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 January 31, 1995
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>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
January 31,
1995 October 31,
(Unaudited) 1994
ASSETS
<S> <C> <C>
Cash and short-term investments, at cost
which approximates market $ 1,990,171 $ 2,230,923
Real estate, at cost:
Land 12,230,400 12,230,400
Buildings and improvements 56,245,320 55,830,515
68,475,720 68,060,915
Accumulated depreciation 22,188,305 21,555,012
46,287,415 46,505,903
Investment in joint venture 8,616,464 8,489,748
Deferred expenses, net 402,290 418,725
Other assets 1,158,405 966,034
$ 58,454,745 $ 58,611,333
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued
liabilities $ 686,378 $ 791,896
Security deposits 182,096 167,218
Loan from affiliate 4,048,307 4,048,307
Deferred distributions 2,467,674 2,429,016
7,384,455 7,436,437
Partners' capital (deficiency):
General partners (3,260,484) (3,250,024)
Limited partners ($1,000 per Unit,
92,780 Units issued) 54,330,774 54,424,920
Total partners' capital 51,070,290 51,174,896
$ 58,454,745 $ 58,611,333
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENTS OF INCOME
Three months ended January 31, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
<S> <C> <C>
Revenues:
Rental $ 1,755,391 $ 1,679,389
Equity in earnings of joint venture 168,944 143,714
Interest and other 22,970 41,896
1,947,305 1,864,999
Expenses:
Property operating 788,303 759,097
Depreciation 633,293 708,874
Amortization 51,864 61,226
Interest 83,913 119,571
General and administrative 107,955 132,600
1,665,328 1,781,368
Net income $ 281,977 $ 83,631
Net income per Unit of limited
partnership interest $ 2.74 $ .81
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
Three months ended January 31, 1995
(Unaudited)
<capiton>
Limited General
Partners Partners Total
<S> <C> <C> <C>
Partners' capital (deficiency)
at November 1, 1994 $ 54,424,920 $(3,250,024) $ 51,174,896
Net income 253,779 28,198 281,977
Distributions (347,925) (38,658) (386,583)
Partners' capital (deficiency)
at January 31, 1995 $ 54,330,774 $(3,260,484) $ 51,070,290
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended January 31, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 281,977 $ 83,631
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 633,293 708,874
Amortization 51,864 61,226
Equity in earnings of joint venture (168,944) (143,714)
(Increase) decrease in operating assets:
Deferred expenses ( 35,429) ( 21,731)
Other assets (192,371) 80,771
(Decrease) increase in operating liabilities:
Accounts payable and accrued liabilities (105,518) (86,327)
Security deposits 14,878 (7,408)
Net cash provided by operating
activities 479,750 675,322
Cash flows from investing activities:
Additions to real estate (414,805) (127,364)
Investment in joint venture (240,608) -
Distributions from joint venture 282,836 194,499
Net cash (used in) provided by investing
activities (372,577) 67,135
Net cash flows from financing activities:
Distributions to Limited Partners (347,925) (347,925)
(Decrease) increase in cash and short-term
investments (240,752) 394,532
Cash and short-term investments at
beginning of year 2,230,923 2,979,407
Cash and short-term investments at
end of period $ 1,990,171 $ 3,373,939
Supplemental disclosure of cash flow information:
Cash paid for interest $ 83,913 $ 119,571
<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. Related Party Transactions
An affiliate of the Managing General Partner provided property
management services for six properties for the three months
ended January 31, 1995 and 1994. The Partnership paid the
affiliate management fees of approximately $50,000 and $55,000
for the three months ended January 31, 1995 and 1994,
respectively.
Another affiliate of the Managing General Partner performs
administrative functions, processes certain investor
transactions and prepares tax information for the Partnership.
For the three months ended January 31, 1995 and 1994 the
Partnership incurred approximately $69,800, each period for
these services.
As of January 31, 1995, 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 $83,913 and $66,546 for the three months
ended January 31, 1995 and 1994, respectively.
Through January 31, 1995 the General Partners have deferred
receipt of an aggregate amount of $2,467,674 of distributions to
which they are entitled. Amounts deferred are charged against
partners' capital and recorded as liabilities to the General
Partner.
3. Cash Distributions
On November 29, 1994, the Partnership paid distributions 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 their distribution.
On February 28, 1995, the Partnership paid a distribution of
$5.00 per Unit to Limited Partners. The distribution aggregated
$515,444 with $463,900 distributed to the Limited Partners and
$51,544 to the General Partners.
<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 cash flow from
operations of its properties, expenditures for tenant improvements
and leasing commissions in connection with the leasing of vacant
space. During the first quarter of 1995, all of the Partnership's
properties generated positive cash flow from operations, and it is
anticipated that they will continue to do so.
In the first quarter of 1995, Partnership distributions to
investors and capital expenditures exceeded cash flow from
operations and distributions received from the joint venture
investment, primarily as a result of capital contributions of
approximately $241,000 to the Century Square joint venture for
leasing commissions incurred to restructure the Countrywide Credit
Industries, Inc. leases as described below, and tenant improvements
of approximately $364,000 paid at Westwood 10 in connection with the
leasing of approximately 30% of the building's net rentable space.
The Partnership expects that cash flows from operations and joint
venture distributions will be sufficient to fund capital
expenditures and distributions to investors for the remainder of
1995. The Partnership increased the cash distribution rate from
1.5% to 2% per Unit beginning with the cash distribution for the
first fiscal quarter of 1995 which was paid on February 28, 1995.
In addition, the General Partners will no longer defer their share
of cash distributions beginning with the cash distribution for the
first fiscal quarter of 1995.
Effective January 1995, the lease term of Countrywide Credit
Industries, Inc., the largest tenant at the Century Square office
building, was extended from March 2000 to March 2010. The rental
rate will remain at the 1994 rate through the year 2004 rather than
increasing, as provided under the original leases. After 2004,
rents will increase ten percent for the remainder of the lease term.
Considering the current market and economic conditions in Southern
California, as discussed below under Operations, and the credit-
worthiness of Countrywide, the Managing General Partner considers
the terms of the new agreement favorable. The cash flow from this
property is expected to be stable for a total of fifteen years at a
higher level than comparable current market rents.
As of January 31, 1995, $4,048,307 was outstanding on a demand
loan from an affiliate of the Managing General Partner. The loan
bears interest at the prime rate (9% as of January 31, 1995).
In December 1992, the Partnership established a $3.8 million
line of credit with a bank. Borrowings bore interest, payable
monthly, at the prime rate plus three quarters percent and were
repayable in 18 consecutive equal payments beginning September 1,
1994. In September 1994, the loan was repaid in its entirety.
On February 28, 1995 the Partnership paid the first quarter cash
distribution of $5.00 per Unit to Limited Partners. The total
distribution aggregated $515.444 with $463,900 distributed to the
Limited Partners and $51,544 distributed to the General Partners.
Operations
Fluctuations in the Partnership's operations for the three-month
period ended January 31, 1995 compared to 1994 are primarily
attributable to the following:
The increase in rental income is primarily due to increased average
occupancy levels at Westwood 10 and Arlington Business Center during
the first quarter of 1995.
The increase in property operating expenses relates primarily to
painting and decorating expenses incurred at North Lake Plaza and
increased average occupancies at Westwood 10 and Arlington Business
Center during the first quarter of 1995.
The decrease in depreciation expense is due to the lower depreciable
basis of the Harborgate office building and Arlington Business
Center properties, as a result of writedowns recorded in October
1994.
The decrease in interest expense is primarily due to the repayment
of the bank loan in September, 1994, partially offset by higher
interest rates in 1995 on the loan from the affiliate.
A summary of the office, retail and research and development
building markets where the Partnership's properties are located and
the performance of each property is as follows:
In Pasadena, California, the location of the Century Square
office building, the office market overall vacancy rate is
approximately 15%, and it is expected to deteriorate in the near
term primarily, as a result of the downsizing of Countrywide Credit
and another large employer in the market. However, Century Square
remained 100% leased as of January 31, 1995. Countrywide Credit
Industries, Inc.'s occupancy at the property remained at
approximately 83%.
The Los Angeles, California office market, the location of
Harborgate, is weak primarily as a result of cuts in the defense and
aerospace industries. The vacancy rate (including sublet space) in
this market is approximately 29%. During the first quarter of 1995,
occupancy at the property increased slightly from 88% to 89%. The
lease to U.S. Sprint Communications, which occupies approximately
52% of the property's net rentable space, expires on October 31,
1995.
Arlington Business Center, located in Arlington Heights,
Illinois, had been negatively impacted by the oversupply of research
and development buildings in its market area. The vacancy rate in
this market is currently 20%. However, as of January 31, 1995,
occupancy at the property remained at 100%.
Westwood 10, located in Westwood, Massachusetts, has also been
subject to significant competition from an oversupply of research
and development buildings primarily, as a result of the severe
contraction experienced by the primary users of research and
development type space. However, recently vacancy rates in this
market have decreased slightly and market rents have increased
slightly. The vacancy rate in this market is approximately 12%.
During the first quarter of 1995, occupancy at the property
increased from 55% to 85% as a result of the Partnership signing a
lease with a major surgical products company.
The Washington D.C., office market in which 1718 Connecticut is
located has begun to improve. During the first quarter of 1995,
occupancy at the property increased from 88% to 100%.
The Charlotte, North Carolina office market vacancy rate is
approximately 7%, there is little new construction, and market
rental rates have increased slightly. During the first quarter of
1995, occupancy at the property increased from 93% to 96%.
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 remained at 91% as of
January 31, 1995.
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 - none
<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: March 17, 1995 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: March 17, 1995 By: /s/Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<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-1
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> JAN-31-1995
<CASH> 1,990,171
<SECURITIES> 0
<RECEIVABLES> 1,055,806
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 58,454,745<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 51,070,290<F2>
<TOTAL-LIABILITY-AND-EQUITY> 58,454,745<F3>
<SALES> 0
<TOTAL-REVENUES> 1,947,305<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,581,415
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 83,913
<INCOME-PRETAX> 281,977
<INCOME-TAX> 0
<INCOME-CONTINUING> 281,977
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 281,977
<EPS-PRIMARY> 2.74<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include net investments
in real estate of $46,287,415, investment in joint venture of $8,616,464,
net deferred expenses of $402,290 and other assets of $102,599.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and accrued liabilities of
$686,378, and other liabilities of $6,698,077.
<F4>Total revenue includes rent of $1,755,391, equity in earnings of joint
venture of $168,944, and interest and other revenue of $22,970.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
