10QSB 1 ccip3.txt CCIP3 FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 U.S. Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 [ ] 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 0-14187 CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3 (Exact name of small business issuer as specified in its charter) California 94-2940208 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 55 Beattie Place, PO Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Registrant's telephone number) 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 INSTITUTIONAL PROPERTIES/3 BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 2001
Assets Cash and cash equivalents $ 1,203 Receivables and deposits 545 Restricted escrows 209 Other assets 649 Investment properties: Land $ 8,641 Buildings and related personal property 46,882 55,523 Less accumulated depreciation (20,809) 34,714 $ 37,320 Liabilities and Partners' (Deficit) Capital Liabilities Accounts payable $ 93 Tenant security deposit liabilities 349 Accrued property taxes 260 Other liabilities 594 Mortgage notes payable 27,925 Partners' (Deficit) Capital General partner $ (759) Limited partners (383,033 units outstanding) 8,858 8,099 $ 37,320 See Accompanying Notes to Financial Statements
b) CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3 STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended March 31, 2001 2000 Revenues: Rental income $ 3,251 $ 3,141 Other income 338 209 Total revenues 3,589 3,350 Expenses: Operating 1,184 1,225 General and administrative 159 153 Depreciation 730 716 Interest 528 523 Property taxes 201 179 Total expenses 2,802 2,796 Net income $ 787 $ 554 Net income allocated to general partner (1%) 8 6 Net income allocated to limited partners (99%) 779 548 $ 787 $ 554 Net income per limited partnership unit $ 2.03 $ 1.43 Distributions per limited partnership unit $ 5.01 $ 3.87 See Accompanying Notes to Financial Statements
c) CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3 STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 383,033 $ 1 $95,758 $95,759 Partners' (deficit) capital at December 31, 2000 383,033 $ (748) $ 9,998 $ 9,250 Distributions to partners -- (19) (1,919) (1,938) Net income for the three months ended March 31, 2001 -- 8 779 787 Partners' (deficit) capital at March 31, 2001 383,033 $ (759) $ 8,858 $ 8,099 See Accompanying Notes to Financial Statements
d) CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3 STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 2001 2000 Cash flows from operating activities: Net income $ 787 $ 554 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 730 716 Amortization of loan costs 26 22 Change in accounts: Receivables and deposits 87 202 Other assets (172) (62) Accounts payable (213) (90) Tenant security deposit liabilities 4 12 Accrued property taxes 108 69 Other liabilities (150) (40) Net cash provided by operating activities 1,207 1,383 Cash flows from investing activities: Property improvements and replacements (313) (385) Net receipts from restricted escrows 237 243 Net cash used in investing activities (76) (142) Cash flows from financing activities: Distributions to partners (1,938) (1,497) Net decrease in cash and cash equivalents (807) (256) Cash and cash equivalents at beginning of period 2,010 5,451 Cash and cash equivalents at end of period $ 1,203 $ 5,195 Supplemental disclosure of cash flow information: Cash paid for interest $ 501 $ 501 See Accompanying Notes to Financial Statements
e) CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3 NOTES TO FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited financial statements of Consolidated Capital Institutional Properties/3 (the "Partnership" or "Registrant") 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 ConCap Equities, Inc. (the "General Partner"), which is wholly owned by Apartment Investment and Management Company ("AIMCO"), 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, 2001, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2001. For further information, refer to the financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-K for the fiscal year ended December 31, 2000. Segment Reporting Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosure about Segments of an Enterprise and Related Information" established standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. It also establishes standards for related disclosures about products and services, geographic areas, and major customers. As defined in SFAS No. 131, the Partnership has only one reportable segment. The General Partner believes that segment-based disclosures will not result in a more meaningful presentation than the financial statements as currently presented. Reclassifications Certain reclassifications have been made to the 2000 information to conform to the 2001 presentation. Note B - Related Party Transactions The Partnership has no employees and is dependent on the General Partner and/or its affiliates for the management and administration of all Partnership activities. The limited partnership agreement ("Partnership Agreement") provides for payments to affiliates for property management services based on a percentage of revenue. 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. The following amounts were paid or accrued to the General Partner and affiliates during each of the three month periods ended March 31, 2001 and 2000: 2001 2000 (in thousands) Property management fees (included in operating expenses) $177 $166 Reimbursements for services of affiliates (included in investment properties, general and administrative expenses, and operating expenses) 137 81 During the three months ended March 31, 2001 and 2000, affiliates of the General Partner were entitled to receive 5% of gross receipts from all of the Partnership's residential properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $177,000 and $166,000 for management fees for the three months ended March 31, 2001 and 2000, respectively. An affiliate of the General Partner received reimbursement of accountable administrative expenses amounting to approximately $137,000 and $81,000 for the three month periods ended March 31, 2001 and 2000, respectively. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates currently own 195,659.9 limited partnership units in the Partnership representing 51.08% of the outstanding units. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make one or more additional offers to acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters, which would include without limitation, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. As a result of its ownership of 51.08% of the outstanding units, AIMCO is in a position to influence all voting decisions with respect to the Registrant. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the General Partner because of their affiliation with the General Partner. Note C - Distributions The Partnership paid distributions of cash generated from operations of approximately $1,938,000 (approximately $1,919,000 to the limited partners or $5.01 per limited partnership unit) during the three months ended March 31, 2001. The Partnership paid distributions of cash generated from operations of approximately $1,497,000 (approximately $1,482,000 to the limited partners or $3.87 per limited partnership unit) for the three months ended March 31, 2000. Subsequent to March 31, 2001, the General Partner declared and paid distributions from operations of approximately $947,000 (approximately $938,000 to the limited partners or $2.45 per limited partnership unit). Note D - Legal Proceedings In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its General Partner and several of their affiliated partnerships and corporate entities. The action purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging, among other things, the acquisition of interests in certain general partner entities by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the Insignia Merger. The plaintiffs seek monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs filed an amended complaint. The General Partner filed demurrers to the amended complaint which were heard February 1999. Note D - Legal Proceedings (continued) Pending the ruling on such demurrers, settlement negotiations commenced. On November 2, 1999, the parties executed and filed a Stipulation of Settlement, settling claims, subject to court approval, on behalf of the Partnership and all limited partners who owned units as of November 3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999 from the Court, at which time the Court set a final approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing, the Court received various objections to the settlement, including a challenge to the Court's preliminary approval based upon the alleged lack of authority of prior lead counsel to enter the settlement. On December 14, 1999, the General Partner and its affiliates terminated the proposed settlement. In February 2000, counsel for some of the named plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated the settlement. On June 27, 2000, the Court entered an order disqualifying them from the case and an appeal was taken from the order on October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the putative class. Plaintiffs filed a third amended complaint on January 19, 2001. On March 2, 2001, the General Partner and its affiliates filed a demurrer to the third amended complaint. The demurrer is scheduled to be heard on May 14, 2001. The Court has also scheduled a hearing on a motion for class certification for August 27, 2001. Plaintiffs must file their motion for class certification no later than June 15, 2001. The General Partner does not anticipate that costs associated with this case will be material to the Partnership's overall operations. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature arising in the ordinary course of business. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The matters discussed in this Form 10-QSB contain certain forward-looking statements and involve risks and uncertainties (including changing market conditions, competitive and regulatory matters, etc.) detailed in the disclosures contained in this Form 10-QSB and the other filings with the Securities and Exchange Commission made by the Registrant from time to time. The discussion of the Registrant's business and results of operations, including forward-looking statements pertaining to such matters, does not take into account the effects of any changes to the Registrant's business and results of operations. Accordingly, actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including those identified herein. The Partnership's investment properties at March 31, 2001 consisted of seven apartment complexes. The following table sets forth the average occupancy of the properties for each of the three month periods ended March 31, 2001 and 2000: Average Occupancy Property 2001 2000 Cedar Rim 87% 93% New Castle, Washington Hidden Cove by the Lake 90% 95% Belleville, Michigan Lamplighter Park 92% 97% Bellevue, Washington Park Capital 89% 94% Salt Lake City, Utah Sandpiper I and II 96% 98% St. Petersburg, Florida Tamarac Village I, II, III, IV 96% 97% Denver, Colorado Williamsburg Manor 96% 96% Cary, North Carolina The General Partner attributes the decrease in occupancy at Cedar Rim to increased competition in the area of the property. The decrease in occupancy at Hidden Cove by the Lake is due to more difficult move-in requirements at the property. The decrease in occupancy at Lamplighter Park is due to layoffs and increased competition in the area of the property. The decrease in occupancy at Park Capital is due to decreased traffic due to the permanent closing of the main street access from downtown Salt Lake City to the apartments. Results of Operations The Partnership had net income of approximately $787,000 for the three months ended March 31, 2001, compared to approximately $554,000 for the three months ended March 31, 2000. The increase in net income is due to an increase in total revenues partially offset by an increase in total expenses. Total revenues increased due to increases in both rental and other income. Rental income increased due to increased average rental rates at all of the Partnership's properties which more than offset the decreases in occupancy at Hidden Cove by the Lake, Park Capital, Lamplighter Park, Sandpiper I and II, Tamarac Village, and Cedar Rim. Other income increased due to increased utilities reimbursements primarily at Sandpiper I and II, Tamarac Village, and Lamplighter Park and increased corporate housing revenue at Tamarac Village and Lamplighter Park. Total expenses increased due primarily to increased depreciation, property tax, and general and administrative expenses which were partially offset by a decrease in operating expenses. Depreciation expense increased due to capital improvements completed during the past twelve months which are now being depreciated. Property tax expense increased primarily due to increases in assessed values at Williamsburg Manor, Tamarac Village, and Park Capital. General and administrative expenses increased due to an increase in the cost of services included in the management reimbursements to the General Partner as allowed under the Partnership Agreement and increased professional fees associated with the administration of the Partnership. Also, included in general and administrative expenses at March 31, 2001 and 2000, are costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement. Operating expenses decreased due to decreased salary expenses primarily at Tamarac Village and decreased maintenance expenses at most of the Partnership's properties. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of each 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. Liquidity and Capital Resources At March 31, 2001, the Partnership held cash and cash equivalents of approximately $1,203,000 compared to approximately $5,195,000 at March 31, 2000. The decrease in cash and cash equivalents for the three months ended March 31, 2001, from the Partnership's year ended December 31, 2000, was approximately $807,000. This decrease is due to approximately $1,938,000 of cash used in financing activities and approximately $76,000 of cash used in investing activities which was partially offset by approximately $1,207,000 of cash provided by operating activities. Cash used in financing activities consisted of distributions to the partners. Cash used in investing activities consisted of property improvements and replacements which was partially offset by net receipts from restricted escrows. The Partnership invests its working capital reserves in interest bearing accounts. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Registrant and to comply with Federal, state, and local legal and regulatory requirements. Capital improvements planned for each of the Registrant's properties are detailed below. Cedar Rim During the three months ended March 31, 2001, the Partnership completed approximately $13,000 of capital improvements at the property, consisting primarily of water heater replacements, appliances, office computers and carpet and vinyl replacements. These improvements were funded primarily from the property's replacement reserves. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted is approximately $35,000, consisting primarily of carpet and vinyl replacements, interior upgrades, and swimming pool improvements. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. Hidden Cove by the Lake During the three months ended March 31, 2001, the Partnership completed approximately $29,000 of capital improvements, consisting primarily of countertop replacements, carpet and vinyl replacements and structural improvements. These improvements were funded from the property's operating cash flow. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted is approximately $175,000, consisting primarily of gas submetering, door repairs, swimming pool improvements, ground lighting, and carpet replacement. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. Lamplighter Park During the three months ended March 31, 2001, the Partnership completed approximately $24,000 of capital improvements, consisting primarily of water heater replacements, window treatments, carpet replacements, and grounds lighting. These improvements were funded from replacement reserves. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted is approximately $58,000, consisting primarily of plumbing upgrades, carpet and vinyl replacements, lighting improvements, and heating improvements. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. Park Capital During the three months ended March 31, 2001, the Partnership completed approximately $54,000 of capital improvements, consisting primarily of signage, office equipment, office computers, structural improvements, and carpet and vinyl replacements. These improvements were funded from operating cash flow. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted is approximately $69,000, consisting primarily of carpet and vinyl replacements, major landscaping, appliances, and structural improvements. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. Tamarac Village During the three months ended March 31, 2001, the Partnership completed approximately $135,000 of capital improvements, consisting primarily of lighting upgrades, appliances, structural improvements, cabinet replacements, interior decoration, carpet and vinyl replacements, and garage and carport improvements. These improvements were funded from replacement reserves and operating cash flow. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted is approximately $408,000, consisting primarily of carpet replacements, remodeling and upgrading the clubhouse, installing a double set of doors at the ATM machine, and roof replacements. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. Williamsburg Manor During the three months ended March 31, 2001, the Partnership completed approximately $25,000 of capital improvements, consisting primarily of water heater replacements, plumbing fixtures, carpet and vinyl replacements, and structural improvements. These expenditures were funded from operating cash flow. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted is approximately $50,000, consisting primarily of air conditioning unit replacement, window treatments, and carpet and vinyl replacements. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. Sandpiper I and II During the three months ended March 31, 2001, the Partnership completed approximately $33,000 of capital improvements consisting primarily of plumbing fixtures, cabinet replacements, carpet replacements, appliances, major landscaping, and structural improvements. These improvements were funded from replacement reserves and operating cash flow. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted is approximately $183,000, consisting primarily of exterior painting, cabinet replacements, carpet and vinyl replacements, and fitness equipment. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. The additional capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that such budgeted capital improvements are required, the Registrant's distributable cash flow, if any, may be adversely affected. The Partnership's current assets are thought to be sufficient for any near-term needs (exclusive of capital improvements) of the Registrant. The mortgage indebtedness of $27,925,000 has maturity dates ranging from November 2003 to December 2005. The General Partner will attempt to refinance such indebtedness and/or sell the properties prior to such maturity dates. If the properties cannot be refinanced or sold for a sufficient amount, the Registrant may risk losing such properties through foreclosure. The Partnership paid distributions of cash generated from operations of approximately $1,938,000 (approximately $1,919,000 to the limited partners or $5.01 per limited partnership unit) during the three months ended March 31, 2001. The Partnership paid distributions of cash generated from operations of approximately $1,497,000 (approximately $1,482,000 to the limited partners or $3.87 per limited partnership unit) for the three months ended March 31, 2000. Subsequent to March 31, 2001, the General Partner declared and paid distributions from operations of approximately $947,000 (approximately $938,000 to the limited partners or $2.45 per limited partnership unit). Future cash distributions will depend on the levels of cash generated from operations, timing of debt maturities, refinancings, and/or property sales, and the availability of cash reserves. The Partnership's distribution policy is reviewed on a monthly basis. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after required capital expenditures to permit further distributions to its partners during the remainder of 2001 or subsequent periods. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates currently own 195,659.9 limited partnership units in the Partnership representing 51.08% of the outstanding units. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make one or more additional offers to acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters, which would include without limitation, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. As a result of its ownership of 51.08% of the outstanding units, AIMCO is in a position to influence all voting decisions with respect to the Registrant. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the General Partner because of their affiliation with the General Partner. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its General Partner and several of their affiliated partnerships and corporate entities. The action purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging, among other things, the acquisition of interests in certain general partner entities by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the Insignia Merger. The plaintiffs seek monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs filed an amended complaint. The General Partner filed demurrers to the amended complaint which were heard February 1999. Pending the ruling on such demurrers, settlement negotiations commenced. On November 2, 1999, the parties executed and filed a Stipulation of Settlement, settling claims, subject to court approval, on behalf of the Partnership and all limited partners who owned units as of November 3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999 from the Court, at which time the Court set a final approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing, the Court received various objections to the settlement, including a challenge to the Court's preliminary approval based upon the alleged lack of authority of prior lead counsel to enter the settlement. On December 14, 1999, the General Partner and its affiliates terminated the proposed settlement. In February 2000, counsel for some of the named plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated the settlement. On June 27, 2000, the Court entered an order disqualifying them from the case and an appeal was taken from the order on October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the putative class. Plaintiffs filed a third amended complaint on January 19, 2001. On March 2, 2001, the General Partner and its affiliates filed a demurrer to the third amended complaint. The demurrer is scheduled to be heard on May 14, 2001. The Court has also scheduled a hearing on a motion for class certification for August 27, 2001. Plaintiffs must file their motion for class certification no later than June 15, 2001. The General Partner does not anticipate that costs associated with this case will be material to the Partnership's overall operations. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: None. b) Reports on Form 8-K filed during the quarter ended March 31, 2001: None. SIGNATURES Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3 By: CONCAP EQUITIES, INC. Its General Partner By: /s/Patrick J. Foye Patrick J. Foye Executive Vice President By: /s/Martha L. Long Martha L. Long Senior Vice President and Controller Date: