<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1998
Commission File Number 33-28493-A
CONDEV LAND FUND III, LTD.
--------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 59-2943405
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(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
2479 Aloma Avenue
Winter Park, Florida 32792
(Address of principal executive offices)
Registrant's telephone number, including area code: (407) 679-1748
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 report), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO .
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CONDEV LAND FUND III, LTD.
INDEX
PAGE
NUMBER
PART I. FINANCIAL INFORMATION:
Statement of Assets, Liabilities and
Partner's Capital - September 30, 1998
and December 31, 1997 1
Statement of Income & Expense -
Three Months Ended September 30, 1998
and September 30, 1997 2
Statement of Income & Expense -
Nine Months Ended September 30, 1998
and September 30, 1997 3
Statement of Cash Flows -
Nine Months ended September 30, 1998
and September 30, 1997 4
Notes to Financial Statements 5 - 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 - 8
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings 8
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
Third Quarter 1998 Report to Limited Partners 10
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PART I. FINANCIAL INFORMATION
CONDEV LAND FUND III, LTD.
STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
ASSETS
------
September 30, 1998 December 31, 1997
------------------ -----------------
(Unaudited) *
Cash and Cash Equivalents $ 83,651 $ 90,357
Accounts Receivable - 2,494
Investment in Joint Venture (2) 534,372 534,372
Land, at cost (3) 405,467 405,467
Organization Costs 2,311 2,311
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Total Assets: $1,023,259 $1,035,001
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Liabilities $ 0 $ 487
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Partner's Capital:
General Partner ($ 851) ($ 738)
Limited Partners 1,024,110 1,035,252
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Total Partners' Capital: $1,023,259 $1,034,514
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Total Liabilities and Partners'
Capital: $1,024,968 $1,035,001
========== ==========
* Condensed from audited financial statements.
The accompanying notes are an integral part of these financial statements
1
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CONDEV LAND FUND III, LTD.
STATEMENT OF INCOME AND EXPENSE
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997
(UNAUDITED)
September 30, 1998 September 30, 1997
------------------ ------------------
INCOME
------
Interest and Other Income $ 960 $1,371
------ ------
Total Income $ 960 $1,371
------ ------
OPERATING EXPENSES
------------------
Professional fees - -
Equity in loss of Joint Venture 225 213
Management fees 936 936
Other expense 526 9
Office expense 981 728
------ ------
Total Operating Expenses: $2,668 $1,886
------ ------
Net Profit (Loss) $1,708 ($ 515)
====== ======
The accompanying notes are an integral part of these financial statements
2
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CONDEV LAND FUND III, LTD.
STATEMENT OF INCOME AND EXPENSE
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997
(UNAUDITED)
September 30, 1998 September 30, 1997
------------------ ------------------
INCOME
------
Interest and Other Income $ 4,618 $ 6,581
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Total Income $ 4,618 $ 6,581
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OPERATING EXPENSES
------------------
Professional fees 7,100 7,000
Equity in loss of Joint Venture 2,542 22,043
Management fees 2,808 2,808
Other expense 569 60
Office expense 2,854 3,466
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Total Operating Expenses: $15,873 $35,377
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Net Profit (Loss) ($11,255) ($28,796)
======= =======
The accompanying notes are an integral part of these financial statements
3
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CONDEV LAND FUND III, LTD.
STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997
Sept. 30, 1998 Sept. 30, 1997
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Cash Flows from Operating Activities:
Net Income (Loss) ($11,255) ($ 28,796)
Adjustments to reconcile net income
(loss) to net cash provided by (used
in) operating activities:
Equity in (income) loss of
joint venture 2,542 22,043
Cash provided by changes in:
Accounts receivable 2,494 -
Accounts payable ( 487) -
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Net Cash Provided in Operating Activities: ($ 6,706) ($ 6,753)
Cash Flows from Investing Activities:
Distributions from joint venture, net $ - $810,000
Investments in joint venture - -
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Net Cash Used in Investing Activities: $ - $810,000
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Cash Flows from Financing Activities:
Distributions to Partners ($ -) ($799,940)
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Net Cash Provided by Financing Activities: ($ -) ($799,940)
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Net increase (decrease) in Cash ($ 6,706) $ 3,307
Cash and cash equivalents, beginning of year 90,357 101,678
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Cash and cash equivalents, end of period $83,651 $104,985
======= ========
The accompanying notes are an integral part of these financial statements
4
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CONDEV LAND FUND III, LTD.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1 BASIS OF PRESENTATION.
---------------------
The accompanying financial statements, in the opinion of Condev
Associates, the general partner of Condev Land Fund III, Ltd.,
reflect all adjustments (which include only normal recurring
adjustments) necessary to a fair statement of the financial position,
the results of operations and the changes in cash position for the
periods presented.
Note 2 INVESTMENT IN JOINT VENTURE:
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The Partnership owns a 90% interest in Condev Osceola Joint Venture.
The joint venture partner, Condev Osceola, Ltd., is a private
partnership sponsored by the general partner. On May 31, 1991, Condev
Osceola Joint Venture purchased two parcels of land aggregating 8.6
acres and related sewer capacity within the Kyng's Heath commercial
subdivision on S.R. 535 near its intersection with Highway 192 in
Osceola County, Florida. The property is zoned tourist-commercial in
Osceola County, Florida.
On August 28, 1996, the Joint Venture sold 5.08 acres of this parcel
to Orlando Resort Development Group for $350,000 cash and a
promissory note in the amount of $900,000. The note was repaid in
full in April 1997.
The Joint Venture continues to own 2.94 acres of land in this
location.
A summary of the assets, liabilities and venturers' capital of Condev
Osceola Joint Venture as of September 30, 1998 are as follows:
ASSETS
------
Cash $ 1,208
Investments in land 589,714
---------
$ 590,922
=========
LIABILITIES AND VENTURERS' CAPITAL
----------------------------------
Venturers' Capital 593,747
Current Profit (Loss) ( 2,825)
---------
$ 590,922
=========
5
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Note 3 INVESTMENT IN LAND:
-------------------
At September 30, 1998 and December 31, 1997, land consisted of a ten-
acre parcel, zoned commercial in Lake County, Florida,
Note 4 DISTRIBUTIONS TO PARTNERS:
--------------------------
Pursuant to the partnership agreement, cash flow generated each year
by the Partnership is to be distributed 99% to the limited partners
and 1% to the general partner. There were no cash flow distributions
during the first nine months of 1998.
Pursuant to the partnership agreement, proceeds realized from the
sale of properties, after the establishment of reserves for future
operating costs, are to be distributed at least annually. There were
no such distributions to limited partners during the first three
quarters of 1998.
Note 4 RELATED PARTY TRANSACTIONS:
---------------------------
The Partnership Agreement provides for the reimbursement to the
general partner of administrative expenses incurred in the direct
operation of the partnership. For the nine months ended September 30,
1998, a total of $1,028 was reimbursed to the general partner for
direct expenses incurred.
When properties are sold, an affiliate of the general partner may be
paid real estate commissions in amounts customarily charged by others
rendering similar services with such commissions plus commissions
paid to nonaffiliated brokers not to exceed 10% of the gross sales
price. No real estate commissions were paid to the general partner or
any affiliate during the nine months ended September 30, 1998
The general partner is obligated to loan up to $100,000 to the
Partnership during its term to meet working capital requirements. No
such loans were made to the Partnership during the nine months ended
September 30, 1998.
6
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
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AND RESULTS OF OPERATIONS
-------------------------
During the nine months ended September 30, 1998, the Partnership
continued to manage the portfolio properties with the objective of
selling the properties at fair market prices. While there are no
properties currently under contract for sale, we are negotiating a
letter of intent on one property, and both of the Partnership's
properties are well-positioned in their markets.
The area of Lake County, Florida in which the Partnership's 10-acre
parcel is located has experienced heightened activity in recent
months. The key to selling this site appears to be the availability
of utilities to support commercial development. The Partnership has
filed for the necessary permits for the extension of sewer and water
utilities to the site. Completion is anticipated during the fourth
quarter of 1998. The general partner is working with the area utility
company and neighboring landowners to insure that every property's
needs are met and that the costs of these improvements are shared
equitably.
Offer to Purchase Units. In September, LP Investors, LLC, an
-----------------------
investment company based in Atlanta, Georgia, exercised their rights
as a limited partner and requested a list of all beneficial owners
and the number of units owned by each. As required by the Partnership
Agreement, this information was provided. LP Investors paid a fee of
$100 to the Partnership in reimbursement of the Partnership's costs
associated with providing the list. LP Investors subsequently wrote
to each beneficial owner offering to purchase their units for $43.75
per unit, less the $25 transfer fee charged by the Partnership. As of
September 30, 1998, there have been no transfers as a result of this
offer. Neither the Partnership, the General Partner, nor any of its
officers, employees or affiliates is in any way connected with this
offer.
Results of Operations
---------------------
Total revenues for the nine months ended September 30, 1998 were
$4,618, compared with total revenues of $6,581 for the nine months
ended September 30, 1997. The primary reason for the decline is lower
interest income on short-term bank deposits. Total expenses for the
nine month period were $15,873 as compared with total expenses in the
1997 period of $35,377. This is due to an improvement in the equity
in the net loss of the Partnership's joint venture, which decreased
from $22,043 in the first nine months of 1997 to $2,542 in the
comparable 1998 period. During the first quarter of 1997 the joint
venture held a mortgage note from Orlando Resort Development Group
relating to the sale of part of the joint venture's land at Kyng's
Heath. The note was repaid in full, together with accrued interest,
in April 1997. During the second quarter of 1997, deferred real
estate commissions in the amount of $45,000 due upon repayment of the
mortgage were paid to non-affiliated real
7
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estate brokers. The 1997 result reflects interest income from the
mortgage note and the deferred commission expense. Other operating
expenses remained relatively constant from period to period.
Operating expenses represent the normal costs of operating the
Partnership and managing the Partnership properties.
Liquidity and Capital Resources at September 30, 1998
-----------------------------------------------------
Total assets decreased from $1,035,001 at December 31, 1997 to
$1,023,259 at September 30, 1998. This reflects the net results of
operations for the period. Assets can be expected to decline in the
future as properties are sold and distributions are made to limited
partners.
Liquidity remained at a satisfactory level. Cash and equivalents
decreased slightly from $90,357 at 1997 year-end to $83,651 at
September 30, 1998.
PART II
Item 1. LEGAL PROCEEDINGS:
-----------------
As of September 30, 1998, there were no legal proceedings in
process, nor to the knowledge of the general partner, threatened
against the Partnership.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K:
---------------------------------
(A) Exhibits
Third Quarter 1998 Report to Limited Partners
(B) Reports on Form 8-K
There were no reports of Form 8-K for the period ended September
30, 1998
8
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CONDEV LAND FUND III, LTD.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned.
CONDEV LAND FUND III, LTD.
BY: Condev Associates, General Partner
October 22, 1998 /s/ Robert N. Gardner
- ---------------------- ---------------------------------
DATE Robert N. Gardner, Partner
October 22, 1998 /s/ Joseph J. Gardner
- ---------------------- ----------------------------------
DATE Joseph J. Gardner, Partner
9
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October 15, 1998
Condev Land Fund III, Ltd.
Third Quarter 1998
The financial statement, on the reverse side hereof, shows a net loss for the
nine months ended September 30, 1998 of $11,255. This represents interest
income from short term investments less the normal costs of operating the
partnership and managing the portfolio properties. There were no sales of
property during the first nine months of 1998. As of September 30, 1998, the net
asset value per unit of limited partner interest was $104.67. The following is a
brief description of the status of each of the partnership's two remaining
properties:
Kyng's Heath. The highly publicized World Expo Center continues to be in the
- ------------
news and appears headed for implementation. As a result, we have received
numerous inquiries from hotel developers for this property. One such inquiry
resulted in a letter of intent. We are negotiating final terms of a contract at
this time.
U.S. Highway 27. This is a 10-acre commercially zoned parcel located
- ---------------
approximately 1 1/4 miles north of U.S. Highway 192 in Lake County, Florida.
This area is experiencing great investor interest at this time, particularly
from developers of residential properties. As the number of residential units
increases, so will the demand for commercially zoned land. We are working with a
number of prospects for all or part of this property. One offer to purchase the
property was received during the third quarter, but we were unable to agree on
an acceptable price with the potential purchaser.
Many of the Limited Partners have called with questions regarding the recent
tender offer for their units made by LP Investors, LLC. Please be advised that
neither Condev nor any of its officers, employees or affiliates is in any way
connected with this offer. The decision on whether or not to sell is entirely up
to each limited partner. We will be pleased to answer any questions you may have
regarding this offer or any other matters relating to the Partnership.
Sincerely yours,
CONDEV ASSOCIATES
10
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<PERIOD-START> JAN-01-1998 JAN-01-1997
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