<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly year ended March 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number 0-19219
Brauvin Income Plus L.P. III
(Exact name of registrant as specified in its charter)
Delaware 36-3639043
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 South Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
(312) 443-0922
(Registrant's telephone number, including area code)
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 .
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
INDEX
Page
PART I Financial Information
Item 1. Consolidated Financial Statements. . . . . . . . . . . . . 3
Consolidated Balance Sheets at March 31, 1996 and
December 31, 1995. . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations for the three months
ended March 31, 1996 and 1995. . . . . . . . . . . . . . . 5
Consolidated Statements of Partners' Capital for
the periods January 1, 1995 to March 31, 1996. . . . . . . 6
Consolidated Statements of Cash Flows for the three months
ended March 31, 1996 and 1995. . . . . . . . . . . . . . . 7
Notes to Consolidated Financial Statements . . . . . . . . 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . 15
PART II Other Information
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 18
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . 18
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . 18
Item 4. Submissions of Matters to a Vote of Security Holders . . . 18
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . 18
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 19
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
Except for the December 31, 1995 Consolidated Balance Sheet, the
following Consolidated Balance Sheet as of March 31, 1996, Consolidated
Statements of Operations for the three months ended March 31, 1996 and 1995,
Consolidated Statements of Partners' Capital for the periods January 1, 1995
to March 31, 1996 and Consolidated Statements of Cash Flows for the three
months ended March 31, 1996 and 1995 for Brauvin Income Plus L.P. III (the
"Partnership") are unaudited and have not been examined by independent public
accountants but reflect, in the opinion of the management, all adjustments
necessary to present fairly the information required. All such adjustments
are of a normal recurring nature.
These consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in the
Partnership's 1995 Annual Report on Form 10-K.
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1996 1995
ASSETS
Investment in real estate, at cost:
Land $ 7,845,528 $ 7,845,528
Buildings and improvements 10,463,264 10,463,264
18,308,792 18,308,792
Less: accumulated depreciation (1,965,870) (1,869,626)
Net investment in real estate 16,342,922 16,439,166
Investment in Brauvin Gwinnett
County Venture (Note 4) 153,230 153,668
Cash and cash equivalents 1,023,482 1,069,555
Deferred rent receivable 38,729 36,572
Due from affiliates -- 7,301
Prepaid offering costs 70,824 72,270
Other assets 21,818 2,059
Total Assets $17,651,005 $17,780,591
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Accounts payable and accrued expenses $ 282,000 $ 311,553
Rent received in advance 87,850 83,800
Total Liabilities 369,850 395,353
MINORITY INTEREST IN BRAUVIN CHILI'S
LIMITED PARTNERSHIP (586) (514)
PARTNERS' CAPITAL:
General Partners 68,219 70,772
Limited Partners 17,213,522 17,314,980
Total Partners' Capital 17,281,741 17,385,752
Total Liabilities and Partners'
Capital $17,651,005 $17,780,591
See accompanying notes to consolidated financial statements.
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31,
1996 1995
INCOME:
Rental $546,007 $536,818
Interest 9,814 10,195
Other 379 2,506
Total income 556,200 549,519
EXPENSES:
Management fees 5,943 6,693
General and administrative 57,279 36,012
Depreciation 96,244 98,108
Total expenses 159,466 140,813
Income before minority interest and
equity interest in joint ventures 396,734 408,706
Minority interest's share in Brauvin
Chili's Limited Partnership's net income (123) (170)
Equity interest in Brauvin Gwinnett
County Venture's net income 3,403 3,154
Net income $400,014 $411,690
Net income allocated to the
General Partners $ 8,000 $ 8,234
Net income allocated to the
Limited Partners $392,014 $403,456
Net income per Unit outstanding (a) $ 0.18 $ 0.18
(a) Net income per Unit was based on the average Units outstanding during
the period since they were of varying dollar amounts and percentages
based upon the dates Limited Partners were admitted to the Partnership
and additional Units were purchased through the distribution
reinvestment plan (the "Plan").
See accompanying notes to consolidated financial statements.
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
For the period January 1, 1995 to March 31, 1996
General Limited
Partners Partners* Total
Balance, January 1, 1995 $ 79,872 $17,493,547 $17,573,419
Contributions, net -- 193,705 193,705
Selling commissions and other
offering costs (Note 1) -- (33,401) (33,401)
Net income 35,137 1,721,710 1,756,847
Cash distributions (44,237) (2,060,581) (2,104,818)
Balance, December 31, 1995 70,772 17,314,980 17,385,752
Contributions, net -- 32,715 32,715
Selling commissions and other
offering costs (Note 1) -- (8,313) (8,313)
Net income 8,000 392,014 400,014
Cash distribution (10,553) (517,874) (528,427)
Balance, March 31, 1996 $ 68,219 $17,213,522 $17,281,741
* Total Units sold at March 31, 1996 and December 31, 1995 were 2,230,375
and 2,227,103, respectively. Cash distributions to Limited Partners per
Unit were $0.23 and $0.70 for the three months ended March 31, 1996 and
the year ended December 31, 1995 respectively. Cash distributions to
Limited Partners per Unit are based on the average Units outstanding
during the period since they were of varying dollar amounts and
percentages based upon the dates Limited Partners were admitted to the
Partnership and additional Units were purchased through the Plan.
See accompanying notes to consolidated financial statements.
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31,
1996 1995
Cash flows from operating activities:
Net income $400,014 $411,690
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 96,244 98,108
Minority interest's share of income from
Brauvin Chili's Limited Partnership 123 170
Equity interest in Brauvin Gwinnett
County Venture's net income (3,403) (3,154)
Decrease in rent receivables -- 12,529
Increase in deferred rent receivable (2,157) (2,157)
Decrease (increase) in due from affiliates 7,301 (374)
Increase in other assets (19,759) --
(Decrease) increase in accounts payable
and accrued expenses (29,553) 9,843
Increase (decrease) in rent received in advance 4,050 (83,190)
Increase in due to affiliates -- 707
Net cash provided by operating activities 452,860 444,172
Cash flows from investing activities:
Cash distribution to minority interest -
Brauvin Chili's Limited Partnership (195) (75)
Cash distribution from Brauvin Gwinnett
County Venture 3,841 5,120
Net cash provided by investing activities 3,646 5,045
Cash flows from financing activities:
Sale of Units, net of liquidations
and selling commissions 25,848 (28,466)
Cash distributions to General Partners (10,553) (13,000)
Cash distributions to Limited Partners (517,874) (512,617)
Net cash used in financing activities (502,579) (554,083)
Net decrease in cash and cash equivalents (46,073) (104,866)
Cash and cash equivalents at beginning
of period 1,069,555 925,719
Cash and cash equivalents at end of period $1,023,482 $820,853
See accompanying notes to consolidated financial statements.
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
BRAUVIN INCOME PLUS L.P. III (the "Partnership") is a Delaware
limited partnership organized for the purpose of acquiring debt-free
ownership of existing, free-standing, income-producing retail, office or
industrial real estate properties predominantly subject to "triple-net"
leases. The General Partners of the Partnership are Brauvin Realty
Advisors III, Inc., Jerome J. Brault and Cezar M. Froelich. Brauvin
Realty Advisors III, Inc. is owned by Messrs. Brault (beneficially)(50%)
and Froelich (50%). Brauvin Securities, Inc., an affiliate of the
General Partners, was the selling agent for the Partnership. The
Partnership is managed by an affiliate of the General Partners.
The Partnership was formed on July 31, 1989 and filed a
Registration Statement on Form S-11 with the Securities and Exchange
Commission which was declared effective on October 30, 1989. The sale
of the minimum of $1,200,000 of limited partnership interests of the
Partnership (the "Units") necessary for the Partnership to commence
operations was achieved on January 15, 1990. The Partnership's
offering was originally expected to close on October 29, 1990 but the
Partnership, with the receipt of the necessary regulatory approval,
extended the offering until it closed on October 29, 1991. Through
March 31, 1996 and December 31, 1995, the Partnership has sold
$22,766,719 and $22,693,694 of Units, respectively. These totals
include $1,459,119 and $1,386,094 of Units, respectively, raised by
Limited Partners who utilized their distributions of Operating Cash Flow
to purchase additional Units through the distribution reinvestment plan
(the "Plan"). Units valued at $462,972 and $422,662 have been purchased
by the Partnership from Limited Partners liquidating their investment in
the Partnership and have been retired as of March 31, 1996 and December
31, 1995, respectively. As of March 31, 1996, the Plan participants
have acquired Units under the Plan which approximate 6% of the total
Units outstanding.
The Partnership has acquired the land and buildings underlying five
Ponderosa restaurants, two Chi-Chi's restaurants, one International
House of Pancakes restaurant, one Applebee's restaurant, two Sports
Unlimited stores, and three Steak n Shake restaurants. The Partnership
also acquired 99.5% and 6.4% equity interests in two joint ventures with
entities affiliated with the Partnership. These ventures own the land
underlying a Chili's restaurant and a CompUSA store, respectively.
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Management's 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 reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Accounting Method
The accompanying financial statements have been prepared using the
accrual method of accounting.
Rental Income
Rental income is recognized on a straight-line basis over the life
of the related leases. Differences between rental income earned and
amounts due per the respective lease agreements are credited or charged
as applicable to deferred rent receivable.
Federal Income Taxes
Under the provisions of the Internal Revenue Code, the
Partnership's income and losses are reportable by the partners on their
respective income tax returns. Accordingly, no provision is made for
Federal income taxes in the consolidated financial statements. However,
in certain instances, the Partnership has been required under applicable
state law to remit directly to the tax authorities amounts representing
withholding from distributions paid to partners.
Consolidation of Joint Venture
The Partnership owns a 99.5% equity interest in a joint venture,
Brauvin Chili's Limited Partnership, which owns one Chili's restaurant.
The accompanying financial statements have consolidated 100% of the
assets, liabilities, operations and partners' capital of Brauvin Chili's
Limited Partnership. All significant intercompany accounts have been
eliminated.
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Investment in Joint Venture
The Partnership owns a 6.4% equity interest in a joint venture,
Brauvin Gwinnett County Venture, which owns one CompUSA store. The
accompanying financial statements include the investment in Brauvin
Gwinnett County Venture using the equity method of accounting.
Investment in Real Estate
The operating properties acquired by the Partnership are stated at
cost including acquisition costs. Depreciation expense is computed on
a straight-line basis over approximately 35 years.
In 1995, the Partnership adopted Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets"
(SFAS 121). In conjunction with the adoption of SFAS 121, the
Partnership performed an analysis of its long-lived assets, and the
Partnership's management determined that there were no events or changes
in circumstances that indicated that the carrying amount of the assets
may not be recoverable. Accordingly, no impairment loss has been
recorded in the accompanying financial statements.
Organization and Offering Costs
Organization costs represent costs incurred in connection with the
organization and formation of the Partnership. Organization costs were
amortized over a period of five years using the straight-line method.
Offering costs represent costs incurred in selling Units, such as the
printing of the Prospectus and marketing materials. Offering costs have
been recorded as a reduction of Limited Partners' Capital.
The General Partners have guaranteed payment of any organization
and offering costs that exceed defined percentages of the gross proceeds
of the offering. Prepaid offering costs represent amounts in excess of
the defined percentages of the gross proceeds. Subsequently, gross
proceeds are expected to increase due to the purchase of additional
Units through the Plan and the prepaid offering costs will be
transferred to offering costs and treated as a reduction in Partners'
Capital.
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Cash and Cash Equivalents
Cash equivalents include all highly liquid debt instruments with
an original maturity within three months of purchase.
Estimated Fair Value of Financial Instruments
Disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of Statement of Financial
Accounting Standards No. 107, "Disclosures About Fair Value of Financial
Instruments." The estimated fair value amounts have been determined by
using available market information and appropriate valuation
methodologies. However, considerable judgement is necessarily required
in interpreting market data to develop estimates of fair value.
The fair value estimates presented herein are based on information
available to management as of March 31, 1996 and December 31, 1995, but
may not necessarily be indicative of the amounts that the Partnership
could realize in a current market exchange. The use of different
assumptions and/or estimation methodologies may have a material effect
on the estimated fair value amounts. Although management is not aware
of any factors that would significantly affect the estimated fair value
amounts, such amounts have not been comprehensively revalued for
purposes of these financial statements since that date, and current
estimates of fair value may differ significantly from amounts presented
herein.
The carrying amounts of the following items are a reasonable
estimate of fair value: cash and cash equivalents; due from affiliates;
accounts payable and accrued expenses; and rents received in advance.
(2) PARTNERSHIP AGREEMENT
Distributions
All Operating Cash Flow, as defined in the Partnership Agreement (the
"Agreement") shall be distributed: (a) first, to the Limited Partners
until the Limited Partners receive an amount equal to a 9-1/4%
non-cumulative, non-compounded, annual return on Adjusted Investment,
as such term is defined in the Agreement, commencing on the last day of
the calendar quarter in which the Unit was purchased (the "Current
Preferred Return"); and (b) thereafter, any remaining amounts will be
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
distributed 98% to the Limited Partners (on a pro rata basis) and 2% to
the General Partners.
The net proceeds of a sale or refinancing of a Partnership property
shall be distributed as follows:
. first, pro rata to the Limited Partners until each Limited Partner
has received an amount equal to a 10.5% cumulative, non-compounded,
annual return of Adjusted Investment (the "Cumulative Preferred
Return");
. second, to the Limited Partners until each Limited Partner has been
paid an amount equal to his Adjusted Investment, as defined in the
Agreement, apportioned pro rata among the Limited Partners based on
the amount of the Adjusted Investment; and
. thereafter, 95% to the Limited Partners (apportioned pro rata based
on Units) and 5% to the General Partners.
Profits and Losses
Net profits and losses from operations of the Partnership [computed
without regard to any allowance for depreciation or cost recovery
deductions under the Internal Revenue Code of 1986, as amended (the
"Code")] for each taxable year of the Partnership shall be allocated to
each Partner in the same ratio as the cash distributions received by
such Partner attributable to that period bears to the total cash
distributed by the Partnership. In the event that there are no cash
distributions, net profits and losses from operations of the Partnership
(computed without regard to any allowance for depreciation or cost
recovery deductions under the Code) shall be allocated 99% to the
Limited Partners and 1% to the General Partners. Notwithstanding the
foregoing, all depreciation and cost recovery deductions allowed under
the Code shall be allocated 2% to the General Partners and 98% to the
Taxable Class Limited Partners, as defined in the Agreement.
The net profit of the Partnership from any sale or other disposition
of a Partnership property shall be allocated (with ordinary income being
allocated first) as follows: (a) first, an amount equal to the
aggregate deficit balances of the Partners' Capital Accounts, as such
term is defined in the Agreement, shall be allocated to each Partner who
or which has a deficit Capital Account balance in the same ratio as the
deficit balance of such Partner's Capital Account bears to the aggregate
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
of the deficit balances of all Partners' Capital Accounts; (b) second,
to the Limited Partners until the Capital Account balances of the
Limited Partners are equal to any unpaid Cumulative Preferred Return, as
of such date; (c) third, to the Limited Partners until the Capital
Account balances of the Limited Partners are equal to the sum of the
amount of their Adjusted Investment plus any unpaid Cumulative Preferred
Return; (d) fourth, to the General Partners until their Capital Account
balances are equal to any previously subordinated fees; and (e)
thereafter, 95% to the Limited Partners and 5% to the General Partners.
The net loss of the Partnership from any sale or other disposition of a
Partnership property shall be allocated as follows: (a) first, an
amount equal to the aggregate positive balances in the Partners' Capital
Accounts, to each Partner in the same ratio as the positive balance in
such Partner's Capital Account bears to the aggregate of all Partners'
positive Capital Accounts balances; and (b) thereafter, 95% to the
Limited Partners and 5% to the General Partners.
(3) TRANSACTIONS WITH RELATED PARTIES
The Partnership pays an affiliate of the General Partners an annual
property management fee equal to up to 1% of gross revenues derived from
Partnership properties managed by such affiliate. The property
management fee is subordinated to receipt by the Limited Partners of
distributions of Operating Cash Flow in an amount equal to the Current
Preferred Return.
An affiliate of one of the General Partners provides securities and
real estate counsel to the Partnership.
Fees, commissions and other expenses paid or payable to the General
Partners or its affiliates for the three months ended March 31, 1996 and
1995 were as follows:
1996 1995
Selling commissions $ 6,867 $ 6,878
Management fees 5,943 6,693
Reimbursable operating expenses 22,200 18,000
Legal fees 3,479 861
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(4) EQUITY INVESTMENT
The Partnership owns an equity interest in the Brauvin Gwinnett
County Venture and reports its investment on the equity method. The
following are condensed financial statements for the Brauvin Gwinnett
County Venture:
BRAUVIN GWINNETT COUNTY VENTURE
March 31, 1996 December 31, 1995
Land and buildings, net $2,365,072 $2,376,510
Other assets 46,170 41,567
$2,411,242 $2,418,077
Liabilities $ 22,702 $ 22,702
Partners' capital 2,388,540 2,395,375
$2,411,242 $2,418,077
For the Three Months Ended March 31,
1996 1995
Rental income $65,225 $61,327
Expenses:
Depreciation 11,438 11,438
Management fees 622 602
12,060 12,040
Net income $53,165 $49,287
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Liquidity and Capital Resources
The Partnership commenced an offering to the public on October 30,
1989 of 2,500,000 Units. The offering was anticipated to close on
October 29, 1990 but was extended by the General Partners with the
necessary regulatory approval to October 29, 1991. The Offering was
conditioned upon the sale of $1,200,000, which was achieved on January
15, 1990. The Offering closed on October 29, 1991 with the
Partnership raising a cumulative total of $21,307,600. The
Partnership continues to raise additional funds through the
distribution reinvestment plan (the "Plan"). The Plan raised
$1,459,119 through March 31, 1996 from Limited Partners investing
their distributions of Operating Cash Flow in additional Units. As of
March 31, 1996, Units valued at $462,972 have been purchased by the
Partnership from Limited Partners liquidating their original
investment in the Partnership and have been retired.
The Partnership purchased the land, buildings and improvements
underlying five Ponderosa restaurants in 1990. In 1991, the
Partnership purchased the land, buildings and improvements underlying
two Chi-Chi's restaurants, an IHOP restaurant an Applebee's restaurant
(which was expanded in 1992), and two Sports Unlimited sporting goods
stores. In 1992, the Partnership purchased the land, buildings and
improvements underlying three Steak n Shake restaurants.
On February 7, 1992, the Partnership purchased a 99.5% equity
interest in a joint venture with an affiliate, Brauvin Chili's Limited
Partnership, which owns one Chili's restaurant.
On November 9, 1993, the Partnership purchased a 6.4% interest in
a joint venture with affiliated real estate limited partnerships (the
"Venture"). The Venture acquired the land and building underlying a
25,000 square foot CompUSA computer superstore from an unaffiliated
seller.
The Partnership is fully invested in properties with the exception
of funds raised through the Plan. These operating properties are
expected to generate cash flow for the Partnership after deducting
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
certain operating and general and administrative expenses from their
rental income. The Partnership has no funds available to purchase
additional property, excluding those raised through the Plan.
Below is a table summarizing the historical data for distribution
rates per annum:
Distribution
Date 1996 1995 1994 1993 1992 1991
February 15 9.25% 9.25% 9.00% 9.00% 9.25% 9.25%
May 15 9.25 9.25 9.00 9.00 9.25 9.25
August 15 9.25 9.00 9.00 9.00 9.25
November 15 9.25 9.25 9.00 9.00 9.25
Future increases in the Partnership's distribution will largely
depend on increased sales at the Partnership's properties resulting in
additional percentage rent and, to a lesser extent rental increases,
which will occur due to increases in receipts from certain leases
based upon increases in the Consumer Price Index or scheduled increases
of base rent.
In order to enhance the Partnership's diversity and overall
financial performance, the General Partners have recently agreed to the
following change within the Partnership's Ponderosa portfolio. Unit
#856 in Dayton, Ohio was converted into a Bennigan's in January, 1996.
Bennigan's is an affiliate of Ponderosa. Metromedia Steakhouses
Company L.P., the current lease obligor, will remain liable on the
existing lease. However, the General Partners believe the conversion
will ultimately generate additional percentage rent to the Partnership
and enhance the overall security of the lease. The General Partners
believe this change within the Partnership's Ponderosa portfolio will
add to both diversity and the underlying quality of the Partnership's
assets.
The Chi Chi's located in Hickory, North Carolina closed October
2, 1995. However, the property is leased to Foodmaker, Inc. whom has
made complete payments under the lease.
<PAGE>
BRAUVIN INCOME PLUS L.P. III
(a Delaware limited partnership)
Chi-Chi's has undertaken to re-lease the closed restaurant. In
March 1996, a potential sub-tenant executed a second sub-lease with
Chi-Chi's for the Hickory, North Carolina property. This sub-lease
is currently being reviewed by both Foodmaker and the Partnership
and must be accepted by all three parties before it becomes effective.
Foodmaker will continue to be the guarantor under terms of the second
sub-lease.
Since the distribution to Limited Partners had been at least 9.25%
per annum during the three months ended March 31, 1996, the General
Partners and its affiliates collected a management fee of $5,943 and
received $10,553 in Operating Cash Flow distributions. This is
anticipated to continue throughout 1996.
Results of Operations - Three months ended March 31, 1996 and 1995
Results of operations for the three months ended March 31, 1996
reflected net income of $400,014 compared to $411,690 for the three
months ended March 31, 1995, a decrease of approximately $11,700. The
decrease in net income was due primarily to an increase in total
expenses as a result of the Partnership's property valuations.
Total income for the three months ended March 31, 1996 was
$556,200 as compared to $549,519 for the three months ended March 31,
1995, an increase of approximately $6,700. The increase in total
income is mainly due to an increase in rental income as a result of
increased percentage rents.
Total expenses for the three months ended March 31, 1996 were
$159,466 as compared to $140,813 for the three months ended March 31,
1995, an increase of approximately $18,700. The increase in expenses
was due to an increase in general and administrative expense related
to the Parntership hiring an independent real estate company to conduct
property valuations.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
None.
ITEM 2. Changes in Securities.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
ITEM 4. Submission of Matters to a Vote of Security Holders.
None.
ITEM 5. Other Information.
As previously reported, the Partnership has engaged a
nationally known real estate firm to perform a valuation of
the Partnership's properties. The stated unit value used for
both liquidations and the purchase of new units through the
dividend reinvestment program will change as a result of this
valuation. At the time of the distribution, the valuation had
not been completed. Once the valuation has been completed, the
new stated unit value will be communicated to all partners.
The General Partners have determined that, for the current
distribution, all investors, including those who had selected
the dividend reinvestment option, will receive their distributions
in the form of a check. When the unit valuation process has been
completed and the new stated unit value communicated to all
partners, each partner will be able to determine if they wish to
enter or continue in the dividend reinvestment program.
Similarly, the General Partners have determined that unit
liquidations will be temporarily suspended until the valuation
has been completed. At that time, pending liquidation requests
will be processed according to the terms of the prospectus and
liquidated at the then current stated unit value.
<PAGE>
ITEM 6. Exhibits and Reports On Form 8-K.
Exhibit 27. Financial Data Schedule
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
BY: Brauvin Realty Advisors III, Inc.
Corporate General Partner of
Brauvin Income Plus L.P. III
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of Directors,
President and Chief Executive Officer
DATE: May 15, 1996
BY: /s/ Thomas J. Coorsh
Thomas J. Coorsh
Chief Financial Officer and Treasurer
DATE: May 15, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,023,482
<SECURITIES> 153,230 <F1>
<RECEIVABLES> 38,729
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 18,308,792 <F2>
<DEPRECIATION> 1,965,870
<TOTAL-ASSETS> 17,651,005
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 17,281,741 <F3>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 17,651,005
<SALES> 0
<TOTAL-REVENUES> 556,200 <F4>
<CGS> 0
<TOTAL-COSTS> 159,466 <F5>
<OTHER-EXPENSES> (3,280) <F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 400,014
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> "SECURITIES" REPRESENTS INVESTMENT IN JOINT VENTURE
<F2> "PP&E" REPRESENTS INVESTMENT IN REAL ESTATE [LAND AND
BUILDING]
<F3> "COMMON" REPRESENTS TOTAL PARTNERS CAPITAL
<F4> "TOTAL REVENUES" REPRESENTS RENTAL, INTEREST, AND OTHER
INCOME
<F5> "TOTAL COSTS" REPRESENTS TOTAL EXPENSES
<F6> "OTHER EXPENSES" REPRESENTS MINORITY INTEREST AND JOINT
VENTURES' NET INCOME/LOSS
</FN>
</TABLE>
