Item 1. BUSINESS
General
Boettcher Western Properties III Ltd. (the "Partnership") was organized in March 1983 as a Colorado limited partnership. The Partnership's primary business is to own and operate income-producing properties. At September 30, 1995, the Partnership owned and operated one multifamily apartment property located in Texas ("La Risa Apartments") and one shopping center located in California ("Venetian Square Shopping Center"), both of which are being held for sale (the "Properties"). The Properties are more fully described in Item 2

Item 2. PROPERTIES
At September 30, 1995, the Partnership owned and operated one multifamily apartment property and one shopping center, both of which are being held for sale, as more fully described below:
Name and Location General Character of Property
La Risa Apartments 33-building, 254-unit multifamily apartment property 800 Babock Road containing approximately 183,896 square feet of net San Antonio, Texas rentable area on approximately 9.7 acres of land.
Venetian Square Shopping Center 3-building shopping center containing 4555 North Pershing Avenue approximately 117,107 square feet of net rentable Stockton, California area on approximately 9.2 acres of land.
As stated above, at September 30, 1995, the Partnership has classified both of the Properties as properties held for sale.
For information regarding the indebtedness to which each of the Properties is subject, see Notes 3 and 6 to the Financial Statements as contained in Item 8 of this report.
On June 6, 1994, the Partnership sold the land, related improvements and personal property of Los Compadres, La Paz and Maryland Villa Apartments (the "Arizona Properties") as described in more detail in Management's Discussion and Analysis of Financial Condition and Results of Operations as contained in Item 7 of this report and Note 2 to the Financial Statements as contained in Item 8 of this report.
On September 9, 1994, a foreclosure sale was held regarding the SouthCenter Plaza Shopping Center ("SouthCenter Plaza"), resulting in the loss of the Partnership's investment in SouthCenter Plaza, as more fully discussed in Note 2 to the Financial Statements as contained in Item 8 of this report.
Average and weighted average occupancies and weighted average effective rental rates generated by the Properties in fiscal 1995, 1994, and 1993 were as follows:
(1) These rates are "triple net". In addition to this base rent, tenants pay their pro rata share of taxes, insurance and common area maintenance expenses at the property.
(2) These rates are "full service". In addition to this base rent, tenants pay only their pro rata share of taxes, insurance and common area maintenance expenses at the property in excess of the expenses incurred at the property during the tenant's initial year of occupancy.
(3) These computations give effect to the sale of the Arizona Properties on June 6, 1994.
(4) Averages computed through date of foreclosure.
Item 3.

Item 3. LEGAL PROCEEDINGS
The Partnership is not a party to, nor are the Properties the subject of, any material pending legal proceedings.
Item 4.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF HOLDERS OF LIMITED PARTNERSHIP INTERESTS
There have been no matters submitted to a vote of holders of Limited Partnership Interests (the "Units") during the fiscal year which is covered by this report.
PART II
Item 5.

Item 5. MARKET FOR THE REGISTRANT'S LIMITED PARTNERSHIP INTERESTS AND RELATED LIMITED PARTNER MATTERS
At September 30, 1995, 22,000 Units were outstanding and held by 2,220 limited partners.
The Units have limited transferability. There is no public market for the Units and it is not expected that any will develop. There are significant restrictions relating to the transferability of Units, including the requirement that the Managing General Partner consent to any transfer and to any transferee becoming a substituted limited partner, which consent may be granted or withheld at the sole discretion of the Managing General Partner. In addition, restrictions on transfers may be imposed by federal and state securities laws.
On June 22, 1994, a distribution of $2,750,000 ($125/Unit) was made to limited partners from the net proceeds of the sale of the Arizona Properties. The Managing General Partner intends to apply cash flow generated from Partnership operations in fiscal 1996, if any, to maintain the Partnership's minimum required cash reserves, as necessary, including any additional reserves to cover potential remediation costs. Thereafter, the Partnership intends to pay amounts owed to the Managing General Partner and make distributions to the limited partners.
The Managing General Partner is attempting to sell the Partnership's remaining real estate investments in fiscal 1996. However, there can be no assurances that the Partnership will sell the Properties in 1996. The Managing General Partner believes that these sales will provide net proceeds to the Partnership after the payment of sales costs, closing costs and mortgages payable; however, the sales transactions may include both cash at closing and deferred payments to the Partnership. The ability of the Partnership to sell Venetian Square Shopping Center may be adversely affected by the potential remediation costs of the petroleum contamination at the property. The Partnership intends to apply net sales proceeds to establish and maintain the minimum required cash reserves, as necessary, including any additional reserves to cover potential remediation costs. Thereafter, the Partnership intends to pay amounts owed to the Managing General Partner and to make distributions to limited partners.
Item 6.

Item 6. SELECTED FINANCIAL DATA
BOETTCHER WESTERN PROPERTIES III LTD. SELECTED FINANCIAL DATA(a)
As of or For the Year Ended September 30,
(a) The above selected financial data should be read in conjunction with the Financial Statements and related Notes as contained in Item 8 of this report.
(b) Per Unit data is based upon the 22,000 weighted average Units outstanding during each fiscal year.
(c) The Partnership is evaluating the remediation of petroleum contaminated soil and groundwater on a parcel of land adjacent to and part of the Venetian Square Shopping Center. The contamination resulted from a leaking underground storage tank which was part of a card-lock fueling station operated at Venetian Square Shopping Center from 1979 through 1990. The Partnership has spent approximately $405,000 to date in evaluating the remediation program. Amounts expended were primarily for the evaluation of the contamination in order to determine the method, cost and timing of required soil and groundwater remediation measures to be implemented in the future. Management is unable at this time to estimate the amount of additional remediation expense that may be incurred. Due to groundwater contamination, the Partnership may incur significant additional remediation costs. Accordingly, the Financial Statements contained in Item 8 of this report do not include any adjustments that reflect the results of the ultimate resolution of this uncertainty. For additional information, refer to Note 7 to the Financial Statements contained in Item 8 of this report.
Item 7.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations 1995 as compared to 1994:
September 30, 1995 marked the close of the Partnership's twelfth year of operations. The Partnership continues to own and operate one multifamily apartment property located in Texas (La Risa Apartments) and one shopping center located in California (Venetian Square Shopping Center), both of which are being held for sale as of September 30, 1995.
For the fiscal year ended September 30, 1995, the Partnership generated total revenue of $2,508,536, and incurred total expenses of $2,655,431, resulting in an operating loss of $146,895. The Partnership's fiscal 1995 operating loss decreased $345,422 (70%) when compared with fiscal 1994. Due to the gain on sale of Los Compadres, La Paz and Maryland Villa Apartments (the "Arizona Properties"), the Partnership generated net earnings of $949,570 in fiscal 1994. Total revenue decreased, primarily rental and other income, and total expenses decreased in all categories, primarily due to the sale of the Arizona Properties. A summary of the Partnership's operations and period-to-period comparisons is presented below.
When making period-to-period comparisons, the exclusion of the Arizona Properties and SouthCenter Plaza's operations from the prior fiscal year's results allows for a more meaningful analysis of the operations of the Partnership's remaining investments. For comparison purposes only, the Arizona Properties and SouthCenter Plaza's results of operations have been excluded from fiscal 1994 results of operations in the table below.
Based upon the actual and pro forma amounts presented above, total revenue generated by the Partnership, excluding the Arizona Properties and SouthCenter Plaza, amounted to $2,508,536 in fiscal 1995, representing an increase of $15,761 (1%) compared with fiscal 1994. The Partnership's properties generated rental income of $2,145,948 in fiscal 1995, which represents a decrease of $8,055 when compared with fiscal 1994. La Risa Apartments achieved a weighted average occupancy of 94% and a weighted average effective rental rate per unit per month of $436, representing a decrease of 2% and an increase of $11, respectively, when compared with fiscal 1994. Rental income from Venetian Square Shopping Center decreased $37,803 (4%) in fiscal 1995 when compared with fiscal 1994. At Venetian Square Shopping Center, average occupancy decreased 4% in fiscal 1995 and the average effective rental rate decreased $.03 when compared with fiscal 1994. For additional information on the average occupancies and average effective rental rates for the Partnership's Properties, refer to the table provided in Item 2 as contained in this report. Other income increased $19,220 (27%) in fiscal 1995 when compared with fiscal 1994, primarily the result of increased interest earned by the
Partnership.
Based upon the actual and pro forma amounts provided above, total expenses, incurred by the Partnership amounted to $2,655,431 in fiscal 1995, a decrease of $158,270 (6%) when compared with fiscal 1994. The largest component of this decrease is the $113,308 (38%) decrease in fees and reimbursements to the managing general partner in fiscal 1995 when compared with fiscal 1994. This decrease is primarily the result of the elimination of the accrual of deferred acquisition fees related to the Arizona Properties in June, 1994. Property tax expense decreased $15,296 (6%) in fiscal 1995 when compared to fiscal 1994, primarily due to lower taxes assessed in 1995 on La Risa Apartments. Repairs and maintenance expense decreased $21,003 (7%) in fiscal 1995 when compared to fiscal 1994 mainly due to roof and parking lot repairs completed at Venetian Square Shopping Center in fiscal 1994. Environmental expense was $72,136 for fiscal 1995, an increase of $24,405 (51%) over fiscal 1994, representing costs associated with the continued evaluation of the soil and groundwater remediation at Venetian Square Shopping Center.
1994 as compared to 1993:
For the fiscal year ended September 30, 1994, the Partnership generated total revenue of $4,521,349, and incurred total expenses of $5,013,666, resulting in an operating loss of $492,317. The Partnership's fiscal 1994 operating loss decreased $899,420 (65%) when compared with fiscal 1993. A gain on the sale of Arizona Properties, in the amount of $1,441,887, was recorded in the third quarter of fiscal 1994 as more fully discussed in Note 2 to the Financial Statements as contained in Item 8

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following Financial Statements of the Partnership are included herein:
Independent Auditors' Report 17
Balance Sheets - September 30, 1995 and 1994 18
Statements of Operations - Years ended September 30, 1995, 1994 and 1993 19
Statements of Partners' Capital (Deficit) - Years ended September 30, 1995, 1994 and 1993 20
Statements of Cash Flows - Years ended September 30, 1995, 1994 and 1993 21
Notes to Financial Statements 23
INDEPENDENT AUDITORS' REPORT
THE PARTNERS BOETTCHER WESTERN PROPERTIES III LTD.:
We have audited the accompanying balance sheets of Boettcher Western Properties III Ltd. (a limited partnership) as of September 30, 1995 and 1994, and the related statements of operations, partners' capital (deficit), and cash flows for each of the years in the three-year period ended September 30, 1995. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Boettcher Western Properties III Ltd. as of September 30, 1995 and 1994, and the results of its operations and its cash flows for each of the years in the three-year period ended September 30, 1995, in conformity with generally accepted accounting principles.
As discussed more fully in Note 7 to the financial statements, management of the Partnership has determined that one of the Partnership's real estate properties has environmental contamination. Management is evaluating the extent of such contamination and the remediation of the property and has accrued certain remediation costs. However, management is currently unable to determine the full extent of the remediation measures and the related total cost. Accordingly, the financial statements do not include any additional adjustments, if any, relating to the ultimate outcome of this uncertainty.
KPMG PEAT MARWICK LLP
Denver, Colorado November 22, 1995
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Balance Sheets
September 30, 1995 and 1994
See accompanying notes to financial statements.
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership) Statements of Operations Years Ended September 30, 1995, 1994 and 1993
See accompanying notes to financial statements.
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Statements of Partners' Capital (Deficit)
Years Ended September 30, 1995, 1994 and 1993
See accompanying notes to financial statements.
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Statements of Cash Flows
Years Ended September 30, 1995, 1994 and 1993
(continued)
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Statements of Cash Flows
Years Ended September 30, 1995, 1994 and 1993
See accompanying notes to financial statements.
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Notes to Financial Statements
September 30, 1995, 1994 and 1993
(1) Significant Accounting Principles
Organization and Allocation of Income and Losses Boettcher Western Properties III Ltd. (the Partnership) is a limited partnership formed on March 18, 1983 for the purpose of investing in improved and unimproved real property. Limited Partnership Interests (Units) were sold through a public offering and currently 22,000 Units at $1,000 per Unit are outstanding.
The managing general partner of the Partnership is Boettcher Properties, Ltd. (BPL), and the associate general partner is Boettcher 1983 Associates, Ltd.
The Partnership Agreement provides for the net operating income of the Partnership to be allocated as follows: (i) to the limited partners to the extent necessary to satisfy the 8% Current Distribution Preference, as defined (an amount equal to 8% of the daily average aggregate adjusted capital contributions of the limited partners) and (ii) 1% of the remainder to the General Partners and 99% to the limited partners. Net operating losses are allocated 1% to the General Partners and 99% to the limited partners.
The Partnership Agreement provides for net capital income from the sale or other disposition of Partnership properties to be allocated on a cumulative basis as follows: (i) 1% to the General Partner and 99% to the limited partners to the extent of depreciation deductions taken from the inception of the Partnership, (ii) to the limited partners to the extent necessary to satisfy the Net Proceeds Distribution Preference, as defined (an amount equal to the sum of limited partner capital contributions not yet returned and any unsatisfied 8% current Distribution Preference from prior periods) and (iii) 25% of the remainder to the General Partners and 75% to the limited partners. Net capital loss is allocated 1% to the General Partners and 99% to the limited partners.
Deferred Leasing Costs Costs associated with the leasing of the Partnership's shopping center and office building are deferred and amortized over the life of the related leases. These costs are comprised of lease commissions and construction costs related to the buildout of tenant space.
Income Taxes No provision has been made for federal income taxes, as the taxable income (loss) is reported by the partners rather than the Partnership. The Partnership reports certain transactions differently for tax and financial statement purposes, primarily depreciation and debt discount.
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Notes to Financial Statements
September 30, 1995, 1994 and 1993
A reconciliation of net earnings (loss) per the accompanying financial statements and Partnership's tax return is shown in the table below. Results of operations for the year ended September 30, 1995 as shown in the financial statements is actual. However, the Partnership's tax return for December 31, 1995 has not been prepared; therefore, the reconciling items for 1995 are estimates by management.
Real Estate Investments Properties held for sale are recorded at the lower of cost or fair market value based upon independent appraised values.
Buildings and improvements are depreciated using the straight-line method over an estimated useful life of 30 years. Equipment and furnishings are depreciated using the straight-line method over an estimated useful life of 5 years. Renewals and betterments are capitalized, and repairs and maintenance are charged to operations as incurred.
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Notes to Financial Statements
September 30, 1995, 1994 and 1993
(1) Continued
Cash and Cash Equivalents For purposes of the Statement of Cash Flows, cash and cash equivalents include highly liquid debt instruments purchased with an original maturity of three months or less. Cash and cash equivalents are comprised of the following as of September 30:
Debt Issuance Costs and Debt Discount Costs incurred in arranging financing, such as loan origination fees, commitment fees and extension fees, are deferred and amortized using the level-interest-yield method over the term of the related debt or the extension period.
Debt discount is amortized to interest expense using the level-interest-yield method over the term of the related debt.
Reclassification
Certain prior year amounts have been reclassified to conform with fiscal 1995 financial statement presentation.
(2) Real Estate Investments
Mortgages assumed in connection with the acquisition of the Partnership's properties were discounted using an equivalent market rate of interest as of the date of acquisition. For financial statement purposes, the resulting discount is deducted from the original cost basis of the related real estate investment property, thereby resulting in a reduction of depreciation expense over the life of the assets.
As of September 30, 1995, the market value of the Partnership's properties held for sale exceeds cost, based upon independent appraised values or preliminary offers to purchase the properties.
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Notes to Financial Statements
September 30, 1995, 1994 and 1993
(2) Continued
The cost of the Partnership's real estate investments and related accumulated depreciation, debt discount and allowance for loss are as follows:
September 30, 1995
Disposition of Real Estate Investments
Sale of Arizona Properties On June 6, 1994, the Partnership sold the land, related improvements and personal property of Los Compadres, La Paz and Maryland Villa apartments (the Arizona Properties) for cash. The net proceeds to the Partnership, before proration of operating income and expenses related to the Arizona Properties, were as follows:
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Notes to Financial Statements
September 30, 1995, 1994 and 1993
SouthCenter Plaza
On May 6, 1994, the Superior Court of Washington for King County issued an order granting the foreclosure of the mortgage secured by the SouthCenter Plaza property. A foreclosure sale was held on September 9, 1994, and the first mortgagor was the only bidder at the sale and became the owner of the property subject to a one-year redemption period. The sale resulted in the loss of the Partnership's investment in SouthCenter Plaza. The Partnership recorded a provision for loss on operating property in fiscal 1993 equal to the excess of the net book value of SouthCenter Plaza over the related mortgage payable as of September 30, 1993.
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Notes to Financial Statements
September 30, 1995, 1994 and 1993
(3) Mortgages Payable
Mortgages payable at September 30 are secured by real estate investment properties and are comprised of the following:
All mortgages payable are secured solely by the respective properties and are nonrecourse to the Partnership.
(a) Discount was based on market interest rate at the time of purchase of 12.5%. (b) The Partnership extended the mortgage payable to January 1, 1996. See note 6 for additional information. (c) Average rate of bond issue. (d) Paid semiannually in April and December. (e) The Partnership extended the mortgage payable to October 1, 1997. See note 6 for additional information.
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Notes to Financial Statements
September 30, 1995, 1994 and 1993
(3) Continued
Aggregate maturities of principal payments for the five fiscal years ending September 30, 2000 and thereafter are as follows:
For additional discussion of the Partnership's mortgages payable refer to note 6.
(4) Transactions with Related Parties
BPL is the Managing Agent of the Partnership and is paid an annual fee for its services. The annual fee is comprised of a property management fee and a deferred acquisition fee. The property management fee is equal to 5% of gross receipts from the Properties, less management fees paid to others. The property management fee earned by BPL amounted to $15,734, $38,635 and $41,830 for the years ended September 30, 1995, 1994, and 1993, respectively. The deferred acquisition fee is an annual fee equal to the sum of 2% of average daily invested capital plus 1/2 of 1% of average daily liquid capital, as defined. The deferred acquisition fee is payable for a maximum of 15 years and is limited in the aggregate to payments having a discounted value equal to 14% of gross limited partner capital contributions. Payments made over the 15-year period will be discounted at 10% per year from the date of payment to May 2, 1983 in determining whether the limit has been reached. Payments are limited in the aggregate to $3,080,000. Since inception, the total discounted deferred acquisition fee earned by the Managing General Partner is approximately $2,224,000. The annual deferred acquisition fee earned by BPL amounted to $140,364, $230,978 and $301,740 for the years ended September 30, 1995, 1994, and 1993, respectively.
The Partnership also reimburses BPL for its allocable share of salaries of nonmanagement and nonsupervisory personnel providing accounting, investor reporting and communications, and legal services to the Partnership and allowable expenses related to the maintenance and repair of data processing equipment used for or by the Partnership. The amount due to BPL for such reimbursements for the years ended September 30, 1995, 1994, and 1993 amounted to $30,795, $30,588 and $30,522, respectively.
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Notes to Financial Statements
September 30, 1995, 1994 and 1993
(5) Future Rental Income Aggregate base rental income relating to long-term noncancellable leases for the Venetian Square Shopping Center for the five fiscal years ending September 30, 2000 and thereafter is as follows:
Certain other leases related to the Partnership's multifamily apartment property are short term and cancelable upon notice by either party and, accordingly, are not included in the above amounts.
(6) Liquidity and Debt Maturities
The Partnership is required under its Partnership Agreement to maintain cash reserves of not less than 3% of aggregate capital contributions for normal repairs, replacements, working capital and other contingencies. As of September 30, 1995, the Partnership had cash reserves of $836,140, while the required minimum amount was $660,000.
During fiscal 1995, the payable to managing general partner increased $126,622 to a total of $1,527,391 as of September 30, 1995. This increase is the result of the accrual of fees and reimbursements earned by the Managing General Partner in fiscal 1995 and cash advances received from the Managing General Partner during fiscal 1995 totalling $92,977 and $33,645, respectively. The Managing General Partner intends to apply cash flow generated from Partnership operations in fiscal 1996, if any, to maintain the minimum required cash reserves, as necessary, including any additional reserves to cover remediation costs at Venetian Square Shopping Center. Thereafter, the Partnership intends to pay the Managing General Partner all unpaid cash advances made to the Partnership, all unpaid administrative reimbursements and all deferred fees earned by the Managing General Partner.
The Managing General Partner is attempting to sell the Partnership's remaining real estate investments in fiscal 1996. However, there can be no assurances that the Partnership will sell such Properties in 1996. As of September 30, 1995 and 1994, the remaining real estate investments are classified as properties held for sale. The Partnership has entered into listing agreements with unrelated real estate brokerage firms to act as exclusive selling agents for the properties. The Managing General Partner believes that both of these sales will provide net proceeds to the Partnership after the payment of sales costs, closing costs and mortgages payable; however, these sales transactions may include both cash at closing and deferred payments to the Partnership. The ability of the Partnership to sell Venetian Square Shopping Center may be adversely affected by the potential remediation costs of the petroleum contamination of the property. The Partnership
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Notes to Financial Statements
September 30, 1995, 1994 and 1993
intends to apply net sales proceeds to maintain the Partnership's minimum required cash reserves, as necessary, including any additional reserves to cover potential remediation costs. Thereafter, the Partnership intends to pay amounts owed to the Managing General Partner and to make distributions to limited partners.
During fiscal 1995 the Partnership entered into a loan extension agreement with MBL Life Assurance Corporation ("MBL") to extend the mortgage payable for La Risa Apartments through January 1, 1996 under similar terms and conditions as the original loan agreement. An additional extension of this loan would facilitate the Partnership's efforts to sell the property in 1996, with a portion of the sales proceeds being utilized to pay all principal and interest owed to MBL at that time. There can be no assurances that the Managing General Partner will be able to obtain such an extension. If the Partnership is unable to obtain an extension, the mortgage payable for La Risa Apartments will be due and payable on January 1, 1996. In this circumstance, if the Partnership does not pay off the mortgage, the Partnership will be in default, entitling MBL to exercise its available remedies, including foreclosure of the property.
Subsequent to September 30, 1995, the Partnership entered into a letter agreement with Great West Life Assurance Company (Great West) to extend the maturity date of the first mortgage payable secured by Venetian Square Shopping Center to October 1, 1997. Under the agreement, the Partnership was obligated to pay a $20,000 fee, the interest rate was increased to 10.5% and the monthly payment was increased to $39,098 effective October 1, 1995.
BOETTCHER WESTERN PROPERTIES III LTD. (A Limited Partnership)
Notes to Financial Statements
September 30, 1995, 1994 and 1993
(7) Environmental Contingency
From approximately 1979 through 1990 a card-lock fueling station had been operated on a parcel of land adjacent to and a part of Venetian Square Shopping Center. In 1990, operation of the fueling station ceased, and in fiscal 1991 the Partnership determined that it would be permanently closed. In compliance with the California and San Joaquin County environmental regulatory requirements, the Partnership contracted with an environmental engineering firm to perform Phase I and Phase II environmental site assessments on this specific parcel of land. The results of those site assessments suggested that the site may contain petroleum contaminants. In fiscal 1992, the Partnership contracted for the excavation and removal of the three underground fuel storage tanks located on this parcel of land. Upon excavation and removal of those underground fuel storage tanks, leakage of petroleum contaminants was discovered through performance of soil and groundwater tests. The Partnership retained California legal counsel and contracted with an environmental engineering firm (EEF) to perform further site analysis and to determine the proximate cause and extent of any contaminants. In the first quarter of fiscal 1993, the Partnership received the Preliminary Site Assessment report (the PSA) from the EEF detailing the results of its Phase II soil and groundwater sampling and analysis, as well as the EEF's recommendation for further action. In working with the San Joaquin County Public Health Services/Environmental Health Division (San Joaquin), the Partnership received approval to proceed with quarterly groundwater monitoring of the site for a term of one year which was completed as of December 31, 1993. An Evaluation of Remedial Alternatives For Petroleum Hydrocarbon Impacted Soil (the Report) was submitted to San Joaquin for further review and comments. San Joaquin notified the Partnership that the remedial alternative consisting primarily of soil vapor extraction complies with regulatory requirements and requested that the Partnership submit a work plan to the regulatory agency which will include the proposed actions and proposed schedule for implementation and operation of the soil vapor extraction system. However, the Partnership has been advised that groundwater contamination has also occurred and the Partnership is in the process of determining the method, cost and timing of required soil and groundwater remediation measures. The Partnership has spent approximately $405,000 to date in evaluating the remediation program. Management is unable at this time to estimate the full extent of additional expenses that may be incurred. Due to groundwater contamination, the Partnership may incur significant additional remediation costs. Accordingly, the accompanying financial statements do not include any adjustments that reflect the results of the ultimate resolution of this uncertainty.
The Partnership has contacted all previous and current insurance companies which have underwritten insurance coverages for Venetian Square. The Partnership intends to determine with these insurance companies the extent of the Partnership insurance coverage, if any, related to the environmental matters at Venetian Square. There can be no assurances that any insurance coverage will be available to the Partnership related to these matters.
Item 9.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in accountants or disagreements with accountants on any matter of accounting principles or practices on financial statement disclosure or auditing scope or procedure.
PART III
Item 10.

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership does not have directors or executive officers. The general partner of the Partnership's Managing General Partner and Associate General Partner is BPL Holdings, Inc. (BPL Holdings), a Delaware corporation. During fiscal 1995, the ultimate parent company of BPL Holdings (Kemper Securities Holdings, Inc.) experienced a change in ownership, whereby it became a wholly-owned subsidiary of EVEREN Capital Corporation and changed its name to EVEREN Securities Holdings, Inc. (ESHI). EVEREN Securities, Inc. is a wholly-owned subsidiary of ESHI. These changes have had no impact on the day-to-day operations of BPL Holdings. The following is a list of the directors and officers of BPL Holdings.
Present Position and Principal Occupation and Name and Age Affiliation During the Last 5 years or More
Janet L. Reali Director, President and Principal Executive Officer Age: 44 of BPL Holdings,Inc. Ms. Reali was elected Executive Vice President and Secretary of EVEREN Capital Corporation in May 1995. Since December 1993 she has been Executive Vice President, Corporate Counsel and Corporate Secretary of EVEREN Securities, Inc. She was became a Director and the President of BPL Holdings, Inc. in May 1995. She was Senior Vice President and Associate General Counsel of EVEREN Securities, Inc. from July 1991 to December 1993. Before joining EVEREN Securities, Inc., she was a partner in the Chicago law firm of Keck, Mahin & Cate.
Stanley R. Fallis Director of BPL Holdings, Inc. Age: 54 Mr. Fallis graduated from the University of Idaho with a BS degree in accounting. Mr. Fallis also obtained an MBA degree from the University of Utah. Mr. Fallis is a Certified Public Accountant and practiced public accounting for six years. Mr. Fallis has been associated with Boettcher & Co. for 18 years and is currently Senior Executive Vice President and Chief Financial Officer as well as Director of Administration of EVEREN Securities, Inc.
Daniel D. Williams Director and Vice President of BPL Holdings, Inc. Age: 44 Mr. Williams became a Director and Vice President of BPL Holdings, Inc. in May 1995. Mr. Williams was elected Senior Executive Vice
President, Treasurer and Chief Financial Officer of EVEREN Capital Corporation in May 1995. Since April 1995 he has been Senior Executive Vice President and Chief Financial Officer of EVEREN Securities, Inc. From January 1994 to April 1995, Mr. Williams was Executive Vice President and Director of Finance and Administration and from January 1991 to January 1994 he was Senior Vice President and Director of Accounting of EVEREN Securities, Inc. Prior thereto, he was Executive Vice President, Treasurer and Chief Financial Officer of Boettcher & Co.
Kelly J. Stradinger Vice President and Secretary of BPL Holdings, Inc. Age: 36 Mr. Stradinger joined BPL in 1983 as Assistant Controller for the syndicated public real estate partnerships. Mr. Stradinger is currently in charge of asset management for all syndicated partnerships where BPL or an affiliate is the general partner. He is also a Vice President of EVEREN Securities, Inc., and Director of Leasing for the facilities management department. Mr. Stradinger graduated from Western Michigan University with a Bachelor of Business Administration in Accounting and successfully completed the Certified Public Accountant exam.
Thomas M. Mansheim Director and Treasurer of BPL Holdings, Inc. Age: 38 (Principal Financial and Accounting Officer of the Partnership) Mr. Mansheim joined BPL in 1984 and is currently a Senior Vice President with EVEREN Securities, Inc. He became a Director and the Treasurer of BPL Holdings, Inc. Mr. Mansheim is a Certified Public Accountant and from 1980 to 1984 was employed with KPMG Peat Marwick. Mr. Mansheim graduated from the University of Colorado with a Bachelor of Science degree in business administration.
There is no family relationship among the officers or directors of BPL Holdings or any of its affiliates.
Item 11.

Item 11. EXECUTIVE COMPENSATION
The Partnership, as an entity, does not have any directors or executive officers. The information required by Item 402 of Regulation S-K relating to amounts owed by the Partnership to the Managing General Partner and its affiliates for services rendered during the fiscal year ended September 30, 1995 is presented below. Reference is also made to Note 4 to Financial Statements as contained in Item 8 of this report for a description of related parties.
No form of non-cash remuneration was paid by the Partnership. See Item 13 below with respect to a description of certain transactions of the General Partners and their affiliates with the Partnership.
Item 12.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the knowledge of the Partnership, no person or group owns of record or beneficially more than 5% of the outstanding Units.
The Partnership has no directors or executive officers. To the knowledge of the Partnership, no directors or officers of the Managing General Partner or its affiliates own any Units.
There exists no arrangement, known to the Partnership, the operation of which may at a subsequent date result in a change in control of the Partnership.
Item 13.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership has no directors or executive officers. The information required by Item 404 of Regulation S-K is set forth in Item 11. Executive Compensation as contained in this report.
The Partnership has a Management Agreement with the Managing General Partner pursuant to which the Managing General Partner is responsible for performing the day-to-day investment and administrative operations of the Partnership and supervising the management and operation of the Partnership's properties. For such services and for services rendered in connection with the acquisition of the Partnership's properties, the Managing General Partner is entitled to receive annual fees comprised of a Deferred Acquisition Fee and a Property Management Fee as more fully discussed in Note 4 to the Financial Statements as contained in Item 8 of this report. The Managing General Partner earns such fees for services provided to the Partnership pursuant to the Management Agreement and not by reason of its Partnership interest. The Managing General Partner earned a Deferred Acquisition Fee of $140,364 and a Property Management Fee of $15,734 for the fiscal year ended September 30, 1995.
Pursuant to the Partnership Agreement, the Managing General Partner may be reimbursed by the Partnership for certain of its costs, including reimbursements for its allocable share of salaries of nonmanagement and nonsupervisory personnel providing accounting, investor reporting and communications and legal services to the Partnership, and the maintenance and repair of data processing equipment used for or by the Partnership. Pursuant to such provision, for services provided during the fiscal year ended September 30, 1995, the Managing General Partner is entitled to receive reimbursements aggregating $30,795.
The Partnership Agreement provides for the net operating income or loss of the Partnership to be allocated as follows: (i) to the limited partners to the extent necessary to satisfy the 8% Current Distribution Preference, as defined (an amount equal to 8% of the daily average aggregate adjusted capital contributions of the limited partners) and (ii) 1% of the remainder to the General Partners and 99% to the limited partners. Net operating losses are allocated 1% to the General Partners and 99% to the limited partners.
The Partnership Agreement provides for net capital income from the sale or other disposition of Partnership properties to be allocated on a cumulative basis as follows: (i) 1% to the General Partners and 99% to the limited partners to the extent of depreciation deductions taken from the inception of the partnership, (ii) to the limited partners to the extent necessary to satisfy the Net Proceeds Distribution Preference, as defined (an amount equal to the sum of limited partner capital contributions not yet returned and any unsatisfied 8% current Distribution Preference from prior periods) and (iii) 25% of the remainder to the General Partners and 75% to the limited partners. Net capital loss is allocated 1% to the General Partners and 99% to the limited partners.
PART IV
Item 14.

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) Financial Statements
The following Financial Statement of the Partnership are included herein:
Independent Auditors' Report
Balance Sheets - September 30, 1995 and 1994
Statements of Operations - Years ended September 30, 1995, 1994 and 1993
Statements of Partners' Capital (Deficit) - Years ended September 30, 1995, 1994 and 1993
Statements of Cash Flows - Years ended September 30, 1995, 1994 and 1993
Notes to Financial Statements
(2) Financial Statement Schedule
Independent Auditor's Report
Schedule III - Real Estate and Accumulated Depreciation - September 30, 1995
Schedules, other than the one listed, are omitted for the reason that they are inapplicable or equivalent information has been included elsewhere herein.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the last quarter of the fiscal year covered by this report.
(c) Exhibits
Number Exhibit ------ ------- 4 Limited Partnership Agreement of Registrant(1)
10.1 Management Agreement (1)
10.2 La Risa Apartments Purchase and Sale Agreement (2)
10.3 Venetian Square Shopping Center Purchase and Sale Agreement(2)
10.4 Southcenter Office Building Purchase and Sale Agreement (2)
10.5 La Paz Apartments Purchase and Sale Agreement(3)
10.6 Maryland Villa Apartments Purchase and Sale Agreement (3)
10.7 Los Compadres Apartments Purchase and Sale Agreement (3)
10.8 Loan Extension Agreement for Los Compadres Apartments dated August 27, 1993 (5)
10.9 Letter Agreement for Loan Extension for Los Compadres Apartments dated as of December 17, 1993 (5)
10.10 Loan Extension Agreement for La Paz Apartments dated August 27, 1993 (5)
10.11 Letter Agreement for Loan Extension for La Paz Apartments dated as of December 17, 1993 (5)
10.12 Loan Extension Agreement for Maryland Villa Apartments dated August 27, 1993 (5)
10.13 Letter Agreement for Loan Extension for Maryland Villa Apartments dated as of December 17, 1993 (5)
10.14 Los Compadres Apartments Purchase and Sale Agreement dated January 11, 1994 (6)
10.15 La Paz Apartments Purchase and Sale Agreement dated January 11, 1994 (6)
10.16 Maryland Villa Apartments Purchase and Sale Agreement dated January 11, 1994 (6)
10.17 First Amendment to Purchase and Sale Agreements for Los Compadres, La Paz and Maryland Villa Apartments dated February 18, 1994 (6)
27 Financial Data Schedule
(c) Exhibits (continued)
Number Exhibit ------ ------- 28.1 Complaint for Judicial Foreclosure of Mortgage Dated May 27, 1993 (4)
28.2 Motion for Appointment of Receiver Dated May 27, 1993 (4)
28.3 Objection to Order to Show Cause Dated June 3, 1993 (4)
28.4 Order Appointing Receiver in Aid of Foreclosure Dated June 7, 1993(4)
28.5 Motion for Order of Default, Order of Summary Judgement, and Entry of Judgement of Foreclosure of Mortgage Dated August 10, 1993(5)
28.6 Second Extension and Modification Agreement dated December 28, 1994
(1) Incorporated by reference to Exhibit No. 3.1 and Exhibit 10 to Amendment No. 2 to Form S-11 Registration Statement filed May 2, 1983 - File No. 2-82570.
(2) Incorporated by reference to Registrant's Reports on Form 8-K dated October 18, 1983, December 9, 1983 and April 27, 1984, respectively.
(3) Incorporated by reference to Registrant's Report on Form 8-K dated October 16, 1984.
(4) Incorporated by reference to Registrant's Report on Form 8-K dated June 7, 1993.
(5) Incorporated by reference to Registrant's Report on Form 10-K dated September 30, 1993.
(6) Incorporated by reference to Registrant's Report on Form 8-K dated February 18, 1994.
(7) Incorporated by reference to Registrant's Report on Form 10-Q dated February 13, 1995.
INDEPENDENT AUDITORS' REPORT
THE PARTNERS BOETTCHER WESTERN PROPERTIES III LTD.:
Under date of November 22, 1995, we reported on the balance sheets of Boettcher Western Properties III Ltd. (a limited partnership) as of September 30, 1995 and 1994, and the related statements of operations, partners' capital (deficit), and cash flows for each of the years in the three-year period ended September 30, 1995, as contained in the Partnership's annual report on Form 10-K for the year 1995. In connection with our audits of the aforementioned financial statements, we also audited the related financial statement Schedule III - Real Estate and Accumulated Depreciation. This financial statement schedule is the responsibility of the Partnership's management. Our responsibility is to express an opinion on this financial statement schedule based on our audit.
In our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
The audit report on the financial statements of Boettcher Western Properties III Ltd. referred to above contains an explanatory paragraph that states that management of the Partnership has determined that one of the Partnership's real estate properties has environmental contamination. Management is evaluating the extent of such contamination and the remediation of the property and has accrued certain remediation costs. However, management is currently unable to determine the full extent of the remediation measures and the related total cost. Accordingly, the financial statements do not include any additional adjustments, if any, relating to the ultimate outcome of this uncertainty.
KPMG PEAT MARWICK LLP
Denver, Colorado November 22, 1995
BOETTCHER WESTERN PROPERTIES III, LTD. (A Limited Partnership) SCHEDULE III - Real Estate and Accumulated Depreciation September 30, 1995
Notes: (a) La Risa and Venetian Square were purchased during the period ended September 30, 1984.
(b) Net of debt discount.
(c) Reconciliation of the total amount at which real estate was carried:
(d) No item of real estate investment has been written down or reserved against.
(e) The aggregate cost for Federal income tax purposes at September 30, 1995 is $16,346,743.
(f) No intercompany profits are included in the total of column E.
See accompanying independent auditors' report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BOETTCHER WESTERN PROPERTIES III LTD. (Registrant)
By: Boettcher Properties, Ltd., Managing General Partner
By: BPL Holdings, Inc., General Partner
By: /s/Thomas M. Mansheim --------------------- Treasurer
Dated: December 29, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons (constituting a majority of the Directors of the corporate general partner of the Registrant's Managing General Partner) on the 29th day of December, 1995 in the capacities indicated below.
Name Capacities
JANET L. REALI Director and President of BPL Holdings, Inc.; Principal Executive Officer of the Partnership
By: /s/ Janet L. Reali Dated: December 29, 1995 ------------------------- Janet L. Reali
DANIEL D. WILLIAMS Director and Vice President of BPL Holdings, Inc.
By: /s/ Daniel D. Williams Dated: December 29, 1995 ------------------------- Daniel D. Williams
THOMAS M. MANSHEIM Director and Treasurer of BPL Holdings, Inc.; Principal Financial and Accounting Officer of the Partnership
By: /s/ Thomas M. Mansheim Dated: December 29, 1995 ------------------------- Thomas M. Mansheim
No annual report or proxy material has been sent to the limited partners of the Partnership. An annual report will be sent to the limited partners subsequent to this filing and the Partnership will furnish copies of such report to the Commission when it is sent to the limited partners.