ 602,285 $ 723,114
Storage centers, net 35,121,146 34,910,768
Other assets 258,242 207,376
Amortizable assets, less accumulated
amortization of $749,074 and $283,726 746,789 682,961
Land held for resale 201,835 201,835
------------- -------------
Total Assets $ 36,930,297 $ 36,726,054
============= =============
Liabilities And Partners' Equity (Deficit):
Liabilities:
Accounts payable and other
accrued expenses $ 428,900 443,440
Notes payable 11,619,725 10,821,000
------------- -------------
Total Liabilities 12,048,625 11,264,440
------------- -------------
Partners' equity (deficit):
Limited partners 24,962,899 25,513,844
General partner (81,227) (52,230)
------------- -------------
Total Partners' Equity 24,881,672 25,461,614
------------- -------------
Total Liabilities and
Partners' Equity $ 36,930,297 $ 36,726,054
============= =============
STATEMENTS OF EARNINGS
Year Ended December 31,
----------------------------------------
1994 1993 1992
---------- ---------- -----------
Revenues:
Rental $6,608,932 $4,109,845 $ 2,572,560
Interest and other income 56,948 230,099 333,318
------------ ----------- -----------
Total Revenues 6,665,880 4,339,944 2,905,878
------------ ----------- -----------
Expenses:
Operating 1,625,933 1,183,446 830,506
Property management fees 393,684 246,650 154,385
Depreciation 1,052,532 661,921 407,262
Real estate taxes 504,422 361,790 283,308
Interest 820,083 122,691
Amortization 465,348 211,138 59,112
Administrative 148,544 125,635 106,001
------------ ----------- -----------
Total Expenses 5,010,546 2,913,271 1,840,574
------------ ----------- -----------
Earnings $1,655,334 $1,426,673 $ 1,065,304
=========== =========== ===========
Earnings per unit of limited partnership
interest $ 13.19 $ 11.37 $ 8.98
=========== =========== ===========
Distributions per unit of limited partnership
interest $ 17.81 $ 15.31 $ 13.80
=========== =========== ===========
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
Limited PartnersGeneral Partner Total
------------- ------------- -------------
Balance, January 1, 1992 $ 19,955,720 $ 1,115 $ 19,956,835
Contributions 7,298,150 7,298,150
Syndication Costs (726,412) (726,412)
Distributions (1,555,516) (81,868) (1,637,384)
Earnings 1,012,039 53,265 1,065,304
------------- ------------- -------------
Balance, December 31, 1992 25,983,981 (27,488) 25,956,493
Distributions (1,825,475) (96,077) (1,921,552)
Earnings 1,355,338 71,335 1,426,673
------------- ------------- -------------
Balance, December 31, 1993 25,513,844 (52,230) 25,461,614
Distributions (2,123,512) (111,764) (2,235,276)
Earnings 1,572,567 82,767 1,655,334
------------- ------------- -------------
Balance, December 31, 1994 $ 24,962,899 $ (81,227) $ 24,881,672
============== ============== =============
STATEMENTS OF CASH FLOWS
Year Ended December 31,
------------------------------------------
1994 1993 1992
----------- ----------- -----------
Operating Activities:
Earnings $ 1,655,334 $1,426,673 $1,065,304
Adjustments to reconcile earnings
to net cash provided by operating activities:
Depreciation and amortization 1,517,880 873,059 466,374
Changes in operating accounts:
Other assets (50,866) (41,318) (74,232)
Accounts payable and other
accrued expenses (14,540) 129,143 190,201
------------ ----------- ------------
Net cash provided by
operating activities 3,107,808 2,387,557 1,647,647
------------ ----------- ------------
Investing Activities:
Purchase of and improvements to
storage centers (588,910) (15,476,979) (11,742,547)
Consideration for amortizable assets (286,950) (670,804) (123,935)
------------ ----------- ------------
Net cash used in
investing activities (875,860) (16,147,783) (11,866,482)
------------ ----------- ------------
Financing Activities:
Decrease in due to affiliates (238,901)
Increase in due from affiliates 414,000
Capital contributions 7,298,150
Syndication costs (726,412)
Proceeds from notes payable 9,500,000 8,865,000
Payments on notes payable (9,375,275) (865,000)
Payments on loan costs (242,226) (127,846)
Distributions to partners (2,235,276) (1,921,552) (1,637,384)
------------ ----------- ------------
Net cash (used in) provided by
financing activities (2,352,777) 5,950,602 5,109,453
------------- ----------- ------------
Decrease in cash and
cash equivalents (120,829) (7,809,624) (5,109,382)
Cash and cash equivalents at
beginning of year 723,114 8,532,738 13,642,120
------------ ----------- ------------
Cash and cash equivalents
at end of year $ 602,285 $ 723,114 $ 8,532,738
============ ============ ============
Supplemental disclosure of cash flow information:
Cash paid during year for interest $ 776,498 $ 113,247 $ _
============ ============ ============
Supplemental disclosure of non-cash investing activities:
Liabilities incurred in connection with the
purchase of storage centers $ 674,000 $2,821,000 $ _
============ ============ ============
NOTES TO FINANCIAL STATEMENTS
Three Years Ended December 31, 1994
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General: IDS/Shurgard Income Growth Partners L.P. III (the
Partnership) was organized under the laws of the State of Washington on
November 15, 1988, for the purpose of acquiring, developing and operating
storage and office and business park centers. The Partnership will
terminate December 31, 2030, unless terminated at an earlier date. The
general partner is Shurgard Associates L.P. III, a Washington limited
partnership.
As of December 31, 1994, there were approximately 4,000 limited partners
in the Partnership. There were 119,215 units of limited partnership
interest outstanding at a contribution of $250 per unit.
Cash Equivalents: Cash equivalents consist of money market
instruments with original maturities of 90 days or less.
Storage Centers: Storage centers, including land, buildings and
equipment, are recorded at cost. Depreciation on buildings and equipment
is recorded on a straight-line basis over their estimated useful lives
which range from three to thirty years.
Acquisition Fees: Acquisition fees are recorded as capital
contributions break escrow and are included in storage centers.
Amortizable Assets: Amortizable assets, consisting primarily of
noncompete covenants and loan costs, are amortized over their expected
useful lives of two to eight years.
Rental Revenue: Rental revenue is recognized as earned under accrual
accounting principles.
Taxes on Income: The financial statements do not reflect a provision
for Federal income taxes because such taxes are the responsibility of the
individual partners.
Earnings Per Unit of Limited Partnership Interest: Earnings per unit
of limited partnership interest is based on earnings allocated to the
limited partners divided by the number of limited partnership units
outstanding during the year. (119,215 units for each of the two years ended
December 31, 1994 and 1993 and 112,747 weighted averaged units for the year
ended December 31, 1992).
Distributions Per Unit of Limited Partnership Interest: Distributions
per unit of limited partnership interest is based on the total amount
distributed to limited partners divided by the number of limited
partnership units outstanding during the year (119,215 units for each of
the two years ended December 31, 1994 and 1993 and 112,747 weighted
averaged units for the year ended December 31, 1992).
Reclassifications: Certain items in the 1993 financial statements
have been reclassified to conform to the current year presentation.
NOTE B NOTES PAYABLE
December 31,
-------------------------
1994 1993
----------- -----------
Notes payable to sellers $2,264,000 $2,821,000
Note payable to bank 9,355,725 8,000,000
----------- -----------
$11,619,725 $10,821,000
=========== ===========
Notes to sellers, which mature December 31, 1996, are secured by
certain storage centers of the Partnership. Annual payments of principal
are due 90 days after year end under conditions provided in the note
agreement based on each center's performance. Quarterly interest is
payable to the extent any center's net operating income, as defined,
exceeds 10% of the Partnership's investment in the related center. During
1994, the Partnership made principal payments of $651,000 on these notes.
Maturities of notes payable include $378,900 due March 31, 1995.
On March 31, 1994, the Partnership consolidated outstanding notes
payable totaling $8 million and borrowed an additional $1.5 million. The
new terms of this note provide the Partnership the option to borrow up to
$12.5 million. This note is secured by real estate and bears interest at
8.125%. The note matures April 1, 2001 and requires monthly payments of
principal and interest based on a twenty-year amortization.
Maturities of notes payable at December 31, 1994, are as follows:
1995 $ 587,372
1996 2,130,222
1997 245,122
1998 265,797
1999 288,215
Thereafter 8,102,997
NOTE C STORAGE CENTERS
Storage centers consist of the following
December 31,
----------------------------
1994 1993
------------ -----------
Land $7,515,406 $5,880,250
Buildings 29,110,884 24,380,638
Equipment 668,167 516,671
----------- -----------
37,294,457 30,777,559
Less accumulated depreciation (2,173,311) (1,120,779)
----------- -----------
35,121,146 29,656,780
Security interest in storage centers 5,253,988
----------- -----------
$35,121,146 $34,910,768
=========== ===========
Security interest in storage centers represents the Partnership's
interest in two California storage centers as part of a binding purchase
agreement and was financed through a note payable to a commercial bank.
These storage centers were purchased on February 10, 1994, for $5.7
million. The purchase price, as well as prorations and closing costs, were
funded through notes payable to the seller of $674,000, the previously
obtained note payable and cash. The seller's notes payable have terms
consistent with those described in Note B.
NOTE D ACQUISITION
During the years ended December 31, 1992, 1993 and 1994, the
Partnership acquired existing storage centers from unaffiliated parties.
All 1992 acquisitions were purchased with cash; the 1993 and 1994
acquisitions were funded through a combination of bank notes, seller notes
and cash. Certain information about these acquisitions is as follows:
Metropolitan Acquisition
Facility Location Price Date
------------------ ------------------- ---------------
Dobson Ranch Phoenix, AZ $ 1,640,000 February, 1992
Norcross Atlanta, GA 2,105,040 March, 1992
Stone Mountain Atlanta, GA 2,016,840 March, 1992
Tucker Atlanta, GA 2,052,120 March, 1992
Forest Park Atlanta, GA 2,098,300 March, 1992
Rochester Detroit, MI 800,000 March, 1992
Castro Valley 1 San Francisco, CA 5,000,000 August, 1993
Newark 1 San Francisco, CA 3,340,000 August, 1993
San Leandro 1 San Francisco, CA 2,671,000 August, 1993
Tracy 1 San Francisco, CA 2,250,000 August, 1993
Sacramento 1 San Francisco, CA 2,834,000 February, 1994
San Lorenzo 1 San Francisco, CA 2,905,000 February, 1994
Castro Valley
Office Bldg. 2 San Francisco, CA 500,000 May, 1994
1 These purchases were funded with cash, a $8 million bank
note, and $3.495 million in seller notes.
2 This property was funded with cash.
The transactions were accounted for as purchases, and the results of
operations for each of the facilities from their respective acquisition
date, have been included in the financial statements. The general partner
estimates that if these properties had been acquired on January 1, 1994 and
1993, the pro forma combined results of operations for the year would have
been as follows:
(unaudited)
1994 1993
------------ ------------
Total revenues $ 6,773,234 $ 6,237,005
Earnings $ 1,613,010 $ 1,331,884
Earnings per unit of limited
partnership interest $ 12.85 $ 10.61
These pro-forma operating results include the Partnership's results of
operations, less increased depreciation and amortization on storage centers
and other assets, respectively, and increased interest expense on the bank
loans.
The pro-forma information does not purport to be indicative of the
results that actually would have been obtained if the combined operations
had been conducted for the full year and is not intended to be a projection
of future results.
NOTE E TRANSACTIONS WITH AFFILIATES
In connection with the offering of units of limited partnership
interest, the acquisition and development of storage centers and the
management of both the centers and the Partnership, the Partnership has
paid or accrued the following amounts to the general partner and its named
affiliates:
December 31,
-------------------------------------------
1994 1993 1992
-------------- ------------ ------------
Shurgard Associates L.P. III
Acquisition fees $ _ $ _ $ 364,900
Shurgard Incorporated and IDS Partnership
Services Corporation
Registration expenses, reimburse-
ments at cost 95,000
Property management fees 393,700 246,700 154,400
Shurgard Realty Advisors
Nonaccountable expense allowance 54,700
Expense reimbursements 56,400
IDS Financial Services, Inc. (IDS)
Selling commissions 434,000
Nonaccountable expense allowance 18,200
IDS Management Corporation
Investor services fees 91,200
INDEPENDENT AUDITORS' REPORT
General Partners and Limited Partners
IDS/Shurgard Income Growth Partners L.P. III
Seattle, Washington
We have audited the accompanying balance sheets of IDS/Shurgard Income
Growth Partners L.P. III as of December 31, 1994 and 1993, and the related
statements of earnings, partners' equity (deficit), and cash flows for each
of the three years in the period ended December 31, 1994. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based
on 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 are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of the Partnership as of December
31, 1994 and 1993, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 1994 in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Seattle, Washington
February 6, 1995
<TABLE> <S> <C>
<ARTICLE> 5
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<NAME> IDS SHURGARD INCOME GROWTH PARTNERS LP III
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 602,285
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 37,294,457
<DEPRECIATION> 2,173,311
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0
0
<OTHER-SE> 24,881,672
<TOTAL-LIABILITY-AND-EQUITY> 36,930,297
<SALES> 0
<TOTAL-REVENUES> 6,665,880
<CGS> 0
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<OTHER-EXPENSES> 4,190,463
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 820,083
<INCOME-PRETAX> 1,655,334
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,655,334
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
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