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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, 2000
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: 0-18150
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
(Exact name of registrant as specified in governing instrument)
Delaware 13-3244091
(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 ________
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
BALANCE SHEETS
April 30, October
31,
2000 1999
ASSETS
Cash and cash equivalents $ 1,256,960 $
1,409,281
Investment in joint venture 2,502,232 2,331,352
Other assets 119,560 57,181
$ 3,878,752 $ 3,797,814
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 234,729 $ 193,982
Partners' capital (deficiency):
General partners (5,429,219)
(5,433,238)
Limited partners ($1,000 per Unit, 177,023 Units issued)
9,073,242 9,037,070
Total partners' capital 3,644,023 3,603,832
$ 3,878,752 $
3,797,814
See accompanying notes to financial statements
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DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
INCOME STATEMENTS
Three and six months ended April 30, 2000 and 1999
<CAPTION>
Three months ended
Six months ended
April 30,
April 30,
2000 1999
2000 1999
<S> <C> <C> <C> <C>
Revenues:
Gains on sales of real $ - $ $ - $
estate - 4,026,422 - 4,026,4
Rental 22
Equity in earnings of 78,739 146,469 126,870
joint venture 551,241
Interest and other 16,523 78,800 33,763
147,569
225,566
259,553
95,262 4,477,257 160,633 4,984,7
85
Expenses:
Property operating - -
Depreciation and - 131,827 - 210,669
amortization
General and 69,469 4,590 120,442 130,469
administrative
61,560 138,664
69,469 197,977 120,442 479,802
Net income $ $ $ $
25,793 4,279,280 40,191 4,504,9
83
Net income allocated to:
Limited partners $ $ $ $
General partners 23,214 4,273,501 36,172 4,476,6
34
2,579 5,779 4,019
28,349
$ $ $ $
25,793 4,279,280 40,191 4,504,9
83
Net income per Unit of
limited $ $ $ $
partnership interest 0.13 24.14 0.20 25.29
See accompanying notes to financial statements.
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DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
STATEMENT OF PARTNERS' CAPITAL
Six months ended April 30, 2000
<CAPTION>
Limited General
Partners Partners
Total
<S> <C> <C>
<C>
Partners' capital (deficiency)
at November 1, 1999 $ 9,037,070
$(5,433,238) $ 3,603,832
Net income 36,172 4,019
40,191
Partners' capital (deficiency)
at April 30, 2000 $ 9,073,242
$(5,429,219) $ 3,644,023
See accompanying notes to financial statements.
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DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
STATEMENTS OF CASH FLOWS
Six months ended April 30, 2000 and 1999
<CAPTION>
2000
1999
<S> <C>
<C>
Cash flows from operating activities:
Net income $ 40,191 $
4,504,983 Adjustments to
reconcile net income to net cash
(used in) provided by operating activities:
Gains on sales of real estate -
(4,026,422)
Depreciation and amortization -
130,469
Equity in earnings of Taxter joint venture (126,870)
(147,569) (Increase) decrease in other assets
(62,379) 128,758
Increase (decrease) in accounts payable and
other liabilities 40,747
(170,514)
Net cash (used in) provided by operating activities
(108,311) 419,705
Cash flows from investing activities:
Proceeds from sale of real estate -
14,465,534
Additions to real estate -
(189,072)
Distributions from Taxter joint venture 141,087
108,780
Investments in Taxter joint venture (185,097)
(13,992)
Net cash (used in) provided by investing activities
(44,010) 14,371,250
Cash flows from financing activities:
Cash distributions to partners -
(14,678,747)
(Decrease) increase in cash and cash equivalents (152,321)
112,208
Cash and cash equivalents at beginning of period 1,409,281
624,315
Cash and cash equivalents at end of period $1,256,960 $
736,523
See accompanying notes to financial statements.
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DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Notes to Financial Statements
1. The Partnership
Dean Witter Realty Income Partnership II, L.P. (the
"Partnership") is a limited partnership organized under the
laws of the State of Delaware in 1984. The Partnership's
fiscal year ends on October 31.
The Partnership's last remaining property investment was its
14.8% interest in the partnership ("TPA") which owned Taxter
Corporate Park (the "Property"). As discussed in Note 2, TPA
sold the Property on May 23, 2000, and this sale has
effectuated the dissolution of the Partnership. Accordingly,
the Partnership is in the process of winding up its affairs,
and it plans to distribute the balance of the Partnership's
cash reserves and terminate by December 31, 2000. However,
there can be no assurance that the Partnership can be
terminated by such date.
The equity method of accounting had been applied to the
Partnership's 14.8% interest in TPA because of the
Partnership's continuing ability to exert significant
influence over TPA.
The Partnership's records are maintained on the accrual basis
of accounting for financial reporting and tax reporting
purposes.
Net income per Unit of limited partnership interest amounts
are calculated by dividing net income allocated to 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 necessary to present fairly the results for the
interim period. Except for the 1999 gains on sales of real
estate, such adjustments consist only of normal recurring
accruals.
These financial statements should be read in conjunction with
the annual financial statements and notes thereto included in
the Partnership's annual report on Form 10-K filed with the
Securities and Exchange Commission for the year ended October
31, 1999. Operating results of interim periods may not be
indicative of the operating results for the entire year.
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DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Notes to Financial Statements
2. Investment in Joint Venture
Pursuant to a Purchase and Sale Agreement dated as of April 4,
2000, as amended (the "Agreement"), TPA sold the land and
buildings which comprise the property on May 23, 2000 to a
subsidiary of Mack-Cali Realty Corporation (the "Purchaser"),
an unaffiliated party, for a negotiated sale price of $42.725
million. In connection with the sale, TPA acquired from an
affiliate and conveyed to the Purchaser certain interests in
the Property, including interests that the affiliate had
acquired from KLM Royal Dutch Airlines, for $6.75 million, in
February 1999. Of the $42.725 million, TPA will remit $6.75
million of the sale proceeds to the affiliate in connection
with the transaction.
TPA is also owned 40.6% by Dean Witter Realty Income
Partnership IV, L.P., an affiliated public partnership, and
44.6% by Dean Witter Realty Income Partnership III, L.P., an
affiliated public partnership.
The purchase price was paid in cash at closing. At closing,
the Partnership received approximately $4.9 million
representing its 14.8% share of the cash received by TPA, net
of its share of TPA's closing costs, the amount of the
obligation owed to the affiliate and other deductions.
The Partnership plans to make a cash distribution of sale
proceeds to Limited Partners only in June 2000. The
Partnership will retain a portion of the sale proceeds to
cover any contingencies that may arise pursuant to the sale
and, if required, pay administrative expenses and liabilities
that may arise during 2000 while the Partnership winds up its
affairs. Any sale proceeds remaining, subsequent to the
payment of any contingencies, will be distributed to Limited
Partners only.
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DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Notes to Financial Statements
Summarized balance sheet information of TPA is as follows:
<CAPTION>
April 30, October
31,
2000 1999
<S> <C> <C>
Real estate held for sale $15,851,278 $
-
Land and buildings, net -
15,680,607
Other 2,719,198
1,670,760
Total assets $18,570,476 $17,351,367
Liabilities $ 278,781 $ 214,272
Partners' Capital 18,291,695 17,137,095
Total liabilities and capital $18,570,476 $17,351,367
Summarized income statements of TPA are as follows:
Three months Six
months
ended April 30, ended
April 30,
2000 1999 2000 1999
Revenues $1,332,700
$1,527,966 $2,669,459 $2,998,688
Expenses 800,675 995,530
1,812,227 2,001,597
Net income $ 532,025 $ 532,436 $ 857,232 $
997,091
On March 31, 2000, TPA reclassified its investment in the
Property as real estate held for sale. Accordingly, TPA did
not record depreciation expense in April 2000 on the building
and related improvements.
3. Related Party Transactions
An affiliate of the Managing General Partner provided property
management services for Taxter Corporate Park through December
31, 1998. The
</TABLE>
Partnership paid the affiliate management fees of
approximately $3,000 for these services in fiscal year 1999.
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DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Notes to Financial Statements
Another affiliate of the Managing General Partner performs
administrative functions, processes investor transactions and
prepares tax information for the Partnership. For the six
months ended April 30, 2000 and 1999, the Partnership
incurred approximately $54,000 and $95,000 respectively, for
these services. These amounts have been recorded in general
and administrative expenses.
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DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
ITEM 2 .MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership's interest in the Taxter Corporate Park office
property (the "Property") was the Partnership's sole property
interest. As discussed in Note 2 to the Financial Statements,
the partnership ("TPA") which owned the Property sold the
Property on May 23, 2000. The Property was approximately 90%
leased at the time of the sale. The favorable leasing status
and an improved real estate market in Westchester, New York,
the location of the Property, enabled TPA to obtain an
attractive price for the property.
The Partnership Agreement provides that the Partnership shall
terminate upon the sale of the Partnership's last investment,
and that dissolution shall be effective on the day on which
the event arises giving rise to the dissolution. Accordingly,
the Partnership dissolved pursuant to the terms of its
Partnership Agreement, effective May 23, 2000, the date on
which the Property was sold. By December 31, 2000, the
Partnership plans to wind up its affairs, distribute its
remaining cash reserves and terminate its existence by filing
a certificate of cancellation in the office of the Delaware
Secretary of State. There can be no assurance that the
Partnership will terminate by December 31, 2000.
The Partnership plans to make a cash distribution of sale
proceeds to Limited Partners only in June 2000. However, the
Partnership will retain a portion of the sale proceeds to
cover any contingencies that may arise during 2000 while the
Partnership winds up it affairs. Any sale proceeds remaining,
subsequent to the payment of any contingencies, will be
distributed to Limited Partners only.
During the three and six month periods ended April 30, 2000,
the Property generated positive cash flow from operations.
However, Partnership cash flow from operations decreased
during the three and six month periods ended April 30, 2000 as
compared to 1999 due to the sale of the Pavilions at East Lake
property in March 1999.
During the six months ended April 30, 2000, the Partnership's
contributions to TPA (to fund its share of tenant improvements
and leasing commissions at the Property) and cash used in
operations exceeded the Partnership's distributions received
from TPA. The Partnership's cash shortfall was funded with
cash reserves.
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DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
At April 30, 2000, the Partnership had commitments to fund
approximately $275,000 for its share of tenant improvements
and leasing commissions at the Property. This amount was
deducted from the Partnership's share of the sale proceeds it
received at closing.
The Partnership did not pay any cash distributions during the
six months ended April 30, 2000.
Except as discussed above and in the financial statements, the
Managing General Partner is not aware of any trends or events,
commitments or uncertainties that may have a material impact
on liquidity.
Operations
Fluctuations in the Partnership's operating results for the
three- and six-month periods ended April 30, 2000 compared to
1999 are primarily attributable to the following:
The 1999 gains on sales of real estate resulted from the March
1999 sale of the Pavilions at East Lake property and the April
1999 receipt of $1.2 million in payment of the Wallkill Plaza
contingent promissory note.
There was no rental income, property operating expenses or
depreciation and amortization expenses in 2000 as a result of
the 1999 sale of the Pavilions East Lake property.
The decrease in equity in earnings of joint venture during the
six-month period in 2000 is primarily due to lower average
occupancy (approximately 79% in 2000 compared to 91% in 1999)
at the Taxter property.
Interest and other income was greater in 1999 than 2000
primarily because the Partnership received approximately
$200,000 of interest in April 1999 under the terms of the
Wallkill Plaza contingent promissory note.
There were no other individually significant factors which
caused changes in revenues or expenses.
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.
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DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
An exhibit index has been filed as part
of this Report on Page E1.
b) Reports on Form 8-K
Report on Form 8-K dated April 25, 2000
disclosing TPA's agreement to sell the
Taxter Corporate Park property and the
Partnership's plan to pay a cash
distribution of sale proceeds.
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DEAN WITTER REALTY INCOME PARTNERSHIP II, 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 there unto duly authorized.
DEAN WITTER REALTY INCOME
Partnership II, L.P.
By: Dean
Witter Realty Income
Properties II Inc.
Managing General Partner
Date: June 14, 2000 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: June 14, 2000 By: /s/Charles M. Charrow
Charles M. Charrow
Controller
(Principal Financial and
Accounting Officer)
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DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Quarter Ended April 30, 2000
Exhibit Index
Exhibit No. Description
27 Financial Data Schedule
E1
