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 September 30, 1995
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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<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Balance Sheets
<CAPTION>
September 30, December 31,
1995 1994
ASSETS
<S> <C> <C>
Real estate, at cost:
Land $ 11,735,340 $ 31,695,941
Buildings and improvements 92,609,183 142,956,910
104,344,523 174,652,851
Accumulated depreciation 13,333,303 12,098,192
91,011,220 162,554,659
Real estate held for sale 61,936,070 -
Investment in participating mortgage loan,
net of allowance of $14,570,278 at
June 30, 1995 and December 31, 1994 19,974,382 19,584,348
Cash and cash equivalents, at cost
which approximates market 6,834,218 4,772,726
Cash in escrow 5,000,000 5,000,000
Deferred expenses, net 1,800,290 1,488,502
Other assets 2,281,384 2,410,682
$188,837,564 $195,810,917
LIABILITIES AND PARTNERS' CAPITAL
Mortgage notes payable $ 57,631,454 $ 57,714,877
Accounts payable and other liabilities 5,918,262 4,615,541
Loan from affiliate 1,710,899 1,726,524
Loans payable to bank 9,350,557 9,350,557
Minority interests 19,363,395 19,873,023
93,974,567 93,280,522
Partners' capital (deficiency):
General partners (6,381,636) (5,614,897)
Limited partners ($20 per Unit,
8,909,969 Units issued) 101,244,633 108,145,292
Total partners' capital 94,862,997 102,530,395
$188,837,564 $195,810,917
See accompanying notes to consolidated financial statements.
/TABLE
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<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and nine months ended September 30, 1995 and 1994
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Rental $7,201,129 $6,744,896 $20,490,325 $18,446,423
Interest on participating
mortgage loan 692,647 652,331 2,060,315 1,942,991
Interest on short-term investments 127,235 107,717 361,834 252,598
Other 169,857 295,447 611,844 1,075,143
8,190,868 7,800,391 23,524,318 21,717,155
Expenses:
Property operating 3,617,427 2,678,905 10,475,336 7,399,347
Interest 1,501,345 1,485,713 4,505,951 3,859,070
Depreciation 1,160,413 1,091,901 3,450,074 3,071,502
Amortization 124,744 190,722 357,577 321,834
General and administrative 160,421 283,929 604,765 888,072
Loss on impairment of real estate 6,931,459 - 6,931,459 -
13,495,809 5,731,170 26,325,162 15,539,825
(Loss) income before minority interests (5,304,941) 2,069,221 (2,800,844) 6,177,330
Minority interests 106,356 186,083 411,572 599,349
(Loss) income before gain on refinancing
of debt (5,411,297) 1,883,138 (3,212,416) 5,577,981
Gain on refinancing of debt - 626,375 - 626,375
Net (loss) income $(5,411,297) $2,509,513 $(3,212,416) $ 6,204,356
Net (loss) income allocated to:
Limited partners $(4,870,167) $ 2,258,562 $(2,891,174) $ 5,583,920
General partners (541,130) 250,951 (321,242) 620,436
$(5,411,297) $ 2,509,513 $(3,212,416) $ 6,204,356
Net (loss) income per Unit of limited
partnership interest $(.55) $.25 $(.32) $.62
See accompanying notes to consolidated financial statements.
/TABLE
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<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Statement of Partners' Capital
Nine months ended September 30, 1995
<CAPTION>
Limited General
Partners Partners Total
<S> <C> <C> <C>
Partners' capital (deficiency)
at January 1, 1995 $108,145,292 $(5,614,897) $102,530,395
Net loss (2,891,174) (321,242) (3,212,416)
Cash distributions (4,009,485) (445,497) (4,454,982)
Partners' capital (deficiency)
at September 30, 1995 $101,244,633 $(6,381,636) $ 94,862,997
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Statements of Cash Flows
Nine months ended September 30, 1995 and 1994
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (3,212,416) $ 6,204,356
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Depreciation and amortization 3,807,651 3,393,336
Minority interests in earnings of
consolidated partnerships 411,572 599,349
Loss on impairment of real estate 6,931,459 -
Increase in deferred expenses (669,365) (521,112)
Decrease in other assets 129,298 830,778
Increase (decrease) in accounts payable and
other liabilities 1,302,721 (1,330,843)
Net cash provided by operating activities 8,700,920 9,175,864
Cash flows from investing activities:
Investment in participating mortgage loan (390,034) -
Additions to real estate (774,164) (1,892,527)
Net cash used in investing activities (1,164,198) (1,892,527)
Cash flows from financing activities:
Cash distributions (4,454,982) (4,454,982)
Repayments of mortgage notes (83,423) (8,821,266)
Contributions by minority interest to
consolidated partnership 482,543 821,131
Minority interest in distributions from
consolidated partnership (1,403,743) (1,091,066)
Repayments of bank loan - (279,563)
Proceeds from bank loans - 8,555,404
Cash received from acquisition of partnerships - 253,660
Decrease in loan from affiliate (15,625) (222,122)
Net cash used in financing activities (5,475,230) (5,238,804)
Increase in cash and cash equivalents 2,061,492 2,044,533
Cash and cash equivalents at beginning of period 4,772,726 4,859,851
Cash and cash equivalents at end of period $ 6,834,218 $ 6,904,384
Supplemental disclosure of cash flow information:
Cash paid for interest $ 4,517,560 $ 3,652,009
(Cont'd)
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Statements of Cash Flows
Nine months ended September 30, 1995 and 1994
(Cont'd)
<CAPTION>
1995 1994
<S> <C> <C>
Supplemental disclosure of non-cash investing activities:
Reclassification of real estate held for sale:
Real estate, at cost
Land $ 15,480,507 $ -
Buildings and improvement 48,670,526 -
Accumulated depreciation (2,214,963) -
Real estate held for sale $ 61,936,070 $ -
Assets acquired and liabilities assumed on receipt
of partnership interests in lieu of foreclosure of
secured loan:
Real estate $ - $(25,731,946)
Other assets $ - $ (95,541)
Mortgage notes $ - $ 25,598,317
Accounts payable and accrued liabilities $ - $ 482,830
Foreclosure of real estate:
Real estate $ - $ 4,150,000
Mortgage note $ - $ (4,150,000)
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Notes to Consolidated Financial Statements
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, Deptford Crossing Associates, Hampton Crossing Associates,
and, effective April 4, 1994, DW Community Centers Limited Partnership
and DW Maplewood Inc. 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.
Net income (loss) per Unit amounts are calculated by dividing net income
(loss) allocated to Limited Partners, in accordance with the Partnership
Agreement, by the weighted average number of Units outstanding.
Certain 1994 amounts have been reclassified to conform to 1995
presentation.
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 periods. Except for the recognition
of loss on impairment of real estate and the reclassification of real
estate held for sale, such adjustments consist only of normal recurring
accruals.
The Partnership does not expect that adoption of SFAS 114, SFAS 118 and
SFAS 121 regarding impairment of the Partnership's assets will have a
significant impact on the Partnership's financial statements.
2. Real Estate
In late February 1995, cracks and spalling were observed on certain
portions of the concrete exterior at the 401 East Ontario Street property
in Chicago, IL. The worst spalls have been removed and temporary repairs
were completed. Beginning in March, the Partnership retained the
services of three independent engineering firms which completed studies
and submitted separate reports. Their reports confirmed that cracking
and spalling of this nature is highly unusual for a building of this age,
and attribute the problems to both the defective design and construction
of the building. The Partnership also retained an architectural firm to
work with the engineers in developing permanent repair specifications.
Drawings and specifications for the exterior concrete repair work were
submitted to five qualified contractors for bidding purposes. The
contract was awarded to the lowest bidder. Permanent repair work was
commenced in September and is currently scheduled to be completed prior
to December 31, 1996. The extensive testing and engineering analysis,
as well as the temporary repairs, have cost approximately $1 million and
the cost of permanent repairs is expected to be approximately $6 million
(of which only a minimal amount has been incurred through September 30,
1995.) Other costs (litigation, rent loss, increased maintenance, etc.)
are still being developed.
The Partnership has notified its insurance carrier of these occurrences
and its remedial activities to date. The carrier has not indicated
whether, or to what extent, it will assume responsibility for testing
and/or remediation costs. In early May, the Partnership initiated
litigation against those it deemed responsible for the design and
construction of the building including the architect, structural
engineer, general contractor and others.
The extent to which the above-described costs may be recoverable through
insurance or litigation proceeds cannot be determined at this time.
On October 19, 1995, the Partnership and certain of its subsidiaries
entered into an agreement to sell to an unaffiliated party, at a price
which exceeds the Partnership's carrying values, the land and buildings
which comprise the Farmington Crossroads, Genessee Crossing, Hampton
Village Centre and Midway Crossing shopping centers. These shopping
centers in the aggregate consist of approximately 802,000 rentable square
feet. As part of the agreement, two affiliated public partnerships, Dean
Witter Realty Income Partnership II, L.P. and Dean Witter Realty Income
Partnership III, L.P., also agreed to sell certain shopping centers owned
by them.
The buyer is conducting its due diligence review, and may terminate the
agreement at any time through November 30, 1995. Accordingly, there can
be no assurance that the Partnership's properties identified above will
be sold.
The sale is scheduled to close December 11, 1995, but the date may be
accelerated or postponed.
The net carrying value of the shopping centers to be sold has been
reclassified to real estate held for sale in the balance sheet.
The aggregate income from the shopping centers to be sold during the
three- and nine-month periods ended September 30, 1995 was approximately
$467,000 and $1,143,000, respectively.
If the Partnership completes the sale of the above-mentioned properties,
the Partnership will pay in full its loans from affiliate and the loans
payable to bank; interest expense relating to these loans was
approximately $226,000 and $698,000 during the three- and nine-month
periods ending September 30, 1995.
Because of continuing weakness in the Deptford, New Jersey retail market,
and the likelihood that such weakness would persist for several years,
in the third quarter of 1995, the Partnership concluded that there was
a decline in the value of the Deptford Crossing shopping center and that
the decline was other-than-temporary. Accordingly, the Partnership
recorded a loss on impairment of the property of approximately $6,931,000
at September 30, 1995.
3. Investment in Participating Mortgage Loan
In January 1995, the Partnership funded $390,034, the remaining portion
of its loan commitment to the borrower at the One Congress Street
property; this amount was reserved in full in 1994. As a result of these
advances, the Partnership has fully funded its loan commitment.
4. Related Party Transactions
Realty and an affiliate of Realty provided property management services
for four properties at September 30, 1995 and five properties at
September 30, 1994. The Partnership paid Realty and its affiliate
management fees of $241,034 and $246,406 for the nine months ended
September 30, 1995 and 1994, respectively.
Realty performs administrative functions, processes certain investor
transactions and prepares tax information for the Partnership. For each
of the nine-month periods ended September 30, 1995 and 1994, the
Partnership incurred approximately $336,000 and $328,000, respectively
for these services.
As of September 30, 1995, Realty and its affiliate were owed a total of
approximately $63,000 for the above-mentioned services.
The Partnership borrowed funds from an affiliate of Realty. Borrowings
are repayable on demand, but no later than July 1, 1997. Interest
expense, which was calculated at the prime rate, amounted to $116,361 and
$88,870 for the nine months ended September 30, 1995 and 1994,
respectively.
5. Subsequent Event
On October 30, 1995, 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.
<PAGE>
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 had originally committed the proceeds raised in the
offering to seven investments in loans or land leases, which provided for
a fixed current return and participation in 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, the Partnership 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. As a result, the
Partnership receives all cash flow from the properties it owns, and will
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.
Many real estate markets are stabilizing. Continued space absorption and
restrained construction have reduced vacancy levels of office properties
in certain markets. With the substantial amount of office space still
available, however, office rental rates are improving only modestly and
in select regions. At current rental rates, significant office
construction activity is considered unlikely in the near-term in all but
a few markets. Retail sales are currently sluggish except for several
discount retailers such as Wal-Mart and "category killer" retailers that
continue to seek increased market share. Many retail center property
owners, including the Partnership, have experienced the effect of this
trend.
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.
On October 19, 1995, the Partnership and certain of its subsidiaries
entered into an agreement with an unaffiliated party, to sell, at a price
which exceeds the Partnership's carrying values, the land and buildings
which comprise the Farmington Crossroads, Genessee Crossing, Hampton
Village Centre and Midway Crossing shopping centers. These shopping
centers in the aggregate consist of approximately 802,000 rentable square
feet.
The buyer is conducting its due diligence review, and may terminate the
agreement at any time through November 30, 1995. Accordingly, there can
be no assurance that the Partnership's properties identified above will
be sold.
The sale is scheduled to close December 11, 1995, but the date may be
accelerated or postponed.
The sale of the shopping centers will reduce future Partnership earnings
and cash flow. The aggregate net income from the shopping centers to be
sold during the three- and nine-month periods ended September 30, 1995
was approximately $467,000 and $1,143,000, respectively. The aggregate
cash flow from operations from these shopping centers during the three-
and nine-month periods ended September 30, 1995 was approximately
$800,000 and $2,141,000, respectively.
If the Partnership completes the sale of the above-mentioned properties,
the Partnership will pay in full its loans from affiliate and the loans
payable to bank; interest expense relating to these loans was
approximately $226,000 and $698,000 during the three- and nine-month
periods ending September 30, 1995.
The Partnership's liquidity depends primarily upon cash flow from
operations of its properties, expenditures for tenant improvements and
leasing commissions in connection with the leasing of vacant space.
During the three- and nine-month periods ended September 30, 1995, all
of the Partnership's properties generated positive cash flow from
operations, and it is expected that they will continue to do so. Also,
in these periods, Partnership cash flow from operations exceeded
distributions to investors, capital expenditures and investments in
participating mortgage loans.
During the nine months ended September 30, 1995, the Partnership incurred
approximately $961,000 of tenant improvements and leasing commissions
(net of capital contributions from the minority interest), primarily
relating to the Michelson joint venture and retail space at the 401 East
Ontario Street property.
As described in footnote 2 to the consolidated financial statements in
Item 1 above, the Partnership expects to fund a significant amount of
expenditures to repair the exterior wall at 401 East Ontario Street.
In addition, as of September 30, 1995, the Partnership has commitments
to fund approximately $1,650,000 of tenant improvements and leasing
commissions (net of capital contributions due from the minority
interest), primarily at the Michelson and Greenway Pointe properties.
The Partnership expects that for the remainder of 1995 and in 1996, the
repairs at 401 East Ontario Street, capital expenditures and cash
distributions will be funded from operating cash flows, the funds from
the sale of the shopping centers and existing cash reserves.
The Partnership's participating mortgage loan is secured by the One
Congress Street property. The office space there is 100% leased to a
federal agency, the General Services Administration ("GSA") under a lease
that is cancelable by the GSA for some or all of their space in August
1995 or thereafter and terminates in 1997. To date, GSA has not
exercised its option to terminate some or all of its space; however, if
GSA elects to exercise its option in the future, property cash flow will
be reduced, and the owner/borrower of the One Congress Street property
may not be able to meet its minimum debt service obligation.
Prior to 1995, the Partnership has borrowed approximately $1.7 million
from an affiliate of Realty. The loan bears interest at the prime rate.
The Partnership has borrowed approximately $9,350,000 under two bank
lines of credit which total $11,000,000. The loans bear interest,
payable monthly, and are repayable in thirty-one installments beginning
March 1, 1996. Effective March 17, 1995, the Partnership changed the
interest rate on all of the loans to a fixed rate based on the LIBOR rate
plus 1.75%. The Partnership can choose a period of one, two, three or
six months during which the fixed rate will apply. The loans are secured
by a first mortgage on the Greenway Pointe and Midway Crossing properties
and an assignment of distributions from the Michelson property.
If the Partnership completes the above-mentioned sale of certain of its
shopping centers, it will use the proceeds to pay in full its mortgage
note payable securing the Farmington Crossroads shopping centers. As
part of the sale agreement, the buyer will assume the Partnership's
mortgage notes payable securing the Hampton Village Centre and Genessee
Crossing shopping centers. The total amount of mortgage notes payable
to be repaid or assumed by the buyer is approximately $41,600,000.
The Partnership provided a $5 million letter of credit, secured by the
Partnership's cash reserves, to the first mortgage lender at the Deptford
Crossing property to secure repayment. The Partnership is currently
negotiating a restructuring and extension of the mortgage note payable
securing the Deptford Crossing shopping center which is due March 1996.
The increase in accounts payable and other liabilities is due to normal
accrual of real estate taxes and the accrual for unpaid repair work at
401 East Ontario Street which was completed by September 30, 1995.
The Partnership does not expect that adoption of SFAS 114, SFAS 118 and
SFAS 121 regarding impairment of the Partnership's assets will have a
significant impact on the Partnership's financial statements.
On October 30, 1995, the Partnership paid the third quarter cash
distribution of $.15 per Unit to Limited Partners. The total cash
distribution was $1,484,994 with $1,336,495 distributed to Limited
Partners and $148,499 distributed to the General Partner.
Further information relating to the Partnership's liquidity and capital
resources is included in footnotes 2 and 3 to the consolidated financial
statements in Item 1 above.
Operations
Fluctuations in the Partnership's operating results for the nine and
three-month periods ended September 30, 1995 compared to 1994 are
primarily attributable to the following:
Rental income for the nine months ended September 30, 1995 increased
primarily because of higher rental rates at 401 East Ontario Street,
higher occupancy at the Greenway Pointe property, increased pass-through
income at the Midway Crossing shopping center and the inclusion of the
operations of the Farmington, Genessee and Midway shopping centers for
nine months in 1995 versus six months in 1994. These increases were
partially offset by lower pass-through income from Hampton Village Centre
and the loss of income from the foreclosure of the Hickory Ridge shopping
center in September 1994.
Rental income for the three months ended September 30, 1995 increased
primarily because of higher occupancies at the Greenway Pointe and
Michelson properties and increased pass-through income at the Midway
Crossing shopping center. These increases were partially offset by lower
pass-through income from Hampton Village Centre and the above-mentioned
loss of income from the Hickory Ridge shopping center.
Non-recurring other income in 1995 includes a first quarter receipt of
a $150,000 lease termination fee at the Michelson property. Other income
in 1994 included the following non-recurring items: a first quarter
receipt of $350,000 from the developer of the 401 East Ontario Street
property, a second quarter receipt of approximately $211,000 from the
partnerships which owned the four community shopping centers that were
lost through foreclosure and third quarter miscellaneous income of
$142,000 from the Midway Crossing and Hickory Ridge shopping centers.
The increase in property operating expenses for the nine months ending
September 30, 1995 is primarily due to increased costs incurred at the
401 East Ontario Street and Hampton Village Centre properties, reserves
of certain uncollectible tenant receivables at the Hampton and Midway
shopping centers, and the inclusion of the operations of the Farmington,
Midway and Genessee Crossing shopping centers for nine months in 1995
versus six months in 1994.
The increase in property operating expenses for the three months ended
September 30, 1995 is primarily due to increased property operating
expenses at the 401 East Ontario Street and Deptford Crossing properties
and reserves of certain uncollectible tenant receivables.
The increases in interest expense represent additional interest on the
Partnership's loan payable to bank which increased by approximately
$8,456,000 in August 1994 (to repay the mortgage note payable securing
the Midway Crossing shopping center), increased interest rates and the
inclusion of the operations of the Farmington and Genessee shopping
centers for nine months in 1995 versus six months in 1994. These
increases were partially offset by interest reductions resulting from the
repayment of the Midway shopping center mortgage (which was outstanding
for only three months in 1994) at the end of the third quarter of 1994
and the above-mentioned loss of the Hickory Ridge shopping center.
The increases in depreciation and amortization during the nine months
ended September 30, 1995 primarily resulted from increased capital
expenditures for the Partnership's properties and the inclusion of the
operations of the Farmington, Midway and Genessee Crossing shopping
centers for nine months in 1995 versus six months in 1994.
The decreases in general and administrative expenses primarily results
from decreased legal fees.
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:
The current vacancy rate in the Columbia, Maryland research and
development market, the location of Greenway Pointe, is 14%; this market
suffers from an oversupply of buildings which will take many years to
work off. However, during the third quarter of 1995, occupancy at the
property remained at 99%. The lease of G Tech, which occupies
approximately 20% of the property's space, expires in September 1996; it
is unlikely that this tenant will renew its space.
The 401 East Ontario property is located in a strong luxury residential
submarket in the central business district of Chicago, Illinois. There
is currently no new luxury high rise construction in this submarket, and
many competing properties are in the process of converting to condominium
ownership. During the third quarter of 1995, new and existing residents
have continued to receive rental increases and the property is 93%
occupied. The current occupancy is slightly below market; this may be
caused by construction activity associated with the above-mentioned
repairs. It is not known at this time what effect the repair program
will have on rents and occupancy in the near future.
Favorable lease rates are attracting tenants to the office market in
Irvine, California, the location of 2600 Michelson Drive, where the
market vacancy rate is approximately 15%. At September 30, 1995,
occupancy at the property was 92%. No significant leases are scheduled
to expire before 1998.
Deptford, New Jersey, the location of Deptford Crossing, has a high
vacancy rate which has exerted downward pressure on rents and has made
further leasing difficult. During the third quarter of 1995, occupancy
at the property decreased from 84% to 82%. No significant leases are
scheduled to expire before 1997.
Because the office space at One Congress Street, located in Boston,
Massachusetts is fully leased, the property has not been affected by the
recent strengthening in the Boston office market. However, some or all
of the space covered by the GSA lease is cancelable beginning in August
1995 and terminates in 1997. The retail space has been difficult to
lease. During the third quarter of 1995, occupancy at the office and
garage space, remained at 100%, and the retail space, which is not a
significant portion of the overall space, is substantially vacant.
A summary of the retail markets where the Partnership's properties to be
sold are located and the performance of each property is as follows:
Rochester Hills, Michigan, the location of Hampton Village Centre, has
remained a relatively stable and strong retail market. During the third
quarter of 1995, occupancy at the property remained at 96%. Leases for
approximately 10% of the property's space are scheduled to expire in
1996.
Flint, Michigan, the location of the Genessee Crossing shopping center,
is an active retail market with a relatively low vacancy rate. During
the third quarter of 1995, occupancy at the property remained at 99%.
No significant leases are scheduled to expire in the near future.
Builder's Square, which owns an 80,000 square foot store at the center,
has announced it will leave its building at the end of the year and move
into a bigger location in the area. Builder's Square has leased the
space to two new tenants which are home entertainment and electronics
retailers. The Partnership believes that the new retailers will increase
traffic at the property.
Elyria, Ohio, the location of the Midway Crossing shopping center, is a
relatively stable retail market, with little vacancy in the vicinity.
The property is located across from a successful regional mall. During
the third quarter of 1995, the property remained fully occupied. Leases
totaling 12% of the property's space are scheduled to expire in 1996.
Farmington Crossroads shopping center is located in the affluent suburban
community of Farmington, Michigan. Farmington's retail market has a
relatively low vacancy rate. During the third quarter of 1995, occupancy
at the property remained at 93%. No significant leases are scheduled to
expire in the near future.
Inflation
Inflation has been consistently low during the periods presented in the
financial statements and, as a result, has not had a significant effect
on the operations of the Partnership or its properties.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits - not applicable.
b) Reports on Form 8-K -
Report dated October 19, 1995 regarding the agreement to sell
certain of the Partnership's retail shopping centers.<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: November 14, 1995 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: November 14, 1995 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,
participating mortgage loans,and real estate joint ventures. In accordance
with industry practice, its balance sheet is unclassified. For full
information, refer to the accompanying financial statements.
</LEGEND>
<NAME> DEAN WITTER REALTY YIELD PLUS, LP
<CIK> 0000810116
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 11,834,218
<SECURITIES> 0
<RECEIVABLES> 1,028,223
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 188,837,564<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 94,862,997<F2>
<TOTAL-LIABILITY-AND-EQUITY> 188,837,564<F3>
<SALES> 0
<TOTAL-REVENUES> 23,524,318<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 15,299,324
<LOSS-PROVISION> 6,931,459
<INTEREST-EXPENSE> 4,505,951
<INCOME-PRETAX> (3,212,416)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,212,416)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,212,416)
<EPS-PRIMARY> (.32)<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include net investments
in real estate of $91,011,220, real estate held for sale of $61,936,070,
net investments in participating mortgage loan of $19,974,382, net deferred
expenses of $1,800,290 and other assets of $1,253,161.
<F2>Represents partners' capital.
<F3>Liabilities include mortgage notes payable of $57,631,454, minority
interests of $19,363,395, loans payable to bank of $9,350,557, accounts
payable and other liabilities of $5,918,262 and loan from affiliate of
$1,710,899.
<F4>Total revenue includes rent of $20,490,325, interest on participating
mortgage loans of $2,060,315, interest on short-term investments of
$361,834 and other revenue of $611,844.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
