7
<PAGE>
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 June 30, 1999
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
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY YIELD PLUS, L.P.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30, December
1999 31,
1998
<S> <C> <C>
ASSETS
Real estate:
Land $ $
Buildings and improvements 2,070,000 2,070,000
10,726,61 10,580,04
4 7
Accumulated depreciation 12,796,61 12,650,04
4 7
2,114,062 1,954,876
10,682,55 10,695,17
Investment in unconsolidated 2 1
partnership
Cash and cash equivalents 20,886,47 19,471,31
6 1
Other assets
4,898,037 4,555,260
410,927 360,860
$36,877,9 $
92 35,082,60
2
LIABILTIES AND
PARTNERS' CAPITAL
$ $
Accounts payable and other liabilites 254,223 382,432
Partners' capital (deficiency):
General partners
Limited partners ($20 per Unit, (7,212,84 (7,405,20
8,909,969 Unit issued) 8) 8)
43,836,61 42,105,37
7 8
Total partners' capital
36,623,76 34,700,17
9 0
$36,877,9 $
92 35,082,60
2
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
CONSOLIDATED INCOME STATEMENTS
Three and six months ended June 30, 1999 and 1998
<CAPTION>
Three months ended
Six months ended
June 30,
June 30,
1999 1998
1999 1998
<S> <C> <C> <C> <C>
Revenues:
Rental $ $ $ 970,739 $
Gain on sale of real 461,166 2,519,224 - 6,719,23
estate - 2
Equity in earnings 25,251,89 882,441
(losses) of 9 149,468 25,251,8
unconsolidated 373,827 99
partnership
Interest and other 94,683 (183,428)
(134,715
347,853 )
558,583
929,676 27,935,54 2,002,648 32,394,9
8 99
Expenses:
Property operating
Depreciation and (453,95 1,618,035 (181,735) 2,005,56
amortization 8) 0
Interest 313,496 172,148
General and 90,706 - 691,152
administrative - 183,714
88,636 370,392
40,088 95,748
274,508
(323,16 2,210,993 79,049 3,341,61
4) 2
Income before minority 1,252,8
interest 40 25,724,55 1,923,599 29,053,3
5 87
Minority interest - -
12,707,95 13,238,5
5 47
Net income $1,252, $13,016,6 $ $15,814,
840 00 1,923,599 840
Net income allocated to:
Limited partners $1,127, $12,971,9 $ $15,490,
General partners 556 44 1,731,239 360
125,284 44,656 192,360 324,480
$1,252, $13,016,6 $ $15,814,
840 00 1,923,599 840
Net income per Unit of
Limited partnership $ $ $ $ $
interest 0.12 1.46 0.19 1.74
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIENCY)
Six months ended June 30, 1999
<CAPTION>
Limited General
Partners Partners Total
<S> <C> <C>
<C>
Partners' capital (deficiency)
at January 1, 1999 $42,105,378
$(7,405,208) $34,700,170
Net income 1,731,239
192,360 1,923,599
Partners' capital (deficiency)
at June 30, 1999 $43,836,617
$(7,212,848) $36,623,769
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30, 1999 and 1998
<CAPTION>
1999 1998
<S> <C>
<C>
Cash flows from operating activities:
Net income $ 1,923,599
$15,814,840
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in (earnings) losses of unconsolidated partnership
(882,441) 134,715
Depreciation and amortization 172,148
691,152
Minority interest in earnings of consolidated partnership
- - 13,238,547
Gain on sale of real estate -
(25,251,899)
Increase in other assets (63,029)
(420,643)
(Decrease) increase in account payable and other liabilities
(128,209) 252,890
Net cash provided by operating activities 1,022,068
4,459,602
Cash flows from investing activities:
Contributions to unconsolidated partnership (1,448,794)
- -
Distributions from unconsolidated partnership
916,070 1,305,175
Additions to real estate (146,567)
(203,933)
Proceeds from sale of real estate, net of closing costs
- - 63,702,423
Additions to real estate held for sale -
(150,016)
Net cash (used in) provided by investing activities
(679,291) 64,653,649
Cash flows from financing activities:
Cash distributions -
(36,337,824)
Minority interest in distributions from consolidated
partnership -
(31,954,354)
Contributions by minority interest to consolidated partnership
- - 171,214
Net cash used in financing activities -
(68,120,964)
Increase in cash and cash equivalents 342,777
992,287
Cash and cash equivalents at beginning of period
4,555,260 4,584,786
Cash and cash equivalents at end of period $ 4,898,037 $
5,577,073
Supplemental disclosure of cash flow information:
Cash paid for interest $ - $
314,200
Supplemental disclosure of non-cash investing activity:
Reclassification of real estate held for sale:
Land $
- - $ 4,063,111
Building and improvements -
33,840,712
Accumulated depreciation -
(4,640,573)
Real estate held for sale $ -
$33,263,250
</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 Michelson Associates, DW Lakeshore
Associates, Deptford Crossing Associates, DW Community
Centers Limited Partnership and DW Maplewood Inc. on a
consolidated basis. All significant intercompany accounts
and transactions have been eliminated.
The Partnership accounts for its investment in GCGA Limited
Partnership ("GCGA"), the partnership which owns the One
Congress Street property, under the equity method.
The Partnership's records are maintained on the accrual
basis of accounting for financial reporting and tax
purposes.
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, include all
adjustments necessary to present fairly the results for the
interim periods. Except for the gain on sale of real estate
in 1998 and the proceeds received in 1999 and 1998 pursuant
to litigation settlements, such adjustments consist only of
normal recurring accruals.
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Notes to Consolidated Financial Statements
These financial statements should be read in conjunction
with the annual financial statements and notes thereto
included in the Partnership's annual report on Form 10-K
filed with the Securities and Exchange Commission for the
year ended December 31, 1998. Operating results of interim
periods may not be indicative of the operating results for
the entire year.
2. Investment in Unconsolidated Partnership
Summarized financial information of GCGA is as follows:
<CAPTION>
Three months ended Six
months ended
June 30, June
30,
1999 1998 1999
1998
<S> <C> <C> <C> <C>
Revenues $ $ $ $
3,694,33 2,657,86 7,673,21 5,153,76
9 8 3 9
Expenses:
Interest on second
mortgage
Loan 2,085,87 1,787,62 4,091,72 3,575,25
Other interest 2 5 0 0
Property operating
Depreciation and 946,737 948,215 1,893,93 1,897,11
amortization 0 8
1,744,45 1,755,33
0 4 3,443,41 2,947,76
5 9
568,856 459,082
1,254,97 918,164
0
5,345,91 4,950,25 10,684,0 9,338,30
5 6 35 1
Net loss $(1,651, $(2,292, $(3,010, $(4,184,
576) 388) 822) 532)
GCGA's second mortgage loan is a participating mortgage loan
from the Partnership (58%) and Dean Witter Realty Yield Plus
II L.P., an affiliated public partnership (42%). The
Partnership does not recognize interest income on its share
of the second mortgage loan; instead, the Partnership
recognizes its share of GCGA's earnings exclusive of GCGA's
interest expense on the second mortgage loan.
</TABLE>
<PAGE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Notes to Consolidated Financial Statements
3. 401 East Ontario Street Litigation
In May 1999, the Partnership received cash of $700,000 and
an interest- bearing non-recourse promissory note of $45,000
pursuant to a negotiated settlement with one of the parties
involved in the design and construction of the 401 East
Ontario Street building. Due to the uncertainty of
realization of this note, it has not been recognized in the
financial statements. Any payment on the note will be
included in net income upon receipt.
In March 1998, the Partnership received $1.2 million
pursuant to a settlement with the architect and engineer of
the property.
In the year the settlements were received, the amounts were
offset against property operating expenses.
The Partnership is continuing its litigation against the
general contractor and others it deems responsible for
defects in the building which were repaired by the
Partnership between 1995 and 1997. The Partnership incurred
legal fees of approximately $158,000 during the six months
ended June 30, 1999 in connection with the litigation.
4. Related Party Transactions
An affiliate of Realty provided property management services
for the Deptford Crossing property in 1999 and 1998 and for
the Michelson property in 1998. The Partnership paid the
affiliate management fees of
approximately $29,000 and $43,000 for the six months ended
June 30, 1999 and 1998, respectively. These amounts are
included in property operating expenses.
<PAGE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Realty performs administrative functions, processes certain
investor transactions and prepares tax information for the
Partnership. Effective January 1, 1999, the affiliate
reduced fees for these services because of the greatly
decreased level of Partnership activity. For the six-month
periods ended June 30, 1999 and 1998, the Partnership
incurred approximately $38,000 and $167,000, respectively,
for these services. These amounts are included in general
and administrative expenses.
<PAGE>
DEAN WITTER REALTY YIELD PLUS, L.P.
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Liquidity and Capital Resources
The Partnership completed a $178,199,380 public offering in
1987. The Partnership has no plans to raise additional
capital.
As a result of property sales in 1998, Partnership cash flow
from operations decreased during the six months ended June
30, 1999 compared to 1998.
The Managing General Partner has accepted a bid from an
unaffiliated third party to purchase the Deptford Crossing
property, and the parties are currently negotiating the
terms of a purchase and sale agreement. The Managing General
Partner is also marketing for sale the land and ground lease
at Military Crossing. The partnership which owns the One
Congress Street property ("GCGA") was negotiating the terms
of an agreement to sell the property to an unaffiliated
third party; however, the third party has withdrawn its
offer to purchase the property. As a result, GCGA will
remarket the property for sale beginning in the third
quarter of 1999. There can be no assurance that any of the
Partnership's property interests will be sold.
The Partnership will not terminate until the remaining
property interests are sold and the outstanding litigation
with respect to the 401 East Ontario property is resolved.
The retail market in Deptford, New Jersey, the location of
Deptford Crossing, currently has a vacancy rate of 5%.
During the three months ended June 30, 1999, occupancy at
the property remained at approximately 84%. No significant
leases expire before 2001.
Currently, the vacancy rate in the downtown Boston office
market, the location of One Congress Street, is
approximately 7% and rental rates in this market are stable.
There is no new significant construction in this market.
During the three months ended June 30, 1999, occupancy at
both the parking garage and the office space at the property
remained at 100%.
<PAGE>
The retail space, which is not a significant portion of the
overall space, remained substantially vacant. No significant
leases expire before 2003.
In 1989, the Partnership and Dean Witter Realty Yield Plus
II, L.P., an affiliate, (collectively, the "New GP"), made a
participating second mortgage loan to GCGA. On October 27,
1997, the loan was restructured and the New GP became the
general partner of GCGA. Subsequently, the New GP
identified several areas of the parking garage at the One
Congress Street property which were in need of repair. In
1998, the New GP had GCGA fund repairs for several of the
problems at the garage that the New GP believed required
immediate attention, and hired an engineering firm to
investigate the overall garage space to determine what
additional repairs are required. During the first quarter of
1999, the engineering firm issued its preliminary report to
GCGA, and during the second quarter of 1999, a second
engineering firm reviewed the first firm's work for
reasonableness and completeness. The New GP is currently
working with the engineering firms to determine and plan the
necessary repair work. Based on the engineers' reports, the
New GP believes that the cost of such repairs could be
significant. However, the New GP does not expect to begin
any repair work until 2000. GCGA will fund the repair costs
by borrowing additional funds from the New GP; the
Partnership will fund 58% of such new borrowing.
The Partnership will fund any capital costs required for the
Deptford Crossing property and its share of the additional
GCGA loan from its cash reserves. However, any costs which
have not been funded by the time of the closing of the sale
of a property may instead be deducted from the sale price.
During the three and six-month periods ended June 30, 1999,
the Deptford Crossing and One Congress Street property
interests generated positive cash flow from operations, and
it is anticipated that they will continue to do so for the
remainder of 1999.
As discussed in Note 3 to the consolidated financial
statements, the Partnership received $700,000 in May 1999
pursuant to a negotiated settlement relating to the ongoing
401 East Ontario Street property litigation.
<PAGE>
During the six months ended June 30, 1999, cash flow from
operations (including the $700,000 litigation settlement)
and distributions from GCGA exceeded capital expenditures
relating to the Deptford Crossing property and the
Partnership's contributions to GCGA to fund its share of
tenant improvements and leasing commissions at the One
Congress Street property.
The Partnership did not pay any cash distributions during
the six months ended June 30, 1999. Generally, future cash
distributions will be paid from cash reserves and proceeds
received from the sales of the One Congress Street and
Deptford Crossing properties.
Except as discussed above and in the consolidated financial
statements, the Managing General Partner is not aware of any
trends or events, commitments or uncertainties that may have
a material impact on liquidity.
Operations
Fluctuations in the Partnership's operating results for the
three and six-month periods ended June 30, 1999 compared to
1998 are primarily attributable to the following:
Rental revenues, interest and other revenues, property
operating expenses, depreciation and amortization expenses,
and general and administrative expenses decreased in 1999
compared to 1998 as a result of the sales of the Michelson
and 401 East Ontario Street properties in April 1998 and
July 1998, respectively.
The April 1998 sale of the Michelson property caused the
gain on sale of real estate in the second quarter of 1998.
Equity in earnings of unconsolidated partnership increased
in 1999 compared to 1998 primarily due to an increase in
occupancy at the office space at the One Congress Street
property from 70% in 1998 to 100% in 1999.
<PAGE>
Property operating expenses also decreased during the three-
and six-month periods ended June 30, 1999 due to the receipt
of the $700,000 litigation settlement mentioned above. In
March 1998, the Partnership received $1,200,000 pursuant to
settlements relating to the 401 East Ontario Street
litigation. Property operating expenses of the Deptford
Crossing property during the three and six-month periods
ended June 30, 1999 were approximately $169,000 and $341,000
respectively.
There was no interest expense in 1999 because the debt
secured by the 401 East Ontario property was repaid in July
1998.
There was no minority interest in the Partnership's net
income from the Michelson property in 1999 due to the sale
of the property in April 1998.
There were no other individually significant factors which
caused changes to revenues or expenses.
Inflation
Inflation has been consistently low during the periods
presented in the consolidated financial statements and, as a
result, has not had a significant effect on the operations
of the Partnership or its properties.
<PAGE>
DEAN WITTER REALTY YIELD PLUS, 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 YIELD PLUS
L.P.
By: Dean Witter Realty Yield Plus
Inc.
Managing General Partner
Date: August 13, 1999 By:
_/s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: August 13, 1999 By: /s/Charles
M. Charrow
Charles S. Charrow
Controller
(Principal Financial and
Accounting Officer)
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Quarter Ended June 30, 1999
Exhibit Index
<CAPTION>
Exhibit No. Description
<S> <C>
27 Financial Data Schedule
E1
</TABLE>
<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 unaudited financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 4,898,037
<SECURITIES> 0
<RECEIVABLES> 410,927
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 36,877,992<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 36,623,769<F2>
<TOTAL-LIABILITY-AND-EQUITY> 36,877,992<F3>
<SALES> 0
<TOTAL-REVENUES> 2,002,648<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 79,049
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,923,599
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,923,599
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,923,599
<EPS-BASIC> 0.19<F5>
<EPS-DILUTED> 0
<FN>
<F1>In additionto cash and receivables, total assets include net investments
in real estate of $10,682,552 and an investment in unconsolidated
partnership of $20,886,476.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and other liabilities of $254,223.
<F4>Total revenue includes rent of $970,739, equity in earnings of
unconsolidated partnership of $882,441 and interest on cash equivalents
and other revenue of $149,468.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
