7
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 June 30, 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: 0-18151
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
(Exact name of registrant as specified in governing instrument)
Delaware 13-3286866
(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 of 12
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30, December
31,
1997 1996
ASSETS
<S> <C>
<C>
Cash and cash equivalents $ 1,084,892
$10,273,472
Deferred expenses, net 186,214
204,832
Sale proceeds receivable -
1,661,039
Other assets 12,117
113,818
$ 1,283,223
$12,253,161
LIABILITIES AND PARTNERS' CAPITAL (DEFICIENCY)
Accounts payable and accrued expenses $ 299,724 $
552,519
Excess of distributions and losses over cost of
investment in partnership 1,186,283
1,186,283
1,486,007
1,738,802
Partners' capital (deficiency):
General partners (3,268,253)
(3,267,091)
Limited partners ($1,000 per Unit, 78,594 Units issued)
3,065,469 13,781,450
Total partners' capital (deficiency) (202,784)
10,514,359
$ 1,283,223
$12,253,161
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and six months ended June 30, 1997 and 1996
<CAPTION>
Three months ended Six
months ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C>
<C>
Revenues:
Hotel operating $ - $7,618,344 $ -
$16,757,265
Interest and other 16,866 48,529 55,823
104,666
16,866 7,666,873 55,823
16,861,931
Expenses:
Hotel operating - 5,546,400 -
11,247,727
Interest - 997,590 -
2,054,743
Property operating - - -
33,912
Depreciation - 455,437 -
910,874
Amortization 9,309 49,205 18,618
98,409
Equity in net losses of
partnerships - 115,316 -
310,765
General and administrative 32,834 149,517
66,244 239,826
Loss on real estate sold/held
for sale - 21,705 -
21,705
42,143 7,335,170 84,862
14,917,961
Income (loss) before minority
interest (25,277) 331,703
(29,039) 1,943,970
Minority interest in income
of joint ventures - (6,025) -
(37,532)
Net income (loss) $(25,277) $ 325,678 $
(29,039) $ 1,906,438
Net income (loss) allocated to:
Limited partners $(24,265) $ 312,651 $
(27,877) $ 1,830,180
General partners (1,012) 13,027
(1,162) 76,258
$(25,277) $ 325,678 $
(29,039) $ 1,906,438
Net income (loss) per Unit of
limited partnership interest $ (0.31) $ 3.98 $
(0.36) $ 23.29
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL DEFICIENCY
Six months ended June 30, 1997
<CAPTION>
Limited General
Partners Partners Total
<S>
<C> <C> <C>
Partners' capital (deficiency)
at January 1, 1997 $ 13,781,450
$(3,267,091) $ 10,514,359
Net loss (27,877)
(1,162) (29,039)
Cash distributions (10,688,104) -
(10,688,104)
Partners' capital (deficiency)
at June 30, 1997 $ 3,065,469
$(3,268,253) $ (202,784)
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30, 1997 and 1996
<CAPTION>
1997 1996
<S>
<C> <C>
Cash flows from operating activities:
Net (loss) income $ (29,039) $
1,906,438
Adjustments to reconcile net(loss)income to net cash
provided by operating activities:
Depreciation and amortization 18,618
1,009,283
Loss on real estate sold/held for sale -
21,705
Minority interest in joint ventures' operations -
37,532
Equity in net losses of partnerships -
310,765
Decrease (increase) in:
Sale proceeds receivable 1,661,039 -
Accounts receivable -
(137,152)
Restricted cash -
(917,442)
Other assets 101,701
(148,916)
Increase (decrease) in:
Accounts payable and accrued expenses
(252,795) (459,234)
Due to affiliates -
242,830
Other liabilities -
636
Net cash provided by operating activities
1,499,524 1,866,445
Cash flows from investing activities:
Proceeds from sale of real estate -
856,280
Additions to real estate -
(106,350)
Net cash provided by investing activities -
749,930
Cash flows from financing activities:
Cash distributions (10,688,104)
- -
Repayment of mortgage notes payable -
(1,906,269)
Repayment of loan to affiliates -
(2,770,000)
Net cash used in financing activities
(10,688,104) (4,676,269)
Decrease in cash and cash equivalents (9,188,580)
(2,059,894)
Cash and cash equivalents at beginning of period
10,273,472 2,072,917
Cash and cash equivalents at end of period $
1,084,892 $ 13,023
Supplemental disclosure of cash flow information:
Cash paid for interest $ - $
2,396,615
See accompanying notes to consolidated financial statements.
</TABLE>
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
Notes to Consolidated Financial Statements
1. The Partnership
Dean Witter Realty Growth Properties, L.P. (the
"Partnership") is a limited partnership formed in 1985
under the laws of the State of Delaware. The Managing
General Partner of the Partnership is Dean Witter
Realty Growth Properties Inc., which is wholly-owned by
Dean Witter Realty Inc. ("Realty").
The financial statements include the accounts of the
Partnership, and in 1996, Braker Associates and Bayport
Ltd.'s investment in the Bayport Plaza Hyatt hotel on a
consolidated basis. The Partnership's interests in
Bayport Ltd.'s investment in the Bayport Plaza office
building and, in 1996, Peninsula/DW Associates are
accounted for on the equity method.
The Partnership's remaining investment consists of a
46.25% interest in the Bayport Plaza office building
joint venture (the "Joint Venture"). The Partnership
is in the process of marketing for sale the Bayport
Plaza office building. The Partnership anticipates the
property will be sold in 1997 and the cash proceeds, if
any, will be distributed 100% to the limited parters.
However, there is no guarantee the investment will be
disposed of in 1997. The Partnership does not expect
that it will need to make additional capital
contributions to the Joint Venture.
The Partnership's records are maintained on the accrual
basis of accounting for financial reporting and tax
purposes.
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.
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.
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
Except for the loss on real estate sold in 1996, 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 December 31,
1996. Operating results of interim periods may not be
indicative of the operating results for the entire
year.
The Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128,
"Earnings per Share" in February 1997. This
pronouncement establishes standards for computing and
presenting earnings per share, and is effective for the
Partnership's 1997 year-end financial statements. The
Partnership's management has determined that this
standard will have no impact on the Partnership's
computation or presentation of net income (loss) per
unit of limited partnership interest.
2. Excess of Distributions and Losses Over Cost of Investments in
Partnership
During the six months ended June 30, 1997, the Bayport
Plaza office building incurred revenues of $2,773,068,
operating expenses of $2,395,135 and net income of
$377,933. Under the terms of the joint venture
agreement, all of the property's income and cash flow
from operations in 1997 and 1996 were allocated 100% to
another partner.
3. Related Party Transactions
Prior to 1995, the Partnership borrowed funds from an
affiliate of Realty. These borrowings were repaid in
the second and third quarters of 1996. Interest
expense, calculated at the prime rate, was $224,461 for
the six months ended June 30, 1996.
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
Realty performs administrative functions, processes
investor transactions and prepares tax information for
the Partnership. For the six months ended June 30,
1997 and 1996, the Partnership incurred expenses of
$38,094 and $89,387, respectively, for these services.
These amounts are included in general and
administrative expenses.
4. Litigation
Various public partnerships sponsored by Realty
(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 variety 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 the actions.
It is impossible to predict the effect, if any, the
outcome of these actions might have on the
Partnership's financial statements.
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Liquidity and Capital Resources
The Partnership raised $78,594,000 in a public offering
which was terminated in 1986. The Partnership has no
plans to raise additional capital.
The Partnership used the proceeds from the offering to
make leveraged investments in five properties. One of
the properties was lost through foreclosure in 1992;
all of the remaining properties other than the Bayport
Plaza office building were sold prior to 1997. No
additional investments are planned.
The Partnership's remaining investment consists of a
46.25% interest in the Bayport Plaza office building
joint venture (the "Joint Venture"). The Partnership
is in the process of marketing for sale the Bayport
Plaza office building. The Partnership anticipates the
property will be sold in 1997 and the cash proceeds, if
any, will be distributed 100% to the limited parters.
However, there is no guarantee the investment will be
disposed of in 1997. The Partnership does not expect
that it will need to make additional capital
contributions to the Joint Venture.
The Partnership does not expect that the Joint Venture
will produce significant operating cash flow for the
Partnership in the near future because it is likely
such cash flow will be distributed 100% to another
partner in accordance with the provisions of the Joint
Venture agreement. Accordingly, the Partnership will
not realize any cash from its remaining investment
until it is sold or refinanced. The Partnership
expects to incur minimal operating expenses until then,
and believes it has sufficient cash reserves to fund
such expenses.
The Partnership does not anticipate making
distributions to its partners until the Partnership's
remaining property investment is sold or refinanced.
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
The Partnership believes that the total cash
distributed to the Limited Partners (including
estimated cash to be realized from disposition of the
Bayport Plaza office building) will be less than the
capital contributed by the Limited Partners.
In January 1997, the Partnership made a distribution to
Limited Partners of approximately $10.7 million ($136
per Unit) from the net proceeds from the sale of its
joint venture interest in Peninsula Office Park, the
sale of land at Braker Center and the remaining
proceeds from the sale of the Bayport Plaza Hyatt
hotel.
In January 1997, the Partnership collected the
remaining sale proceeds receivable from the sale of its
joint venture interest in Peninsula Office Park.
Except as discussed herein and in the consolidated
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 June 30, 1997
compared to 1996 are primarily attributable to the
following:
The sale of the Bayport Plaza Hyatt Hotel in the third
quarter of 1996 and of the Partnership's joint venture
interest in the Peninsula Office Park in the fourth
quarter of 1996 resulted in the elimination of all
operating revenues and expenses, interest expense,
depreciation, equity in losses of partnerships, and the
decrease in amortization in 1997. The Partnership was
not entitled to an allocation of income from the
Bayport office building in 1997 and 1996.
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
General and administrative expenses decreased in 1997
compared to 1996 as a result of the reduction of
operating activities of the Partnership.
A summary of the office market in which the
Partnership's remaining property interest is located
and the performance of the property is as follows:
The market vacancy rate for Class A buildings in the
Westshore market in Tampa, Florida, the location of the
Bayport office building, decreased to approximately 6%
during the second quarter of 1997. With little new
office supply added to this market over the past
several years, occupancy levels have increased and
rental rates have risen. Office buildings in this
market continue to compete for quality tenants with an
improving downtown Tampa market; however, the Bayport
office building's accessibility to the Tampa airport
and its ability to offer free parking continue to
provide competitive advantages. During the second
quarter of 1997, occupancy at the property increased to
100%. Leases totalling approximately 17% and 11% of
the space are scheduled to expire in 1998 and 1999,
respectively.
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.
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.
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto
duly authorized.
DEAN WITTER REALTY GROWTH
PROPERTIES, L.P.
By: Dean Witter Realty Growth
Properties Inc.
Managing General Partner
Date: August 13, 1997 By: /s/ E. Davisson Hardman,
Jr. E. Davisson Hardman,
Jr.
President
Date: August 13, 1997 By: /s/ Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
Exhibit Index
Quarter Ended June 30, 1997
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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,084,892
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,283,223<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (202,784)<F2>
<TOTAL-LIABILITY-AND-EQUITY> 1,283,223<F3>
<SALES> 0
<TOTAL-REVENUES> 55,823<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 84,862<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (29,039)
<INCOME-TAX> 0
<INCOME-CONTINUING> (29,039)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,039)
<EPS-PRIMARY> (0.36)<F6>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash, total assets include net deferred expenses of
$186,214, and other assets of $12,117.
<F2>Represents partners' capital deficiency.
<F3>Liabilities include investments in unconsolidated partnerships of
$1,186,283 and accounts payable and other liabilities of $299,724.
<F4>Represents interest and other revenue.
<F5>Total expense includes amortization of $18,618 and
general and administrative of $66,244.
<F6>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
