<PAGE>

                       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, 2001.

[ ]     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)

                          3011 Armory Drive, Suite 310
                           Nashville, Tennessee 37204
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                    (Address of principal executive offices)


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

                                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......................................................................3

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS....................................3

PART II

ITEM 5.      MARKET FOR THE PARTNERSHIP'S UNITS OF LIMITED PARTNERSHIP
             INTEREST AND RELATED SECURITY HOLDER MATTERS...........................................3

ITEM 6.      SELECTED FINANCIAL DATA................................................................4
                        SELECTED QUARTERLY FINANCIAL DATA...........................................5

ITEM 7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
             AND RESULTS OF OPERATIONS..............................................................6
             Background.............................................................................6
             Results of Operations..................................................................6
             2001 Compared to 2000..................................................................6
             2000 Compared to 1999..................................................................7
             Liquidity and Capital Resources........................................................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....................................8

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
</TABLE>


                                       -i-
<PAGE>

<TABLE>
<S>          <C>                                                                                   <C>
ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................................10

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>


                                      -ii-
<PAGE>

                                     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 has since been scheduled to terminate on December 31, 2001.
There are currently no plans to extend the Partnership agreement. Since there is
land remaining at December 31, 2001, the current General Partner will continue
to run operations through the liquidation mode.

         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, through January 2002, the Partnership has sold
approximately 50% of its Fulton County, Georgia Property, all of its Henry
County, Georgia Property, all of its Nashville, Tennessee Property, all of its
Fort Myers, Florida Property and all of its Columbia, South Carolina Property.
All of the remaining Property in Fulton County, Georgia is currently under
contract, but there can be no assurance that this transaction will close.

         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 one more year 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.

         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.


                                       1
<PAGE>

         Material Recent Developments

         During 2001, the Partnership sold 100.01 acres of the Fulton County,
Georgia land for a sales price of $2,000,000 and recognized a gain of
$1,147,677. During 1999, 2000 and 2001 the Partnership also received extension
fees and interest income totaling $372,781 related to the extension of the
closing of this sale, which originally closed in escrow in November 1999. In
September 2001, the Partnership entered into a sales contract to sell all of the
remaining Fulton County, Georgia Property for a sales price of $32,100 per acre.
The contract allows for several extension periods, which could extend the
closing to as late as July 2002. There are contract contingencies that could
allow the purchaser to terminate the agreement. There can be no assurance that
this transaction will close. The Partnership also sold 1.59 acres of the
Columbia, South Carolina Property for a sales price of $25,000 and recognized a
loss of $5,992. In January 2002, all of the remaining Columbia, South Carolina
Property was sold for a sales price of $500,000.

         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 remaining Property. The remaining
Property is located in central Georgia.

         Trademarks and Patents

         The Partnership has no trademarks or patents.

ITEM 2.  PROPERTIES

         The Partnership owns one tract of undeveloped land consisting of
approximately 105 acres in Fulton County, Georgia.

         Fulton County, Georgia Property

         The Fulton County, Georgia Property consists of approximately 105 acres
of 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 quadrant of the intersection of State route 92
(Campbelltown-Fairburn Road) and the South Fulton Parkway. The Property has
approximately 2,750 feet of frontage along State Route 92 on its east side and
3,345 feet of frontage on Thompson Road. Thompson Road is paved and intersects
with State Route 92 north of the South Fulton Parkway. South Fulton Parkway
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. The Property is located in the northeast quadrant of
the State Route 92 and South Fulton Parkway intersection and is currently zoned
for agriculture use.

         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


                                       2
<PAGE>

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. The Partnership currently has a contract to sell
all of the remaining Fulton County, Georgia Property for a sales price of
$32,100 per acre. There can be no reasonable assurance that this transaction
will close.

         Fort Myers, Florida Property

         All of the Fort Myers, Florida Property has been sold. The Property
consisted of approximately 47 acres and was sold at a sales price of $1,300,000,
less commissions and expenses.

         Columbia, South Carolina Property

         All of the Columbia, South Carolina Property has been sold. During
2001, the Partnership sold approximately 1.59 acres at a sales price of $25,000,
less commissions and expenses. The remaining 33 acres were sold in January 2002
at a sales price of $500,000, less commissions and expenses.

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 2001.

                                     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, 2001, there were 703 limited partners in the
Partnership.


                                       3
<PAGE>

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,
                                  2001               2000             1999              1998             1997
------------------------------------------------------------------------------------------------------------------
<S>                            <C>                <C>              <C>               <C>              <C>
Operating
Revenues                       $ 1,328,458        $   393,435      $ 1,343,860       $   333,395      $   114,666

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Net Income (Loss)              $ 1,027,182**      $   289,363      $ 1,113,511*      $   240,988      $    (5,089)

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Net Income (Loss) per
Unit of Limited
Partnership
Interest                       $     82.84        $     23.34      $     89.80       $     19.43      $      (.41)

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Total Assets                   $ 1,238,158        $ 2,526,397      $ 3,597,804       $ 4,490,341      $ 4,895,246

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Long Term
Obligations                          None.               None             None              None             None

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Cash
Distributions
Declared per
Unit of Limited
Partnership
Interest                       $       160        $       140      $       165       $        50             None

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</TABLE>

*        Includes a provision for loss on land of $141,147.

**       Includes a provision for lose on land of $140,844.


                                       4
<PAGE>

                        SELECTED QUARTERLY FINANCIAL DATA
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------

                                  For  the           For the           For  the        For the         For the
                               Quarter Ended      Quarter Ended     Quarter Ended   Quarter Ended   Quarter Ended
                                December 31,       September 30,       June 30,       March 31,      December 31,
                                    2001                2001             2001            2001             2000
----------------------------------------------------------------------------------------------------------------------
<S>                            <C>                <C>               <C>             <C>             <C>
Operating Revenue                $     405           $    628         $1,298,627        $28,798         $(36,242)***

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Gross Profit*                          N/A                N/A                N/A            N/A              N/A

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Net Income (Loss)
before Extra-
ordinary Items and
Cumulative Effect
of a Change in
Accounting                       $(238,954)**        $(15,101)        $1,282,397        $(1,160)        $(55,279)

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Net Income (Loss)****
per Unit of Limited
Partnership
Interest                         $  (19.27)          $  (1.22)        $   103.42        $ (0.09)        $  (4.46)

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Net Income
(Loss)                           $(238,954)          $(15,101)        $1,282,397        $(1,160)        $(55,279)

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<CAPTION>
                                  For the           For the         For the
                               Quarter Ended    Quarter Ended    Quarter Ended
                                September 30,      June 30,        March 31,
                                     2000            2000           2000
------------------------------------------------------------------------------

<S>                            <C>              <C>              <C>
Operating Revenue                   $27,980         $53,568        $348,129

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

Gross Profit*                           N/A             N/A            N /A

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

Net Income (Loss)
before Extra-
ordinary Items and
Cumulative Effect
of a Change in
Accounting                          $(2,000)        $30,574        $316,068

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

Net Income (Loss)****
per Unit of Limited
Partnership
Interest                            $ (0.16)        $  2.47        $  25.49

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

Net Income
(Loss)                              $(2,000)        $30,574        $316,068

------------------------------------------------------------------------------
</TABLE>

*        In the real estate industry, costs of sales are netted in the gain on
         sale of land and are included in operating revenues; therefore, there
         is no breakdown for gross profit.

**       Includes a provision for loss on land of $140,844.

***      Negative revenues resulted from the General Partner's fourth quarter
         decision to apply $50,000 of extension fees to the sales price of a
         pending land sale at closing. The previous agreement between the
         Partnership and the potential purchaser was that the $50,000 was a
         non-refundable extension fee and would not apply to the purchase price.

****     Net income (loss) per unit of limited partnership interest for the
         first three quarters of 2000 have been restated to conform to the
         year-end presentation.


                                       5
<PAGE>

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.

                  The Partnership originally purchased 595 acres of unimproved
land at five locations. The status of these Properties at December 31, 2001 is
as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                           Property Sold Prior to             Remaining Property
            Place                         Property Purchased                 December 31, 2001                   Held for Sale
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                              <C>                                <C>
Fulton County, Georgia.....                   208 acres                            103 acres                        105 acres
-----------------------------------------------------------------------------------------------------------------------------------

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

Fort Myers, Florida........                   47 acres                             47 acres                           0 acres

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Columbia, South Carolina...                   51 acres                             18 acres                          33 acres
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Nashville, Tennessee.......                   24 acres                             24 acres                           0 acres
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</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.

2001 Compared to 2000

                  During 2001, the Partnership had one sale of the Fulton
County, Georgia Property, recognized non-refundable extension fees and interest
income related to the Fulton County, Georgia sale and had one sale of the
Columbia, South Carolina Property. The revenues recognized from these
transactions totaled $1,311,829 as compared to gains from Property sales,
extension fees and interest income related to Property sales of $377,229 in
2000. During 2001 the Partnership also recognized other income of $6,411, $6,319
of which was for payment of prior year real estate taxes related to the Fulton
County, Georgia sale. There was no such income in 2000. Other revenue in 2001
consisted of $10,218 in interest income compared to $16,206 in 2000. During
2001, a distribution of $160 per Unit was made to the Limited Partners compared
to a distribution per Unit of $140 in 2000.

                  Expenses for 2001 were $301,276 consisting of general and
administrative expenses of $35,403, management fees of $26,500, franchise and
excise taxes of $14,562, real estate taxes of $83,745, insurance of $222 and a
provision for loss on land of $140,844 based on the amount the Partnership had
committed to sell the


                                       6
<PAGE>

Columbia, South Carolina Property for during January 2002, net of estimated
selling costs. The general and administrative fees included $23,004 in
accounting and legal fees, which represents a decrease of $7,145 from 2000. In
2001 the Partnership did not require the additional legal assistance that had
been needed for the Fort Myers, Florida Property sale in 2000. The general and
administrative expenses also included $7,002 for professional fees related to
the wetlands delineation and flood plains study on the Columbia, South Carolina
Property. There were no such fees in 2000. The franchise and excise tax
liability to Tennessee was primarily related to the interest income from the
Fulton County, Georgia Property sale. There were no such taxes paid in 2000. The
real estate taxes in 2001 included $80,146 in Greenbelt rollback taxes. These
taxes, along with the provision for loss on land, are both related to the sale
of the remaining Columbia, South Carolina Property, which occurred in January
2002. There were no rollback taxes or provision for loss on land in 2000.

                  2000 Compared to 1999

                  During 2000, the Partnership had two sales of the Columbia,
South Carolina Property, sold all of the Fort Myers, Florida Property and
recognized interest income on a pending sale of the South Fulton County
Property. The gain recognized from these transactions totaled $377,229 as
compared to gains from Property sales, extension fees and related interest
income of $1,321,313 in 1999. Other revenue in 2000 consisted of $16,206 in
interest income compared to $22,547 in 1999.

                  Expenses for 2000 were $104,072, consisting of general and
administrative expenses of $38,217, management fees of $26,500, real estate
taxes of $39,182 and insurance of $173. The general and administrative expenses
included legal and accounting fees of $30,149, which represents an increase of
$7,972 compared to 1999. This increase was primarily due to additional legal
assistance needed for the Fort Myers, Florida Property sale. The general and
administrative expenses also includes professional fees of $1,987, which
represents a decrease from 1999 of $5,258. The 1999 fees included $1,100 for an
appraisal on the Fort Myers, Florida Property and $3,498 for engineering fees in
relation to a sale of the Columbia, South Carolina Property. There were no such
fees in 2000. The Partnership also had to pay $2,000 for debris removal on the
South Fulton County Property. The $19,972 increase in real estate taxes is
primarily due to greenbelt rollback taxes of $12,727, which resulted from the
Columbia, South Carolina sales.

                  Inflation did not have a material impact on operations during
2001, 2000 or 1999.

                  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 $83,860 at December 31, 2001. The General Partner believes that the
Partnership has sufficient cash reserves to cover normal partnership expenses
for an additional year. 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.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                  The Partnership's financial statements for the years ended
December 31, 2001, 2000 and 1999, 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.


                                       7
<PAGE>

                                    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 76, has over 40 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 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 52. 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 48. 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.


                                       8
<PAGE>

                  Axson E. West, age 47. 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 40. 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 46. 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 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, 2001, 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, 2001, 2000 and 1999, 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, 2001, 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.


                                       9
<PAGE>

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. No management fees will be paid in the year 2002
since the Partnership will be operating in liquidation mode.

                  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 2001, 2000, and 1999 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. 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 2001, 2000 and 1999, the Partnership paid
real estate commissions of $41,250, $72,477 and $57,069, respectively, to the
General Partner.

                                     PART IV

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

                  (a)      Index to Financial Statements

<TABLE>
<CAPTION>
                                                                                                          Page
                           <S>                                                                            <C>
                           Report of Independent Auditors                                                  F-1
                           Balance Sheets                                                                  F-2
                           Statements of Income                                                            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.
</TABLE>

                  (b)      Reports on Form 8-K

                           No reports on Form 8-K were filed by the Partnership
                           during the fourth quarter of 2001.

                  (c)      Exhibits (numbered in accordance with Item 601 of
                           Regulation S-K)


                                       10
<PAGE>

<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

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>

                        SOUTHEAST ACQUISITIONS III, L.P.
              (A Limited Partnership Operating in Liquidation Mode)

                          AUDITED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001

                                      with

                          INDEPENDENT AUDITORS' REPORT


<PAGE>

Audited Financial Statements
(A Limited Partnership Operating in Liquidation Mode)

SOUTHEAST ACQUISITIONS III, L.P.

December 31, 2001

<TABLE>
<S>                                                                                                         <C>
Independent Auditors' Report.................................................................................F-1
Balance Sheets...............................................................................................F-2
Statements of Income.........................................................................................F-3
Statements of Partners' Equity (Deficit).....................................................................F-4
Statements of Cash Flows.....................................................................................F-5
Notes to Financial Statements................................................................................F-6
</TABLE>


<PAGE>

[WILLIAMS
BENATOR
&
LIBBY, LLP
LOGO]

                          INDEPENDENT AUDITORS' REPORT

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 operating in liquidation mode) as of
December 31, 2001 and 2000, and the related statements of income, partners'
equity (deficit), and cash flows for the years ended December 31, 2001, 2000,
and 1999. 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 auditing standards generally accepted
in the United States of America. 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. (a limited partnership operating in liquidation mode) as of December 31,
2001 and 2000, and the results of its operations and its cash flows for the
years ended December 31, 2001, 2000, and 1999, in conformity with accounting
principles generally accepted in the United States of America.

As more fully described in Note A, according to the terms of the partnership
agreement, the Partnership was scheduled to terminate on December 31, 2001 and
is continuing to operate in liquidation mode.



                                       WILLIAMS BENATOR & LIBBY, LLP

Atlanta, Georgia
January 16, 2002


                                      F-1
<PAGE>

BALANCE SHEETS

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Operating in Liquidation Mode)

<TABLE>
<CAPTION>
                                                                                              December 31
                                                                                        2001               2000
                                                                                    --------------     --------------
<S>                                                                                 <C>                <C>
ASSETS

Land and improvements held for sale--Note E                                         $   1,149,677      $   1,969,243
Cash and cash equivalents                                                                  83,860            534,903
Accounts receivable                                                                         4,621             22,251
                                                                                    -------------      -------------

                                                                                    $   1,238,158      $   2,526,397
                                                                                    =============      =============

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Accounts payable and accrued expenses                                               $      97,319      $      16,576
Escrow on pending sale of land--Note D                                                        -0-            412,164
Payable to previous general partner--Note B                                                 3,584              3,584

Partners' equity (deficit)--Note C
    General partner                                                                       (19,609)           (29,880)
    Limited partners (12,400 units outstanding)                                         1,156,864          2,123,953
                                                                                    -------------      -------------
                                                                                        1,137,255          2,094,073
                                                                                    -------------      -------------

                                                                                    $   1,238,158      $   2,526,397
                                                                                    =============      =============
</TABLE>

See notes to financial statements.


                                      F-2
<PAGE>

STATEMENTS OF INCOME

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Operating in Liquidation Mode)

<TABLE>
<CAPTION>
                                                                               Year Ended December 31
                                                                    2001                2000                1999
                                                                -------------- ----------------------- ------------
<S>                                                             <C>            <C>                     <C>
Revenues:
    Gain on sale of land                                        $   1,141,685      $     224,598       $  1,260,125
    Interest and other income                                          16,629             16,206             22,547
    Extension fees and interest income related to
       land sales--Note D                                             170,144            152,631             61,188
                                                                -------------      -------------       ------------
                                                                    1,328,458            393,435          1,343,860

Expenses:
    General and administrative                                         35,403             38,217             42,454
    Management fee--Note B                                             26,500             26,500             26,500
    Franchise and excise taxes                                         14,562                -0-                -0-
    Real estate taxes                                                  83,745             39,182             19,210
    Insurance                                                             222                173              1,038
    Provision for loss on land--Note E                                140,844                -0-            141,147
                                                                -------------      -------------       ------------
                                                                      301,276            104,072            230,349
                                                                -------------      -------------       ------------

Net income--Note C:
    General partner                                                    10,271              2,894             11,135
    Limited partners                                                1,016,911            286,469          1,102,376
                                                                -------------      -------------       ------------

                                                                $   1,027,182      $     289,363       $  1,113,511
                                                                =============      =============       ============

Net income per limited partnership unit                         $       82.84      $       23.34       $      89.80
                                                                =============      =============       ============
</TABLE>

See notes to financial statements.


                                      F-3
<PAGE>

STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Operating in Liquidation Mode)

<TABLE>
<CAPTION>
                                                                General              Limited
                                                                Partner             Partners             Total
                                                              -----------        -------------      --------------
<S>                <C>                                        <C>                <C>                <C>
Balance at January 1, 1999                                    $   (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

Net income for the year ended December 31, 2000                     2,894              286,469             289,363

Distributions ($140 per unit)                                         -0-           (1,736,000)         (1,736,000)
                                                              -----------        -------------      --------------

Balance at December 31, 2000                                      (29,880)           2,123,953           2,094,073

Net income for the year ended December 31, 2001                    10,271            1,016,911           1,027,182

Distributions ($160 per unit)                                         -0-           (1,984,000)         (1,984,000)
                                                              -----------        -------------      --------------

Balance at December 31, 2001                                  $   (19,609)       $   1,156,864      $    1,137,255
                                                              ===========        =============      ==============
</TABLE>

See notes to financial statements.


                                      F-4
<PAGE>

STATEMENTS OF CASH FLOWS

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Operating in Liquidation Mode)

<TABLE>
<CAPTION>
                                                                                 Year Ended December 31
                                                                        2001              2000             1999
                                                                   ------------      -------------     -----------
<S>                                                                <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                     $    1,027,182    $     289,363     $   1,113,511
    Adjustments to reconcile net income to net
       cash provided by operating activities:
         Gain on sale of land                                          (1,141,685)        (224,598)       (1,260,125)
         Proceeds from sale of land, net of escrowed
           cash of $412,164 in 2001                                     1,408,243        1,419,067         2,052,257
         Cash paid for land improvements                                      -0-         (100,000)              -0-
         Provision for loss on land                                       140,844              -0-           141,147
         Decrease (increase) in accounts receivable                        17,630          (22,251)              -0-
         Decrease (increase) in deposit                                       -0-            5,750            (5,750)
         Increase (decrease) in accounts payable and
           accrued expenses                                                80,743            3,066               (48)
         Increase in escrow on pending sale of land                           -0-          372,164            40,000
                                                                   --------------    -------------      ------------

                                          NET CASH PROVIDED
                                    BY OPERATING ACTIVITIES            1,532,957        1,742,561         2,080,992

CASH FLOWS FROM FINANCING ACTIVITIES
    Distributions paid to limited partners                             (1,984,000)      (1,736,000)       (2,046,000)
                                                                   --------------    -------------      ------------

                                     (DECREASE) INCREASE IN
                                  CASH AND CASH EQUIVALENTS              (451,043)           6,561            34,992

Cash and cash equivalents at beginning of year                            534,903          528,342           493,350
                                                                   --------------    -------------      ------------

                                  CASH AND CASH EQUIVALENTS
                                             AT END OF YEAR        $       83,860    $     534,903      $    528,342
                                                                   ==============    =============      ============
</TABLE>

See notes to financial statements.


                                      F-5
<PAGE>

NOTES TO FINANCIAL STATEMENTS

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Operating in Liquidation Mode)

December 31, 2001

NOTE A--DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Southeast Acquisitions III, L.P. (a limited Partnership operating in liquidation
mode) ("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. It is the intention of the
general partner to operate in liquidation mode until all of the Partnership's
land is sold. At December 31, 2001, there were no adjustments necessary to
present the financial statements on a liquidation basis.

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. The land in Fort Meyers,
Florida, was sold during 2000. At December 31, 2001, the Partnership's property
consisted of approximately 104.8 acres in Fulton County, Georgia and
approximately 33 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: Land held for sale is carried at the lower of cost or fair value less
estimated cost to sell. 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, 2001 totaled $3,622,126 on the
Fulton County, Georgia land and $766,705 on the Columbia, South Carolina land.


                                      F-6
<PAGE>

NOTES TO FINANCIAL STATEMENTS--Continued

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Operating in Liquidation Mode)

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, 2001 and 2000, remaining write-downs
that had not been recognized for income tax purposes totaled $2,379,967 and
$4,052,554, respectively.

Estimates: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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, 2001, cash
on deposit included approximately $165,000 in excess of federally insured
limits.

NOTE B--RELATED PARTY TRANSACTIONS

During each of the years ended December 31, 2001, 2000 and 1999, the Partnership
paid management fees of $26,500 to the general partner, as provided for in the
amendment to the partnership agreement that was adopted during November 1997. No
management fees will be paid during 2002 since the Partnership will be operating
in liquidation mode.

At December 31, 2001 and 2000, the Partnership had commissions payable to its
previous general partner of $3,584. During the years ended December 31, 2001,
2000, and 1999, the Partnership paid commissions to the current general partner
related to the sale of land of $41,250, $72,477, and $57,069, respectively.


                                      F-7
<PAGE>

NOTES TO FINANCIAL STATEMENTS--Continued

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Operating in Liquidation Mode)

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, 2001, 2000, and 1999, reimbursements to the
general partner's members and related companies totaled $2,455, $2,148, and
$7,016, respectively.

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 ($4,437,337 at
         December 31, 2001) plus (ii) cumulative distributions equal to their
         10% noncompounded cumulative annual return on their adjusted capital
         contributions, as defined ($13,089,295 at December 31, 2001);
         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, 2001, 2000, and 1999, the Partnership made
distributions to the limited partners of $1,984,000, $1,736,000, and $2,046,000,
respectively, or $160, $140, and $165 per unit, respectively, representing a
return of their capital contributions.


                                      F-8
<PAGE>

NOTES TO FINANCIAL STATEMENTS--Continued

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Operating in Liquidation Mode)

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 PREVIOUS PENDING SALE OF LAND

During the year ended December 31, 1999, the Partnership received a
non-refundable extension fee of $50,000 and interest income of $11,188 related
to the extension of the closing date of a pending sales contract. During the
year ended December 31, 1999, the Partnership also received a deposit of $40,000
to be applied to the sales price at closing.

During the year ended December 31, 2000, the general partner agreed to apply the
non-refundable extension fee of $50,000, that had been received during 1999, to
the sales price at closing. Therefore, the extension fee of $50,000 was
reclassified from revenues to the escrow liability account during the year ended
December 31, 2000. In addition, during the year ended December 31, 2000, the
Partnership recognized interest income of $191,449 related to the extension of
the closing date of this pending sales contract. The Partnership also received
additional escrow deposits of $322,164 to be applied to the sales price at
closing.

During the year ended December 31, 2001, the Partnership recognized received
non-refundable extension fees of $132,534 and interest income of $37,610 related
to this sales contract. The contract closed during May 2001. Total escrow
deposits of $412,164 were applied to the sales price.

During the year ended December 31, 2000, the Partnership received extension fees
of $10,000 and interest income of $1,182 on another sale of land that closed in
October 2000.


                                      F-9
<PAGE>

NOTES TO FINANCIAL STATEMENTS--Continued

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Operating in Liquidation Mode)

NOTE E--SUMMARY OF PROPERTY AND ACTIVITY

At December 31, 2001, land consisted of the following:

<TABLE>
<CAPTION>
                  Description                   Initial Cost            Carrying Amount          Date Acquired
---------------------------------------------   ------------            ---------------          -------------
<S>                                             <C>                     <C>                      <C>
104.8 acres of undeveloped land in
    Fulton County, Georgia                      $   2,528,100             $     699,677          June 1989

33 acres of undeveloped land
    in Columbia, South Carolina                     1,001,544                   450,000          December 1989
                                                -------------             -------------

                                                $   3,529,644             $   1,149,677
                                                =============             =============
</TABLE>

There were no liens on the land as of December 31, 2001. At December 31, 2001,
the aggregate carrying value of this land for income tax purposes was
$3,529,644. 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, 1999, 2000 and 2001 consisted
of the following:

<TABLE>
         <S>                                                                              <C>
         Balance at January 1, 1999                                                       $    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

         Additions--water main extension                                                         100,000
         Deductions--cost of land sold                                                        (1,194,469)
                                                                                          --------------
                                                      Balance at December 31, 2000             1,969,243

         Additions                                                                                   -0-
         Deductions--cost of land sold                                                          (678,722)
         Write-down to lower of cost or fair value,
             less estimated cost to sell, recognized in the fourth quarter
             of 2001, based on the proceeds from the sale of land
             described below                                                                    (140,844)
                                                                                          --------------

                                                      Balance at December 31, 2001        $    1,149,677
                                                                                          ==============
</TABLE>


                                      F-10
<PAGE>

NOTES TO FINANCIAL STATEMENTS--Continued

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Operating in Liquidation Mode)

NOTE E--SUMMARY OF PROPERTY AND ACTIVITY--Continued

During January 2002, the Partnership sold the remaining 33 acres of the
Columbia, South Carolina land for $500,000 and recognized a loss of $1,850.


                                      F-11
<PAGE>

                                   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                  March 28, 2002
-----------------------                     and Chief Financial Officer of
                                            Southern Management Group, LLC
</TABLE>