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 April 30, 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>
April 30, October 31,
1995 1994
ASSETS
<S> <C> <C>
Cash and cash equivalents, at cost
which approximates market $ 2,273,219 $ 2,230,923
Real estate, at cost:
Land 12,230,400 12,230,400
Buildings and improvements 56,461,223 55,830,515
68,691,623 68,060,915
Accumulated depreciation 22,842,844 21,555,012
45,848,779 46,505,903
Investment in joint venture 8,469,413 8,489,748
Deferred expenses, net 351,619 418,725
Other assets 1,243,456 966,034
$ 58,186,486 $ 58,611,333
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $ 579,409 $ 791,896
Security deposits 183,931 167,218
Loan from affiliate 4,048,307 4,048,307
Deferred distributions 2,467,674 2,429,016
7,279,321 7,436,437
Partners' capital (deficiency):
General partners (3,276,796) (3,250,024)
Limited partners ($1,000 per Unit,
92,780 Units issued) 54,183,961 54,424,920
Total partners' capital 50,907,165 51,174,896
$ 58,186,486 $ 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 six months ended April 30, 1995 and 1994
<CAPTION>
Three months ended Six months ended
April 30, April 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Rental $1,863,668 $1,942,096 $3,619,059 $3,621,485
Equity in earnings of joint
venture 116,273 145,143 285,217 288,857
Interest and other 35,263 35,442 58,233 77,338
2,015,204 2,122,681 3,962,509 3,987,680
Expenses:
Property operating 769,247 860,989 1,557,550 1,620,086
Depreciation 654,539 731,660 1,287,832 1,440,534
Amortization 52,031 74,503 103,895 135,729
Interest 86,658 115,615 170,571 235,186
General and administrative 100,410 117,600 208,365 250,200
1,662,885 1,900,367 3,328,213 3,681,735
Net income $ 352,319 $ 222,314 $ 634,296 $ 305,945
Net income per Unit of limited
partnership interest $3.41 $2.16 $6.15 $2.97
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
Six months ended April 30, 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 570,866 63,430 634,296
Distributions (811,825) (90,202) (902,027)
Partners' capital (deficiency)
at April 30, 1995 $ 54,183,961 $(3,276,796) $ 50,907,165
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended April 30, 1995 and 1994
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 634,296 $ 305,945
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 1,287,832 1,440,534
Amortization 103,895 135,729
Equity in earnings of joint venture (285,217) (288,857)
(Increase) in operating assets:
Deferred expenses (36,789) (113,991)
Other assets (277,422) (213,928)
(Decrease) increase in operating liabilities:
Accounts payable and accrued liabilities (212,487) (265,598)
Security deposits 16,713 (5,839)
Net cash provided by operating activities 1,230,821 993,995
Cash flows from investing activities:
Additions to real estate (630,708) (481,794)
Investments in joint venture (240,608) (6,466)
Distributions from joint venture 546,160 633,977
Net cash (used in) provided by investing
activities (325,156) 145,717
Net cash flows from financing activities:
Cash distributions (863,369) (695,850)
Increase in cash and cash equivalents 42,296 443,862
Cash and cash equivalents at beginning of year 2,230,923 2,979,407
Cash and cash equivalents at end of period $ 2,273,219 $ 3,423,269
Supplemental disclosure of cash flow information:
Cash paid for interest $ 170,571 $ 235,186
<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 six months ended April 30, 1995 and
1994. The Partnership paid the affiliate management fees of $104,975 and
$111,852 for the six months ended April 30, 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 six months ended April 30, 1995
and 1994 the Partnership incurred approximately $139,000, each period for
these services.
As of April 30, 1995 the affiliates were owed a total of $87,496 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 $170,571 and $129,541 for the six months ended April 30, 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 May 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 continued downsizing by many major
corporations. Increased consumer spending has helped the retail property
market although increased interest rates have slowed spending.
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
six months ended April 30, 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 six months ended April 30, 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 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.
The Partnership contributed approximately $241,000 to the Century Square
joint venture for its share of leasing commissions in connection with the
new Countrywide lease.
During the six months ended April 30, 1995, the Partnership incurred
approximately $667,000 of capital expenditures, primarily in connection
with the leasing of space at the Westwood 10 and Carmel Park office
buildings.
The increase in other assets during the six months ended April 30, 1995
primarily result from increases in the accrual to recognize rental
revenue on a straight-line basis.
As of April 30, 1995, $4,048,307 was outstanding on a loan from an
affiliate of the Managing General Partner. The loan bears interest at
the prime rate (9% as of April 30, 1995).
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 May 30, 1995 the Partnership paid the second 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 six-month
periods ended April 30, 1995 compared to 1994 are primarily attributable
to the following:
The decrease in rental revenues for the three months ended April 30, 1995
results from a reduction in the pass-through of costs at the Arlington
Business Center and North Lake Plaza, partially offset by increases in
rent resulting from increased occupancies at the Westwood 10 and
Arlington properties.
The decrease in equity in earnings of joint venture for the three months
ended April 30, 1995 primarily results from a reduction in the pass-
through of costs at the Century Square property.
The decrease in property operating expenses for the three months ended
April 30, 1995 relates primarily to decreased operating costs at the
Arlington and 1718 Connecticut properties; the decrease in property
operating expenses for the six-month period ended April 30, 1995 relates
primarily to decreased operating costs at the Arlington property only.
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%,
and it is expected to increase in the near term, primarily as a result
of the downsizing of large employers in the market. However, Century
Square remained 100% leased during the six months ended April 30, 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. The vacancy rate (including sublet space) in this market is
approximately 24%. During the three months ended April 30, 1995,
occupancy at the property decreased from 89% to 87%. The lease to U.S.
Sprint Communications, which occupies approximately 52% of the property,
expires on October 31, 1995.
Although 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
has decreased slightly, to approximately 18%. During the six months
ended April 30, 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. 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 six months ended April 30, 1995, occupancy at the property remained
at 85%; however, a tenant vacated 12% of the property's space upon the
expiration of its lease in May 1995.
The Washington D.C., office market in which 1718 Connecticut is located
has a vacancy rate of approximately 9%. However, during the three months
ended April 30, 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 7%. There is little new
construction, and market rental rates have increased slightly. During
the three months ended April 30, 1995, occupancy at the property
increased from 96% to 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 the market vacancy rate is approximately
20%. However, during the six months ended April 30, 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>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits - not applicable
b) Reports on Form 8-K -
Report dated April 3, 1995 of the Valuation per Unit of
Limited Partnership Interest at December 31, 1994.
<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: June 14, 1995 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: June 14, 1995 By: /s/Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
</TABLE>
<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> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> APR-30-1995
<CASH> 2,273,219
<SECURITIES> 0
<RECEIVABLES> 1,149,286
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 58,186,486<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 50,907,165<F2>
<TOTAL-LIABILITY-AND-EQUITY> 58,186,486<F3>
<SALES> 0
<TOTAL-REVENUES> 3,962,509<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,157,642
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 170,571
<INCOME-PRETAX> 634,296
<INCOME-TAX> 0
<INCOME-CONTINUING> 634,296
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 634,296
<EPS-PRIMARY> 6.15<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include net investments
in real estate of $45,848,779, investment in joint venture of $8,469,413,
net deferred expenses of $351,619 and other assets of $94,170.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and accrued liabilities of
$579,409, and other liabilities of $6,699,912.
<F4>Total revenue includes rent of $3,619,059, equity in earnings of joint
venture of $285,217, and interest and other revenue of $58,233.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
