N-Q 1 c62618nvq.htm FORM N-Q nvq
Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT
INVESTMENT COMPANY
Investment Company Act file number (811-07444)
American Strategic Income Portfolio Inc. III
(Exact name of registrant as specified in charter)
800 Nicollet Mall
Minneapolis, MN 55402
(Address of principal executive offices) (Zip code)
Jill M. Stevenson
800 Nicollet Mall Minneapolis, MN 55402
(Name and address of agent for service)
800-677-3863
Registrant’s telephone number, including area code
Date of fiscal year end: 08/31/11
Date of reporting period: 11/30/10
 
 

 


TABLE OF CONTENTS

Item 1. Schedule of Investments
Item 2. Controls and Procedures
Item 3. Exhibits
SIGNATURES
EX-99.CERT


Table of Contents

Item 1. Schedule of Investments.
Schedule of Investments     |     November 30, 2010 (unaudited)
American Strategic Income Portfolio III (CSP)
                                 
    DATE                     FAIR  
DESCRIPTION   ACQUIRED     PAR     COST     VALUE  
(Percentages of each investment category relate to total net assets)
                               
 
Whole Loans ¥ p — 81.8%
                               
Commercial Loans — 51.6%
                               
150 North Pantano I, Tucson, AZ, 5.90%, 2/1/10 b§ u
    1/4/05     $ 3,525,000     $ 3,525,000     $ 2,452,297  
150 North Pantano II, Tucson, AZ, 14.88%, 2/1/10 ¶ § u
    1/4/05       440,000       440,259       211,224  
8324 East Hartford Drive I, Scottsdale, AZ, 4.90%, 5/1/20 b
    4/8/04       3,220,015       3,369,044       3,220,015  
Academy Spectrum, Colorado Springs, CO, 7.73%, 5/1/09 § u
    12/18/02       4,959,112       5,086,926       2,593,616  
Alliant University, Fresno, CA, 7.15%, 8/1/11 b
    7/12/06       2,743,385       2,743,385       2,770,819  
Apple Blossom Convenience Center, Winchester, VA, 6.58%, 8/1/12 b
    7/9/07       2,150,000       2,150,000       2,193,000  
Biltmore Lakes Corporate Center, Phoenix, AZ, 6.00%, 9/1/14 b
    8/2/04       2,823,459       2,823,459       2,823,459  
Carrier 360 I, Grand Prairie, TX, 4.90%, 7/1/10 b §
    6/28/04       3,104,380       3,104,380       3,104,380  
Carrier 360 II, Grand Prairie, TX, 4.88%, 7/1/10 §
    12/16/05       324,286       324,286       306,135  
Fairview Business Park, Salem, OR, 7.33%, 8/1/11 b u
    7/14/06       7,590,028       7,600,761       4,134,440  
First Colony Marketplace, Sugar Land, TX, 6.43%, 9/1/10 b§
    8/15/07       11,700,000       11,700,000       9,979,831  
France Avenue Business Park II, Brooklyn Center, MN, 7.40%, 10/1/12 b
    9/12/02       4,200,948       4,200,948       4,284,967  
France Avenue Business Park II (second), Brooklyn Center, MN, 7.38%, 10/1/12 ¶
    1/17/08       600,000       600,000       612,000  
Jilly’s American Grill, Scottsdale, AZ, 6.88%, 9/1/11 b
    8/19/05       1,810,000       1,810,000       1,810,000  
La Cholla Plaza I, Tucson, AZ, 3.43%, 8/1/09 b§ D
    7/26/06       11,135,604       11,135,604       10,930,341  
La Cholla Plaza II, Tucson, AZ, 14.88%, 8/1/09 ¶ § u
    7/26/06       1,389,396       1,389,396       674,212  
NCH Commercial Pool I, Tucson, AZ, 11.93%, 4/1/10 ¶ u
    3/27/07       5,500,000       5,500,000       48,768  
NCH Commercial Pool II, Phoenix, AZ, 11.93%, 1/1/11 ¶ u
    12/4/07       14,000,000       14,019,534       7,322,000  
Noah’s Ark Self Storage, San Antonio, TX, 6.48%, 9/1/10 b§
    8/24/07       2,400,000       2,400,000       2,400,000  
North Austin Business Center, Austin, TX, 5.65%, 11/1/11 b
    10/29/04       3,683,255       3,683,255       3,683,255  
Outlets at Casa Grande I, Casa Grande, AZ, 6.93%, 3/1/11 bu
    2/27/06       7,300,000       7,534,192       3,817,900  
Outlets at Casa Grande II, Casa Grande, AZ, 6.90%, 3/1/11 bu
    4/11/07       3,500,000       3,500,200       1,830,500  
Paradise Boulevard, Albuquerque, NM, 6.50%, 4/1/17 b
    3/26/07       4,600,000       4,600,000       4,830,000  
RealtiCorp Fund III, Orlando/Crystal River, FL, 6.93%, 7/1/11 ¶
    2/28/06       3,372,755       3,372,755       3,372,755  
Silver Star Storage, Austin, TX, 6.40%, 4/1/11 b
    3/25/08       4,091,986       4,091,986       3,568,932  
Spa Atlantis, Pompano Beach, FL, 6.43%, 8/1/14 ¶
    9/30/05       11,000,000       11,000,000       11,000,000  
Tatum Ranch Center, Phoenix, AZ, 6.15%, 10/1/15 b
    8/25/04       3,204,207       3,204,207       3,236,249  
 
                    124,909,577       97,211,095  
 
                               
Multifamily Loans — 30.2%
                               
Avalon Hills I, Omaha, NE, 6.93%, 3/1/12 b
    3/1/07       10,720,000       10,720,000       10,720,000  
Avalon Hills II, Omaha, NE, 9.88%, 3/1/12 ¶ R S
    3/1/07       2,448,800       2,448,800       1,816,770  
Chateau Club Apartments I, Athens, GA, 6.18%, 12/1/12 ¶
    12/20/07       6,000,000       6,000,000       5,334,012  
Chateau Club Apartments II, Athens, GA, 6.88%, 12/1/12 ¶ R
    12/20/07       2,991,624       2,991,624       1,671,453  
Country Villa Apartments, West Lafayette, IN, 6.90%, 9/1/13 b
    8/29/03       2,386,805       2,386,805       2,506,144  
Courtyards at Mesquite I, Mesquite, TX, 6.53%, 11/1/09 b § u
    10/14/05       7,389,373       7,389,373       4,026,403  
Courtyards at Mesquite II, Mesquite, TX, 7.90%, 11/1/09 ¶ § R S
    10/14/05       2,850,000       2,850,000       1,467,944  
El Dorado Apartments I, Tucson, AZ, 7.15%, 9/1/12 b
    8/26/04       2,472,876       2,472,876       2,522,334  
El Dorado Apartments II, Tucson, AZ, 7.13%, 9/1/12
    8/26/04       485,283       485,283       466,891  
Geneva Village Apartments I, West Jordan, UT, 7.00%, 1/1/14 b
    12/24/03       1,053,110       1,053,110       1,105,766  
Geneva Village Apartments II, West Jordan, UT, 9.88%, 1/1/13
    12/24/03       25,380       25,380       24,807  
Good Haven Apartments I, Dallas, TX, 5.43%, 9/1/07 ¶ § u D
    8/24/04       6,737,000       6,737,000       3,523,451  
Good Haven Apartments II, Dallas, TX, 14.88%, 9/1/07 ¶ § u
    8/24/04       842,000       842,000       202,991  
Good Haven Apartments III, Dallas, TX, 14.88%, 5/1/09 ¶ § u
    7/3/08       694,096       694,096       138,466  
Meadowview Village Apartments I, West Jordan, UT, 7.00%, 1/1/14
    12/24/03       764,354       764,354       802,572  
Meadowview Village Apartments II, West Jordan, UT, 9.88%, 1/1/13
    12/24/03       25,380       25,380       24,807  
Montevista Apartments, Fort Worth, TX, 7.43%, 9/1/12 ¶ R
    8/30/07       7,308,000       7,308,000       5,296,202  
NCH Multifamily Pool, Oklahoma City, OK, 11.93%, 11/1/09 ¶ § u
    10/17/06       4,993,450       4,993,450       46,284  
Parkway Village Apartments I, West Jordan, UT, 7.00%, 1/1/14
    12/24/03       720,601       720,601       756,631  
Parkway Village Apartments II, West Jordan, UT, 9.88%, 1/1/13
    12/24/03       25,380       25,380       24,693  
Plantation Pines I, Tyler, TX, 6.59%, 2/1/10 b§
    1/17/07       3,328,000       3,328,000       3,328,000  
FIRST AMERICAN MORTGAGE FUNDS     |     2010 QUARTERLY REPORT

 


Table of Contents

Schedule of Investments     |     November 30, 2010 (unaudited)
American Strategic Income Portfolio III (CSP)
                                 
    DATE     PAR/             FAIR  
DESCRIPTION   ACQUIRED     SHARES     COST     VALUE  
Plantation Pines II, Tyler, TX, 10.57%, 2/1/10 ¶ § u
    1/17/07     $ 416,000     $ 416,000     $ 224,651  
RiverPark Land Lot III, Oxnard, CA, 6.90%, 3/1/12 ¶
    10/9/07       3,650,000       3,650,000       3,650,000  
Villas of Woodgate, Lansing, MI, 6.40%, 2/1/12 b
    2/1/07       3,496,055       3,496,055       3,321,794  
Whispering Oaks I, Little Rock, AR, 6.43%, 2/1/12 bu
    1/10/07       5,800,000       5,831,627       3,033,400  
Whispering Oaks II, Little Rock, AR, 9.88%, 2/1/12 ¶ R S
    1/10/07       2,636,000       2,636,000       711,185  
 
                    80,291,194       56,747,651  
 
                               
Total Whole Loans
                    205,200,771       153,958,746  
 
                               
Corporate Notes ¥— 11.3%
                               
Fixed Rate — 11.3%
                               
Sarofim Brookhaven, 6.90%, 1/1/11
    12/21/07       10,040,375       10,040,375       10,040,375  
Stratus Properties IV, 8.75%, 12/31/13
    12/1/06       7,000,000       7,000,000       7,210,000  
Stratus Properties VI, 8.75%, 12/31/11
    6/1/07       4,000,000       4,000,000       4,000,000  
 
                               
Total Corporate Notes
                    21,040,375       21,250,375  
 
                               
Private Mortgage-Backed Security ¥ Ä — 0.0%
                               
Fixed Rate — 0.0%
                               
First Gibraltar, Series 1992-MM, Class B, 6.06%, 10/25/21
    7/30/93       68,676       45,760        
 
                               
U.S. Government Agency Mortgage-Backed Securities a — 14.9%
                               
Fixed Rate — 14.9%
                               
Federal Home Loan Mortgage Corporation,
                               
5.50%, 1/1/18, #E93231
            1,508,872       1,535,745       1,637,629  
9.00%, 7/1/30, #C40149
            143,037       146,016       163,405  
5.00%, 5/1/39, #G05430
            4,057,725       4,162,039       4,292,639  
Federal National Mortgage Association,
                               
6.00%, 10/1/16, #607030
            92,275       92,540       100,886  
5.50%, 2/1/17, #623874
            182,458       182,221       198,570  
5.50%, 6/1/17, #648508
            154,147       154,577       167,855  
5.00%, 9/1/17, #254486
            224,407       224,745       241,066  
5.00%, 11/1/17, #657356
            420,424       421,696       451,636  
6.50%, 6/1/29, #252497
            425,494       423,263       480,856  
7.50%, 5/1/30, #535289
            81,640       79,492       93,874  
8.00%, 5/1/30, #538266
            25,911       25,655       30,556  
8.00%, 6/1/30, #253347
            89,507       88,619       105,553  
5.00%, 11/1/33, #725027
            2,915,134       2,978,225       3,106,219  
5.00%, 12/1/35, #995317
            6,276,250       6,465,725       6,687,654  
5.00%, 7/1/39, #AA9716
            7,623,146       7,829,961       8,089,486  
5.00%, 7/1/39, #935512
            1,987,672       2,026,455       2,109,266  
 
                               
Total U.S. Government Agency Mortgage-Backed Securities
                    26,836,974       27,957,150  
 
                               
Commercial Mortgage-Backed Securities ¶ D — 6.7%
                               
Other — 6.7%
                               
Banc of America Commercial Mortgage, Series 2005-4, Class A5B, 5.00%, 7/10/45 a
            6,400,000       4,153,914       6,368,118  
Citigroup/Deutsche Bank Commercial Mortgage Trust, 5.89%, 11/15/44, Series 2007-CD4, Class A4 b
            3,600,000       3,375,574       3,853,177  
LB-UBS Commercial Mortgage Trust, Series 2008-C1, Class A2, 6.32%, 4/15/41 b
            2,250,000       1,547,122       2,459,728  
 
                               
Total Commercial Mortgage-Backed Securities
                    9,076,610       12,681,023  
 
                               
Preferred Stocks — 26.9%
                               
Real Estate Investment Trusts — 26.9%
                               
AMB Property, Series L
            164,120       3,789,361       3,830,561  
AMB Property, Series M
            41,240       950,889       989,760  
AMB Property, Series O
            9,613       240,325       239,556  
AMB Property, Series P
            21,200       429,300       533,816  
FIRST AMERICAN MORTGAGE FUNDS     |     2010 QUARTERLY REPORT

 


Table of Contents

Schedule of Investments     |     November 30, 2010 (unaudited)
American Strategic Income Portfolio III (CSP)
                                 
                            FAIR  
DESCRIPTION           SHARES     COST     VALUE  
BRE Properties, Series C
            66,300     $ 1,317,381     $ 1,636,947  
BRE Properties, Series D
            5,250       104,318       128,835  
Developers Diversified Realty, Series G
            44,600       769,350       1,112,770  
Developers Diversified Realty, Series H
            41,320       667,318       983,416  
Developers Diversified Realty, Series I
            4,270       89,030       103,334  
Duke Realty, Series J
            81,556       1,825,205       1,870,079  
Duke Realty, Series L
            19,220       367,486       440,522  
Duke Realty, Series M
            55,040       1,110,800       1,352,333  
Duke Realty, Series O
            44,550       1,051,380       1,181,466  
Equity Residential Properties, Series N b
            62,700       1,497,705       1,558,722  
Kimco Realty, Series F b
            163,000       3,797,000       3,967,420  
Kimco Realty, Series G b
            114,700       2,796,559       2,961,554  
ProLogis Trust, Series F
            33,905       835,567       804,227  
ProLogis Trust, Series G
            8,300       174,300       197,623  
PS Business Parks, Series H b
            26,520       530,400       659,022  
PS Business Parks, Series I b
            94,300       1,634,731       2,305,635  
PS Business Parks, Series M b
            26,520       546,312       661,674  
PS Business Parks, Series O b
            100,000       2,050,000       2,517,000  
PS Business Parks, Series P b
            8,200       157,194       199,670  
Public Storage, Series A b
            38,000       921,909       939,740  
Public Storage, Series C b
            30,000       626,100       745,800  
Public Storage, Series E b
            9,300       186,000       232,872  
Public Storage, Series H b
            40,000       876,000       1,008,400  
Public Storage, Series I b
            26,520       576,810       679,177  
Public Storage, Series K b
            17,550       381,712       449,455  
Public Storage, Series L b
            20,000       430,000       503,000  
Public Storage, Series X b
            74,000       1,786,319       1,829,280  
Public Storage, Series Z b
            30,000       746,643       751,500  
Realty Income, Series D b
            97,500       2,474,125       2,457,975  
Realty Income, Series E b
            26,520       572,832       655,309  
Vornado Realty Trust, Series E b
            7,400       186,598       183,520  
Vornado Realty Trust, Series F b
            7,800       164,970       190,164  
Vornado Realty Trust, Series H b
            163,000       2,771,000       3,993,500  
Weingarten Realty Investors, Series D
            95,170       2,112,774       2,335,472  
Weingarten Realty Investors, Series F
            140,000       3,104,500       3,442,600  
 
                               
Total Preferred Stocks
                    44,650,203       50,633,706  
 
                               
Total Unaffiliated Investments
                    306,850,693       266,481,000  
 
                               
Real Estate Owned ¥ l — 1.2%
                               
Memphis Medical Building, Memphis, TN
                    3,964,599       2,222,750  
 
                               
Short-Term Investment — 2.3%
                               
First American Prime Obligations Fund, Class Z, 0.09% x
            4,398,821       4,398,821       4,398,821  
 
                               
Total Investments — 145.1%
                  $ 315,214,113     $ 273,102,571  
 
                               
Other Assets and Liabilities, Net — (45.1)%
                            (84,897,575 )
 
                             
 
                               
Total Net Assets — 100.0%
                          $ 188,204,996  
 
                             
FIRST AMERICAN MORTGAGE FUNDS     |     2010 QUARTERLY REPORT

 


Table of Contents

Schedule of Investments     |     November 30, 2010 (unaudited)
American Strategic Income Portfolio III (CSP)
 
  The fund’s investments in whole loans (multifamily and commercial), are generally not traded in any organized market and therefore, market quotations are not readily available. These investments are valued at fair value according to procedures adopted by the fund’s board of directors. Pursuant to these procedures, these investments are initially fair valued at cost as this approximates fair value and adjusted using a U.S. Bancorp Asset Management, Inc. (“USBAM”) pricing model designed to incorporate, among other things, the present value of the projected stream of cash flows on such investments. The pricing model takes into account a number of relevant factors including the projected rate of prepayments, the delinquency profile, the historical payment record, the expected yield at purchase, changes in prevailing interest rates, and changes in the real or perceived liquidity of whole loans as the case may be. Changes in prevailing interest rates, real or perceived liquidity, yield spreads, and creditworthiness are factored into the pricing model each week. The results of the pricing model may be further subject to price floors given the intrinsic values of the underlying properties subject to the loans and ceilings due to the illiquid nature of the loans. USBAM has modified, and may in the future modify, price floors, price ceilings, and other factors contained in the model in light of changing economic and market conditions. Such modifications will affect the fund’s net asset value.
 
    Certain mortgage loan information is received once a month. This information includes, but is not limited to, the projected rate of prepayments, projected rate and severity of defaults, the delinquency profile, and the historical payment record. Valuations of whole loans are determined no less frequently than weekly. Although USBAM believes the pricing model to be reasonable and appropriate, the actual values that may be realized upon the sale of whole loans can only be determined in negotiations between the fund and third parties.
 
    Security valuations for the fund’s investments (other than whole loans) are generally furnished by an independent pricing service that has been approved by the fund’s board of directors. Investments in equity securities that are traded on a national securities exchange (or reported on the Nasdaq national market system) are stated at the last quoted sales price if readily available for such securities on each business day. For securities traded on the Nasdaq national market system, the fund utilizes the Nasdaq Official Closing Price which compares the last trade to the bid/ask price of a security. If the last trade falls within the bid/ask range, then that price will be the closing price. If the last trade is outside the bid/ask range, and falls above the ask, then the ask price will be the closing price. If the last trade is below the bid, then the bid will be the closing price. Other equity securities traded in the over-the-counter market and listed equity securities for which no sale was reported on that date are stated at the last quoted bid price. Investments in open-end funds are valued at their respective net asset values on the valuation date.

Debt obligations exceeding 60 days to maturity are valued by an independent pricing service. The pricing service may employ methodologies that utilize actual market transactions, broker-dealer supplied valuations, or other formula-driven valuation techniques. These techniques generally consider such factors as yields or prices of bonds of comparable quality, type of issue, coupon, maturity, ratings, and general market conditions. Securities for which prices are not available from an independent pricing service, but where an active market exists, are valued using market quotations obtained from one or more dealers that make markets in the securities or from a widely-used quotation system. Debt obligations with 60 days or less remaining until maturity may be valued at their amortized cost which approximates market value.
 
    The following investment vehicles, when held by the fund, are priced as follows: exchange listed futures and options on futures are priced at their last sale price on the exchange on which they are principally traded, as determined by USBAM on the day the valuation is made. If there were no sales on that day, futures and options on futures will be valued at the last reported bid price. Options on securities and indices traded on Nasdaq or listed on a stock exchange are valued at the last sale price on Nasdaq or on any exchange on the day the valuation is made. If there were no sales on that day, the options will be valued at the last sale price on the previous valuation date. Last sale prices are obtained from an independent pricing service. Forward contracts, swaps, and over-the-counter options on securities and indices are valued at the quotations received from an independent pricing service, if available.

When market quotations are not readily available, securities are internally valued at fair value as determined in good faith by procedures established and approved by the fund’s board of directors. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on disposition; trading in similar securities of the same issuer or comparable companies; information from broker-dealers; and an evaluation of the forces that influence the market in which the securities are purchased or sold. If events occur that materially affect the value of securities between the close of trading in those securities and the close of regular trading on the New York Stock Exchange, the securities will be valued at fair value. The use of fair value pricing by the fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without fair value pricing.
 
    In accordance with the valuation procedures adopted by the fund’s board of directors, real estate acquired through foreclosure, if any, is initially valued similar to defaulted multifamily and commercial whole loans. The value is subsequently revised to an estimated market value, as determined by independent third party appraisals, less estimated selling costs.

As of November 30, 2010, the fund held internally fair valued securities which are disclosed in footnote ¥.
 
¥   Securities purchased as part of a private placement which have not been registered with the Securities and Exchange Commission under the Securities Act of 1933 and which are considered to be illiquid. These securities are fair valued in accordance with the board approved valuation procedures. On November 30, 2010, the fair value of these securities was $177,431,871 or 94.3% of total net assets.
 
p   Interest rates on commercial and multifamily loans are the net coupon rates in effect (after reducing the coupon rate by any mortgage servicing fees paid to mortgage servicers) on November 30, 2010. For participating loans, the rates are based on the annual cash flow payments expected at the time of purchase.
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Schedule of Investments     |     November 30, 2010 (unaudited)
American Strategic Income Portfolio III (CSP)
 
b   Securities pledged as collateral for outstanding borrowings under a loan agreement with Massachusetts Mutual Life Insurance Company (“MMLIC”). On November 30, 2010, securities valued at $136,104,800 were pledged as collateral for the following outstanding borrowings:
                   
                Accrued
Amount     Rate*     Interest
$ 54,400,000       5.00%     $ 7,556
               
 
*   Interest rate as of November 30, 2010. Rate is based on the London Interbank Offered Rate (“LIBOR”) plus 2.625% subject to a “floor” interest rate of 5.00% and reset monthly.
 
Description of collateral:
Whole Loans
150 North Pantano I, Tucson, AZ, 5.90%, 2/1/10, $3,525,000 par
8324 East Hartford Drive I, Scottsdale, AZ, 4.90%, 5/1/20, $3,220,015 par
Alliant University, Fresno, CA, 7.15%, 8/1/11, $2,743,385 par
Apple Blossom Convenience Center, Winchester, VA, 6.58%, 8/1/12, $2,150,000 par
Avalon Hills I, Omaha, NE, 6.93%, 3/1/12, $10,720,000 par
Biltmore Lakes Corporate Center, Phoenix, AZ, 6.00%, 9/1/14, $2,823,459 par
Carrier 360 I, Grand Prairie, TX, 4.90%, 7/1/10, $3,104,380 par
Country Villa Apartments, West Lafayette, IN, 6.90%, 9/1/13, $2,386,805 par
Courtyards at Mesquite I, Mesquite, TX, 6.53%, 11/1/09, $7,389,373 par
El Dorado Apartments I, Tucson, AZ, 7.15%, 9/1/12, $2,472,876 par
Fairview Business Park, Salem, OR, 7.33%, 8/1/11, $7,590,028 par
First Colony Marketplace, Sugar Land, TX, 6.43%, 9/1/10, $11,700,000 par
France Avenue Business Park II, Brooklyn Center, MN, 7.40%, 10/1/12, $4,200,948 par
Geneva Village Apartments I, West Jordan, UT, 7.00%, 1/1/14, $1,053,110 par
Jilly’s American Grill, Scottsdale, AZ, 6.88%, 9/1/11, $1,810,000 par
La Cholla Plaza I, Tucson, AZ, 3.43%, 8/1/09, $11,135,604 par
Noah’s Ark Self Storage, San Antonio, TX, 6.48%, 9/1/10, $2,400,000 par
North Austin Business Center, Austin, TX, 5.65%, 11/1/11, $3,683,255 par
Outlets at Casa Grande I, Casa Grande, AZ, 6.93%, 3/1/11, $7,300,000 par
Outlets at Casa Grande II, Casa Grande, AZ, 6.90%, 3/1/11, $3,500,000 par
Paradise Boulevard, Albuquerque, NM, 6.50%, 4/1/17, $4,600,000 par
Plantation Pines I, Tyler, TX, 6.59%, 2/1/10, $3,328,000 par
Silver Star Storage, Austin, TX, 6.40%, 4/1/11, $4,091,986 par
Tatum Ranch Center, Phoenix, AZ, 6.15%, 10/1/15, $3,204,207 par
Villas of Woodgate, Lansing, MI, 6.40%, 2/1/12, $3,496,055 par
Whispering Oaks I, Little Rock, AR, 6.43%, 2/1/12, $5,800,000 par

Commercial Mortgage-Backed Securities
Citigroup/Deutsche Bank Commercial Mortgage Trust, Series 2007-CD5, Class A4, 5.89%, 11/15/44, $3,600,000 par
LB-UBS Commercial Mortgage Trust, Series 2008-C1, Class A2, 6.32%, 4/15/41, $2,250,000 par

Preferred Stocks
Equity Residential Properties, Series N, 10,700 shares
Kimco Realty, Series F, 163,000 shares
Kimco Realty, Series G, 114,700 shares
PS Business Parks, Series H, 26,250 shares
PS Business Parks, Series I, 94,300 shares
PS Business Parks, Series M, 26,520 shares
PS Business Parks, Series O, 100,000 shares
PS Business Parks, Series P, 8,200 shares
Public Storage, Series A, 38,000 shares
Public Storage, Series C, 30,000 shares
Public Storage, Series E, 9,300 shares
Public Storage, Series H, 40,000 shares
Public Storage, Series I, 26,520 shares
Public Storage, Series K, 17,550 shares
Public Storage, Series L, 20,000 shares
Public Storage, Series X, 74,000 shares
Public Storage, Series Z, 30,000 shares
Realty Income, Series D, 97,500 shares
Realty Income, Series E, 26,520 shares
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Schedule of Investments     |     November 30, 2010 (unaudited)
American Strategic Income Portfolio III (CSP)
 
Vornado Realty Trust, Series E, 7,400 shares
Vornado Realty Trust, Series F, 7,800 shares
Vornado Realty Trust, Series H, 163,000 shares
 
    The fund has entered into a loan agreement with MMLIC under which MMLIC made a term loan to the fund of $54,400,000, which matures on July 31, 2011, and agreed to make revolving loans to the fund of up to $15,600,000. Loans made under the loan agreement are secured by whole loans, commercial mortgage-backed securities, and preferred stocks in the fund’s portfolio and bear interest at the one-month LIBOR plus 2.625% with a “floor” interest rate of 5.00%. In addition, the fund pays an annual fee of 1.28% on any unused portion of the fund’s revolving loan commitment.
 
  Interest Only — Represents securities that entitle holders to receive only interest payments on the mortgage. Principal balance on the loan is due at maturity. The interest rate disclosed represents the net coupon rate in effect as of November 30, 2010.
 
§   Loan has matured and the fund is anticipating payoff or refinancing. Unless disclosed otherwise, the loan continues to make monthly payments.
 
u   Loan is currently in default with regards to scheduled interest and/or principal payments.
 
D   Variable Rate Security — The rate shown is the net coupon rate in effect as of November 30, 2010.
 
R   Participating Loan — A participating loan is one which contains provisions for the fund to participate in the income stream provided by the property, including net cash flows and capital proceeds. Monthly cash flow proceeds are only required to the extent excess cash flow is generated by the property as determined by the loan documents.
 
S   The participating loan is not currently making monthly cash flow payments or is making cash flow payments of less than original coupon rate disclosed.
 
Ä   Non-Income Producing Security.
 
a   Securities pledged as collateral for outstanding reverse repurchase agreements. On November 30, 2010, securities valued at $34,230,817 were pledged as collateral for the following outstanding reverse repurchase agreements:
                                           
                                      Name of Broker  
      Acquisition                     Accrued     and Description  
Amount   Date     Rate*     Due     Interest     of Collateral  
$
23,677,676
    11/24/10       0.30%       12/27/10     $ 1,381       (1)  
2,958,581
    11/8/10       0.29%       12/8/10       548       (2)  
 
5,059,000
    10/14/10       1.29%       1/12/11       8,695       (3)  
 
                                     
$
31,695,257
                          $ 10,624          
 
                                     
 
*   Interest rate as of November 30, 2010. Rate is based on the LIBOR plus a spread and reset monthly.
Name of broker and description of collateral:
(1) Goldman Sachs:
Federal Home Loan Mortgage Corporation, 5.50%, 1/1/18, $1,421,847 par
Federal Home Loan Mortgage Corporation, 9.00%, 7/1/30, $143,037 par
Federal Home Loan Mortgage Corporation, 5.00%, 5/1/39, $4,057,725 par
Federal National Mortgage Association, 6.00%, 10/1/16, $92,275 par
Federal National Mortgage Association, 5.50%, 2/1/17, $182,458 par
Federal National Mortgage Association, 5.50%, 6/1/17, $154,147 par
Federal National Mortgage Association, 5.00%, 9/1/17, $224,407 par
Federal National Mortgage Association, 5.00%, 11/1/17, $420,424 par
Federal National Mortgage Association, 6.50%, 6/1/29, $425,494 par
Federal National Mortgage Association, 7.50%, 5/1/30, $81,640 par
Federal National Mortgage Association, 8.00%, 5/1/30, $25,911 par
Federal National Mortgage Association, 8.00%, 6/1/30, $89,507 par
Federal National Mortgage Association, 5.00%, 12/1/35, $6,276,250 par
Federal National Mortgage Association, 5.00%, 7/1/39, $7,623,146 par
Federal National Mortgage Association, 5.00%, 7/1/39, $1,987,672 par
 
(2) Goldman Sachs:
Federal National Mortgage Association, 5.00%, 11/1/33, $2,915,134 par
 
(3) JP Morgan:
Banc of America Commercial Mortgage, Series 2005-4, Class A5B, 5.00%, 7/10/45, $6,400,000 par
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Schedule of Investments     |     November 30, 2010 (unaudited)
American Strategic Income Portfolio III (CSP)
 
    The fund has entered into a lending commitment with Goldman Sachs. The monthly agreement permits the fund to enter into reverse repurchase agreements using U.S. Government Agency Mortgage-Backed Securities as collateral.
 
    The fund has entered into a lending commitment with JP Morgan. The monthly agreement permits the fund to enter into reverse repurchase agreements using Commercial Mortgage-Backed Securities as collateral.
 
l   Real Estate Owned. See footnote above.
 
x   Investment in affiliated security. This money market fund is advised by U.S. Bancorp Asset Management, Inc., which also serves as advisor for the fund. The rate shown is the annualized seven-day effective yield as of November 30, 2010.
 
  On November 30, 2010, the cost of investments for federal income tax purposes was approximately $315,214,113. The approximate aggregate gross unrealized appreciation and depreciation of investments, based on this cost, were as follows:
         
Gross unrealized appreciation
  $ 11,693,626  
Gross unrealized depreciation
    (53,805,168 )
 
     
Net unrealized depreciation
  $ (42,111,542 )
 
     
Generally accepted accounting principles (“GAAP”) require disclosures regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or technique. These principles establish a three-tier fair value hierarchy for inputs used in measuring fair value. Fair value inputs are summarized in the three broad levels listed below:
Level 1 — Quoted prices in active markets for identical securities.
Level 2 — Other significant observable inputs (including quoted prices for similar securities, with similar interest rates, prepayment speeds, credit risk, etc.).
Level 3 — Significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments). Generally, the types of securities included in Level 3 of the fund are securities that are not traded in any organized market, or for which there are significant unobservable fair value inputs available such as the fund’s investments in whole loans.
The valuation levels are not necessarily an indication of the risk associated with investing in these investments.
As of November 30, 2010, the fund’s investments were classified as follows:
                                 
                            Total  
    Level 1     Level 2     Level 3     Fair Value  
Investments
                               
Whole Loans
  $     $     $ 153,958,746     $ 153,958,746  
Corporate Notes
                21,250,375       21,250,375  
Private Mortgage-Backed Security
                       
U.S. Government Agency Mortgage-Backed Securities
          27,957,150             27,957,150  
Commercial Mortgage-Backed Securities
          12,681,023             12,681,023  
Preferred Stocks
    50,633,706                   50,633,706  
Real Estate Owned
                2,222,750       2,222,750  
Short-Term Investment
    4,398,821                   4,398,821  
 
                       
Total Investments
  $ 55,032,527     $ 40,638,173     $ 177,431,871     $ 273,102,571  
 
                       
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Schedule of Investments     |     November 30, 2010 (unaudited)
American Strategic Income Portfolio III (CSP)
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
                                         
                    Private              
    Whole     Corporate     Mortgage-Backed     Real Estate     Total  
    Loans     Notes     Security     Owned     Fair Value  
Balance as of August 31, 2010
  $ 158,210,375     $ 21,250,375     $     $ 2,460,750     $ 181,921,500  
Accrued discounts/premiums
                522             522  
Realized gain (loss)
                             
Net change in unrealized appreciation or depreciation
    (4,157,488 )           (522 )     (238,000 )     (4,396,010 )
Net purchases (sales)
    (94,141 )                       (94,141 )
 
                             
Balance as of November 30, 2010
  $ 153,958,746     $ 21,250,375     $     $ 2,222,750     $ 177,431,871  
 
                             
 
                                       
Net change in unrealized appreciation or depreciation during the period of Level 3 investments held as of November 30, 2010
  $ (4,157,488 )   $     $ (522 )   $ (238,000 )   $ (4,396,010 )
 
                             
During the period ended November 30, 2010, the funds recognized no significant transfers to/from Level 1 or Level 2. Transfers in and/or out of Level 3 are shown using beginning of period values.
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Item 2. Controls and Procedures.
(a)   The Registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.
 
(b)   There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 3. Exhibits.
Separate certifications for each principal executive officer and principal financial officer of the Registrant as required by
Rule 30a-2(a) under the 1940 Act are filed herewith
.

 


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
American Strategic Income Portfolio Inc. III
         
     
  By:   /s/ Joseph M. Ulrey III  
    Joseph M. Ulrey III   
    President   
 
Date: January 26, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
         
     
  By:   /s/ Joseph M. Ulrey III  
    Joseph M. Ulrey III   
    President   
 
Date: January 26, 2011
         
     
  By:   /s/ Jill M. Stevenson  
    Jill M. Stevenson   
    Treasurer   
 
Date: January 26, 2011