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, 1996
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
(State of organization)
13-3293754
(IRS Employer Identification No.)
2 World Trade Center, New York, NY
(Address of principal executive offices)
10048
(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>
<TABLE>
PART I - FINANCIAL INFORMATION
<CAPTION>
Item 1. Financial Statements
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED BALANCE SHEETS
January 31, October 31,
1996 1995
ASSETS
<S> <C> <C>
Cash and cash equivalents, at cost,
which approximates market $ 40,843,705 $ 4,687,564
Real estate, at cost:
Land 11,263,904 15,200,000
Buildings and improvements 89,954,517 88,128,571
101,218,421 103,328,571
Accumulated depreciation 23,021,053 22,180,045
78,197,368 81,148,526
Real estate held for sale - 45,495,628
Investments in joint ventures 42,351,443 42,784,835
Deferred leasing commissions, net 989,736 968,202
Other assets 2,060,414 2,904,092
$164,442,666 $177,988,847
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $ 707,212 $ 596,476
Security deposits 196,410 169,245
903,622 765,721
Partners' capital (deficiency):
General partners (7,535,205) (6,166,797)
Limited partners ($500 per Unit,
534,020 Units issued) 171,074,249 183,389,923
Total partners' capital 163,539,044 177,223,126
$164,442,666 $177,988,847
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended January 31, 1996 and 1995
1996 1995
<S> <C> <C>
Revenues:
Rental $ 3,442,483 $ 4,119,116
Equity in earnings of joint ventures 892,057 817,500
Interest 333,331 52,373
Other 36,273 82,759
4,704,144 5,071,748
Expenses:
Property operating 1,284,059 1,341,902
Depreciation 841,008 1,131,636
Amortization 59,598 66,255
General and administrative 257,640 248,901
Loss on impairment of real estate 12,422,872 -
14,865,177 2,788,694
Net income (loss) $(10,161,033) $ 2,283,054
Net income (loss) allocated to:
Limited partners $ (9,144,930) $ 2,054,749
General partners (1,016,103) 228,305
$(10,161,033) $ 2,283,054
Net income (loss) per Unit of limited
partnership interest $(17.12) $ 3.85
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
Three months ended January 31, 1996
Limited General
Partners Partners Total
<S> <C> <C> <C>
Partners' capital (deficiency)
at November 1, 1995 $183,389,923 $(6,166,797) $177,223,126
Net loss (9,144,930) (1,016,103) (10,161,033)
Cash distributions (3,170,744) (352,305) (3,523,049)
Partners' capital (deficiency)
at January 31, 1996 $171,074,249 $(7,535,205) $163,539,044
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended January 31, 1996 and 1995
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(10,161,033) $ 2,283,054
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation 841,008 1,131,636
Amortization 59,598 66,255
Equity in earnings of joint ventures (892,057) (817,500)
Loss on impairment of real estate 12,422,872 -
(Increase) decrease in operating assets:
Deferred expenses (81,132) (275,280)
Other assets 843,678 (128,552)
Increase (decrease) in operating liabilities:
Accounts payable and accrued liabilities 110,736 600,248
Security deposits 27,165 (3,368)
Net cash provided by operating activities 3,170,835 2,856,493
Cash flows from investing activities:
Proceeds from disposition of real estate
held for sale 35,256,585 -
Additions to real estate (73,679) (116,585)
Investment in joint ventures (129,597) (907,594)
Distributions from joint ventures 1,455,046 1,287,339
Net cash provided by investing
activities 36,508,355 263,160
Cash flows from financing activities:
Cash distributions (3,523,049) (2,966,778)
Increase in cash and cash equivalents 36,156,141 152,875
Cash and cash equivalents at beginning of period 4,687,564 5,683,026
Cash and cash equivalents at end of period $ 40,843,705 $ 5,835,901
Supplemental disclosure of non-cash investing activities:
Reclassification of real estate held for sale:
Increase to real estate, at cost
Land $ 1,023,904 $ -
Buildings and improvements 9,215,139 -
Decrease to real estate held for sale $ 10,239,043 $ -
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
Notes to Consolidated Financial Statements
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's fiscal year ends on October 31.
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's interests in Taxter Corporate
Park, Tech Park Reston and 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 reporting purposes.
Net income (loss) per Unit of limited partnership interest 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. Except for the losses on
impairment of real estate, such adjustments consist only of normal
recurring accruals.
These financial statements should be read in conjunction with the annual
financial statements and notes thereto included in the Partnership's
annual report on Form 10-K filed with the Securities and Exchange
Commission for the year ended October 31, 1995. Operating results of
interim periods may not be indicative of the operating results for the
entire year.
2. Real Estate
In the fourth quarter of fiscal 1995, the Partnership entered into an
agreement with New Plan Realty Trust, an unaffiliated party, to sell the
Delta Center, Fashion Corners, Hall Road Crossing and Westland Crossing
shopping centers. The net carrying values of these properties were
reduced to the net sales price in October 1995.
The closing of the sale of the Delta Center, Fashion Corners and Hall
Road Crossing shopping centers, for a negotiated sale price of
approximately $35.5 million (net of closing costs), took place on
December 11, 1995. No gain or loss was incurred as a result of the
closing. The net proceeds from the sale will be distributed to Limited
Partners in March 1996.
The sale of the Westland Crossing shopping center was cancelled, pursuant
to the sale agreement, because the Partnership was unable to obtain a
replacement tenant for an anchor tenant which vacated its space.
Westland Crossing is no longer being actively marketed for sale;
accordingly, its carrying value has been reclassified from real estate
held for sale to real estate.
In the first quarter of fiscal 1996, in accordance with its policies, the
Partnership evaluated the recoverability of its investments in real
estate and concluded that, based on revised expectations as to the
holding period of the properties, the Partnership will be unable to
recover its investment in certain properties. Accordingly, the
Partnership has written down to fair value (based on independent
appraisals) its Glenhardie and Holcomb Woods properties, and recorded
losses on impairment of approximately $4.7 million and $7.7 million,
respectively.
3. Related Party Transactions
An affiliate of the Managing General Partner provided property management
services for eight properties (including the three shopping centers sold)
as well as for five buildings at the Chesterbrook Corporate Center. The
Partnership incurred management fees of approximately $103,000 and
$129,000 for the three months ended January 31, 1996 and 1995,
respectively. These amounts are included in property operating expenses.
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, 1996 and
1995, the Partnership incurred approximately, $180,000 and $190,000,
respectively, for these services. These amounts are included in general
and administrative expenses.
As of January 31, 1996, the affiliates were owed a total of approximately
$80,000 for these services.
4. Litigation
Various public partnerships sponsored by Realty (including the
Partnership and its Managing General Partner) have been named as
defendants in four class actions 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 have
not yet responded to the complaints and 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.
5. Subsequent Event
On February 28, 1996, the Partnership paid a cash distribution of
approximately $5.9375 per Unit to the Limited Partners. The total cash
distribution amounted to $3,523,049, with $3,170,744 distributed to the
Limited Partners and $352,305 to the General Partners.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
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 (three of which have
been sold) 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.
The closing of the sale of the Delta Center, Fashion Corners and Hall
Road Crossing shopping centers occurred on December 11, 1995. See Note
2 to the consolidated financial statements. During the first quarter of
1996, the Partnership's aggregate cash flow from operations was reduced
by approximately $660,000 as a result of the sale of the shopping
centers.
The Partnership's liquidity depends upon cash flow from operations
of its properties and expenditures for tenant improvements and leasing
commissions in connection with the leasing of space. During the first
quarter of 1996, 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 addition, the Partnership's liquidity will be affected by the sale
of the Partnership's properties. In accordance with the provisions of
the Partnership Agreement, the net sales proceeds from the sale of the
three shopping centers of $35.5 million ($66.40 per Unit) will be
distributed to the Limited Partners in March 1996, representing a return
of invested capital. Because the Partnership has fewer income producing
investments, the Partnership's cash from operations available for
distribution will decline in 1996 and thereafter. Accordingly, the
Partnership will decrease its quarterly cash distribution to Limited
Partners from $5.9375 to $4.85 per Unit, beginning with the second
quarter distribution payable in May 1996.
Given the weaker retail property fundamentals and reduced investor
interest for retail properties, absent changed circumstances, the
Managing General Partner currently does not plan to offer the
Partnership's two remaining shopping centers for sale until 1997. The
suburban office market has begun to stabilize as a result of improved
operating results at many office properties and the lack of construction.
Most construction is limited to build-to-suit projects. The recovery in
the suburban office sector has been uneven for different geographic
regions but the Managing General Partner currently plans to offer for
sale certain of the Partnership's office properties in 1996 with the
objective of completing sales of all the Partnership's properties by
1998. There is no assurance the Partnership will be able to achieve
these objectives.
During the first quarter of 1996, the Partnership's cash flow from
operations and distributions received from its joint ventures exceeded
distributions to investors, capital expenditures, leasing commissions and
contributions to its joint ventures.
During the first quarter of 1996, the Partnership incurred
approximately $120,000 of tenant improvements and leasing commissions,
primarily relating to the Glenhardie and Holcomb Woods properties and
contributed approximately $130,000, its share of capital expenditures,
to the Chesterbrook and Taxter joint ventures.
As of January 31, 1996, the Partnership has commitments to fund
approximately $1,130,000 of tenant improvements and leasing commissions,
primarily relating to the Glenhardie and Holcomb Woods properties, and
commitments to contribute approximately $662,000, its share of capital
expenditures, to the Chesterbrook and Taxter joint ventures.
Also, the Partnership may incur material capital expenditures to
lease vacant space at the Laurel Lakes Centre and Westland Crossing
shopping centers. The amount of such expenditures is uncertain at this
time. To the extent that the vacant space at these two properties can
not be re-leased, the Partnership's cash flow will be reduced.
Capital expenditures and leasing commissions are expected to be
funded from excess Partnership cash reserves during the remainder of
1996.
At the Taxter property, Fuji Photo USA, Inc., which occupies
approximately 24% of the property's space, has exercised its option to
extend its leases through March 2001, at an effective rent which is
approximately ninety percent of current rental rates in the Westchester
market. This renewal was accomplished without incurring any expenditures
for tenant improvements or significant leasing commissions. Because
market rates have declined since Fuji signed its original lease, rental
revenue and cash flow from Fuji during the renewal term will be
significantly lower than what the Partnership currently receives. In
addition, Fuji will not pay any rent in the six month period beginning
April 1, 1996. As a result of this renewal, the Partnership expects that
cash distributions in 1996 compared to 1995 from the Taxter Joint Venture
will be reduced by approximately $490,000, primarily during the second
half of 1996.
The joint venture which owns Tech Park Reston is discussing a
restructuring of its leases with Sprint Communications, the property's
sole tenant. At present, it is uncertain whether the leases will be
restructured and, if they are, what the effect of the restructuring on
the Partnership's cash flow and income will be.
Except as described above and in the consolidated financial
statements, the Managing General Partner is not aware of any trends or
events, commitments or uncertainties that will materially impact
liquidity.
The decrease in other assets during the three months ended January
31, 1996 primarily results from the receipt of unpaid distributions from
the partnership which owns Tech Park Reston, a decrease in miscellaneous
operating assets due to the above-mentioned sale of three shopping
centers and a decrease in accounts receivable and prepaid expenses at the
Partnership's remaining properties.
On February 28, 1996, the Partnership paid the fourth quarter
distribution of $5.9375 per Unit to the Limited Partners. The total cash
distribution amounted to $3,523,049 with $3,170,744 distributed to the
Limited Partners and $352,305 to the General Partners.
Operations
Fluctuations in the Partnership's operating results for the quarter
ended January 31, 1996 compared to 1995 are primarily attributable to the
following:
The decrease in rental income is primarily due to approximately
$767,000 of lost revenues from the above-described shopping centers sold
on December 11, 1995.
The increase in equity in earnings of joint ventures primarily
results from lower depreciation charges at the Chesterbrook joint venture
(due to the writedown of the property in October 1995).
The increase in interest income represents interest earned on the
proceeds from the shopping centers sold.
The decrease in property operating expenses is primarily due to a
reduction of approximately $100,000 in operating expenses on the shopping
centers sold.
Depreciation decreased because no depreciation was recorded on the
shopping centers sold while they were held for sale during the first
quarter of 1996. There was no real estate held for sale during the first
quarter of 1995.
In the first quarter of fiscal 1996, the Partnership recorded losses
on impairment of the Glenhardie and Holcomb Woods properties totalling
approximately $12.4 million. See Note 2 to the consolidated financial
statements.
A summary of the markets in which the Partnership's office properties
are located and the performance of each property is as follows:
Generally, office/research and development properties such as Holcomb
Woods are benefiting from growth in the computer, communications and
electronics industries. The office market in suburban Atlanta, the
location of Business Park at Holcomb Woods, has a current vacancy rate
of approximately 8% and rental rates increased 5% to 10% during 1995.
An increase in employment growth from corporate relocations and
improvements to Atlanta's infrastructure are contributing to the area's
prosperity. As a result, a number of office developments have commenced
in this market, and several other projects are in the planning stage of
development. During the first quarter of 1995, the Partnership
negotiated a 3-year lease renewal with Kimberly Clark at a higher rental
rate for approximately 14% of the property's space. At January 31, 1996,
the property was 91% leased. No leases for significant amounts of space
expire before 1998. The Partnership expects that the new construction
in this market will have minimal effect on this property.
Chesterbrook Corporate Center is located in Valley Forge,
Pennsylvania, a market in which the vacancy rate has recently improved
from 16% to 12% because of increasing demand and a slowdown in corporate
downsizings. At January 31, 1996, the property was 93% leased (including
one tenant which will move into its space in April 1996). No leases for
significant amounts of space expire before 1998.
Glenhardie Corporate Center III and IV is also located in Valley
Forge, Pennsylvania. At January 31, 1996, occupancy at the property was
91%. No leases for significant amounts of space expire before 1999.
The decline in the office market in Westchester County, New York, the
location of Taxter Corporate Park, has recently stabilized, and the
current vacancy level in this market is approximately 22%. It is
unlikely that this vacant space will be absorbed in the market for
several years. At January 31, 1996, occupancy at the property was 99%.
As discussed above in "Liquidity and Capital Resources", the leases of
Fuji Photo Film (for approximately 24% of the property's space) have been
renewed through 2001. Other leases aggregating approximately 12% of the
space expire in 1997.
The Reston market in Virginia, the location of Tech Park Reston, has
a vacancy rate of approximately 10%. The leases with Sprint
Communications, which occupies 100% of the space, expire in 2003. Sprint
has the option to terminate its leases on two of the three buildings (for
approximately 96% of the property's space) beginning in 1997 and 1998.
As discussed above in "Liquidity and Capital Resources", the joint
venture which owns the property is discussing a modification of its
leases with Sprint.
Generally, at retail properties, vacancy levels are increasing and
rental rates are stagnant as a result of sluggish retail sales and
competition from large power centers, discounters and reorganized
department stores. 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%. Many retailers in this market are experiencing
financial difficulties. However, the property's design, location and
tenant mix has enabled it to maintain relatively stable rental rates.
At January 31, 1996, occupancy at the property was 87%. Leases
aggregating approximately 10% of the property's space expire in 1997.
Westland Crossing is situated outside downtown Detroit and is in an
overbuilt market with a current vacancy rate of approximately 17%. A
significant amount of new retail space is under construction in this
market. When complete, this space will compete with Westland Crossing
for tenants. During the first quarter of 1996, occupancy at the property
decreased to 67% because Marshall's vacated the property upon the
expiration of its lease (for approximately 18% of the property's space)
in January 1996. Other leases for approximately 12% and 11% of the
property's space expire in 1996 and 1997, 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 1. Legal Proceedings
On December 27, 1995, a class action lawsuit (the "Grigsby Action")
naming various public real estate partnerships sponsored by Realty
(including the Partnership and its Managing General Partner and Associate
General Partner), Realty, Dean Witter Reynolds Inc. and others as
defendants was filed in Superior Court in California. The complaint
alleges fraud, negligent misrepresentation, intentional and negligent
breach of fiduciary duty, unjust enrichment and related claims and seeks
compensatory and punitive damages in unspecified amounts and injunctive
and other equitable relief. The defendants have removed the case to the
United States District Court for the Southern District of California.
The parties have signed a stipulation requesting that the action be
transferred to the United States District Court for the Southern District
of New York. The defendants have not yet responded to the complaint and
intend to vigorously defend the action.
On February 14, 1996, a class action lawsuit (the "Schectman Action")
naming various public real estate partnerships sponsored by Realty
(including the Partnership and its Managing General Partner), Realty,
Dean Witter Discover & Co., and Dean Witter Reynolds Inc. as defendants
was filed in the Chancery Court of Delaware for New Castle County. The
complaint alleges reckless and/or negligent misrepresentation and
nondisclosure, breach of fiduciary duty and related claims and seeks an
accounting of profits and rescissory and/or compensatory damages in
unspecified amounts. The defendants have not yet responded to the
complaint and intend to vigorously defend the action.
On February 23, 1996, a class action lawsuit (the "Dosky Action") naming
various public real estate partnerships sponsored by Realty (including
the Partnership and its Managing General Partner), Realty, Dean Witter
Discover & Co., Dean Witter Reynolds Inc. and others as defendants was
filed in the Chancery Court of Delaware for New Castle County. The
complaint alleges breach of fiduciary duty and seeks an accounting of
profits, compensatory damages in unspecified amounts, possible
liquidation of the Partnership under a receiver's supervision and other
equitable relief. The defendants have not yet responded to the complaint
and intend to vigorously defend the action.
On February 29, 1996, a class action lawsuit (the "Segel Action") naming
various public real estate partnerships sponsored by Realty (including
the Partnership and its Managing General Partner), Realty, Dean Witter
Reynolds Inc., Dean Witter Discover & Co. and others as defendants was
filed in the Chancery Court of Delaware for New Castle County. The
complaint alleges breach of fiduciary duty and seeks an accounting of
profits, compensatory damages in unspecified amounts, possible
liquidation of the Partnership under a receiver's supervision and other
equitable relief. The defendants have not yet responded to the complaint
and intend to vigorously defend the action.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits - not applicable.
b) Reports on Form 8-K -
Report dated December 11, 1995 with regard to the
Partnership's sale of three of its shopping centers.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, 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 Income
Partnership III, L.P.
By: Dean Witter Realty Income
Properties III Inc.
Managing General Partner
Date: March 18, 1996 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: March 18, 1996 By: /s/Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
<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>
<CIK> 0000784161
<NAME> DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JAN-31-1996
<CASH> 40,843,705
<SECURITIES> 0
<RECEIVABLES> 1,580,633
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 164,442,666<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 163,539,044<F2>
<TOTAL-LIABILITY-AND-EQUITY> 164,442,666<F3>
<SALES> 0
<TOTAL-REVENUES> 4,704,144<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 14,865,177
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (10,161,033)
<INCOME-TAX> 0
<INCOME-CONTINUING> (10,161,033)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,161,033)
<EPS-PRIMARY> (17.12)<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include net investments
in real estate of $78,197,368, investment in joint ventures of $42,351,443,
net deferred leasing commissions of $989,736 and other assets of $479,781.
<F2>Other Stockholders' Equity represents partners' capital.
<F3>Liabilities include accounts payable and accrued liabilities of
$707,212, and security deposits of $196,410.
<F4>Total revenue includes rent of $3,442,483, equity in earnings of joint
ventures of $892,057 interest of $333,331 and other revenues of
$36,273.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
