10-Q 1 realmarkiii_10q.txt QUARTERLY REPORT FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2002 Commission File Number: 0-13331 REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III ----------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 16-1234990 ----------------------- --------------------------------- (State of organization) (IRS Employer Identification No.) 2350 North Forest Road, Suite 12A,Getzville, New York 14068 ------------------------------------------------------------ (Address of principal executive offices) (716) 636-0280 -------------- (Registrant's telephone number) Indicate by a 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. Yes [X] No [ ]

2 Condensed Consolidated Statements of Cash Flows -----------------------------------------------

Notes to Consolidated Financial Statements Six months ended June 30, 2002 and 2001 Organization ------------ Realmark Property Investors Limited Partnership - III (the Partnership), a Delaware limited partnership, was formed on November 18, 1983, to invest in a diversified portfolio of income-producing real estate investments. The general partners are Realmark Properties, Inc. (the corporate general partner) and Joseph M. Jayson (the individual general partner). Joseph M. Jayson is the sole shareholder of J.M. Jayson & Company, Inc. Realmark Properties, Inc. is a wholly-owned subsidiary of J.M. Jayson & Company, Inc. Under the partnership agreement, the general partners and their affiliates can receive compensation for services rendered and reimbursement for expenses incurred on behalf of the Partnership. Basis of Presentation --------------------- The accompanying interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and, in the opinion of management, contain all necessary adjustments for a fair presentation. The Partnership's significant accounting policies are set forth in its December 31, 2001 Form 10-K. The interim financial statements should be read in conjunction with the financial statements included therein. The interim results should not be considered indicative of the annual results. 3 Property and Equipment ---------------------- At June 30, 2002, the Partnership owned and operated two commercial buildings (Perrymont and Inducon Amherst). Both of the properties are being actively marketed for sale and, therefore, are not being depreciated. Depreciation not recorded for the three and six months ended June 30, 2002 was approximately $63,000 and $126,000, respectively. Depreciation not recorded for the three and six months ended June 30, 2001 was approximately $117,000 and $234,000, respectively. PART I - Item 2. Management's Discussion and Analysis of Financial Condition ----------------------------------------------------------- and Results of Operations ------------------------- Liquidity and Capital Resources ------------------------------- The Partnership continues to maintain a cash position adequate to fund capital improvements and to make scheduled debt payments. Cash increased approximately $63,000 during the first six months of 2002. The Partnership's cash position and the sale of one of its properties, Ambassador Towers (sold October 18, 2001), enabled the Partnership to make a $5,000,000 distribution to the Limited Partners in the last quarter of 2001. Results of Operations --------------------- As compared to the first six months of 2001, the Partnership's loss, excluding Ambassador Towers which was sold in October 2001, increased approximately $58,000 from a loss of $118,000 in 2001 to a loss of $176,000 in 2002. Rental income at Perrymont increased approximately $52,000 for the first six months as occupancy increased to above 57%. Rental income at Inducon Amherst decreased approximately $11,000 for the first six months as occupancy decreased to about 69%. The net change in rental income was an increase of approximately $41,000. The increase in rental income along with a decrease in other income of $68,000, primarily common area maintenance fees at the property level and interest income in Topside, was offset by an increase in property operations of $41,000, an increase in other administrative expense of $10,000, and a decrease in administrative expense to affiliates of $16,000. The increase in property operating costs was a result of $42,000 payroll increase at the property level. The increase in other administrative expense was primarily attributable to increased advertising. PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- The Partnership's cash equivalents are short term, interest bearing bank accounts and its mortgage loans are fixed-rate. It has not entered into any derivative contracts. Therefore, it has no market risk exposure. PART II - OTHER INFORMATION ----------------- Item 1. Legal Proceedings ----------------- As previously reported, the Partnership, as a nominal defendant, the General Partners of the Partnership and of affiliated public partnerships (the "Realmark Partnerships") and the officers and directors of the Corporate General Partner, as defendants, had been involved in a class action litigation in New York State court. The Partnership's settlement of this litigation is described in its Annual Report on Form 10-K for the year ended December 31, 2001. 4 Item 5. Other Information ----------------- The Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is attached as an exhibit in this report. 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. REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP - III August 14, 2002 /s/ Joseph M. Jayson --------------- ---------------------------- Date Joseph M. Jayson, Individual General Partner and Principal Financial Officer 5 Exhibit REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - III CERTIFICATION 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 of Realmark Property Investors Limited Partnership - III (the "Partnership") on Form 10-Q for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Joseph M. Jayson, Individual General Partner and Principal Financial Officer, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that to the best of my 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 result of the operations of the Partnership. August 14, 2002 /s/ Joseph M. Jayson --------------- ---------------------------- Date Joseph M. Jayson, Individual General Partner and Principal Financial Officer

REALMARK PROPERTY INVESTORS LTD PARTNERSHIP III 10-Q