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, 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>
July 31, October 31,
1995 1994
ASSETS
<S> <C> <C>
Cash and cash equivalents, at cost
which approximates market $ 3,064,545 $ 2,230,923
Real estate, at cost:
Land 12,230,400 12,230,400
Buildings and improvements 56,516,026 55,830,515
68,746,426 68,060,915
Accumulated depreciation 23,462,229 21,555,012
45,284,197 46,505,903
Investment in joint venture 8,461,468 8,489,748
Deferred expenses, net 301,985 418,725
Other assets 1,182,486 966,034
$ 58,294,681 $ 58,611,333
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $ 867,618 $ 791,896
Security deposits 201,364 167,218
Loan from affiliate 4,032,527 4,048,307
Deferred distributions 2,467,674 2,429,016
7,569,183 7,436,437
Partners' capital (deficiency):
General partners (3,294,963) (3,250,024)
Limited partners ($1,000 per Unit,
92,780 Units issued) 54,020,461 54,424,920
Total partners' capital 50,725,498 51,174,896
$ 58,294,681 $ 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 and nine months ended July 31, 1995 and 1994
<CAPTION>
Three months ended Nine months ended
July 31, July 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Rental $1,657,631 $1,765,415 $5,276,690 $5,386,900
Equity in earnings of joint venture 124,717 135,341 409,934 424,198
Interest and other 58,659 48,373 116,892 125,711
1,841,007 1,949,129 5,803,516 5,936,809
Expenses:
Property operating 653,144 676,930 2,210,694 2,297,016
Depreciation 619,385 727,705 1,907,217 2,168,239
Amortization 52,071 64,244 155,966 199,973
Interest 76,268 135,058 246,839 370,244
General and administrative 106,362 105,512 314,727 355,712
1,507,230 1,709,449 4,835,443 5,391,184
Net income $ 333,777 $ 239,680 $ 968,073 $ 545,625
Net income per Unit of limited
partnership interest $3.24 $2.32 $9.39 $5.29
<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, 1995
<CAPTION>
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 871,266 96,807 968,073
Distributions (1,275,725) (141,746) (1,417,471)
Partners' capital (deficiency)
at July 31, 1995 $ 54,020,461 $(3,294,963) $ 50,725,498
<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, 1995 and 1994
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 968,073 $ 545,625
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 1,907,217 2,168,239
Amortization 155,966 199,973
Equity in earnings of joint venture (409,934) (424,198)
Increase in operating assets:
Deferred expenses (39,226) (113,991)
Other assets (216,452) (407,428)
(Decrease) increase in operating liabilities:
Accounts payable and accrued liabilities 75,722 42,598
Security deposits 34,146 (3,675)
Net cash provided by operating activities 2,475,512 2,007,143
Cash flows from investing activities:
Additions to real estate (685,511) (549,755)
Investments in joint venture (302,982) (8,239)
Distributions from joint venture 741,196 813,053
Net cash (used in) provided by investing
activities (247,297) 255,059
Cash flows from financing activities:
Cash distributions (1,378,813) (1,043,775)
Repayment of loan from affiliate (15,780) -
Net cash used in fiancing activities (1,394,593) (1,043,775)
Increase in cash and cash equivalents 833,622 1,218,427
Cash and cash equivalents at beginning of year 2,230,923 2,979,407
Cash and cash equivalents at end of period $ 3,064,545 $ 4,197,834
Supplemental disclosure of cash flow information:
Cash paid for interest $ 246,839 $ 370,244
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
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, include all adjustments, consisting only of
normal recurring accruals, 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 nine months ended July 31, 1995 and
1994. The Partnership paid the affiliate management fees of
approximately $161,000 and $167,000 for the nine months ended July 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 each of the nine months ended July
31, 1995 and 1994, the Partnership incurred approximately $209,000 for
these services.
As of July 31, 1995 the affiliates were owed a total of approximately
$73,000 for these services.
The Partnership borrowed funds from an affiliate of the Managing General
Partner. Interest expense, which was calculated at the prime rate (8.75%
as of July 31, 1995), amounted to $246,839 and $202,437 for the nine
months ended July 31, 1995 and 1994, respectively.
Through January 31, 1995 the General Partners deferred receipt of
distributions aggregating $2,467,674 to which they are entitled; amounts
deferred were charged against partners' capital and recorded as
liabilities to the General Partner. Beginning with the February 28, 1995
distribution, the General Partners began to receive their distributions
currently.
3. Cash Distributions
On August 30, 1995, the Partnership paid a distribution of $5.00 per Unit
to 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 has been and may continue to be slow, because tenant
demand is weak, as a result of slow job growth. Also, retail sales
generally remain sluggish.
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 and expenditures for tenant improvements and leasing
commissions in connection with the leasing of vacant space. During the
nine months ended July 31, 1995, all of the Partnership's properties
generated positive cash flow from operations, and it is anticipated that
they will continue to do so.
During the nine months ended July 31, 1995, Partnership cash flow from
operations and distributions received from the joint venture exceeded
distributions to partners and capital expenditures. The Partnership
expects that such cash flows for the remainder of 1995 will be sufficient
to fund capital expenditures and distributions to partners. The
Partnership increased the cash distribution rate from 1.5% to 2% per Unit
beginning with the first quarter cash distribution paid on February 28,
1995. Also, beginning with the first quarter cash distribution, the
General Partners no longer defer their distributions.
Effective January 1, 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.
During the nine months ended July 31, 1995, the Partnership incurred
approximately $725,000 of capital expenditures, primarily in connection
with the leasing of space at the Westwood 10 and Carmel Park office
buildings. The Partnership also contributed approximately $303,000 to
the Century Square joint venture, primarily for its share of leasing
commissions in connection with the new Countrywide lease.
As of July 31, 1995, the Partnership has commitments to fund
approximately $200,000 of capital expenditures at its owned properties,
primarily relating to its Carmel Park property. The Partnership also has
commitments to contribute approximately $125,000, its share of capital
expenditures, to the Century Square Joint Venture.
The increase in other assets during the nine months ended July 31, 1995,
primarily results from increases in tenant accounts receivable and the
accrual to recognize rental revenue on a straight-line basis.
The Partnership had established a $3.8 million line of credit with a bank
in December 1992. In September 1994, the loan, which bore interest at
the prime rate plus three quarters percent, was repaid in its entirety.
On August 30, 1995 the Partnership paid the third 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 and nine-month
periods ended July 31, 1995 compared to 1994 are primarily attributable
to the following:
The decreases in rental revenues result from a reduction in the pass-
through of costs at the Arlington Business Center and decreases in rent
resulting from lower occupancy at the Harborgate property, partially
offset by increases in rent resulting from increased occupancy at the
Westwood 10 property.
The decrease in property operating expenses for the nine months ended
July 31, 1995 relates primarily to decreased real estate tax costs at the
Harborgate and 1718 Connecticut properties. During the three months
ended July 31, 1995, such decreases were partially offset by increased
operating costs at the Arlington property.
The decreases in depreciation expense are 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 decreases in interest expense are primarily due to the repayment of
the bank loan in September 1994, partially offset by higher interest
rates in 1995 on the loan from 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%.
However, Century Square remained 100% leased during the nine months ended
July 31, 1995. Countrywide Credit continues to occupy approximately 82%
of the property's space.
The Los Angeles, California office market, the location of Harborgate,
is weak, primarily as a result of cuts in the defense and aerospace
industries. Recently, the vacancy rate (including sublet space) in this
market has increased to approximately 33%. During the three months ended
July 31, 1995, occupancy at the property decreased to 82%. The lease to
U.S. Sprint Communications, which occupies approximately 52% of the
property, expires on October 31, 1995. The Partnership is negotiating
with U.S. Sprint to renew the lease; however, it is too soon to know if
such negotiations will be successful.
In Arlington Heights, Illinois, the location of Arlington Business
Center, the research and development market vacancy rate is approximately
15%. During the nine months ended July 31, 1995, occupancy at the
property remained at 100%. Leases covering approximately 16% of the
property's space expire in 1996.
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 contraction experienced by the
primary users of this type of space. Although the vacancy rate in this
market is still high, vacancy rates have decreased slightly and market
rents have increased slightly. During the three months ended July 31,
1995, occupancy at the property remained at 85%.
The Washington D.C., office market in which 1718 Connecticut is located
has a vacancy rate of approximately 8%. However, during the three months
ended July 31, 1995, occupancy at the property remained at 100%.
The Charlotte, North Carolina office market in which Carmel Park is
located, has a vacancy rate of approximately 5%. In this market, there
is little new construction, and rental rates have increased slightly.
During the three months ended July 31, 1995, occupancy at the property
remained at 98%.
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 high vacancy rates for small tenant space.
During the nine months ended July 31, 1995, occupancy at the property
remained at 91%.
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>
PART II - OTHER INFORMATION
Not applicable
<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 14, 1995 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: September 14, 1995 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>
<CIK> 0000726315
<NAME> DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> JUL-31-1995
<CASH> 3,064,545
<SECURITIES> 0
<RECEIVABLES> 1,182,486
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 58,294,681<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 50,725,498<F2>
<TOTAL-LIABILITY-AND-EQUITY> 58,294,681<F3>
<SALES> 0
<TOTAL-REVENUES> 5,803,516<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,588,604
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 246,839
<INCOME-PRETAX> 968,073
<INCOME-TAX> 0
<INCOME-CONTINUING> 968,073
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 968,073
<EPS-PRIMARY> 9.39<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include net investments
in real estate of $45,284,197, investment in joint venture of $8,461,468 and
net deferred expenses of $301,985.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and accrued liabilities of
$867,618, and other liabilities of $6,701,565.
<F4>Total revenue includes rent of $5,276,690, equity in earnings of joint
venture of $409,934, and interest and other revenue of $116,892.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
