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 March 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: 0-18151
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<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, December 31,
1997 1996
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 1,101,333 $10,273,472
Deferred expenses, net 195,523 204,832
Sale proceeds receivable - 1,661,039
Other assets 105,663 113,818
$ 1,402,519 $12,253,161
LIABILITIES AND PARTNERS' CAPITAL (DEFICIENCY)
Accounts payable and accrued expenses $ 393,743 $ 552,519
Excess of distributions and losses over cost
of investment in partnership 1,186,283 1,186,283
1,580,026 1,738,802
Partners' capital (deficiency):
General partners (3,267,241) (3,267,091)
Limited partners ($1,000 per Unit, 78,594
Units issued) 3,089,734 13,781,450
Total partners' capital (deficiency) (177,507) 10,514,359
$ 1,402,519 $12,253,161
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31, 1997 and 1996
<CAPTION>
1997 1996
<S> <C> <C>
Revenues:
Hotel operating $ - $9,138,921
Interest and other 38,957 56,137
38,957 9,195,058
Expenses:
Hotel operating - 5,735,239
Interest - 1,057,153
Depreciation and amortization 9,309 504,641
Equity in net losses of partnerships - 195,449
General and administrative 33,410 90,309
42,719 7,582,791
(Loss) income before minority interest (3,762) 1,612,267
Minority interest in income of consolidated
partnerships - (31,507)
Net (loss) income $ (3,762) $1,580,760
Net (loss) income allocated to:
Limited partners $ (3,612) $1,517,529
General partners (150) 63,231
$ (3,762) $1,580,760
Net (loss) income per Unit of limited
partnership interest $ (0.05) $ 19.31
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL DEFICIENCY
Three months ended March 31, 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 (3,612) (150) (3,762)
Cash distributions (10,688,104) - (10,688,104)
Partners' capital (deficiency)
at March 31, 1997 $ 3,089,734 $(3,267,241) $ (177,507)
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, 1997 and 1996
<CAPTION>
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (3,762) $ 1,580,760
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Depreciation and amortization 9,309 504,641
Minority interest in income of unconsolidated
partnership - 31,507
Equity in net losses of partnerships - 195,449
Decrease (increase) in:
Sale proceeds receivable 1,661,039 -
Accounts receivable - (739,382)
Restricted cash - 254,464
Other assets 8,155 (12,209)
(Decrease) increase in:
Accounts payable and accrued expenses (158,776) (62,715)
Due to affiliates - 127,281
Other liabilities - 636
Net cash provided by operating activities 1,515,965 1,880,432
Cash flows from investing activities:
Additions to real estate - (30,616)
Cash flows from financing activities:
Repayment of mortgage notes payable - (1,906,269)
Cash distributions (10,688,104) -
Net cash used in financing activities (10,688,104) (1,906,269)
Decrease in cash and cash equivalents (9,172,139) (56,453)
Cash and cash equivalents at beginning of period 10,273,472 2,072,917
Cash and cash equivalents at end of period $ 1,101,333 $ 2,016,464
Supplemental disclosure of cash flow information:
Cash paid for interest $ - $ 1,208,305
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
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,
Bayport Ltd.'s investment in the Bayport Plaza Hyatt hotel and, in
1996, Braker Associates 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 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, consisting
only of normal recurring accruals, necessary to present fairly the
results for the interim periods.
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 three months ended March 31, 1997, the Bayport Plaza
office building incurred revenues of $1,302,757, operating expenses
of $1,193,625 and net income of $109,132. 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 $126,508 for the three months ended March 31, 1996.
Realty performs administrative functions, processes investor
transactions and prepares tax information for the Partnership. For
the three months ended March 31, 1997 and 1996, the Partnership
incurred expenses of $19,047 and $44,701, 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
purported class action lawsuits pending in state and federal courts.
The complaints allege a number of claims, including breach of
fiduciary duty, fraud and misrepresentation, and seek an accounting
of profits, compensatory and other damages in an unspecified amount,
possible liquidation of the Partnership under a receiver's
supervision and other equitable relief. The defendants are
vigorously defending these actions. It is impossible to predict the
effect, if any, the outcome of these actions might have on the
Partnership's financial statements.
<PAGE>
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 discussing with its joint venture
partner the possible sale of the Bayport Plaza office building;
however, the timing of the disposition of this investment is
uncertain. 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.
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 approximatley $10.7 million ($136 per Unit) from the net
proceeds from the sale of the 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 proceeds
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-
month period ended March 31, 1997 compared to 1996 are primarily
attributable to the following:
The sale of the Bayport Plaza Hyatt Hotel in the third quarter of
1996 eliminated hotel operating revenues and expenses in 1997.
Interest expense was eliminated and depreciation and amortization
decreased in 1997 as a result of sales of real estate and repayment
of loans in the second and third quarters of 1996.
There was no equity in net losses of partnerships in 1997 because of
the sale of the joint venture interest Peninsula Office Park in the
fourth quarter of 1996. The Partnership was not entitled to an
allocation of income from the Bayport office building in 1997 and
1996.
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, improved to approximately 7% during the first quarter of
1997, and rental rates have also increased during the quarter.
Large blocks of vacant office space are limited in the Westshore
office market and new office construction is primarily on a build-
to-suit basis. Office buildings in this market also 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 are competitive advantages.
During the first quarter of 1997, occupancy at the property remained
stable at 94%; however, at March 31, 1997, the property was 100%
leased. 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.
<PAGE>
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.
<PAGE>
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: May 14, 1997 By: /s/ E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: May 14, 1997 By: /s/ Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
<PAGE>
DEAN WITTER REALTY GROWTH PROPERTIES, L.P.
Exhibit Index
Quarter Ended March 31, 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,101,333
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,402,519<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (177,507)<F2>
<TOTAL-LIABILITY-AND-EQUITY> 1,402,519<F3>
<SALES> 0
<TOTAL-REVENUES> 38,957<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 42,719<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,762)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,762)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,762)
<EPS-PRIMARY> (0.05)<F6>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash, total assets include net deferred expenses of
$195,523, and other assets of $105,663.
<F2>Represents partners' capital deficiency.
<F3>Liabilities include investments in unconsolidated partnerships of
$1,186,283 and accounts payable and other liabilities of $393,743.
<F4>Represents interest and other revenue.
<F5>Total expense includes depreciation and amortization of $9,309 and
general and administrative of $33,410.
<F6>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
