<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION Washington, D.C.
20549
FORM 10-Q
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended July 31, 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) 392-2974
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 II, L.P.
BALANCE SHEETS
<CAPTION>
July 31,
October
31,
2000
1999
ASSETS
<S>
<C> <C>
Cash and cash equivalents $
1,193,546 $
1,409,281
Investment in joint venture 34,586
2,331,352
Other assets 80,658
57,181
$ 1,308,790
$ 3,797,814
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 272,637
$ 193,982
Partners' capital (deficiency):
General partners
(5,427,295)
(5,433,238)
Limited partners ($1,000 per Unit, 177,023 Units
issued) 6,463,448 9,037,070
Total partners' capital 1,036,153
3,603,832
$ 1,308,790 $
3,797,814
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
STATEMENTS OF OPERATIONS
Three and Nine months ended July 31, 2000 and 1999
<CAPTION>
Three
months ended Nine months ended
July
31,
July 31,
2000 1999 2000
1999
<S> <C> <C> <C> <C>
Revenues:
Gains on sales of real $ - $ $
- $
estate - (32,288)
- 3,994,1
Rental - 34
Equity in earnings of 2,522,015
2,648,8
joint venture 49,825 85 551,241
Interest and other 46,007
11,160
79,770 197,394
270,713
2,568,022 28,697
2,728,6 5,013,4
55 82
Expenses:
Property operating - -
-
Depreciation and - -
- 210,669
amortization
General and 42,225 32,208
162,667 130,469
administrative
170,872
42,225 32,208
162,667 512,010
Net income (loss) $ $
$2,565, $
2,525,797 (3,511) 988 4,501,4
72
Net income (loss)
allocated to: $ $
$2,560, $
Limited partners 2,523,873 (6,389) 045 4,470,2
General partners 45
1,924 2,878
5,943
31,227
$ $
$2,565, $
2,525,797 (3,511) 988 4,501,4
72
Net income (loss) per
Unit of limited $ $ $ $
partnership interest 14.26 (.04)
14.46 25.25
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
STATEMENT OF PARTNERS' CAPITAL
Nine months ended July 31, 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
Cash distributions (5,133,667)
-
(5,133,667)
Net income 2,560,045 5,943
2,565,988
Partners' capital (deficiency)
at July 31, 2000 $ 6,463,448
$(5,427,295) $ 1,036,153
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
STATEMENTS OF CASH FLOWS
Nine months ended July 31, 2000 and 1999
<CAPTION>
2000
1999
<S>
<C>
<C>
Cash flows from operating activities:
Net income $
2,565,988 $
4,501,472
Adjustments to reconcile net income to net cash
(used in)
provided by operating activities:
Gains on sales of real estate
-
(3,994,134) Depreciation and amortization
-
130,469
Equity in earnings of Taxter joint venture
(2,648,885)
(197,394)
(Increase) decrease in operating
assets:
Deferred leasing commissions
-
(60,767)
Other assets (23,477)
173,878 Increase (decrease) in accounts
payable
and other liabilities 78,655
(205,622)
Net cash (used in) provided by operating activities
(27,719)
347,902
Cash flows from investing activities:
Proceeds from sale of real estate -
14,463,246
Additions to real estate -
(189,072)
Distributions from Taxter joint venture
5,136,229
270,110
Investments in Taxter joint venture
(190,578)
(37,839)
Net cash provided by investing activities
4,945,651 14,506,445
Cash flows from financing activities:
Cash distributions to partners
(5,133,667) (14,678,747)
(Decrease) increase in cash and cash equivalents
(215,735)
175,600
Cash and cash equivalents at beginning of period
1,409,281 624,315
Cash and cash equivalents at end of period $
1,193,546 $
799,915
See accompanying notes to financial statements.
</TABLE>
<PAGE>
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. As discussed in
Note 2, TPA sold the Taxter 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 (loss) per Unit of limited
partnership interest amounts are calculated by
dividing net income (loss) allocated to Limited
Partners, 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
gains on sales of real estate in 1999 and the
gain on sale of the Taxter property included in
equity in earnings in 2000, 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.
<PAGE>
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, on May 23, 2000,
TPA sold the land and buildings which comprise
the Taxter property 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 Taxter 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 remitted $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.
On June 29, 2000, the Partnership paid, 100%
to Limited Partners, a cash distribution (see
Note 3) which included Taxter sale proceeds of
approximately $4.7 million ($26.76 per Unit).
The Partnership retained 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.
The Partnership's share of TPA's gain on sale of
the Taxter property was approximately $2.5
million, such gain was
allocated 100% to the Limited Partners.
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Notes to Financial Statements
Summarized balance sheets of TPA are as follows:
<CAPTION>
July 31,
October 31,
2000
1999
<S> <C>
<C>
Land and buildings, net
$ -
$15,680,607
Other
479,004
1,670,760
Total assets $ 479,004
$17,351,367
Liabilities $ 245,319
$ 214,272
Partners' capital 233,685
17,137,095
Total liabilities and capital $ 479,004
$17,351,367
Summarized income statements of TPA are as
follows:
Three
months Nine months
ended July 31,
ended July 31,
2000 1999 2000
1999
Operating Income $ 395,751 $1,706,457
$
3,065,210 $4,705,145
Gain on sale of
real estate 15,551,472 -
15,551,472 -
15,947,223 1,706,457
18,616,682
4,705,145
Expenses
291,300 1,369,802 2,103,527 3,371,399
Net income $15,655,923 $ 336,655
$16,513,155
$1,333,746
</TABLE>
On March 31, 2000, TPA reclassified its
investment in the Taxter property as real
estate held for sale. Accordingly, since April
1, 2000, TPA has not recorded depreciation expense
on the buildings and related improvements.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Notes to Financial Statements
3. Cash Distributions
On June 29, 2000, the Partnership also
distributed, 100% to Limited Partners, $397,000
($2.24 per Unit) of previously undistributed
proceeds from the sales of the Glenhardie and
Pavilions at East Lake properties in 1998
and 1999, respectively. As of August 1, 2000,
approximately $374,000 ($2.11 per Unit) of
proceeds from those sales, payable 100% to Limited
Partners, remain undistributed.
On June 29, 2000, the Partnership's
distributions, to Limited Partners only, of the
Taxter sale proceeds (see Note 2), and the
above-mentioned sale proceeds totaled $5,133,667
($29.00 per Unit).
4. Related Party Transactions
An affiliate of the Managing General Partner
provided property management services for the
Taxter property through December 31,
1998. The Partnership paid the affiliate
management fees
of approximately $3,000 for these services in
fiscal year 1999.
Another affiliate of the Managing General
Partner performs administrative functions,
processes investor transactions and prepares tax
information for the Partnership. For the nine
months ended July 31, 2000 and 1999, the
Partnership incurred approximately $81,000 and
$102,000 respectively, for these services.
These amounts have been recorded in general and
administrative expenses.
<PAGE>
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 was the Partnership's sole
property interest. As discussed in Note 2
to the Financial Statements,
the
partnership ("TPA") which owned the Taxter
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 Taxter
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 Taxter 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.
As discussed in Notes 2 and 3 to the Financial
Statements, on June 29, 2000, the Partnership
paid, to Limited Partners only, a distribution
of sale proceeds of $29.00 per Unit. The
Partnership retained a portion of the Taxter sale
proceeds it received to cover any contingencies
that may arise during 2000 while the Partnership
winds up it affairs.
As of the date of closing of the sale of the
Taxter property, 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.
During the period the Partnership owned its
interest in the Taxter property in 2000, the
property generated positive cash flow from
operations. However, Partnership cash flow from
operations decreased during the nine months
ended July 31, 2000 as compared to 1999 due to
the sale of the Pavilions at East Lake property
in March 1999.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
During the nine months ended July 31, 2000, the
Partnership's contributions to TPA (to fund its
share of tenant improvements and leasing
commissions at the Taxter property) and cash used
in operations slightly exceeded the
Partnership's distributions received from TPA
(excluding the distribution of sale proceeds).
The Partnership's cash shortfall was funded with
cash reserves.
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 nine-month periods
ended July 31, 2000 compared to 1999 are
primarily attributable to the following:
The increases in equity in earnings of joint
venture in 2000 are primarily due to the
Partnership's share of the gain on sale of the
Taxter property (approximately $2.5 million).
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.
As a result of the 1999 sale of the Pavilions
East Lake property, there was no rental
income, property operating expenses or
depreciation and amortization expenses in 2000.
Interest and other income was greater during the
nine months ended July 31, 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. Interest and other
income was greater during the three months ended
July 31, 2000 than 1999 primarily due to interest
earned on the proceeds from the Taxter sale before
such proceeds were distributed to the Limited
Partners.
There were no other individually significant
factors which caused changes in revenues or
expenses.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
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 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
Reports on Form 8-K dated May
23, 2000 disclosing TPA's
sale of Taxter Corporate
Park.
<PAGE>
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: September 13, 2000 By: /s/E. Davisson
Hardman,
Jr.
E. Davisson Hardman,
Jr. President
Date: September 13, 2000 By: /s/Raymond E.
Koch
Raymond E. Koch
Principal
Financial and
Accounting Officer
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Quarter Ended July 31, 2000
Exhibit Index
Exhibit No.
Description
27 Financial
Data Schedule
E1
