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, 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: 0-18148
DEAN WITTER REALTY YIELD PLUS, L.P.
(Exact name of registrant as specified in governing instrument)
Delaware 13-3426531
(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
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Balance Sheets
<CAPTION>
March 31,
1994 December 31,
(Unaudited) 1993
ASSETS
<S> <C> <C>
Real estate, at cost:
Land $ 28,423,820 $ 28,423,820
Buildings and improvements 122,834,118 122,181,781
151,257,938 150,605,601
Accumulated depreciation 8,876,838 7,953,483
142,381,100 142,652,118
Investments in participating mortgage
and other secured loans, net of allowance
of $17,523,066 at December 31, 1993 and
March 31, 1994 19,977,608 19,977,608
Cash and short-term investments, at cost
which approximates market 5,625,765 4,859,851
Cash in escrow 5,000,000 5,000,000
Deferred expenses, net 1,283,124 1,274,326
Accrued interest and other assets 1,582,054 2,083,466
$175,849,651 $175,847,369
LIABILITIES AND PARTNERS' CAPITAL
Mortgage notes payable $ 45,144,566 $ 45,144,566
Accounts payable and other liabilities 3,668,095 4,357,759
Due to affiliates 1,970,907 1,971,435
Loan payable to bank 1,062,333 1,062,333
Minority interest 19,768,425 19,491,926
71,614,326 72,028,019
Partners' capital (deficiency):
General partners (5,444,405) (5,486,003)
Limited partners ($20 per Unit,
8,909,969 Units issued) 109,679,730 109,305,353
Total partners' capital 104,235,325 103,819,350
$175,849,651 $175,847,369
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
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<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Statements of Income
Three months ended March 31, 1994 and 1993
(Unaudited)
<CAPTION>
1994 1993
<S> <C> <C>
Revenues:
Rental $5,640,908 $3,453,484
Interest on participating mortgage and
other secured loans 638,209 784,237
Interest on short-term investments 68,719 33,350
Other 378,952 379,392
6,726,788 4,650,463
Expenses:
Property operating 2,383,531 1,473,779
Interest 917,865 36,672
Depreciation 923,355 792,708
Amortization 67,232 46,520
General and administrative 281,673 426,092
4,573,656 2,775,771
Income before minority interests 2,153,132 1,874,692
Minority interest 252,163 323,989
Net income $1,900,969 $1,550,703
Net income per Unit of limited
partnership interest $.19 $ .16
<FN>
</TABLE>
See accompanying notes to consolidated financial statements.
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<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Statement of Changes in Partners' Capital
Three months ended March 31, 1994
(Unaudited)
<CAPTION>
Limited General
Partners Partners Total
<S> <C> <C> <C>
Partners' capital (deficiency)
at January 1, 1994 $109,305,353 $ (5,486,003) $103,819,350
Net income 1,710,872 190,097 1,900,969
Cash distributions (1,336,495) (148,499) (1,484,994)
Partners' capital (deficiency)
at March 31, 1994 $109,679,730 $(5,444,405) $104,235,325
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Statements of Cash Flows
Three months ended March 31, 1994 and 1993
(Unaudited)
<CAPTION>
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,900,969 $ 1,550,703
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 990,587 839,228
Minority interest in earnings of
consolidated partnership 252,163 323,989
Deferred expenses (76,030) (47,751)
Decrease (increase) in accrued interest
and other assets 501,412 (1,789,569)
(Decrease) increase in accounts payable
and other liabilities (689,664) 1,642,051
(Decrease) increase in due to affiliates (528) 126,667
Net cash provided by operating activities 2,878,909 2,645,318
Cash flows from investing activities:
Investments in participating mortgage loans - (616,040)
Minority interest in contributions to
consolidated partnership 352,976 -
Minority interest in distributions from
consolidated partnership (328,640) (150,954)
Additions to real estate (652,337) (83,150)
Net cash used in investing activities (628,001) (850,144)
Cash flows from financing activities:
Proceeds from bank loan - 992,846
Cash distributions (1,484,994) (1,484,994)
Net cash used in financing activities (1,484,994) (492,148)
Increase in cash and short-term investments 765,914 1,303,026
Cash and short-term investments at
beginning of period 4,859,851 626,920
Cash and short-term investments at
end of period $ 5,625,765 $ 1,929,946
Supplemental disclosure of cash flow information:
Cash paid for interest $ 926,830 $ 11,466
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
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DEAN WITTER REALTY YIELD PLUS, L.P.
Notes to Consolidated Financial Statements
(Unaudited)
1. The Partnership
Dean Witter Realty Yield Plus, L.P. (the "Partnership") is a limited
partnership organized under the laws of the State of Delaware in 1987.
The Managing General Partner of the Partnership is Dean Witter Realty
Yield Plus Inc., which is wholly-owned by Dean Witter Realty Inc.
("Realty").
The financial statements include the accounts of the Partnership, DW
Columbia Gateway Associates, DW Michelson Associates, DW Lakeshore
Associates (formerly Lakeshore Ontario Associates), Deptford Crossing
Associates (effective July 16, 1993), and Hampton Crossing Associates
(effective September 7, 1993) on a consolidated basis. All significant
intercompany accounts and transactions have been eliminated.
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting and tax reporting purposes.
Real estate acquired in settlement of loans is recorded at the lower of
the book value of the investment or estimated fair value at the date of
foreclosure or in-substance foreclosure. The Partnership periodically
evaluates the recoverability of the net carrying value of its real
estate and investments in participating mortgages and other secured
loans. The evaluation is based on a review of expected future cash
flows, determination of the Partnership's expected holding period of
these assets, the financial condition of guarantors, if any, and other
factors.
The net income 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.
In the opinion of management, the accompanying financial statements,
which have not been audited, reflect all adjustments necessary to
present fairly the results for the interim period.
2. Investments in Real Estate
401 East Ontario Street, Chicago, Illinois
The Partnership had funded an approximately $47,000,000 leasehold
mortgage loan, land purchase and participating land lease for 401 East
Ontario Street, a high rise luxury apartment building. The property was
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DEAN WITTER REALTY YIELD PLUS, L.P.
Notes to Consolidated Financial Statements
(Unaudited)
developed and owned by Lakeshore Ontario Associates, a 50/50 joint
venture between a Chicago developer ("Chicago Developer") and an entity
comprised of former and current Realty employees, several of whom are
former or current officers of the Managing General Partner. The
Partnership received a completion guaranty and a $6,000,000 operating
deficits guaranty from the borrower land/lessee. One half of these
guarantees was the obligation of Realty and the other half was the
obligation of the principals of the Chicago Developer. Realty funded
all of the additional construction costs paid to date (approximately
$2,300,000) and has fully funded its obligation under the operating
deficits guaranty of $4,509,212 as of December 31, 1993. During the
first quarter of 1993, Realty paid the Partnership $379,392 pursuant to
its guaranty obligations.
Beginning in March 1992, the Chicago Developer failed to fund deficits
it guaranteed totaling $1,490,788 through March 31, 1994 plus accrued
interest on the unpaid balance which was reserved in full. This resulted
in a default on its loan. For financial reporting purposes, the
Partnership placed this loan on non-accrual status in July 1992. As of
December 31, 1992, the Partnership accounted for this loan as if the
property were foreclosed upon, wrote down the loan to its estimated fair
value, and reclassified the loan to real estate.
In January 1994, the borrower transferred to the Partnership the ground
lease and ownership of the improvements by deed-in-lieu of foreclosure.
In addition, the Chicago Developer paid the Partnership $350,000 in
exchange for the Partnership's release of the principals of the Chicago
Developer from any continuing liability under their deficit guaranty.
Deptford Crossing, Deptford, New Jersey
In March 1991, the Partnership made a $7.5 million participating loan
secured by partnership interests on Deptford Crossing, a community
shopping center. However, the borrower of the project failed to make
the required debt service payments to the Partnership since May 1992.
As of December 31, 1992, the Partnership accounted for this loan as if
the property was foreclosed upon, wrote down the loan to its estimated
fair value, and reclassified the loan to real estate.
In July 1993, the interests in the owner of the Deptford Crossing
project were transferred to the Partnership in lieu of foreclosure.
The Partnership provided a $5.4 million letter of credit, secured by the
Partnership's cash reserves, to the first mortgage lender to secure
repayment. During the third quarter of 1993, the bank allowed the
Partnership to use $400,000 of its cash reserves for tenant improvements
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DEAN WITTER REALTY YIELD PLUS, L.P.
Notes to Consolidated Financial Statements
(Unaudited)
at the property. At the same time, the bank reduced the letter of
credit from $5.4 million to $5 million. The letter of credit will
be reduced further to $3 million if the property achieves a debt
service coverage ratio of 125% on the first mortgage for twelve
consecutive months.
Hampton Village Centre, Rochester Hills, Michigan
The Partnership's borrower had obtained a first mortgage loan of
$29,000,000, secured by Phase I of the property, from a major insurance
company.
In addition, the Partnership made the following loans to Hampton Village
Centre: a) a $3,000,000 second mortgage loan, secured by Phase I, II and
III of the center, b) an $8,000,000 construction loan secured by a
mortgage on Phases II and III of the center, and c) a $2,318,523
construction loan secured by a junior mortgage on Phases II and III of
the center. In addition to its right to repayment of these loans, the
Partnership was also entitled to a 50% participation in the property's
excess cash flow and appreciation over $40,000,000.
Debt service payments on the first mortgage loan, which had an interest
rate of 9.37% and the Partnership's $3,000,000 second mortgage loan,
which had a 10.5% interest rate were current. However, the
Partnership's $8,000,000 loan, which had a 9.5% interest rate and the
Partnership's $2,318,523 construction loan, which had a 13.5% annual
interest rate were in default and were placed on non-accrual status in
1992.
During the first quarter of 1993, the Partnership initiated legal
proceedings to foreclose on the property and to extend the lien of its
mortgages to cover a portion of a 10-acre parcel of land, owned by
Hampton Crossing Associates, adjacent to the property necessary in order
to provide adequate parking spaces for the shopping center.
In September 1993, the Partnership indirectly acquired one-half of the
Partnership interests of Hampton Crossing Associates, the owner of
Hampton Village Centre, thereby obtaining effective control of the
center, and began accounting for the loans as if the property were
owned, by reclassifying the loans to real estate and recording the
$29,000,000 first mortgage loan. During the first quarter of 1994, the
Partnership indirectly acquired all of the partnership interests of
Hampton Crossing Associates not previously owned by it.
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DEAN WITTER REALTY YIELD PLUS, L.P.
Notes to Consolidated Financial Statements
(Unaudited)
Contractors who worked on the property have brought claims of about
$2,000,000 against the borrower and have filed liens against the
property; the Partnership is contesting these claims and expects to
settle them for less than their face amounts.
3. Investment in Participating Mortgage and Other Secured Loans
One Congress Street, Boston, Massachusetts
The property consists of a nine-story parking garage, two office levels
above the garage, and ground level retail space. The Partnership has
funded approximately $32,876,000 of its $34,350,000 commitment. Base
interest is payable currently at 8%.
The garage is fully leased under an agreement which expires in 2003.
The retail space is approximately 49% occupied. The office space is
100% leased to a federal agency, the General Services Administration
("GSA") under a lease that is cancellable by the GSA in 1995 and
terminates in 1997. In addition, not later than August 1994, the GSA
will be entitled to free rent for five months in connection with GSA's
financing of tenant improvements for its premises, which might adversely
affect the borrower's ability to pay debt service on the Partnership's
loan. The borrower has made a claim against GSA of approximately $3.3
million for the costs incurred in connection with the GSA tenant
improvements. This amount, if collected, would be sufficient to pay
debt service on the Partnership's loan, as well as projected operating
costs, during the free rent period. GSA has responded to the borrower's
claim by disputing the amount claimed in connection with the tenant
improvements. The borrower and GSA are continuing negotiations to
resolve this matter.
Shopping Centers Investment, Michigan, Ohio, Virginia and Tennessee
In 1990, the Partnership loaned $6,000,000 to the partners of the
Michigan Developer, secured by partnership interests in eleven
partnerships which owned eleven community shopping centers. The loan
was due in August 1991, with interest at 15%. During the second quarter
of 1991, through the sale of three of the shopping centers, the
Partnership received a payment of $1,588,000, but has since received no
further installments of principal or interest. The Partnership is not
accruing interest on this loan.
The borrower was unable to repay the loan when due. As a result of the
default, the Partnership instituted legal proceedings to collect on the
note and to foreclose on the collateral partnership interests. The
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DEAN WITTER REALTY YIELD PLUS, L.P.
Notes to Consolidated Financial Statements
(Unaudited)
properties owned by the partnerships in which the Partnership has a
collateral interest are all encumbered by mortgages. As of March 31,
1994, two of the properties had been acquired by the respective first
mortgage lenders through foreclosure. First mortgage loans have also
matured, but have not been repaid, on two other properties, one of which
is cross-collateralized with a property which is current on its
mortgage. The Partnership established an allowance of $4,664,271
against its loan at December 31, 1992.
In April 1994, two additional shopping centers were taken by the lender
through foreclosure, and the Partnership obtained control of all of the
partnerships which own three of the community shopping centers and joint
control of the partnership which owns the remaining shopping center.
4. Related Party Transactions
An affiliate of Realty provided property management services for four
properties for the quarters ended March 31, 1994 and 1993. The
Partnership paid the affiliate management fees of $79,200 and $98,183
for the quarters ended March 31, 1994 and 1993, respectively.
An affiliate of Realty performs administrative functions, processes
certain investor transactions and prepares tax information for the
Partnership. For the quarters ended March 31, 1994 and 1993, the
Partnership incurred approximately $110,000 and $109,000 respectively
for these services.
The Partnership borrowed funds from an affiliate of Realty. Interest
expense, which was calculated at the prime rate, amounted to $25,725 and
$25,206 for the quarters ended March 31, 1994 and 1993, respectively.
As of March 31, 1994 and 1993, the amounts due to the affiliate were
$1,714,149 and $1,697,233, respectively.
5. Subsequent Event
On April 28, 1994, the Partnership paid a cash distribution of $.15 per
Unit to Limited Partners. The cash distribution aggregated $1,484,994
with $1,336,495 distributed to Limited Partners and $148,499 distributed
to the General Partners.
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
The Partnership raised $178,199,380 through a public offering which
terminated in 1987. The Partnership has no plans to raise additional
capital.
The Partnership has committed the proceeds raised in the offering to seven
investments.
Real estate, in general, has been negatively affected by a major cyclical
downturn. The downturn has been caused by a variety of factors including
an oversupply of office and retail properties, continued downsizing by many
major corporations, and a lack of credit availability for real estate
financings and purchases.
These factors have contributed to a general decrease in market rental rates,
an increase in vacancy rates and an increase in concessions such as free
rent and tenant improvement expenditures for both new and existing tenants.
As a result, there has been an overall decline in the liquidity and market
values of investments in real estate properties, mortgage loans and land
leases.
Real estate markets are generally divided into sub-markets by geographic
locations and property type. Not all sub-markets have been affected equally
by the above factors.
The Partnership's original investments were mortgage loans or land leases,
which provided for a fixed current return and participation on the long-term
appreciation and/or revenue from operation of the properties involved in
such investments. Due to the weakness in real estate markets, most of the
properties did not generate sufficient cash flow to fully service their
debt. As a result, through March 31, 1994, the Partnership has acquired,
through foreclosure, or through transfers of ownership interests in lieu of
foreclosure, all but one of the properties in which it originally invested.
The resulting foreclosures have effectively changed the Partnership from a
participating lender to an equity owner of real estate. While the benefits
to Limited Partners were expected to come from interest and a participation
in the increases in cash flow and appreciation of the properties, after
foreclosure, the Partnership receives all cash flow from the properties,
which is currently less than the interest that was required to have been
paid on the debt. In addition, the Partnership will now be required to
expend funds for tenant improvements and leasing commissions in connection
with the leasing of vacant space as is customary in most real estate
markets.
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During the first three months of 1994, Partnership cash flow from operations
and its share of distributions received from joint ventures exceeded
distributions to investors and capital expenditures. The Partnership
expects that such cash flows for the remainder of 1994 will be sufficient
to fully fund capital expenditures and cash distributions.
The Partnership had funded an approximately $47,000,000 leasehold mortgage
loan, land purchase and participating land lease for 401 East Ontario
Street, a high rise luxury apartment building. The property was developed
and owned by Lakeshore Ontario Associates, a 50/50 joint venture between a
Chicago developer ("Chicago Developer") and an entity comprised of former
and current Realty employees, several of whom are former or current officers
of the Managing General Partner. The Partnership received a completion
guaranty and a $6,000,000 operating deficits guaranty from the borrower
land/lessee. One half of these guarantees was the obligation of Realty and
the other half was the obligation of the principals of the Chicago
Developer. Realty funded all of the additional construction costs paid to
date (approximately $2,300,000) and has fully funded its obligation under
the operating deficits guaranty of $4,509,212 as of December 31, 1993.
During the first quarter of 1993, Realty paid the Partnership $379,392
pursuant to its guaranty obligations.
Beginning in March 1992, the Chicago Developer failed to fund the deficits
it guaranteed totaling $1,490,788 through March 31, 1994 plus accrued
interest on the unpaid balance which was reserved in full. This resulted
in a default on its loan. For financial reporting purposes, the Partnership
placed this loan on non-accrual status as of July 1, 1992, declared defaults
under the mortgage and ground lease and, during the first quarter of 1993,
initiated litigation seeking foreclosure, termination of the ground lease
and payment under the guarantees. As of December 31, 1992, the Partnership
accounted for this loan as if the property were foreclosed upon, wrote down
the loan to its estimated fair value, and reclassified the loan to real
estate.
In the first quarter of 1994, the borrower transferred to the Partnership
the ground lease and ownership of the improvements by deed-in-lieu of
foreclosure. In addition, the Chicago Developer paid the partnership
$350,000 in exchange for the Partnership's release of the principals of the
Chicago Developer from any continuing liability under their deficit
guaranty.
In March 1991, the Partnership made a $7.5 million participating loan
secured by partnership interests on Deptford Crossing, a community shopping
center. However, the borrower of the project failed to make the required
debt service payments to the Partnership since May 1992. As of December 31,
1992, the Partnership accounted for this loan as if the property was
foreclosed upon, wrote down the loan to its estimated fair value and
reclassified the loan to real estate. <PAGE>
<PAGE>
In July 1993, the interests in the owner of the Deptford Crossing project
were transferred to the Partnership in lieu of foreclosure.
The Partnership provided a $5.4 million letter of credit, secured by the
Partnership's cash reserves, to the first mortgage lender to secure
repayment. During the third quarter of 1993, the bank allowed the
Partnership to use $400,000 of its cash reserves for tenant improvements at
the property. At the same time, the bank reduced the letter of credit from
$5.4 million to $5 million. The letter of credit will be reduced
further to $3 million if the property achieves a debt service coverage ratio
of 125% on the first mortgage for twelve consecutive months.
The Partnership committed $34.35 million for the second mortgage financing
of One Congress Street. As of March 31, 1994, the Partnership has funded
approximately $32.9 million on this second mortgage loan. At the One
Congress Street property, the garage is fully leased under an agreement
which expires in 2003. The retail space is approximately 49% leased. The
office space is 100% leased to a federal agency, the General Services
Administration ("GSA") under a lease that is cancellable by the GSA in 1995
and terminates in 1997. In addition, not later than August 1994, the GSA
will be entitled to free rent for five months in connection with the GSA's
financing of tenant improvements for its premises, which might adversely
affect the borrower's ability to pay debt service on the Partnership's loan.
The borrower has made a claim of approximately $3.3 million against the GSA
for certain costs associated with the GSA tenant improvements. This amount,
if collected, would be sufficient to pay debt service on the Partnership's
loan, as well as projected operating costs during the free rent period. GSA
has responded to the borrower's claim by disputing the amount claimed in
connection with the tenant improvements. The borrower and the GSA are
continuing to negotiate to resolve this matter.
The Partnership's borrower on the Hampton Village Centre property had
obtained a $29 million first mortgage loan secured by Phase I of the
property, from a major insurance company.
In addition, the Partnership made the following loans to Hampton Crossing
Associates: a) a $3 million second mortgage loan, secured by Phase I, II and
III of the center, b) an $8 million construction loan secured by a mortgage
on Phases II and III of the center, and c) a $2,318,823 construction loan
secured by a junior mortgage on Phases II and III of the center. In
addition to its right to repayment of these loans, the Partnership was
entitled to a 50% participation in the property's excess cash flow and
appreciation over $40 million.
During the first quarter of 1993, as a result of defaults under its loans,
the Partnership initiated legal proceedings to foreclose on the property and
to extend the lien of its mortgages to cover a portion of a 10-acre parcel
of land owned by Hampton Crossing Associates adjacent to the property and<PAGE>
<PAGE>
necessary in order to provide adequate parking spaces for the shopping
center.
In September 1993, the Partnership indirectly acquired one-half of the
Partnership interests of Hampton Crossing Associates, the owner of Hampton
Village Centre, thereby obtaining effective control of the center and began
accounting for the loans as if the property were owned, by reclassifying the
loans to real estate and recording the $29 million first mortgage loan.
During the first quarter of 1994, the Partnership indirectly acquired all
of the partnership interests of Hampton Crossing Associates not previously
owned by it.
Contractors who worked on the property have brought claims of about $2
million against the borrower and have filed liens against the property; the
Partnership is contesting these claims and expects to settle them for less
than their face amounts.
In 1990, the Partnership loaned $6,000,000 to the partners of the Michigan
Developer, secured by partnership interest in eleven partnerships which
owned eleven community shopping centers. The loan was due in August 1991,
with interest at 15%. During the second quarter of 1991, through the sale
of three of the shopping centers, the Partnership received a payment of
$1,588,000, but has since received no further installments of principal or
interest. The Partnership is not accruing interest on this loan.
The borrower was unable to repay the loan when due. As a result of the
default, the Partnership instituted legal proceedings to collect on the
note and to foreclose on the collateral partnership interests. The
properties owned by the partnerships in which the Partnership has a
collateral interest are all encumbered by mortgages. As of March 31, 1994,
two of the properties had been acquired by the respective first mortgage
lenders through foreclosure. First mortgage loans have also matured, but
have not been repaid on two other properties, one of which is cross-
collateralized with a property which is current on its mortgage. The
Partnership established an allowance of $4,664,271 against its loan at
December 31, 1992.
In April 1994, two additional shopping centers were taken by the lender
through foreclosure, and the Partnership obtained control of the
partnerships which own three of the community shopping centers and joint
control of the partnership which owns the remaining shopping center.
In January 1993, the Partnership established a $3 million secured line of
credit with a bank, against which it has borrowed $1,062,333 as of March 31,
1994 and 1993. Borrowings bear interest, payable monthly, at the prime rate
plus three quarters percent, and are repayable in nineteen consecutive
payments beginning March 30, 1994. The prime rate at March 31, 1994 was
6.25%.<PAGE>
<PAGE>
On April 28, 1994, the Partnership paid a cash distribution of $.15 per Unit
to Limited Partners. Total cash distributed was $1,484,994 with $1,336,495
distributed to Limited Partners and $148,499 to the General Partners.
Operations
Fluctuations in the Partnership's operating results for the three-month
period ended March 31, 1994 compared to the comparable period in 1993 are
primarily attributable to the following:
The increase in rental income, property operating expenses and depreciation
primarily results from recording property operations for Deptford Crossing
beginning in July 1993 and Hampton Village Centre beginning in September
1993, due to the reclassification of these investments to real estate from
investments in participating mortgage loans.
The decrease in interest income from participating mortgage loans and other
secured loans primarily results from reclassifying Hampton Village Center
to real estate from investments in participating mortgage loans.
The increase in interest expense represents interest on the Hampton Village
Centre and Deptford Crossing first mortgage loans which the Partnership
began to record when it obtained ownership of the properties.
The decrease in general and administrative expense primarily results from
decreased legal fees incurred in connection with foreclosures and
restructurings.
A summary of the office, retail, residential and research and development
building markets where the Partnership's properties are located and the
performance of each property is as follows:
Greenway Pointe, located in Columbia, Maryland has been affected by an
oversupply of research and development buildings in its market area.
Current vacancy levels in the Columbia research and development market are
approximately 18%. During the first quarter of 1994, occupancy at the
property remained at 81%.
401 East Ontario Street is located in an improved residential sub-market in
Chicago, Illinois. The market vacancy rate is approximately 5% and there
has been no new construction. In addition, rental inducements including
free rent are no longer being offered by competing buildings. During the
first quarter of 1994, occupancy at the property decreased from 92% to 89%.
The office market in Irvine, California, the location of 2600 Michelson
Drive is very weak due to the economic downturn in the aerospace, defense,
and construction industries. This results in higher vacancy rates, lower
rental rates, longer free rent periods and additional expenditures for<PAGE>
<PAGE>
tenant improvements when space is leased to new tenants or re-leased to
existing tenants. However, during 1993, occupancy at the property increased
from 83% to 89%.
Deptford Crossing located in Deptford, New Jersey has been affected by a
combination of the recession in real estate, retailer reluctance to expand
and overbuilding, which has exerted downward pressure on rents and has made
further leasing difficult. Occupancy at the property remained at 83% during
the first quarter of 1994. In contrast, Rochester Hills, Michigan, the
location of Hampton Village Centre has remained a relatively stable and
strong retail market. Occupancy at the property decreased slightly from 97%
to 96% during the first quarter of 1994.
The office space at One Congress Street located in Boston, Massachusetts has
not been affected by the weakness in the Boston economy. However, the GSA
lease is cancellable in 1995 and terminates in 1997. Additionally, the
retail space, which is a small portion of the property, has been difficult
to lease-up due to reduced demand for retail space. During the first
quarter of 1994, the occupancy at the office space and garage space remained
at 100%, however, occupancy at the retail space decreased slightly to 49%
from 52%.
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>
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - not applicable.
Item 2. Changes in Securities - not applicable.
Item 3. Defaults upon Senior Securities - not applicable.
Item 4. Submission of Matters to a Vote of Security Holders -
not applicable.
Item 5. Other Information - not applicable.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits - not applicable
b) Reports on Form 8-K - not applicable<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DEAN WITTER REALTY YIELD PLUS, L.P.
By: Dean Witter Realty Yield Plus Inc.
Managing General Partner
Date: May 13, 1994 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: May 13, 1994 By: /s/Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and Accounting
Officer)
