UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 1994
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 0-18146
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3293754
(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
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
State the aggregate market value of the voting stock held by non-
affiliates of the registrant. N/A
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
PART I.
ITEM 1. BUSINESS.
The Registrant, Dean Witter Realty Income Partnership III, L.P. (the
"Partnership"), is a limited partnership formed in August 1985 under the
Uniform Limited Partnership Act of the State of Delaware for the purpose
of investing primarily in income-producing office, industrial and retail
properties.
The Managing General Partner of the Partnership is Dean Witter
Realty Income Properties III Inc. (the "Managing General Partner"), a
Delaware corporation which is wholly owned by Dean Witter Realty Inc.
The Associate General Partner is Dean Witter Realty Income Associates
III, L.P. (the "Associate General Partner"), a Delaware limited
partnership, the general partner of which is Dean Witter Realty Income
Properties III Inc., a wholly-owned subsidiary of the Managing General
Partner. The Managing General Partner manages and controls all aspects
of the business of the Partnership. The terms of transactions between
the Partnership and its affiliates are set forth in Item 13 below.
The Partnership issued 534,020 units of limited partnership interest
(the "Units") with gross proceeds from the offering of $267,010,000. The
offering has been terminated and no additional Units will be sold.
The proceeds from the offering were used to make equity investments
in six office properties and five retail properties which have been
acquired without mortgage debt. The properties are described below in
Item 2, the Operations section of Item 7 and footnotes 4 and 5 to the
consolidated financial statements included in Item 8.
The Partnership considers its business to include one industry
segment, investment in real property.
The Partnership's real property investments are subject to
competition from similar types of properties in the vicinities in which
they are located. In recent years, an oversupply condition has persisted
nationally and many markets have experienced high vacancy rates.
Currently, many real estate markets are beginning to stabilize, primarily
due to the continued absence of significant construction activity;
however, the recovery is expected to be slow. Further information
regarding competition in the markets where the Partnership's properties
are located is set forth in Item 7, "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
The Partnership has no employees.
All of the Partnership's business is conducted in the United States.
ITEM 2. PROPERTIES.
The Partnership owns directly or through a partnership interest the
following eleven property interests, none of which is encumbered by
indebtedness. Generally, the leases pertaining to the properties provide
for pass-throughs to the tenants of their pro-rata share of certain
operating expenses.
<TABLE>
<CAPTION>
Year Acquisition Net Rentable Type of Ownership
Completed/ Cost Area of land and
Property and Location Acquired ($000) (000 sq. ft.) Improvements
<S> <C> <C> <C> <C>
Glenhardie III, Valley Forge, PA 1984/1986 $9,646 64 Fee interest
Office Building
Glenhardie IV, Valley Forge, PA 1985/1986 $10,354 64 99.9% General Partner-
Office Building ship interest1
Delta Center, Lansing, MI 1985/1986 $13,582 174 Fee interest
Shopping Center
Hall Road Crossing, Sterling
Heights, MI 1986/1986,'91,'93 $15,420 176 Fee interest
Shopping Center
Fashion Corners, Saginaw, MI 1986/1986 $12,974 189 Fee interest
Shopping Center
Westland Crossing, Westland, MI 1986/1986 $13,225 137 Fee interest
Shopping Center
Taxter Corporate Park,
Westchester, NY 1987-1988/ $23,063 345 44.6% General Partner-
2 Office Buildings 1986-1988 ship interest2
Business Park at Holcomb Woods,
Roswell, GA 1984/1986 $23,100 244 Fee interest
4 Office Buildings
Laurel Lakes Centre, Laurel, MD 1987/1987 $51,297 466 99.999% General Part-
Shopping Center nership interest1
Technology Park Reston,
Reston, VA 1983-1985/1987 $20,170 374 35.0% General Partner-
3 Office Buildings ship interest3
Chesterbrook Corp. Center,
Valley Forge, PA 1982-1987/1987 $32,430 621 26.7% General Partner-
8 Office Buildings ship interest4
</TABLE>
1. The remaining general partnership ("GP") interest is held by the
Managing General Partner.
2. The remaining GP interests are held by Dean Witter Realty Income
Partnership II, L.P. (14.8%) and Dean Witter Realty Income
Partnership IV, L.P. (40.6%). The total cost of the property
was $51.8 million
3. The remaining GP interest is held by Dean Witter Realty Income
Partnership IV, L.P. The total cost of the property was $57.6 million.
4. The remaining GP interests are held by Dean Witter Realty Income
Partnership IV, L.P. (41.2%) and an affiliate of the Managing General
Partner (32.1%). The total cost of the property was $1
Each property has been built with on-site parking facilities.
An affiliate of the Partnership is the property manager for
Laurel Lakes Centre, Taxter Corporate Park, Hall Road Crossing, Delta
Center, Fashion Corners and Westland Crossing and the co-property manager
for the Glenhardie buildings and five buildings at the Chesterbrook
Corporate Center.
Further information relating to the Partnership's properties is
included in Item 7 below and footnotes 4 and 5 to the consolidated
financial statements included in Item 8 below.
ITEM 3. LEGAL PROCEEDINGS.
Neither the Partnership nor any of its properties is subject to
any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted during the fourth quarter of the fiscal
year to a vote of Unit holders.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
An established public trading market for the Units does not
exist, and it is not anticipated that such a market will develop in the
future. Accordingly, information as to the market value of a Unit at any
given date is not available. However, the Partnership does allow its
limited partners (the "Limited Partners") to transfer their Units if a
suitable buyer can be located.
As of October 31, 1994, there were 38,732 holders of limited
partnership interests.
The Partnership is a limited partnership and, accordingly, does
not pay dividends. It does, however, make quarterly distributions of
cash to its partners. Pursuant to the partnership agreement,
distributable cash, as defined, is paid 90% to the Limited Partners and
10% to the general partners (the "General Partners").
During the year ended October 31, 1994, the Partnership paid cash
distributions aggregating $11,867,112, with $10,680,400 distributed to
the Limited Partners and $1,186,712 to the General Partners. The
distributions aggregated $20.00 per Unit to the Limited Partners.
On November 29, 1994, the Partnership paid the fourth quarter
distribution of $5.00 per Unit to the Limited Partners. The total cash
distribution amounted to $2,966,778, with $2,670,100 distributed to the
Limited Partners and $296,678 to the General Partners.
The Partnership anticipates making regular distributions to its
partners in the future.
Sale or financing proceeds will be distributed, to the extent
available, first, to each Limited Partner, until there has been a return
of the Limited Partner's capital contribution plus cumulative
distributions of distributable cash and sale or refinancing proceeds in
an amount sufficient to provide a 9% cumulative annual return on the
Limited Partner's adjusted capital contribution. Thereafter, any
remaining sale or financing proceeds will be distributed 85% to the
Limited Partners and 15% to the General Partners after the Managing
General Partner receives a brokerage fee of up to 3% of the selling price
of any equity investment.
Taxable income generally will be allocated in the same
proportions as distributions of distributable cash or sale or financing
proceeds. In the event there is no distributable cash or sale or
financing proceeds, taxable income will be allocated 90% to the Limited
Partners and 10% to the General Partners. Any tax loss will be allocated
90% to the Limited Partners and 10% to the General Partners.
<PAGE>
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA.
The following sets forth a summary of the selected financial data for the
Partnership:
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
For the years ended October 31, 1994, 1993, 1992, 1991 and 1990
<CAPTION>
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Total revenues $ 20,279,777 $ 7,977,133 $ 20,957,942 $ 21,542,531 $ 22,029,495
Net income (loss) $ 9,711,910 $ (3,002,627) $ 10,556,999 $ 11,397,429 $ 12,421,996
Net income (loss) per Unit of
limited partnership
interest $ 16.37 $ (5.06) $ 17.79 $ 19.21 $ 20.94
Cash distributions paid
per Unit of limited
partnership interest $ 20.00 $ 20.00 $ 31.25 $ 31.25 $ 31.25
Total assets at October 31 $195,350,000 $197,751,501 $212,527,983 $220,764,686 $227,627,170
Note: The above financial data should be read in conjunction with the consolidated financial statements and
the related notes appearing in Item 8.
<FN>
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Liquidity and Capital Resources
The Partnership raised $267,010,000 in a public offering of
534,020 units which was terminated in 1987. The Partnership has no plans
to raise additional capital.
The Partnership has purchased eight properties and has made
three investments in partnerships on an all-cash basis. The
Partnership's acquisition program has been completed. No additional
investments are planned.
Many real estate markets are stabilizing, primarily due to the
continued absence of significant construction activity. However, the
recovery of the office market will be slow, because tenant demand is
weak, as a result of continued downsizing by many major corporations.
Increased consumer spending has helped the retail property market
although increased interest rates have slowed spending.
Real estate markets are generally divided into sub-markets by
geographic location and property type. Not all sub-markets have been
affected equally by the above factors.
The Partnership's liquidity depends in part upon cash flow from
operations of its properties, expenditures for tenant improvements and
leasing commissions in connection with the leasing of vacant space. In
1994, all of the Partnership's properties and joint venture interests
generated positive cash flow from operations, and it is anticipated that
they will continue to do so.
In 1994, Partnership cash flow from operations and distributions
received from its joint venture investment exceeded distributions to
investors and capital expenditures. The Partnership expects that such
cash flows will be sufficient to fund capital expenditures and
distributions to investors in 1995. The Partnership expects to increase
the cash distribution rate from 4.0% to 4.75% per Unit beginning with the
cash distribution for the first fiscal quarter of 1995.
Also, in 1994, the Partnership incurred approximately $2,605,000
of tenant improvements and leasing commissions, primarily relating to the
Glenhardie and Holcomb Woods properties. The Partnership also invested
approximately $1,234,000, representing its share of building
improvements, tenant improvements and leasing commissions at the Taxter
and Chesterbrook joint ventures.
The Vanguard Group, the largest tenant in the Chesterbrook joint
venture, vacated its space in two of the buildings in November 1993 and
October 1994 and will vacate its remaining space upon the expiration of
its leases in November 1995. In September 1994, the Partnership signed
leases with two new tenants to fill a significant portion of the space
vacated by Vanguard to date. The Partnership's share of capital
expenditures which will result from these new leases in 1995 is
approximately $777,000. The Partnership expects to incur significant
additional capital expenditures in order to attract new tenants to the
Holcomb Woods and Glenhardie properties, where there is also significant
vacant space.
In fiscal 1993, the Partnership concluded that there was a
decline in the value of the Taxter Corporate Park property, and that the
decline was other-than-temporary. Accordingly, the general partners of
the partnership which owns the property recorded a loss on impairment of
its investment in the property of approximately $27.8 million at October
31, 1993. The Partnership's share of this loss, which was included in
equity in earnings (losses) of joint ventures was $12,411,356.
On November 29, 1994, the Partnership paid the fourth quarter
distribution of $5.00 per Unit to the Limited Partners. The total cash
distribution amounted to $2,966,778 with $2,670,100 distributed to the
Limited Partners and $296,678 to the General Partners.
Operations
Fluctuations in the Partnership's operating results for the year
ended October 31, 1994 compared to 1993 and for the year ended October
31, 1993 compared to 1992 are primarily attributable to the following:
The increase in equity in earnings (losses) of joint ventures in
1994 compared to 1993 and the decrease in 1993 compared to 1992 are
primarily attributable to the loss incurred in 1993 when the Partnership
recorded its share ($12,411,356) of the loss on impairment of the Taxter
property. Excluding the 1993 loss, the equity in earnings (losses) of
joint ventures decreased by approximately $254,000 in 1994 compared to
1993. This decrease was primarily caused by lower rental income from the
Chesterbrook and Taxter joint ventures. These decreases were partially
offset by lower depreciation charges from the Taxter joint venture (due
to the writedown of the property in 1993).
The decrease in property operating expenses for 1994 compared to
1993 is primarily due to lower real estate taxes incurred at most of the
Partnership's properties in 1994 and lower building services costs at the
Partnership's office buildings. The increase in property operating
expenses in 1993 compared to 1992 was primarily due to write-offs of
uncollectible tenant receivables at various properties of $190,000 and
higher real estate taxes incurred at the Partnership's retail properties.
A summary of the markets in which the Partnership's office
properties are located and the performance of each property is as
follows:
The office market in suburban Atlanta, the location of Business
Park at Holcomb Woods, is improving; the current vacancy in this market
is approximately 16%. During 1994, average occupancy at the property was
76%, and at October 31, 1994, the property was 88% leased to 29 tenants
(including one tenant which moved into its space in November 1994). No
single tenant occupies more than 15% of the property's space. Leases on
approximately 21% and 34% of the property's space are scheduled to expire
in 1995 and 1996, respectively.
Chesterbrook Corporate Center is located in Valley Forge,
Pennsylvania, a market in which the vacancy rate is approximately 14%.
During 1994, average occupancy at the property was 87%, and at October
31, 1994, the property was 90% leased to 20 tenants (including two
tenants which moved into their space in December 1994). Vanguard has
been vacating its space to move into its own newly-constructed space in
this market. This, and other new construction in the Valley Forge area,
will cause the office market to deteriorate further. The leases of
Philadelphia Electric company, the other major tenant at the property
(occupying 25% of the space), expire in 1998. No other significant
leases are scheduled to expire in the near future.
Glenhardie Corporate Center III and IV is also located in Valley
Forge, Pennsylvania. During 1994, average occupancy at the property was
74% and at October 31, 1994, the property was 80% leased to 21 tenants.
No single tenant occupies more than 15% of the property's space. No
significant leases are scheduled to expire before 1999.
The office market in Westchester County, New York, the location
of Taxter Corporate Park, has experienced a significant decline. The
current vacancy level in the Westchester office market is approximately
25%. It is unlikely that this vacant space will be absorbed in the
market for several years. However, during 1994, average occupancy at the
property was 98%, and at October 31, 1994, the property was 99% leased
to 26 tenants. One of the tenants purchased a long-term leasehold
interest in approximately 20% of the space at the property. The leases
of Fuji Photo Film, the other major tenant (covering 21% of the
property's space) expire in 1996. No other significant leases are
scheduled to expire in the near future.
The Reston market in Virginia, the location of Tech Park Reston,
has a vacancy rate of 12% due to the contraction of the high-tech and
defense firms which are the major tenants in the market. The leases with
Sprint Communications, the sole tenant, expire in 2003. Sprint has the
option to terminate its leases on two of the three buildings beginning
in 1997 and 1998.
A summary of the markets in which the Partnership's retail
properties are located and the leasing status of each property is as
follows:
Laurel Lakes Centre is located in a suburb of Baltimore and
Washington, D.C. Retail centers in this market have generally
experienced lower net rental rates and, currently, a vacancy rate of
approximately 16%. However, the property's design, location and tenant
mix has enabled it to maintain an average occupancy rate of 94% in 1994
and retain relatively stable rental rates. At October 31, 1994, the
property was 95% leased to 46 tenants (including one tenant which moved
into its space in November 1994). The lease of K-Mart (covering
approximately 18% of the space) expires in 2005; other leases totaling
approximately 10% of the space are scheduled to expire in 1995.
The Partnership owns four shopping centers in Michigan.
Sterling Heights, the location of Hall Road Crossing, is currently a
strong and expanding market with a vacancy rate of less than 5%. During
1994, average occupancy at the property was 75%, and at October 31, 1994
the property was 95% leased to 16 tenants (including two tenants who
moved into their spaces in November 1994). No significant leases are
scheduled to expire before 1997. The lease of Gander Mountain (covering
approximately 21% of the property's space) expires in 2009.
Saginaw, Michigan, the location of Fashion Corners, has a
vacancy rate of approximately 10%. During 1994, and at October 31, 1994,
the property was 94% leased to 21 tenants. In the third quarter of 1994,
Best Products, which occupies approximately 21% of the property's space
and whose lease expires in 2005, emerged from bankruptcy, and is now
current on all rental payments. The lease of Best Buy (covering
approximately 19% of the space) expires in 2009, and the lease of another
tenant (covering approximately 12% of the space) expires in 1996.
A retail center is under construction near Fashion Corners.
This center as well as a nearby center may compete with Fashion Corners
for larger tenants.
Lansing, Michigan, the location of Delta Center, is a strong and
stable market with a vacancy rate of approximately 7%. During 1994,
average occupancy at the property was 97%, and at October 31, 1994, the
property was 98% leased to 23 tenants. In May 1994, Pet Food Warehouse
moved into approximately 15% of the property's space under a sub-lease
from Perry Drugs who vacated its space in 1991 but continued to pay rent
pursuant to its lease (which expires in 2005). The lease of Service
Merchandise (covering approximately 18% of the space) expires in 2006,
and the lease of another tenant (covering approximately 13% of the space)
expires in 1995.
Westland Crossing is situated outside downtown Detroit and is in
an overbuilt market. Several large retailers left their locations during
the first quarter of 1994, and the vacancy rate in this market is
currently 16%. During 1994, average occupancy at the property was 89%,
and at October 31, 1994, the property was 90% leased to 21 tenants
(including one tenant who moved into its space in December 1994). Toys
R Us owns a 47,800 square foot store at the property. The leases of
Marshall's (covering approximately 18% of the space) and Frank's
Supercrafts (covering approximately 16% of the space) expire in 1996 and
2006, respectively.
A 110,000 square foot retail center is under construction near
Westland Crossing. When complete, this center as well as a nearby
center which recently lost a large anchor tenant to the new retail center
may compete with Westland Crossing for tenants.
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>
<TABLE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
INDEX
<CAPTION>
Page
<S> <C>
Independent Auditors' Report 12
Consolidated Balance Sheets at October 31, 1994 and 1993 13
Consolidated Statements of Operations for the years ended
October 31, 1994, 1993 and 1992 14
Consolidated Statements of Partners' Capital for the years
ended October 31, 1994, 1993 and 1992 15
Consolidated Statements of Cash Flows for the years ended
October 31, 1994, 1993 and 1992 16
Notes to Consolidated Financial Statements 17-23
</TABLE>
<TABLE>
<CAPTION>
Schedule
<S> <C> <C>
Supplementary Income Statement Information X 24
Real Estate and Accumulated Depreciation XI 25-27
All schedules other than those indicated above have been omitted because either
the required information is not applicable or the information is shown in the
consolidated financial statements or notes thereto.
/TABLE
<PAGE>
Independent Auditors' Report
To The Partners of
Dean Witter Realty Income Partnership III, L.P.:
We have audited the accompanying consolidated balance sheets of Dean
Witter Realty Income Partnership III, L.P. and consolidated
partnerships (the "Partnership") as of October 31, 1994 and 1993, and
the related consolidated statements of income, partners' capital, and
cash flows for each of the three years in the period ended October 31,
1994. Our audits also included the financial statement schedules
listed in the index at Item 8. These financial statements and
financial statement schedules are the responsibility of the
Partnerships' management. Our responsibility is to express an opinion
on the financial statements and financial statement schedules based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly in all
material respects, the financial position of Dean Witter Realty Income
Partnership III, L.P. and consolidated partnerships as of October 31,
1994 and 1993, and the results of their operations and their cash flows
for each of the three years in the period ended October 31, 1994 in
conformity with generally accepted accounting principles. Also in our
opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a
whole, present fairly in all material respects, the information set
forth therein.
/s/Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
January 27, 1995
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED BALANCE SHEETS
October 31, 1994 and 1993
<CAPTION>
1994 1993
ASSETS
<S> <C> <C>
Cash and short-term investments, at cost,
which approximates market $ 5,683,026 $ 5,238,000
Real estate, at cost (note 4):
Land 21,043,309 21,043,309
Buildings 140,320,824 138,500,302
161,364,133 159,543,611
Accumulated depreciation (30,244,746) (26,170,957)
131,119,387 133,372,654
Investments in joint ventures (note 5) 54,767,448 55,509,648
Deferred expenses, net 952,951 670,381
Other assets 2,827,188 2,960,818
$195,350,000 $197,751,501
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $ 788,033 $ 1,054,213
Security deposits 238,537 218,656
1,026,570 1,272,869
Partners' capital (deficiency):
General partners (4,583,254) (4,367,733)
Limited partners ($500 per Unit,
534,020 Units issued) 198,906,684 200,846,365
Total partners' capital 194,323,430 196,478,632
$ 195,350,000 $ 197,751,501
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended October 31, 1994, 1993 and 1992
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Revenues:
Rental (note 6) $16,027,787 $16,197,353 $16,424,132
Equity in earnings (losses) of joint ventures
(note 5) 3,651,193 (8,505,971) 4,039,353
Interest 186,333 151,874 212,697
Other 414,464 133,877 281,760
20,279,777 7,977,133 20,957,942
Expenses:
Property operating (note 7) 5,018,380 5,355,247 4,847,379
Depreciation 4,378,952 4,397,065 4,400,743
Amortization 197,129 185,134 130,839
General and administrative (note 7) 973,406 1,042,314 1,021,982
10,567,867 10,979,760 10,400,943
Net income (loss) $ 9,711,910 $(3,002,627) $10,556,999
Net income (loss) per Unit of limited
partnership interest (note 2) $16.37 $(5.06) $17.79
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
For the years ended October 31, 1994, 1993 and 1992
<CAPTION>
Limited General
Partners Partners Total
<S> <C> <C> <C>
Partners' capital (deficiency)
at November 1, 1991 $221,416,144 $(2,082,222) $219,333,922
Net income 9,501,299 1,055,700 10,556,999
Cash distributions (16,688,314) (1,854,236) (18,542,550)
Partners' capital (deficiency)
at October 31, 1992 214,229,129 (2,880,758) 211,348,371
Net loss (2,702,364) (300,263) (3,002,627)
Cash distributions (10,680,400) (1,186,712) (11,867,112)
Partners' capital (deficiency)
at October 31, 1993 200,846,365 (4,367,733) 196,478,632
Net income 8,740,719 971,191 9,711,910
Cash distributions (10,680,400) (1,186,712) (11,867,112)
Partners' capital (deficiency)
at October 31, 1994 $198,906,684 $(4,583,254) $194,323,430
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended October 31, 1994, 1993 and 1992
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 9,711,910 $ (3,002,627) $ 10,556,999
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation 4,378,952 4,397,065 4,400,743
Amortization 197,129 185,134 130,839
Equity in (earnings) losses of joint ventures (3,651,193) 8,505,971 (4,039,353)
(Increase) decrease in operating assets:
Deferred expenses (479,699) (398,050) (248,278)
Other assets 133,630 595,807 (85,916)
Increase (decrease) in operating liabilities:
Accounts payable and accrued liabilities (266,180) 47,744 (172,551)
Other liabilities 19,881 45,513 (78,601)
Net cash provided by operating activities 10,044,430 10,376,557 10,463,882
Cash flows from investing activities:
Additions to real estate (2,125,685) (1,979,673) (1,247,532)
Investment in joint ventures (1,234,388) (643,451) (851,210)
Distributions from joint ventures 5,627,781 6,015,198 5,727,408
Net cash provided by investing activities 2,267,708 3,392,074 3,628,666
Cash flows from financing activities:
Cash distributions (11,867,112) (11,867,112) (18,542,550)
Increase (decrease) in cash and short-term investments 445,026 1,901,519 (4,450,002)
Cash and short-term investments at beginning
of year 5,238,000 3,336,481 7,786,483
Cash and short-term investments at end of year $ 5,683,026 $ 5,238,000 $ 3,336,481
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
October 31, 1994, 1993 and 1992
1. The Partnership
Dean Witter Realty Income Partnership III, L.P. (the "Partnership")
is a limited partnership organized under the laws of the State of
Delaware in 1985. The Partnership is managed by Dean Witter Realty
Income Properties III Inc. (the "Managing General Partner"). The
Partnership's fiscal year ends on October 31.
In 1986 and 1987, the Partnership issued 534,020 units of limited
partnership interest (the "Units") for $267,010,000. No additional
Units will be sold. The proceeds of the offering were used to make
investments in income-producing office, industrial and retail
properties which were not encumbered by debt.
2. Summary of Significant Accounting Policies
The financial statements include the accounts of the Partnership,
Part Six Associates and Laurel-Vincent Place Associates Limited
Partnership on a consolidated basis. The Partnership owns a 99.9%
and 99.999% general partnership interest in Part Six Associates and
Laurel-Vincent Place Associates Limited Partnership, respectively.
The remaining interests in these partnerships are held by the
Managing General Partner.
The Partnership's 44.6% general partnership interest in Taxter
Corporate Park, 35% general partnership interest in Tech Park
Reston and 26.7% general partnership interest in the partnership
which owns interests in Chesterbrook Corporate Center 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.
The carrying value of real estate includes the purchase price paid
by the Partnership and acquisition fees and expenses. Costs of
improvements to the properties are capitalized, and repairs are
expensed. Depreciation is recorded on the straight-line method.
The Partnership periodically evaluates the recoverability of the
net carrying value of its real estate and investments in joint
ventures. The evaluation is based on a review of expected future
cash flows, determination of the Partnership's expected holding
period of these assets, and other factors.
Deferred expenses consist of leasing commissions which are
amortized over the applicable lease terms.
Rental income is recognized on a straight-line basis.
The Partnership considers short-term investments with original
maturities of three months or less to be cash equivalents.
Net income (loss) per Unit 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.
No provision for income taxes has been made in the financial
statements, since the liability for such taxes is that of the
partners rather than the Partnership.
For income tax purposes, Partnership results are reported for the
calendar year. The accounting policies used for tax reporting
purposes differ from those used for financial reporting as follows:
(a) depreciation is calculated using accelerated methods; (b)
rental income is recognized based on the payment terms in the
applicable leases; and (c) writedowns for impairment of real estate
are not deductible. In addition, offering costs are treated
differently for tax and financial reporting purposes. The tax
basis of the Partnership's assets and liabilities is approximately
$21.5 million higher than the amounts reported for financial
statement purposes.
3. Partnership Agreement
The Partnership Agreement provides that distributable cash, as
defined, will be paid 90% to the Limited Partners and 10% to the
General Partners.
Sale or financing proceeds will be distributed, to the extent
available, first, to each Limited Partner, until there has been a
return of the Limited Partner's capital contribution plus
cumulative distributions of distributable cash and sale or
refinancing proceeds in an amount sufficient to provide a 9%
cumulative annual return on the Limited Partner's adjusted capital
contribution. Thereafter, any remaining sale or financing proceeds
will be distributed 85% to the Limited Partners and 15% to the
General Partners after the Managing General Partner receives a
brokerage fee of up to 3% of the selling price of any equity
investment.
Taxable income generally is allocated in the same proportions as
distributions of distributable cash or sale or financing proceeds.
In the event there is no distributable cash or sale or financing
proceeds, taxable income is allocated 90% to the Limited Partners
and 10% to the General Partners. Any tax loss will be allocated
90% to the Limited Partners and 10% to the General Partners.
4. Real Estate Investments
The location, year of acquisition and net carrying values of the
properties are as follows:
<TABLE>
<CAPTION>
Year of October 31,
Property Acquisition 1994 1993
<S> <C> <C> <C>
Glenhardie III and IV
Valley Forge, PA 1986 $ 17,451,287 $ 17,058,528
Delta Center
Lansing, MI 1986 11,727,540 11,982,008
Hall Road Crossing
Sterling Heights, MI 1986,'91,'93 13,350,164 13,839,094
Fashion Corners
Saginaw, MI 1986 11,224,815 11,409,085
Westland Crossing
Westland, MI 1986 11,515,810 11,821,652
Holcomb Woods
Roswell, GA 1986 20,702,311 20,912,996
Laurel Lakes Centre
Laurel, MD 1987 45,147,460 46,349,291
$131,119,387 $133,372,654
</TABLE>
5. Investments in Joint Ventures
Taxter Corporate Park, Westchester County, New York
In 1986, the Partnership purchased a 44.6% partnership interest in
the general partnership which owns the property. Affiliates of the
Partnership, Dean Witter Realty Income Partnership II, L.P., and
Dean Witter Realty Income Partnership IV, L.P., purchased the
remaining interests of 14.8% and 40.6%, respectively.
The partners each receive cash flow and profits and losses
according to their pro rata shares.
In fiscal 1993, because of continuing weakness in the Westchester
County, New York office market, and the likelihood that such
weakness would persist for several years, the general partners of
the partnership which owns the property concluded that there was a
decline in its value and that the decline was other-than-temporary.
Accordingly, the partnership which owns the property recorded a
loss on impairment of the property of $27,828,152 at October 31,
1993. The Partnership's share of this loss ($12,411,356) was
included in equity in earnings (losses) of joint ventures in 1993.
Summarized balance sheet information of the joint venture is as
follows:
<TABLE>
<CAPTION>
October 31,
1994 1993
<S> <C> <C>
Land and buildings, net $18,525,138 $17,988,250
Other 1,720,405 1,501,419
Total assets $20,245,543 $19,489,669
Liabilities $ 214,584 $ 218,247
Partners' capital 20,030,959 19,271,422
Total liabilities and capital $20,245,543 $19,489,669
Summarized results of operations of the joint venture are as follows:
Years ended October 31,
1994 1993 1992
Rental income $ 6,269,934 $ 6,516,950 $ 6,109,525
Other income 81,301 100,967 187,250
6,351,235 6,617,917 6,296,775
Property operating expenses 3,020,235 2,956,814 3,019,392
Depreciation and amortization 991,163 1,576,393 1,470,390
Loss on impairment of real
estate - 27,828,152 -
4,011,398 32,361,359 4,489,782
Net income (loss) $ 2,339,837 $(25,743,442) $ 1,806,993
<FN>
</TABLE>
Tech Park Reston, Reston, Virginia
In 1987, the Partnership purchased a 35% partnership interest in the general
partnership which owns the property. The remaining 65% interest in the
general partnership is owned by Income Partnership IV, L.P.
The partners receive cash flow and profits and losses according to their pro
rata shares.
Summarized balance sheet information of the joint venture is as follows:
<TABLE>
<CAPTION>
October 31,
1994 1993
<S> <C> <C>
Land and buildings, net $49,295,259 $50,871,359
Other 1,372,378 891,333
Total assets $50,667,637 $51,762,692
Total partners' capital $50,667,637 $51,762,692
<FN>
</TABLE>
<TABLE>
Summarized results of operations of the joint venture are as follows:
<CAPTION>
Years ended October 31,
1994 1993 1992
<S> <C> <C> <C>
Rental income $5,267,825 $4,999,432 $5,502,907
Depreciation 1,576,100 1,576,100 1,576,100
Amortization 106,960 106,960 71,307
1,683,060 1,683,060 1,647,407
Net income $3,584,765 $3,316,372 $3,855,500
<FN>
</TABLE>
Chesterbrook Corporate Center, Valley Forge, Pennsylvania
In 1987, the Partnership, Income Partnership IV, and affiliates of the
Managing General Partner acquired 26.7%, 41.2% and 32.1% interests in the
general partnership which owns the property.
The partners receive cash flow and profits and losses according to their pro
rata shares.
<TABLE>
Summarized balance sheet information of the joint venture is as follows:
<CAPTION>
October 31,
1994 1993
<S> <C> <C>
Land and buildings, net $107,691,195 $109,977,880
Other 2,326,971 3,081,617
Total assets $110,018,166 $113,059,497
Liabilities $ 1,689,444 $ 2,120,071
Partners' capital 108,328,722 110,939,426
Total liabilities and capital $110,018,166 $113,059,497
<FN>
</TABLE>
<TABLE>
Summarized results of operations of the joint venture are as follows:
<CAPTION>
Years ended October 31,
1994 1993 1992
<S> <S> <C> <C>
Rental income $13,232,900 $14,629,033 $13,437,241
Other income (161,469) 49,658 1,249,219
13,071,431 14,678,691 14,686,460
Property operating expenses 4,028,834 4,060,221 3,986,941
Depreciation and amortization 3,975,339 3,821,190 3,643,305
8,004,173 7,881,411 7,630,246
Net income $ 5,067,258 $ 6,797,280 $ 7,056,214
<FN>
</TABLE>
<TABLE>
Activity in the Investments in Joint Ventures is as follows:
<CAPTION>
Years ended October 31,
1994 1993 1992
<S>
Investments at beginning <C> <C> <C>
of year $55,509,648 $69,387,366 $70,224,211
Equity in earnings (losses) 3,651,193 (8,505,971) 4,039,353
Distributions (5,627,781) (6,015,198) (5,727,408)
Contributions 1,234,388 643,451 851,210
Investments at end of year $54,767,448 $55,509,648 $69,387,366
<FN>
</TABLE>
6. Leases
Minimum future rental income under noncancellable operating leases as of
October 31, 1994 is as follows:
Year ending October 31:
1995 $12,767,145
1996 10,814,987
1997 9,189,072
1998 8,091,929
1999 7,118,424
Thereafter 37,654,035
Total $ 85,635,592
The Partnership has determined that all leases relating to its properties
are operating leases. The terms range from one to twenty-five years, and
generally provide for fixed minimum rents with rental escalation and/or
expense reimbursement clauses.
7. Related Party Transactions
An affiliate of the Managing General Partner provided property management
services for eight properties in 1994 and 1993 and six properties in
1992, as well as for five buildings at the Chesterbrook Corporate Center.
The Partnership incurred management fees of $459,128, $449,164 and
$429,159 for the years ended October 31, 1994, 1993 and 1992,
respectively.
Another affiliate of the Managing General Partner performs administrative
functions, processes investor transactions and prepares tax information
for the Partnership. The Partnership incurred approximately $761,000 for
these services in each of the years ended October 31, 1994, 1993 and
1992.
As of October 31, 1994, the affiliates were owed a total of approximately
$138,000 for these services.
8. Subsequent Event
On November 29, 1994, the Partnership paid a cash distribution of $5.00
per Unit to the Limited Partners. The total cash distribution amounted
to $2,966,778, with $2,670,100 distributed to the Limited Partners and
$296,678 to the General Partners.
<PAGE>
<TABLE> SCHEDULE X
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
Supplementary Income Statement Information
For the years ended October 31, 1994, 1993 and 1992
<CAPTION>
Charged to costs and expenses
1994 1993 1992
<S> <C> <C>
Maintenance & Repairs $ 235,542 $ 199,710 $ 187,079
Real estate taxes $2,173,659 $2,406,174 $2,292,160
<FN>
</TABLE>
<PAGE>
<TABLE>
SCHEDULE XI
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
Real Estate and Accumulated Depreciation
December 31, 1994
<CAPTION>
Initial cost to Partnership (A)
Building and
Description Land Improvements Total
<S> <C> <C> <C>
Glenhardie III & IV
Valley Forge, PA 2,000,000 18,805,786 20,805,786
Delta Center
Lansing, MI 1,413,865 12,724,789 14,138,654
Hall Road Crossing
Sterling Heights,
MI 1,301,369 11,712,321 13,013,690
Fashion Corners
Saginaw, MI 1,350,541 12,154,869 13,505,410
Westland Crossing
Westland, MI 1,376,659 12,389,933 13,766,592
Holcomb Business
Park Roswell, GA 5,400,000 18,675,322 24,075,322
Laurel Lakes Centre
Laurel, MD 7,800,000 45,536,882 53,336,882
20,642,434 131,999,902 152,642,336
<FN>
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at which
Carried at End of Period (B)
Cost
Capitalized
Subsequent to Buildings &
Description Acquisition Land Improvement Total
<S> <C> <C> <C> <C>
Glenhardie III & IV
Valley Forge, PA 2,256,786 2,000,000 21,062,572 23,062,572
Delta Center
Lansing, MI 335,769 1,413,865 13,060,558 14,474,423
Hall Road Crossing
Sterling Heights, MI 3,272,257 1,702,244 14,583,703 16,285,947
Fashion Corners
Saginaw, MI 214,031 1,350,541 12,368,900 13,719,441
Westland Crossing
Westland, MI 379,327 1,376,659 12,769,260 14,145,919
Holcomb Business Park
Roswell, GA 1,755,292 5,400,000 20,430,614 25,830,614
Laurel Lakes Centre
Laurel, MD 508,335 7,800,000 46,045,217 53,845,217
8,721,797 21,043,309 140,320,824 161,364,133
</TABLE>
<TABLE>
<CAPTION>
Life on which
Depreciation
in Latest Income
Accumulated Date of Date Statement is
Description Depreciation Construction Acquired Computed
<S> <C> <C> <C> <C>
Glenhardie III & IV
Valley Forge, PA 5,611,285 1984-1985 June 1986 up to 40 years
Delta Center
Lansing, MI 2,746,883 1985 December 1986 up to 40 years
Hall Road Crossing
Sterling Heights,
MI 2,935,783 1986 December 1986 up to 40 years
Fashion Corners
Saginaw, MI 2,494,626 1986 December 1986 up to 40 years
Westland Crossing
Westland, MI 2,630,109 1986 December 1986 up to 40 years
Holcomb Business Park
Roswell, GA 5,128,303 1984 December 1986 up to 40 years
Laurel Lakes Centre
Laurel, MD 8,697,757 1987 June 1987 up to 40 years
30,244,746
</TABLE>
<PAGE>
<TABLE>
Notes:
(A) The initial cost includes the purchase price paid by the Partnership and acquisition fees and
expenses. There is no difference between cost for financial reporting purposes and cost for
federal income tax purposes.
<CAPTION>
(B) Reconciliation of real estate owned
at October 31: 1994 1993 1992
<S> <C> <C> <C>
Balance at beginning of period 159,543,611 158,786,622 157,661,978
Additions (deletions) during period:
Purchases - 1,508,748 -
Improvements 2,125,685 470,925 1,247,532
Write-offs due to lease expirations (305,163) (1,222,684) (122,888)
Balance at end of period 161,364,133 159,543,611 158,786,622
(C) Reconciliation of accumulated depreciation:
Balance at beginning of period 26,170,957 22,996,576 18,718,721
Depreciation expense 4,378,952 4,397,065 4,400,743
Write-offs due to lease expirations (305,163) (1,222,684) (122,888)
Balance end of period 30,244,746 26,170,957 22,996,576
<FN>
</TABLE>
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The Partnership is a limited partnership which has no directors
or officers.
The directors and executive officers of the Managing General
Partner are as follows:
Position with the
Name Managing General Partner
William B. Smith Chairman of the Board of Directors
E. Davisson Hardman, Jr. President and Director
Lawrence Volpe Controller, Assistant Secretary and
Director
Ronald T. Carman Secretary and Director
All of the directors have been elected to serve until the next
annual meeting of the shareholder of the Managing General Partner or
until their successors are elected and qualify. Each of the officers has
been elected to serve until his successor is elected and qualifies.
William B. Smith, age 51, is a Managing Director of Dean Witter
Realty Inc. and has been with Dean Witter Realty Inc. since April 1982.
E. Davisson Hardman, Jr., age 45, is a Managing Director of
Dean Witter Realty Inc. and has been with Dean Witter Realty Inc. since
April 1982.
Lawrence Volpe, age 47, is a Director and the Controller of
Dean Witter Realty Inc. He is a Senior Vice President and Controller of
Dean Witter Reynolds Inc., which he joined in 1983.
Ronald T. Carman, age 43, is a Director and the Secretary of
Dean Witter Realty Inc. He is a Senior Vice President and Associate
General Counsel of Dean Witter Reynolds Inc., which he joined in 1984.
There is no family relationship among any of the foregoing
persons.
ITEM 11. EXECUTIVE COMPENSATION
The General Partners are entitled to receive cash
distributions, when and as cash distributions are made to the Limited
Partners, and a share of taxable income or tax loss. Descriptions of
such distributions and allocations are in Item 5 above. The General
Partners received cash distributions of $1,186,712, $1,186,712 and
$1,854,236 during the years ended October 31, 1994, 1993 and 1992,
respectively.
The General Partners and their affiliates were paid certain
fees and reimbursed for certain expenses. Information concerning such
fees and reimbursements is contained in Note 7 to the Consolidated
Financial Statements in Item 8 above.
The directors and officers of the Partnership's Managing
General Partner received no remuneration from the Partnership.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) No person is known to the Partnership to be the beneficial
owner of more than five percent of the Units.
(b) The directors of the Managing General Partner and the
current and former officers and directors of the Managing General Partner
as a group own the following Units as of January 27, 1995:
<TABLE>
<CAPTION>
(1) (2) (3)
<S> <S> <S>
Amount and
Title of Name and Address of Nature of
Class Beneficial Owner Beneficial Ownership
Limited Current and former Indirectly: The Associate
Partnership officers and directors of General Partner, the
Interests Managing General Partner, limited partner of which
as a group includes current and former
officers and directors of
Dean Witter Realty Inc. the Managing General
2 World Trade Center Partner, owns 10 Units
New York, NY 10048 (.003 percent of class)
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
As a result of their being partners of a limited partnership which
is the Limited Partner of the Associate General Partner, certain current
and former officers and directors of the Managing General Partner also
own indirect partnership interests in the Partnership. The Partnership
Agreement of the Partnership provides that cash distributions and
allocations of income and loss to the General Partners be distributed or
allocated 50% to the Managing General Partner and 50% to the Associate
General Partner. The General Partners' share of cash distributions and
income or loss is described in Item 5 above.
All of the outstanding shares of common stock of the Managing
General Partner are owned by Dean Witter Realty Inc. ("Realty"), a
Delaware corporation which is a wholly-owned subsidiary of Dean Witter,
Discover & Co. The general partner of the Associate General Partner is
the Managing General Partner. The limited partner of the Associate
General Partner is LSA 86 L.P., a Delaware limited partnership. Realty
and certain current and former officers and directors of the Managing
General Partner are partners of LSA 86 L.P. Additional information with
respect to the directors and executive officers and compensation of the
Managing General Partner and affiliates is contained in Items 10 and 11
above.
The General Partners and their affiliates were paid certain fees and
reimbursed for certain expenses. Information concerning such fees and
reimbursements is contained in Note 7 to the Consolidated Financial
Statements in Item 8 above.
<PAGE>
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K.
(a) The following documents are filed as part of this Annual Report:
1. Financial Statements (see Index to Financial Statements filed as
part of Item 8 of this Annual Report).
2. Financial Statement Schedules (see Index to Financial Statements
filed as part of Item 8 of this Annual Report).
3. Exhibits
(3) Amended and Restated Agreement of Limited Partnership dated
as of February 11, 1986 set forth in Exhibit A to the
Prospectus included in the Registration Statement Number
33-1912 is incorporated herein by reference.
(4) Not applicable.
(9) Not applicable.
(10) Purchase and Sale Agreements for properties purchased were
filed as Exhibits to Form 8-K on June 27, 1986, December 29,
1986, December 30, 1986, June 1, 1987, December 7, 1987, and
December 15, 1987 and are incorporated herein by reference.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(18) Not applicable.
(19) Not applicable.
(22) Subsidiaries: Part Six Associates, a Pennsylvania limited
partnership.
Laurel Vincent Place Associates, a Maryland
limited partnership.
(23) Not applicable.
(24) Not applicable.
(25) Not applicable.
(28) Not applicable.
(29) Not applicable.
(b) No Forms 8-K were filed by the Partnership during the last quarter
of the period covered by this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
<S> <S>
By: Dean Witter Realty Income Properties III Inc.
Managing General Partner
By: /s/E. Davisson Hardman, Jr. Date: January 27, 1995
E. Davisson Hardman, Jr.
President
By: /s/Lawrence Volpe Date: January 27, 1995
Lawrence Volpe
Controller
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
DEAN WITTER REALTY INCOME PROPERTIES III INC.
Managing General Partner
/s/William B. Smith Date: January 27, 1995
William B. Smith
Chairman of the Board of Directors
/s/E. Davisson Hardman, Jr. Date: January 27, 1995
E. Davisson Hardman, Jr.
Director
/s/Lawrence Volpe Date: January 27, 1995
Lawrence Volpe
Director
/s/Ronald T. Carman Date: January 27, 1995
Ronald T. Carman
Director
</TABLE>
<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
audited financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
<CASH> 5,683,026
<SECURITIES> 0
<RECEIVABLES> 1,863,279
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 195,350,000<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 194,323,430<F2>
<TOTAL-LIABILITY-AND-EQUITY> 195,350,000<F3>
<SALES> 0
<TOTAL-REVENUES> 20,279,777<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,567,867
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 9,711,910
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,711,910
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,711,910
<EPS-PRIMARY> 16.37<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include net investments
in real estate of $131,119,387, investment in joint ventures of $54,767,448,
net deferred expenses of $952,951 and other assets of $963,909.
<F2>Other Stockholders' Equity represents partners' capital.
<F3>Liabilities include accounts payable and accrued liabilities of
$788,033, and security deposits of $238,537.
<F4>Total reveue includes rent of $16,027,787, equity in earnings of joint
ventures of $3,651,193, interest of $186,333 and other revenues of
$414,464.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
