FORM 10-KSB--Annual or Transitional Report
Under Section 10 or 15(d)
(As last amended by 34-31905, eff. 4/26/93)
[X] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934 [Fee Required]
For the fiscal year ended December 31, 1995
or
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934 [No Fee Required]
For the transition period.........to.........
Commission file number 0-18419
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
(Name of small business issuer in its charter)
Delaware 31-1266850
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interest
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 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
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $2,147,266
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests, as of December 31, 1995. Market value information for the
Registrant's partnership interests is not available. Should a trading market
develop for these interests, it is management's belief that such trading would
not exceed $25,000,000.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Prospectus of Registrant dated May 12, 1989 (included in
Registration Statement, No.33-27407, of Registrant) are incorporated by
reference into Parts I and III.
PART I
Item 1. Description of Business
General
Brunner Companies Income Properties L.P. III (the "Partnership" or
"Registrant") is a Delaware limited partnership formed in March 1989. The
Partnership will continue in existence until December 31, 2008, unless earlier
dissolved or terminated. Brunner Management Limited Partnership ("General
Partner"), an Ohio limited partnership formed in February 1988, is the sole
general partner of the Partnership. 104 Management, Inc. ("Managing General
Partner"), an Ohio corporation formed in February 1988, is the sole general
partner of the General Partner, and in that capacity manages the business of the
Partnership.
As of December 31, 1995, the Partnership had 850,900 units of Class A Limited
Partnership Interest ("Units") and 8,600 units of Class B Limited Partnership
Interest ("Subordinated Interest") issued and outstanding. The Subordinated
Interest was sold to the Managing General Partner. Holders of the Units are
referred to as "Unitholders," holders of the units of Subordinated Interest are
referred to as "Subordinated Limited Partners," and Unitholders and Subordinated
Limited Partners are collectively referred to as "Limited Partners." Limited
Partners are not required to make any additional capital contributions. There
are only two differences between the Class A and Class B limited partnership
interests. First, the holders of Class A units are entitled to receive their
Class A Priority Return before the holders of Class B units are entitled to
receive any portion of their Class B Priority Return. Second, holders of Class
B units, if such holders are affiliates of the General Partners, are not
entitled to vote upon the removal of the General Partner or upon consideration
of a sale of any Retail Center to the General Partner or any affiliate of the
General Partner.
The offering terminated in September 1989. Upon termination of the offering,
the Partnership had accepted subscriptions for 851,400 Units of Class A Interest
and 8,600 units of Class B Interest purchased by the General Partner for
aggregate gross proceeds of $8,506,170. During 1994, the number of Class A
Limited Partnership units decreased by 500 units due to Class A Limited Partners
abandoning their units. The Partnership invested substantially all of the net
offering proceeds in four Retail Centers which were acquired on September 22,
1989. During 1995, two of these Retail Centers were foreclosed upon by the
lender. (See "Note K" to the Financial Statements in "Item 7"). The Partnership
will not acquire or invest in any other properties or debt or equity securities
of any other issuers (other than short term investments of cash in high grade
United States government obligations during interim periods between the receipt
of revenues and the distribution of cash to the Limited Partners and pending
payment of operating expenses of the Partnership) and will not issue any
additional limited partnership interests or other equity securities in the
Partnership. The policies of the Partnership noted above can only be changed by
an affirmative vote of limited partners owning a majority in interest and the
General Partner.
The General Partner, the Managing General Partner and the Subordinated
Limited Partners are all affiliates of a related group of corporations and
partnerships engaged generally in the real estate development business.
Pursuant to an agreement effective December 31, 1992, IBGP, Inc., an affiliate
of Insignia Financial Group, Inc. ("Insignia"), acquired a majority of the
outstanding stock of 104 Management Inc. on March 5, 1993. IBGP, Inc. is an
indirect wholly-owned subsidiary of Metropolitan Asset Enhancement, L.P.("MAE"),
an affiliate of Insignia. As a result of this transaction, IBGP, Inc.
effectively controls the General Partner. The Partnership is in the business of
owning and operating for investment two regional shopping centers: Gateway
Plaza, Mt. Sterling, Kentucky; and Highpoint Village, Bellefontaine, Ohio (the
"Retail Centers"). During 1995, two of the Partnership's investment properties,
Forest Ridge and Bay Village, were foreclosed upon, leaving the Partnership with
the two remaining shopping centers mentioned previously. See "Item 2.
Description of Properties" for additional information regarding the Retail
Centers and the foreclosures.
The real estate business is highly competitive. The Registrant's real
property investments are subject to competition from similar types of properties
in the vicinities in which they are located and the Partnership is not a
significant factor in its industry. In addition, various limited partnerships
have been formed by related parties to engage in business which may be
competitive with the Registrant.
The Registrant has no employees. Management and administrative services are
performed by affiliates of Insignia. The property manager is responsible for
the day-to-day operations of each property. The Managing General Partner has
also selected affiliates of Insignia to provide real estate advisory and asset
management services to the Partnership. As advisor, such affiliates provide all
partnership accounting and administrative services, investment management, and
supervisory services over property management and leasing. For a further
discussion of property and partnership management, see "Item 12", which
descriptions are herein incorporated by reference.
Item 2. Description of Properties
The Partnership was formed for the purpose of acquiring and operating the
Retail Centers. Under the Partnership Agreement, the Partnership will not
invest in the securities of any other issuer, lend funds to other persons or
entities or engage in the purchase or sale of any investments other than the
Retail Centers and properties directly related to the Retail Centers and short-
term liquid investments of cash. The policies of the Partnership noted above
can only be changed by an affirmative vote of limited partners owning a majority
in interest and the General Partner.
The following table sets forth the Partnership's investments in properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
<S> <C> <C> <C>
Gateway Plaza 09/22/89 Fee ownership, subject to Retail Center
Mt. Sterling, Kentucky first mortgage 157,141 sq.ft.
Highpoint Village 09/22/89 Fee ownership, subject to Retail Center
Bellefontaine, Ohio first mortgage 153,267 sq.ft.
</TABLE>
A significant feature of all the retail centers is the fact that
approximately 75% of the leasable space is, in the aggregate, leased to anchor
tenants with national or regional name recognition. Although such anchor
tenants generally pay lower base rents than smaller tenants, anchor tenants
offer greater security and stability of long-term leases from well-established
and more credit worthy tenants and tend to attract greater traffic to the retail
centers.
On January 5, 1995, the lender foreclosed on Forest Ridge Shopping Center,
located in Asheville, North Carolina. The Partnership recorded a valuation
write-down of approximately $415,000 to reduce the carrying costs of the Forest
Ridge assets to their estimated market value and an extraordinary gain on the
foreclosure of approximately $844,000. The $7,200,000 mortgage matured January
1, 1994, and was in default. The lender granted forebearances through June 30,
1994, while refinancing discussions continued between the Partnership and the
lender. These discussions did not ultimately produce an agreement to either
refinance or sell the property and the Partnership did not contest the lender's
foreclosure. In the Managing General Partner's opinion, it was not in the
Partnership's best interests to contest the foreclosure action or file for
reorganization under the bankruptcy laws.
On December 4, 1995, the lender foreclosed on Bay Village Shopping Center,
located in Conway, South Carolina. The $5,300,000 mortgage matured January 1,
1994, and had been in default since that date. The lender granted forebearances
through June 30, 1994, while refinancing discussions continued between the
Partnership and the lender. These discussions did not ultimately produce an
agreement to either refinance or sell the property and the lender foreclosed on
the property. In the Managing General Partner's opinion, it was not in the
Partnership's best interests to contest the foreclosure action or file
bankruptcy. The estimated fair value of Bay Village approximated the amount
payable to the mortgage holder; therefore, a gain on the disposal of the
property in foreclosure of $16,363, the difference between the carrying value of
the property and the debt to the mortgage holder, was recorded.
Schedule of Properties:
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Useful Federal
Property Value Depreciation Life Method Tax Basis
<S> <C> <C> <C> <C> <C>
Gateway Plaza $ 6,170,392 $ 1,240,426 28-31.5 yrs S/L $ 7,086,839
Highpoint Village 8,256,107 1,499,439 5-31.5 yrs S/L 6,434,468
$14,426,499 $ 2,739,865 $13,521,307
</TABLE>
See "Note A" of the financial statements included in "Item 7" for a
description of the Partnership's depreciation policy.
Schedule of Mortgages:
Principal Principal
Balance At Stated Balance
December 31, Interest Maturity Due At
Property 1995 Rate Date Maturity
Gateway Plaza
1st mortgage $ 5,561,960 9.25% 01/01/08 (1) $ 3,498,386
Highpoint Village
1st mortgage 6,534,629 9.25% 10/01/08 (1) 3,770,374
Total $12,096,589
(1) These mortgages matured March 1, 1995, and were not paid resulting in a
default until the Partnership successfully obtained a long-term loan
extension in May 1995 to the year 2008. Both notes are cross-
collateralized and cross-defaulted and have an interest rate of 9.25%.
Schedule of Rental Rates and Occupancy:
Average Annual
Rental Rates Average Annual
(per Square Foot) Occupancy
1995 1994 1995 1994
Gateway Plaza $4.80 $4.72 95% 91%
Highpoint Village 5.58 5.59 95% 94%
The increase in occupancy at Gateway Plaza is a result of six new tenants
moving in during late 1994 that occupy approximately 9,400 square feet. The
Managing General Partner has been notified by an anchor tenant, Wal-Mart
(occupying approximately 42% of the leasable square footage) of its intent to
vacate Gateway Plaza in 1996. This tenant is liable for, and the Partnership
expects that it will pay, its rental payments through the year 2008, when the
lease expires. It is unknown at this time to what extent this vacancy will
negatively impact the performance of the shopping center.
As noted under "Item 1. Description of Business", the real estate industry
is highly competitive. All of the properties of the Partnership are subject to
competition from other commercial buildings in the area. Management believes
that all of the properties are adequately insured.
The following is a schedule of the lease expirations for the years 1996-2005:
Number of % of Gross
Expirations Square Feet Annual Rent Annual Rent
Gateway Plaza
1996 3 4,800 $ 40,453 5.7%
1997 2 5,600 38,580 5.4%
1998 5 8,900 76,784 10.7%
1999 4 12,530 76,975 10.8%
2000 1 3,600 32,400 4.5%
2001-2005 0 0 0 0
Highpoint Village
1996 0 0 $ 0 0
1997 6 17,800 155,318 19.6%
1998 1 2,400 22,924 2.9%
1999 2 2,700 25,245 3.2%
2000-2005 0 0 0 0
The following schedule reflects information on tenants occupying 10% or
more of the leasable square feet for each property:
<TABLE>
<CAPTION>
Square Footage Annual Rent Lease
Nature of Business Leased Per Square Foot Expiration
<S> <C> <C> <C> <C>
Gateway Plaza Discount Store 65,930 $3.45 02/01/08
Clothing Store 22,731 3.76 02/28/09
Grocery Store 25,000 5.86 11/04/09
Highpoint Discount Store 65,930 $3.41 10/14/08
Grocery Store 52,337 6.60 01/14/10
</TABLE>
Schedule of Real Estate Taxes and Rates:
1995 1995
Taxes Rate
Gateway Plaza $45,349 1.03%
Highpoint Plaza 53,397 2.10%
Item 3. Legal Proceedings
The Registrant is unaware of any pending or outstanding litigation that is
not of a routine nature. The Managing General Partner of the Registrant
believes that all such pending or outstanding litigation will be resolved
without a material adverse effect upon the business, financial condition, or
operations of the Partnership.
Item 4. Submission of Matters to a Vote of Security Holders
During the fourth quarter of the fiscal year ended December 31, 1995, no
matters were submitted to a vote of the Unitholders through the solicitation of
proxies or otherwise.
PART II
Item 5. Market for Partnership Equity and Related Partner Matters
As of December 31, 1995, the number of holders of record of Limited
Partnership Units and Subordinated Interest Units was 656 and one, respectively.
Neither the Units nor the Subordinated Interest are traded on any established
public trading market, and it is not anticipated that such a market will develop
in the future. During 1994, the number of Class A Limited Partnership Units
decreased by 500 Units due to Class A Limited partners abandoning their Units.
In abandoning Units, a limited partner relinquishes all rights, title and
interest in the Partnership as of the date of abandonment.
No cash distributions were paid during 1995 or 1994. Future distributions
will depend on the levels of cash generated from operations, refinancings,
property sales and the availability of cash reserves. At this time, the
Managing General Partner does not anticipate making a cash distribution during
1996.
Item 6. Management's Discussion and Analysis or Plan of Operation
Results of Operations
The Partnership realized net income of $176,450 for the year ended December 31,
1995, compared to a net loss of $1,348,974 for the year ended December 31, 1994.
The net income in 1995 is primarily attributed to the $844,287 extraordinary
gain on extinguishment of debt in the foreclosure of the Forest Ridge Shopping
Center. In addition, the decreases for the year ended December 31, 1995, in
rental income, operating expenses, property management fees, depreciation,
interest expense, property taxes, and tenant reimbursements were primarily a
result of the foreclosure of Forest Ridge. Other income increased for the year
ended December 31, 1995, compared to the year ended December 31, 1994, as a
result of an easement fee paid by Wal-Mart at Gateway Plaza Shopping Center.
The gain on the Forest Ridge foreclosure was partially offset by a related
$414,859 write-down to reduce the net book value of the Forest Ridge assets to
their estimated market value.
Liquidity and Capital Resources
At December 31, 1995, the Partnership held unrestricted cash of $699,743
compared to $732,942 at December 31, 1994. Net cash provided by operating
activities increased due to a decrease in tax and insurance escrow funding and
lower interest payments. Net cash used in financing activities increased due to
increased principal payments on the Highpoint and Gateway mortgage notes.
On January 5, 1995, the lender foreclosed on Forest Ridge Shopping Center.
The $7,200,000 mortgage matured January 1, 1994, and was in default. The lender
granted forebearances through June 30, 1994, while refinancing discussions
continued between the Partnership and the lender. These discussions did not
ultimately produce an agreement to either refinance or sell the property and the
Partnership did not contest the lender's foreclosure. In the Managing General
Partner's opinion, it was not in the Partnership's best interest to contest the
foreclosure action or file for reorganization under the bankruptcy laws. On
January 5, 1995, the Partnership recorded a valuation write-down of $414,859, to
reduce the carrying costs of the Forest Ridge assets to their estimated market
value, and an extraordinary gain on the foreclosure of $844,287.
On December 4, 1995, Aetna Life Insurance Company, the lender, foreclosed on
Bay Village Shopping Center, located in Conway, South Carolina. The $5,300,000
mortgage matured January 1, 1994, and had been in default since that date. The
lender granted forebearances through June 30, 1994, while refinancing
discussions continued between the Partnership and the lender. These discussions
did not ultimately produce an agreement to either refinance or sell the property
and the lender foreclosed on the property. In the Managing General Partner's
opinion, it was not in the Partnership's best interest to contest the
foreclosure action or file bankruptcy. The Partnership recognized a gain on
disposal of the property in foreclosure of $16,363.
The mortgage notes payable for Highpoint ($6,600,000) and Gateway
($5,616,000) matured on March 1, 1995. The Partnership successfully obtained a
long-term extension related to the Highpoint and Gateway notes in May of 1995.
The Highpoint note matures October 1, 2008, and the Gateway note matures January
1, 2008. Both notes are cross-collateralized and cross-defaulted and have an
interest rate of 9.25%. Loan costs of $29,875 were paid in conjunction with the
extension of these notes. These loan costs will be amortized over the term of
the respective loans.
The sufficiency of existing liquid assets to meet future liquidity and
capital expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and meet other operating needs of the Partnership. Due to the successful
closing of the long-term financing on Highpoint and Gateway, the level of
existing liquid assets is believed to be sufficient to meet any near term needs
of the Partnership. No distributions were made in 1994 or 1995 and future cash
distributions will depend on the levels of net cash generated from operations,
refinancings, property sales, and the availability of cash reserves. At this
time, the Managing General Partner does not anticipate making a cash
distribution during 1996.
ITEM 7. FINANCIAL STATEMENTS
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
LIST OF FINANCIAL STATEMENTS
Report of Independent Auditors
Balance Sheet - December 31, 1995
Statements of Operations - Years ended December 31, 1995 and 1994
Statements of Changes in Partners' Capital (Deficit) - Years ended December
31, 1995 and 1994
Statements of Cash Flows - Years ended December 31, 1995 and 1994
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Brunner Companies Income Properties L.P. III
We have audited the accompanying balance sheet of Brunner Companies Income
Properties L.P. III as of December 31, 1995, and the related statements of
operations, changes in partners capital (deficit) and cash flows for each of
the two years in the period ended December 31, 1995. 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 the
Partnership s 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, the financial statements referred to above present fairly, in
all material respects, the financial position of Brunner Companies Income
Properties L.P. III as of December 31, 1995, and the results of its operations
and its cash flows for each of the two years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Greenville, South Carolina
February 19, 1996
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
BALANCE SHEET
December 31, 1995
Assets
Cash:
Unrestricted $ 699,743
Restricted-tenant security deposits 3,750
Accounts receivable 247,581
Escrows for taxes and insurance 70,177
Other assets 108,131
Investment properties (Notes C and J):
Land $ 1,525,447
Buildings and related personal property 12,901,052
14,426,499
Less accumulated depreciation (2,739,865) 11,686,634
$12,816,016
Liabilities and Partners' Capital
Liabilities
Accounts payable $ 21,275
Tenant security deposits 3,750
Accrued taxes 57,159
Other liabilities 17,980
Mortgage notes payable (Note C) 12,096,589
Partners' Capital
General partner (deficit) $ (54,249)
Class A Limited Partners - 850,900 units 650,513
Class B Limited Partners - 8,600 units 22,999 619,263
$12,816,016
See Accompanying Notes to Financial Statements
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994
<S> <C> <C>
Revenues:
Rental income $ 2,100,199 $ 2,871,489
Other income 47,067 27,678
Total revenues 2,147,266 2,899,167
Expenses:
Operating 205,892 321,590
General and administrative 106,309 122,230
Property management fees 68,728 87,196
Depreciation 582,439 808,739
Amortization of lease commissions 14,010 15,274
Interest 1,542,564 2,303,397
Property taxes 154,255 219,079
Write-down of properties (Note G) 414,859 696,805
Gain on disposal of property in foreclosure (16,363) --
Tenant reimbursements (Note D) (257,590) (326,169)
Total expenses 2,815,103 4,248,141
Net loss before extraordinary item (667,837) (1,348,974)
Extraordinary gain on extinguishment of debt (Note K) 844,287 --
Net income (loss) $ 176,450 $(1,348,974)
Net income (loss) allocated to general
partner (1%) $ 1,764 $ (13,490)
Net income (loss) allocated to Class A
limited partners (98.01%) 172,939 (1,322,129)
Net income (loss) allocated to Class B
limited partners (.99%) 1,747 (13,355)
$ 176,450 $(1,348,974)
Net loss before extraordinary item per Class A
limited partnership unit $ (.77) $ (1.55)
Extraordinary gain per Class A limited
partnership unit .97 --
Net income (loss) per Class A limited
partnership unit $ .20 $ (1.55)
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
General Limited Partners
Partner Class A Class B Total
<S> <C> <C> <C> <C>
Original capital contributions 1,000 $ 8,420,170 $ 86,000 $ 8,507,170
Partners' (deficit) capital at
December 31, 1993 $(42,523) $ 1,799,703 $ 34,607 $ 1,791,787
Net loss for the year ended
December 31, 1994 (13,490) (1,322,129) (13,355) (1,348,974)
Partners' (deficit) capital at
December 31, 1994 (56,013) 477,574 21,252 442,813
Net income for the year ended
December 31, 1995 1,764 172,939 1,747 176,450
Partners' (deficit) capital at
December 31, 1995 $(54,249) $ 650,513 $ 22,999 $ 619,263
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 176,450 $(1,348,974)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation 582,439 808,739
Amortization of loan costs and leasing
commissions 20,786 32,442
Extraordinary gain on extinguishment of debt (844,287) --
Write-down of properties 414,859 696,805
Gain on disposal of property in foreclosure (16,363) --
Change in accounts:
Restricted cash 5,029 (8,779)
Accounts receivable (106,802) 12,663
Escrows for taxes and insurance 58,578 (72,777)
Other assets (18,518) (86,890)
Accounts payable (2,933) 5,561
Tenant security deposit liabilities (5,029) 8,779
Accrued taxes (50,697) 10,669
Other liabilities 8,966 1,905
Net cash provided by operating activities 222,478 60,143
Cash flows from investing activities:
Property improvements and replacements -- (1,266)
Deposits to restricted escrow (106,391) --
Withdrawals from restricted escrow 106,391 --
Net cash used in investing activities -- (1,266)
Cash flows from financing activities:
Payments on mortgage notes payable (225,802) --
Loan extension costs (29,875) (22,072)
Net cash used in financing activities (255,677) (22,072)
Net (decrease) increase in cash (33,199) 36,805
Cash at beginning of year 732,942 696,137
Cash at end of year $ 699,743 $ 732,942
Supplemental disclosure of cash flow information:
Cash paid for interest $1,634,143 $ 2,286,230
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES
Foreclosure
During 1995, Forest Ridge Shopping Center and Bay Village Shopping Center
were foreclosed upon by the mortgage holders. In connection with these
foreclosures, the following balance sheet accounts were adjusted by the non-cash
amounts noted below:
Forest Ridge Bay Village
Accounts receivable $ (25,405) $ (27,127)
Other assets (31,509) (3,794)
Investment properties (7,586,627) (6,239,195)
Accumulated depreciation 1,163,217 1,096,113
Accrued taxes 66,643 --
Accounts payable -- (5,124)
Other liabilities 57,968 1,881
Mortgage notes payable 7,200,000 5,193,609
Gain on disposal of properties $ 844,287 $ 16,363
See Accompanying Notes to Financial Statements
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
Notes to Financial Statements
December 31, 1995
Note A - Organization and Significant Accounting Policies
Organization: Brunner Companies Income Properties L.P. III (the "Partnership
or "Registrant"), a Delaware limited partnership, was formed on March 10, 1989,
for the purpose of acquiring and operating the following retail centers: Bay
Village, a 133,474 square foot retail center in Conway, South Carolina; Forest
Ridge, a 164,672 square foot retail center in Asheville, North Carolina; Gateway
Plaza, a 157,141 square foot retail center in Mt. Sterling, Kentucky; and
Highpoint Village, a 153,267 square foot retail center in Bellefontaine, Ohio
(collectively referred to as the Retail Centers ). The Seller of these Retail
Centers was related to the then general partners of the Partnership. On January
5, 1995, and December 4, 1995, the mortgage holders on the Forest Ridge Shopping
Center and Bay Village Shopping Center foreclosed on the properties,
respectively. Refer to "Note K" of the financial statements for a further
discussion of the foreclosure transactions.
The general partner of the Partnership is Brunner Management Limited Partnership
("General Partner"). The General Partner is an Ohio limited partnership whose
general partner is 104 Management, Inc. ("Managing General Partner") and whose
limited partner is a shareholder of 104 Management, Inc. On March 5, 1993,
IBGP, Inc., an affiliate of Insignia Brunner L.P., acquired a majority of the
outstanding stock of 104 Management, Inc. IBGP, Inc. is an indirect wholly-
owned subsidiary of Metropolitan Asset Enhancement L.P., an affiliate of
Insignia Financial Group, Inc. As a result of this transaction, IBGP, Inc.
effectively controls the Managing General Partner of the Partnership.
The Partnership shall continue in existence until December 31, 2008, unless it
is earlier dissolved and terminated pursuant to the provisions of the
partnership agreement.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Investment Properties: During 1995, the Partnership adopted FASB Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of", which requires impairment losses to be recognized for
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows are not sufficient to recover the assets'
carrying amount. The impairment loss is measured by comparing the fair value of
the asset to its carrying amount. The adoption of FASB No. 121 did not have a
material effect on the Partnership's financial statements.
Buildings and improvements are depreciated on the straight-line basis over an
estimated useful life of 5 to 31.5 years. Tenant improvements are depreciated
over the term of the lease.
For Federal income tax purposes, the Partnership depreciates a portion (90
percent attributable to non tax-exempt investors) of the property s basis using
the straight-line method over thirty-one and one-half years and the balance (10
percent attributable to tax-exempt investors) using the straight-line method
over forty years.
Advertising: The Partnership expenses the costs of advertising as incurred.
Leases: The Partnership leases certain commercial space to tenants under
various lease terms. For leases with fixed rental increases, rents are
recognized on a straight-line basis over the terms of the lease. This straight-
line basis recognized $17,604 more in rental income than has been collected in
1995 and prior years. This amount is expected to be collected in future years
as cash collections under the terms of the leases exceed the straight-line basis
of revenue recognition. For all other leases, minimum rents are recognized over
the terms of the leases as received.
Lease Commissions: Lease commissions are capitalized and amortized by the
straight-line method over the life of the applicable lease. Lease commissions
of $48,648, net of accumulated amortization of $20,157, are included in other
assets.
Loan Costs: Loan extension costs of $29,875 were incurred in extending the
mortgages on Gateway Plaza and Highpoint Village. These costs are included in
other assets and are being amortized on a straight-line basis over the terms of
the respective extensions.
Cash:
Unrestricted - Unrestricted cash includes cash on hand and in banks and money
market funds. At certain times the amount of cash deposited at a bank may
exceed the limit on insured deposits.
Restricted cash - tenant security deposits - The Partnership requires security
deposits from new lessees for the duration of the lease with such deposits being
considered restricted cash. Deposits are refunded when the tenant vacates,
provided the tenant has not damaged its space and is current on its rental
payments.
Fair Value: In 1995, the Partnership implemented Statement of Financial
Accounting Standards No. 107, "Disclosure about Fair Value of Financial
Instruments," which requires disclosure of fair value information about
financial instruments for which it is practicable to estimate that value. The
Partnership estimates the fair value of its fixed rate mortgage by discounted
cash flow analysis, based on estimated borrowing rates currently available to
the Partnership (Note C).
Reclassification: Certain reclassifications have been made to the 1994
information to conform to the 1995 presentation.
Note B - Partnership Allocations, Contributions and Distributions
Distributions of operating cash flow, as defined in the partnership agreement,
will be distributed as follows:
First, to the Class A Limited Partners until they have received a
cumulative noncompounded annual cash return of 10% (Class A priority
return) of their adjusted capital contributions;
Second, to the Class B Limited Partners until they have received a
cumulative noncompounded annual cash return of 10% (Class B priority
return) of their adjusted capital contributions;
Third, to the General Partner to the extent that taxable income for the
fiscal year is allocated to the General Partner; and
Fourth, to the Class A Limited Partners and to the Class B Limited
Partners an amount equal to 99% and 1%, respectively, of the balance, if
any, remaining.
Taxable income or loss from operations will be allocated 98.01% to the Class A
Limited Partners, .99% to the Class B Limited Partners and 1% to the General
Partner.
All excess proceeds from sales and debt refinancings generally will be
distributed in the following order:
First, to the Class A Limited Partners until their adjusted capital
contributions are reduced to zero;
Second, to the Class B Limited Partners until their adjusted capital
contributions are reduced to zero;
Note B - Partnership Allocations, Contributions and Distributions (continued)
Third, to the Class A Limited Partners for any unpaid priority return of
cash distributions of operating cash flows;
Fourth, to the Class B Limited Partners for any unpaid priority return
of cash distributions of operating cash flows;
Fifth, to the General Partner until its original capital contribution is
reduced to zero; and
The balance, if any, 74.25% to the Class A Limited Partners, .75% to the
Class B Limited Partners and 25% to the General Partner.
During 1994, the number of Class A limited partnership units decreased by 500
due to Class A limited partners abandoning their units. In abandoning his or
her partnership units, a limited partner relinquishes all right, title and
interest in the Partnership as of the date of abandonment.
As of December 31, 1995, the Partnership had undeclared distributions of
$3,751,198 or $4.41 per Class A unit and $53,750 or $6.25 per Class B unit of
the cumulative annual 10% cash returns.
Note C - Mortgage Notes Payable
<TABLE>
<CAPTION>
Principal Monthly
Balance At Principal Stated Balance
December 31, and Interest Interest Maturity Due At
Property 1995 Payment Rate Date Maturity
<S> <C> <C> <C> <C> <C>
Gateway Plaza
1st mortgage $ 5,561,960 $ 50,833 9.25% 01/01/08(1) $3,498,386
Highpoint
1st mortgage 6,534,629 60,000 9.25% 10/01/08(1) 3,770,374
Total $12,096,589 $110,833
<FN>
(1) These mortgages matured March 1, 1995, and were not paid resulting in a
default until the Partnership successfully obtained a long-term loan
extension in May 1995 to the year 2008. Both notes are cross-
collateralized and cross-defaulted and have an interest rate of 9.25%.
The estimated fair values of the Partnership's aggregate debt approximates the
carrying value.
The mortgage notes payable are secured by the properties and by a pledge of the
revenues from the respective properties.
Note C - Mortgage Notes Payable (continued)
Schedule of principal payments of mortgage notes payable subsequent to December
31, 1995, are as follows:
1996 $ 218,563
1997 239,660
1998 262,793
1999 288,158
2000 315,973
Thereafter 10,771,442
$12,096,589
Note D - Operating Leases
Tenants are responsible for their own utilities and maintenance of their space,
and payment of their proportionate share of common area maintenance, utilities,
insurance and real estate taxes. Real estate taxes, insurance, and common area
maintenance expenses are paid directly by the Partnership. The Partnership is
then reimbursed by the tenants for their proportionate share. The expenses paid
by the Partnership are included in the accompanying Statements of Operations as
property taxes, insurance, and operating expenses. The portion which is
reimbursable from the tenants has been classified as tenant reimbursements in
the accompanying Statements of Operations.
Most of the leases also provide for percentage rent of .75% to 5% of sales after
a certain level of sales are achieved. Percentage rents were not material in
1995 and 1994.
The future minimum rental payments to be received under operating leases that
have initial or remaining noncancellable lease terms in excess of one year as of
December 31, 1995, are as follows:
1996 $ 1,461,610
1997 1,355,263
1998 1,230,500
1999 1,122,166
2000 1,032,389
Thereafter 8,478,351
$14,680,279
One anchor tenant represents $5,624,297 of the above minimum future rentals
under leases expiring in 2008.
Note E - Major Tenants
Rent from tenants representing at least 10% of rental income were as follows:
1995 1994
Amount Percent Amount Percent
Wal-Mart Stores, Inc. $654,740 31% $1,013,122 35%
Kroger 345,424 16% 345,424 12%
Note F - Contingencies
The Partnership is unaware of any pending or outstanding litigation that is not
of a routine nature. The Managing General Partner of the Partnership believes
that all such pending or outstanding litigation will be resolved without a
material adverse effect upon the business, financial condition, or operations of
the Partnership.
Note G - Valuation Adjustments
During the first quarter of 1995, the Forest Ridge Shopping Center was
foreclosed on by the mortgage note holder. As part of the foreclosure
transaction, the Partnership recorded a valuation write-down of $414,859 to
reduce the carrying costs of Forest Ridge to its estimated market value and an
extraordinary gain on extinguishment of debt in the foreclosure of this property
of $844,287.
The estimated fair value of Bay Village approximated the amount payable to the
mortgage holder; therefore, a gain on the disposal of the property in
foreclosure of $16,363, the difference between the carrying values of the
property and the debt for the mortgage holder, was recorded.
During 1994, all of the properties in the Partnership experienced cash flow
difficulties. Accordingly, in the fourth quarter of 1994, the Partnership
recorded a valuation write-down to reduce the carrying costs of the assets
related to Highpoint, Bay Village and Gateway Plaza based on estimated fair
values. Prior to the implementation of FASB No. 121, the write-downs were
calculated using the higher of nonrecourse debt, when applicable, or net
operating income of the property capitalized at a rate deemed reasonable for the
type of property adjusted for market conditions, physical condition of the
property and other factors to assess whether any permanent impairment in value
has occurred. Due to highly competitive conditions in the market place which
forced reductions in average rental rates to maintain occupancy levels and the
likely move-out of an anchor tenant, the Managing General Partner concluded that
a permanent impairment in value had occurred. The write-downs resulted in a
charge to operations of $696,805 for the year ended December 31, 1994.
Note H - Income Taxes
The Partnership is classified as a partnership for Federal income tax purposes.
Accordingly, no provision for income taxes is made in the financial statements
of the Partnership. Taxable income or loss of the Partnership is reported in
the income tax returns of its partners.
Differences between the net income (loss) as reported and Federal taxable loss
result primarily from (1) write-down of property, (2) depreciation over
different methods and lives and on differing cost bases of investment
properties, and (3) change in rental income received in advance. The following
is a reconciliation of reported net income (loss) and Federal taxable loss:
1995 1994
Net income (loss) as reported
Add (deduct): $ 176,450 $(1,348,974)
Depreciation differences (47,227) (55,239)
Unearned income 5,761 6,191
Miscellaneous (4,462) (3,220)
Write-down of properties -- 696,805
Loss on foreclosure (1,965,272) --
Federal taxable loss $(1,834,750) $ (704,437)
Federal taxable loss per Class A
limited partnership unit $ (2.11) $ (.81)
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities:
Net assets as reported $ 619,263
Land and buildings 1,871,690
Accumulated depreciation (37,017)
Syndication 830,579
Other 2,885
Net assets - Federal tax basis $3,287,400
Note I - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The partnership agreement provides for payments to
affiliates for services and for reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following payments were made to
affiliates of Insignia Financial Group, Inc. in 1995 and 1994:
1995 1994
Property management fees $68,728 $87,196
Reimbursement for services of affiliates 29,572 38,712
Leasing commissions 26,055 32,821
The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the General Partner. An affiliate of the General
Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the current year's master policy. The current agent assumed the
financial obligations to the affiliate of the General Partner, who receives
payments on these obligations from the agent. The amount of the Partnership's
insurance premiums accruing to the benefit of the affiliate of the General
Partner by virtue of the agent's obligations is not significant.
Note J - Investment Properties and Accumulated Depreciation
</TABLE>
<TABLE>
<CAPTION>
Initial Cost
To Partnership
Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
Retail Centers
<S> <C> <C> <C> <C>
Gateway Plaza
Mt.Sterling, Kentucky $ 5,561,960 $1,021,523 $ 6,590,424 $(1,441,555)
Highpoint Village 29,000
Bellefontaine, Ohio 6,534,629 720,676 7,848,598 (342,167)
Totals $12,096,589 $1,742,199 $14,439,022 $(1,754,722)
</TABLE>
Note J - Investment Properties and Accumulated Depreciation (continued)
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1995
Buildings
And Related
Personal Accumulated Date Depreciable
Description Land Property Total Depreciation Acquired Life-Years
<S> <C> <C> <C> <C> <C> <C>
Gateway Plaza
Mt.Sterling, $ 835,082 $ 5,335,310 $ 6,170,392 $ 1,240,426 09/22/89 28-31.5
Highpoint Village
Bellefontaine, Ohio 690,365 7,565,742 8,256,107 1,499,439 09/22/89 5-31.5
Totals $1,525,447 $12,901,052 $14,426,499 $ 2,739,865
</TABLE>
Reconciliation of "Investment Properties and Accumulated Depreciation":
1995 1994
Investment Properties
Balance at beginning of year $28,667,180 $29,362,719
Property improvements -- 1,266
Write-down of properties (414,859) (696,805)
Foreclosure of Forest Ridge (7,586,627) --
Foreclosure of Bay Village (6,239,195) --
Balance at End of Year $14,426,499 $28,667,180
Accumulated Depreciation
Balance at beginning of year $ 4,416,756 $ 3,608,017
Additions charged to expense 582,439 808,739
Foreclosure of Forest Ridge (1,163,217) --
Foreclosure of Bay Village (1,096,113) --
Balance at End of Year $ 2,739,865 $ 4,416,756
Note J - Investment Properties and Accumulated Depreciation (continued)
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1995 is $16,298,189. The accumulated depreciation balance for
Federal income tax purposes at December 31, 1995 is $2,776,882.
Note K - Foreclosure of Forest Ridge and Bay Village
On January 5, 1995, the lender foreclosed on Forest Ridge Shopping Center. The
$7,200,000 mortgage matured January 1, 1994, and was in default. The lender
granted forebearances through June 30, 1994, while refinancing discussions
continued between the Partnership and the lender. These discussions did not
ultimately produce an agreement to either refinance or sell the property and the
Partnership did not contest the lender's foreclosure. In the Managing General
Partner's opinion, it was not in the Partnership's best interests to contest the
foreclosure action or file bankruptcy. On January 5, 1995, the Partnership
recorded a valuation write-down of $414,859 to reduce the carrying costs of the
Forest Ridge assets to their estimated market value and an extraordinary gain on
extinguishment of debt in the foreclosure of $844,287.
On December 4, 1995, Aetna Life Insurance Company, the lender, foreclosed on Bay
Village Shopping Center, located in Conway, South Carolina. The $5,300,000
mortgage matured January 1, 1994, and had been in default since that date. The
lender granted forebearances through June 30, 1994, while refinancing
discussions continued between the Partnership and the lender. These discussions
did not ultimately produce an agreement to either refinance or sell the property
and the lender foreclosed on the property. In the Managing General Partner's
opinion, it was not in the Partnership's best interest to contest the
foreclosure action or file bankruptcy.
The estimated fair value of Bay Village approximated the amount payable to the
mortgage holder; therefore, a gain on the disposal of the property in
foreclosure of $16,363, the difference between the carrying value of the
property and the debt to the mortgage holder, was recorded.
Operating revenues and expenses from Forest Ridge and Bay Village were
approximately $588,000 and $620,000, respectively, in 1995 and $1,418,000 and
$1,664,000, respectively, in 1994.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The Registrant has no officers or directors. The Managing General Partner
manages and controls the Registrant and has general responsibility and authority
in all matters affecting its business.
The name of the directors and executive officers of 104 Management, Inc.,
the Partnership's Managing General Partner, as of December 31, 1995, their age
and the nature of all positions with 104 Management, Inc. presently held by them
are set forth below. There are no family relationships between or among any
officers and directors.
Name Age Position
Carroll D. Vinson 55 President, Director
Robert D. Long, Jr. 28 Controller, Principal
Accounting Officer
William H. Jarrard, Jr. 49 Vice President
John K. Lines 36 Secretary
Kelley M. Buechler 38 Assistant Secretary
Carroll D. Vinson has been President of the Managing General Partner and
Metropolitan Asset Enhancement, L.P. ("MAE") subsidiaries since August 1994.
Prior to that, during 1993 to August 1994, Mr. Vinson was affiliated with Crisp,
Hughes & Co. (regional CPA firm) and engaged in various other investment and
consulting activities. Briefly, in early 1993, Mr. Vinson served as President
and Chief Executive Officer of Angeles Corporation, a real estate investment
firm. From 1991 to 1993 Mr. Vinson was employed by Insignia in various
capacities including Managing Director-President during 1991. From 1986 to
1990, Mr. Vinson was President and Director of U.S. Shelter Corporation, a real
estate services company, which sold substantially all of its assets to Insignia
in December 1990.
Robert D. Long, Jr. is Controller and Principal Accounting Officer of the
Managing General Partner and MAE subsidiaries. Prior to joining MAE in February
1994, he was an auditor for the State of Tennessee and was associated with the
accounting firm of Harshman Lewis and Associates. He is a graduate of the
University of Memphis.
William H. Jarrard, Jr. is Vice President of the Managing General Partner and
MAE subsidiaries and Managing Director - Partnership Administration of Insignia.
During the five years prior to joining Insignia in 1991, he served in a similar
capacity for U.S. Shelter. Mr. Jarrard is a graduate of the University of South
Carolina and a certified public accountant.
John K. Lines has been Secretary of the Managing General Partner and MAE
subsidiaries since August 1994 and General Counsel and Secretary of Insignia
since July 1994. From May 1993 until June 1994, Mr. Lines was the Assistant
General Counsel and Vice President of Ocwen Financial Corporation in West Palm
Beach, Florida. From October 1991 until April 1993, Mr. Lines was a Senior
Attorney with Banc One Corporation in Columbus, Ohio. From May 1984 until
October 1991, Mr. Lines was employed as an associate with Squire Sanders &
Dempsey in Columbus, Ohio.
Kelley M. Buechler is Assistant Secretary of the Managing General Partner and
MAE subsidiaries and Assistant Secretary of Insignia. During the five years
prior to joining Insignia in 1991, she served in a similar capacity for U.S.
Shelter. Ms. Buechler is a graduate of the University of North Carolina.
Item 10. Executive Compensation
None of the directors and officers of the Managing General Partner received
any remuneration from the Registrant.
Item 11. Security Ownership of Certain Beneficial Owners and Management
As of December 31, 1995, there were 850,900 Units and 8,600 units of
Subordinated Interest issued and outstanding. The following table sets forth
certain information, as of December 31, 1995, (except to the extent otherwise
indicated), with respect to the ownership of Units and units of Subordinated
Interest by: (i) any person or group who is known to the Partnership to be the
beneficial owner of more than 5% of either the Units or units of Subordinated
Interest; (ii) the directors and officers of the Managing General Partner,
naming them; and (iii) the directors and officers of the Managing General
Partner as a group.
Units of Subordinated
Name and Address Units (1) Interest (1)
or Group Amount Percent Amount Percent
Insignia Brunner L.P. -- -- 8,600 100%
One Insignia Financial Plaza
Greenville, SC 29602
Alexander Hamilton Life 106,383(2) 12.5% -- --
Insurance Company
of America
33045 Hamilton Boulevard
Farmington Hills,
Michigan 48018
All directors and officers -- -- -- --
of the Managing General
Partner (5 persons) as a group
(1) The Limited Partners have no right or authority to participate in the
management or control of the Partnership or its business. However,
Limited Partners do have limited rights to approve or disapprove certain
fundamental Partnership matters as provided in "Article 7" of the
Partnership Agreement. Transfer of Units are subject to certain
restrictions set forth in "Article 9" of the Partnership Agreement.
(2) To the best knowledge of the Partnership, these Units are held with sole
voting and investment power (see Note (1) above).
Item 12. Certain Relationships and Related Transactions
The General Partner did not receive cash distributions from or with respect
to the fiscal years ended December 31, 1995 and 1994. For a description of the
share of cash distributions from operations, if any, to which the General
Partner is entitled, see "Note B" of the financial statements included in "Item
7" of this report.
The Registrant has a property management agreement with affiliates of
Insignia pursuant to which such affiliates have assumed direct responsibility
for day-to-day management of the Partnership's properties. This service
includes the supervision of leasing, rent collection, maintenance, budgeting,
employment of personnel, payment of operating expenses, etc. Insignia's
affiliate received a property management fee equal to 3% of gross revenues from
all tenants. Insignia's affiliate was property manager of Highpoint and Gateway
for all of 1995 and 1994 and provided property management services for Bay
Village and Forest Ridge from November 1, 1993 until the date of their
foreclosure. During the twelve months ended December 31, 1995 and 1994, an
affiliate of Insignia received $68,728 and $87,196 in fees for property
management, respectively.
Section 6.4 of the Partnership Agreement provides that the Partnership shall
reimburse the General Partner and its affiliates for all out-of-pocket costs and
expenses incurred by the General Partner and it affiliates in connection with
the operation of the Partnership's business, including, without limitation,
legal and accounting fees and the cost of other administrative services
performed by them for the benefit of the Partnership; provided that any such
reimbursement shall be in an amount equal to the lesser of the General Partner's
or affiliates' actual cost with respect thereto or the amount which the
Partnership would be required to pay to an independent person for comparable
services in the same geographic location; and further provided that no
reimbursement is permitted with respect to, among other things, salaries, fringe
benefits, travel expenses and other administrative items incurred or allocated
to any controlling persons of the General Partner or any affiliate.
If the Partnership requires additional funds, the General Partner or its
affiliates may, but are not obligated to, lend funds to the Partnership. Any
such loan and any disposition, re-negotiation or other subsequent transaction
involving such loan, shall be made only upon receipt from an independent and
qualified advisor of an opinion letter to the effect that such proposed loan or
disposition, re-negotiation or subsequent transaction is fair and at least as
favorable to the Partnership as a loan to an unaffiliated borrower in similar
circumstances. The advisor's compensation must be paid by the General Partner
and is not reimbursable by the Partnership. No such loan has yet been made by
the General Partner.
A commission of up to 2% of the sale price may be paid to Brunner Management
Limited Partnership upon the sale of each of the Retail Centers, if it performs
substantial services in connection with the sale. Any such commission paid to
the Brunner Management Limited Partnership will be subordinated to the Limited
Partners' priority distributions. Total commissions paid will not exceed those
reasonable, customary and competitive in light of the size and location of the
Retail Center sold.
See "Note I" of the Financial Statements for further discussion of
transactions with related parties and certain other parties.
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits: See Exhibit Index contained herein.
(b) Reports on Form 8-K: A Form 8-K dated December 4, 1995 was filed
reporting the disposition of the Bay Village Shopping Center.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BRUNNER COMPANIES INCOME PROPERTIES L.P. III,
A Delaware Limited Partnership
By: Brunner Management Limited
Partnership, an Ohio Limited Partnership,
its General Partner
By: 104 Management, Inc., an Ohio Corporation,
its General Partner
By: /s/ Carroll D. Vinson
Carroll D. Vinson
President
Date: March 21, 1996
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
date indicated.
/s/ Carroll D. Vinson President March 21, 1996
Carroll D. Vinson
/s/ Robert D. Long, Jr. Controller March 21, 1996
Robert D. Long, Jr. and Principal
Accounting Officer
INDEX OF EXHIBITS
Exhibit No.
3.1 Partnership Agreement of Brunner Companies Income
Properties L.P. III (the "Partnership"); [included as
Exhibit B to the Prospectus of Registrant dated May 12,
1989 contained in Registration Statement No. 33-27407 of
Registrant filed May 12, 1989 (the "Prospectus") and
incorporated herein by reference.]
3.2 Certificate of Limited Partnership for the Partnership;
incorporated by reference to Exhibit 3.2 to Registration
Statement No. 33-27407 on Form S-11
4.1 Form of Unitholder Certificate for the Partnership;
incorporated by reference to Exhibit 4.1 to Registration
Statement No. 33-27407 on Form S-11
4.2 Form of Subordinated Interest Certificate for the
Partnership; incorporated by reference to Exhibit 4.2 to
Registration Statement No. 33-27407 on Form S-11
10.1 Purchase Agreement for Forest Ridge; incorporated by
reference to Exhibit 19.1 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.2 Purchase Agreement for Bay Village; incorporated by
reference to Exhibit 19.2 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.3 Purchase Agreement for Gateway Plaza; incorporated by
reference to Exhibit 19.3 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.4 First Amendment to Real Property Purchase Agreement for
Gateway Plaza, dated September 22, 1989 between Tennessee &
Associates - IV ("T&A-IV") and the Partnership;
incorporated by reference to Exhibit 10.4 to Form 10-K for
fiscal year ended December 31, 1989
10.5 Second Amendment to Real Property Purchase Agreement for
Gateway Plaza, dated March 23, 1990, between T&A-IV and the
Partnership; incorporated by reference to Exhibit 10.5 to
Form 10-K for fiscal year ended December 31, 1989
10.6 Purchase Agreement for Highpoint Village; incorporated by
reference to Exhibit 19.4 to Form 10-Q for the fiscal
quarter ended September 30, 1989
Exhibit No.
10.7 First Amendment to Real Property Purchase Agreement for
Highpoint Village, dated September 22, 1989, between
Tennessee & Associates-VII ("T&A-VII") and the Partnership;
incorporated by reference to Exhibit 10.7 to Form 10-K for
fiscal year ended December 31, 1989
10.8 Second Amendment to Real Property Purchase Agreement for
Highpoint Village, dated March 23, 1990 between T&A-VII and
the Partnership; incorporated by reference to Exhibit 10.8
to Form 10-K for fiscal year ended December 31, 1989
10.9 Management Agreement for Forest Ridge; incorporated by
reference to Exhibit 10.6 to Registration Statement No. 33-
27407 on Form S-11
10.10 Amendment to Management Agreement for Forest Ridge;
incorporated by reference to Exhibit 19.5 to Form 10-Q for
the fiscal quarter ended September 30, 1989
10.11 Management Agreement for Bay Village; incorporated by
reference to Exhibit 10.5 to Registration Statement No. 33-
27407 on Form S-11
10.12 Amendment to Management Agreement for Bay Village;
incorporated by reference to Exhibit 19.6 to Form 10-Q for
the fiscal quarter ended September 30, 1989
10.13 Management Agreement for Gateway Plaza; incorporated by
reference to Exhibit 10.7 to Registration Statement No. 33-
27407 on Form S-11
10.14 Assignment of Management Agreement to HCI Management for
Gateway Plaza; incorporated by reference to Exhibit 19.7 to
Form 10-Q for the fiscal quarter ended September 30, 1989
10.15 Amended and restated Management Agreement for Gateway
Plaza; incorporated by reference to Exhibit 19.9 to Form
10-Q for the fiscal quarter ended September 30, 1989
10.16 Management Agreement for Gateway Plaza with Lane
Consultants, Inc. by reference to Exhibit 10.16 to Form 10-
K for fiscal year ended December 31, 1990
10.17 Management Agreement for Highpoint Village; incorporated by
reference to Exhibit 10.8 to Registration Statement No. 33-
27407 on Form S-11
10.18 Assignment of Management Agreement to HCI Management for
Highpoint Village; incorporated by reference to Exhibit
19.8 to Form 10-Q for the fiscal quarter ended September
30, 1989
Exhibit No.
10.19 Amended and Restated Management Agreement for Highpoint
Village; incorporated by reference to Exhibit 19.10 to Form
10-Q for the fiscal quarter ended September 30, 1989
10.20 Bay Village Lease with Wal-Mart Stores, Inc.; incorporated
by reference to Exhibit 10.9 to Registration Statement No.
33-27407 on Form S-11
10.21 Bay Village Lease with Consolidated Stores International
Corporation d/b/a Odd Lots; incorporated by reference to
Exhibit 10.10 to Registration Statement No. 33-27407 on
Form S-11
10.22 Forest Ridge Lease with Wal-Mart Stores, Inc.; incorporated
by reference to Exhibit 10.12 to Registration Statement No.
33-27407 on Form S-11
10.23 Forest Ridge Lease with Goody's Family Clothing Inc.;
incorporate by reference to Exhibit 10.13 to Registration
Statement No. 33-27407 on Form S-11
10.24 Gateway Plaza Lease with Wal-Mart Stores, Inc.;
incorporated by reference to Exhibit 10.15 to Registration
Statement No. 33-27407 on Form S-11
10.25 Gateway Plaza Lease with J.C. Penney Company, Inc.,
incorporated by reference to Exhibit 10.16 to Registration
Statement No. 33-27407 on Form S-11
10.26 Gateway Plaza Lease with Food Lion, Inc.; incorporated by
reference to Exhibit 10.17 to Registration Statement No.
33-27407 on Form S-11
10.27 Highpoint Village Lease with Wal-Mart Stores, Inc.;
incorporated by reference to Exhibit 10.18 to Registration
Statement No. 33-27407 on Form S-11
10.28 Second Amendment to Highpoint Village Lease with Wal-Mart
Stores, Inc.; incorporated by reference to Exhibit 10.27 to
Form 10-K for fiscal year ended December 31, 1989
10.29 Highpoint Village Lease with James R. Keen and Alfred E.
Lefeld d/b/a Warehouse Paint Center; incorporated by
reference to Exhibit 10.19 to Registration Statement No.
33-27407 on Form S-11
10.30 Highpoint Village Lease with The Kroger Co.; incorporated
by reference to Exhibit 10.20 to Registration Statement No.
33-27407 on Form S-11
10.31 Bay Village Lease with Dayton & Associates- XIX ("D&A-
XIX"); incorporated by reference to Exhibit 19.12 to Form
10-Q for the fiscal quarter ended September 30, 1989
Exhibit No.
10.32 Forest Ridge Ground Lease with Dayton & Associates-XVIII
("D&A-XVIII"); incorporated by reference to Exhibit 19.11
to Form 10-Q for the fiscal quarter ended September 30,
1989
10.33 Modification and Termination of Ground Lease and Agreement
to Acquire Assets for Forest Ridge, dated as of March 1,
1990; incorporated by reference to Exhibit 10.32 to Form
10-K for fiscal year ended December 31, 1989
10.34 Bill of Sale from D&A-XVIII to the Partnership dated as of
March 1, 1990; incorporated by reference to Exhibit 10.33
to Form 10-K for fiscal year ended December 31, 1989
10.35 Assignment of Leases and Rents from D&A-XVIII to the
Partnership, dated as of March 1, 1990; incorporated by
reference to Exhibit 10.34 to Form 10-K for fiscal year
ended December 31, 1989
10.36 Assignment of Warranties from D&A-XVIII to the Partnership,
dated as of March 1, 1990; incorporated by reference to
Exhibit 10.35 to Form 10-K for fiscal year ended December
31, 1989
10.37 Rent Guarantee and Escrow Agreement, dated as of March 1,
1990, between D&A-XVIII and the Partnership; incorporated
by reference to Exhibit 10.36 to Form 10-K for fiscal year
ended December 31, 1989
10.38 Promissory Note in the amount of $170,000.00, dated March
1, 1990, between D&A-XVIII and the Partnership,
incorporated by reference to Exhibit 10.37 to Form 10-K for
fiscal year ended December 31, 1989
10.39 Second Priority Assignment of Leases and Rents from the
Partnership in favor of D&A-XVIII dated March 1, 1990,
securing the Note of even date; incorporated by reference
to Exhibit 10.38 to Form 10-K for fiscal year ended
December 31, 1989
10.40 Loan Application with Aetna Casualty and Surety Company
("Aetna"), incorporated by reference to Exhibit 10.21 to
Registration Statement No. 33-27407 on Form S-11
10.41 Supplemental Letter of Aetna, dated September 12, 1988;
incorporated by reference to Exhibit 10.22 to Registration
Statement No. 33-27407 on Form S-11
10.42 Supplemental Letter of Aetna, dated October 14, 1988;
incorporated by reference to Exhibit 10.23 to Registration
Statement No. 33-27404 on Form S-11
10.43 Supplemental Letter of Aetna, dated October 26, 1988;
incorporated by reference to Exhibit 10.24 to Registration
Statement No. 33-27404 on Form S-11
Exhibit No.
10.44 Promissory Note secured by a Mortgage on Bay Village, with
Aetna as Payee; incorporated by reference to Exhibit 10.25
to Registration Statement No. 33-27407 on Form S-11
10.45 Promissory Note secured by a Deed of Trust on Forest Ridge,
with Aetna as Payee; incorporated by reference to Exhibit
10.26 to Registration Statement No. 33-27407 on Form S-11
10.46 Mortgage, Assignment of Rents and Security Agreement for
Bay Village to Aetna; incorporated by reference to Exhibit
10.27 to Registration Statement No. 33-27407 on Form S-11
10.47 Deed of Trust, Assignment of Rents and Security Agreement
for Forest Ridge to a Trustee for the benefit of Aetna;
incorporated by reference to Exhibit 10.28 to Registration
Statement No. 33-27407 on Form S-11
10.48 Assignment of Rents and Leases for Bay Village to Aetna;
incorporated by reference to Exhibit 10.29 to Registration
Statement No. 33-27407 on Form S-11
10.49 Assignment of Rents and Leases for Forest Ridge to Aetna;
incorporated by reference to Exhibit 10.30 to Registration
Statement No. 33-27407 on Form S-11
10.50 Supplemental Letter of Aetna, dated November 30, 1988;
incorporated by reference to Exhibit 19.13 to Form 10-Q for
the fiscal quarter ended September 30, 1989
10.51 Modification and Assumption Agreement dated September 22,
1989, between Aetna, Seller, and the Partnership concerning
D&A-XVIII; incorporated by reference to Exhibit 19.14 to
Form 10-Q for the fiscal quarter ended September 30, 1989
10.52 Modification and Assumption Agreement dated September 22,
1989, between Aetna, Seller, and the Partnership concerning
D&A-XIX; incorporated by reference to Exhibit 19.15 to Form
10-Q for the fiscal quarter ended September 30, 1989
10.53 Second Modification Agreement dated March 1, 1990, between
Aetna, Seller, and the Partnership concerning D&A-XVIII;
incorporated by reference to Exhibit 10.52 to Form 10-K for
fiscal year ended December 31, 1989
10.54 Second Modification Agreement dated March 1, 1990, between
Aetna, Seller, and the Partnership concerning D&A-XIX;
incorporated by reference to Exhibit 10.53 to Form 10-K for
fiscal year ended December 31, 1989
10.55 Commitment from Aetna to Increase Mortgage for Forest
Ridge, dated January 31, 1990; incorporated by reference to
Exhibit 10.54 to Form 10-K for fiscal year ended December
31, 1989
Exhibit No.
10.56 Mortgage Loan Application/Commitment with Capital Holding
Corporation for Highpoint Village; incorporated by
reference to Exhibit 10.33 to Registration Statement No.
33-27407 on Form S-11
10.57 Mortgage Loan Application/Commitment with Capital Holding
Corporation for Gateway Plaza; incorporated by reference to
Exhibit 10.34 to Registration Statement No. 33-27407 on
Form S-11
10.58 Amendment to Gateway Plaza Mortgage Loan Applica-
tion/Commitment, dated March 6, 1989; incorporated by
reference to Exhibit 19.16 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.59 Amendment to Gateway Plaza Mortgage Loan Applica-
tion/Commitment, dated March 9, 1989; incorporated by
reference to Exhibit 19.17 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.60 Amendment to Gateway Plaza Mortgage Loan Applica-
tion/Commitment, dated May 1, 1989; incorporated by
reference to Exhibit 19.18 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.61 Amendment to Gateway Plaza Mortgage Loan
Application/Commitment, dated May 3, 1989; incorporated by
reference to Exhibit 19.19 to Form 10-Q for the fiscal
quarter ended September 30,1 989
10.62 Amendment to Gateway Plaza Mortgage Loan
Application/Commitment, dated June 21, 1989; incorporated
by reference to Exhibit 19.20 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.63 Amendment to Highpoint Village Mortgage Loan
Application/Commitment, dated March 6, 1989; incorporated
by reference to Exhibit 19.21 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.64 Amendment to Highpoint Village Mortgage Loan
Application/Commitment, dated March 9, 1989; incorporated
by reference to Exhibit 19.22 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.65 Amendment to Highpoint Village Mortgage Loan
Application/Commitment, dated May 1, 1989; incorporated by
reference to Exhibit 19.23 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.66 Amendment to Highpoint Village Mortgage Loan
Application/Commitment, dated May 3, 1989; incorporated by
reference to exhibit 19.24 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.67 Amendment to Highpoint Village Mortgage Loan
Application/Commitment, dated June 21, 1989; incorporated
by reference to Exhibit 19.25 to Form 10-A for the fiscal
quarter ended September 30, 1989
Exhibit No.
10.68 Promissory Note for $5,850,000 secured by a Mortgage on
Gateway Plaza, with Commonwealth Life Insurance Company as
Payee, incorporated by reference to Exhibit 19.26 to Form
10-Q for the fiscal quarter ended September 30, 1989
10.69 Promissory Note for $6,600,000 secured by a Mortgage on
Highpoint Village, with Commonwealth Life Insurance Company
as Payee; incorporated by reference to Exhibit 19.27 to
Form 10-Q for the fiscal quarter ended September 30, 1989
10.70 Mortgage, Assignment of Rents and Security Agreement for
Gateway Plaza to Commonwealth Life Insurance Company;
incorporated by reference to Exhibit 19.28 to Form 10-Q for
the fiscal quarter ended September 30, 1989
10.71 Mortgage, Assignment of Rents and Security Agreement for
Highpoint Village to Commonwealth Insurance Company;
incorporated by reference to Exhibit 19.29 to Form 10-Q for
the fiscal quarter ended September 30, 1989
10.72 Assignment of Rents and Leases for Gateway Plaza to
Commonwealth Insurance Company; incorporated by reference
Exhibit 19.30 to Form 10-Q for the fiscal quarter ended
September 30, 1989
10.73 Assignment of Rents and Leases for Highpoint Village to
Commonwealth Insurance Company; incorporated by reference
to Exhibit 19.31 to Form 10-Q for the fiscal quarter ended
September 30, 1989
10.74 Application and Agreement for Irrevocable Letter of Credit
from Fleet National Bank dated May 8, 1989; incorporated by
reference to Exhibit 19.32 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.75 Letter of Credit, issued May 11, 1989, from Fleet National
Bank in the amount of $5,850,000; incorporated by reference
to Exhibit 19.33 to Form 10-Q for the fiscal quarter ended
September 30, 1989
10.76 First Amendment to $5,850,000 Letter of Credit, dated July
21, 1989, extending the expiration date of the Letter of
Credit; incorporated by reference to Exhibit 19.34 to Form
10-Q for the fiscal quarter ended September 30, 1989
10.77 Second Amendment to $5,850,000 Letter of Credit, dated
September 25, 1989, reducing the amount of the letter of
credit to $2,050,000; incorporated by reference to Exhibit
19.35 to Form 10-Q for the fiscal quarter ended September
30, 1989
10.78 Modification of Promissory Note, Mortgage and Security
Agreement and Security Documents for Gateway Plaza between
T&A-IV and Fleet National Bank, dated May 12, 1989;
incorporated by reference to Exhibit 19.36 to Form 10-Q for
the fiscal quarter ended September 30, 1989
Exhibit No.
10.79 Intercreditor Agreement dated May 12, 1989, among
Commonwealth Life Insurance Company, Fleet National Bank,
Capital Holding Corporation, Fidelity Land Title Agency and
T&A-IV; incorporated by reference to Exhibit 19.37 to Form
10-Q for the fiscal quarter ended September 30, 1989
10.80 Loan Agreement, dated May 12, 1989, between Fleet National
Bank and T&A-IV; incorporated by reference to exhibit 19.38
to Form 10-Q for the fiscal quarter ended September 30,
1989
10.81 Third Amendment to $2,050,000.00 Letter of Credit, dated
November 14,1989, extending the expiration date of the
Letter of Credit; incorporated by reference to Exhibit
10.80 to Form 10-K for fiscal year ended December 31, 1989
10.82 Intercreditor Agreement dated May 12, 1989, between
Commonwealth Life Insurance Company and BancOhio National
Bank regarding T&A-VII; incorporated by reference to
Exhibit 19.39 to Form 10-Q for the fiscal quarter ended
September 30, 1989
10.83 Amendment to Intercreditor Agreement of May 12, 1989, dated
September 22, 1989; incorporated by reference to Exhibit
19.40 to Form 10-Q for the fiscal quarter ended September
30, 1989
10.84 Mortgage Note made by T&A-VII with BancOhio as Payee, in
the amount of $3,400,000; incorporated by reference to
Exhibit 19.41 to Form 10-Q for the fiscal quarter ended
September 30, 1989
10.85 Open-end Mortgage, Assignment of Rents and Security
Agreement between T&A-VII, Mortgagor and BancOhio National
Bank, Mortgagee, dated September 22, 1989; incorporated by
reference to Exhibit 19.42 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.86 Application for Letter of Credit from BancOhio in the
amount of $3,400,000, dated September 22, 1989;
incorporated by reference to Exhibit 19.43 to Form 10-Q for
the fiscal quarter ended September, 1989
10.87 Letter of Credit from BancOhio in the amount of $3,400,000,
dated September 22, 1989; incorporated by reference to
Exhibit 19.44 to Form 10-Q for the fiscal quarter ended
September 30, 1989
10.88 Letter of Credit Loan Agreement for the $3,400,000 Letter
of Credit, dated September 22, 1989; incorporated by
reference to Exhibit 19.45 to Form 10-Q for the fiscal
quarter ended September 30, 1989
10.89 Construction Escrow Agreement, dated September 22, 1989,
between BancOhio National Bank and T&A-VII; incorporated by
reference to Exhibit 19.46 to Form 10-Q for the fiscal
quarter ended September 30, 1989
Exhibit No.
10.90 Letter amending Letter of Credit Loan Agreement and
Construction Escrow Agreement, dated September 22, 1989;
incorporated by reference to Exhibit 19.47 to Form 10-Q for
the fiscal quarter ended September 30, 1989
10.91 Partial Release of Mortgage and Security Instrument, dated
October 10, 1989, by BancOhio National Bank, regarding T&A-
VII; incorporated by reference to Exhibit 19.48 to Form 10-
Q for the fiscal quarter ended September 30, 1989
10.92 Consent to Reduction of Fleet Letter of Credit dated March
21, 1990, from Commonwealth Life Insurance Company to
Fleet; incorporated by reference to Exhibit 10.91 to Form
10-K for fiscal year ended December 31, 1989
10.93 Fourth Amendment to $2,050,000.00 Letter of Credit, dated
March 23, 1990, reducing the amount of the Letter of Credit
to $800,000; incorporated by reference to Exhibit 10.92 to
Form 10-K for fiscal year ended December 31, 1989
10.94 Release of Mortgage, dated March 30, 1990, releasing the
Mortgage held by Fleet National Bank on the Food Lion
parcel; incorporated by reference to Exhibit 10.93 to Form
10-K for fiscal year ended December 31, 1989
10.95 Amendment to Highpoint Village Mortgage Loan
Application/Commitment, dated March 14, 1990, incorporated
by reference to Exhibit 10.94 to Form 10-K for fiscal year
ended December 31, 1989
10.96 Amendment to Gateway Plaza Mortgage Loan
Application/Commitment, dated March 14, 1990; incorporated
by reference to Exhibit 10.95 to From 10-K for fiscal year
ended December 31, 1989
10.97 First Amendment to Intercreditor Agreement, dated March 30,
1990, among Commonwealth Life Insurance Company, Fleet
National Bank, T&A-IV, Capital Holding Corporation, and
Fidelity Land Title Agency, Inc.; incorporated by reference
to Exhibit 10.96 to Form 10-K for fiscal year ended
December 31, 1989
10.98 Amendment to BancOhio Letter of Credit, dated March 28,
1990, extending the expiration date to September 30, 1990;
incorporated by reference to Exhibit 10.97 to Form 10-K for
fiscal year ended December 31, 1989
10.99 Modification of Note, Mortgage, Construction Escrow
Agreement, Pledge Agreement and Guaranty, dated March 29,
1990, among BancOhio, T&A-VII, and Guarantors; incorporated
by reference to Exhibit 10.98 to Form 10-K for fiscal year
ended December 31, 1989
10.100 Promissory Note dated March 26, 1991 in the principal
amount of $234,000 from Tennessee & Associates - IV
relating to Gateway Plaza by reference to Exhibit 10.100 to
Form 10-K for fiscal year ended December 31, 1990
Exhibit No.
10.101 Promissory Note dated March 1, 1990 in the principal amount
of $170,000 from Dayton & Associated - XVIII relating to
Forest Ridge by reference to Exhibit 10.101 to Form 10-K
for fiscal year ended December 31, 1990
10.102 Memorandum of Deal Terms For Restructure of Rent Guaranty
and Related Obligations dated March 1, 1991, among
Tennessee & Associates - IV, Tennessee & Associates - VII,
Dayton & Associates - XVIII, Dayton & Associates - XIX,
Dayton Partners Limited Partnership, Dayton Partners, J.
Brett Hutchens, and the Partnership by reference to Exhibit
10.102 to Form 10-K for fiscal year ended December 31, 1990
10.103 Advisory Agreement made as of September 1, 1991 between
Brunner Companies Income Properties L.P. III and Insignia
GP Corporation and Insignia Financial Group, Inc. by
reference to Form 10-Q for fiscal quarter ended September
30, 1991
10.104 First Amendment to Advisory Agreement changing effective
date from September 1, 1991 to October 1, 1991 by reference
to Form 10-Q for the fiscal quarter ended September 30,
1991
10.105 Transfer Agent Agreement between Brunner Companies Income
Properties L.P. III and Insignia GP Corporation
incorporated by reference to exhibit 10.105 to Form 10-K
for fiscal year ended December 31, 1991
10.106 Property Management Agreement for Highpoint Village
incorporated by reference to exhibit 10.106 to Form 10-K
for fiscal year ended December 31, 1991
10.107 Property Management Agreement for Gateway Plaza
incorporated by reference to exhibit 10.107 to Form 10-K
for fiscal year ended December 31, 1991
10.108 Lease Termination Agreement between Brunner Companies
Income Properties LP III and Warehouse Paint at Highpoint
Village dated March 19, 1992 incorporated by reference to
exhibit 10.108 to Form 10-K for fiscal year ended December
31, 1991
10.109 Restructure of Rent Guarantee and Related Obligations
Agreement among Tennessee & Associates - IV, Tennessee &
Associates - VII, Dayton & Associates - XVIII, Dayton &
Associates - XIX, Dayton Partners Limited Partnership,
Dayton Partners, J. Brett Hutchens, and the Partnership
incorporated by reference to exhibit 10.109 to Form 10-K
for fiscal year ended December 31, 1991
10.110 Closing Agreement dated October 16, 1992 showing the
acquisition of a majority of the outstanding stock of 104
Management, Inc. by IBGP, Inc. incorporated by reference to
exhibit 2 to Form 8-K dated March 5, 1993
16.1 Letter from the Registrant's former independent accountant
regarding its concurrence with the statements made by the
Registrant is incorporated by reference to the exhibit
filed with Form 8-K dated January 12, 1993
Exhibit No.
27 Financial Data Schedule
99.1 Foreclosure Master's Deed and Satisfaction of Mortgage made
as of the 4th day of December, 1995 by and between Aetna
Life Insurance Company and Brunner Companies Income
Properties L.P. III, a Delaware Limited Partnership
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Brunner
Companies Income Properties III 1995 Year-End 10-KSB and is qualified in its
entirety by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000847319
<NAME> BRUNNER COMPANIES INCOME PROPERTIES III
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 669,743
<SECURITIES> 0
<RECEIVABLES> 247,581
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 14,426,499
<DEPRECIATION> 2,739,865
<TOTAL-ASSETS> 12,816,016
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 12,096,589
0
0
<COMMON> 0
<OTHER-SE> 619,263
<TOTAL-LIABILITY-AND-EQUITY> 12,816,616
<SALES> 0
<TOTAL-REVENUES> 2,147,266
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,815,103
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,542,564
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 176,450
<EPS-PRIMARY> .20
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
