10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

or

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to _________

Commission file number 0-14187

CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3, LP

(Exact name of registrant as specified in its charter)

Delaware	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, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] Yes  [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes  [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes  [X] No

PART I – FINANCIAL INFORMATION

Item 1.     Financial Statements.

CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3, LP

BALANCE SHEETS

(Unaudited)

 (In thousands)

	September 30,	December 31,
	2011	2010
Assets
Cash and cash equivalents	$    362	$    336
Receivables and deposits	283	343
Restricted escrow	--	15
Other assets	454	509
Note receivable	--	2,418
Investment properties:
Land	3,082	3,082
Buildings and related personal property	39,683	42,082
Total investment property	42,765	45,164
Less accumulated depreciation	(27,994)	(28,722)
Investment property, net	14,771	16,442
Assets held for sale	--	5,113
Total assets	$ 15,870	$ 25,176
Liabilities and Partners' Deficit
Liabilities
Accounts payable	$    202	$    122
Tenant security deposit liabilities	183	182
Accrued property taxes	160	164
Other liabilities	396	411
Due to affiliates	346	--
Mortgage notes payable	25,758	25,984
Liabilities related to assets held for sale	--	10,569
Total liabilities	27,045	37,432
Partners' Deficit
General partner	(954)	(965)
Limited partners	(10,221)	(11,291)
Total partners’ deficit	(11,175)	(12,256)
Total liabilities and partners’ deficit	$ 15,870	$ 25,176

See Accompanying Notes to Financial Statements

CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3, LP

STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per unit data)

	Three Months Ended September 30,		Nine Months Ended September 30,
	2011	2010	2011	2010
Revenues:
Rental income	$ 1,427	$ 1,388	$ 4,215	$ 4,089
Other income	273	242	834	708
Total revenues	1,700	1,630	5,049	4,797
Expenses:
Operating	716	658	2,103	2,109
General and administrative	51	66	193	252
Depreciation	917	965	2,746	2,929
Interest	492	490	1,467	1,486
Property tax	67	107	230	333
Total expenses	2,243	2,286	6,739	7,109
Loss from continuing operations	(543)	(656)	(1,690)	(2,312)
Loss from discontinued operations	(47)	(102)	(3,599)	(288)
Gain on sale of discontinued operations	--	--	19,571	7,708
Net income (loss)	$  (590)	$  (758)	$14,282	$ 5,108
Net income (loss) allocated to general partner	$    (6)	$    (8)	$   143	$    51
Net income (loss) allocated to limited partners	$    --	$  (750)	$  (888)	$ 5,057
Net income (loss) allocated to limited partners (Series A)	$  (537)	$    --	$  (817)	$    --
Net income (loss) allocated to limited partners (Series B)	$   (47)	$    --	$15,844	$    --
Per limited partnership unit:
Loss from continuing operations	$    --	$ (1.69)	$ (2.24)	$ (5.97)
Loss from continuing operations (Series A)	(1.41)	--	(2.14)	--
Loss from discontinued operations	--	(.27)	(.08)	(.75)
Loss from discontinued operations (Series B)	(.12)	--	(9.22)	--
Gain on sale of discontinued operations	--	--	--	19.92
Gain on sale of discontinued operations (Series B)	--	--	50.60	--
Net income (loss) per limited partnership unit	$ (1.53)	$ (1.96)	$ 36.92	$ 13.20
Distribution per limited partnership unit:	$    --	$    --	$   .77	$  4.33
Series A	$    --	$    --	$  6.46	$    --
Series B	$    --	$    --	$ 26.89	$    --

See Accompanying Notes to Financial Statements

CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3, LP

STATEMENT OF CHANGES IN PARTNERS' (DEFICIENCY)/CAPITAL

(Unaudited)

(In thousands)

	General Partner	Limited Partners	Series A Unit Holders	Series B Unit Holders	Subtotal Limited Partners	Total
Partners’ deficit at   December 31, 2010	$(965)	$(11,291)	$     --	$     --	$(11,291)	$(12,256)
Distributions to partners   January 1, 2011 through   May 9, 2011	(3)	(297)	--	--	(297)	(300)
Net loss for the period   January 1, 2011 through   May 9, 2011	(8)	(888)	--	--	(888)	(896)
Partners’ deficit at   May 9, 2011	(976)	(12,476)	--	--	(12,476)	(13,452)
Allocation of Units	--	12,476	(7,056)	(5,420)	--	--
Distributions to partners   May 10, 2011 through   September 30, 2011	(129)	--	(2,475)	(10,297)	(12,772)	(12,901)
Net income (loss) for the   period May 10, 2011   through September 30,   2011	151	--	(817)	15,844	15,027	15,178
Partners’ (deficiency)   capital at   September 30, 2011	$(954)	$     --	$(10,348)	$    127	$(10,221)	$(11,175)

See Accompanying Notes to Financial Statements

CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3, LP

STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Nine Months Ended
	September 30,
	2011	2010
Cash flows from operating activities:
Net income	$ 14,282	$ 5,108
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation	2,984	3,380
Amortization of loan costs	75	94
Amortization of and early recognition of discount on
note receivable	(82)	(18)
Casualty gain	(13)	(25)
Gain on sale of discontinued operations	(19,571)	(7,708)
Loss on extinguishment of debt	3,380	44
Change in accounts:
Receivables and deposits	125	258
Other assets	(4)	130
Accounts payable	(68)	(153)
Tenant security deposit liabilities	(64)	(50)
Accrued property taxes	(4)	63
Other liabilities	(75)	(192)
Due to affiliates	3	(5)
Net cash provided by operating activities	968	926
Cash flows from investing activities:
Property improvements and replacements	(1,092)	(841)
Proceeds from the sale of discontinued operations	24,393	2,468
Net withdrawals from restricted escrow	15	194
Collection of note receivable	2,500	--
Insurance proceeds received	13	27
Net cash provided by investing activities	25,829	1,848
Cash flows from financing activities:
Payments on mortgage notes payable	(296)	(337)
Repayment of mortgage notes payable	(10,374)	--
Prepayment penalty paid	(3,243)	--
Advances from affiliate	542	47
Repayment of advances from affiliate	(199)	(661)
Distributions to partners	(13,201)	(1,674)
Net cash used in financing activities	(26,771)	(2,625)
Net increase in cash and cash equivalents	26	149
Cash and cash equivalents at beginning of period	336	196
Cash and cash equivalents at end of period	$    362	$   345
Supplemental disclosure of cash flow information:
Cash paid for interest	$  1,934	$ 2,106
Supplemental disclosure of non-cash activity:
Property improvements and replacements in accounts payable	$    150	$    13
Note receivable, net of discount	$     --	$ 2,389
Assumption of mortgage by buyer	$     --	$10,586

See Accompanying Notes to Financial Statements

CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3, LP

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Note A – Basis of Presentation

The accompanying unaudited financial statements of Consolidated Capital Institutional Properties/3, LP (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-Q and Article 8-03 of Regulation S-X.  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"), a publicly traded real estate investment trust, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2011. The balance sheet at December 31, 2010 has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. 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, 2010.

The Partnership Agreement provides that the Partnership is to terminate on December 31, 2015 unless terminated prior to that date. The Partnership Agreement also provides that the term of the Partnership cannot be extended beyond the termination date.

The Partnership’s management evaluated subsequent events through the time this Quarterly Report on Form 10-Q was filed.

Certain reclassifications have been made to the 2010 balances to conform to the 2011 presentation.

The accompanying statements of operations for the three and nine months ended September 30, 2010 have been restated to reflect the operations of Lamplighter Park Apartments as discontinued operations as a result of the sale of the property in June 2011. In addition, the statement of operations for the nine months ended September 30, 2010 reflects the operations of Sienna Bay Apartments as discontinued operations as a result of the sale of the property in March 2010.  As a result of the sale of Lamplighter Park Apartments in June 2011, the accompanying balance sheet as of December 31, 2010 has been restated to reflect the respective assets and liabilities of Lamplighter Park Apartments as held for sale. The following table presents summarized results of operations related to the Partnership’s discontinued operations for the nine months ended September 30, 2011 and 2010 (in thousands):

Nine Months Ended September 30, 2011
	Revenues	Expenses	Casualty Gain	Loss on Extinguishment of Debt	Loss from Discontinued Operations
Lamplighter Park   Apartments	$ 1,123	$(1,355)	$   13	$  (3,380)	$  (3,599)

Nine Months Ended September 30, 2010
	Revenues	Expenses	Casualty Gain	Loss on Extinguishment of Debt	Loss from Discontinued Operations
Lamplighter Park  Apartments	$ 1,700	$(1,940)	$   25	$    --	$  (215)
Sienna Bay  Apartments	481	(510)	--	(44)	(73)
	$ 2,181	$(2,450)	$    25	$   (44)	$  (288)

Organization:

On May 9, 2011, the General Partner amended the Partnership’s certificate of limited partnership and the Partnership Agreement to establish and convert the Partnership’s existing partnership interests into two separate series of partnership interests that have separate rights with respect to specified Partnership property.  Effective as of the close of business on May 9, 2011 (the “Establishment Date”), each then outstanding interest of the General Partner of the Partnership was converted into one Series A GP Interest and one Series B GP Interest and each then outstanding unit of limited partnership interest in the Partnership was converted into one Series A Unit and one Series B Unit.  The Series A GP Interest and the Series A Units are collectively referred to as the “Series A Interests”, and the Series B GP Interest and the Series B Units are collectively referred to as the “Series B Interests”. Except as described below, the Series A Interests and the Series B Interests entitle the holders thereof to the same rights as the holders of partnership interests had prior to the Establishment Date.

From and after the Establishment Date, the Series A Interests will be entitled to all of the Partnership’s interests in any entity in which the Partnership owns an interest, other than the Series B Interests (as defined below), including, but not limited to, all profits, losses and distributions from such entities.

From and after the Establishment Date, the Series B Interests will be entitled to all of the Partnership’s interest in Lamplighter Park Apartments (the “Series B Interests”), including, but not limited to, all profits, losses and distributions from Lamplighter Park Apartments.

On July 28, 2011, the Partnership entered into an agreement and plan of merger with AIMCO Properties, L.P., a Delaware limited partnership and AIMCO CCIP/3 Merger Sub LLC, a Delaware limited liability company of which AIMCO Properties, L.P. is the sole member (the “Merger Subsidiary”), pursuant to which the Merger Subsidiary will be merged with and into the Partnership, with the Partnership as the surviving entity.

In the merger each Series A unit of limited partnership interest (each a “Series A Unit”) of the Partnership outstanding immediately prior to the consummation of the merger (other than Series A Units held by limited partners who perfect their appraisal rights pursuant to the merger agreement) will be converted into the right to receive, at the election of the limited partner, either (i) $59.36 in cash (the “Cash Consideration”) or (ii) a number of partnership common units of AIMCO Properties, L.P. calculated by dividing $59.36 by the average closing price of Aimco common stock, as reported on the New York Stock Exchange, over the ten consecutive trading days ending on the second trading day immediately prior to the effective time of the merger (the “OP Unit Consideration”). However, if AIMCO Properties, L.P. determines that the law of the state or other jurisdiction in which a limited partner resides would prohibit the issuance of partnership common units of AIMCO Properties, L.P. in that state or other jurisdiction (or that registration or qualification in that state or jurisdiction would be prohibitively costly), then such limited partner will only be entitled to receive the Cash Consideration for each Series A Unit. Those limited partners who do not make an election will be deemed to have elected to receive the Cash Consideration.

In the merger, AIMCO Properties, L.P.’s membership interest in the Merger Subsidiary will be converted into Series A Units of the Partnership.  As a result, after the merger, AIMCO Properties, L.P. will own all of the outstanding Series A Units. The Series B Units of limited partnership interest of the Partnership will not be affected by the merger and will remain outstanding following the consummation of the merger. ConCap Equities, Inc. will continue to be the general partner of the Partnership after the merger, and the Partnership’s partnership agreement in effect immediately prior to the merger will remain unchanged after the merger.

Completion of the merger is subject to certain conditions, including approval by a majority in interest of the limited partners holding Series A Units. In addition, the terms of the merger may be modified before the merger is completed. As of September 30, 2011 and December 31, 2010, the Partnership had issued and outstanding 382,925.60 Series A and B Units, and AIMCO Properties, L.P. and its affiliates owned 239,212 of those Series A and B Units, or approximately 62.47% of the number of outstanding Series A and B Units. AIMCO Properties, L.P. and its affiliates have indicated that they intend to take action by written consent to approve the merger.

Note B – Transactions with Affiliated Parties

The Partnership has no employees and depends on the General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for (i) certain payments to affiliates for services and (ii) reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. 

Affiliates of the General Partner receive 5% of gross receipts from all of the Partnership's properties as compensation for providing property management services. The Partnership was charged by such affiliates approximately $299,000 and $353,000 for the nine months ended September 30, 2011 and 2010, respectively, which is included in operating expense and loss from discontinued operations.

Affiliates of the General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $210,000 and $204,000 for the nine months ended September 30, 2011 and 2010, respectively, which is included in general and administrative expenses, investment properties, assets held for sale and gain on sale of discontinued operations. The portion of these reimbursements included in investment properties, assets held for sale and gain on sale of discontinued operations for the nine months ended September 30, 2011 and 2010 are construction management services provided by an affiliate of the General Partner of approximately $94,000 and $67,000, respectively.

During the nine months ended September 30, 2011, AIMCO Properties, L.P., an affiliate of the General Partner, advanced the Partnership approximately $542,000 to cover property taxes at Cedar Rim Apartments and capital expenditures and operating expenses at Tamarac Village Apartments. During the nine months ended September 30, 2010, AIMCO Properties, L.P. advanced the Partnership approximately $47,000 to cover expenses related to operations at Tamarac Village Apartments and Cedar Rim Apartments. During the nine months ended September 30, 2011 and 2010, the Partnership repaid AIMCO Properties, L.P., approximately $204,000 and $667,000, respectively. The repayments included accrued interest of approximately $5,000 and $6,000, respectively.  AIMCO Properties, L.P. charges interest on advances under the terms permitted by the Partnership Agreement. The interest rates charged on the outstanding advances made to the Partnership range from the prime rate to a variable rate based on the prime rate plus a market rate adjustment for similar type loans. Affiliates of the General Partner review the market rate adjustment quarterly. The interest rate on outstanding advances at September 30, 2011 was 8.92%. Interest expense on outstanding advance balances was approximately $8,000 and $1,000 for the nine months ended September 30, 2011 and 2010, respectively. At September 30, 2011, total advances and accrued interest of approximately $346,000 were owed to AIMCO Properties, L.P. and are included in due to affiliates. There were no such amounts owed at December 31, 2010. The Partnership may receive additional advances of funds from AIMCO Properties, L.P. although AIMCO Properties, L.P. is not obligated to provide such advances.  For more information on AIMCO Properties, L.P., including copies of its audited balance sheet, please see its reports filed with the Securities and Exchange Commission. Subsequent to September 30, 2011, the Partnership repaid AIMCO Properties, L.P. approximately $160,000, including accrued interest of approximately $3,000.

The Partnership insures its properties up to certain limits through coverage provided by Aimco which is generally self-insured for a portion of losses and liabilities related to workers’ compensation, property casualty, general liability and vehicle liability. The Partnership insures its properties above the Aimco limits through insurance policies obtained by Aimco from insurers unaffiliated with the General Partner. During the nine months ended September 30, 2011, the Partnership was charged by Aimco and its affiliates approximately $91,000 for hazard insurance coverage and fees associated with policy claims administration. Additional charges will be incurred by the Partnership during 2011 as other insurance policies renew later in the year. The Partnership was charged by Aimco and its affiliates approximately $135,000 for insurance coverage and fees associated with policy claims administration during the year ended December 31, 2010.

Note C – Casualty Event

During October 2009, one of the Partnership’s investment properties, Lamplighter Park Apartments, sustained storm damage from leaking roofs of approximately $49,000, including clean-up costs of approximately $22,000 which were included in operating expense during the fourth quarter of 2009. During the nine months ended September 30, 2010, the Partnership received insurance proceeds of approximately $42,000 including approximately $3,000 for rental loss and approximately $12,000 for clean-up costs. The Partnership recognized a casualty gain of approximately $25,000 during the nine months ended September 30, 2010, as the result of receiving insurance proceeds of approximately $27,000 net of the write off of approximately $2,000 of undepreciated damaged assets. The casualty gain is included in loss from discontinued operations.

During December 2010, one of the Partnership’s investment properties, Lamplighter Park Apartments, sustained flood damage from a broken sump pump of approximately $25,000. During the nine months ended September 30, 2011, the Partnership received insurance proceeds of approximately $15,000, including approximately $2,000 for rental loss. The Partnership recognized a casualty gain of approximately $13,000 during the nine months ended September 30, 2011 as a result of the receipt of insurance proceeds of approximately $15,000, net of the rental loss of approximately $2,000 and the write off of undepreciated damaged assets of less than $1,000. The casualty gain is included in loss from discontinued operations.

Note D – Sale of Investment Properties

On June 21, 2011, the Partnership sold Lamplighter Park Apartments to a third party for a gross sales price of $25,125,000. The net proceeds realized by the Partnership were approximately $24,393,000 after payment of closing costs of approximately $732,000. The Partnership used approximately $10,374,000 of the net proceeds to repay the mortgages encumbering the property. As a result of the sale, the Partnership recognized a gain on sale of discontinued operations of approximately $19,571,000 during the nine months ended September 30, 2011. In addition, the Partnership recorded a loss on extinguishment of debt of approximately $3,380,000 during the nine months ended September 30, 2011 due to the write-off of unamortized loan costs and the payment of a prepayment penalty associated with the payment of the mortgage of approximately $3,243,000, which is included in loss from discontinued operations.

On March 5, 2010, the Partnership sold Sienna Bay Apartments to a third party for a gross sales price of $16,850,000. The net proceeds realized by the Partnership were approximately $3,468,000 after payment of closing costs of approximately $296,000, the assumption of the mortgage of approximately $10,586,000 by the purchaser and financing of $2,500,000 provided by the Partnership (see “Note E – Note Receivable”). In connection with the sale, the Partnership received a non-refundable sale deposit of $1,000,000 from the purchaser during the year ended December 31, 2009. The sale deposit was released during the nine months ended September 30, 2010 and is included with the net proceeds realized by the Partnership (as discussed above). As a result of the sale, the Partnership recognized a gain on sale of discontinued operations of approximately $7,708,000 during the nine months ended September 30, 2010. In addition, the Partnership recorded a loss on extinguishment of debt of approximately $44,000 during the nine months ended September 30, 2010 due to the write-off of unamortized loan costs, which is included in loss from discontinued operations.

Note E – Note Receivable

In connection with the sale of Sienna Bay Apartments, the Partnership provided $2,500,000 in financing to the purchaser (the “Seller Loan”). Monthly payments of interest only commenced May 1, 2010 and were to continue through the Seller Loan’s October 10, 2012 maturity, which was consistent with the maturity of the senior mortgage loan encumbering Sienna Bay Apartments that was assumed by the purchaser in connection with the sale. Interest on the Seller Loan was payable at a rate of 5.0% each year until maturity. At the date of the sale, the fair value of the note receivable was approximately $2,389,000 and accordingly the Partnership recorded a discount of approximately $111,000 which was calculated using a rate of 7%. The discount was being amortized over the term of the note. During the nine months ended September 30, 2011 and 2010, the Partnership recognized related interest income of approximately $87,000 and $79,000, respectively, which is included in other income. At December 31, 2010, the discount on the note receivable was approximately $82,000. During the nine months ended September 30, 2011, the Partnership received from the purchaser $2,500,000 plus accrued interest in full satisfaction of the note receivable. Included in other income for the nine months ended September 30, 2011 is approximately $60,000 which was the remaining discount balance as a result of the payment of the note receivable prior to its maturity.

Note F – Fair Value of Financial Instruments

Financial Accounting Standards Board Accounting Standards Codification Topic 825, “Financial Instruments”, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value is defined as the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Partnership believes that the carrying amount of its financial instruments (except for mortgage notes payable) approximates their fair value due to the short-term maturity of these instruments. The Partnership estimates the fair value of its mortgage notes payable by discounting future cash flows using a discount rate commensurate with that currently believed to be available to the Partnership for similar term, mortgage notes payable. At September 30, 2011, the fair value of the Partnership's mortgage notes payable at the Partnership's incremental borrowing rate was approximately $30,860,000.

Note G – Distributions

The Partnership distributed the following amounts during the nine months ended September 30, 2011 and 2010 (in thousands, except per unit data).

		Per Limited		Per Limited
	Nine Months Ended	Partnership	Nine Months Ended	Partnership
	September 30, 2011	Unit	September 30, 2010	Unit
Sale (1)	$ 2,558	$ 6.61	$1,674	$ 4.33
Sale (2)	10,401	26.89	--	--
Operations	242	.62	--	--
	$13,201	$34.12	$1,674	$ 4.33

(1) Proceeds from the March 2010 sale of Sienna Bay Apartments.

(2) Proceeds from the June 2011 sale of Lamplighter Park Apartments.

Note H – Investment Property

During the nine months ended September 30, 2011, the Partnership retired and wrote off personal property no longer being used that had a cost basis of approximately $4,406,000 and accumulated depreciation of approximately $4,406,000.

Note I – Contingencies

The Partnership is unaware of any pending or outstanding litigation matters involving it or its investment properties that are not of a routine nature arising in the ordinary course of business.

Environmental

Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain potentially hazardous materials  present on a property, including lead-based paint, asbestos, polychlorinated biphenyls, petroleum-based fuels, and other miscellaneous materials. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of such materials. The presence of, or the failure to manage or remedy properly, these materials may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the improper management of these materials on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of these materials through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of these materials is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of its properties, the Partnership could potentially be responsible for environmental liabilities or costs associated with its properties.

Item 2.     Management's Discussion and Analysis of Financial Condition and Results of Operations.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements in certain circumstances. Certain information included in this Quarterly Report contains or may contain information that is forward-looking within the meaning of the federal securities laws, including, without limitation, statements regarding the Partnership’s ability to maintain current or meet projected occupancy, rental rates and property operating results and the effect of redevelopments. Actual results may differ materially from those described in these forward-looking statements and, in addition, will be affected by a variety of risks and factors, some of which are beyond the Partnership’s control, including, without limitation: financing risks, including the availability and cost of financing and the risk that the Partnership’s cash flows from operations may be insufficient to meet required payments of principal and interest; natural disasters and severe weather such as hurricanes; national and local economic conditions, including the pace of job growth and the level of unemployment; energy costs; the terms of governmental regulations that affect the Partnership’s properties and interpretations of those regulations; the competitive environment in which the Partnership operates; real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for residents in such markets; insurance risk, including the cost of insurance; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by the Partnership. Readers should carefully review the Partnership’s financial statements and the notes thereto, as well as the other documents the Partnership files from time to time with the Securities and Exchange Commission.

The Partnership's investment properties consist of two apartment complexes. The following table sets forth the average occupancy of the properties for each of the nine months ended September 30, 2011 and 2010:

	Average Occupancy
Property	2011	2010
Cedar Rim Apartments	96%	96%
New Castle, Washington
Tamarac Village Apartments	98%	97%
Denver, Colorado

The Partnership’s financial results depend upon a number of factors including the ability to attract and maintain tenants at the investment properties, interest rates on mortgage loans, costs incurred to operate the investment properties, general economic conditions and weather. 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, the General Partner may use rental concessions and rental rate reductions to offset softening market conditions, accordingly, there is no guarantee that the General Partner will be able to sustain such a plan. Further, a number of factors that are outside the control of the Partnership such as the local economic climate and weather can adversely or positively affect the Partnership’s financial results.

Results of Operations

The Partnership recognized net loss of approximately $590,000 and net income of approximately $14,282,000 for the three and nine months ended September 30, 2011, respectively, compared to net loss of approximately $758,000 and net income of approximately $5,108,000 for the three and nine months ended September 30, 2010, respectively. The statements of operations for three and nine months ended September 30, 2010 have been restated to reflect the operations of Lamplighter Park Apartments as discontinued operations as a result of the sale of the property in June 2011. In addition, the statement of operations for the nine months ended September 30, 2010 reflects the operations for Sienna Bay Apartments as discontinued operations as a result of the sale of the property in March 2010. As a result of the sale of Lamplighter Park Apartments in June 2011, the balance sheet as of December 31, 2010 has been restated to reflect the respective assets and liabilities of Lamplighter Park Apartments as held for sale.

The following table presents summarized results of operations related to the Partnership’s discontinued operations for the nine months ended September 30, 2011 and 2010 (in thousands):

Nine Months Ended September 30, 2011
	Revenues	Expenses	Casualty Gain	Loss on Extinguishment of Debt	Loss from Discontinued Operations
Lamplighter Park   Apartments	$ 1,123	$(1,355)	$   13	$  (3,380)	$  (3,599)

Nine Months Ended September 30, 2010
	Revenues	Expenses	Casualty Gain	Loss on Extinguishment of Debt	Loss from Discontinued Operations
Lamplighter Park  Apartments	$ 1,700	$(1,940)	$   25	$    --	$  (215)
Sienna Bay  Apartments	481	(510)	--	(44)	(73)
	$ 2,181	$(2,450)	$    25	$   (44)	$  (288)

On June 21, 2011, the Partnership sold Lamplighter Park Apartments to a third party for a gross sales price of $25,125,000. The net proceeds realized by the Partnership were approximately $24,393,000 after payment of closing costs of approximately $732,000. The Partnership used approximately $10,374,000 of the net proceeds to repay the mortgages encumbering the property. As a result of the sale, the Partnership recognized a gain on sale of discontinued operations of approximately $19,571,000 during the nine months ended September 30, 2011. In addition, the Partnership recorded a loss on extinguishment of debt of approximately $3,380,000 during the nine months ended September 30, 2011 due to the write-off of unamortized loan costs and the payment of a prepayment penalty associated with the payment of the mortgage of approximately $3,243,000, which is included in loss from discontinued operations.

On March 5, 2010, the Partnership sold Sienna Bay Apartments to a third party for a gross sales price of $16,850,000. The net proceeds realized by the Partnership were approximately $3,468,000 after payment of closing costs of approximately $296,000, the assumption of the mortgage of approximately $10,586,000 by the purchaser and financing of $2,500,000 provided by the Partnership. In connection with the sale, the Partnership received a non-refundable sale deposit of $1,000,000 from the purchaser during the year ended December 31, 2009. The sale deposit was released during the nine months ended September 30, 2010 and is included with the net proceeds realized by the Partnership (as discussed above). As a result of the sale, the Partnership recognized a gain on sale of discontinued operations of approximately $7,708,000 during the nine months ended September 30, 2010. In addition, the Partnership recorded a loss on extinguishment of debt of approximately $44,000 during the nine months ended September 30, 2010 due to the write-off of unamortized loan costs, which was included in loss from discontinued operations. In connection with the sale of Sienna Bay Apartments, the Partnership provided $2,500,000 in financing to the purchaser (the “Seller Loan”). Monthly payments of interest only commenced May 1, 2010 and were to continue through the Seller Loan’s October 10, 2012 maturity, which is consistent with the maturity of the senior mortgage loan encumbering Sienna Bay Apartments that was assumed by the purchaser in connection with the sale. Interest on the Seller Loan was payable at a rate of 5.0% each year until maturity. During the nine months ended September 30, 2011, the Partnership received from the purchaser $2,500,000 plus accrued interest in full satisfaction of the note receivable. Included in other income for the nine months ended September 30, 2011 is approximately $60,000 which was the remaining discount balance as a result of the payment of the note receivable prior to its maturity.

During October 2009, one of the Partnership’s investment properties, Lamplighter Park Apartments, sustained storm damage from leaking roofs of approximately $49,000, including clean-up costs of approximately $22,000 which were included in operating expense during the fourth quarter of 2009. During the nine months ended September 30, 2010, the Partnership received insurance proceeds of approximately $42,000 including approximately $3,000 for rental loss and approximately $12,000 for clean-up costs. The Partnership recognized a casualty gain of approximately $25,000 during the nine months ended September 30, 2010, as the result of receiving insurance proceeds of approximately $27,000 net of the write off of approximately $2,000 of undepreciated damaged assets. The casualty gain is included in loss from discontinued operations.

During December 2010, one of the Partnership’s investment properties, Lamplighter Park Apartments, sustained flood damage from a broken sump pump of approximately $25,000. During the nine months ended September 30, 2011, the Partnership received insurance proceeds of approximately $15,000, including approximately $2,000 for rental loss. The Partnership recognized a casualty gain of approximately $13,000 during the nine months ended September 30, 2011 as a result of the receipt of insurance proceeds of approximately $15,000, net of the rental loss of approximately $2,000 and the write off of undepreciated damaged assets of less than $1,000. The casualty gain is included in loss from discontinued operations.

The Partnership recognized losses from continuing operations of approximately $543,000 and $1,690,000 for the three and nine months ended September 30, 2011, respectively, compared to approximately $656,000 and $2,312,000 for the three and nine months ended September 30, 2010, respectively. The decrease in loss from continuing operations for both the three and nine months ended September 30, 2011 is due to an increase in total revenues and a decrease in total expenses.

Total revenues increased for both the three and nine months ended September 30, 2011 due to increases in both rental and other income. Rental income increased for both periods primarily due to an increase in the average rental rate at Tamarac Village Apartments. Other income increased for the three month period primarily due to increases in utility reimbursements at Tamarac Village Apartments, partially offset by a decrease in interest income earned on the note receivable related to the sale of Sienna Bay Apartments. Other income increased for the nine month period due to interest income earned on the note receivable related to the sale of Sienna Bay Apartments and the recognition of remaining discount on the note receivable during June 2011 upon repayment in full of the note receivable prior to its maturity.

Total expenses decreased for both the three and nine months ended September 30, 2011 due to decreases in general and administrative, depreciation, and property tax expenses. The decrease in total expenses for the three month period was partially offset by an increase in operating expenses. Operating expenses remained relatively constant for the nine month period. Interest expense remained relatively constant for the comparable periods.

Operating expense increased for the three month period primarily due to increases in utilities and administrative costs at both investment properties. Depreciation expense decreased for both periods due to assets becoming fully depreciated at both of the Partnership’s investment properties during 2010. Property tax expense decreased for both periods primarily due to a decrease in the assessed value of Tamarac Village Apartments. Additionally, property tax expense decreased for the nine month period due to the receipt of a refund of prior year taxes paid for Cedar Rim Apartments.

General and administrative expense decreased for the three and nine months ended September 30, 2011 primarily due to a decrease in management reimbursements to the General Partner as allowed under the Partnership Agreement. Also included in general and administrative expenses for the three and nine months ended September 30, 2011 and 2010 are costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement.

Liquidity and Capital Resources

At September 30, 2011, the Partnership had cash and cash equivalents of approximately $362,000 compared to approximately $336,000 at December 31, 2010. The increase in cash and cash equivalents of approximately $26,000 is due to approximately $25,829,000 and $968,000 of cash provided by investing and operating activities, respectively, partially offset by approximately $26,771,000 of cash used in financing activities. Cash provided by investing activities consisted of proceeds from the sale of discontinued operations, net withdrawals from a restricted escrow, note receivable collection, and insurance proceeds received, partially offset by property improvements and replacements. Cash used in financing activities consisted of payments on mortgage notes payable, repayment of mortgage notes payable, distributions to partners, repayment of advances from an affiliate, and payment of a prepayment penalty, partially offset by advances received from an affiliate.

During the nine months ended September 30, 2011, AIMCO Properties, L.P., an affiliate of the General Partner, advanced the Partnership approximately $542,000 to cover property taxes at Cedar Rim Apartments and capital expenditures and operating expenses at Tamarac Village Apartments. During the nine months ended September 30, 2010, AIMCO Properties, L.P. advanced the Partnership approximately $47,000 to cover expenses related to operations at Tamarac Village Apartments and Cedar Rim Apartments. During the nine months ended September 30, 2011 and 2010, the Partnership repaid AIMCO Properties, L.P., approximately $204,000 and $667,000, respectively. The repayments included accrued interest of approximately $5,000 and $6,000, respectively.  AIMCO Properties, L.P. charges interest on advances under the terms permitted by the Partnership Agreement. The interest rates charged on the outstanding advances made to the Partnership range from the prime rate to a variable rate based on the prime rate plus a market rate adjustment for similar type loans. Affiliates of the General Partner review the market rate adjustment quarterly. The interest rate on outstanding advances at September 30, 2011 was 8.92%. Interest expense on outstanding advance balances was approximately $8,000 and $1,000 for the nine months ended September 30, 2011 and 2010, respectively. At September 30, 2011, total advances and accrued interest of approximately $346,000 were owed to AIMCO Properties, L.P. and are included in due to affiliates. There were no such amounts owed at December 31, 2010. The Partnership may receive additional advances of funds from AIMCO Properties, L.P. although AIMCO Properties, L.P. is not obligated to provide such advances.  For more information on AIMCO Properties, L.P., including copies of its audited balance sheet, please see its reports filed with the Securities and Exchange Commission. Subsequent to September 30, 2011, the Partnership repaid AIMCO Properties, L.P. approximately $160,000, including accrued interest of approximately $3,000.

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 Partnership and to comply with Federal, state, and local legal and regulatory requirements. The General Partner monitors developments in the area of legal and regulatory compliance.  Capital improvements planned for each of the Partnership's properties are detailed below.

Cedar Rim Apartments

During the nine months ended September 30, 2011, the Partnership completed approximately $28,000 of capital improvements at the property consisting primarily of floor covering replacements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during the remainder of 2011. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Lamplighter Park Apartments

During the nine months ended September 30, 2011, the Partnership completed approximately $142,000 of capital improvements at the property consisting primarily of heating upgrades, appliance and floor covering replacements and construction related to the December 2010 casualty discussed above. These improvements were funded from operating cash flow and insurance proceeds. This property was sold during June 2011.

Tamarac Village Apartments

During the nine months ended September 30, 2011, the Partnership completed approximately $1,045,000 of capital improvements at the property consisting primarily of stairway and railings upgrades, parking lot repaving, water heater and floor covering replacements and heating upgrades. These improvements were funded from operating cash flow, advances from an affiliate and replacement reserves. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during the remainder of 2011. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Capital expenditures will be incurred only if cash is available from operations, Partnership reserves or advances from AIMCO Properties, L.P., although AIMCO Properties, L.P. is not obligated to fund such advances. To the extent that capital improvements are completed, the Partnership's distributable cash flow, if any, may be adversely affected at least in the short term.

The Partnership's assets are thought to be generally sufficient for near-term needs (exclusive of capital improvements) of the Partnership. The mortgage indebtedness encumbering the Partnership's properties of approximately $25,758,000 requires monthly payments until the loans mature during July and August 2021 and have balloon payments totaling approximately $21,712,000 due at maturity. The General Partner may attempt to refinance such indebtedness and/or sell the properties prior to termination of the Partnership.

The Partnership distributed the following amounts during the nine months ended September 30, 2011 and 2010 (in thousands, except per unit data).

		Per Limited		Per Limited
	Nine Months Ended	Partnership	Nine Months Ended	Partnership
	September 30, 2011	Unit	September 30, 2010	Unit
Sale (1)	$ 2,558	$ 6.61	$1,674	$ 4.33
Sale (2)	10,401	26.89	--	--
Operations	242	.62	--	--
	$13,201	$34.12	$1,674	$ 4.33

(1) Proceeds from the March 2010 sale of Sienna Bay Apartments.

(2) Proceeds from the June 2011 sale of Lamplighter Park Apartments.

If the merger transaction (as discussed below) is not consummated, future cash distributions will depend on the levels of cash generated from operations, the timing of debt maturities, property sales and/or refinancings. The Partnership’s cash available for distribution is reviewed on a monthly basis. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after required capital improvement expenditures, to permit any additional distributions to its partners in 2011 or subsequent periods.

Other

In addition to its indirect ownership of the general partner interest in the Partnership, Aimco and its affiliates owned 239,212 limited partnership units (the "Units") in the Partnership representing 62.47% of the outstanding Units at September 30, 2011. A number of these Units were acquired pursuant to tender offers made by Aimco or its affiliates. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. As a result of its ownership of 62.47% of the outstanding Units, Aimco and its affiliates are in a position to control all such voting decisions with respect to the Partnership. Although the General Partner owes fiduciary duties to the limited partners of the Partnership, the General Partner also owes fiduciary duties to Aimco as its sole stockholder. As a result, the duties of the General Partner, as general partner, to the Partnership and its limited partners may come into conflict with the duties of the General Partner to Aimco as its sole stockholder.

On July 28, 2011, the Partnership entered into an agreement and plan of merger with AIMCO Properties, L.P., a Delaware limited partnership and AIMCO CCIP/3 Merger Sub LLC, a Delaware limited liability company of which AIMCO Properties, L.P. is the sole member (the “Merger Subsidiary”), pursuant to which the Merger Subsidiary will be merged with and into the Partnership, with the Partnership as the surviving entity.

In the merger each Series A unit of limited partnership interest (each a “Series A Unit”) of the Partnership outstanding immediately prior to the consummation of the merger (other than Series A Units held by limited partners who perfect their appraisal rights pursuant to the merger agreement) will be converted into the right to receive, at the election of the limited partner, either (i) $59.36 in cash (the “Cash Consideration”) or (ii) a number of partnership common units of AIMCO Properties, L.P. calculated by dividing $59.36 by the average closing price of Aimco common stock, as reported on the New York Stock Exchange, over the ten consecutive trading days ending on the second trading day immediately prior to the effective time of the merger (the “OP Unit Consideration”). However, if AIMCO Properties, L.P. determines that the law of the state or other jurisdiction in which a limited partner resides would prohibit the issuance of partnership common units of AIMCO Properties, L.P. in that state or other jurisdiction (or that registration or qualification in that state or jurisdiction would be prohibitively costly), then such limited partner will only be entitled to receive the Cash Consideration for each Series A Unit. Those limited partners who do not make an election will be deemed to have elected to receive the Cash Consideration.

In the merger, AIMCO Properties, L.P.’s membership interest in the Merger Subsidiary will be converted into Series A Units of the Partnership.  As a result, after the merger, AIMCO Properties, L.P. will own all of the outstanding Series A Units. The Series B Units of limited partnership interest of the Partnership will not be affected by the merger and will remain outstanding following the consummation of the merger. ConCap Equities, Inc. will continue to be the general partner of the Partnership after the merger, and the Partnership’s partnership agreement in effect immediately prior to the merger will remain unchanged after the merger.

Completion of the merger is subject to certain conditions, including approval by a majority in interest of the limited partners holding Series A Units. In addition, the terms of the merger may be modified before the merger is completed. As of September 30, 2011 and December 31, 2010, the Partnership had issued and outstanding 382,925.60 Series A and B Units, and AIMCO Properties, L.P. and its affiliates owned 239,212 of those Series A and B Units, or approximately 62.47% of the number of outstanding Series A and B Units. AIMCO Properties, L.P. and its affiliates have indicated that they intend to take action by written consent to approve the merger.

Critical Accounting Policies and Estimates

The financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Partnership to make estimates and assumptions. The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity.

Impairment of Long-Lived Assets

Investment properties are recorded at cost, less accumulated depreciation, unless the carrying amount of the asset is not recoverable.  If events or circumstances indicate that the carrying amount of a property may not be recoverable, the Partnership will make an assessment of its recoverability by comparing the carrying amount to the Partnership’s estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the estimated aggregate undiscounted future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.

Real property investment is subject to varying degrees of risk. Several factors may adversely affect the economic performance and value of the Partnership’s investment properties. These factors include, but are not limited to, general economic climate; competition from other apartment communities and other housing options; local conditions, such as loss of jobs or an increase in the supply of apartments that might adversely affect apartment occupancy or rental rates; changes in governmental regulations and the related cost of compliance; increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multi-family housing; and changes in interest rates and the availability of financing. Any adverse changes in these and other factors could cause an impairment of the Partnership’s assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less. The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area. Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease. The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants.

Assets Held for Sale

The Partnership classifies long-lived assets as held for sale in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the asset; the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Depreciation is not recorded during the period in which the long-lived asset is classified as held for sale.  When the asset is designated as held for sale, the related results of operations are presented as discontinued operations.

Item 4.     Controls and Procedures.

(a)   Disclosure Controls and Procedures.

The Partnership’s management, with the participation of the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.

(b)   Changes in Internal Control Over Financial Reporting.

There has been no change in the Partnership’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 6.     Exhibits.

See Exhibit Index Attached.

The agreements included as exhibits to this Form 10-Q contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

• should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

• have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

• may apply standards of materiality in a way that is different from what may be viewed as material to an investor; and

• were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. The Partnership acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this Form 10-Q not misleading. Additional information about the Partnership may be found elsewhere in this Form 10-Q and the Partnership’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov. 

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 thereunto duly authorized.

	CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3, LP
	By:   CONCAP EQUITIES, INC.
	General Partner
Date: November 9, 2011	By:   /s/Steven D. Cordes
	Steven D. Cordes
	Senior Vice President
Date: November 9, 2011	By:   /s/Stephen B. Waters
	Stephen B. Waters
	Senior Director of Partnership Accounting

CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3, LP

EXHIBIT INDEX

Exhibit Number   Description of Exhibit

3.1         Certificate of Limited Partnership of Registrant, dated August 29, 2008.

3.2         Amendment to Certificate of Limited Partnership of Registrant, dated May 9, 2011 (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, dated May 9, 2011).

3.3         Second Amended and Restated Limited Partnership Agreement of Registrant, dated May 22, 1984.

3.4         First Amendment to the Second Amended and Restated Limited Partnership Agreement of Registrant, dated October 23, 1990.

3.5         Second Amendment to the Second Amended and Restated Limited Partnership Agreement of Registrant, dated October 23, 1990.

3.6         Third Amendment to the Second Amended and Restated Limited Partnership Agreement of Registrant, dated October 12, 2006 (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006).

3.7         Fourth Amendment to the Second Amended and Restated Limited Partnership Agreement of Registrant, dated August 29, 2008 (incorporated herein by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008).

3.8         Fifth Amendment to the Second Amended and Restated Limited Partnership Agreement of Registrant, dated May 9, 2011 (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, dated May 9, 2011).

10.1        Agreement and Plan of Merger, dated July 28, 2011, by and among Consolidated Capital Institutional Properties/3, LP, AIMCO Properties, L.P. and AIMCO CCIP/3 Merger Sub LLC.  Incorporated by reference to the Registrant’s Current Report on Form 8-K dated July 28, 2011.

10.66       Multifamily Note, dated March 31, 2009, between Cedar Rim Apartments, LLC, a Delaware limited liability company and Capmark Bank, a Utah industrial bank. Incorporated by reference to the Registrant's Current Report on Form 8-K dated March 31, 2009.

10.67       Multifamily Deed of Trust, Assignment of Rents and Security Agreement, dated March 31, 2009, between Cedar Rim Apartments, LLC, a Delaware limited liability company and Capmark Bank, a Utah industrial bank. Incorporated by reference to the Registrant's Current Report on Form 8-K dated March 31, 2009.

10.68       Guaranty, dated March 31, 2009, between AIMCO Properties, L.P., a Delaware limited partnership, and Capmark Bank, a Utah industrial bank. Incorporated by reference to the Registrant's Current Report on Form 8-K dated March 31, 2009.

10.69       Amended and Restated Multifamily Note (Recast Transaction), dated March 31, 2009, between Cedar Rim Apartments, LLC, a Delaware limited liability company and Federal Home Loan Mortgage Corporation. Incorporated by reference to the Registrant's Current Report on Form 8-K dated March 31, 2009.

10.70       Amended and Restated Multifamily Deed of Trust, Assignment of Rents and Security Agreement (Recast Transaction), dated March 31, 2009, between Cedar Rim Apartments, LLC, a Delaware limited liability company and Federal Home Loan Mortgage Corporation. Incorporated by reference to the Registrant's Current Report on Form 8-K dated March 31, 2009.

10.71       Amended and Restated Guaranty (Recast Transaction), dated March 31, 2009, between AIMCO Properties, L.P., a Delaware limited partnership, and Federal Home Loan Mortgage Corporation. Incorporated by reference to the Registrant's Current Report on Form 8-K dated March 31, 2009.

10.80       Multifamily Note, dated October 5, 2009, between Tamarac Village, LLC, a Delaware limited liability company and Capmark Bank, a Utah industrial bank. Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 5, 2009.

10.81       Multifamily Deed of Trust, Assignment of Rents and Security Agreement, dated October 5, 2009, between Tamarac Village, LLC, a Delaware limited liability company and Capmark Bank, a Utah industrial bank. Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 5, 2009.

10.82       Guaranty, dated October 5, 2009, between AIMCO Properties, L.P., a Delaware limited partnership, and Capmark Bank, a Utah industrial bank. Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 5, 2009.

10.83       Amended and Restated Multifamily Note (Recast Transaction), dated October 5, 2009, between Tamarac Village, LLC, a Delaware limited liability company and Federal Home Loan Mortgage Corporation. Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 5, 2009.

10.84       Amended and Restated Multifamily Deed of Trust, Assignment of Rents and Security Agreement (Recast Transaction), dated October 5, 2009, between Tamarac Village, LLC, a Delaware limited liability company and Federal Home Loan Mortgage Corporation. Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 5, 2009.

10.85       Amended and Restated Guaranty (Recast Transaction), dated October 5, 2009, between AIMCO Properties, L.P., a Delaware limited partnership, and Federal Home Loan Mortgage Corporation. Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 5, 2009.

10.99       Purchase and Sale Contract between Consolidated Capital Institutional Properties/3, LP, a Delaware limited partnership, and The Ezralow Company, LLC, a Delaware limited liability company, dated March 21, 2011. Incorporated by reference to the Registrant’s Current Report on Form 8-K dated March 21, 2011.

10.100      First Amendment to Purchase and Sale Contract between Consolidated Capital Institutional Properties/3, LP, a Delaware limited partnership, and The Ezralow Company, LLC, a Delaware limited liability company, dated April 22, 2011. Incorporated by reference to the Registrant’s Current Report on Form 8-K dated April 22, 2011.

10.101      Second Amendment to Purchase and Sale Contract between Consolidated Capital Institutional Properties/3, LP, a Delaware limited partnership, and The Ezralow Company, LLC, a Delaware limited liability company, dated May 4, 2011. Incorporated by reference to the Registrant’s Current Report on Form 8-K dated May 4, 2011.

28.1        Fee Owner's General Partnership Agreement (Incorporated by reference to Registration Statement of Partnership (File No. 2-97664) filed July 23, 1985).

28.2        Fee Owner's Certificate of Partnership (Incorporated by reference to Registration Statement of Partnership (File No. 2-97664) filed July 23, 1985).

31.1        Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2        Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1        Certification of equivalent of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101         XBRL (Extensible Business Reporting Language). The following materials from Consolidated Capital Institutional Properties/3, LP’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, formatted in XBRL: (i) balance sheets, (ii) statements of operations, (iii) statement of changes in partners’ (deficiency) capital, (iv) statements of cash flows, and (v) notes to financial statements. (1)

(1)         As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

EX-31.1

Exhibit 31   

EX-31.2

Exhibit 31   

EX-32.1

Exhibit 32.1

Certification of CEO and CFO

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Consolidated Capital Institutional Properties/3, LP (the "Partnership"), for the quarterly period ended September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Steven D. Cordes, as the equivalent of the chief executive officer of the Partnership, and Stephen B. Waters, as the equivalent of the chief financial officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

      /s/Steven D. Cordes

Name: Steven D. Cordes

Date: November 9, 2011

      /s/Stephen B. Waters

Name: Stephen B. Waters

Date: November 9, 2011

This certification is furnished with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Revenues:
Rental income	$ 1,427	$ 1,388	$ 4,215	$ 4,089
Other income	273	242	834	708
Total revenues	1,700	1,630	5,049	4,797
Expenses:
Operating	716	658	2,103	2,109
General and administrative	51	66	193	252
Depreciation	917	965	2,746	2,929
Interest	492	490	1,467	1,486
Property tax	67	107	230	333
Total expenses	2,243	2,286	6,739	7,109
Loss from continuing operations	(543)	(656)	(1,690)	(2,312)
Loss from discontinued operations	(47)	(102)	(3,599)	(288)
Gain on sale of discontinued operations	0	0	19,571	7,708
Net income (loss)	(590)	(758)	14,282	5,108
Net income (loss) allocated to general partner	(6)	(8)	143	51
Net income (loss) allocated to limited partners	0	(750)	(888)	5,057
Net income (loss) allocated to Series A limited partners	(537)	0	(817)	0
Net income (loss) allocated to Series B limited partners	$ (47)	$ 0	$ 15,844	$ 0
Net income (loss) per limited partnership unit total	$ (1.53)	$ (1.96)	$ 36.92	$ 13.20
Per limited partnership unit info by series:
Loss from continuing operations per limited partnership unit	$ 0.00	$ (1.69)	$ (2.24)	$ (5.97)
Loss from discontinued operations per limited partnership unit	$ 0.00	$ (0.27)	$ (0.08)	$ (0.75)
Gain on sale of discontinued operations per limited partnership unit	$ 0.00	$ 0.00	$ 0.00	$ 19.92
Distribution per limited partnership unit	$ 0.00	$ 0.00	$ 0.77	$ 4.33
Series A - Per Limited Partnership Interest
Per limited partnership unit info by series:
Loss from continuing operations per limited partnership unit	$ (1.41)	$ 0.00	$ (2.14)	$ 0.00
Distribution per limited partnership unit	$ 0.00	$ 0.00	$ 6.46	$ 0.00
Series B - Per Limited Partnership Interest
Per limited partnership unit info by series:
Loss from discontinued operations per limited partnership unit	$ (0.12)	$ 0.00	$ (9.22)	$ 0.00
Gain on sale of discontinued operations per limited partnership unit	$ 0.00	$ 0.00	$ 50.60	$ 0.00
Distribution per limited partnership unit	$ 0.00	$ 0.00	$ 26.89	$ 0.00

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Statement of Shareholders Equity (Deficit) (Unaudited) (USD $) In Thousands	Total	General Partner	Limited Partners	Limited Partners Series A	Limited Partners Series B	Limited Partners Subtotal
Partners' (deficit) capital, beginning balance at Dec. 31, 2010	$ (12,256)	$ (965)	$ (11,291)	$ 0	$ 0	$ (11,291)
Distributions to partners January 1, 2011 through May 9, 2011	(300)	(3)	(297)	0	0	(297)
Net loss for the period January 1, 2011 through May 9, 2011	(896)	(8)	(888)	0	0	(888)
Partners' deficit at May 9, 2011	(13,452)	(976)	(12,476)	0	0	(12,476)
Allocation of Units	0	0	12,476	(7,056)	(5,420)	0
Distributions to partners May 10, 2011 through September 30, 2011	(12,901)	(129)	0	(2,475)	(10,297)	(12,772)
Net income (loss) for the period May 10, 2011 through September 30, 2011	15,178	151	0	(817)	15,844	15,027
Partners' (deficit) capital, ending balance at Sep. 30, 2011	$ (11,175)	$ (954)	$ 0	$ (10,348)	$ 127	$ (10,221)

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Document and Entity Information	9 Months Ended
	Sep. 30, 2011
Document and Entity Information
Entity Registrant Name	CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES 3
Document Type	10-Q
Document Period End Date	Sep. 30, 2011
Amendment Flag	false
Entity Central Index Key	0000768890
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	382,925.6
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3

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Extraordinary and Unusual Items

9 Months Ended

Sep. 30, 2011

Extraordinary and Unusual Items

Unusual or Infrequent Items Disclosure [Text Block]

Note C – Casualty Event

During October 2009, one of the Partnership’s investment properties, Lamplighter Park Apartments, sustained storm damage from leaking roofs of approximately $49,000, including clean-up costs of approximately $22,000 which were included in operating expense during the fourth quarter of 2009. During the nine months ended September 30, 2010, the Partnership received insurance proceeds of approximately $42,000 including approximately $3,000 for rental loss and approximately $12,000 for clean-up costs. The Partnership recognized a casualty gain of approximately $25,000 during the nine months ended September 30, 2010, as the result of receiving insurance proceeds of approximately $27,000 net of the write off of approximately $2,000 of undepreciated damaged assets. The casualty gain is included in loss from discontinued operations.

During December 2010, one of the Partnership’s investment properties, Lamplighter Park Apartments, sustained flood damage from a broken sump pump of approximately $25,000. During the nine months ended September 30, 2011, the Partnership received insurance proceeds of approximately $15,000, including approximately $2,000 for rental loss. The Partnership recognized a casualty gain of approximately $13,000 during the nine months ended September 30, 2011 as a result of the receipt of insurance proceeds of approximately $15,000, net of the rental loss of approximately $2,000 and the write off of undepreciated damaged assets of less than $1,000. The casualty gain is included in loss from discontinued operations.

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Property, Plant, and Equipment

9 Months Ended

Sep. 30, 2011

Property, Plant, and Equipment

Property, Plant and Equipment Disclosure [Text Block]

Note H – Investment Property

During the nine months ended September 30, 2011, the Partnership retired and wrote off personal property no longer being used that had a cost basis of approximately $4,406,000 and accumulated depreciation of approximately $4,406,000.

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Related Party Disclosures

9 Months Ended

Sep. 30, 2011

Related Party Disclosures

Related Party Transactions Disclosure [Text Block]

Note B – Transactions with Affiliated Parties

The Partnership has no employees and depends on the General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for (i) certain payments to affiliates for services and (ii) reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. 

Affiliates of the General Partner receive 5% of gross receipts from all of the Partnership's properties as compensation for providing property management services. The Partnership was charged by such affiliates approximately $299,000 and $353,000 for the nine months ended September 30, 2011 and 2010, respectively, which is included in operating expense and loss from discontinued operations.

Affiliates of the General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $210,000 and $204,000 for the nine months ended September 30, 2011 and 2010, respectively, which is included in general and administrative expenses, investment properties, assets held for sale and gain on sale of discontinued operations. The portion of these reimbursements included in investment properties, assets held for sale and gain on sale of discontinued operations for the nine months ended September 30, 2011 and 2010 are construction management services provided by an affiliate of the General Partner of approximately $94,000 and $67,000, respectively.

During the nine months ended September 30, 2011, AIMCO Properties, L.P., an affiliate of the General Partner, advanced the Partnership approximately $542,000 to cover property taxes at Cedar Rim Apartments and capital expenditures and operating expenses at Tamarac Village Apartments. During the nine months ended September 30, 2010, AIMCO Properties, L.P. advanced the Partnership approximately $47,000 to cover expenses related to operations at Tamarac Village Apartments and Cedar Rim Apartments. During the nine months ended September 30, 2011 and 2010, the Partnership repaid AIMCO Properties, L.P., approximately $204,000 and $667,000, respectively. The repayments included accrued interest of approximately $5,000 and $6,000, respectively.  AIMCO Properties, L.P. charges interest on advances under the terms permitted by the Partnership Agreement. The interest rates charged on the outstanding advances made to the Partnership range from the prime rate to a variable rate based on the prime rate plus a market rate adjustment for similar type loans. Affiliates of the General Partner review the market rate adjustment quarterly. The interest rate on outstanding advances at September 30, 2011 was 8.92%. Interest expense on outstanding advance balances was approximately $8,000 and $1,000 for the nine months ended September 30, 2011 and 2010, respectively. At September 30, 2011, total advances and accrued interest of approximately $346,000 were owed to AIMCO Properties, L.P. and are included in due to affiliates. There were no such amounts owed at December 31, 2010. The Partnership may receive additional advances of funds from AIMCO Properties, L.P. although AIMCO Properties, L.P. is not obligated to provide such advances.  For more information on AIMCO Properties, L.P., including copies of its audited balance sheet, please see its reports filed with the Securities and Exchange Commission. Subsequent to September 30, 2011, the Partnership repaid AIMCO Properties, L.P. approximately $160,000, including accrued interest of approximately $3,000.

The Partnership insures its properties up to certain limits through coverage provided by Aimco which is generally self-insured for a portion of losses and liabilities related to workers’ compensation, property casualty, general liability and vehicle liability. The Partnership insures its properties above the Aimco limits through insurance policies obtained by Aimco from insurers unaffiliated with the General Partner. During the nine months ended September 30, 2011, the Partnership was charged by Aimco and its affiliates approximately $91,000 for hazard insurance coverage and fees associated with policy claims administration. Additional charges will be incurred by the Partnership during 2011 as other insurance policies renew later in the year. The Partnership was charged by Aimco and its affiliates approximately $135,000 for insurance coverage and fees associated with policy claims administration during the year ended December 31, 2010.

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Fair Value Measures and Disclosures

9 Months Ended

Sep. 30, 2011

Fair Value Measures and Disclosures

Fair Value Disclosures [Text Block]

Note F – Fair Value of Financial Instruments

Financial Accounting Standards Board Accounting Standards Codification Topic 825, “Financial Instruments”, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value is defined as the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Partnership believes that the carrying amount of its financial instruments (except for mortgage notes payable) approximates their fair value due to the short-term maturity of these instruments. The Partnership estimates the fair value of its mortgage notes payable by discounting future cash flows using a discount rate commensurate with that currently believed to be available to the Partnership for similar term, mortgage notes payable. At September 30, 2011, the fair value of the Partnership's mortgage notes payable at the Partnership's incremental borrowing rate was approximately $30,860,000.

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Organization, Consolidation and Presentation of Financial Statements

9 Months Ended

Sep. 30, 2011

Organization, Consolidation and Presentation of Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

Note A – Basis of Presentation

The accompanying unaudited financial statements of Consolidated Capital Institutional Properties/3, LP (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-Q and Article 8-03 of Regulation S-X.  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"), a publicly traded real estate investment trust, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2011. The balance sheet at December 31, 2010 has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. 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, 2010.

The Partnership Agreement provides that the Partnership is to terminate on December 31, 2015 unless terminated prior to that date. The Partnership Agreement also provides that the term of the Partnership cannot be extended beyond the termination date.

The Partnership’s management evaluated subsequent events through the time this Quarterly Report on Form 10-Q was filed.

Certain reclassifications have been made to the 2010 balances to conform to the 2011 presentation.

The accompanying statements of operations for the three and nine months ended September 30, 2010 have been restated to reflect the operations of Lamplighter Park Apartments as discontinued operations as a result of the sale of the property in June 2011. In addition, the statement of operations for the nine months ended September 30, 2010 reflects the operations of Sienna Bay Apartments as discontinued operations as a result of the sale of the property in March 2010.  As a result of the sale of Lamplighter Park Apartments in June 2011, the accompanying balance sheet as of December 31, 2010 has been restated to reflect the respective assets and liabilities of Lamplighter Park Apartments as held for sale. The following table presents summarized results of operations related to the Partnership’s discontinued operations for the nine months ended September 30, 2011 and 2010 (in thousands):

Nine Months Ended September 30, 2011
	Revenues	Expenses	Casualty Gain	Loss on Extinguishment of Debt	Loss from Discontinued Operations
Lamplighter Park   Apartments	$ 1,123	$(1,355)	$   13	$  (3,380)	$  (3,599)

Nine Months Ended September 30, 2010
	Revenues	Expenses	Casualty Gain	Loss on Extinguishment of Debt	Loss from Discontinued Operations
Lamplighter Park  Apartments	$ 1,700	$(1,940)	$   25	$    --	$  (215)
Sienna Bay  Apartments	481	(510)	--	(44)	(73)
	$ 2,181	$(2,450)	$    25	$   (44)	$  (288)

Organization:

On May 9, 2011, the General Partner amended the Partnership’s certificate of limited partnership and the Partnership Agreement to establish and convert the Partnership’s existing partnership interests into two separate series of partnership interests that have separate rights with respect to specified Partnership property.  Effective as of the close of business on May 9, 2011 (the “Establishment Date”), each then outstanding interest of the General Partner of the Partnership was converted into one Series A GP Interest and one Series B GP Interest and each then outstanding unit of limited partnership interest in the Partnership was converted into one Series A Unit and one Series B Unit.  The Series A GP Interest and the Series A Units are collectively referred to as the “Series A Interests”, and the Series B GP Interest and the Series B Units are collectively referred to as the “Series B Interests”. Except as described below, the Series A Interests and the Series B Interests entitle the holders thereof to the same rights as the holders of partnership interests had prior to the Establishment Date.

From and after the Establishment Date, the Series A Interests will be entitled to all of the Partnership’s interests in any entity in which the Partnership owns an interest, other than the Series B Interests (as defined below), including, but not limited to, all profits, losses and distributions from such entities.

From and after the Establishment Date, the Series B Interests will be entitled to all of the Partnership’s interest in Lamplighter Park Apartments (the “Series B Interests”), including, but not limited to, all profits, losses and distributions from Lamplighter Park Apartments.

On July 28, 2011, the Partnership entered into an agreement and plan of merger with AIMCO Properties, L.P., a Delaware limited partnership and AIMCO CCIP/3 Merger Sub LLC, a Delaware limited liability company of which AIMCO Properties, L.P. is the sole member (the “Merger Subsidiary”), pursuant to which the Merger Subsidiary will be merged with and into the Partnership, with the Partnership as the surviving entity.

In the merger each Series A unit of limited partnership interest (each a “Series A Unit”) of the Partnership outstanding immediately prior to the consummation of the merger (other than Series A Units held by limited partners who perfect their appraisal rights pursuant to the merger agreement) will be converted into the right to receive, at the election of the limited partner, either (i) $59.36 in cash (the “Cash Consideration”) or (ii) a number of partnership common units of AIMCO Properties, L.P. calculated by dividing $59.36 by the average closing price of Aimco common stock, as reported on the New York Stock Exchange, over the ten consecutive trading days ending on the second trading day immediately prior to the effective time of the merger (the “OP Unit Consideration”). However, if AIMCO Properties, L.P. determines that the law of the state or other jurisdiction in which a limited partner resides would prohibit the issuance of partnership common units of AIMCO Properties, L.P. in that state or other jurisdiction (or that registration or qualification in that state or jurisdiction would be prohibitively costly), then such limited partner will only be entitled to receive the Cash Consideration for each Series A Unit. Those limited partners who do not make an election will be deemed to have elected to receive the Cash Consideration.

In the merger, AIMCO Properties, L.P.’s membership interest in the Merger Subsidiary will be converted into Series A Units of the Partnership.  As a result, after the merger, AIMCO Properties, L.P. will own all of the outstanding Series A Units. The Series B Units of limited partnership interest of the Partnership will not be affected by the merger and will remain outstanding following the consummation of the merger. ConCap Equities, Inc. will continue to be the general partner of the Partnership after the merger, and the Partnership’s partnership agreement in effect immediately prior to the merger will remain unchanged after the merger.

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Commitment and Contingencies

9 Months Ended

Sep. 30, 2011

Commitment and Contingencies

Commitments and Contingencies Disclosure [Text Block]

Note I – Contingencies

The Partnership is unaware of any pending or outstanding litigation matters involving it or its investment properties that are not of a routine nature arising in the ordinary course of business.

Environmental

Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain potentially hazardous materials  present on a property, including lead-based paint, asbestos, polychlorinated biphenyls, petroleum-based fuels, and other miscellaneous materials. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of such materials. The presence of, or the failure to manage or remedy properly, these materials may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the improper management of these materials on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of these materials through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of these materials is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of its properties, the Partnership could potentially be responsible for environmental liabilities or costs associated with its properties.

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Equity

9 Months Ended

Sep. 30, 2011

Equity

Schedule of Distributions Made to Members or Limited Partners, by Distribution [Table Text Block]

Note G – Distributions

The Partnership distributed the following amounts during the nine months ended September 30, 2011 and 2010 (in thousands, except per unit data).

		Per Limited		Per Limited
	Nine Months Ended	Partnership	Nine Months Ended	Partnership
	September 30, 2011	Unit	September 30, 2010	Unit
Sale (1)	$ 2,558	$ 6.61	$1,674	$ 4.33
Sale (2)	10,401	26.89	--	--
Operations	242	.62	--	--
	$13,201	$34.12	$1,674	$ 4.33

(1) Proceeds from the March 2010 sale of Sienna Bay Apartments.

(2) Proceeds from the June 2011 sale of Lamplighter Park Apartments.

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Discontinued Operations and Disposal Groups

9 Months Ended

Sep. 30, 2011

Discontinued Operations and Disposal Groups

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note D – Sale of Investment Properties

On June 21, 2011, the Partnership sold Lamplighter Park Apartments to a third party for a gross sales price of $25,125,000. The net proceeds realized by the Partnership were approximately $24,393,000 after payment of closing costs of approximately $732,000. The Partnership used approximately $10,374,000 of the net proceeds to repay the mortgages encumbering the property. As a result of the sale, the Partnership recognized a gain on sale of discontinued operations of approximately $19,571,000 during the nine months ended September 30, 2011. In addition, the Partnership recorded a loss on extinguishment of debt of approximately $3,380,000 during the nine months ended September 30, 2011 due to the write-off of unamortized loan costs and the payment of a prepayment penalty associated with the payment of the mortgage of approximately $3,243,000, which is included in loss from discontinued operations.

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Statements of Cash Flows (Unaudited) (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Cash flows from operating activities:
Net income	$ 14,282	$ 5,108
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	2,984	3,380
Amortization of loan costs	75	94
Amortization of and early recognition of discount on note receivable	(82)	(18)
Casualty gain	(13)	(25)
Gain on sale of discontinued operations	(19,571)	(7,708)
Loss on extinguishment of debt	3,380	44
Change in accounts:
Receivables and deposits	125	258
Other assets	(4)	130
Accounts payable	(68)	(153)
Tenant security deposit liabilities	(64)	(50)
Accrued property taxes	(4)	63
Other liabilities	(75)	(192)
Due to affiliates	3	(5)
Net cash provided by operating activities	968	926
Cash flows investing activities:
Property improvements and replacements	(1,092)	(841)
Proceeds from the sale of discontinued operations	24,393	2,468
Net withdrawals from restricted escrow	15	194
Collection of note receivable	2,500	0
Insurance proceeds received	13	27
Net cash provided by investing activities	25,829	1,848
Cash flows from financing activities:
Payments on mortgage notes payable	(296)	(337)
Repayment of mortgage note payable	(10,374)	0
Prepayment penalty paid	(3,243)	0
Advances from affiliate	542	47
Repayment of advances from affiliate	(199)	(661)
Distributions to partners	(13,201)	(1,674)
Net cash used in financing activities	(26,771)	(2,625)
Net increase in cash and cash equivalents	26	149
Cash and cash equivalents at beginning of period	336	196
Cash and cash equivalents at end of period	362	345
Supplemental disclosure of cash flow information:
Cash paid for interest	1,934	2,106
Supplemental disclosure of non-cash flow activity:
Property improvements and replacements in accounts payable	150	13
Note receivable, net of discount	0	2,389
Assumption of mortgage by buyer	$ 0	$ 10,586

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Receivables, Loans, Notes Receivable, and Others

9 Months Ended

Sep. 30, 2011

Receivables, Loans, Notes Receivable, and Others

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note E – Note Receivable

In connection with the sale of Sienna Bay Apartments, the Partnership provided $2,500,000 in financing to the purchaser (the “Seller Loan”). Monthly payments of interest only commenced May 1, 2010 and were to continue through the Seller Loan’s October 10, 2012 maturity, which was consistent with the maturity of the senior mortgage loan encumbering Sienna Bay Apartments that was assumed by the purchaser in connection with the sale. Interest on the Seller Loan was payable at a rate of 5.0% each year until maturity. At the date of the sale, the fair value of the note receivable was approximately $2,389,000 and accordingly the Partnership recorded a discount of approximately $111,000 which was calculated using a rate of 7%. The discount was being amortized over the term of the note. During the nine months ended September 30, 2011 and 2010, the Partnership recognized related interest income of approximately $87,000 and $79,000, respectively, which is included in other income. At December 31, 2010, the discount on the note receivable was approximately $82,000. During the nine months ended September 30, 2011, the Partnership received from the purchaser $2,500,000 plus accrued interest in full satisfaction of the note receivable. Included in other income for the nine months ended September 30, 2011 is approximately $60,000 which was the remaining discount balance as a result of the payment of the note receivable prior to its maturity.

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Balance Sheets (Unaudited) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Assets
Cash and cash equivalents	$ 362	$ 336
Receivables and deposits	283	343
Restricted escrow	0	15
Other assets	454	509
Note receivable	0	2,418
Investment properties:
Land	3,082	3,082
Buildings and related personal property	39,683	42,082
Total investment property	42,765	45,164
Less accumulated depreciation	(27,994)	(28,722)
Investment property, net	14,771	16,442
Assets held for sale	0	5,113
Total assets	15,870	25,176
Liabilities
Accounts payable	202	122
Tenant security deposit liabilities	183	182
Accrued property taxes	160	164
Other liabilities	396	411
Due to affiliates	346	0
Mortgage notes payable	25,758	25,984
Liabilities related to assets held for sale	0	10,569
Total liabilities	27,045	37,432
Partners' Deficit
General partner	(954)	(965)
Limited partners	(10,221)	(11,291)
Total partners' deficit	(11,175)	(12,256)
Total liabilities and partners' deficit	$ 15,870	$ 25,176