<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

[X]     ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
        OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999.

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

               COMMISSION FILE NUMBER: 0-18454 (FORMERLY 33-26759)

                  --------------------------------------------

                        SOUTHEAST ACQUISITIONS III, L.P.

                  --------------------------------------------

                         (Name of issuer in its charter)

         Delaware                                                    23-2532708
(State of Incorporation)       (IRS Employer Identification Organization Number)

                         301 South Perimeter Park Drive
                           Nashville, Tennessee 37211
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                    (Address of principal executive offices)

           Issuer's telephone no., including area code: (615) 833-8716
--------------------------------------------------------------------------------

           Securities registered pursuant to Section 12(b) of the Act.

                           Name of each exchange: None
             Title of each Class on which registered: Not Applicable

           Securities registered pursuant to Section 12(g) of the Act:
                    Limited Partnership Units $1,000 Per Unit

--------------------------------------------------------------------------------

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past ninety (90) days.
Yes [X]  No [ ]

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
is not contained in this form, and no disclosure will be contained, to the best
of registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes [X]  No [ ]

<PAGE>   2

                          TABLE OF CONTENTS
<TABLE>
<S>         <C>                                                                               <C>
PART I

ITEM 1.     BUSINESS...........................................................................1
            Background.........................................................................1
            Material Recent Developments.......................................................2
            Employees..........................................................................2
            Competition........................................................................2
            Trademarks and Patents.............................................................2

ITEM 2.     PROPERTIES.........................................................................2

ITEM 3.     LEGAL PROCEEDINGS..................................................................4

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................................4

PART II

ITEM 5.     MARKET FOR THE PARTNERSHIP'S UNITS OF LIMITED PARTNERSHIP
            INTEREST AND RELATED SECURITY HOLDER MATTERS.......................................4

ITEM 6.     SELECTED FINANCIAL DATA............................................................5

ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS..........................................................5
            Background.........................................................................5
            Results of Operations..............................................................6
            1999 Compared to 1998..............................................................6
            1998 Compared to 1997..............................................................6
            Liquidity and Capital Resources....................................................7
            Year 2000 Compliance...............................................................7

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................................7

ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE................................................7

PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP................................7

ITEM 11.    EXECUTIVE COMPENSATION.............................................................9

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.....................9
            Security Ownership of Management...................................................9
            Changes in Control.................................................................9

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................................9

ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K..................10
            (a)  Index to Financial Statements................................................10
            (b)  Reports on Form 8-K..........................................................10
            (c)  Exhibits (numbered in accordance with Item 601 of Regulation S-K)............10

SIGNATURES
</TABLE>

                                      - i -

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                                     PART I

ITEM 1.           BUSINESS

                  Background

                  Southeast Acquisitions III, L.P. (the "Partnership") was
formed on November 4, 1988, as a Delaware limited partnership. The Partnership's
public offering of 12,400 units of limited partnership interest ("Units")
commenced on May 2, 1989 and terminated on August 29, 1989 when all 12,400 Units
were sold. The Partnership is scheduled to terminate on December 31, 2001.

                  The Partnership purchased the following five parcels of
unimproved land in 1989: 208 acres in Fulton County, Georgia; 265 acres in Henry
County, Georgia; 24 Acres in Nashville, Tennessee; 47 acres in Fort Myers,
Florida; and 51 acres in Columbia, South Carolina. The Partnership's primary
business objective is to realize appreciation in the value of the five parcels
of unimproved land (each a "Property, collectively the "Properties"), by holding
the Properties for investment and eventual sale, although there is no assurance
that this will be attained.

                  Since acquisition, the Partnership has sold various parcels of
the Property. At December 31, 1999, the Partnership's Property consisted of
approximately 208 acres in Fulton County, Georgia, approximately 47 acres in
Fort Myers, Florida and approximately 42 acres in Columbia, South Carolina.

                  During 1999 there was one sale of 100.01 acres of Fulton
County, Georgia Property at $17,608 per acre. This transaction closed in escrow
and by year-end had not been funded. This sale will not be reflected on the
Income Statement until the closing is funded. However, non-refundable extension
fees of $50,000 and related interest payments from the buyer of $11,188 are
reflected in the 1999 Statement of Income. The 1999 Balance Sheet includes a
deposit in escrow of $40,000 related to this pending sale.

                  During 1998, sales of the Henry County Property consisted of
66 acres at a price of $8,550 per acre, less commissions and expenses, and 13
acres at a price of $12,000 per acre, less commissions and expenses. The
remaining 154 acres of the Henry County Property were sold during 1999 for a
price of $15,243 per acre, less commissions and expenses.

                  The 24 acre Nashville, Tennessee Property was sold in 1995.

                  The 47 acres of residential land owned in Fort Myers, Florida
remain unsold. This land is now under contract for $1,300,000 to close at or
before August 31, 2000, subject to various contingencies.

                  None of the Partnership's Property in Columbia, South Carolina
was sold during 1999. This Property is currently being marketed through a
Columbia, South Carolina real estate broker.

                  The timing and manner of sale will be determined by Southern
Management Group, LLC, the General Partner of the Partnership. The General
Partner generally has the right to sell Property, or portions thereof, without
the consent of the Limited Partners. The Partnership Agreement provides,
however, that a majority in interest of the Limited Partners must consent to the
sale or disposition at one time of 60% or more of the real estate acreage held
by the Partnership as of September 22, 1997 unless the sale or disposition is
being made in connection with the liquidation of the Partnership pursuant to the
Partnership Agreement or in the event that the net proceeds of the sale, when
distributed in accordance with the Partnership Agreement, will be sufficient to
provide the Limited Partners with distributions equal to the acquisition cost of
the assets sold.

                  The General Partner believes that the Partnership's cash
reserves will be sufficient to last for at least two more years assuming no
significant increases in expenses. However, if the reserves are exhausted and
the Partnership is unable to borrow funds, the Partnership may have to sell the
Property on unfavorable terms.



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<PAGE>   4

                  The General Partner has no plans to develop the Properties,
except for activities necessary to prepare the Properties for sale. There can be
no assurance that necessary funds would be available should it be desirable for
the Partnership to improve the Properties to facilitate their sale.

                  At a special meeting of Limited Partners held on November 5,
1997, the Partnership Agreement was amended to (i) extend the term of the
Partnership from its original expiration date of December 31, 1999 to December
31, 2001; (ii) substitute Southern Management Group, LLC for Southeast
Acquisitions, Inc. as the General Partner of the Partnership; (iii) authorize
new commissions and new management fees for the new General Partner; (iv) give
the new General Partner the exclusive right to sell Partnership property; and
(v) modify the Partnership Agreement to require that a majority in interest of
the Limited Partners must consent to the sale or disposition at one time of 60%
or more of the real estate acreage held by the Partnership as of September 22,
1997 unless the sale or disposition is being made in connection with the
liquidation of the Partnership pursuant to the Partnership Agreement or the net
proceeds of the sale, when distributed in accordance with the Partnership
Agreement, will be sufficient to provide the Limited Partners with distributions
equal to the acquisition cost of the assets sold.

                  Material Recent Developments

                  The aforementioned closing on the Fulton County, Georgia
Property closed in escrow and has not yet been funded. However, the Partnership
has received an additional $165,934 of non-refundable earnest money and interest
in the first quarter of 2000. The contract has been amended to extend the
closing period to May 31, 2000. Until the transaction is funded the outstanding
amount will accrue interest at a rate of 10%. All of the remaining Henry County
Property sold during 1999 for a total sales price of $2,282,776. All of the Fort
Myers Property is currently under contract for One Million Three Hundred
Thousand Dollars ($1,300,000) and is scheduled to close during the third quarter
of 2000. There can be no assurance that this contract will close. A contract on
approximately 7.5 acres of the Columbia, South Carolina Property for $38,000 per
acre closed on February 4, 2000. The Partnership has entered into a contract
with the City of Columbia and other parties to jointly fund the design and
construction of a water main extension to serve the Columbia Property. The
estimated cost to the Partnership will be approximately $91,000.

                  Employees

                  The Partnership presently has no employees. The General
Partner manages and controls the affairs of the Partnership. (See Part III, Item
10, Directors and Executive Officers of the Partnership).

                  Competition

                  The General Partner believes that there is significant direct
competition within a five-mile radius of the Properties. The Properties are
located in three distinct areas of the Southeastern United States.

                  Trademarks and Patents

                  The Partnership has no trademarks or patents.

ITEM 2.           PROPERTIES

                  The Partnership owns three tracts of undeveloped land
consisting of approximately 208 acres in Fulton County, Georgia, 47 acres in
Fort Myers, Florida and 42 acres in Columbia, South Carolina.

                  Fulton County, Georgia Property:

                  The Fulton County, Georgia Property consists of 208 acres of
multi-zoned undeveloped land located in the southern portion of Fulton County
approximately 16 miles southwest of the central business district, approximately
10 miles west of the Hartsfield-Atlanta International Airport. The Property is
located at the northeast and southeast quadrants of the intersection of State
route 92 (Campbelltown-Fairburn Road) and the South Fulton Parkway. The Property
has approximately 6,000 feet of frontage along State Route 92 on its east side,
1,955 feet of frontage on Red Mill Road and 3,345 feet of frontage on Thompson
Road. Both Red Mill and Thompson Roads are


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paved and intersect with State Route 92 south and north, respectively, of the
South Fulton Parkway. The portion of the South Fulton Parkway which intersects
the Property provides the site with direct access to both I-85 and I-285, major
north-south arteries. The Property is currently the only non-residentially zoned
land in the immediate surrounding area. Approximately 108 acres are located in
the northeast quadrant of the State Route 92 and South Fulton Parkway
intersection, of which 22 acres are zoned C-1 Commercial, 52 are zoned M-1A
Industrial Park, and 34 acres are zoned Multi-Family Apartment. Approximately
100 acres are located at the southeast quadrant of State Route 92 and South
Fulton Parkway intersection of which 37 acres are zoned C-1 Commercial, 46 are
zoned M-1A Industrial Park and 17 acres are zoned 0-1 Office Institutional.
This 100 acre portion closed in escrow (see Material Recent Developments above).

                  All utilities are available to the Property except sewer
facilities. The Partnership has no other plans for development of this Property.
The General Partner has the sole discretion to decide whether the Partnership
should develop the Property to facilitate sales.

                  The former general partner had the Fulton County Property
appraised in 1996 by Urban Realty Advisors, Inc. The 1996 appraiser has no
relationship with the former general partner or the current General Partner. The
Property was appraised in 1996 for $1,350,000 or approximately $6,490 per acre.
The appraiser used the sales comparison (market) approach to value the Property.
The appraiser concluded that the Property's only immediate use was residential
due to the low traffic counts and low population density in the area. The
appraiser also determined that the Property was not imminently ready for
development and therefore did not conduct a development analysis for comparison
to the market approach.

                  The appraised value does not reflect costs, expenses and
commissions, which would be incurred in connection with a sale of the property.
Moreover, appraisals are only an approximation of current market value which can
only be established by an actual sale.

                  Fort Myers, Florida Property

                  The Fort Myers Property is situated in Lee County
approximately two miles inland from the Gulf of Mexico. The Property consists of
47 acres of undeveloped land located one mile south of the Summerlin
Road/Winkler Road intersection. Approximately three-fourths of the Property is
generally level farm land with the remaining one-fourth being heavily wooded.
The Property lies within federally designated Flood Hazard Zone A-12 which will
require increasing the elevation of home sites by approximately three feet.

                  The Property is currently zoned AG Agricultural which
designation is considered to be a "holding" classification until such time as
the Property can be rezoned to permit a more intensive development. The Property
is also classified as "Suburban" under the Lee County Comprehensive Land Use
Plan. The "Suburban" areas are characterized as being predominantly residential
areas that are either on the fringe of the central urban areas or in areas where
it is appropriate to protect existing residential neighborhoods.

                  All utilities including sewer and water are presently
available to the Property for a high density residential use. The General
Partner believes that the availability of sewer and water to this Property is an
important factor since both sewer and water are necessary before a building
permit can be issued in Lee County.

                  The former general partner had the Fort Myers Property
appraised in 1996 by Stewart, Stephan & Bowen, Inc. The 1996 appraiser has no
relationship with the former general partner or the current General Partner. The
Property was appraised in 1996 for $1,395,000 or approximately $29,062 per acre.
The appraiser used the sales comparison (market) approach to value the Property.
The current General Partner had the land appraised in 1999 by Stephen &
Associates. The property was appraised at $1,201,050, or approximately $25,500
per acre. This appraiser also used the sales comparison (market) approach to
value the property. The land was written down to appraised value, less estimated
cost to sale, resulting in the recognition of a provision for loss on land of
$141,147 during the year end December 31, 1999.

                  The appraised value does not reflect costs, expenses and
commissions, which would be incurred in connection with a sale of the property.
Moreover, appraisals are only an approximation of current market value which can
only be established by an actual sale.


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<PAGE>   6

                  All 47 acres are under contract for sale for $1,300,000 with
an outside closing date of August 31, 2000, but there can be no assurance the
contract will close.

                  Columbia, South Carolina Property

                  The Columbia, South Carolina Property is located on the
southwest side of US Highway 176, also known as Broad River Road in Richland
County, northwest of downtown Columbia, South Carolina. The Property consists of
approximately 42 acres of undeveloped land, generally rectangular in shape, and
heavily wooded with a sloping topography. The Property has an abundance of paved
frontage including frontage on US Highway 176, County Road 286, County Road 385,
and on a new county road.

                  During the first quarter of 2000, the Partnership entered into
a contract with an independent contractor that will extend a water line into the
property. Funds totaling $100,000 were escrowed from the February 4, 2000
closing to cover the Partnership's share of this water line. All other utilities
including a sewer line on the Property are presently available to the Property
for commercial use.

                  The former general partner had the Columbia Property appraised
in 1996 by Owen Faulkner & Associates. The appraiser has no affiliation with the
former general partner or the current General Partner. The Property, which
consisted of approximately 50 acres at the time, was appraised for $740,000 or
approximately $14,800 per acre. The appraisal used the sales comparison (market)
approach to value.

                  The appraised value does not reflect costs, expenses and
commissions, which would be incurred in connection with a sale of the property.
Moreover, appraisals are only an approximation of current market value which can
only be established by an actual sale.

ITEM 3.           LEGAL PROCEEDINGS

                  The Partnership is not directly a party to, nor is the
Partnership's Property directly the subject of, any material legal proceedings.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  There were no matters submitted to a vote of security holders
in 1999.

                                     PART II

ITEM 5.           MARKET FOR THE PARTNERSHIP'S UNITS OF LIMITED PARTNERSHIP
                  INTEREST AND RELATED SECURITY HOLDER MATTERS

                  There is no established public trading market for the Units
and it is not anticipated that any will develop in the future. The Partnership
commenced an offering to the public on May 2, 1989 of 12,400 Units of limited
partnership interests. The offering of $12,400,000 was fully subscribed and
terminated on August 29, 1989. As of December 31, 1999, there were 711 limited
partners in the Partnership.



                                       4
<PAGE>   7

ITEM 6.           SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                   For the Year        For the Year     For the Year      For the Year     For the Year
                      Ended               Ended             Ended             Ended           Ended
                   December 31,         December 31,     December 31,      December 31,     December 31,
                       1999                1998              1997              1996            1995
------------------------------------------------------------------------------------------------------------
<S>                <C>                  <C>              <C>               <C>             <C>
Operating
Revenues             $1,343,860         $  333,395        $  114,666       $   131,091       $  438,539
------------------------------------------------------------------------------------------------------------

Net Income (Loss)    $1,113,511**       $  240,988        $   (5,089)      $(4,306,098)*     $  362,771
------------------------------------------------------------------------------------------------------------

Net Income (Loss) per
Unit of Limited
Partnership
Interest             $    89.80         $    19.43        $     (.41)      $   (347.27)      $    29.26
------------------------------------------------------------------------------------------------------------

Total Assets         $3,597,804         $4,490,341        $4,895,246       $ 4,876,351       $9,180,938
------------------------------------------------------------------------------------------------------------

Long Term
Obligations             None                None              None              None            None
------------------------------------------------------------------------------------------------------------

Cash
Distributions
Declared per
Unit of Limited
Partnership
Interest             $      165         $       50            None              None           $    125
------------------------------------------------------------------------------------------------------------
</TABLE>
 *Includes a provision for loss on land of $4,348,886.
**Includes a provision for loss on land of $141,147.

ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

                  Background

                  The Partnership was formed to acquire and realize appreciation
in the Property by holding it for investment and eventual sale. However, there
can be no assurance that the Partnership's objectives will be realized.





                                       5
<PAGE>   8

                  The Partnership originally purchased 595 acres of unimproved
land at five locations. The status of these Properties at December 31, 1999 is
as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                         Property Sold Prior to     Remaining Property
        Place                   Property Purchased          December 31, 1999         Held for Sale
--------------------------------------------------------------------------------------------------------
<S>                             <C>                      <C>                        <C>
Fulton County, Georgia               208 acres                    0 acres                208 acres
--------------------------------------------------------------------------------------------------------

Henry County, Georgia                265 acres                  265 acres                  0 acres
--------------------------------------------------------------------------------------------------------

Fort Myers, Florida                   47 acres                    0 acres                 47 acres
--------------------------------------------------------------------------------------------------------

Columbia, South Carolina              51 acres                    9 acres                 42 acres
--------------------------------------------------------------------------------------------------------

Nashville, Tennessee                  24 acres                   24 acres                  0 acres
--------------------------------------------------------------------------------------------------------
</TABLE>

                  Results of Operations

                  The Partnership had no operations from the date of its
formation on November 4, 1988 until June 1, 1989 when it acquired the initial
Property and sold 6,215 Units of Limited Partnership interest. During 1989 the
Partnership acquired four additional Properties and sold 6,185 additional Units
of Limited Partnership interests.

                  1999 Compared to 1998

                  During 1999 the Partnership had one sale of the Henry County,
Georgia Property for a gain of $1,260,125 as compared to 1998 when gains from
Property sales were $310,015. Other revenue during 1999 consisted of $61,188 in
non-refundable extension fee income and related interest income and $22,547 in
interest income.

                  Expenses for 1999 were $230,349, consisting of general and
administrative expenses of $34,349, management fees of $26,500, real estate
taxes of $19,210, engineering fees of $7,775, insurance of $1,038, Delaware
franchise and excise taxes of $330 and a provision for loss on land of $141,147
as previously discussed on page 3. The $9,398 decrease in real estate taxes
between 1999 and 1998 was primarily due to the sale of land. The engineering
fees were paid as a settlement against a lien on the Fulton County, Georgia
Property. A lien had been placed on the property in 1994 by engineers that had
been hired to conduct tests on the property adjoining the Partnership Property.
It is unclear as to whether Southeast Acquisitions III, LP was a party to the
aforementioned contract, however, the prior General Partner did not appear in
court to contest the claim filed by the engineers. The creditors agreed to
release the lien on the Partnership land for $7,775.

                  1998 Compared to 1997

                  During 1998, the Partnership had two sales of the Henry
County, Georgia Property for a gain of $310,015 as compared to 1997 when gains
from Property sales were $91,709. Other revenue during 1998 was interest income
of $23,380 compared with 1997 interest income of $22,957.

                  Expenses for 1998 were $92,407, consisting of general and
administrative expenses of $35,940, management fees of $26,500, real estate
taxes of $28,608 and insurance of $1,359. The general and administrative fees
included $26,004 for legal and accounting fees. The $13,333 increase in legal
and accounting fees over 1997 was due to the change in the general partner, as
well as additional assistance required for preparing the income tax


                                       6


<PAGE>   9

return and preparing Security and Exchange Commission reports. The general and
administrative fees also included consulting fees totaling $3,256 related to
customizing the General Partner's computer software for maintaining limited
partner records. In 1997, expenses were $119,755 consisting of general and
administrative expenses of $15,397, management fees of $20,260, real estate
taxes of $34,365, insurance of $584 and professional fees of $49,149. The latter
amount related to a change in the General Partner and Amendments to the
Partnership Agreement. The increase in management fees between 1997 and 1998
represent new management fees for the new General Partner which were included as
part of an amendment to the Limited Partnership Agreement. The $5,757 decrease
in property taxes was due to the sale of land.

                  Inflation did not have a material impact on operations during
1999, 1998 and 1997.

                  Liquidity And Capital Resources

                  Cash generated by operating activities varies from year to
year based on the level of land sale activity. The Partnership had cash reserves
of $528,342 at December 31, 1999. The General Partner believes that the
Partnership has sufficient cash reserves to cover normal partnership expenses
for an additional two years. However, if additional expenses are incurred or if
the Partnership goes forward with the construction to bring sewer to the Fulton
County Property, the reserves may be inadequate to cover the Partnership's
operating expenses. If the reserves are exhausted, the Partnership may have to
dispose of some of the Property or incur indebtedness on unfavorable terms.

                  Year 2000 Compliance

                  The Partnership's operations are not dependent in any
meaningful way on computer hardware or software. The "Year 2000 Issue" generally
refers to the inability of computer software or hardware to recognize years in
more than two digits. As a result, the year 2000 would appear as "00" and may be
viewed by the computer as the year 1900. There was no effect on the
Partnership's accounting systems or the Limited Partner registration records
from the "Year 2000 Issue."

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                  The Partnership's financial statements for the years ended
December 31, 1999, 1998 and 1997, together with the report of the Partnership's
independent auditors, Williams Benator & Libby, LLP, are included in this Form
10-K

ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURE

                  Not Applicable.

                                    PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP

                  The Partnership does not have any directors or officers. The
General Partner manages and controls the affairs of the Partnership and has
responsibility for all aspects of the Partnership's operations. The current
members and executive officers and directors of the General Partner are
identified and described below.

                  The General Partner is a Tennessee limited liability company
whose members are Richard W. Sorenson, who owns a 50% interest in the General
Partner and has a 51% voting right, and Southeast Venture LLC, a Tennessee
limited liability company which owns 50% and has a 49% voting right.

                  Mr. Sorenson, age 74, has over 38 years experience in several
real estate disciplines, including land acquisition and development, development
of office buildings, shopping centers, warehouses and medical facilities. All of
these activities occurred in the southeastern United States.

                  Mr. Sorenson was President of Phoenix Investment Company
("Phoenix"), a publicly owned, Atlanta based real estate development and
investment firm from 1965 to 1970. Concurrent with his employment at



                                       7

<PAGE>   10

Phoenix, he was President of First Atlanta Realty Fund, a publicly owned real
estate investment trust. During his tenure with the trust, he served as a
Trustee of the National Association of Real Estate Investment Trusts.

                  Following his departure from Phoenix in 1970, Mr. Sorenson
became Vice President of Cousins Properties in Atlanta, where he was responsible
for development of office buildings, shopping centers and apartments until 1971.
Until forming Southeast Venture Companies ("SV") in 1979, Mr. Sorenson was an
independent real estate developer.

                  Mr. Sorenson was co-founder of SV in 1979. In 1992,
substantially all of the assets of SV were sold to Southeast Venture
Corporation.

                  Mr. Sorenson is a graduate of the Northwestern University
Business School with a major in real estate.

                  The other member of the General Partner is Southeast Venture
LLC ("SVLLC"). The officers and key employees of SVLLC include the following:

                  Paul J. Plummer, age 50. Mr. Plummer is a registered architect
and serves as director of architecture services for SVLLC. Mr. Plummer is
responsible for facility programming, planning, master planning, facility
assessment and design. Before joining SV in 1986, Mr. Plummer served as a
partner and director of design for the Nashville-based architecture and
engineering firm of Gresham, Smith and Partners. In that capacity he was
responsible for the design and planning of over 15 major projects throughout the
United States and Saudi Arabia. Mr. Plummer earned his bachelor of architecture
degree from the University of Kentucky and is a member of the American Institute
of Architects.

                  Wood S. Caldwell, age 46. Mr. Caldwell is responsible for all
site development activities on behalf of commercial and health care clients of
SVLLC, including managing all design consultants, permitting, scheduling,
budgeting and construction management. He contributes to SVLLC's development
team in the areas of land planning, zoning, permitting, engineering and
construction. Before joining SV in 1985, Mr. Caldwell served as a professional
engineer for Gresham, Smith and Partners. As the prime site design engineer for
Gresham, Smith and Partners, Mr. Caldwell produced and coordinated site
development plans for over 50 separate medical facilities in over 40 different
communities throughout the southeast. Mr. Caldwell earned his bachelor of
engineering degree from the Vanderbilt University School of Engineering.

                  Axson E. West, age 45. Mr. West serves as vice president of
brokerage services for SVLLC, specializing in office and industrial leasing,
improved property sales and land disposition for several commercial and
residential projects. Mr. West has sold real estate and real estate securities
since 1980 and, since joining SV in 1988, he has been responsible for the
disposition of land encompassing industrial, office and retail developments. Mr.
West is past director of the Nashville Board of Realtors and past president of
the board's commercial investment division. He received his bachelor of arts
degree from Vanderbilt University and is a Certified Commercial Investment
Member, a designation of the Commercial Investment Real Estate Institute.

                  Cameron W. Sorenson, age 38. Mr. Sorenson serves as director
of vertical development for SVLLC. He is primarily responsible for providing
development and project management for the clients of SVLLC. Prior to assuming
these responsibilities, Mr. Sorenson was project director for two large scale
land development ventures for SVLLC. Prior to joining SV in 1987, Mr. Sorenson
was with Trust Company Bank in Atlanta, as an officer in the National Division,
managing a credit portfolio in excess of $150 million. He received his bachelor
of science degree in finance from the MacIntyre School of Business at the
University of Virginia. Cameron Sorenson is the son of Richard W. Sorenson, the
individual majority member of the General Partner.

                  Randall W. Parham, age 44. Mr. Parham is the President of
SVLLC. He is primarily responsible for property management, park and association
management and also specializes in real estate development and brokerage. Mr.
Parham is a licensed real estate broker and architect. Prior to joining SVLLC in
1998, Mr. Parham was a project manager with Gresham, Smith and Partners from
1978 to 1983 and was responsible for overall project management of project team
and project financial management. Following his departure from Gresham, Smith
and Partners, Mr. Parham joined MetroCenter Properties, Inc., an 850 acre
mixed-use development in Nashville, Tennessee. He was Vice President and was
responsible for initiation and development of new projects, land sales


                                       8

<PAGE>   11

and lease negotiations. In 1991 he purchased the assets of MetroCenter
Properties and formed MetroCenter Management, Inc. where he served as President
through 1997.

ITEM 11.          EXECUTIVE COMPENSATION

                  During the fiscal year ended December 31, 1999, the
Partnership did not pay compensation to any officers of the General Partner. The
Partnership paid the General Partner a management fee of $26,500 in the fiscal
years ended December 31, 1999 and 1998 respectively. See Item 13 of this report,
"Certain Relationships and Related Transactions."

ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

                  As of December 31, 1999, no person or "group" (as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934) was known by
the Partnership to beneficially own more than five percent of the Units of the
Partnership.

                  Security Ownership of Management

                  No individual member, or director or officer of a member, of
the General Partner nor such directors or officers as a group, owns any of the
Partnership's outstanding securities. The General Partner owns a general
partnership interest which entitles it to receive 30% of cash distributions
after the Limited Partners have received a return of their capital contributions
plus cumulative distributions equal to a 10% non-compounded Cumulative Annual
Return of their Adjusted Capital Contributions as those terms are defined in the
Partnership Agreement. The General Partner will share in taxable income to
reflect cash distributions or, to the extent there are losses, 1% of such
losses.

                  Changes in Control

                  There are no arrangements known to the Partnership that would
at any subsequent date result in a change in control of the Partnership.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                  From 1988 to November 5, 1997, the Partnership paid $24,886
annually as an administration fee to the former general partner. This fee was
computed as one quarter of one percent of the base cost of the land. The
cumulative amount of such fee could not exceed $207,244,which limit was reached
and paid during 1997 as provided in the Partnership Agreement. As of November 5,
1997, the Limited Partners voted and agreed to pay the new General Partner,
Southern Management Group, LLC, a fee of $4,066 for the period November 5, 1997
through December 31, 1997 and annual fees of $26,500 from January 1, 1998
through December 31, 2001. Any fee payments will cease at a date when the
Partnership is liquidated.

                  The General Partner will also receive 30% of cash
distributions after the Limited Partners have received (i) a return of their
Capital Contributions plus (ii) cumulative distributions equal to a 10%
Cumulative Annual Return on their Adjusted Capital Contributions (as those terms
are defined in the Partnership Agreement). During 1999, 1998, and 1997 the
General Partner received no cash distributions.

                  At the special meeting of Limited Partners held on November 5,
1997, the Partnership Agreement was amended to provide that total compensation
paid to all persons, including the General Partner, for the sale of the
Partnership's Property is limited to a competitive real estate commission or
disposition fee not to exceed 10% of the contract price of the property,
provided that the General Partner or its affiliates would only be entitled to up
to 50% of any such compensation. Any such real estate commission or disposition
fee that is paid to the General Partner will reduce any distributions to which
it would otherwise be entitled under the amended Partnership Agreement. In
addition, the Partnership Agreement was amended to provide that the General
Partner may act as the exclusive agent for the sale of the Property. During 1999
and 1998, the Partnership paid real estate commissions of $57,069 and $8,059,
respectively, to the General Partner. No real estate sales commissions were paid
to the General Partner in 1997.



                                       9

<PAGE>   12

                                     PART IV

ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
                  FORM 8-K

<TABLE>
<CAPTION>
                                                                                               Page
<S>                        <C>                                                                 <C>
                  (a)      Index to Financial Statements

                           Report of Independent Auditors                                       F-1
                           Balance Sheets                                                       F-2
                           Statements of Operations                                             F-3
                           Statements of Partners' Equity (Deficit)                             F-4
                           Statements of Cash Flows                                             F-5
                           Notes to Financial Statements                                        F-6

                           Schedules have been omitted because they are inappropriate,
                           not required, or the information is included elsewhere in the
                           financial statements or notes thereto.

                  (b)      Reports on Form 8-K

                           No reports on Form 8-K were filed by the Partnership
                           during the fourth quarter of 1999.


                  (c)      Exhibits (numbered in accordance with Item 601 of
                           Regulation S-K)
</TABLE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Exhibit Numbers                        Description                               Page Numbers
---------------------------------------------------------------------------------------------
<S>               <C>                                                            <C>
3.1(a)            Certificate of Limited Partnership                                   *
---------------------------------------------------------------------------------------------

3.1(b) & (4)      Restated Limited Partnership Agreement                              **
---------------------------------------------------------------------------------------------

3.1(c)            First Amendment to Restated Limited Partnership Agreement          E-1
---------------------------------------------------------------------------------------------

11                Not Applicable
---------------------------------------------------------------------------------------------

12                Not Applicable
---------------------------------------------------------------------------------------------

13                Not Applicable
---------------------------------------------------------------------------------------------

16                Not Applicable
---------------------------------------------------------------------------------------------

18                Not Applicable
---------------------------------------------------------------------------------------------

19                Not Applicable
</TABLE>

                                       10
<PAGE>   13
<TABLE>
<S>               <C>
---------------------------------------------------------------------------------------------

22                Not Applicable
---------------------------------------------------------------------------------------------

24                Not Applicable
---------------------------------------------------------------------------------------------

25                Not Applicable
---------------------------------------------------------------------------------------------

27                Financial Data Schedule (for SEC use only)
---------------------------------------------------------------------------------------------

28                Not Applicable
---------------------------------------------------------------------------------------------

29                Not Applicable
---------------------------------------------------------------------------------------------
</TABLE>

*        Incorporated by reference to Exhibit 3.1 filed as part of the Exhibits
         to the Partnership's Registration Statement on Form S-18, Registration
         No. 33-26759.

**       Incorporated by reference to Exhibit 3.2 filed as part of the
         Partnership's Registration Statement on Form S-18, Registration
         No. 33-26759.



                                       11
<PAGE>   14

                                   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.

                                 SOUTHEAST ACQUISITIONS III, L.P.
                                 a Delaware limited partnership


                                 By:      SOUTHERN MANAGEMENT GROUP, LLC
                                          General Partner

                                 By:      /s/ Richard W. Sorenson
                                          -------------------------------------
                                          RICHARD W. SORENSON
                                          President and Chief Executive Officer

                  Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following person on behalf of the
Registrant and in the capacities and on the date indicated.

<TABLE>
<CAPTION>
         Signature                              Title                           Date
         ---------                              -----                           ----
<S>                               <C>                                           <C>
/s/ Richard W. Sorenson           President, Chief Executive Officer          3/15/00
-----------------------           and Chief Financial Officer of
                                  Southern Management Group, LLC
</TABLE>








                                       12
<PAGE>   15







                        SOUTHEAST ACQUISITIONS III, L.P.

                          AUDITED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

                                      with

                         REPORT OF INDEPENDENT AUDITORS


<PAGE>   16








                         REPORT OF INDEPENDENT AUDITORS

Partners
Southeast Acquisitions III, L.P.
Nashville, Tennessee

We have audited the accompanying balance sheets of Southeast Acquisitions III,
L.P. (a Delaware limited partnership) as of December 31, 1999 and 1998, and the
related statements of operations, partners' equity (deficit), and cash flows for
the years ended December 31, 1999, 1998, and 1997. 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 Southeast Acquisitions III,
L.P. as of December 31, 1999 and 1998, and the results of its operations and its
cash flows for the years ended December 31, 1999, 1998, and 1997, in conformity
with generally accepted accounting principles.

WILLIAMS BENATOR & LIBBY, LLP

Atlanta, Georgia
January 13, 2000





                                       F-1


<PAGE>   17


BALANCE SHEETS

SOUTHEAST ACQUISITIONS III, L.P.

<TABLE>
<CAPTION>
                                                            December 31
                                                       1999             1998
                                                    ----------------------------
<S>                                                 <C>              <C>
ASSETS

Land and improvements held for sale--Note F         $ 3,063,712      $ 3,996,991
Cash and cash equivalents                               528,342          493,350
Deposit--Note E                                           5,750              -0-
                                                    -----------      -----------

                                                    $ 3,597,804      $ 4,490,341
                                                    ===========      ===========


LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Accounts payable and accrued expenses               $    13,510      $    13,558
Escrow on pending sale of land--Note D                   40,000              -0-
Payable to previous general partner--Note B               3,584            3,584

Partners' equity (deficit)--Note C
    General partner                                     (32,774)         (43,909)
    Limited partners (12,400 units outstanding)       3,573,484        4,517,108
                                                    -----------      -----------
                                                      3,540,710        4,473,199
                                                    -----------      -----------

                                                    $ 3,597,804      $ 4,490,341
                                                    ===========      ===========
</TABLE>



See notes to financial statements.




                                       F-2


<PAGE>   18


STATEMENTS OF OPERATIONS

SOUTHEAST ACQUISITIONS III, L.P.

<TABLE>
<CAPTION>
                                                               Year Ended December 31
                                                         1999          1998           1997
                                                      ---------------------------------------
<S>                                                   <C>            <C>            <C>
Revenues:
    Gain on sale of land                              $1,260,125     $ 310,015      $  91,709
    Interest and other income                             22,547        23,380         22,957
    Extension fee and interest income on
       pending sale of land--Note D                       61,188           -0-            -0-
                                                      ----------     ---------      ---------
                                                       1,343,860       333,395        114,666

Expenses:
    General and administrative                            42,454        35,940         15,397
    Management fee--Note B                                26,500        26,500         20,260
    Real estate taxes                                     19,210        28,608         34,365
    Insurance                                              1,038         1,359            584
    Professional and other fees related to change
       in general partner and amendment of
       partnership agreement                                 -0-           -0-         49,149
    Provision for loss on land--Note F                   141,147           -0-            -0-
                                                      ----------     ---------      ---------
                                                         230,349        92,407        119,755
                                                      ----------     ---------      ---------

Net income (loss)--Note C:
    General partners                                      11,135         2,410            (51)
    Limited partners                                   1,102,376       238,578         (5,038)
                                                      ----------     ---------      ---------

                                                      $1,113,511     $ 240,988      $  (5,089)
                                                      ==========     =========      =========

Net income (loss) per limited partnership unit        $    89.80     $   19.43      $    (.41)
                                                      ==========     =========      =========
</TABLE>



See notes to financial statements.





                                       F-3


<PAGE>   19


STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

SOUTHEAST ACQUISITIONS III, L.P.

<TABLE>
<CAPTION>
                                                    General        Limited
                                                    Partners       Partners           Total
                                                    --------      -----------      -----------
<S>                                                 <C>           <C>              <C>
Balance at January 1, 1997                          $(46,268)     $ 4,903,708      $ 4,857,440

Net loss for the year ended December 31, 1997            (51)          (5,038)          (5,089)
                                                    --------      -----------      -----------

Balance at December 31, 1997                         (46,319)       4,898,670        4,852,351

Net income for the year ended December 31, 1998        2,410          238,578          240,988

Distributions ($50 per unit)                             -0-         (620,140)        (620,140)
                                                    --------      -----------      -----------

Balance at December 31, 1998                         (43,909)       4,517,108        4,473,199

Net income for the year ended December 31, 1999       11,135        1,102,376        1,113,511

Distributions ($165 per unit)                            -0-       (2,046,000)      (2,046,000)
                                                    --------      -----------      -----------

Balance at December 31, 1999                        $(32,774)     $ 3,573,484      $ 3,540,710
                                                    ========      ===========      ===========
</TABLE>



See notes to financial statements.





                                       F-4


<PAGE>   20


STATEMENTS OF CASH FLOWS

SOUTHEAST ACQUISITIONS III, L.P.

<TABLE>
<CAPTION>
                                                                               Year Ended December 31
                                                                         1999            1998           1997
                                                                      -----------------------------------------
<S>                                                                   <C>              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)                                                 $ 1,113,511      $ 240,988      $  (5,089)
    Adjustments to reconcile net income (loss) to net
       cash provided by operating activities:
         Gain on sale of land                                          (1,260,125)      (310,015)       (91,709)
         Net proceeds from sale of land                                 2,052,257        707,940        232,351
         Cash paid for land improvements                                      -0-        (18,500)           -0-
         Provision for loss on land                                       141,147            -0-            -0-
         Decrease (increase) in receivable from affiliate                     -0-         13,954        (13,954)
         Increase in deposit                                               (5,750)           -0-            -0-
         (Decrease) increase in accounts payable and
            accrued expenses                                                  (48)        (5,753)        10,206
         Increase (decrease) in escrow on pending
            sale of land                                                   40,000        (20,000)        20,000
         Decrease in payable to previous
            general partner                                                   -0-            -0-         (6,222)
                                                                      -----------      ---------      ---------

                                               NET CASH PROVIDED
                                         BY OPERATING ACTIVITIES        2,080,992        608,614        145,583

CASH FLOWS FROM FINANCING ACTIVITIES
    Distributions paid to limited partners                             (2,046,000)      (620,140)           -0-
                                                                      -----------      ---------      ---------

                                          INCREASE (DECREASE) IN
                                       CASH AND CASH EQUIVALENTS           34,992        (11,526)       145,583

Cash and cash equivalents at beginning of year                            493,350        504,876        359,293
                                                                      -----------      ---------      ---------

                                       CASH AND CASH EQUIVALENTS
                                                  AT END OF YEAR      $   528,342      $ 493,350      $ 504,876
                                                                      ===========      =========      =========
</TABLE>



See notes to financial statements.




                                       F-5


<PAGE>   21


NOTES TO FINANCIAL STATEMENTS

SOUTHEAST ACQUISITIONS III, L.P.

December 31, 1999


NOTE A--DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Southeast Acquisitions III, L.P. ("the Partnership") is a Delaware limited
partnership that was formed to acquire undeveloped land. The Partnership was
formed during November 1988 and received equity contributions totaling
$12,373,480 through the sale of 12,400 limited partnership units during 1989.
The Partnership was originally scheduled to terminate on December 31, 1999.
However, during November 1997, concurrent with the replacement of the previous
general partner, the term of the Partnership was extended to December 31, 2001.

During 1989, the Partnership purchased undeveloped land as follows:
approximately 211 acres in Fulton County, Georgia, approximately 265 acres in
Henry County, Georgia, approximately 24 acres in Nashville, Tennessee,
approximately 48 acres in Fort Myers, Florida, and approximately 51 acres in
Columbia, South Carolina. This land was purchased from an affiliate of the
previous general partner. The land in Nashville, Tennessee was sold during 1995.
The land in Henry County, Georgia was sold during 1999. At December 31, 1999,
the Partnership's property consisted of approximately 208 acres in Fulton
County, Georgia, approximately 47 acres in Fort Myers, Florida, and
approximately 42 acres in Columbia, South Carolina.

The following accounting policies are presented to assist the reader in
understanding the Partnership's financial statements:

Basis of Accounting: The Partnership maintains its accounting records on the
accrual basis of accounting. Sales of land are recognized upon the closing of an
enforceable sales contract and the Partnership's execution of its obligations
under the contract.

Land: The Partnership has adopted Statement of Financial Accounting Standards
("SFAS") No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of. In accordance with SFAS Statement No. 121,
land held for investment is carried at the lower of cost or fair value. Land
held for sale is carried at the lower of cost or fair value less estimated cost
to sell. During 1997, land that had previously been considered as held for
investment was reclassified to held for sale.

The Partnership's land is carried net of write-downs to fair value, as
determined by independent appraisals. Cumulative original write-downs to fair
value through December 31, 1999 totaled $3,622,126 on the Fulton County, Georgia
land, $817,346 on the Fort Myers, Florida land (including a write-down of
$141,147 that was recognized during the last quarter of the year ended December
31, 1999) and $625,861 on the Columbia, South Carolina land.



                                       F-6


<PAGE>   22


NOTES TO FINANCIAL STATEMENTS--Continued

SOUTHEAST ACQUISITIONS III, L.P.


NOTE A--DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES--Continued

Income Taxes: Federal and state income taxes have not been provided for in the
financial statements. Under existing law, the Partnership is not treated as a
taxable entity. Rather, each partner must include his allocated share of
Partnership income, loss, gain, deduction, and credit in his individual income
tax return. Write-downs of the land's carrying value that have been recorded for
financial statement purposes will not be recognized for income tax purposes
until the land is sold. At December 31, 1999 and 1998, remaining write-downs
that had not been recognized for income tax purposes totaled $4,964,005 and
$4,822,859, respectively.

Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents: For purposes of reporting cash flows, the Partnership
considers all demand deposits and highly liquid investments purchased with an
original maturity of three months or less which can be readily converted to cash
on demand, without penalty, to be cash equivalents. At December 31, 1999, cash
on deposit included approximately $501,000 in excess of federally insured
limits.

NOTE B--RELATED PARTY TRANSACTIONS

During the years ended December 31, 1999, 1998 and 1997, the Partnership paid
management fees of $26,500, $26,500 and $4,066, respectively, to the current
general partner, as provided for in the amendment to the partnership agreement
that was adopted during November 1997. Management fees of $16,194 were paid to
the previous general partner during the year ended December 31, 1997. The
original partnership agreement provided for cumulative management fees to be
paid to the previous general partner of $207,244. That limit was reached during
1997.

The amended partnership agreement provides for annual management fees of $26,500
to be paid to the current general partner through the year ended December 31,
2001.

At December 31, 1999 and 1998, the Partnership had commissions payable to its
previous general partner of $3,584. During the years ended December 31, 1999 and
1998, the Partnership paid commissions to the current general partner related to
the sale of land of $57,069 and $8,059, respectively.



                                       F-7


<PAGE>   23


NOTES TO FINANCIAL STATEMENTS--Continued

SOUTHEAST ACQUISITIONS III, L.P.


NOTE B--RELATED PARTY TRANSACTIONS--Continued

The Partnership agreement provides for reimbursement of expenses incurred by the
general partner related to the administration and operation of the Partnership.
During the years ended December 31, 1999 and 1998, reimbursements to the current
general partner's members and related companies totaled $7,016 and $10,090,
respectively. Reimbursements to the previous general partner totaled $41,325
during the year ended December 31, 1997.

NOTE C--PARTNERS' EQUITY

In accordance with the partnership agreement (as amended in November 1997), cash
distributions and Partnership profits and losses are to be allocated as follows:

(a)      Cash Distributions--Except for distributions in connection with the
         liquidation of the Partnership, cash distributions, if any, will be
         made 100% to the limited partners until the limited partners have
         received (i) a return of their capital contributions ($8,157,337 at
         December 31, 1999) plus (ii) cumulative distributions equal to their
         10% noncompounded cumulative annual return on their adjusted capital
         contributions, as defined ($12,003,427 at December 31, 1999);
         thereafter distributions will be made 70% to the limited partners and
         30% to the general partner. Distributions in connection with the
         Partnership's liquidation will be made in accordance with the partners'
         capital accounts as maintained for federal income tax purposes.

(b)      Profits and losses are to be allocated as provided in the partnership
         agreement. Generally, profits will be allocated to reflect cash
         distributions, or to offset negative balances in the partners' capital
         accounts, but at least 1% of profits will be allocated to the general
         partner. Losses will generally be allocated 99% to the limited
         partners, in proportion to their units, and 1% to the general partner,
         or to reduce any positive account balances in the partners' capital
         accounts. In no event will the general partner be allocated less than
         1% of profits or losses for any year.

Upon Partnership dissolution and termination, the general partner is required to
contribute to the capital of the Partnership the lesser of any negative amount
of its capital account as defined, or 1.01% of the capital contributions made by
the limited partners. Any amount so contributed shall be distributed to the
limited partners in proportion to their positive capital account balances.

During the years ended December 31, 1999 and 1998, the Partnership made
distributions to the limited partners of $2,046,000 and $620,140, respectively,
or $165 and $50 a unit, respectively, representing a return of their capital
contributions. The Partnership made no distributions to the limited partners
during the year ended December 31, 1997.



                                       F-8


<PAGE>   24


NOTES TO FINANCIAL STATEMENTS--Continued

SOUTHEAST ACQUISITIONS III, L.P.


NOTE C--PARTNERS' EQUITY--Continued

Total compensation paid to all persons, including the general partner, upon the
sale of the Partnership's property is limited to a competitive real estate
commission or disposition fee not to exceed 10% of the contract price. Any such
commission or disposition fee paid to the general partner would reduce any
distribution which it would otherwise be entitled to pursuant to the partnership
agreement. The general partner or an affiliate may be given an exclusive right
to sell property for the partnership.

NOTE D--EXTENSION FEE AND INTEREST INCOME ON PENDING SALE OF LAND

During the year ended December 31, 1999, the Partnership received a
nonrefundable extension fee of $50,000 and interest income of $11,188 related to
the extension of the closing date of a pending sales contract. In addition, the
Partnership received a deposit of $40,000 to be applied to the sales price at
closing. This contract had not closed as of December 31, 1999. No similar fees
or interest income were received during the years ended December 31, 1998 and
1997.

NOTE E--COMMITMENT

During the year ended December 31, 1999, the Partnership entered into a joint
agreement with several other parties to share in the cost of the design and
construction of a water main extension to serve each of the parties' properties
in Columbia, South Carolina. The Partnership paid an initial deposit of $5,750
toward their total commitment of approximately $91,000. As of December 31, 1999,
construction of the water main extension had not begun.




                                       F-9


<PAGE>   25


NOTES TO FINANCIAL STATEMENTS--Continued

SOUTHEAST ACQUISITIONS III, L.P.


NOTE F--SUMMARY OF PROPERTY AND ACTIVITY

At December 31, 1999, land consisted of the following:

<TABLE>
<CAPTION>
          Description                     Initial Cost         Carrying Amount         Date Acquired
--------------------------------          ------------         ---------------         -------------
<S>                                       <C>                  <C>                     <C>
208 acres of undeveloped land in
  Fulton County, Georgia                  $   4,972,126         $   1,350,000          June 1989

47 acres of undeveloped land
  in Fort Myers, Florida                      1,898,291             1,080,945          August 1989

42 acres of undeveloped land
  in Columbia, South Carolina                 1,157,300               632,767          December 1989
                                          -------------         -------------

                                          $   8,027,717         $   3,063,712
                                          =============         =============
</TABLE>

There were no liens on the land as of December 31, 1999. At December 31, 1999,
the aggregate carrying value of this land for income tax purposes was
$8,027,717. The difference between the carrying value for financial statement
purposes and income tax purposes resulted from write-downs on the land that were
recorded for financial statement purposes as more fully described in Note A.

Land activity during the years ended December 31, 1997, 1998 and 1999 consisted
of the following:

<TABLE>
<S>                                                                     <C>
         Balance at January 1, 1997                                     $4,517,058
         Additions                                                             -0-
         Deductions--cost of land sold                                    (140,642)
                                                                        ----------
                                      Balance at December 31, 1997       4,376,416

         Additions--water and sewer improvements                            18,500
         Deductions--cost of land sold                                    (397,925)
                                                                        ----------
                                      Balance at December 31, 1998       3,996,991

         Additions                                                             -0-
         Deductions--cost of land sold                                    (792,132)
         Write-down to lower of cost or fair value,
             less estimated cost to sell                                  (141,147)
                                                                        ----------
                                      Balance at December 31, 1999      $3,063,712
                                                                        ==========
</TABLE>


                                      F-10