<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 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
Securities registered pursuant to Section 12(b) of the Act:
Title of each className of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
State the aggregate market value of the voting stock held by
nonaffiliates of the registrant. Not Applicable
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
PART I.
ITEM 1. BUSINESS
The Registrant, Dean Witter Realty Yield Plus, L.P. (the
"Partnership"), is a limited partnership organized in
January 1987 under the Uniform Limited Partnership Act of
the State of Delaware for the purpose of investing in income-
producing properties.
The Managing General Partner of the Partnership is Dean
Witter Realty Yield Plus Inc. (the "Managing General
Partner"), a Delaware corporation which is wholly-owned by
Dean Witter Realty Inc. ("Realty"). The Associate General
Partner is Dean Witter Realty Yield Plus Associates, L.P.
(the "Associate General Partner"), a Delaware limited
partnership, the general partner of which is the Managing
General Partner. The Managing General Partner manages and
controls all aspects of the business of the Partnership.
The terms of transactions between the Partnership and its
affiliates are set forth in the consolidated financial
statements in Item 8 and in Item 13 below.
The Partnership issued 8,909,969 units of limited
partnership interest (the "Units") for $178,199,380. The
offering has been terminated and no additional Units will be
sold.
The proceeds from the offering were used to make investments
in six participating mortgage loans and land leases secured
by interests in real property. Additionally, proceeds were
used to make an investment in a short-term loan secured by
eleven partnership interests. The Partnership subsequently
acquired equity interests in the real estate securing all of
the loans through foreclosure or through transfers of
ownership in lieu of foreclosure. All property interests
but three were sold to unaffiliated purchasers or lost
through foreclosure prior to December 31, 1998. The
Partnership's remaining property interests are described in
Item 2 below.
The Military Crossing land was sold, for $350,000, in
February 2000 and the Partnership's remaining property
interests currently are being marketed for sale, with the
objective of completing sales of such interests during 2000.
There can be no assurance that these interests will be sold.
<PAGE>
The Partnership considers its business to include one
industry segment, investment in real property. Financial
information regarding the Partnership is in the
Partnership's consolidated financial statements in Item 8
below. The Partnership's real property investments are
subject to competition from similar types of properties in
the vicinities in which they are located. Further
information regarding competition and market conditions
where the Partnership's properties are located is set forth
in Item 7 below.
The Partnership has no employees.
All of the Partnership's business is conducted in the United
States.
ITEM 2. PROPERTIES
The Partnership's principal offices are located at Two World
Trade Center, New York, New York 10048. The Partnership has
no other offices.
As of December 31, 1999, the Partnership owned the following
interests in real estate. Generally, the leases pertaining
to the properties provide for pass-throughs to the tenants
of their pro-rata share of certain operating expenses. In
the opinion of the Managing General Partner, all of the
properties are adequately covered by insurance.
<PAGE>
<TABLE>
<CAPTION>
Date of Initial Net Rentable Type
of
Property, Completion/ Investment2 Area
Ownership of
Location and Type Acquisition1 ($000) (000
sq. ft.) Land & improvements
<S> <C> <C> <C> <C>
Deptford Crossing 1991/1992 $18,291 200
100% through interests
Deptford, NJ in general
partnerships
shopping center and a
corporation.
One Congress Street3 1990,91/1997 $19,500
office-246 58% general partner-
Boston, MA
retail-37 ship interest
through
office building and interests in
corporations.4
garage
Military Crossing N/A/1994 $300 .6 acres 100%
through interests
Norfolk, VA in general
partnerships
land and a
corporation.
_________________________
1.Acquisition date is date of foreclosure or in-substance
foreclosure.
2.The lower of estimated fair value of property or net
carrying value of loan at acquisition date.
3. Property is subject to a mortgage loan.
4.Dean Witter Realty Yield Plus II, L.P., an affiliate, owns
the remaining 42% general partnership interest. The total
net carrying value of the general partnership interest at
the acquisition date was approximately $33.4 million.
In February 2000, the Partnership sold the Military Crossing
land.
Each property, except the Military Crossing land, was built
with on-site parking facilities.
An affiliate of Realty was the property manager for the
Deptford Crossing property in 1999.
Further information relating to the Partnership's properties
is included in Item 7 and Notes 4, 5, 6, 7 and 8 to the
consolidated financial statements in Item 8 below.
ITEM 3. LEGAL PROCEEDINGS
None.
</TABLE>
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the
fiscal year to a vote of Unit holders.
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
An established public trading market for the Units does not
exist, and it is not anticipated that such a market will
develop in the future. Accordingly, information as to the
market value of a Unit at any given date is not available.
However, the Partnership does allow its limited partners
(the "Limited Partners") to transfer their Units, if a
suitable buyer can be located.
As of March 10, 2000, there were 14,502 holders of limited
partnership interests.
The Partnership is a limited partnership and, accordingly,
does not pay dividends. It does, however, make
distributions of cash to its partners. Pursuant to the
Partnership Agreement, distributable cash, as defined, is
paid 90% to the Limited Partners and 10% to the general
partners (the "General Partners"). Pursuant to the
Partnership Agreement, $1,239,345 of the General Partner's
share of such net cash flow distributable to them through
December 31, 1990, was deferred subject to receipt by the
Limited Partners of an 8% annual return on their invested
capital through that date.
During the year ended December 31, 1999, the Partnership
paid cash distributions aggregating $0.53 per Unit
(including approximately $0.16 per Unit of undistributed
proceeds from 1998 property sales paid 100% to the Limited
Partners). The total distributions amounted to $5,090,612,
with $4,722,284 distributed to the Limited Partners and
$368,328 distributed to the General Partners.
During the year ended December 31, 1998, the Partnership
paid cash distributions aggregating $10.97 per Unit
(including approximately $10.58 per Unit from proceeds from
the sales of the Michelson and 401 East Ontario properties
paid 100% to the Limited Partners). The total
<PAGE>
distributions amounted to $98,173,009, with $97,777,999
distributed to the Limited Partners and $395,010 distributed
to the General Partners.
The Partnership does not anticipate making regular
distributions to its partners in the future. Generally,
future cash distributions will be paid from proceeds
received from the sales of the One Congress Street and
Deptford Crossing properties and cash reserves.
Sale or financing proceeds will be distributed, to the
extent available: first, 97% to the Limited Partners and 3%
to the General Partners until the Limited Partners receive a
return of their invested capital plus an amount sufficient
to provide a 10% cumulative annual return thereon; second,
100% to the General Partners until they have received the
amount of any net cash flow previously deferred and not
distributed; and third, 85% to the Limited Partners and 15%
to the General Partners.
Taxable income generally will be allocated to the partners
in proportion to the distribution of distributable cash or
sale or financing proceeds, as the case may be (or 90% to
the Limited Partners and 10% to the General Partners if
there is no distributable cash or sale or financing
proceeds). At a minimum, the General Partners must be
allocated at least 1% of the taxable income from a sale or
financing. Tax losses, if any, will be allocated 90% to the
Limited Partners and 10% to the General Partners.
<PAGE>
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
The following sets forth a summary of selected financial
data for the Partnership:
<CAPTION>
DEAN WITTER REALTY YIELD PLUS, L.P.
For the years ended December 31, 1999, 1998, 1997, 1996 and
1995
1999 19981 19972
19963 19954
<S> <C> <C> <C> <C> <C>
Total revenues $ 4,679,722 $ 74,796,181 $
24,706,819 $ 20,071,013 $ 34,399,506
Income (loss)
before extra-
ordinary item $ 3,972,207 $ 57,364,812 $
6,322,426 $ (1,785,073) $ 1,343,582
Extraordinary item $ - $ - $ 548,3955 $
- - $ -
Net income (loss) $ 3,972,207 $ 57,364,812 $
6,870,821 $ (1,785,073) $ 1,343,582
per Unit of
limited
partnership
interest:
Income (loss)
before extra-
ordinary item $ 0.40 $ 6.39 $
.69 $ (.18) $ .17
Extraordinary
item $ - $ - $ .06 $
- - $ -
Net income
(loss) $ 0.40 $ 6.39 $ .75
$ (.18) $ .17
Cash distribution
paid per Unit
of limited
partnership
interest6 $ 0.537 $ 10.978 $
1.719 $ 1.2610 $ .60
Total assets at
December 31 $33,808,733 $ 35,082,602
$107,962,275 $126,752,827 $141,753,976
Long-term debt due
after one year $ - $ - $ 10,566,268 $
- - $ 19,823,736
__________________
</TABLE>
<PAGE>
1.Total revenues include gains on the sales of the Michelson
property ($25.2 million), the 401 East Ontario property
($39.8 million) and the Pine Ridge land ($0.4 million).
Net income includes these gains, reduced by the minority
interest share of the gain on Michelson ($12.7 million).
2.Total revenues, income before extraordinary item and net
income include reserves of $1.6 million of accrued but
unpaid interest on the One Congress Street participating
mortgage loan, and $5.2 million gain on sale of the
Greenway Pointe property.
3.Total revenues and net loss include reserves of $0.7
million of accrued but unpaid interest on the One Congress
Street participating mortgage loan, and net loss also
includes a $1.0 million impairment loss on principal of
the One Congress Street participating mortgage loan.
4.Total revenues and net income include a $3.3 million gain
on sale of three shopping centers and net income is net
of a $6.9 million loss on impairment of real estate.
5.Represents gain on extinguishment of debt through
foreclosure.
6.Distributions paid to Limited Partners for the years ended
December 31, 1999 and 1998 included returns of capital of
$0.13 and of $7.14 per Unit, respectively, calculated as
the excess of cash distributed per Unit over accumulated
earnings per Unit not previously distributed. All
distributions paid to Limited Partners in 1995 through
1997 represent returns of capital.
7. Includes approximately $0.16 per Unit of proceeds from
the 1998 sales of the 401 East Ontario and Pine Ridge
properties.
8.Includes approximately $10.58 per Unit of proceeds from
the sales of the Michelson and 401 East Ontario
properties.
9. Includes approximately $1.19 per Unit of proceeds from
sale of the Greenway Pointe property.
10. Includes approximately $0.72 per Unit of proceeds from
the December 1995 sale of three shopping centers.
The above financial data should be read in conjunction with
the consolidated financial statements and the related notes
in Item 8.
<pag>
DEAN WITTER REALTY YIELD PLUS, L.P.
ITEM 7.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.
The Partnership originally invested in seven loans or land
leases. Due to the past weakness in real estate markets, the
properties securing the loans did not generate sufficient
cash flow to fully service their debt. As a result, the
Partnership acquired equity interests in all of the
properties in which it originally invested, through
foreclosure or transfers of ownership in lieu of
foreclosure. No additional investments are planned.
The Michelson, 401 East Ontario Street and Pine Ridge
properties were sold in April 1998, July 1998 and November
1998, respectively. See Note 5 to the consolidated
financial statements.
As a result of the property sales, Partnership cash flow
from operations decreased during the year ended December 31,
1999 compared to 1998.
<PAGE>
In the third quarter of 1999, the Partnership had accepted a
bid from an unaffiliated third party to purchase the
Deptford Crossing property; however, the parties were unable
to successfully negotiate a sale agreement. As a result, the
Partnership is remarketing the property for sale. Currently,
the partnership which owns the One Congress Street property
("GCGA") is discussing the sale of the property with parties
it has identified as being interested in acquiring the
property. There can be no assurance that either of these
properties will be sold.
In February 2000, the Partnership sold the Military Crossing
land. In 1999, the Partnership received approximately
$45,000 of rental income and incurred minimal expenses from
holding the land. See Note 4 to the consolidated financial
statements.
The Partnership will not terminate until the remaining
property interests are sold and the litigation with respect
to the 401 East Ontario property, described in Note 5 to the
consolidated financial statements, is resolved.
The retail market in Deptford, New Jersey, the location of
Deptford Crossing, is an improving market, with no new
construction. During 1999 and at December 31, 1999,
occupancy at the property was 84% compared to average
occupancy of 79% in 1998 and 81% occupancy at December 31,
1998. Tenants occupying 10% or more of the property's space
include T.J. Maxx (16%), Marshalls (13%), Office Max (13%)
and Petsmart (13%); their leases expire in 2001, 2002, 2002
and 2009, respectively. The property is leased to eleven
other tenants. Leases of smaller tenants covering
approximately 10% of the space will expire in 2001.
The Partnership also leased 5% of the vacant space at
Deptford Crossing to a new tenant, which will occupy its
space beginning in the first quarter of 2000. In connection
with the new lease, the Partnership has a commitment to fund
tenant-related capital expenditures and leasing commissions
totaling $677,000.
The Managing General Partner has determined that the surface
of the parking lot at Deptford Crossing is in need of
repair, and, after consulting with an engineer, has
determined and planned the necessary repair work. The
Managing General Partner has also selected a contractor to
perform the repair work, which is expected to begin in the
second quarter of 2000. The cost of this work is expected
to be approximately $480,000.
<PAGE>
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 significant new construction in this market.
During the year ended December 31, 1999, occupancy at both
the parking garage and the office space at the property
remained at 100%. GCGA's lease with the Government Services
Administration ("GSA"), which occupies approximately 82% of
the office space is scheduled to expire no earlier than
August 1, 2003. The lease with the Commonwealth of
Massachusetts, which occupies the remaining office space is
scheduled to expire in January 2004. The lease for 100% of
the parking lot space at the property with Kinney System,
Inc. expires in December 2003. The retail space, which is
not a significant portion of the overall space, remains
substantially vacant.
GCGA is negotiating the leasing of all the vacant retail
space at the property to a single tenant. If GCGA is
successful, it may incur a significant amount of capital
expenditures and leasing commissions to lease the space.
The Partnership will be responsible for making additional
loans to GCGA to fund its 58% share of such expenditures
(the amount of which is uncertain at this time).
In 1998, the Partnership and Dean Witter Realty Yield Plus
II, L.P., an affiliate, (collectively, 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 the New GP, and during the second quarter of 1999, a
second engineering firm reviewed the first firm's work for
reasonable and completeness. The New GP, after consulting
with the engineering firms, has determined and planned the
necessary repair work, and has selected the contractors who
will perform the repair work. The New GP expects that the
repair work will begin during the second quarter of 2000,
and will be completed by the end of 2000. The cost of this
work to GCGA is expected to be between $2 million and $3
million. The Partnership will be responsible for making
additional loans to GCGA to fund its 58% share of such
fundings (between $1,160,000 and $1,740,000).
The Partnership will fund any capital costs required for the
Deptford Crossing property and its share of additional GCGA
loans from its cash
<PAGE>
reserves. However, any costs of tenant related capital
expenditures which have not been funded by the time of the
closing of the sale of a property may instead be deducted
from the sale proceeds.
During the year ended December 31, 1999, all of the
Partnership's remaining property interests generated
positive cash flow from operations, and it is anticipated
that the Deptford Crossing and One Congress Street
properties will continue to do so for the remainder of the
period the Partnership owns its interests.
As discussed in Note 5 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.
During the year ended December 31, 1999, the Partnership
made cash distributions of cash flow from operations and
proceeds from the 1998 sales of properties. See Item 5.
During the year ended December 31, 1999, the Partnership's
distributions to investors, contributions to GCGA (to fund
its share of tenant improvements and leasing commissions at
the One Congress Street property) and capital expenditures
relating to the Deptford Crossing property exceeded cash
flow from operations (including the $700,000 litigation
settlement) and distributions from GCGA. This deficiency was
funded with Partnership cash reserves.
In February 2000, the Partnership added approximately
$326,000 of net proceeds from the sale of the Military
Crossing land to its cash reserves. The Managing General
Partner believes that the Partnership's remaining cash
reserves are adequate for its needs in 2000. Generally,
future cash distributions will be paid from proceeds
received from the sales of the Deptford Crossing and One
Congress Street properties and cash reserves.
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
year ended December 31, 1999 compared to 1998 and 1998
compared to 1997 are primarily attributable to the
following:
<PAGE>
In 1998, the gains on sales of real estate resulted from the
sales of the Michelson, 401 East Ontario Street and Pine
Ridge properties in April, July and November, respectively.
In 1997, the gain on sale of real estate resulted from the
sale of the Greenway Pointe property in November.
Rental revenues, other revenues, property operating
expenses, depreciation and amortization expenses, and
general and administrative expenses decreased in 1999
compared to 1998 and in 1998 compared to 1997 as a result of
property sales. Such revenues and expenses also decreased
in 1998 compared to 1997 due to the loss through foreclosure
of the Genessee Crossing property in 1997.
The 1998 decreases in rental revenue were partially offset
by an increase in rental revenue at the 401 East Ontario
Street property in the months preceding its sale. This
increase resulted from higher occupancy and rental rates at
the property in 1998 and the discontinuance of rental
concessions and free rent.
Equity in earnings of the joint venture which owns the
general partnership interest in GCGA increased in 1999
compared to 1998 primarily due to the increase in rental
revenues at the One Congress Street property resulting from
an increase in office space occupancy from 73% in 1998 to
100% in 1999; the Partnership's 58% share of the increase
in revenues was $2,657,000. This increase was partially
offset by increases in the property's real estate taxes and
depreciation and amortization expenses relating to capital
expenditures and leasing commissions incurred in leasing the
remaining vacant space; the Partnerships' share of the
increases in these costs were $599,000 and $452,0000,
respectively. Equity in earnings of the GCGA joint venture
was lower in 1997 than 1998 because the Partnership did not
begin to recognize its share of earnings from this joint
venture until October 27, 1997.
In 1999 and 1998, there was no interest income recorded on
the Partnership's participating mortgage loan to GCGA
because the loan was accounted for as an investment in joint
venture.
Interest on cash and cash equivalents increased in 1998
compared to 1997 because interest earned on the proceeds
from the 1998 property sales (before such proceeds were
distributed to Limited Partners) exceeded interest earned on
sales proceeds in 1997. In 1999, there was minimal interest
earned on proceeds from property sales.
<PAGE>
The decreases in property operating expenses in 1999 were
partially offset by a reduction in the amounts of 401 East
Ontario Street litigation settlements received in 1999
($700,000) compared to 1998 ($1,200,000). See Note 5 to
consolidated financial statements.
Property operating expenses also decreased in 1998 at the
401 East Ontario Street property due to the absence of
expenditures for repairs (such costs totaled $2,750,000 in
1997) and due to the 1998 receipt of the $1.2 million
litigation settlement mentioned above.
There was no interest expense in 1999 because the debt
secured by the 401 East Ontario property was repaid in July
1998. Interest expense decreased in 1998 compared to 1997
due to the repayment of the 401 East Ontario Street debt and
the extinguishment through foreclosure of the debt secured
by the Genesee Crossing property in 1997.
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.
The extraordinary gain in 1997 resulted from the
extinguishment of the mortgage note payable secured by the
Genesee Crossing property.
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 financial statements and, as a result, has
not had a significant effect on the operations of the
Partnership or its properties.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
DEAN WITTER REALTY YIELD PLUS, L.P.
INDEX
(a) Financial statements
Page
Independent Auditors' Report
Consolidated Balance Sheets at December 31, 1999 and 1998
Consolidated Income Statements for the years ended
December 31, 1999, 1998 and 1997
Consolidated Statements of Partners' Capital for the years
ended December 31, 1999, 1998 and 1997
Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements
(b) Financial statement schedule
Real Estate and Accumulated Depreciation III
All schedules other than those indicated above have been
omitted because either the required information is not
applicable or the information is shown in the consolidated
financial statements or notes thereto.
<PAGE>
Independent Auditors' Report
The Partners
Dean Witter Realty Yield Plus, L.P.:
We have audited the accompanying consolidated balance sheets
of Dean Witter Realty Yield Plus, L.P. and consolidated
partnerships (the "Partnership") as of December 31, 1999 and
1998, and the related consolidated statements of income,
partners' capital and cash flows for each of the three years
in the period ended December 31, 1999. Our audits also
included financial statement schedule III. These financial
statements and the financial statement schedule are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements and the financial statement schedule based on our
audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, such consolidated financial statements
present fairly, in all material respects, the financial
position of Dean Witter Realty Yield Plus, L.P. and
consolidated partnerships as of December 31, 1999 and 1998,
and the results of their operations and their cash flows for
each of the three years in the period ended December 31,
1999, in conformity with generally accepted accounting
principles. Also, in our opinion, financial statement
schedule III, when considered in relation to the basic
consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth
therein.
Deloitte & Touche LLP
/s/Deloitte & Touche LLP
New York, New York
March 20, 2000
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Balance Sheets
December 31, 1999 and 1998
<CAPTION>
1999 1998
<S> <C>
<C>
ASSETS
Real estate:
Land $
1,770,000 $ 2,070,000
Building and improvements 10,728,014
10,580,047
12,498,014
12,650,047
Accumulated depreciation 2,248,131
1,954,876
10,249,883
10,695,171
Real estate held for sale 300,000
- -
Investment in joint venture 20,007,478
19,471,311
Cash and cash equivalents 2,796,347
4,555,260
Other assets 455,025
360,860
$ 33,808,733 $
35,082,602
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 226,968 $
382,432
Partners' capital (deficiency):
General partners (7,376,315)
(7,405,208)
Limited partners ($20 per Unit, 8,909,969 issued
and outstanding) 40,958,080
42,105,378
Total partners' capital 33,581,765
34,700,170
$ 33,808,733 $
35,082,602
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
CONSOLIDATED INCOME STATEMENTS
Years ended December 31, 1999, 1998 and 1997
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Revenues:
Rental $ $ $17,559,4
1,954,967 8,003,46 16
2
Gains on sales of real estate - 65,403,7 5,242,166
28
Equity in earnings of joint 2,474,464 462,869 264,862
venture
Interest on participating - - 697,153
mortgage loan
Interest on cash and cash 205,171 449,572 178,585
equivalents
Other 45,120 476,550 764,637
4,679,722 74,796,1 24,706,81
81 9
Expenses:
Property operating 220,310 2,492,12
2 11,241,22
8
Depreciation and amortization 309,732 847,026 4,058,531
Interest - 404,509 1,476,954
General and administrative 177,473 468,674 673,852
707,515 4,212,33 17,450,56
1 5
Income before minority interests
and extraordinary item 70,583,8 7,256,254
3,972,207 50
Minority interest - 13,219,0 933,828
38
Income before extraordinary item 3,972,207 57,364,8 6,322,426
12
Extraordinary item:
Gain on extinguishment of debt - 548,395
through foreclosure -
Net income $ $ $
3,972,2 57,364,8 6,870,821
07 12
Net income allocated to:
Limited partners $ $ $
3,574,986 56,902,0 6,707,955
45
General partners 462,767 162,866
397,221
$ $ $
3,972,207 57,364,8 6,870,821
12
Per Unit of limited partnership
interest:
Income before extraordinary $.40 $6.39 $.69
item
Extraordinary item - .06
-
Net income $.40 $6.39 $.75
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Statements of Partners' Capital
Years ended December 31, 1999, 1998 and 1997
<CAPTION>
Limited General
Partners Partners
Total
<S> <C> <C> <C>
Partners' capital (deficiency)
at January 1, 1997 $91,509,128
$(7,121,032) $84,388,096
Net income 6,707,955
162,866 6,870,821
Cash distributions (15,235,751)
(514,799) (15,750,550)
Partners' capital (deficiency)
at December 31, 1997 82,981,332
(7,472,965) 75,508,367
Net income 56,902,045
462,767 57,364,812
Cash distributions (97,777,999)
(395,010) (98,173,009)
Partners' capital (deficiency)
at December 31, 1998 42,105,378 (7,405,208) 3
4,700,170
Net income 3,574,986
397,221 3,972,207
Cash distributions (4,722,284)
(368,328) (5,090,612)
Partners' capital (deficiency) at
December 31, 1999 $40,958,080 $(7,376,315) $33,581,765
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Statements of Cash Flows
Years ended December 31, 1999, 1998 and 1997
<CAPTION>
1999 1998
1997
<S> <C> <C> <C>
Cash flows from operating
activities:
Net income $ $
3,972,207 57,364,81 $6,870,82
2 1
Adjustments to reconcile net
income to net
cash provided by operating
activities:
Equity in earnings of joint (2,474,46
venture 4) (462,869) (264,862)
Depreciation and amortization
309,732 847,026 4,058,531
Gains on sales of real estate - (65,403,7
28) (5,242,16
6)
Minority interests in earnings
of consolidated
Partnerships -
13,219,03 933,828
8
Gain on extinguishment of debt - -
(548,395)
(Increase) decrease in other (110,642)
assets 374,575 316,329
Decrease in accounts payable (155,464) (90,608)
and other liabilities (2,960,61
5)
Net cash provided by 2,978,239 6,033,478
operating activities 1,541,369
Cash flows from investing
activities:
Proceeds from sales of real
estate, net of closing costs - 137,280,7 10,600,35
94 3
Additions to real estate (498,404) (856,266)
(147,967)
Distributions from joint venture -
3,475,816 2,252,968
Contributions to joint venture (1,540,21
(1,537,51 5) (116,000)
9)
Net cash provided by
investing 9,628,08
activities 1,790,330 137,495,1 7
43
Cash flows from financing
activities:
Cash distributions (98,173,0 (15,750,5
(5,090,61 09) 50)
2)
Repayments of mortgage notes - (10,566,2
payable 68) (11,136,4
96)
Borrowings under mortgage note - -
payable 10,566,26
8
Minority interest in
distributions from - (31,934,8 (1,884,76
consolidated partnerships 45) 6)
Contributions by minority
interest to - 171,214 329,445
consolidated partnerships
Net cash used in financing (140,502, (17,876,0
activities (5,090,61 908) 99)
2)
Decrease in cash and cash (29,526) (2,214,53
equivalents (1,758,91 4)
3)
Cash and cash equivalents at 4,584,786 6,799,320
beginning of year 4,555,260
Cash and cash equivalents at end $ $
of year $2,796,34 4,555,260 4,584,786
7
(continued)
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Consolidated Statements of Cash Flows
Years ended December 31, 1999, 1998 and 1997
(continued)
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Supplemental disclosure of cash
flow information:
Cash paid for interest $ - $ $
404,509 1,476,954
Supplemental disclosure of non-
cash investing
activities:
Reclassification of real estate
held for sale: $ $ - $
Land 300,000 4,080,416
Building and improvements - - 45,012,80
1
Accumulated depreciation - - (12,196,8
46)
Real estate held for sale $ $ - $36,896,3
300,000 71
Acquisition of investment in
joint venture
resulting from restructuring
of participating mortgage
loan:
Investment in participating $ - $ - $18,995,3
mortgage loan, net 82
Deferred costs, net - -
344,951
Investment in joint venture $ - $ - $19,340,3
33
Supplemental disclosures of non-
cash
financing activities:
Extinguishment of debt and
loss of real
estate through foreclosure:
Balance due on mortgage $ - $ - $8,590,00
note payable 0
Write-off of real estate:
Land - - (1,709,53
5)
Building - - (6,830,46
5)
Accumulated depreciation - -
565,640
- (7,974,36
0)
Decrease in other assets - - (67,245)
Gain on extinguishment of debt $ - $ - $
due to foreclosure 548,395
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Notes to Consolidated Financial Statements
December 31, 1999, 1998 and 1997
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 to invest in participating mortgage loans
collateralized by income-producing properties. 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 Partnership issued 8,909,969 units of limited
partnership interests (the "Units") for $178,199,380. No
additional Units will be sold.
The Partnership expects to sell its remaining real estate
investments in 2000. Pursuant to the Partnership Agreement,
the sale of the Partnership's last such investment will
cause the dissolution of the Partnership. Thereafter, the
Partnership will wind up its affairs, make a final cash
distribution, and terminate. However, the Partnership will
not terminate until the litigation with respect to the 401
East Ontario property described in Note 5 is resolved.
2. Summary of Significant Accounting Policies
The financial statements include the accounts of the
Partnership, and the partnerships which own the Deptford
Crossing, Military Crossing, 401 East Ontario Street, Pine
Ridge, Michelson, Genessee Crossing and Greenway Point
properties on a consolidated basis.
Effective October 27, 1997, the Partnership acquired a 58%
interest in the corporate joint venture which owns the
general partnership interest in GCGA Limited Partnership
("GCGA"), the owner/borrower of the One Congress Street
property, and began accounting for this investment using the
equity method. See Note 6.
The Partnership's records are maintained on the accrual
basis of accounting for financial reporting and tax
purposes. The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of
<PAGE>
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from those estimates.
Real estate and the investment in joint venture, all of
which were acquired in settlement of loans, were recorded at
the lower of the carrying value of the original loan or the
estimated fair value of the real estate investment acquired
at the date of foreclosure or in-substance foreclosure.
Costs of improvements to real estate are capitalized and
repairs are expensed. Depreciation is recorded on the
straight-line method.
At least annually, and more often if circumstances dictate,
the Partnership evaluates the recoverability of the net
carrying value of its real estate and any related assets,
including the real estate and related assets owned by the
joint venture. As part of this evaluation, the Partnership
assesses, among other things, whether there has been a
significant decrease in the market value of any of its
properties. If events or circumstances indicate that the
net carrying value of a property may not be recoverable, the
expected future net cash flows from the property are
estimated for a period of approximately five years (or a
shorter period if the Partnership expects that the property
may be disposed of sooner), along with estimated sales
proceeds at the end of the period. If the total of these
future undiscounted cash flows were less than the carrying
amount of the property, the property would be written down
to its fair value as determined (in some cases with the
assistance of outside real estate consultants) based on
discounted cash flows, and a loss on impairment recognized
by a charge to earnings.
Because the determination of fair value is based upon
projections of future economic events such as property
occupancy rates, rental rates, operating cost inflation and
market capitalization rates which are inherently subjective,
the amounts ultimately realized at disposition may differ
materially from the net carrying value as of December 31,
1999. The cash flows used to evaluate the recoverability of
the assets and to determine fair value are based on good
faith estimates and assumptions developed by the Managing
General Partner. Unanticipated events and circumstances may
occur and some assumptions may not materialize; therefore
actual results may vary from the estimates and the variances
may be material. The Partnership may provide additional
write-downs, which could be material, in subsequent years if
real estate markets or local economic conditions change.
<PAGE>
Cash and cash equivalents consist of cash and highly liquid
investments with maturities, when purchased, of three months
or less.
Other assets include leasing commissions and, prior to
October 27, 1997, origination fees in connection with the
participating mortgage loan. Leasing commissions are
amortized over the applicable lease terms. Origination fees
were amortized over the loan term, which approximated the
effective yield method.
Rental income is accrued on a straight-line basis over the
terms of the leases. Accruals in excess of amounts payable
by tenants pursuant to their leases (resulting from rent
concessions or rents which periodically increase over the
term of a lease) are recorded as receivables and included in
other assets.
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.
No provision for income taxes has been made in the
consolidated financial statements, since the liability for
such taxes is that of the partners rather than the
Partnership.
The accounting policies used for tax reporting purposes
differ from those used for financial reporting purposes.
For tax purposes, the Partnership's subsidiaries are not
consolidated, and properties acquired by the subsidiaries
are not treated as real estate owned by the Partnership.
Instead, the Partnership recognizes taxable interest income
on its original participating mortgage loans. For all
subsidiaries owned by the Partnership through interests in
partnerships, the Partnership also recognizes its share of
the subsidiaries' taxable income (which is net of interest
expense on the participating mortgage loans which are still
outstanding). In addition, the Partnership's offering costs
are treated differently for tax and financial reporting
purposes. The tax basis of the Partnership's assets and
liabilities is approximately $45.6 million higher than the
amounts reported for financial statement purposes at
December 31, 1999.
The policies used by the subsidiary partnerships to account
for property operations for tax reporting purposes differ
from those used by the Partnership for financial reporting
purposes as follows: (a) depreciation is calculated using
accelerated methods, (b) rental income is recognized based
on the payment terms in the applicable leases, and (c) write-
downs for impairments of real estate are not deductible.
<PAGE>
3. Partnership Agreement
The Partnership Agreement provides that net cash flow, as
defined, will be paid 90% to the Limited Partners and 10% to
the General Partners. Pursuant to the Agreement, $1,239,345
of the General Partners' share of such net cash flow
distributable to them through December 31, 1990 was
deferred, subject to receipt by the Limited Partners of an
8% annual return on their invested capital through that
date.
Sale or financing proceeds will be distributed, to the
extent available: first, 97% to the Limited Partners and 3%
to the General Partners until the Limited Partners receive a
return of their invested capital plus an amount sufficient
to provide a 10% cumulative annual return thereon; second,
100% to the General Partners until they have received the
amount of any net cash flow previously deferred and not
distributed; and third, 85% to the Limited Partners and 15%
to the General Partners.
Taxable income generally will be allocated to the partners
in proportion to the distribution of distributable cash or
sale or financing proceeds, as the case may be (or 90% to
the Limited Partners and 10% to the General Partners if
there is no distributable cash or sale or financing
proceeds). At a minimum, the General Partners must be
allocated at least 1% of the taxable income from a sale or
financing. Tax losses, if any, are allocated 90% to the
Limited Partners and 10% to the General Partners.
Distributions paid to Limited Partners in 1999 and 1998
included returns of capital of $0.13 and $7.14 per Unit,
respectively, calculated as the excess of cash distributed
per Unit over accumulated earnings per Unit not previously
distributed. All distributions paid to Limited Partners in
1997 represented returns of capital.
4. Real Estate and Real Estate Held for Sale
The locations, years of acquisition through foreclosure or
in-substance foreclosure and net carrying values of the
Partnership's properties are as follows:
<PAGE>
<TABLE>
<CAPTION>
Year of December 31,
Property Acquisition 1999
1998
<S> <C> <C> <C>
Deptford Crossing, Deptford, NJ 1992
$10,249,883 $10,395,171
Military Crossing (land), Norfolk, VA 1994
- - 300,000
$10,249,883
$10,695,171
</TABLE>
<PAGE>
The Deptford Crossing property was subject to a first
mortgage loan, which was repaid in December 1997 with funds
obtained through a revolving credit facility secured by the
401 East Ontario Street property. All amounts due under the
revolving credit facility were repaid in July 1998 with a
portion of the proceeds from the sale of the 401 East
Ontario Street property (see Note 7).
On February 14, 2000, the Partnership sold the Military
Crossing land, which had a net carrying value of $300,000 at
December 31, 1999, for a negotiated sale price of $350,000.
The Partnership added approximately $326,000, (the sale
proceeds, net of closing costs) to the Partnership's cash
reserves upon receipt. The net carrying value of the land
was reclassified to real estate held for sale as of December
31, 1999.
5. Disposition of Real Estate
401 East Ontario Street
In July 1998, the Partnership sold the 401 East Ontario
Street property to Streeterville Development Associates, LLC
("SDA") for a negotiated sale price of $74.5 million. The
Partnership used a portion of the sale proceeds to repay the
mortgage note payable to which the property was subject (see
Note 7). SDA is an unaffiliated party; however, Draper and
Kramer Inc., which owns 37.5% of SDA, was the manager of the
property while it was owned by the Partnership.
The Partnership received sale proceeds, net of the mortgage
note repayment, closing costs and other deductions, of
approximately $62.7 million. The Partnership distributed
100% to Limited Partners approximately $61.8 million of such
proceeds ($6.94 per Unit) on July 31, 1998 and the remaining
proceeds ($0.10 per Unit) on October 27, 1999. The
Partnership recognized a gain on this sale of approximately
$39.8 million, which was allocated 100% to the Limited
Partners in accordance with the Partnership Agreement.
In 1996, the Partnership discovered that certain of the
interior walls of the 401 East Ontario Street building did
not meet the City of Chicago's fire code requirements. The
Partnership retained the services of
<PAGE>
nationally recognized consultants to review the building's
fire and life safety systems and determine how to fix the
problems they identified with those systems. The City of
Chicago agreed with the proposed corrections and the
Partnership commenced repair work in 1996. The Partnership
completed such repairs in 1997. The total cost of these
measures was approximately $3.6 million, of which
approximately $2.75 million was incurred in 1997. In
addition, free rent and rent concessions were offered to the
residents in order to maintain occupancy during the period
in 1997 when repairs were being performed. The building's
insurance carriers were notified of the repairs to the fire
and life safety systems.
In 1995 and 1996, the Partnership also incurred a total of
$5.6 million, net of a $0.1 million insurance settlement, to
repair cracking and spalling of the concrete exterior of the
building. Reports by three independent engineering firms in
1995 noted that the cracking and spalling were highly
unusual for a building of the age of the 401 East Ontario
Street property, and attributed the problems to both
defective design and construction of the building.
The Partnership initiated litigation against all parties it
deemed responsible for all of the building's defects. 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 the building's
testing agency. Due to the uncertainty of realization of
the 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 building.
In the years 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.
The Partnership incurred legal fees of approximately
$273,000, $222,000 and $425,000 in 1999, 1998 and 1997
respectively, in connection with the litigation.
Michelson, Irvine, California
In April 1998, DW Michelson Associate ("DMA") sold its 90%
general partnership interest in the Company to SC
Enterprises ("SCE"), the 10% limited partner of DMA, along
with two promissory notes totaling approximately $1.2
million due from SCE, for a negotiated aggregate sale price
of $64 million. SCE assigned its right to purchase the
interest in
<PAGE>
the Company to Spieker Properties, L.P., which is not
affiliated with the Partnership or SCE.
The sale price was received in cash at closing on April 3,
1998. On April 28, 1998, the Partnership distributed
approximately $32.4 million ($3.635 per Unit), its share of
the proceeds from the sale (net of closing costs), 100% to
the Limited Partners. DMA recognized a gain on sale of this
property of $25.2 million. The Partnership's share of this
gain was approximately $12.6 million; such gain was
allocated 100% to the Limited Partners in accordance with
the Partnership Agreement.
Pine Ridge
In November 1998, the Partnership sold the Pine Ridge
unimproved land parcel to an unaffiliated purchaser for a
negotiated sale price of $550,000. The proceeds from the
sale, net of closing costs, of approximately $515,000 were
distributed 100% to Limited Partners ($0.06 per Unit) on
October 27,1999. The Partnership recognized a gain on this
sale of approximately $372,000, which was allocated 100% to
the Limited Partners in accordance with the Partnership
Agreement.
Genessee Crossing
The Partnership's 9.375% mortgage note payable secured by
the Genessee Crossing shopping center matured in May 1997.
The Partnership determined that it could not refinance the
loan without making an additional equity investment in the
property, and determined that in light of its estimate of
the property's market value such an additional investment
would not be in the Partnership's best interest. As a
result, the property was foreclosed upon in August 1997, and
in March 1998, the lender took final possession of the
property. Since the amount of the mortgage note payable
($8,590,000) exceeded the net book value of the property and
related assets (approximately $8,040,000), the Partnership
recognized an extraordinary gain on the extinguishment of
debt of approximately $550,000 in 1997.
Greenway Pointe, Columbia, Maryland
In November 1997, the Partnership sold the Greenway Pointe
property to an unaffiliated party for a negotiated sale
price of $11,050,000. The proceeds from the sale, net of
closing costs, were approximately $10.6 million, and were
distributed 100% to the Limited Partners in December 1997.
The Partnership recognized a gain on this sale of
approximately
<PAGE>
$5.2 million, which was allocated 100% to Limited Partners
in accordance with the Partnership Agreement.
6. Investment in Joint Venture
One Congress Street, Boston, Massachusetts
The Partnership and Yield Plus II (collectively the
"Lender") made a $59.2 million participating second mortgage
loan on the One Congress Street building (the "Loan") to
GCGA. The Loan is due in 2001. Base interest was
originally payable at 8% and the first $250,000 of net
revenues in any calendar year from the property was payable
as additional interest. The Lender also owned a 58%
interest in adjusted net revenue and capital proceeds
generated by the property. The property is subject to a
first mortgage loan.
In October 1996, GCGA defaulted on the Loan by failing to
pay timely its debt service. Thereafter, the Lender
accelerated the Loan and attempted to take possession of the
property. On October 15, 1996, GCGA filed a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code. On
October 27, 1997, the Lender entered into a settlement
agreement with GCGA (the "Agreement"). As part of the
Agreement, a new corporate joint venture, which is jointly
owned by the Partnership (58%) and Yield Plus II (42%)
became the sole general partner of GCGA (the "New General
Partner"), with an aggregate 19.81% ownership interest in
the property. The Partnership and Yield Plus II have agreed
to make all decisions concerning the property jointly. The
Lender has retained an affiliate of GCGA`s original general
partner as property manager.
The Agreement also provides the following:
(a) as a result of their interests in the New General
Partner, the Partnership and Yield Plus II are required
to make additional loans, if needed, to fund future
capital expenditures and leasing commissions at the
property (the "New Loans") in proportion to their
ownership of the New General Partner. Any New Loans
will bear interest at 12%, payable monthly from
available cash flow generated by the property after
payment of debt service on the first mortgage loan and
certain operating escrows;
(b) the interest rate on the principal of the Loan and past
due interest thereon (aggregating approximately $12.3
million at the date of the agreement) has been increased to
10%, payable monthly from available cash flow generated by
the property after payment of debt service on the New Loans;
<PAGE>
(c) any future unpaid debt service will accrue interest at
10%; and
(d) the Partnership's and Yield Plus II's interest in
adjusted net revenue and capital proceeds generated by
the property was increased to 80%.
The Agreement effectively changed the Lender from a
participating lender to GCGA into the general partner in a
partnership which owns the One Congress Street property.
The Partnership, through the New General Partner, owns an
11.5% partnership interest in GCGA and, accordingly, at
October 27, 1997, the Partnership recorded its investment at
an amount equal to the net carrying value of its investment
in the participating mortgage loan and related assets (which
carrying value was less than the estimated fair value of the
property at that date). The Partnership began, effective
October 27, 1997, to account for its investment on the
equity method (and stopped recognizing interest income from
its participating mortgage loan). Because the Partnership
and Yield Plus II control GCGA and are entitled to receive
substantially all the cash flow and other economic benefits
from the property, the Partnership and Yield Plus II
recognize all of GCGA's profit and losses in proportion to
their ownership of the New General Partner.
In 1997 (prior to the Agreement), the Partnership reserved
accrued but unpaid interest on the Loan of $1,560,000.
<PAGE>
<TABLE>
<CAPTION>
Summarized financial information of GCGA is as follows:
December 31,
1999 1998
<S> <C> <C>
ASSETS
Land and building, net $59,243,308 $
60,698,880
Other 8,331,755
6,394,881
Total assets $67,575,063 $
67,093,761
LIABILITIES AND PARTNERS' CAPITAL DEFICIENCY
First mortgage loan $37,750,000 $
37,750,000
Second mortgage loan and accrued interest
84,028,030 79,023,308
Other liabilities 3,630,657
3,190,814
Partners' capital deficiency (57,833,624)
(52,870,361)
Total liabilities and partners' capital deficiency
$67,575,063 $ 67,093,761
STATEMENTS OF OPERATIONS
Years ended December
31,
1999 1998 1997
Revenues:
Rental $16,094,032
$11,513,818 $ 11,498,722
Other 311,709
79,390 238,937
16,405,741
11,593,208 11,737,659
Expenses:
Interest on second mortgage loan 8,346,614
8,078,420 8,036,377
Other interest 3,785,371
3,798,362 3,768,876
Property operating and other 6,498,471
5,946,569 5,075,676
Depreciation and amortization 2,738,548
1,960,626 1,940,143
21,369,004
19,783,977 18,821,072
Net loss $(4,963,263)
$(8,190,769) $ (7,083,413)
GCGA's second mortgage loan consists of the Loan. The
accounting policies of GCGA are consistent with those of the
Partnership.
</TABLE>
<PAGE>
7. Mortgage Notes Payable
A mortgage note securing the Deptford Crossing property was
scheduled to mature in September 1997. Interest on this
mortgage note (bearing a rate at the Partnership's election
of LIBOR plus 0.375%, the bank's quoted variable rate plus
1.375% or the bank's fixed rate) and principal payments of
$15,000 were payable monthly. In December 1997, the
Partnership borrowed $10,566,268 under a revolving credit
facility to repay the Deptford mortgage note and reimburse
the lender for all of its expenses caused by the forbearance
by the lender from exercising its rights during the two
months the loan was in default. Interest on the revolving
credit facility was payable monthly (bearing a rate at the
Partnership's election of Prime Rate or LIBOR plus 1.15%).In
July 1998, the Partnership paid in full all amounts due
under the revolving credit facility using a portion of the
sale proceeds from the sale of the 401 East Ontario Street
property (see Note 5).
8. Leases
Minimum future rentals under noncancellable operating leases
at the Deptford Crossing shopping center as of December 31,
1999 are as follows:
Year ending December 31,
2000 $1,548,870
2001 1,496,238
2002 490,444
2003 399,278
2004 352,510
Thereafter 1,340,562
Total $5,627,902
The Partnership has determined that all leases relating to
the shopping center are operating leases. These leases
range in term from two to ten years, and generally provide
for fixed minimum rent with expense reimbursement clauses.
9. Related Party Transactions
An affiliate of Realty provided property management services
for the Deptford Crossing property through December 31, 1999
and for the Michelson, Genessee Crossing and Greenway Pointe
properties until they were sold. The Partnership paid the
affiliate property management fees (included in property
operating expenses) of approximately $63,000, $79,000 and
$220,000 for the years ended December 31, 1999, 1998 and
1997, respectively.
<PAGE>
Realty performs administrative functions, and processes
certain investor and tax information on behalf of the
Partnership. For the years ended December 31, 1999, 1998
and 1997, Realty was reimbursed approximately $68,000,
$275,000 and $391,000, respectively, for these services
(included in general and administrative expenses).
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III.
ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership is a limited partnership and has no
directors or officers.
The directors and executive officers of the Managing General
Partner are as follows:
Position with the
Name Managing General Partner
William B. Smith Chairman of the Board of
Directors
E. Davisson Hardman, Jr. President and Director
Ronald T. Carman Secretary and Director
Lewis A. Raibley, III Director
All of the directors have been elected to serve until the
next annual meeting of the Shareholders of the Managing
General Partner or until their successors are elected and
qualify. Each of the executive officers has been elected to
serve until his successor is elected and qualifies.
William B. Smith, age 56, has been a Managing Director of
Morgan Stanley & Co. Incorporated ("MWD")and Co-head of
Morgan Stanley Realty Incorporated since the merger of
Morgan Stanley Group Inc. and Dean Witter Discover & Co. in
1997. Prior to the merger, Mr. Smith was Executive Vice
President of Dean Witter Reynolds Inc. and Director of its
Investment Banking department since January 1987. Mr. Smith
joined Dean Witter in 1982 as Co-Director of Dean Witter
Realty.
E. Davisson Hardman, Jr., age 50, has been a Managing
Director of Morgan Stanley Asia, Ltd. since July 1997, and a
Managing Director of Dean Witter Realty Inc., which he
joined in 1982.
Ronald T. Carman, age 48, is a Director and the Secretary of
Dean Witter Realty Inc. He has been an Assistant Secretary
of Morgan Stanley Dean Witter & Co. ("MWD") and a Managing
Director of Morgan Stanley & Co. Inc. since July 1998.
Previously, he was a Senior Vice President and Associate
General Counsel of Dean Witter Reynolds Inc., which he
joined in 1984.
<PAGE>
Lewis A. Raibley, III, age 38, is a Senior Vice President
and Controller in the Individual Asset Management Group of
MWD. From July 1997 to May 1998, Mr. Raibley was Senior
Vice President and Director in the Internal Reporting
Department of MWD; from 1992 to 1997, he served as Senior
Vice President and director in the Financial Reporting and
Policy Division for MWD. He has been with MWD and its
affiliates since 1986.
There is no family relationship among any of the foregoing
persons.
ITEM 11. EXECUTIVE COMPENSATION
The General Partners are entitled to receive cash
distributions, when and as cash distributions are made to
the Limited Partners, and a share of taxable income or tax
loss. Descriptions of such distributions and allocations
are in Item 5 above. The General Partners received cash
distributions totaling $368,328, $395,010, and $514,799,
during the years ended December 31, 1999, 1998 and 1997,
respectively. The General Partners have deferred
distribution of their share of all proceeds from property
sales to date.
The General Partners and their affiliates were paid certain
fees and reimbursed for certain expenses. Information
concerning such fees and reimbursements is contained in Note
9 to the consolidated financial statements in Item 8 above.
The directors and executive officers of the Partnership's
Managing General Partner received no renumeration from the
Partnership.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
(a) The following table sets forth certain information
regarding each person or group of persons known to the
Partnership to be the beneficial owner of more than 5% of
the Units.
Units
Name of Beneficial Owners
beneficially owned
Number
Percent
Madison Avenue Investment
Partners, LLC ("MAIP");
First Equity Realty, LLC("FER");
The Harmony Group II, LLC ("Harmony");
Ronald M. Dickerman;
Bryan E. Gordon (collectively the
"Reporting Persons")
454,657 5.10%
The information set forth in this Item 12 (a) is based on
Amendment No. 1 to a Schedule 13G Information Statement
filed for the year ended December 31, 1999 by the Reporting
Persons. Such Schedule 13G discloses that each Reporting
Person beneficially owns 454,657 Units, MAIP has sole voting
and sole dispositive power over 454,657 Units and shared
voting and shared dispositive over 454,617 Units and that
each of the other Reporting Persons has shared voting and
shared dispostive power over 454,657 Units.
The address of MAIP, Harmony and Mr. Gordon is P.O. Box
7533, Incline Village, Nevada 89452. The address of FER and
Mr. Dickerman is 555 Fifth Avenue, 9th Floor, NY, NY 10017.
(b) The executive officers and directors
of the Managing General Partner own the following
Units as of February 29, 2000:
(3)
Amount
and Nature of
(1) (2) of Beneficial
Title of Class Ownership Name of
Beneficial Owner Ownership
Limited Partnership All directors and executive
*
Interests officers of the Managing
General Partner, as a group
__________________________
<PAGE>
* Own, by virtue of ownership of limited partnership
interests in the Associate General Partner, less than 1%
of the Units of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As a result of their being partners of a limited partnership
which is the limited partner of the Associate General
Partner, certain current and former officers and directors
of the Managing General Partner also own indirect general
partnership interests in the Partnership. The Partnership
Agreement of the Partnership provides that cash
distributions and allocations of income and loss to the
General Partners shall be distributed or allocated 50% to
the Managing General Partner and 50% to the Associate
General Partner. The General Partners' share of cash
distributions and income or loss is described in Item 5
above.
All of the outstanding shares of common stock of the
Managing General Partner are owned by Realty, a Delaware
corporation which is a wholly-owned subsidiary of Morgan
Stanley Dean Witter & Co. The general partner of the
Associate General Partner is the Managing General Partner.
The limited partner of the Associate General Partner is LSYP
87, L.P., a Delaware limited partnership. Realty and
certain current and former officers and directors of the
Managing General Partner are partners of LSYP 87, L.P.
Additional information with respect to the directors and
executive officers and compensation of the Managing General
Partner and affiliates is contained in Items 10 and 11
above.
The 401 East Ontario Street property was developed by a
joint venture between a third party developer and an entity
comprised of former and current Realty executives, several
of whom are former or current executive officers of the
Managing General Partner. In January 1994, the Partnership
obtained ownership of the property by deed-in-lieu of
foreclosure.
The One Congress Street property was developed by a
partnership between a Maryland-based developer and an entity
comprised of former Realty executives, some of whom were
formerly executive officers of the Managing General Partner.
This entity withdrew as a partner of the borrower in
September 1993, so the borrower partnership was controlled
solely by the Maryland-based developer until control of the
borrower was transferred to the Partnership and Yield Plus
II in 1997.
The General Partners and their affiliates were paid certain
fees and reimbursed for certain expenses. Information
concerning such fees and
<PAGE>
reimbursements is contained in Note 9 to the Consolidated
Financial Statements in Item 8 above. The Partnership
believes that the payment of fees and the reimbursement of
expenses to the General Partners and their affiliates are on
terms as favorable as would be obtained from unrelated third
parties.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM
8-K
(a) The following documents are filed as part of this
Annual Report:
1. Financial Statements (see Index to Financial
Statements filed as part of Item 8 of this Annual
Report).
2. Financial Statement Schedules (see Index to
Financial Statements filed as part of Item 8 of
this Annual Report).
3. Exhibits
(3)(a) Amended and Restated Agreement of
Limited Partnership dated as of April 29, 1987 set
forth in Exhibit A to the Prospectus included in
Registration Statement Number 33-11648 is
incorporated herein by reference.
(3)(b) Certificate of Limited Partnership dated as of April 29, 1987
incorporated by reference in Registration Statement Number 33-11648 is
incorporated herein by reference.
(4)(a) Amended and Restated Agreement of Limited Partnership dated as
of April 29, 1987 set forth in Exhibit A to the Prospectus included in
Registration Statement Number 33-11648 is incorporated herein by
reference.
(4)(b)Certificate of Limited Partnership dated as of April 29, 1987
incorporated by reference in Registration Statement Number 33-11648 is
incorporated herein by reference.
(10)(a) Partnership Agreement for DW Michelson Associates dated March
14, 1988. Incorporated by reference to Exhibit 10(a) to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1995.
(10)(b) First Mortgage Promissory Note, dated April 26, 1989, between
the Government Center Garage Realty Trust (Maker) and Dean Witter
Realty Yield Plus, L.P. (Holder) was filed as Exhibit to Amendment No.
2 to Current Report on Form 8-K on April 26, 1989 and is incorporated
herein by reference.
<PAGE>
(10)(c) Construction Loan Agreement, dated April 26, 1989, between
Government Center Garage Realty Trust, as Borrower and Dean Witter
Realty Yield Plus, L.P. and Dean Witter Realty Yield Plus II, L.P., as
Lender was filed as Exhibit to Amendment No. 2 to Current Report on
Form 8-K on April 26, 1989 and is incorporated herein by reference.
(10)(d)Intercreditor Agreement among Dean Witter Realty Yield Plus,
L.P., Dean Witter Realty Yield Plus II, L.P., and Realty Management
Services Inc. dated as of April 26, 1989 was filed as Exhibit to
Amendment No. 2 to Current Report on Form 8-K on April 26, 1989 and is
incorporated herein by reference.
(10)(e)First Amendment to Construction Loan Agreement dated October
12, 1989 between Government Center Garage Realty Trust, as Borrower
and Dean Witter Realty Yield Plus, L.P. and Dean Witter Realty Yield
Plus II, L.P., as Lender. Incorporated by reference to Exhibit 10(e)
to Registrant's Annual Report on Form 10-K for the year ended December
31, 1995.
(10)(f)Amended and Restated Construction Loan/Office Loan Promissory
Note dated October 12, 1989 between Government Center Garage Realty
Trust (Maker) and Dean Witter Realty Yield Plus, L.P. (Holder).
Incorporated by reference to Exhibit 10(f) to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1995.
(10)(g)Second Amendment to Construction Loan Agreement dated June 22,
1990 between Government Center Garage Realty Trust, as Borrower and
Dean Witter Realty Yield Plus, L.P. and Dean Witter Realty Yield Plus
II, L.P., as Lender. Incorporated by reference to Exhibit 10(g) to
Registrant's Annual Report on Form 10-K for the year ended December
31, 1995.
(10)(h)First Amendment to Amended and Restated Construction
Loan/Office Loan Promissory Note dated June 22, 1990 between
Government Center Garage Realty Trust (Maker) and Dean Witter Realty
Yield Plus, L.P. (Holder). Incorporated by reference to Exhibit 10(h)
to Registrant's Annual Report on Form 10-K for the year ended December
31, 1995.
(10)(i)Supplemental Loan Agreement dated September 20, 1993 between
Government Center Garage Realty Trust, as Borrower and Dean
<PAGE>
Witter Realty Yield Plus, L.P. and Dean Witter Realty Yield
Plus II, L.P., as Lender. Incorporated by
reference to Exhibit 10(i) to Registrant's Annual
Report on Form 10-K for the year ended December
31, 1995.
(10)(j)Second Amendment to Notes dated September 20, 1993 between
Government Center Garage Realty Trust (Maker) and Dean Witter Realty
Yield Plus, L.P. and Dean Witter Realty Yield Plus II, L.P.,
(Holders). Incorporated by reference to Exhibit 10(j) to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1995.
(10)(k)Supplement and Amendment to Construction Loan Agreement dated
October 27, 1997 between Government Center Garage Realty Trust
(Borrower) and Dean Witter Realty Yield Plus, L.P. and Dean Witter
Realty Yield Plus II, L.P.(Lenders) was filed as an Exhibit to Form 8-
K on October 27, 1997 and is incorporated herein by reference.
(10)(l)Third Amendment to Notes dated October 27, 1997 between
Government Center Garage Realty Trust (Maker) and Dean Witter Realty
Yield Plus, L.P. and Dean Witter Realty Yield Plus II, L.P. (Holder)
was filed as an Exhibit to Form 8-K on October 27, 1997 and is
incorporated herein by reference.
(10)(m)Purchase and Sale Agreement dated as of December 26, 1997 among
DW Michelson Associates as Seller, Michelson Company Limited
Partnership as Acquired Partnership and SC Enterprises as Purchaser,
First Amendment to Purchase and Sale Agreement dated as of February 3,
1998 and Assignment and Assumption Agreement dated as of April 3, 1998
were collectively filed as an Exhibit to Form 8-k on April 3, 1998 and
is incorporated herein by reference.
(10)(n)Purchase and Sale Agreement among DW Lakeshore Associates,
L.P., a Delaware Limited Partnership, as Seller and Streeterville
Development Associates, LLC, an Illinois Limited Liability Company, as
Purchaser dated July 17, 1997 was filed as an Exhibit to Form 8-k on
July 17, 1998 and is incorporated herein by reference.
(21) Subsidiaries:
Deptford Crossing Associates, a New Jersey
limited partnership.
DW Lakeshore Associates, an Illinois limited
partnership.
<PAGE>
DW Columbia Gateway Associates, a Maryland limited
partnership.
DW Michelson Associates, a California limited
partnership.
DW Community Centers Limited Partnership, a
Delaware
limited partnership.
DW Maplewood Inc.
(27) Financial Data Schedule
(d) Financial Statement Schedules
1. Financial Statements of GCGA Limited
Partnership, owner of an office building/parking
garage located in Boston, Massachusetts.
<PAGE>
<TABLE>
SCHEDULE III
DEAN WITTER REALTY YIELD PLUS, L.P.
Real Estate and Accmulated Depreciation
December 31, 1999
<CAPTION>
Initial Cost to
Partnership (A)
Building and
Description Encumbrances Land
Improvements Total
<S> <C> <C> <C> <C>
Shopping Center, Deptford, NJ - $ 6,250,094
$12,041,180 $18,291,274
Land, Military Crossing,
Norfolk, VA - 300,000 -
300,000
- $ 6,550,094
$12,041,180 $18,591,274
Cost Loss on
Reclassification
Capitalized Impairment to
Real Estate
Subsequent to of Land
and Held for
Description Acquisition Real Estate Sale
Shopping Center, Deptford, NJ $1,138,199 $(6,931,459) -
Land, Military Crossing, Norfolk, VA - -
(300,000)
$1,138,199 $(6,931,459) $
(300,000)
SCHEDULE III (continued)
Gross Amount
at which Carried at End of Period (B)
Buildings and
Depreciation
Description Land Improvements Total
(C)
Shopping Center, Deptford, NJ $1,770,000 $10,728,014
$12,498,014 $2,248,131
Land, Military Crossing,
Norfolk, VA - - - -
$1,770,000 $10,728,014
$12,498,014 $2,248,131
Life on which
Depreciation
Date of in Latest
Income
Description Construction Date
Acquired Statements is Computed
Shopping Center, Deptford, NJ 1991 December 1992
40 years
Land, Military Crossing, Norfolk, VA N/A April
1994 -
</TABLE>
<PAGE>
<TABLE>
Notes:
(A)The basis in the properties at acquisition for financial
reporting purposes is the lower of net carrying value of the
original loan or estimated fair market value of the property.
Losses on foreclosure of real estate and real estate
impairment losses do not reduce the basis for federal income
tax purposes.
(B)Reconciliation of real estate owned:
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Balance at beginning of period $12,650,047 $
50,340,229 $115,682,356
Additions during period:
Additions 147,967
498,404 856,266
Foreclosure of real estate - -
(8,540,000)
Sale of real estate - (38,188,586)
(8,565,176)
Reclassification to real estate held
for sale (300,000) -
(49,093,217)
Balance at end of period $12,498,014 $
12,650,047 $ 50,340,229
1999 1998 1997
(C)Reconciliation of accumulated depreciation:
Balance at beginning of year $ 1,954,876 $
5,847,422 $ 18,386,846
Depreciation expense 293,255
748,020 3,673,145
Foreclosure of real estate - -
(565,640)
Sale of real estate - (4,640,566)
(3,450,083)
Reclassification of real estate held
for sale - -
(12,196,846)
Balance at end of period $ 2,248,131 $
1,954,876 $ 5,847,422
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DEAN WITTER REALTY YIELD PLUS, L.P.
By: Dean Witter Realty Yield Plus Inc.
Managing General Partner
By: /S/ E. Davisson Hardman, Jr. Date: March 30,
2000
E. Davisson Hardman, Jr.
President
By: /S/ Charles M. Charrow Date: March 30,
2000
Charles M. Charrow
Controller
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities
and on the dates indicated.
DEAN WITTER REALTY YIELD PLUS INC.
Managing General Partner
/S/ William B. Smith Date: March 30,
2000
William B. Smith
Chairman of the Board of Directors
/S/E. Davisson Hardman, Jr. Date: March 30,
2000
E. Davisson Hardman, Jr.
Director
/S/ Lewis A. Raibley, III Date: March 30,
2000
Lewis A. Raibley, III
Director
/S/ Ronald T. Carman Date: March 30,
2000
Ronald T. Carman
Director
<PAGE>
DEAN WITTER REALTY YIELD PLUS, L.P.
Year Ended December 31, 1999
Exhibit Index
Exhibit
No.
Description
(3)(a) Amended and Restated Agreement of Limited
Partnership dated as of April 29, 1987 set forth
in Exhibit A to the Prospectus included in
Registration Statement Number 33-11648 is
incorporated herein by reference.
(3)(b) Certificate of Limited Partnership dated as of
April 29, 1987 incorporated by reference in
Registration Statement Number 33-11648 is
incorporated herein by reference.
(4)(a) Amended and Restated Agreement of Limited
Partnership dated as of April 29, 1987 set forth
in Exhibit A to the Prospectus included in
Registration Statement Number 33-11648 is
incorporated herein by reference.
(4)(b) Certificate of Limited Partnership dated as of
April 29, 1987 incorporated by reference in
Registration Statement Number 33-11648 is
incorporated herein by reference.
(10)(a) Partnership Agreement for DW Michelson Associates
dated March 14, 1988. Incorporated by reference
to Exhibit 10(a) to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1995.
(10)(b) First Mortgage Promissory Note, dated April 26,
1989, between the Government Center Garage Realty
Trust (Maker) and Dean Witter Realty Yield Plus,
L.P. (Holder) was filed as Exhibit to Amendment
No. 2 to Current Report on Form 8-K on April 26,
1989 and is incorporated herein by reference.
E-1
<PAGE>
(10)(c) Construction Loan Agreement, dated April 26, 1989,
between Government Center Garage Realty Trust, as
Borrower and Dean Witter Realty Yield Plus, L.P.
and Dean Witter Realty Yield Plus II, L.P., as
Lender was filed as Exhibit to Amendment No. 2 to
Current Report on Form 8-K on April 26, 1989 and
is incorporated herein by reference.
(10)(d) Intercreditor Agreement among Dean Witter Realty
Yield Plus, L.P., Dean Witter Realty Yield Plus
II, L.P., and Realty Management Services Inc.
dated as of April 26, 1989 was filed as Exhibit to
Amendment No. 2 to Current Report on Form 8-K on
April 26, 1989 and is incorporated herein by
reference.
(10)(e) First Amendment to Construction Loan Agreement
dated October 12, 1989 between Government Center
Garage Realty Trust, as Borrower and Dean Witter
Realty Yield Plus, L.P. and Dean Witter Realty
Yield Plus II, L.P., as Lender. Incorporated by
reference to Exhibit 10(e) to Registrant's Annual
Report on Form 10-K for the year ended December
31, 1995.
(10)(f) Amended and Restated Construction Loan/Office Loan
Promissory Note dated October 12, 1989 between
Government Center Garage Realty Trust (Maker) and
Dean Witter Realty Yield Plus, L.P. (Holder).
Incorporated by reference to Exhibit 10(f) to
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1995.
(10)(g) Second Amendment to Construction Loan Agreement
dated June 22, 1990 between Government Center
Garage Realty Trust, as Borrower and Dean Witter
Realty Yield Plus, L.P. and Dean Witter Realty
Yield Plus II, L.P., as Lender. Incorporated by
reference to Exhibit 10(g) to Registrant's Annual
Report on Form 10-K for the year ended December
31, 1995.
(10)(h) First Amendment to Amended and Restated
Construction Loan/Office Loan Promissory Note
dated June 22, 1990 between Government Center
Garage Realty Trust (Maker) and Dean Witter Realty
Yield Plus, L.P. (Holder). Incorporated by
reference to Exhibit 10(h) to Registrant's Annual
Report on Form 10-K for the year ended December
31, 1995.
E-2
<PAGE>
(10)(i) Supplemental Loan Agreement dated September 20,
1993 between Government Center Garage Realty
Trust, as Borrower and Dean Witter Realty Yield
Plus, L.P. and Dean Witter Realty Yield Plus II,
L.P., as Lender. Incorporated by reference to
Exhibit 10(i) to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1995.
(10)(j) Second Amendment to Notes dated September 20, 1993
between Government Center Garage Realty Trust
(Maker) and Dean Witter Realty Yield Plus, L.P.
and Dean Witter Realty Yield Plus II, L.P.,
(Holders). Incorporated by reference to Exhibit
10(j) to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995.
(10)(k) Supplement and Amendment to Construction Loan
Agreement dated October 27, 1997 between
Government Center Garage Realty Trust (Borrower)
and Dean Witter Realty Yield Plus, L.P. and Dean
Witter Realty Yield Plus II, L.P. (Lenders) was
filed as an Exhibit to Form 8-K on October 27,
1997 and is incorporated herein by reference.
(10)(l) Third Amendment to Notes dated October 27, 1997
between Government Center Garage Realty Trust
(Maker) and Dean Witter Realty Yield Plus, L.P.
and Dean Witter Realty Yield Plus II, L.P.
(Holder) was filed as an Exhibit to Form 8-K on
October 27, 1997 and is incorporated herein by
reference.
(10)(m) Purchase and Sale Agreement dated as of December
26, 1997 among DW Michelson Associates as Seller,
Michelson Company Limited Partnership as Acquired
Partnership and SC Enterprises as Purchaser, First
Amendment to Purchase and Sale Agreement dated as
of February 13, 1998 and Assignment and Assumption
Agreement dated as of April 3, 1998 were
collectively filed as an Exhibit to Form 8-K on
April 3, 1998 and is incorporated herein by
reference.
(10) (n) Purchase and Sale Agreement among DW Lakeshore
Associates, L.P., a Deleware Limited Partnership,
as Seller and Streeterville Development
Associates, LLC, an Illinois Limited Liability
Company, as Purchaser dated July 17, 1997 was
filed as an Exhibit to Form 8-K on July 17, 1998
and is incorporated herein by reference.
(27) Financial Data Schedule
(99) Financial Statements of GCGA Limited Partnership,
owner of an office building/parking garage located
in Boston, Massachusetts.
<PAGE>
GCGA LIMITED PARTNERSHIP
Financial Statements
Independent Auditors' Report
<PAGE>
Independent Auditors' Report
To the Partners of
GCGA Limited Partnership
We have audited the accompanying balance sheets of GCGA
Limited Partnership (the "Partnership") as of December 31,
1999 and 1998 and the related statements of operations,
partners' capital deficiency, and cash flows for each of the
three years in the period ended December 31, 1999. These
financial statements are the responsibility of the
Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in
all material respects, the financial position of GCGA
Limited Partnership as of December 31, 1999 and 1998 and the
results of its operations and its cash flows for each of the
three years in the period ended December 31, 1999, in
conformity with generally accepted accounting principles.
Deloitte & Touche, LLP
/s/ Deloitte & Touche,
LLP
New York, New York
March 20, 2000
<PAGE>
<TABLE>
GCGA LIMITED PARTNERSHIP
Balance Sheets
December 31, 1999 and 1998
<CAPTION>
1999 1998
<S> <C> <C>
Assets
Real estate, at cost:
Land $
4,892,336 $ 4,892,336
Building and improvements 74,563,455
73,624,779
79,455,791
78,517,115
Accumulated depreciation (20,212,483)
(17,818,235)
59,243,308
60,698,880
Cash
1,054,639 385,172
Escrow deposits 1,015,167
808,617
Accounts receivable 4,917,634
4,761,502
Deferred expenses, net 1,228,081
325,806
Other assets 116,234
113,784
$ 67,575,063 $
67,093,761
Liabilities and Partners' Capital Deficiency
Liabilities:
First mortgage loan $ 37,750,000 $
37,750,000
Second mortgage loan and accrued interest 84,028,030
79,023,308
Note payable 2,371,498
2,446,428
Accounts payable and other liabilities 1,259,159
744,386
125,408,687
119,964,122
Partners' capital deficiency (57,833,624)
(52,870,361)
$ 67,575,063 $
67,093,761
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
GCGA LIMITED PARTNERSHIP
Statements of Operations
Years ended December 31, 1999, 1998 and 1997
<CAPTION>
1999 1998 1997
<S>
<C> <C> <C>
Revenues:
Rental $16,094,032
$11,513,818 $11,498,722
Interest and other 311,709
79,390 238,937
16,405,741
11,593,208 11,737,659
Expenses:
Interest 12,131,985
11,876,782 11,805,253 Property
operating 6,205,129
4,996,224 4,393,023
Depreciation 2,394,248
1,895,228 1,774,048
Amortization 344,300
65,398 166,095
General and administrative 293,342
950,345 682,653
21,369,004
19,783,977 18,821,072
Net loss $(4,963,263)
$(8,190,769) $(7,083,413)
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
GCGA LIMITED PARTNERSHIP
Statements of Changes in Partners' Capital Deficiency
Years ended December 31, 1999, 1998 and 1997
<CAPTION>
Total
<S>
<C>
Partner's capital deficiency at January 1, 1997
$(37,719,179)
Contributions
200,000
Distributions
(77,000)
Net loss
(7,083,413)
Partners' capital deficiency at December 31, 1997
(44,679,592)
Net loss
(8,190,769)
Partners' capital deficiency at December 31, 1998
(52,870,361)
Net loss
(4,963,263)
Partners' capital deficiency at December 31, 1999
$(57,833,624)
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
GCGA LIMITED PARTNERSHIP
Statements of Cash Flows
Years ended December 31, 1999, 1998 and 1997
<CAPTION>
1999 1998
1997
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(4,963,2 $(8,190,7 $(7,083,4
Adjustments to reconcile net loss to 63) 69) 13)
net cash
(used in) provided by operating
activities:
Interest accrual on second
mortgage loan in excess 2,353,827 4,154,099 6,856,266
of payments
Depreciation and amortization 2,738,548 1,960,626 1,940,143
(Increase) decrease in operating
assets:
Escrow deposits (206,550) (36,239) (188,802)
Accounts receivable
Deferred expenses (156,132) 213,677 (36,403)
Other assets (132,862)
Increase (decrease)in accounts (1,246,57 (29,417)
payable and 5) 96,406
other liabilities (98,627)
(2,450)
222,624
(92,377)
514,773
Net cash (used in) provided by
operating activities
(967,822) (1,712,43 1,267,370
8)
Cash flows from investing activities:
Additions to building and -
improvements (938,676) (2,672,80
2)
Cash flows from financing activities:
Borrowings under second mortgage loan -
Repayment of note payable 2,650,895 2,720,943
Partner contributions (80,571)
Partner distributions (74,930) (67,827)
- - 200,000
- -
(77,000)
Net cash provided by financing
activities 2,575,965 2,653,116 42,429
Increase (decrease) in cash
669,467 (1,732,12 1,309,799
Cash at beginning of year 4)
385,172 807,497
2,117,296
Cash at end of year $ $
$1,054,63 385,172 2,117,296
9
Supplemental disclosure of cash paid
during the year $ $
for interest $9,778,15 7,752,794 4,948,987
8
See accompanying notes to financial statements.
</TABLE>
<PAGE>
GCGA LIMITED PARTNERSHIP
Notes to Financial Statements
1. Organization
GCGA Limited Partnership (the "Partnership") is a limited
partnership organized under the laws of the Commonwealth of
Massachusetts. The Partnership is the sole beneficiary of
the Government Center Garage Realty Trust (the "Trust")
which owns One Congress Street (the "Property"), an 11-story
structure containing approximately 283,000 square feet of
office and retail space and a 2,200-space parking garage,
located in Boston, Massachusetts.
Prior to October 27, 1997, the partners of the Partnership
were Government Center Garage Associates Limited Partnership
("GCA"), which owned a 1% general partnership interest and a
98% limited partnership interest, and an individual
affiliated with the developer of the property who owned a 1%
limited partnership interest (the "Affiliate").
In October 1996, the Partnership defaulted on its second
mortgage loan by failing to timely pay its debt service.
Thereafter, the second mortgage lenders (Dean Witter Yield
Plus, L.P. ("Yield Plus") and Dean Witter Yield Plus II,
L.P. ("Yield Plus II"), collectively, (the "Lender"))
accelerated the loan and attempted to take possession of the
property. On October 15, 1996, the Partnership and the
Trust filed a voluntary petition for relief under Chapter 11
of Title 11 of the United States Code in the United States
Bankruptcy Court for the District of Maryland (the
"Bankruptcy Court"). While in bankruptcy, the Partnership
operated as a debtor-in-possession, whereby the Partnership
could not engage in transactions outside of the ordinary
course of business without approval of the Bankruptcy Court,
after notice and hearing.
On October 27, 1997, the Partnership entered into a
settlement agreement with the Lender (the "Agreement"). As
part of the Agreement, two new corporations each of which
are jointly owned by Yield Plus (58%) and Yield Plus II
(42%), became the sole general partners (the "New General
Partners") of the Partnership (with an aggregate 19%
ownership interest) and GCA (with an aggregate 1% ownership
interest). Yield Plus and Yield Plus II have agreed to make
all decisions concerning the Partnership and its property
jointly, and retained an affiliate of the Partnership's
<PAGE>
GCGA LIMITED PARTNERSHIP
Notes to Financial Statements
1. Organization (continued)
original general partner as property manager. As part of
the Agreement, the second mortgage loan was also
restructured (see Note 3).
Pursuant to the Agreement, GCA's limited partnership
interest in the Partnership was reduced to 81% and the
Affiliate's 1% interest in the Partnership was eliminated.
2. Summary of Significant Accounting Policies
The Partnership's records are maintained on the accrual
basis of accounting for financial reporting and tax
purposes. The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Real estate is recorded at cost less accumulated
depreciation. Cost includes land, improvements, direct
construction costs, indirect project costs, and carrying
costs, including real estate taxes, interest and loan costs
incurred during the construction period. Depreciation is
recorded on the straight-line method. Repairs are expensed.
At least annually, and more often if circumstances dictate,
the Partnership evaluates the recoverability of the net
carrying value of the Property and any related assets. As
part of this evaluation, the Partnership assesses, among
other things, whether there has been a significant decrease
in the market value of the Property. If events or
circumstances indicate that the net carrying value of the
Property may not be recoverable, the expected future net
cash flows from the Property are estimated for a period of
approximately five years (or a shorter period if the
Partnership expects that the Property may be disposed of
sooner), along with estimated sales proceeds at the end of
the period.
<PAGE>
GCGA LIMITED PARTNERSHIP
Notes to Financial Statements
2. Summary of Significant Accounting Policies (continued)
If the total of these future undiscounted cash flows were
less than the carrying amount of the Property, the Property
would be written down to its fair value as determined (in
some cases with the assistance of outside real estate
consultants) based on discounted cash flows, and a loss on
impairment recognized by a charge to earnings.
Because the determination of fair value is based upon
projections of future economic events such as property
occupancy rates, rental rates, operating cost inflation and
market capitalization rates which are inherently subjective,
the amounts ultimately realized at disposition may differ
materially from the net carrying value as of December 31,
1999. The cash flows used to evaluate the recoverability of
the assets and to determine fair value are based on good
faith estimates and assumptions developed by the New General
Partners. Unanticipated events and circumstances may occur
and some assumptions may not materialize; therefore actual
results may vary from the estimates and the variances may be
material. The Partnership may provide additional write-
downs, which could be material, in subsequent years if real
estate markets or local economic conditions change.
Deferred expenses consist of origination fees in connection
with the mortgage loans and leasing commissions.
Origination fees are amortized over the applicable loan
terms. Leasing commissions are amortized over the applicable
lease terms.
Rental income is accrued on a straight-line basis over the
terms of the leases. Accruals in excess of amounts payable
by tenants pursuant to their leases (resulting from rent
concessions or rents which periodically increase over the
term of a lease) are recorded as receivables and included in
other assets.
No provision for income taxes has been made in the financial
statements, since the liability for such taxes is that of
the partners rather than the Partnership.
<PAGE>
GCGA LIMITED PARTNERSHIP
Notes to Financial Statements
2. Summary of Significant Accounting Policies (continued)
The accounting policies used for tax reporting purposes
differ from those used for financial reporting as follows:
(a) depreciation is calculated
using accelerated methods and (b) rental income is
recognized based on the payment terms in the applicable
leases. The tax basis of the Partnership's assets and
liabilities is approximately $12.2 million lower than the
amounts reported for financial statement purposes at
December 31, 1999.
3. Mortgage Loans Payable
The Trust has a $37,750,000 first mortgage loan payable to a
major insurance company. The loan requires monthly payments
of interest only, payable at 9.39% and matures November 1,
2001. For each of the three years in the period ended
December 31, 1999, the Partnership incurred interest expense
of $3,544,725 on this loan.
The Trust also has a participating second mortgage loan
payable to the Lender which is due in 2001. Prior to
October 27, 1997, principal of the loan was $59,200,000,
base interest was payable monthly at 8% and the first
$250,000 of net revenues in any calendar year from the
property was payable as additional interest. The Lender
also owned a 58% interest in adjusted net revenues and
capital proceeds generated by the property.
The second mortgage loan was restructured as follows:
(a) any New Loans (the "New Loans") made by the New General
Partners will bear interest at 12%, payable monthly
from available cash flow generated by the property
after payment of debt service on the first mortgage
loan and certain operating escrows;
<PAGE>
GCGA LIMITED PARTNERSHIP
Notes to Financial Statements
(b) the interest rate on the principal and past due
interest on the second mortgage loan (aggregating
approximately $12.3 million at October 27, 1997) has
been increased to 10%, payable monthly from available
cash flow generated by the property after payment of
debt service on the New Loans;
(c) any future unpaid debt service will accrue interest at
10%; and
(d) Yield Plus' and Yield Plus II's interest in adjusted
net revenue and capital proceeds generated by the
property was increased to 80%.
The Partnership incurred interest expense on the second
mortgage loan of $8,346,614, $8,078,420, and $8,036,377 in
1999, 1998 and 1997, respectively.
4. Note Payable
At the inception of the parking garage lease with Kinney
System of Sudbury St., Inc., a wholly owned subsidiary of
Kinney System, Inc., the lessee granted a $3,000,000 loan to
the Partnership, which is payable in monthly payments of
$26,350, which include interest at 10 percent per annum. The
lease provides for supplemental rental payments to the
Partnership of $26,350 per month to cover loan principal and
interest payments. These amounts are included in rental
income. The lease also provides that the unpaid principal
of the loan may be forgiven if certain conditions described
in the note agreement are met. Interest expense incurred on
this loan in 1999, 1998, and 1997 were approximately
$241,000, $248,000, and $224,000, respectively. The loan
will be fully paid by December 2003.
<PAGE>
GCGA LIMITED PARTNERSHIP
Notes to Financial Statements
5. Leases
Minimum future rental income under noncancelable operating
leases as of December 31, 1999 is as follows:
Year ended December 31 Future minimum rentals
2000 $12,470,989
2001 12,710,556
2002 13,013,044
2003 10,190,833
2004 135,156
$48,520,578
The Partnership has determined that all leases relating to
its properties are operating leases. Lease terms range from
five to twenty one years.
6. Related-Party Transactions
The Property is managed by an affiliate of the Partnership.
For the years ended December 31, 1999, 1998, and 1997, the
affiliate earned management fees of approximately $
173,000, $105,000, and $124,000, respectively. These
amounts are included in property operating expenses.
E-3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Registrant is a limited partnership which invests in real estate and real
estate joint ventures. In accordance with industry practice, its balance
sheet is unclassified. For full information, refer to the accompanying
audited financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,796,347
<SECURITIES> 0
<RECEIVABLES> 455,025
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 33,808,733<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 33,581,765<F2>
<TOTAL-LIABILITY-AND-EQUITY> 33,808,733<F3>
<SALES> 0
<TOTAL-REVENUES> 4,679,722<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 707,515
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,972,207
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,972,207
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,972,207
<EPS-BASIC> 0.40<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include net
investments in real estate of $10,249,883, real estate held for sale of
$300,000 and an investment in unconsolidated partnership of
$20,007,478.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and other liabilities of $229,968.
<F4>Total revenue includes rent of $1,954,967, equity in earnings of
unconsolidated partnership of $2,474,464 and interest and other revenue
of $250,291.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
