UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the period ended July 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
Commission File Number: 0-13260
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
(Exact name of registrant as specified in governing instrument)
Delaware 13-3174553
(State of organization) (IRS Employer Identification No.)
2 World Trade Center, New York, NY 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 392-1054
Former name, former address and former fiscal year, if changed since last
report: not applicable
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
Page 1 of 13<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
July 31,
1994 October 31,
(Unaudited) 1993
ASSETS
<S> <C> <C>
Cash and short-term investments, at cost
which approximates market $ 4,197,834 $ 2,979,407
Restricted cash 250,000 250,000
Real estate, at cost:
Land 12,230,400 12,230,400
Buildings and improvements 66,525,114 65,975,359
78,755,514 78,205,759
Accumulated depreciation 20,773,895 18,605,656
57,981,619 59,600,103
Investment in joint venture 8,683,932 9,064,548
Deferred expenses, net 421,108 507,090
Other assets 1,298,478 891,050
$ 72,832,971 $ 73,292,198
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $ 836,015 $ 793,417
Security deposits 158,936 162,611
Loan payable to bank 3,116,621 3,116,621
Due to affiliate 4,048,307 4,048,307
Deferred distributions 2,390,357 2,274,383
10,550,236 10,395,339
Partners' capital (deficiency):
General partners (2,139,240) (2,077,828)
Limited partners ($1,000 per Unit,
92,780 Units issued) 64,421,975 64,974,687
Total partners' capital 62,282,735 62,896,859
$ 72,832,971 $ 73,292,198
<FN>
See accompanying notes to consolidated financial statements.
</table<PAGE>
</TABLE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENTS OF INCOME
Three and nine months ended July 31, 1994 and 1993
(Unaudited)
<CAPTION>
Three months ended Nine months ended
July 31, July 31,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Revenues:
Rental $1,765,415 $1,768,606 $5,386,900 $5,099,851
Equity in earnings of joint
venture 135,341 141,486 424,198 449,441
Interest and other 48,373 10,554 125,711 153,892
1,949,129 1,920,646 5,936,809 5,703,184
Expenses:
Property operating 676,930 747,672 2,297,016 2,112,573
Depreciation 727,705 714,292 2,168,239 2,113,252
Amortization 64,244 68,671 199,973 190,570
Interest 135,058 114,036 370,244 353,438
General and administrative 105,512 107,450 355,712 406,300
1,709,449 1,752,121 5,391,184 5,176,133
Net income $ 239,680 $ 168,525 $ 545,625 $ 527,051
Net income per Unit of limited
partnership interest $2.32 $1.63 $5.29 $5.11
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
Nine months ended July 31, 1994
(Unaudited)
<CAPTION>
Limited General
Partners Partners Total
<S> <C> <C> <C>
Partners' capital (deficiency)
at November 1, 1993 $ 64,974,687 $(2,077,828) $ 62,896,859
Net income 491,063 54,562 545,625
Distributions (1,043,775) (115,974) (1,159,749)
Partners' capital (deficiency)
at July 31, 1994 $ 64,421,975 $(2,139,240) $ 62,282,735
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended July 31, 1994 and 1993
(Unaudited)
<CAPTION>
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income $ 545,625 $ 527,051
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 2,168,239 2,113,252
Amortization 199,973 190,570
Equity in earnings of joint venture (424,198) (449,441)
Increase in operating assets:
Deferred expenses (113,991) (193,094)
Other assets (407,428) (144,194)
Increase (decrease) in operating liabilities:
Accounts payable and accrued liabilities 42,598 103,155
Security deposits (3,675) (26,260)
Net cash provided by operating activities 2,007,143 2,121,039
Cash flows from investing activities:
Additions to real estate (549,755) (484,185)
Investment in joint venture (8,239) (7,350)
Distributions from joint venture 813,053 740,393
Net cash provided by investing activities 255,059 248,858
Cash flows from financing activities:
Repayments to affiliate - (2,738,635)
Proceeds from loan payable to bank - 3,116,621
Distributions to Limited Partners (1,043,775) (1,043,775)
Net cash used in financing activities (1,043,775) (665,789)
Increase in cash and short-term investments 1,218,427 1,704,108
Cash and short-term investments at beginning of year 2,979,407 1,061,988
Cash and short-term investments at end of period $ 4,197,834 $ 2,766,096
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
(Unaudited)
1. The Partnership
Dean Witter Realty Income Partnership I, L.P. (the
"Partnership") is a limited partnership organized under the laws
of the State of Delaware in 1983. The Partnership's fiscal year
ends on October 31.
The financial statements include the accounts of the Partnership
and 1718 Connecticut, Ltd. on a consolidated basis. The
Partnership's interest in the Century Square property is
accounted for on the equity method.
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting and tax purposes.
Net income per Unit of limited partnership amounts are
calculated by dividing net income allocated to the Limited
Partners in accordance with the Partnership Agreement by the
weighted average number of Units outstanding.
In the opinion of management, the accompanying financial
statements, which have not been audited, reflect all adjustments
necessary to present fairly the results for the interim period.
2. Loan Payable
The Partnership has established a $3.8 million secured line of
credit with a bank. Borrowings bear interest, payable monthly,
at the prime rate plus three quarters percent (8.00% at July 31,
1994) and will be repayable in 18 consecutive equal monthly
payments beginning September 1, 1994. Additionally, a $250,000
interest-bearing deposit must be maintained with the lender.
3. Investment in Joint Venture
In fiscal 1994, the Century Square joint venture settled a
lawsuit with the developer of the property relating to certain
defects in the parking structure and heating, ventilation and
air conditioning systems. Pursuant to the settlement, the joint
venture received $835,000 in 1994. The proceeds were
distributed to the co-venturers according to their interests;
accordingly the Partnership received $208,750. The joint
venture will receive an additional $100,000 in each of fiscal
years 1995 and 1996. The Partnership recorded these proceeds,
which represent the recovery of costs incurred and capitalized
to correct the defects, as a reduction of its investment in
joint venture.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
(Unaudited)
4. Related Party Transactions
An affiliate of the Managing General Partner provided property
management services for six properties for the nine months ended
July 31, 1994 and 1993. The Partnership paid the affiliate
management fees of approximately $167,000 and $161,000 for the
nine months ended July 31, 1994 and 1993, respectively.
Another affiliate of the Managing General Partner performs
administrative functions, processes certain investor
transactions and prepares tax information for the Partnership.
For the nine months ended July 31, 1994 and 1993 the Partnership
incurred approximately $209,000, each period for these services.
As of July 31, 1994, the affiliate was owed a total of
approximately $70,000 for these services.
The Partnership borrowed funds from an affiliate of the Managing
General Partner. Interest expense, which was calculated at the
prime rate, amounted to $202,437 and $225,486 for the nine
months ended July 31, 1994 and 1993, respectively.
Through July 31, 1994 the General Partners have deferred receipt
of an aggregate amount of $2,390,357 of distributions to which
they are entitled. Amounts deferred are charged against
partners' capital and recorded as liabilities to the General
Partner.
5. Cash Distributions
On November 29, 1993, February 25, 1994 and May 26, 1994, the
Partnership paid distributions of $3.75 per Unit to Limited
Partners. Each distribution aggregated $386,583 with $347,925
of cash distributed to the Limited Partners and $38,658 due to
the General Partners.
On August 30, 1994, the Partnership paid a distribution of $3.75
per Unit to Limited Partners. The distribution aggregated
$386,583 with $347,925 of cash distributed to the Limited
Partners and $38,658 due to the General Partners.
The General Partners deferred receipt of all of these
distributions.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Liquidity and Capital Resources
The Partnership raised $92,780,000 in a public offering which was
terminated in 1984. The Partnership has no plans to raise
additional capital.
The Partnership has purchased six properties and has made one
investment in a partnership on an all-cash basis. The Partnership's
acquisition program has been completed. No additional investments
are planned.
Many real estate markets are stabilizing primarily due to the
continued absence of significant construction activity. However,
the recovery of the office market will be slow because tenant demand
is weak as a result of continued downsizing by many major
corporations. Increased consumer spending has helped the retail
property market although increased interest rates have slowed
spending. Most geographic regions of the country are stabilizing or
improving, with the exception of Southern California, where the
impact of defense industry reductions has not been offset by growth
in other industries.
Real estate markets are generally divided into sub-markets by
geographic location and property type. Not all sub-markets have
been affected equally by the above factors.
The Partnership's liquidity depends on the operating cash flow of
its properties, expenditures for leasing commissions and tenant
improvements in connection with the leasing of vacant space. All of
the properties have been generating positive cash flow from
operations and it is anticipated that they will continue to do so.
In the first three quarters of 1994, Partnership cash flow from
operations and distributions received from its joint venture
investment exceeded distributions to investors and capital
expenditures. The Partnership expects that such cash flows for the
remainder of 1994 will be sufficient to fund capital expenditures
and distributions to Limited Partners. The General Partners
continued to defer receipt of their cash distributions in the first
three quarters of 1994.
The Partnership has established a $3.8 million secured line of
credit with a bank. Borrowings bear interest, payable monthly, at
the prime rate plus three quarters percent (8% at July 31, 1994) and
will be repayable in 18 consecutive equal monthly payments beginning
September 1, 1994. Additionally, a $250,000 interest-bearing
deposit must be maintained with the lender. Interest expense on
this loan amounted to $167,807 and $127,952 for the nine months
ended July 31, 1994 and 1993, respectively.
On August 30, 1994, the Partnership paid a distribution of $3.75 per
Unit to Limited Partners. The total distribution was $386,583 with
$347,925 of cash distributed to the Limited Partners and $38,658 due
to the General Partners. The General Partners deferred receipt of
their distribution.
Operations
Fluctuations in the Partnership's operations for the nine and three
month periods ended July 31, 1994 compared to the comparable periods
ended July 31, 1993 are primarily attributable to the following:
The increase in rental revenue for the nine months ended July 31,
1994 compared to 1993 is primarily attributable to increased average
occupancy levels at 1718 Connecticut, Westwood 10 and Arlington
Business Center during the first three quarters of 1994.
The decrease in interest and other revenue for the nine months ended
July 31, 1994 compared to 1993 is primarily attributable to a lease
termination fee which was received from a tenant at Arlington
Business Center in the first quarter of 1993. The increase in
interest and other revenue for the three months ended July 31, 1994
compared to 1993 primarily represents increased interest income on
higher average cash balances in 1994.
The increase in property operating expenses for the nine months
ended July 31, 1994 compared to 1993 relates primarily to increased
average occupancies at 1718 Connecticut and Arlington Business
Center in 1994, and a real estate tax refund recognized at
Harborgate during the first quarter of 1993. The decrease in
property operating expenses for the three months ended July 31, 1993
primarily represents a real estate tax refund recognized at Westwood
10 in July 1994.
The decreases in general and administrative expenses are primarily
attributable to decreased professional fees.
A summary of the office, retail and research and development
building markets in which the Partnership's properties are located
and the leasing status of each property is as follows:
In Pasadena, California, the location of the Century Square office
building, the office market overall vacancy rate was approximately
15% during the third quarter of 1994, and it is expected to increase
in the near term due to anticipated downsizing by two large
corporations headquartered in Pasadena. However, Century Square
remained 100% leased during the first three quarters of 1994. The
occupancy of the property's largest tenant, Countrywide Credit,
remained at approximately 83%. No significant space is up for lease
until 2000.
The Los Angeles, California office market, the location of
Harborgate, continues to decline primarily as a result of further
cuts in the defense industry. The vacancy rate (including sublet
space) in this market is approximately 29%. During the third
quarter of 1994, occupancy at the property decreased from 93% to
88%. The lease to US Sprint Communications, which occupies
approximately 52% of the property's net rentable space, was extended
until October 1995.
Arlington Business Center, located in Arlington Heights, Illinois,
has been negatively impacted by the oversupply of research and
development buildings in its market area. The vacancy rate in this
market is currently 22%, and is expected to remain relatively high.
However, during the third quarter of 1994, occupancy at the property
remained at 100%.
Similarly, Westwood 10, located in Westwood, Massachusetts, has been
subject to significant competition from an oversupply of research
and development buildings. This is due in large part to the sharp
decline in the Boston economy and the severe contraction experienced
by the primary users of research and development type space. During
the third quarter of 1994, occupancy at the property remained at
55%. However, subsequent to period-end, the Partnership signed a
lease with a publicly traded surgical products company which will
increase occupancy at the property to approximately 85%.
The Washington D.C., office market in which 1718 Connecticut is
located has begun to stabilize. During the third quarter of 1994,
occupancy at the property remained at 97%.
The Charlotte, North Carolina office market vacancy rate is
approximately 5% and there is little new construction. In addition,
market rental rates have increased slightly. Carmel Park's
occupancy remained at 93% during the third quarter of 1994.
Altamonte Springs, Florida, the location of the North Lake Plaza
Shopping Center, is a difficult retail market where overbuilding has
exerted downward pressure on rents and the market vacancy rate is
approximately 20%. Occupancy at the property increased slightly
from 90% to 91% during the third quarter of 1994.
Inflation
Inflation has been consistently low during the periods presented in
the financial statements, and, as a result, has not had a
significant effect on the operations of the Partnership or its
properties.<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - not applicable.
Item 2. Changes in Securities - not applicable.
Item 3. Defaults upon Senior Securities - not applicable.
Item 4. Submission of Matters to a Vote of Security Holders -
not applicable.
Item 5. Other Information - not applicable.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits - not applicable.
b) Reports on Form 8-K - Report dated May 10, 1994 of the
valuation per Unit of Limited Partnership Interest at
December 31, 1993.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
DEAN WITTER REALTY INCOME
PARTNERSHIP I, L.P.
By: Dean Witter Realty Income
Properties I Inc.
Managing General Partner
Date: September 13, 1994 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: September 13, 1994 By: /s/Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Registrant is a limited partnership which invests in real estate and real
estate joint ventures. In accordance with industry practice, its balance
sheet is unclassified. For full information, refer to the accompanying
unaudited financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> QTR-3
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> JUL-31-1994
<CASH> 4,447,834
<SECURITIES> 0
<RECEIVABLES> 1,134,024
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 72,832,971<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 62,282,735<F2>
<TOTAL-LIABILITY-AND-EQUITY> 72,832,971<F3>
<SALES> 0
<TOTAL-REVENUES> 5,936,809<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,020,940
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 370,244
<INCOME-PRETAX> 545,625
<INCOME-TAX> 0
<INCOME-CONTINUING> 545,625
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 545,625
<EPS-PRIMARY> 5.29<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include net investments
in real estate of $57,981,619, investment in joint venture of $8,683,932, net
deferred expenses of $421,108 and other assets of $164,454.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and accrued liabilities of $836,015,
loans payable to bank of $3,116,621, and other liabilities of $6,597,600.
<F4>Total revenue includes rent of $5,386,900; equity in earnings of joint
venture of $424,198 and interest and other revenue of $125,711.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
