-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QtehkHMOgq5cGUJDefwNTX6jPQ1WG5Qy8qRm9OaFelyl1R6paImURfkzHA1sWY4s NMvjHnDGgGTYkNnb81NTzQ== 0000719184-97-000003.txt : 19970520 0000719184-97-000003.hdr.sgml : 19970520 ACCESSION NUMBER: 0000719184-97-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED CAPITAL PROPERTIES III CENTRAL INDEX KEY: 0000317331 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 942653686 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-10273 FILM NUMBER: 97607139 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391591 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 QUARTERLY OR TRANSITIONAL REPORT U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period.........to......... Commission file number 0-10273 CONSOLIDATED CAPITAL PROPERTIES III (Exact name of small business issuer as specified in its charter) California 94-2653686 (State or other jurisdiction of (IRS 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 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) CONSOLIDATED CAPITAL PROPERTIES III CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 1997 Assets Cash and cash equivalents: Unrestricted $ 3,720 Restricted-tenant security deposits 112 Accounts receivable 38 Escrows for taxes and insurance 99 Restricted escrows 242 Other assets 303 Investment properties: Land $ 1,552 Buildings and related personal property 12,333 13,885 Less accumulated depreciation (9,300) 4,585 $ 9,099 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 32 Tenant security deposits 109 Accrued taxes 54 Other liabilities 142 Mortgage notes 4,200 Partners' Capital (Deficit) General partner $ (1,847) Limited partners (158,636 units issued and outstanding) 6,409 4,562 $ 9,099 See Accompanying Notes to Consolidated Financial Statements b) CONSOLIDATED CAPITAL PROPERTIES III CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 1997 1996 Revenues: Rental income $ 835 $ 1,085 Other income 74 105 Total revenues 909 1,190 Expenses: Operating 343 444 General and administrative 65 81 Maintenance 110 143 Depreciation 101 229 Interest 84 161 Property taxes 54 84 Total expenses 757 1,142 Net income $ 152 $ 48 Net income allocated to general partner (4%) $ 6 $ 2 Net income allocated to limited partners (96%) 146 46 $ 152 $ 48 Net income per limited partnership unit $ .92 $ .29 See Accompanying Notes to Consolidated Financial Statements c) CONSOLIDATED CAPITAL PROPERTIES III CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 158,945 $ 1 $79,473 $79,474 Partners' capital (deficit) at December 31, 1996 158,636 $(1,853) $ 6,263 $ 4,410 Net income for the three months ended March 31, 1997 -- 6 146 152 Partners' capital (deficit) at March 31, 1997 158,636 $(1,847) $ 6,409 $ 4,562 See Accompanying Notes to Consolidated Financial Statements
d) CONSOLIDATED CAPITAL PROPERTIES III CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Net income $ 152 $ 48 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 101 229 Amortization of lease commissions and loan costs 11 9 Change in accounts: Restricted cash 3 (12) Accounts receivable 10 40 Escrows for taxes and insurance (10) (126) Other assets 9 (4) Accounts payable (82) (41) Tenant security deposit liabilities (5) 4 Accrued taxes 54 78 Other liabilities (19) 3 Net cash provided by operating activities 224 228 Cash flows from investing activities: Property improvements and replacements (67) (53) Disposition of property -- 11 Deposits to restricted escrows (20) -- Receipts from restricted escrows -- 7 Net cash used in investing activities (87) (35) Cash flows from financing activities: Payments on notes payable -- (25) Loan costs paid (20) -- Net cash used in financing activities (20) (25) Net increase in cash and cash equivalents 117 168 Cash and cash equivalents at beginning of period 3,603 2,854 Cash and cash equivalents at end of period $3,720 $3,022 Supplemental disclosure of cash flow information: Cash paid for interest $ 77 $ 154 See Accompanying Notes to Consolidated Financial Statements
e) CONSOLIDATED CAPITAL PROPERTIES III NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of Consolidated Capital Properties III ("The Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the General Partner (ConCap Equities, Inc.), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the fiscal year ended December 31, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 presentation. Consolidation The Partnership's financial statements include the accounts of ConCap Mountain Plaza Associates, Ltd. ("Mountain Plaza Associates) 1996 only, and ConCap Village Green Associates, Ltd. ("Village Green Associates"), two majority-owned limited partnerships. All intercompany transactions have been eliminated. Cash and Cash Equivalents Cash and cash equivalents for purposes of reporting cash flows include cash on hand, money market funds and certificates of deposit with original maturities of three months or less. NOTE B - TRANSACTIONS WITH AFFILIATED PARTNERS The Partnership has paid property management fees based on collected gross rental revenues for property management services in each of the three months ended March 31, 1997 and 1996. Property management fees of approximately $44,000 and $55,000 were paid to affiliates of the General Partner for the three months ended March 31, 1997 and 1996, respectively. These fees are included in operating expenses. The Partnership Agreement also provides for reimbursement to the General Partner and its affiliates for costs incurred in connection with the administration of Partnership activities. Reimbursements for services of affiliates of approximately $45,000 and $42,000 were paid to the General Partner and its affiliates for the three months ended March 31, 1997 and 1996, respectively. Additionally, the Partnership paid $1,000 and $9,000 during the three months ended March 31, 1997 and 1996, respectively, to an affiliate of the General Partner for lease commissions at the Partnership's commercial property. These lease commissions are included in other assets and amortized over the term of the respective leases. 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 payment 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 C - DISTRIBUTIONS No distributions were made during the three months ended March 31, 1997 and 1996. NOTE D - MORTGAGE NOTES PAYABLE During the second quarter of 1996, the Partnership entered into an interim financing arrangement for both Ventura Landing and Village Green for $2.2 million and $2 million, respectively. The previous Ventura Landing note of $3.2 million was repaid at that time. The interest rate was 250 basis points over the 30-day LIBOR, resulting in a total note rate of 8.00%. The loans matured on August 1, 1996, with a 60-day extension option. The Partnership exercised this option to convert the interim loans to fixed rate amortizing loans with an interest rate equal to the Treasury Rate, as defined in the financing agreement, plus 2.15%. Such converted loans would mature in ten years with monthly payments of principal and interest based on a schedule which would fully amortize the loans over a thirty year term. The Partnership, however, continued seeking alternative long-term financing to obtain a lower interest rate. In November of 1996, these two properties obtained long-term refinancing. Proceeds from this transaction totaled $4,200,000. The debt accrues interest at a rate of 7.33% per year, matures on November 1, 2003, and requires balloon payments at maturity for the full principal amount. Throughout the mortgage term, interest only payments are made. Loan costs of $20,000 were incurred by the properties as a result of the long-term refinancing during the three months ended March 31, 1996, and are included in other assets on the balance sheet. The entire amount of the Partnership's outstanding indebtedness of $4,200,000 is scheduled to mature in November of 2003. NOTE E - FORECLOSURE OF MOUNTAIN PLAZA APARTMENTS On September 3, 1996, the lender foreclosed on Mountain Plaza Apartments. The mortgage note payable had been in default since May 13, 1996. In the Managing General Partner's opinion, it was not in the Partnership's best interest to contest the foreclosure action. During the third quarter of 1996, the Partnership recorded a gain on disposition of property of $1,820,000, to increase the carrying value of the Mountain Plaza assets to their estimated market value and an extraordinary gain on the foreclosure of $1,149,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The Partnership's investment properties consist of three apartment complexes and one commercial property. The following table sets forth the average occupancy of the properties for the three months ended March 31, 1997 and 1996: Average Occupancy 1997 1996 Professional Plaza Office Building 95% 96% Salt Lake City, UT Ventura Landing Apartments 96% 93% Orlando, FL Village Green Apartments 92% 95% Altamante Springs, FL West Chase Apartments 86% 93% Lexington, KY The decrease in occupancy at West Chase Apartments is a result of increased competition in the Lexington area. Several new apartment complexes were completed in 1996 which gave potential residents the opportunity to rent luxury apartments at extremely competitive rates. The increase in occupancy at Ventura Landing Apartments is due to several exterior building improvements in 1996, improving the appearance of the entire property. The Partnership realized net income of $152,000 for the three months ended March 31, 1997, compared to net income of $48,000 for the three months ended March 31, 1996. The increase in net income is primarily due to the foreclosure of Mountain Plaza Apartments in September 1996. Total expenses decreased for the three months ended March 31, 1997 compared to the corresponding period of 1996 due to the foreclosure of Mountain Plaza Apartments. Depreciation expense also decreased due to many of the assets acquired with the purchase of the partnership now being fully depreciated. The decrease in interest expense was also impacted by the refinancing of the Ventura Landing note payable which resulted in a lower interest rate and principle balance. This decrease was mitigated by a new mortgage at Village Green resulting from the refinancing. Also contributing to the decrease in maintenance was a decrease in interior and exterior building repairs at West Chase and Ventura Landing. Included in maintenance expense is approximately $9,000 and $30,000 of major repairs and maintenance for the three months ended March 31, 1997 and 1996, respectively. These expenses are comprised primarily of exterior building repairs. General and administrative expenses decreased due to a decrease in professional fees for the three months ended March 31, 1997 compared to the three months ended March 31, 1996. Partially offsetting the decrease in expenses was a decrease in total revenue for the three months ended March 31, 1997 compared to the corresponding period of 1996 due to the foreclosure of Mountain Plaza Apartments. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the General Partner will be able to sustain such a plan. At March 31, 1997, the Partnership held cash and cash equivalents of $3,720,000, compared to approximately $3,022,000 at March 31, 1996. Net cash used in investing activities increased due to increased deposits to restricted escrows and increased property improvements and replacements. 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 property to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of approximately $4,200,000 matures at various times with balloon payments due at maturity, at which time the properties will either be refinanced or sold. Future cash distributions will depend on the levels of net cash generated from operations, capital expenditure requirements, property sales and the availability of cash reserves. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. (b) Reports on Form 8-K None filed during the quarter ended March 31, 1997. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CONSOLIDATED CAPITAL PROPERTIES III By: CONCAP EQUITIES, INC. General Partner By: /s/ William H. Jarrard, Jr. William H. Jarrard, Jr. President By: /s/ Ronald Uretta Ronald Uretta Vice President/Treasurer Date: May 15, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Consolidated Capital Properties III 1997 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000317331 CONSOLIDATED CAPITAL PROPERTIES III 1,000 3-MOS DEC-31-1997 MAR-31-1997 3,720 0 38 0 0 0 13,885 9,300 9,099 0 4,200 0 0 0 4,562 9,099 0 909 0 0 757 0 84 0 0 0 0 0 0 152 .92 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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