<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 January 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) 392-1054
Former name, former address and former fiscal year,
if changed since last report: not applicable
Indicate by check mark whether the registrant (1)
has filed all
reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such
shorter period that the registrant was required to
file such reports), and (2) has been subject to
such filing
requirements for the past 90 days. Yes X No
Page 1
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
BALANCE SHEETS
<CAPTION>
January
31, October 31,
2000
1999
<S>
<C> <C>
ASSETS
Cash and cash equivalents $
1,435,874 $
1,409,281
Investment in joint venture 2,272,963
2,331,352
Other assets 107,427
57,181
$ 3,816,264
$ 3,797,814
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 198,034
$ 193,982
Partners' capital (deficiency):
General partners
(5,431,798)
(5,433,238)
Limited partners ($1,000 per Unit, 177,023 Units
issued) 9,050,028
9,037,070
Total partners' capital 3,618,230
3,603,832
$ 3,816,264
$ 3,797,814
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
INCOME STATEMENTS
Three months ended January 31, 2000 and 1999
<CAPTION>
2000
1999
<S> <C> <C>
Revenues:
Rental $ -
$ 404,772
Equity in earnings of joint 48,131 68,769
venture 17,240 33,987
Interest and other
65,371 507,528
Expenses:
Property operating - 78,842
Depreciation and amortization - 125,879
General and administrative 50,973 77,104
50,973 281,825
Net income $ 14,398
$ 225,703
Net income allocated to:
Limited partners $ 12,958
$ 203,133
General partners 1,440 22,570
$ 14,398
$ 225,703
Net income per Unit of limited
partnership interest $ 0.07
$ 1.15
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
STATEMENT OF PARTNERS' CAPITAL
Three months ended January 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
Net income 12,958
1,440
14,398
Partners' capital (deficiency)
at January 31, 2000 $ 9,050,028
$(5,431,798) $
3,618,230
See accompanying notes to financial
statements. </TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME
PARTNERSHIP II, L.P.
STATEMENTS OF CASH FLOWS
Three months ended January 31, 2000 and 1999
<CAPTION>
2000
1999
<S>
<C>
<C>
Cash flows from operating activities:
Net income $
14,398 $
225,703
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization -
125,879
Equity in earnings of Taxter joint
venture
(48,131) (68,769)
(Increase) decrease in operating
assets:
Deferred leasing commissions -
(16,258)
Other assets (50,246)
48
Increase (decrease) in accounts payable
and other liabilities
4,052
(9,012)
Net cash (used in) provided by operating
activities (79,927)
257,591
Cash flows from investing activities:
Additions to real estate -
(174,006)
Distributions from Taxter joint venture
111,771
108,780
Investments in Taxter joint venture
(5,251)
(4,949)
Net cash (used in) provided by investing activities
106,520
(70,175)
Increase in cash and cash equivalents
26,593
187,416
Cash and cash equivalents at beginning of period
1,409,281
624,315
Cash and cash equivalents at end of period $
1,435,874 $ 811,731
Supplemental disclosure of non-cash investing
activities:
Real estate
Land
$ - $
1,900,300
Building and improvement -
13,347,404
Accumulated depreciation
- -
(4,841,229)
Real estate held for sale $ -
$
10,406,475
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 equity method of accounting has been
applied to the Partnership's 14.8% interest in
the partnership which owns the Taxter Corporate
Park property (the "Taxter Partnership")
because of the Partnership's continuing
ability to exert significant influence over the
Taxter Partnership.
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,
consisting only of normal recurring accruals,
necessary to present fairly the results for
the interim period.
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>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Notes to Financial Statements
2. Investment in Joint Venture
On February 8, 1999, an affiliate of the
Managing General Partner (the "Affiliate"), as
an accommodation to the Partnership and the
other partners of the Taxter Partnership,
purchased a leasehold interest in approximately
20% of the space at the Taxter property for
$6.75 million, and assumed the rights and
obligations of the Taxter Partnership under the
lease covering the space subject to the
leasehold interest (the "Lease"). The leasehold
interest was previously owned by the tenant
subject to the Lease.
As part of the purchase of the leasehold
interest, the Taxter Partnership received an
option to purchase the leasehold interest and
assume the Lease from the Affiliate for a
purchase price of $6.75 million plus the costs of
any tenant improvements, leasing commissions
and capital expenditures incurred by the
Affiliate in connection with the leasehold
interest (collectively, the "Resale Price").
The Taxter Partnership also granted the
Affiliate an option to require the Taxter
Partnership to purchase the leasehold interest and
assume the Lease for the Resale Price. When the
property is sold, the Taxter Partnership will be
obligated to purchase the leasehold interest and
assume the Lease from the Affiliate for the Resale
Price.
Summarized financial information of the Taxter
Partnership is as follows:
<CAPTION>
Quarter ended
January 31,
2000
1999
<S> <C> <C>
Revenues $ 1,336,759 $ 1,470,722
Expenses 1,011,552 1,006,067
Net income $ 325,207 $ 464,655
</TABLE>
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Notes to Financial Statements
3. Related Party Transactions
An affiliate of the Managing General Partner
provided property management services for Taxter
Corporate Park through December 31, 1998. The
Partnership paid the affiliate management fees
of approximately $3,000 for these services.
Another affiliate of the Managing General
Partner performs administrative functions,
processes investor transactions and prepares tax
information for the Partnership. For the three
months ended January 31, 2000 and 1999, the
Partnership incurred approximately $27,000 and
$65,000, respectively, for these services.
These amounts have been recorded in general and
administrative expenses.
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
As a result of the sale of the Pavilions at East
Lake property in March 1999, Partnership cash flow
from operations decreased during the three months
ended January 31, 2000 as compared to 1999.
The Partnership's interest in the Taxter Corporate
Park office property is the Partnership's sole
property interest. The
partnership which owns the property (the "Taxter
Partnership") has accepted a bid from an
unaffiliated third party to purchase the
property, and the parties are currently
negotiating the terms of a purchase and sale
agreement. There can be no assurance that the
Taxter property will be sold.
An affiliate of the Managing General Partner owns
a leasehold interest in approximately 20% of the
property's space (see Note 2 to the financial
statements). The Taxter Partnership expects to
buy and immediately sell the leasehold interest
at the time the property is sold.
The office markets in Westchester County, New
York and the west Westchester sub-market in
which Taxter Corporate Park is located are
improving as both occupancy levels and rental
rates are increasing. During the quarter ended
January 31, 2000, occupancy at the property
increased slightly to 74%. Subsequently, the
Taxter Partnership leased 16% of the
property's space to Nextel Communications Inc. (a
new tenant who will occupy approximately 14% of
the space for five years) and two existing
tenants; these tenants will begin to occupy their
new spaces during the second fiscal quarter of
2000. The Taxter Partnership also extended its
lease with Fuji Photo Film (for approximately
30% of the property's space) from 2001 to 2003.
During the three months ended January 31, 2000,
the Taxter property generated positive cash flow
from operations, and it is anticipated that it
will continue to do so during the period the
Partnership continues to own its interest in the
property.
During the three months ended January 31, 2000, the
Partnership's distributions received from
the Taxter Partnership exceeded its cash
used in operations and
contributions to the Taxter Partnership.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Currently the Partnership has commitments
to fund approximately $486,000 for its share
of tenant improvements and leasing commissions
at the Taxter property. Any unfunded costs at
the time the Taxter property is sold may be
deducted from the Partnership's share of the sale
proceeds.
The Partnership did not pay any cash
distributions during the three months ended
January 31, 2000. Generally, future cash
distributions will be paid from the remaining
proceeds from the sale of the Taxter property and
cash reserves.
The Partnership believes that its cash reserves
are adequate for its needs during the remainder
of fiscal 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 month period ended January
31, 2000 compared to 1999 are primarily
attributable to the following:
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
ventures during the three-month period in 2000
is primarily due to lower occupancy at the
Taxter property.
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.
<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
None.
<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: March 15, 2000 By: /s/E. Davisson
Hardman, Jr.
E. Davisson Hardman,
Jr. President
Date: March 15, 2000 By: /s/Charles M.
Charrow
Charles M. Charrow
Controller
(Principal
Financial
and
Accounting
Officer)
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
Quarter Ended January 31, 2000
Exhibit Index
Exhibit No.
Description
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 unaudited financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-2000
<PERIOD-END> JAN-31-2000
<CASH> 1,435,874
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,816,264<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,618,230<F2>
<TOTAL-LIABILITY-AND-EQUITY> 3,816,264<F3>
<SALES> 0
<TOTAL-REVENUES> 65,371<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 50,973
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 14,398
<INCOME-TAX> 0
<INCOME-CONTINUING> 14,398
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,398
<EPS-BASIC> 0.07
<EPS-DILUTED> 0
<FN>
<F1>IN addition to cash and receivables, total assets include investment
in joint venture of $2,272,963 and other asset of $107,427.
<F2>Other Stockholders' Equity represents partners' capital.
<F3>Liabilities include accounts payable and other liabilities of $198,034.
<F4>Total revenue includes equity in earnings of joint venture of $48,131
and interest and
other revenues of $17,240.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
