UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 1997
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 its charter)
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
Securities registered pursuant to Section 12(b) of the Act:
Title of each className of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interests
(Title of Class)
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
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not 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's or any amendment to this Form 10-K. [X]
State the aggregate market value of the voting stock held by
nonaffiliates of the registrant. Not Applicable
DOCUMENTS INCORPORATED BY REFERENCE
None
Page 1 of 41
PART I.
ITEM 1. BUSINESS
The Registrant, Dean Witter Realty Income Partnership I,
L.P. (the "Partnership"), is a limited partnership formed
in August 1983 under the Uniform Limited Partnership Act of
the State of Delaware for the purpose of investing
primarily in income-producing office, industrial and retail
properties.
The Managing General Partner of the Partnership is Dean
Witter Realty Income Properties I Inc. (the "Managing
General Partner"), a Delaware corporation which is wholly
owned by Dean Witter Realty Inc. ("Realty"). The Associate
General Partner is Dean Witter Realty Income Associates I,
L.P. (the "Associate General Partner"), a Delaware limited
partnership, the general partner of which is Dean Witter
Realty Income Associates I Inc., a wholly-owned subsidiary
of the Managing General Partner. The Managing General
Partner manages and controls all aspects of the business of
the Partnership. The terms of transactions between the
Partnership and its affiliates are set forth below in
footnote 8 to the Consolidated Financial Statements in Item
8 and in Item 13 below.
The Partnership issued 92,780 units of limited partnership
interest (the "Units") with gross proceeds from the
offering of $92,780,000. The offering has been terminated
and no additional Units will be sold.
The proceeds from the offering were used to make equity
investments in four office properties, two office/research
and development properties and one retail property which
were acquired without mortgage debt. One office property
was sold in each of fiscal years 1996 and 1997 and one
office/research and development property was sold in fiscal
year 1997. Subsequent to fiscal year-end 1997, one office
building and the remaining office/research and development
property were sold. The properties are described in Item 2
below.
The Partnership currently plans to market for sale its
remaining properties during fiscal 1998, with the objective
of completing sales of such properties by the end of 1998.
There is no assurance that the Partnership will be able to
achieve this objective.
The Partnership considers its business to include one
industry segment, investment in real property. Financial
information regarding the Partnership is included in the
Partnership's Consolidated Financial Statements in Item 8
below.
The Partnership's real property investments are subject to
competition from similar types of properties in the
vicinities in which they are located. Further information
regarding competition and market conditions where the
Partnership's properties are located is set forth in Item
7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
The Partnership has no employees.
All of the Partnership's business is conducted in the
United States.
ITEM 2. PROPERTIES
The Partnership's principal offices are located at Two
World Trade Center, New York, New York 10048. The
Partnership has no other offices.
As of October 31, 1997, the Partnership owned directly or
through a partnership interest the following four property
interests, none of which is encumbered by mortgage debt.
Generally, the leases pertaining to the properties provide
for pass-throughs to the tenants of their pro-rata share of
certain operating expenses. In the opinion of the Managing
General Partner, all of the properties are adequately
covered by insurance.
<TABLE>
<CAPTION>
Year Acquisition Net Rentable
Type of
Completed/ Cost Area
Ownership of Land
Property and Location Acquired ($000) (000 sq. ft.)
and Improvements
<S> <C> <C> <C> <C>
Westwood 101
Westwood, MA 1986/1984,86 $8,952 122 Fee
Ownership
Office/research and
development building
North Lake Plaza
Altamonte Springs, FL 1985/1984,86 $10,110 137
Fee Ownership
Shopping center
Harborgate
Los Angeles, CA 1984/1984 $13,000 68 Fee Ownership
Office Building
Carmel Park I and II1
Charlotte, NC 1985/1985 $18,530 168 Fee Ownership
Office Building
_________________
1. Sold in December 1997.
</TABLE>
Each property was built with on-site parking facilities.
In fiscal 1997, the Partnership sold the three
office/research and development buildings comprising the
Arlington Business Center in Arlington Heights, Il. and the
Century Square joint venture, in which the Partnership has
a 25% interest, sold its office building in Pasadena, CA.
An affiliate of the Partnership is the property manager for
the North Lake Plaza, Westwood 10 and Carmel Park
properties.
Further information relating to the Partnership's
properties is included in Item 7 and footnotes 4, 5 and 6
to the Consolidated Financial Statements in Item 8 below.
ITEM 3. LEGAL PROCEEDINGS
On December 27, 1995, a purported class action lawsuit (the
"Grigsby Action") naming various public real estate
partnerships sponsored by Realty (including the Partnership
and its Managing General Partner and Associate General
Partner), Realty, Dean Witter Reynolds Inc. ("DWR") and
others as defendants was filed in Superior Court in
California. The complaint alleged fraud, negligent
misrepresentation, intentional and negligent breach of
fiduciary duty, unjust enrichment and related claims and
sought compensatory and punitive damages in unspecified
amounts and injunctive and other equitable relief. The
defendants removed the case to the United States District
Court for the Southern District of California. Pursuant to
an order of the U.S. District Court for the Southern
District of California entered May 24, 1996, the Grigsby
Action was transferred to the U.S. District Court for the
Southern District of New York.
On February 14, 1996, a purported class action lawsuit (the
"Schectman Action") naming various public real estate
partnerships sponsored by Realty (including the Partnership
and its Managing General Partner), Realty, Dean Witter,
Discover & Co. ("DWD") and DWR as defendants was filed in
the Chancery Court of Delaware for New Castle County (the
"Delaware Chancery Court"). On February 23, 1996, a
purported class action lawsuit (the "Dosky Action") naming
various public real estate partnerships sponsored by Realty
(including the Partnership and its Managing General
Partner), Realty, DWD, DWR and others as defendants was
filed in the Delaware Chancery Court. On February 29,
1996, a purported class action lawsuit (the "Segal Action")
naming various public real estate partnerships sponsored by
Realty (including the Partnership and its Managing General
Partner), Realty, DWR, DWD and others as defendants was
filed in the Delaware Chancery Court. On March 13, 1996, a
purported class action lawsuit (the "Young Action") naming
the partnership, other unidentified limited partnerships,
DWD, DWR and others as defendants was filed in the Circuit
Court for Baltimore City in Baltimore, Maryland. The
defendants removed the Young Action to the United States
District Court for the District of Maryland.
Thereafter, the Schectman Action, the Dosky Action and the
Segal Action were consolidated in a single action (the
"Consolidated Action") in the Delaware Chancery Court. The
Young Action was dismissed without prejudice. The
plaintiffs in the Young Action and the Grigsby Action
joined the Consolidated Action. The Grigsby Action remains
stayed indefinitely subject to being reopened for good
cause.
On October 7, 1996, the plaintiffs in the Consolidated
Action filed a First Consolidated and Amended Class Action
Complaint naming various public real estate partnerships
sponsored by Realty (including the Partnership and its
Managing General Partner), Realty, DWD, DWR and others as
defendants. This complaint alleges breach of fiduciary
duty and seeks an accounting of profits, compensatory
damages in an unspecified amount, possible liquidation of
the Partnership under a receiver's supervision and other
equitable relief. The defendants filed a motion to dismiss
this complaint on December 10, 1996.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
No matter was submitted during the fourth quarter of the
fiscal year to a vote of Unit holders.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
STOCKHOLDER MATTERS
An established public trading market for the Units does not
exist, and it is not anticipated that such a market will
develop in the future. Accordingly, information as to the
market value of a Unit at any given date is not available.
However, the Partnership does allow its limited partners
(the "Limited Partners") to transfer their units if a
suitable buyer can be located.
As of January 5, 1998 there were 13,608 holders of limited
partnership interests.
The Partnership is a limited partnership and, accordingly,
does not pay dividends. It does, however, make quarterly
distributions of cash to its partners. Pursuant to the
partnership agreement, distributable cash, as defined, is
paid 90% to the Limited Partners and 10% to the general
partners (the "General Partners").
The Partnership paid cash distributions during the year
ended October 31, 1997 aggregating $144.61 per Unit
(including $110.05 per Unit from proceeds from the sale of
the Century Square property, which was paid 100% to the
Limited Partners). The total distributions aggregated
$13,773,673 with $13,417,293 distributed to the Limited
Partners and $356,380 to the General Partners. For the year
ended October 31, 1996, the Partnership paid cash
distributions aggregating $42.28 per Unit (including $12.28
per Unit from proceeds from the sale of the 1718 Connecticut
Avenue property, which was paid 100% to the Limited
Partners). The total distribution aggregated $4,232,069 with
$3,922,805 distributed to the Limited Partners and $309,264
to the General Partners.
On November 25, 1997, the Partnership paid a cash
distribution of $7.72 per Unit. The distribution totaled
$795,846 with $716,262 distributed to the Limited Partners
and $79,584 distributed to the General Partners.
On November 26, 1997, the Partnership distributed
approximately $4,538,000 ($48.91 per Unit), the net sale
proceeds from the sale of the Arlington property. The
distribution was paid 100% to the Limited Partners.
On December 29, 1997, the Partnership distributed
approximately $26,065,000 ($280.93 per Unit), the net sale
proceeds from the sale of the Carmel Park and Westwood 10
properties. The distribution was paid 100% to the Limited
Partners.
The Partnership anticipates making regular distributions to
its partners in the future. Future cash distribution levels
will fluctuate based on cash flow generated by the
Partnership's remaining properties and proceeds received
from property sales.
Sale or financing proceeds will be distributed, to the
extent available, first, to each Limited Partner, until
there has been a return of the Limited Partner's capital
contribution plus cumulative distributions of distributable
cash and sale or financing proceeds in an amount sufficient
to provide a 9% cumulative annual return on the Limited
Partner's adjusted capital contribution. Thereafter, any
remaining sale or financing proceeds will be distributed 85%
to the Limited Partners and 15% to the General Partners
after the Managing General Partner receives a brokerage fee,
if earned, of up to 3% of the selling price of any equity
investment.
Taxable income generally will be allocated in the same
proportions as distributions of distributable cash or sale
or financing proceeds (except that the General Partners must
be allocated at least 1% of taxable income from sales or
financings). In the event there is no distributable cash or
sale or financing proceeds, taxable income will be allocated
90% to the Limited Partners and 10% to the General Partners.
Any tax loss will be allocated 90% to the Limited Partners
and 10% to the General Partners.
ITEM 6. SELECTED FINANCIAL DATA
The following sets forth a summary of selected financial
data for the Partnership:
<TABLE>
<CAPTION>
Dean Witter Realty Income Partnership I, L.P.
For the years ended October 31, 1997, 1996, 1995, 1994 and
1993
19971 19962 1995
1994 1993
<S> <C> <C> <C> <C> <C>
Total revenues $10,453,915 $ 8,493,737 $
8,000,566 $ 7,900,587 $ 7,211,147
Net income (loss) $ 5,854,208 $(5,607,581)3 $
1,535,137 $(10,175,630)4 $ 191,052
Net income (loss) per
Unit of
Limited
partnership
interest $60.72 $(53.66)
$14.89 $(98.71) $1.85
Cash distributions
paid per Unit
of Limited
partnership
interest5 $144.616 $42.287
$18.75 $15.00 $15.00
(continued)
<CAPTION>
Dean Witter Realty Income Partnership I, L.P.
For the years ended October 31, 1997, 1996, 1995, 1994 and
1993
(continued)
19971 19962 1995
1994 1993
<S> <C> <C> <C> <C> <C>
Total assets at
October 31 $33,613,496 $43,069,014
$58,295,735 $58,611,333 $73,292,198
Loan payable to bank
due after one year $ - $ - $ - $ -
$ 2,785,665
1. Revenues and net income include gains of $2.2 million
and $1.5 million on the sale of the Century Square
and Arlington Business Center properties, respectively. See
Notes 4 and 6 to the Consolidated Financial
Statements.
2. Revenues and net income include a gain of $0.7 million
on the sale of the 1718 Connecticut Avenue property.
See Note 4 to the Consolidated Financial Statements.
3. Includes an $8.5 million loss on impairment recorded for
the Westwood 10, 1718 Connecticut
Avenue, Northlake Plaza and Carmel Park properties. See
Note 4 to the Consolidated Financial Statements.
4. Includes a $10.8 million loss on impairment recorded for
the Arlington Business Center
and Harborgate properties.
5. Distributions paid to Limited Partners in 1994-1997
represent returns of capital and distributions paid
to Limited Partners in 1993 include a return of capital per
Unit of $13.15, calculated as the excess of cash
distributed per Unit over accumulated earnings per
Unit not previously distributed.
6. Includes $110.05 per Unit distribution of proceeds from
the sale of the Century Square
property.
7. Includes $12.28 per Unit distribution of proceeds from
the sale of 1718 Connecticut
Avenue.
The above financial date should be read in conjunction with
the Consolidated Financial Statements and the related notes
in Item 8.
</TABLE>
ITEM 7. 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 purchased six properties and made one
investment in the partnership which owned the Century Square
property on an all-cash basis. The Partnership's acquisition
program has been completed. No additional investments are
planned
The 1718 Connecticut property was sold in fiscal 1996. The
Century Square and Arlington Business Center properties were
sold in fiscal 1997, and the Carmel Park and Westwood 10
properties were sold subsequent to fiscal year-end. See
Notes 4, 5 and 6 to the Consolidated Financial Statements.
Employment growth, especially in the business services and
technology industries, has increased demand for space in
many office markets. Such increasing demand and the limited
amount of speculative construction has resulted in falling
vacancies, rising rents and increasing property values in
many markets. Some office markets are faring better than
others and, in certain areas, improved market conditions can
support construction. In 1997, vacancy in the SouthBay area
of the Los Angeles office market, the location of
Harborgate, improved slightly to 20% due to tenant influx
caused by limited leasing options in surrounding markets.
In the retail sector, consolidation among retailers
continued to lessen the demand for retail space. The
abundance of available retail space and sub-lease space
offered by retailers (usually at lower rents) has exerted
downward pressure on rents in many markets. Despite the
oversupply of retail space, new projects are being built,
although the pace of new construction has slowed
considerably. Many outdated properties are being
redeveloped in order to compete with newer retail
properties. Although North Lake Plaza is located in a
strong retail market (Altamonte Springs which is near
Orlando, Florida), the property's vacancy rate is currently
21%.
The Partnership's liquidity depends on cash flow from
operations of its properties and expenditures for building
improvements and tenant improvements and leasing commissions
in connection with the leasing of space. During the year
ended October 31, 1997, all of the Partnership's properties
generated positive cash flow from operations, and it is
anticipated that the Partnership's remaining two properties
will continue to generate positive cash flow from operations
in 1998.
In addition, the Partnership's liquidity has been and will
continue to be affected by sales of the Partnership's
properties; as the properties are sold, the Partnership has
fewer income-producing investments, Partnership cash from
operations decreases and Partnership distributions will
decline. During the year October 31, 1997, Partnership cash
flow from operations decreased compared to 1996 by
approximately $416,000 due to the absence of cash flows from
the 1718 Connecticut Avenue property subsequent to its sale
in June 1996. Partnership cash flow from operations also
decreased in 1997 compared to 1996 as a result of the sale
of the Century Square building; the Partnership's operating
cash flow from the Century Square joint venture was
approximately $977,000 and $466,000 in fiscal years 1996 and
1997, respectively. Because of the decrease in operating
cash flow caused by the sale of the Century Square building,
the Partnership decreased its quarterly cash distribution
from $8.95 per Unit to $7.72 per Unit beginning with the
third quarter distribution paid in August 1997.
During 1998, Partnership cash flow from operations will
decrease further because of the sales of the Arlington
Business Center, Carmel Park and Westwood 10 properties in
October and December 1997. The Partnership's aggregate
operating cash flows from the Arlington Business Center,
Carmel Park and Westood 10 properties was approximately $3.1
million in 1997. Future cash distribution levels will
fluctuate based on cash flow generated by the Partnership's
remaining properties and proceeds received from property
sales.
The Managing General Partner believes that, barring a change
in circumstances, it will market the Harborgate and North
Lake Plaza properties for sale in fiscal year 1998.
However, there can be no assurance that either property will
be sold.
During the year ended October 31, 1997, the Partnership
incurred capital expenditures of $387,000, primarily in
connection with the leasing of space at the Carmel Park and
Westwood 10 properties.
During the year ended October 31, 1997, the Partnership's
capital expenditures and distributions to partners
(excluding distribution of sales proceeds from the joint
venture) exceeded its cash flow from operations and
distributions received from operations of its joint venture.
These deficiencies and the November 1996 payment of deferred
distributions to the General Partners were funded from
Partnership cash reserves which the Managing General Partner
determined were in excess of the Partnership's needs.
As of October 31, 1997, the Partnership had commitments to
fund approximamtely $340,000 of capital expenditures,
primarily relating to the Westwood 10 property.
In 1998, the Partnership expects that cash flow from
operations will exceed distributions to Limited Partners
(other than distribuitons of net proceeds from property
sales); the Partnership expects to fund a portion of capital
expenditures from cash reserves.
On November 25, 1997, the Partnership paid the fourth
quarter cash distribution of $7.72 per Unit. The total
distribution aggregated $795,846 with $716,262 distributed
to the Limited Partners and $79,584 distributed to the
General Partners.
On November 26, 1997, the Partnership distributed
approximately $4,538,000 ($48.91 per Unit), the net sale
proceeds from the sale of the Arlington property. The
distribution was paid 100% to the Limited Partners.
On December 29, 1997, the Partnership distributed
approximately $26,065,000 ($280.93 per Unit), the net sale
proceeds from the sale of the Carmel Park and Westwood 10
properties. The distribution was paid 100% to the Limited
Partners.
Except as discussed above and in the consolidated financial
statements, the Managing General Partner is not aware of any
trends or events, commitments or uncertanities that may have
a material impact on liquidity.
Operations
Fluctuations in the Partnership's operating results for the
year ended October 31, 1997 compared to 1996 and the year
ended October 31, 1996 compared to 1995 were primarily
attributable to the following:
Rental revenues and property operating expenses decreased in
1997 primarily because of the absence of revenues and costs
from the 1718 Connecticut Avenue property, which was sold in
June 1996. See Note 4 to the consolidated financial
statements.
The gains on sales of real estate resulted from the sale of
the Arlington Business Center and 1718 Connecticut Avenue
properties in 1997 and 1996, respectively. See Note 4 to
the consolidated financial statements.
Equity in earnings of joint venture increased in 1997
compared to 1996 as a result of the Partnership's share
(approximately $2.2 million) of the gain from the sale of
the Century Square office building.
Interest and other revenue decreased in 1996 compared to
1995 primarily due to tenant reimbursements for certain
expenses by tenants at Arlington Business Center in 1995.
Depreciation and amortization decreased in 1997 compared to
1996 and 1996 compared to 1995 by approximately $252,000 and
$405,000 respectively, because of the impairment writedown
for the Westwood 10, Northlake Plaza and Carmel Park
properties recorded at the end of the first quarter of 1996.
Depreciation and amortization also decreased in 1997 by
approximately $154,000 due to the sale of the 1718
Connecticut Avenue property. No other individual
significant factors account for the remaining decreases in
1997 and 1996.
In June 1996, the Partnership repaid its loan from
affiliate; therefore, in 1997, the Partnership incurred no
interest expense and its interest expense decreased in 1996
compared to 1995.
In the first quarter of fiscal 1996, the Partnership
recorded losses on impairment of the Westwood 10, 1718
Connecticut, North Lake Plaza and Carmel Park properties
totaling $8,510,000.
In 1997, no individual factor accounted for a significant
change in interest and other revenues and general and
administrative expenses. In 1996, no individual factor
accounted for a signifcant change in rental revenue, equity
in earnings of joint venture, property operating expenses
and general and administrative expenses.
A summary of the markets where the Partnership's properties
are located and the performance of each property is as
follows:
In 1997, the vacancy rate in the office market in the
SouthBay area of Los Angeles, California, the location of
Harborgate, has decreased to approximately 20% (a 6%
improvement from the end of 1996), and market rental rates
have stablized. During 1997, average occupancy at the
property was approximately 66%, and at October 31, 1997,
occupancy at the property was approximately 59% compared to
91% at the prior year-end. Occupancy fell in 1997 because
U.S. Sprint exercised a termination option on approximately
33% of the property's space effective December 31, 1996. The
lease for U.S. Sprint's remaining space at the property (for
approximately 19% of the property's space) expires in 2000;
however, U.S. Sprint has an option to terminate its lease on
this space in 1998. The property is leased to 11 other
tenants, no other tenants occupy more than 10% of the
property's space. No other significant amounts of space are
scheduled to expire before 2000.
Arlington Business Center, a research and development
building, is located in Arlington Heights, Illinois. In
1997, the vacancy rate in this market decreased to
approximamtely 11% (a 3% improvement from the end of 1996)
and market rental rates increased slightly. During 1997,
average occupancy at the property was 100% (a 1% improvement
from 1996). In October 1997, the Partnership sold this
property. See note 4 to the consolidated financial
statements.
In 1997, the vacancy rate for the research and development
building market in Westwood, Massachusetts, the location of
the Westwood 10 building, remained at approximately 15%;
however rental rates in this market increased slightly.
During 1997, and at October 31, 1997, occupancy at the
property was 100% (a 9% improvement from 1996). In December
1997, the Partnership sold this property. See Note 5 to the
consolidated financial statements.
During 1997, the vacancy rate in the Charlotte, North
Carolina office market, the location of the Carmel Park
property, increased significantly to 12% due to the
completion of new construction in this market.
Contemporaneously, market rental rates have stablized.
During 1997, average occupancy at the property remained at
99%. In December 1997, the Partnership sold this property.
See Note 5 to the consolidated financial statements.
Altamonte Springs, Florida, the location of the North Lake
Plaza Shopping Center, is a strong retail market. During
1997, vacancy in this market decreased slightly from 8% to
7%, and market rental rates continue to be stable. During
1997, and at October 31, 1997, occupancy at the property was
79% (a decrease of 1% from October 31, 1996). Development
of nearby office projects and the scheduled expansion of
North Lake Boulevard (which borders the shopping center) are
anticipated to increase traffic at the property. The lease
for Home Depot (for approximately 50% of the property's
space) which was scheduled to expire in 1998 has been
renewed for a five-year period. Home Depot will continue to
sub-lease its space to Burlington Coat Factory during the
new lease term, but will remain obligated to pay rent under
the new lease. The lease of Marshalls Inc., (for
approximately 21% of the space) is scheduled to expire in
2002. The property is leased to 6 other tenants; no other
tenant occupies more than 10% of the property's space.
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.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
INDEX
Page
(a) Financial Statements
Independent Auditors' Report 16
Consolidated Balance Sheets at October 31, 1997 and 1996
17
Consolidated Statements of Operations for the years ended
October 31, 1997, 1996 and 1995 18
Consolidated Statements of Partners' Capital for the
years ended October 31, 1997, 1996 and 1995 19
Consolidated Statements of Cash Flows for the years
ended October 31, 1997, 1996 and 1995 20-21
Notes to Consolidated Financial Statements 22-32
(b) Financial statement schedule
Real Estate and Accumulated Depreciation III
39-40
__________
All schedules other than those indicated above have been
omitted because either the required information is not
applicable or the information is shown in the consolidated
financial statements or notes thereto.
Independent Auditors' Report
To the Partners of
Dean Witter Realty Income Partnership I, L.P.:
We have audited the accompanying consolidated balance sheets
of Dean Witter Realty Income Partnership I, L.P. and
consolidated partnership (together,the "Partnership") as of
October 31, 1997 and 1996, and the related consolidated
statements of operations, partners' capital and cash flows
for each of the three years in the period ended October 31,
1997. Our audits also included the financial statement
schedule listed in the Index at Item 8. These financial
statements and financial statement schedule are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on the financial
statements and the financial statement schedule based on our
audits.
We conducted our audits in accordance with generally
accepted auditing standards. 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, such consolidated financial statements
present fairly, in all material respects, the financial
position of Dean Witter Realty Income Partnership I, L.P.
and consolidated partnership as of October 31, 1997 and 1996
and the results of their operations and their cash flows for
each of the three years in the period ended October 31, 1997
in conformity with generally accepted accounting principles.
Also, in our opinion, such financial statement schedule,
when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.
/s/Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
January 16, 1998
<TABLE>
<CAPTION>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED BALANCE SHEET
October 31,
1997 1996
Assets
<S> <C> <C>
Cash and cash equivalents $ 5,974,627 $ 2,954,592
Real estate:
Land 4,942,300 10,367,200
Buildings and improvements 12,736,897 42,683,414
17,679,197 53,050,614
Accumulated depreciation 7,054,850 22,598,452
10,624,347 30,452,162
Real estate held for sale 15,761,239 -
Investment in joint venture - 8,423,845
Deferred leasing commissions, net 345,238 252,819
Other assets 908,045 985,596
$33,613,496 $43,069,014
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $ 484,705
$ 748,320
Security deposits 110,788 149,389
Deferred distributions - 1,233,837
595,493 2,131,546
Partners' capital (deficiency)
General partners (4,364,301)
(4,228,169)
Limited partners ($1,000 per Unit,
92,780 Units issued) 37,382,304 45,165,637
Total partners' capital 33,018,003 40,937,468
$33,613,496 $43,069,014
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended October 31, 1997, 1996 and 1995
1997 1996 1995
<S> <C> <C> <C>
Revenues:
Rental $ 6,325,230$ 7,013,164
$7,110,106
Gains on sales of real estate 1,470,551 683,471 -
Equity in earnings of joint
venture 2,483,485 589,362 474,263
Interest and other 174,649 207,740 416,197
10,453,915 8,493,737 8,000,566
Expenses:
Property operating 2,851,534 3,085,939 2,963,316
Depreciation 1,220,659 1,745,666 2,534,549
Amortization 115,553 138,008 219,225
Interest - 218,159 342,221
General and administrative 411,961 403,546 406,118
Losses on impairment of real
estate - 8,510,000 -
4,599,707 14,101,318 6,465,429
Net income (loss) $5,854,208
$(5,607,581) $1,535,137
Net income (loss) allocated to:
Limited partners $5,633,960 $(4,978,476) $1,381,623
General partners 220,248 (629,105) 153,514
$5,854,208 $(5,607,581) $1,535,137
Net income (loss) per Unit of
limited partnership interest $60.72 $(53.66) $14.89
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
For the years ended October 31, 1997, 1996 and 1995
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 1,381,623
153,514 1,535,137
Distributions (1,739,625) (193,290)
(1,932,915)
Partners' capital (deficiency)
at October 31, 1995 54,066,918 (3,289,800) 50,777,118
Net loss (4,978,476) (629,105)
(5,607,581)
Distributions (3,922,805) (309,264)
(4,232,069)
Partners' capital (deficiency)
at October 31, 1996 45,165,637 (4,228,169) 40,937,468
Net income 5,633,960
220,248 5,854,208
Distributions (13,417,293) (356,380)
(13,773,673)
Partners' capital (deficiency)
at October 31, 1997 $37,382,304 $(4,364,301) $33,018,003
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended October 31, 1997, 1996 and 1995
1997 1996 1995
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $5,854,208
$(5,607,581) $ 1,535,137
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation 1,220,659
1,745,666 2,534,549
Amortization 115,553
138,008 219,225
Equity in earnings of joint venture(2,483,485) (589,362) (474,263)
Gain on sale of real estate (1,470,551)
(683,471) -
Losses on impairment of real estate -
8,510,000 -
(Increase) decrease to operating assets:
Deferred leasing commissions (240,140) (129,915) (61,412)
Other assets (265,849)
19,568 (442,889)
(Decrease) increase to operating liabilities:
Accounts payable and accrued liabilities
(448,203) (51,471) 16,107
Security deposits (21,921)
(19,544) 43,195
Net cash provided by operating activities
2,260,271 3,331,898 3,369,649
Cash flows from investing activities:
Proceeds from disposition of real estate 5,006,453 5,092,559 -
Additions to real estate (146,509)
(335,596) (720,356)
Distributions from joint venture 10,912,889
922,699 989,365
Investments in joint venture (5,559)
(130,576) (387,503)
Net cash provided by (used in) investing
activities 15,767,274
5,549,086 (118,494)
Cash flows from financing activities:
Cash distributions (13,773,673)
(4,232,069) (1,894,257)
Decrease in deferred distributions (1,233,837) (1,233,837) -
Decrease in loan from affiliates - (4,032,527) (15,780)
Net cash used in financing activities(15,007,510) (9,498,433) (1,910,037)
Increase (decrease) in cash and cash equivalents
3,020,035 (617,449) 1,341,118
Cash and cash equivalents at beginning of year
2,954,592 3,572,041 2,230,923
Cash and cash equivalents at end of year $5,974,627 $ 2,954,592 $ 3,572,041
(continued)
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended October 31, 1997, 1996 and 1995
(continued)
1997 1996 1995
Supplemental disclosure of cash flow information:
Cash paid for interest $ - $
218,159 $ 342,221
Supplemental disclosure of non-cash investing activities:
Reclassification of real estate held for sale:
Decrease in real estate at cost
Land $ 3,144,900 $ - $
- -
Building and improvements 25,116,782 -
- -
Accumulated depreciation (12,500,443)
- - -
Increase in real estate held for sale $15,761,239
$ - $ -
See accompanying notes to consolidated financial statements.
</TABLE>
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 is managed by Dean Witter Realty Income
Properties I Inc. (the "Managing General Partner"). The
Partnership's fiscal year ends on October 31.
In 1984, the Partnership issued 92,780 units of limited
partnership interest (the "Units") for $92,780,000. No
additional Units will be sold. The proceeds of the
offering were used to make equity investments in
income-producing office, industrial and retail properties
which were not encumbered by debt when acquired.
2. Summary of Significant Accounting Policies
The financial statements include the accounts of the
Partnership and, prior to 1997, 1718 Connecticut, Ltd. on
a consolidated basis. In 1996, 1718 Connecticut Ltd. sold
its sole property, and is currently inactive.
The Partnership's 25% interest in the Century Square
property (which was sold in fiscal 1997) was accounted
for on the equity method.
The Partnership's records are maintained on the accrual
basis of accounting for financial reporting and tax
purposes. The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions
that affect the reported amounts of assets and
liabilities and disclosure 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 consist of cash and highly
liquid investments with maturities, when purchased, of
three months or less.
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
The carrying value of real estate includes the purchase
price paid by the Partnership and acquisition fees and
expenses. Costs of improvements to the properties are
capitalized, and repairs are expensed. Depreciation is
recorded on the straight-line method. The Partnership
stops depreciating its properties after it reclassifies
them to real estate held for sale.
At least annually, and more often if circumstances
dictate, the Partnership evaluates the recoverability of
the net carrying value of its real estate and any related
assets. As part of this evaluation, the Partnership
assesses, among other things, whether there has been a
significant decrease in the market value of any of its
properties. If events or circumstances indicate that the
net carrying value of a property may not be recoverable,
the expected future net cash flows from the property are
estimated for a period of approximately five years (or a
shorter period if the Partnership expects that the
property may be disposed of sooner), along with estimated
sales proceeds at the end of the period. If the total of
these future undiscounted cash flows were less than the
carrying amount of the property, the property would be
written down to its fair value as determined (in some
cases with the assistance of outside real estate
consultants) based on discounted cash flows, and a loss
on impairment recognized by a charge to earnings. The
Partnership's accounting policy complies with Statement
of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of".
Because the determination of fair value is based upon
projections of future economic events such as property
occupancy rates, rental rates, operating cost inflation
and market capitalization rates which are inherently
subjective, the amounts ultimately realized at
disposition may differ materially from the net carrying
value as of October 31, 1997. The cash flows used to
evaluate the recoverability of the properties and to
determine fair value are based on good faith estimates
and assumptions developed by the Managing General
Partner. Unanticipated events and circumstances may occur
and some assumptions
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
may not materialize; therefore, actual results may vary
from the estimates and the variances may be material.
The Partnership may provide additional write-downs which
could be material in subsequent years if real estate
markets or local economic conditions change.
Deferred leasing commissions are amortized over the
applicable lease terms.
Rental income is accrued on a straight-line basis over
the terms of the leases. Accruals in excess of amounts
payable by tenants pursuant to their leases (resulting
from rent concessions or rents which periodically
increase over the term of a lease) are recorded as
receivables and included in other assets.
Net income (loss) per Unit amounts are calculated by
dividing net income (loss) allocated to Limited Partners,
in accordance with the Partnership Agreement, by the
weighted average number of Units outstanding.
No provision for income taxes has been made in the
financial statements, since the liability for such taxes
is that of the partners rather than the Partnership.
For income tax purposes, Partnership results are reported
for the calendar year. The accounting policies used for
tax reporting purposes differ from those used for
financial reporting as follows:(a) depreciation is
calculated using accelerated methods, (b) rental income
is recognized based on the payment terms in the
applicable leases, and (c) writedowns for impairment of
real estate are not deductible. In addition, offering
costs are treated differently for tax and financial
reporting purposes. The tax basis of the Partnership's
assets and liabilities is approximately $10.0 million
higher than the amounts reported for financial statement
purposes.
The Financial Accounting Standards Board has recently
issued several new accounting pronouncements.
Statement No. 128, "Earnings per
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
Share" established standards for computing and presenting
earnings per share, and Statement No. 129, "Disclosure of
Information about Capital Structure" establishes
standards for disclosing information about an entity's
capital structure. These two standards will be effective
for the Partnership's 1998 year-end financial statements.
Statement No. 130, "Reporting Comprehensive Income"
establishes standards for reporting and display of
comprehensive income and its components. Statement No.
131, "Disclosures about Segments of an Enterprise and
Related Information" establishes standards for the way
that public business enterprises report information about
operating segments in annual financial statements and
requires that those enterprises report selected
information about operating segments in interim financial
reports issued to shareholders. It also establishes
standards for related discloure about products and
services, geographic areas, and major customers. These
two standards are effective for the Partnership's 1999
financial statements.
Management of the Partnership does not believe that these
new standards will have any effect on the Partnership's
computation or presentation of net income or net income
per Unit, or its disclosures of capital structure, or
other disclosures.
3. Partnership Agreement
The Partnership Agreement provides that distributable
cash, as defined, will be paid 90% to the Limited
Partners and 10% to the General Partners.
Sale or financing proceeds will be distributed, to the
extent available, first, to each Limited Partner, until
there has been a return of the Limited Partner's capital
contribution, plus cumulative distributions of
distributable cash and sale or financing proceeds, in an
amount sufficient to provide a 9% cumulative annual
return on the Limited Partner's adjusted capital
contribution. Thereafter, any remaining sale or financing
proceeds will be distributed 85% to the Limited Partners
and 15% to the General Partners after the Managing
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
General Partner receives a brokerage fee, if earned, of
up to 3% of the selling price of any equity investment.
Taxable income generally will be allocated in the same
proportions as distributions of distributable cash or
sale or financing proceeds (except that the General
Partners must be allocated at least 1% of taxable income
from sales or financings). In the event there is no
distributable cash or sale or financing proceeds, taxable
income will be allocated 90% to the Limited Partners and
10% to the General Partners. Any tax loss will be
allocated 90% to the Limited Partners and 10% to the
General Partners.
All distributions paid to Limited Partners during the
years ended October 31, 1997, 1996 and 1995 are
considered to be a return of capital (cash distributed
per Unit in excess of accumulated earnings per Unit not
previously distributed).
4. Real Estate Investments
The locations, years of acquisition and net carrying
values of the properties are as follows:
<TABLE>
<CAPTION>
Net Carrying Value
Year of at October 31,
Acquisition 1996 1995
Acquisition 1997 1996
<S> <C> <C> <C>
North Lake Plaza,
Altamonte Springs, FL 1984, 1986 $ 6,741,580 $ 6,877,537
Harborgate, Los Angeles, CA 1984 3,882,767 3,926,202
Westwood 10, Westwood, MA 1984, 1986 - 5,614,689
Arlington Business Center,
Arlington Heights, IL 1984 - 3,084,915
Carmel Park, Charlotte, NC 1985 - 10,948,819
$10,624,347 $30,452,162
</TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
On June 24, 1996, the Partnership sold the 1718
Connecticut property to an unaffiliated party for a sales
price of approximately $5.1 million (net of closing
costs). The Partnership recognized a gain on this sale
of approximatley $683,000, which was allocated 100% to
the Limited Parters in accordance with the Partnership
Agreement.
On October 10, 1997, the Partnership sold the Arlington
Business Center property to an unaffiliated party for a
negotiated sale price of approximately $5.2 million. The
Partnership recognized a gain on this sale of
approximately $1,471,000, which was allocated 100% to the
Limited Partners in accordance with the Partnership
Agreement. On November 26, 1997, the Partnership
distributed approximately $4,538,000 ($48.91 per Unit),
the net proceeds from the sale of the Arlington property.
The distribution was paid 100% to the Limited Partners.
The net carrying value of the Westwood 10 and Carmel Park
properties have been reclassified to real estate held for
sale at October 31, 1997. See note 5.
In the first quarter of fiscal 1996, in accordance with
the impairment evaluation policy described in Note 2, the
Partnership evaluated the recoverability of its
investments in real estate and concluded that, based on
revised expectations as to the holding periods of the
properties, the Partnership would be unable to recover
its investments in the Westwood 10, 1718 Connecticut,
Northlake Plaza and Carmel Park properties. Accordingly,
the Partnership wrote these properties down to their
estimated fair values (based on independent appraisals)
and recorded losses on impairment of totaling $8,510,000.
5. Real Estate Held for Sale
In October and November 1997, the Partnership entered
into agreements with two unaffiliated parties to sell the
land and buildings which comprise the Westwood 10 and
Carmel Park properties, respectively.
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
The closing of the sale of the Carmel Park property, for
a sale price of approximately $17.7 milion, took place on
December 8, 1997. The carrying value of the property at
October 31, 1997 was approximately $10.4 million. At
closing, the Partnership received proceeds of
approximately $17.2 million, net of closing costs and
other deductions.
The closing of the sale of the Westwood 10 property, for
a sale price of approximately $9.4 million, took place on
December 23, 1997. The carrying value of the property at
October 31, 1997 was approximately $5.4 million. At
closing the Partnership received proceeds of
approximately $8.8 million, net of closing costs and
other deductions.
On December 29, 1997, the Partnership distributed
approximately $26,065,000 ($280.93 per Unit), the net
sale proceeds from the sale of the Carmel Park and
Westwood 10 properties. The distribution was paid 100%
to the Limited Partners.
6. Investment in Joint Venture
Century Square, Pasadena, California
In 1985, the Partnership purchased, for $9.7 million, a
25% general partnership interest in the partnership (the
"Joint Venture") which owned the property, an office
building. An affiliate of the Partnership, Dean Witter
Realty Income Partnership II, L.P., purchased the
remaining 75% general partnership interest. Cash flow and
profits and losses were allocated to the Partnership and
the affiliate according to their interests in the Joint
Venture.
On April 10, 1997, the Joint Venture sold the property to
an unaffiliated party for $41,500,000 ($40,800,000, net
of closing costs). The Partnership's share of the net
sales proceeds was approximately $10.2 million. The
Partnership's share of the gain on sale was approximately
$2.2 million, which was allocated 100% to the Limited
Partners in accordance with the Partnership Agreement.
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
Summarized balance sheet information of the Joint Venture
as of October 31, 1996 was as follows:
<TABLE>
<S> <C>
Land and building, net $31,312,446
Other 2,567,434
Total assets $33,879,880
Liabilities $ 184,503
Partners' capital 33,695,377
Total liabilities and capital $33,879,880
Summarized results of operations of the Joint Venture are
as follows:
Year ended October 31,
1997 1996 1995
<S> <C> <C> <C>
Gain on sale of property $7,678,505 $ - $ -
Rental income 2,568,682 5,761,715 5,403,499
Other income 24,006 69,838 21,519
10,271,193 5,831,553 5,425,018
Property operating expenses 1,041,475
1,926,040 1,917,052
Depreciation and amotization 336,005
1,548,067 1,610,915
1,377,480 3,474,107 3,527,967
Net income $8,893,713 $2,357,446$1,897,051
</TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
Activity in the Partnership's Investment in Joint Venture is
as follows:
<TABLE>
Year ended October 31,
1997 1996 1995
<S> <C> <C>
<C>
Investment at beginning
of year $8,423,845 $8,626,606
$8,754,205
Equity in earnings 2,483,485 589,362
474,263
Distributions (10,912,889) (922,699)
(989,365)
Additional investments 5,559 130,576
387,503
Investment at end of year $ - $8,423,845
$8,626,606
</TABLE>
The accounting policies of the Joint Venture are the same as
those
of the Partnership.
7. Leases
Minimum future rental income under noncancellable
operating leases as of October 31, 1997 (excluding leases
of space at properties held for sale) is as follows:
Year ending October 31:
1998 $1,135,935
1999 1,143,146
2000 1,062,903
2001 691,912
2002 477,783
Thereafter 111,394
Total $ 4,623,073
The Partnership has determined that all leases relating
to its properties are operating leases. The lease terms
range from three to ten years, and generally provide for
fixed minimum rents with rental escalation and/or expense
reimbursement clauses.
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
8. Related Party Transactions
An affiliate of the Managing General Partner provided
property management services for five properties in 1997,
1996 and 1995. The Partnership paid the affiliate
management fees (included in property operating expenses)
of $191,427, $225,800 and $186,538 for the years ended
October 31, 1997, 1996 and 1995, respectively.
Another affiliate of the Managing General Partner
performs administrative functions and processes certain
investor and tax information on behalf of the
Partnership. In 1997, 1996 and 1995 the affiliate was
reimbursed $240,043, $259,076 and $247,518, respectively
(included in general and administrative expenses) for
these services.
As of October 31, 1997, the affiliates were owed
approximately $36,000 for these services.
Prior to 1990, the Partnership borrowed funds from an
affiliate of the Managing General Partner to fund the
cost of tenant improvements, capital expenditures and
other Partnership expenditures. The loan bore interest
at the prime rate. In June 1996, the loan was repaid with
a portion of the proceeds from the sale of the 1718
Connecticut Avenue property. Interest expense amounted to
$218,159 and $342,221 in 1996 and 1995, respectively.
Through January 31, 1995, the General Partners deferred
receipt of an aggregate amount of $2,467,674 of
distributions to which they were entitled, including
distributions of $38,658 for the year ended October 31,
1995; 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. In September 1996, the
Partnership paid $1,233,837 of deferred distributions,
and, in November 1996, paid the remaining deferred
distributions to the General Partners.
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Notes to Consolidated Financial Statements
9. Litigation
Various public partnerships sponsored by Dean Witter
Realty Inc. (including the Partnership and its Managing
General Partner) are defendants in a number of class
action lawsuits pending in state and federal courts. The
complaints allege a number of claims, including breach of
fiduciary duty, fraud, misrepresentation and related
claims, and seek compensatory and other damages and
equitable relief. The defendants intend to vigorously
defend these actions. It is impossible to predict the
effect, if any, the outcome of these actions might have
on the Partnership's financial statements.
10. Subsequent Distribution
On November 25, 1997, the Partnership paid a cash
distribution of $7.72 per Unit. The distribution totaled
$795,846 with $716,262 distributed to the Limited
Partners and $79,584 distributed to the General Partners.
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT.
The Partnership is a limited partnership which has no
directors or officers.
The directors and executive officers of the Managing
General Partner are as follows:
Position with the
Name Managing General Partner
William B. Smith Chairman of the Board of
Directors
E. Davisson Hardman, Jr. President and Director
Lawrence Volpe Controller and Director
Ronald T. Carman Secretary and Director
All of the directors have been elected to serve until the
next annual meeting of the shareholder of the Managing
General Partner or until their successors are elected and
qualify. Each of the executive officers has been elected
to serve until his successor is elected and qualifies.
William B. Smith, age 54, has been a Managing Director
of Morgan Stanley and co-head of Morgan Stanley Realty
Incorporated since 1997, and a Managing Director of Dean
Witter Realty Inc., which he joined in 1982. He is an
Executive Vice President of Dean Witter Reynolds, Inc.
E. Davisson Hardman, Jr., age 48, has been a Managing
Director of Morgan Stanley Asia, Ltd. since 1997, and is
a Managing Director of Dean Witter Realty Inc., which he
joined in 1982.
Lawrence Volpe, age 50, is a Director and the Controller
of Dean Witter Realty Inc. He is a Senior Vice President
and Controller of Dean Witter Reynolds Inc., which he
joined in 1983.
DEAN WITTER REALTY INCOME PARNTERSHIP I, L.P.
Ronald T. Carman, age 46, is a Director and the Secretary
of Dean Witter Realty, Inc. He is an Assistant Secretary
of MWD and a Senior Vice President and Associate General
Counsel of Dean Witter Reynolds Inc., which he joined in
1984.
There is no family relationship among any of the
foregoing persons.
ITEM 11. EXECUTIVE COMPENSATION
The General Partners are entitled to receive cash
distributions, when and as cash distributions are made to
the Limited Partners, and a share of taxable income or
tax loss. Descriptions of such distributions and
allocations are in Item 5 above. At October 31, 1995,
the General Partners had deferred receipt of a total of
$2,467,674 of cash distributions to which they were
entitled, including $38,658 for the year ended October
31, 1995. The General Partners receive their share of
cash distributions currently, beginning with the
distribution made in February 1995, and received cash
distributions of $356,380, $309,264 and $154,632 in
fiscal years 1997, 1996 and 1995, respectively. In
September 1996, the Partnership paid $1,233,837 of
deferred distributions to the General Partners, and, in
November 1996, paid the remaining deferred distributions.
The General Partners and their affiliates were paid
certain fees and reimbursed for certain expenses.
Information concerning such fees and reimbursements is
contained in Note 8 to the Consolidated Financial
Statements in Item 8 above.
The directors and officers of the Partnership's Managing
General Partner received no remuneration from the
Partnership.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND
MANAGEMENT.
(a) No person is known to the Partnership to be the
beneficial owner of more than five percent of the
Units.
(b) The directors and executive officers of the
Managing General Partner own the following Units as of
January 1, 1998:
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
(1) (2) (3)
Amount and
Title of Name of Nature of
Class Beneficial Owner Benneficial Ownership
Limited All directors and executive *
Partnership officers of Managing
General
Interests Partner, as a group
*Own, by virtue of their ownership of Limited
Partnership interests in the Associate General Partner,
less than 1% of the Units of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As a result of their being partners of a limited
partnership which is the limited partner of the Associate
General Partner, certain current and former officers and
directors of the Managing General Partner also own
indirect general partnership interests in the
Partnership. The Partnership Agreement of the Partnership
provides that cash distributions and allocations of
income and loss to the General Partners be distributed or
allocated 50% to the Managing General Partner and 50% to
the Associate General Partner. The General Partners'
share of cash distributions and income or loss is
described in Item 5 above.
All of the outstanding shares of common stock of the
Managing General Partner are owned by Realty, a Delaware
corporation which is a wholly-owned subsidiary of Morgan
Stanley, Dean Witter, Discover & Co. The general partner of
the Associate General Partner is Dean Witter Realty Income
Associates I Inc., which is a wholly-owned subsidiary of the
Managing General Partner. The limited partner of the
Associate General Partner is LSA 84 L.P., a Delaware limited
partnership. Realty and certain current and former officers
and directors of Realty are partners of LSA 84 L.P.
Additional information with respect to the directors and
executive officers and compensation of the Managing General
Partner and affiliates is contained in Items 10 and 11
above.
DEAN WITTER INCOME PARTNERSHIP I, L.P.
The General Partners and their affiliates were paid
certain fees and reimbursed for certain expenses.
Information concerning such fees and reimbursements is
contained in Note 8 to the Consolidated Financial
Statements in Item 8 above. The Partnership believes
that the payment of fees and the reimbursement of
expenses to the General Partners and their affiliates are
on terms as favorable as would be obtained from unrelated
third parties.
Prior to 1990, the Partnership borrowed funds from an
affiliate of the Managing General Partner to fund the
cost of tenant improvements, capital expenditures and
other Partnership expenditures. The loan bore interest
at the prime rate. During the first quarter of 1996, the
Partnership and the affiliate amended and restated the
Partnership's borrowing relationship. The Partnership
agreed to repay all outstanding amounts borrowed from the
affiliate no later than October 31, 1997. Advances to
the Partnership under the Partnership's line of credit
were capped at $4,500,000. In June 1996, the loan was
repaid with a portion of the proceeds from the sale of
the 1718 Connecticut Avenue property.
Through January 31, 1995, the General Partners deferred
receipt of an aggregate amount of $2,467,674 of
distributions to which they are entitled, including
distributions of $38,658 for the year ended October 31,
1995; 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. In September 1996, the
Partnership paid $1,233,837 of deferred distributions,
and, in November 1996, paid the remaining deferred
distributions to the General Partners.
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON
FORM 8-K
(a) The following documents are filed as part of this
Annual Report:
1. Financial Statements (see Index to
Financial Statements filed as part of Item 8 of
this Annual Report).
2. Financial Statement Schedules (see Index
to Financial Statements filed as part of Item 8
of this Annual Report).
3. Exhibits
(a) Amended and Restated Agreement of Limited
Partnership dated as of August 15, 1983 set forth
in Exhibit A to the Prospectus included in
Registration Statement Number 286041 is
incorporated herein by reference.
(b) Certificate of Limited Partnership included in
Registration Statement Number 286041 is
incorporated herein by reference.
(4)(a) Amended and Restated Agreement of Limited
Partnership dated as of August 15, 1983 set forth
in Exhibit A to the Prospectus included in
Registration Statement Number 286041 is
incorporated herein by reference.
(b) Certificate of Limited Partnership included in
Registration Statement Number 286041 is
incorporated herein by reference.
(10)(a) Purchase and Sale Agreements for properties
purchased were filed as Exhibits to Form 8-K on
April 26, 1984, October 17, 1984, October 26,
1984, October 31, 1984, December 20, 1984, July
15, 1985 and October 29, 1985 and are
incorporated herein by reference.
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
(b) "Purchase Agreement" dated as of May 31,
1996 for sale of the 1718 Connecticut Avenue
property was filed as an Exhibit to Form 8-K on
June 24, 1996 and is incorporated herein by
reference.
(c) "Purchase and Sale Agreement" dated as of
February 28, 1997 for sale of the Century Square
property was filed as an Exhibit to Form 8-K on
April 10, 1997 and is incorporated herein by
reference.
(d) "Purchase and Sale Agreement" dated as of
September 8, 1997 for sale of the Arlington
Business Center property was filed as an Exhibit
to Form 8-K on October 10, 1997 and is
incorporated herein by reference.
(e) "Purchase and Sale Agreement" dated as of
November 10, 1997 for sale of the Carmel Park
property and the related "First Amendment to
Purchase and Sale Agreement" dated as of December
2, 1997 were filed as Exhibits to Form 8-K on
December 8, 1997 and are incorporated herein by
reference.
(f) "Purchase and Sale Agreement" dated as of
October 30, 1997 for sale of the Westwood 10
property was filed as an Exhibit to Form 8-K on
December 23, 1997 and is incorporated herein by
reference.
(21) Subsidiary: 1718 Connecticut, Ltd., a
District of Columbia limited partnership.
(27) Financial Data Schedule.
(b) A Form 8-K reporting the sale of the Arlington
Business Center property was filed by the
Partnership on October 10, 1997.
<TABLE>
<CAPTION>
SCHEDULE III
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Real Estate and Accumulated Depreciation
October 31, 1997
Initial Cost to Partnership (A)
Cost
Capitalized
Building and Subsequent
Description Land Improvements Total
Acquisition
<S> <C> <C> <C> <C>
Shopping Center
Altamonte
Springs, FL $2,300,000 $ 7,626,517 $ 9,926,517 $ 895,642
Office Building
Los Angeles, CA 2,630,000 10,919,123 13,549,123
814,614
$4,930,000 $18,545,640 $23,475,640 $1,710,256
Gross Amount at which
Carried at End of Period (B)
Losses on
Impairment of Buildings &
Description Real Estate Land Improvements
Total
Shopping Center
Altamonte
Springs, FL $(1,377,000) $2,312,300 $7,132,859
$9,445,159
Office Building
Los Angeles, CA (6,129,699) 2,630,000
5,604,038 8,234,038
$(7,506,699) $4,942,300 $12,736,897
$17,679,197
</TABLE>
<TABLE>
<CAPTION>
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Real Estate and Accumulated Depreciation
October 31, 1997
SCHEDULE III (continued)
Life on which
Depreciation
in Latest
Income
Accumulated Date of Date
Statements is
Description Depreciation Construction Acquired
Computed
<S> <C> <C> <C> <C>
Shopping Center
Altamonte
Springs, FL $2,703,579 1981-1985 October 1984 5-40 years
Office Building
Los Angeles, Ca 4,351,271 1984 October 1984
5-40 years
$7,054,850
Notes:
(A) The initial cost includes the purchase price paid by the
Partnership and acquisition
fees and expenses. No carrying costs have been capitalized
subsequent to acquisition. There is no difference between
cost for financial reporting purposes and federal
income tax purposes.
(B) Reconciliation of real estate owned at October 31:
1997 1996
1995
Balance at beginning of period$53,050,614$68,781,271$6
8,060,915
Improvements 146,509 335,596 720,356
Sale of real estate (7,256,244) (7,556,253)-
Real estate held for sale (28,261,682)
Losses on impairments of
real estate - (8,510,000)
- -
Balance at end of period $17,679,197
$53,050,614 $68,781,271
(C) Reconciliation of accumulated depreciation:
Balance at beginning of period $22,598,452 $24,089,561
$21,555,012
Depreciation expense 1,220,659 1,745,666 2,534,549
Sale of real estate (4,263,818) (3,236,775) -
Real estate held for sale (12,500,443)- -
Balance end of period$ 7,054,850$22,598,452$24,089,561
</TABLE>
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.
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
By: Dean Witter Realty Income Properties I Inc.
Managing General Partner
By: /s/E. Davisson Hardman, Jr. Date: January 27, 1998
E. Davisson Hardman, Jr.
President
By: /s/Lawrence Volpe Date: January 27, 1998
Lawrence Volpe
Controller
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
DEAN WITTER REALTY INCOME PROPERTIES I INC.
Managing General Partner
/s/William B. Smith Date: January 27, 1
998
William B. Smith
Chairman of the Board of Directors
/s/E. Davisson Hardman, Jr. Date: January 27,
1998
E. Davisson Hardman, Jr.
Director
/s/Lawrence Volpe Date: January 27, 1
998
Lawrence Volpe
Director
/s/Ronald T. Carman Date: January 27, 19
98
Ronald T. Carman
Director
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
Year Ended October 31, 1997
Exhibit Index
Exhibit
No.
27 Financial Data Schedule
E1
<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
audited financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<CASH> 5,974,627
<SECURITIES> 0
<RECEIVABLES> 908,045
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 33,613,496<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 33,018,003<F2>
<TOTAL-LIABILITY-AND-EQUITY> 33,613,496<F3>
<SALES> 0
<TOTAL-REVENUES> 10,453,915<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,599,707
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,854,208
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,854,208
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,854,208
<EPS-PRIMARY> 60.72<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include net investments
in real estate of $10,624,347, real estate hold for sale of $15,761,239 and
net deferred leasing commissions of $345,238.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and accrued liabilities of
$484,705 and other liabilities of $110,788.
<F4>Total revenue includes rent of $6,325,230, gain on sale of real estate
of $1,470,551, equity in earnings of joint venture of $2,483,485, and interest
and other revenue of $174,649.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
