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, 1997
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 0-18147
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3378315
(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
PART I.
ITEM 1. BUSINESS
The Registrant, Dean Witter Realty Income Partnership IV,
L.P. (the "Partnership"), is a limited partnership formed in
October 1986 under the Uniform Limited Partnership Act of
the State of Delaware for the purpose of investing primarily
in income-producing office, industrial and retail
properties.
The Managing General Partner of the Partnership is Dean
Witter Realty Fourth Income Properties 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 Income Associates IV,
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 below in Note 6 to the consolidated
financial statements in Item 8 and in Item 13.
The Partnership issued 304,437 units of limited partnership
interest (the "Units") for $152,218,500. The offering has
been terminated and no additional Units will be sold.
The proceeds from the offering were used to make equity
investments in four office properties. One investment was
sold in 1996, one sold in 1997 and, in 1998, the Partnership
entered into an agreement to sell a third investment. The
properties are described below in Item 2.
The partnership which owns Taxter Corporate Park, currently
plans to market the property for sale during 1998, with the
objective of completing a sale of the property by the end of
1998. There is no assurance that the Partnership will be
able to achieve this objective.
The Partnership considers its business to include one
industry segment, investment in real property. Financial
information regarding the Partnership is in the
Partnership's 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, 1997, the Partnership owned through
partnership interests the following two property interests,
none of which is encumbered by indebtedness. 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.
<TABLE>
<CAPTION>
Year Acquisition Net Rentable
Type of
Completed/ Cost Area
Ownership of Land
Property and Location Acquired ($000) (000 sq. ft.)
and Improvements
<S> <C> <C> <C>
<C>
Chesterbrook Corp. Center1 1982-1987/1987 $50,000
621 41.2% General
Valley Forge, PA
Partnership interest1
8 Office buildings
Taxter Corporate Park, 1987-1988/1988 $21,002
345 40.6% General
Westchester, NY Partnership
interest2
2 Office buildings
________________________
</TABLE>
1. The remaining GP interests are owned by
Dean Witter Realty Income Partnership III, L.P. (26.7%)
and an affiliate of the Managing General Partner (32.1%).
The total cost of the property was $121.3
million. Subsequent to year-end, the partnership which owns
the property entered into an Agreement
to sell the property. See Note 5 to the consolidated
financial statements.
2. The remaining GP interests are owned by
Dean Witter Realty Income Partnership II, L.P. (14.8%)
and Dean Witter Realty Income Partnership III, L.P.(44.6%).
The total cost of the property was $51.8
million.
Each property was built with on-site parking facilities.
On April 10, 1997, Lake Colorado Associates, L.P., in which
the Partnership had a 56% general partnership interest, sold
the Pasadena Financial Center property. See note 4 to the
consolidated financial statements.
Affiliates of the Partnership are the property manager for
Taxter Corporate Park and the co-property manager for five
buildings at the Chesterbrook Corporate Center.
Further information relating to the Partnership's properties
is included below in Item 7 and footnotes 4, 5 and 6 to the
consolidated financial statements included in Item 8.
ITEM 3. LEGAL PROCEEDINGS
On December 27, 1995, a purported class action lawsuit (the
"Grigsby Action") naming various public real estate
partnerships sponsored by Realty (including the Partnership
and its Managing General Partner and Associate General
Partner), Realty, Dean Witter Reynolds Inc. ("DWR") and
others as defendants was filed in Superior Court in
California. The complaint alleged fraud, negligent
misrepresentation, intentional and negligent breach of
fiduciary duty, unjust enrichment and related claims and
sought compensatory and punitive damages in unspecified
amounts and injunctive and other equitable relief. The
defendants removed the case to the United States District
Court for the Southern District of California. Pursuant to
an order of the U.S. District Court for the southern
District of California entered May 24, 1996, the Grigsby
Action was transferred to the U.S. District Court for the
Southern District of New York. The case was dismissed by
stipulation of the parties dated March 6, 1997 and refiled
and consolidated with the Consolidated Action (as defined
below).
On February 14, 1996, a purported class action lawsuit (the
"Schectman Action") naming various public real estate
partnerships sponsored by Realty (including the Partnership
and its Managing General Partner), Realty, Dean Witter,
Discover & Co. ("DWD") and DWR as defendants was filed in
the Chancery Court of Delaware for New Castle County (the
"Delaware Chancery Court"). On February 23, 1996, a
purported class action lawsuit (the "Dosky Action") naming
various public real estate partnerships sponsored by Realty
(including the Partnership and its Managing General
Partner), Realty, DWD, DWR and others as defendants was
filed in the Delaware Chancery Court. On February 29, 1996,
a purported class action lawsuit (the "Segal Action') naming
various public real estate partnerships sponsored by Realty
(including the Partnership and its Managing General
Partner), Realty, DWR, DWD and others as defendants was
filed in the Delaware Chancery Court. On March 13, 1996, a
purported class action lawsuit (the "Young Action") naming
the partnership, other unidentified limited partnerships,
DWD, DWR and others as defendants was filed in the Circuit
Court for Baltimore City in Baltimore, Maryland. The
defendants removed the Young Action to the United States
District Court for the District of Maryland.
Thereafter, the Schectman Action, the Dosky Action and the
Segal Action were consolidated in a single action (the
"Consolidated Action") in the Delaware Chancery Court. The
Young Action was dismissed without prejudice. The
plaintiffs in the Young Action joined the Consolidated
Action.
On October 7, 1996, the plaintiffs in the Consolidated
Action filed a First Consolidated and Amended Class Action
Complaint naming various public real estate partnerships
sponsored by Realty (including the Partnership and its
Managing General Partner), Realty, DWD, DWR and others as
defendants. This complaint alleges breach of fiduciary duty
and seeks an accounting of profits, compensatory damages in
an unspecified amount, possible liquidation of the
Partnership under a receiver's supervision and other
equitable relief. The defendants filed a motion to dismiss
this complaint on December 10, 1996.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the
year to a vote of Unit holders.
PART II.
ITEM 5. MARKET FOR THE 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, 17, 1998, therewere 16,788 holders of limited
partnership interests.
The Partnership is a limited partnership and, accordingly,
does not pay dividends. It does, however, make quarterly
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").
During the year ended December 31, 1997, the Partnership
paid quarterly cash distributions aggregating $6,377,908,
with $5,740,052 ($18.85 per Unit) distributed to the Limited
Partners and $637,856 to the General Partners. In addition,
the Partnership distributed $32,881,031 ($108.01 per Unit)
and $14,737,795 ($48.41 per Unit) respectively, from its
share of the net proceeds from the sales of the Technology
Park Reston office park and Pasadena Financial Center. The
sales proceeds distributions were paid 100% to Limited
Partners. On August 28, 1997, the Partnership paid cash
distribution from cash reserves aggregating $2,114,145 with
$1,902,731 ($6.25 per Unit), distributed to the Limited
Partners and $211,414 to the General Partners.
During the year ended December 31, 1996, the Partnership
paid quarterly cash distributions aggregating $8,032,230,
with $7,229,007 ($23.75 per Unit) distributed to Limited
Partners and $803,223 to the General Partners.
On January 28, 1998, the Partnership paid the fourth quarter
1997 distribution of $1,238,044, with $1,114,240 ($3.66 per
Unit) distributed to the Limited Partners and $123,804 to
the General Partners.
Future cash distribution levels will fluctuate based on cash
flow generated by the Partnership's remaining properties and
proceeds received from property sales.
Sale or financing proceeds will be distributed, to the
extent available, first, to each Limited Partner, until
there has been a return of the Limited Partner's capital
contribution plus cumulative distributions of distributable
cash and sale or refinancing proceeds in an amount
sufficient to provide a 9% cumulative annual return on the
Limited Partner's adjusted capital contribution.
Thereafter, any remaining sale or financing proceeds will be
distributed 85% to the Limited Partners and 15% to the
General Partners after the Managing General Partner receives
a brokerage fee, if earned, of up to 3% of the selling price
of any equity investment.
Taxable income generally will be allocated in the same
proportions as distributions of distributable cash or sale
or financing proceeds (except that the General Partners must
be allocated at least 1% of taxable income from the sale or
financing). In the event there is no distributable cash or
sale or financing proceeds, taxable income will be allocated
90% to the Limited Partners and 10% to the General Partners.
Any tax loss will be allocated 90% to the Limited Partners
and 10% to the General Partners.
ITEM 6. SELECTED FINANCIAL DATA
The following sets forth a summary of selected financial
data for the Partnership:
<TABLE>
<CAPTION>
For the years ended October 31,
19971 19962 1995 1994
1993
<S> <C> <C> <C> <C> <C>
Total revenues $ 8,574,341 $15,185,608 $
(4,999,134)3 $ 11,219,617 $ 3,378,0225
Net income $ 4,674,724 $ 7,977,890
$(15,490,563)3,4 $ 4,588,878 $(2,932,582)5
Net income (loss)
per Unit of
Limited partner-
ship interest $ 14.30 $ 24.32 $
(45.79) $ 13.57 $ (8.67)
Cash distributions
paid per Unit
of limited
partnership
interest6 $ 181.52 $ 23.75 $
20.00 $ 20.00 $ 20.00
Total assets of
December 31 $37,482,526 $115,446,796
$115,021,277 $141,476,185 $144,340,130
__________________
</TABLE>
1. Revenues and net income include $4.2
million gain on sale of Pasadena Financial Center.
2. Revenues and net income include $3.2
million gain on sale of Tech Park Reston office park.
3. Includes the Partnership's share
($16,027,387) of loss on impairment of the Chesterbrook
property.
4. Includes loss on impairment of Pasadena
Financial Center ($4,348,954, net of minority
interest).
5. Includes the Partnership's share
($8,644,627) of loss on impairment of the Taxter property.
6. Distributions paid to Limited Partners
include returns of capital per Unit of limited
partnership interest of $181.52, $23.75, $20.00, $15.10 and
$20.00 for the years ended December 31, 1997,
1996, 1995 and 1994 and 1993, respectively, calculated as
the excess of cash
distributed per Unit over accumulated earnings per Unit not
previously distributed.
The above financial data should be read in conjunction with
the consolidated financial statements in Item 8.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership raised $152,218,500 in a public offering of
304,437 units which was terminated in 1988. The Partnership
has no plans to raise additional capital.
The Partnership made four investments in partnerships which
own or owned interests in properties, on an all-cash basis.
One of such partnerships sold its property interest in 1996,
another sold its property interest in 1997, and a third
entered into an agreement to sell its property interest in
1998. The Partnership's acquisition program has been
completed. No additional investments are planned.
In 1997, limited speculative construction and the strong job
growth, especially in the business services and technology
industries, resulted in strong performance in the office
sector. Tenant competition for a shrinking amount of office
space had a positive influence on rental rates and lease
terms. Favorable market fundamentals led to value
appreciation as investors bid for office properties.
Investors, including institutional, foreign and REIT
investors, have been buying office buildings in many
markets.
On April 10, 1997, Lake Colorado Associates, L.P., in which
Pasadena Lake Associates, L.P. is an 85% general partner,
sold the land and the building of Pasadena Financial Center
for $26.7 million. The Partnership (which owns a 56%
interest in Pasadena Lake Associates, L.P.) shared the net
sales proceeds of approximately $14.7 million, and all of
the sales proceeds ($48.41 per Unit) were distributed to the
Limited Partners in April 1997. Cash flow from this
property (net of minority interest) was approximately $2.6
million in 1997.
Pursuant to a Purchase and Sale Agreement dated as of
February 10, 1998, the partnership (in which the Partnership
has a 41.2% general partnership interest) which owns the
Chesterbrook Corporate Center agreed to sell the property to
FV Office Partners, L.P., an unaffiliated party. See Note 5
to the consolidated financial statements in Item 8.
The partnership which owns Taxter Corporate Park currently
plans to market the property for sale during 1998, with the
objective of completing a sale of the property by the end of
1998. There is no assurance that the partnership will be
able to achieve this objective.
The Partnership's liquidity depends upon cash flow from
operations of its investments in joint ventures and required
contributions for building improvements and tenant
improvements and leasing commissions in connection with the
leasing of vacant space. In 1997, all of the Partnership's
property investments generated positive cash flow from
operations, and it is anticipated that they will continue to
do so in 1998.
In addition, the Partnership's liquidity has been and will
be affected by the sale of properties. As the Partnership
has fewer income-producing investments, Partnership cash
from operations will decline, as will Partnership
distributions. The Partnership will also require less cash
reserves to fund capital expenditures and leasing
commissions.
Future cash distribution levels will fluctuate based on cash
flow generated by the Partnership's remaining properties and
proceeds received from property sales.
In 1997, distributions to investors (excluding the
distribution of proceeds from the sales of the Technology
Park Reston office park and Pasadena financial Center
properties), capital expenditures and contributions to joint
ventures exceeded cash flow from operations and
distributions from joint ventures. This shortfall was
funded from cash reserves. The Managing General Partner
believes cash reserves will be sufficient for the
Partnership's future needs.
In 1997, the Partnership contributed $226,000 and $265,000
respectively, for its share of capital expenditures at the
Chesterbrook and Taxter joint ventures.
As of December 31, 1997, the Partnership had commitments to
fund approximately $1,665,000, its share of capital
expenditures, primarily to the Chesterbrook joint venture.
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.
The decrease in deferred leasing commissions and other
assets is due to the elimination of these assets as a result
of the sales of the Technology Park Reston property and
Pasadena Financial Center property.
On January 28 1998 the Partnership paid the fourth quarter,
1997 distribution of $3.66 per Unit to the Limited Partners.
The total cash distribution amounted to $1,238,044, with
$1,114,240 distributed to the Limited Partners and $123,804
to the General Partners.
Operations
Fluctuations in the Partnership's operating results for the
year ended December 31, 1997 compared to 1996 and for 1996
compared to 1995 are primarily attributable to the
following:
Rental income, property operating expenses and depreciation
and amortization expenses decreased in 1997 compared to 1996
due to the December 31, 1996 sale of the Technology Park
Reston office park and the April 10, 1997 sale of Pasadena
Financial Center. Rental income was higher in 1996 than in
1995 primarily due to increased rental income at Pasadena
Financial Center.
The gains on sales of real estate resulted from the property
sales described above.
No individual factor accounted for a significant portion of
the decrease in equity in earnings of joint ventures in 1997
compared to 1996. The increase in equity in earnings
(losses) of joint ventures in 1996 compared to 1995 was
primarily attributable to the $16 million impairment
writedown in 1995 on the Chesterbrook property.
Interest and other income increased in 1997 compared to 1996
primarily due to the interest received on the investment of
the cash proceeds from the sales of the Technology Park
Reston office park and the Pasadena Financial Center
properties until such proceeds were distributed to Limited
Partners on January 31 and April 28, 1997, respectively.
Property operating expenses were lower in 1995 than in 1996
primarily due to a real estate tax refund received at
Pasadena Financial Center in 1995.
Depreciation and amortization decreased in 1996 compared to
1995 primarily due to the $7.8 million impairment writedown
of Pasadena Financial Center in the fourth of quarter of
1995.
No individual factor accounted for a significant portion of
the decrease in general and administrative expenses in 1997
compared to 1996.
A summary of the markets in which the Partnership's
properties are located and the performance of each property
is as follows:
The office market in Valley Forge, Pennsylvania, the
location of the Chesterbrook Corporate Center, has shown
continued improvement with rental rates rising and limited
availability of larger space. Market vacancy improved to
less than 10%. At December 31, 1997 the property was 100%
leased to 29 tenants, compared to 99% at the prior year-end.
The average occupancy during 1997 was 99%. The lease of Dun
& Bradstreet (for approximately 12% of total space) expires
in year 1999; the leases of Philadelphia Electric Company
(for approximately 15% of total space) and Aetna Health Plan
(for approximately 12% of total space) expire in year 2000.
There are no other significant tenants. The Partnership has
entered into an agreement to sell this property. See Note 5
to the consolidated financial statements.
The overall vacancy level in the office market in
Westchester County, New York, the location of Taxter
Corporate Park, decreased from 24% to 17% in 1997. The
vacancy level in the west Westchester market in which the
building is located is currently 11%, reflecting a 4%
absorption in 1997 over the prior year. During 1997,
average occupancy at the property was approximately 99%, and
at December 31, 1997, the property was 100% occupied. The
property is leased to 21 tenants. KLM Royal Dutch Airlines
owns a long-term leasehold in approximately 20% of the space
at the property. The lease of Fuji Photo Film (for
approximately 28% of the property's space) expires in year
2001. No other tenants occupy more than 10% of the
property.
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.
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
INDEX
(a) Financial Statements
Page
Independent Auditors' Report 13
Consolidated Balance Sheets at December 31, 1997 and 1996 14
Consolidated Statements of Operations for the years ended
December 31, 1997, 1996 and 1995 15
Consolidated Statements of Partners' Capital for the years
ended December 31, 1997, 1996 and 1995 16
Consolidated Statements of Cash Flows for the years ended
December 31, 1997, 1996 and 1995 17
Notes to Consolidated Financial Statements 18
All schedules have been omitted because either the required
information is not applicable or the information is shown in the
consolidated financial statements or notes thereto.
Independent Auditors' Report
To The Partners of
Dean Witter Realty Income Partnership IV, L.P.:
We have audited the accompanying consolidated balance sheets
of Dean Witter Realty Income Partnership IV, L.P. and
consolidated partnerships (the "Partnership") as of December
31, 1997 and 1996, and the related consolidated statements of
operations, partners' capital, and cash flows for each of the
three years in the period ended December 31, 1997. 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 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 consoldiated financial statements present
fairly, in all material respects, the financial position of
Dean Witter Realty Income Partnership IV, L.P. and
consolidated partnerships as of December 31, 1997 and 1996,
and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1997
in conformity with generally accepted accounting principles.
/s/Deloitte & Touche
LLP
DELOITTE & TOUCHE LLP
New York, New York
March 24, 1998
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
CONSOLIDATED BALANCE SHEETS
December 31, 1997 and 1996
<CAPTION>
1997 1996
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 1,868,422 $
56,199,072
Real estate held for sale - 20,322,459
Investments in joint ventures 35,449,866
36,899,178
Deferred leasing commissions, net - 567,184
Other assets 164,238 1,458,903
$37,482,526
$115,446,796
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $ 389,627 $
268,202
Minority interest in consolidated joint ventures -
26,649,540
389,627
26,917,742
Partners' capital (deficiency):
General partners (5,417,146)
(4,887,822)
Limited partners ($500 per Unit, 304,437 Units issued)
42,510,045 93,416,876
37,092,899
88,529,054
$37,482,526
$115,446,796
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended December 31, 1997, 1996 and 1995
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Revenues:
Rental $ 1,019,935 $
8,669,237 $ 8,272,320
Equity in earnings (losses) of joint
ventures 2,995,878
3,041,184 (13,630,960)
Gains on sales of real estate 4,184,529
3,169,132 -
Interest and other 373,999
306,055 359,506
8,574,341
15,185,608 (4,999,134)
Expenses:
Property operating 420,334
1,414,012 1,082,243
Depreciation - 2,312,930
2,663,406
Amortization 6,279
130,853 183,618
General and administrative 493,830
596,945 585,574
Loss on impairment of real estate - -
7,765,989
920,443
4,454,740 12,280,830
Income (loss) before minority interests 7,653,898
10,730,868 (17,279,964)
Minority interests 2,979,174
2,752,978 (1,789,401)
Net income (loss) $ 4,674,724 $
7,977,890 $(15,490,563)
Net income (loss) allocated to:
Limited partners $ 4,354,778 $
7,404,058 $(13,941,507)
General partners 319,946
573,832 (1,549,056)
$ 4,674,724 $
7,977,890 $(15,490,563)
Net income (loss) per Unit of limited
partnership interest $ 14.30 $
24.32 $ (45.79)
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
Years ended December 31, 1997, 1996 and 1995
<CAPTION>
Limited General
Partners Partners Total
<S> <C> <C> <C>
Partners' capital (deficiency) at
January 1, 1995 $113,272,072
$(2,432,847) $110,839,225
Net loss (13,941,507)
(1,549,056) (15,490,563)
Cash distributions (6,088,740)
(676,528) (6,765,268)
Partners' capital (deficiency) at
December 31, 1995 93,241,825
(4,658,431) 88,583,394
Net income 7,404,058
573,832 7,977,890
Cash distributions (7,229,007)
(803,223) (8,032,230)
Partners' capital (deficiency) at
December 31, 1996 93,416,876
(4,887,822) 88,529,054
Net income 4,354,778
319,946 4,674,724
Cash distributions (55,261,609)
(849,270) (56,110,879)
Partners' capital (deficiency)
at December 31, 1997 $ 42,510,045
$(5,417,146) $ 37,092,899
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 1997, 1996 and 1995
<CAPTION>
1997 1996 1995
<S> <C> <C>
<C>
Cash flows from operating activities:
Net income (loss) $ 4,674,724 $
7,977,890 $(15,490,563)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation - 2,312,930
2,663,406
Amortization 6,279
130,853 183,618
Equity in earnings of joint ventures (2,995,878)
(3,041,184) 13,630,960
Gain on sale of land and building (4,184,529)
(3,169,132) -
Minority interest in earnings of
consolidated joint ventures 2,979,174
2,752,979 (1,789,401)
Loss on impairment of real estate - -
7,765,989
(Increase) decrease in operating assets:
Deferred expenses - -
(87,142)
Other assets (45,810)
(274,617) (823,531)
(Decrease) increase in operating liabilities:
Accounts payable and accrued liabilities
157,694 60,690 (229,441)
Net cash provided by operating activities
591,654 6,750,409 5,823,895
Cash flows from investing activities:
Proceeds from sale of real estate 26,372,099
50,943,086 -
Investments in joint ventures (490,712)
(1,277,336) (1,250,865)
Distributions from joint ventures 4,935,902
4,745,191 5,368,592
Additions to buildings and improvements -
(1,058,880) (708,475)
Net cash provided by investing
activities 30,817,289
53,352,061 3,409,252
Cash flows from financing activities:
Cash distributions (56,110,879)
(8,032,230) (6,765,268)
Additional investments by minority interests
263,494 465,907 348,595
Minority interests in distributions from
consolidated joint ventures (29,892,208)
(2,793,284) (2,528,830)
Net cash used in financing activities (85,739,593)
(10,359,607) (8,945,503)
Increase (decrease) in cash and cash equivalents
(54,330,650) 49,742,863
287,644
Cash and cash equivalents at beginning of year
56,199,072 6,456,209
6,168,565
Cash and cash equivalents at end of year $ 1,868,422 $
56,199,072 $ 6,456,209
See accompanying notes to consolidated financial statements.
</TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The Partnership
Dean Witter Realty Income Partnership IV, L.P. (the
"Partnership") is a limited partnership organized under the laws
of the State of Delaware in 1986 to invest primarily in income-
producing office, industrial and retail properties. The
Partnership is managed by Dean Witter Realty Fourth Income
Properties Inc. (the "Managing General Partner").
In 1987 and 1988, the Partnership issued 304,437 units of limited
partnership interest (the "Units") for $152,218,500. No
additional Units will be sold. The proceeds of the offering were
used to make investments in income-producing office properties
which were not encumbered by debt.
2. Summary of Significant Accounting Policies
The consolidated financial statements include the accounts of the
Partnership and its majority-controlled subsidiaries, Technology
Park Associates and Lake Colorado Associates, the former owner of
Pasadena Financial Center.
The Partnership's 40.6% general partnership interest in Taxter
Corporate Park and 41.2% general partnership interest in the
partnership which owns interests in Chesterbrook Corporate Center
are accounted for on the equity method.
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting and tax 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.
Cash and cash equivalents consist of cash and highly liquid
investments with maturities, when purchased, of three months or
less.
The carrying value of real estate includes the purchase price
paid by the Partnership and acquisition fees and expenses. Costs
of improvements to the properties 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 (including that held by its investee
partnerships) 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 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, 1997. The cash flows used to
evaluate the recoverability of the properties 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.
Deferred 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.
Net income (loss) per Unit amounts are calculated by dividing net
income (loss) allocated to Limited Partners, in accordance with
the Partnership Agreement, by the weighted average number of
Units outstanding.
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.
The accounting policies used for tax reporting purposes differ
from those used for financial reporting 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) writedowns for impairment of real estate are not
deductible. In addition, offering costs are treated differently
for tax and financial reporting purposes. The tax basis of the
Partnership's assets and liabilities is approximately $24 million
higher than the amounts reported for financial statement
purposes.
The Financial Accounting Standards Board ("FASB") has recently
issued several new accounting pronouncements. Statement No. 130,
"Reporting Comprehensive Income" establishes standards for
reporting and display of comprehensive income and its components.
Statement No. 131, "Disclosures about Segments of an Enterprise
and Related Information" establishes standards for the way that
public business enterprises report information about operating
segments in annual financial statements and requires that those
enterprises report selected information about operating segments
in interim financial reports issued to shareholders. It also
establishes standards for related disclosure about products and
services, geographic areas, and major customers. These two
standards are effective for the Partnership's 1998 financial
statements, but the Partnership does not believe that they will
have any effect on the Partnership's computation or presentation
of net income or other disclosures.
The implementation in 1997 of FASB Statement No. 128, "Earnings
per Share" and Statement No. 129, "Disclosure of Information
about Capital Structure" effective for the Partnership's 1997
year-end financial statements did not have any impact on the
Partnership financial statements.
3. Partnership Agreement
The Partnership Agreement provides that distributable cash, as
defined, will be paid 90% to the Limited Partners and 10% to the
General Partners. Sale or financing proceeds will be
distributed, to the extent available, first, to each Limited
Partner, until there has been a return of the Limited Partner's
capital contribution plus cumulative distributions of
distributable cash and sale or refinancing proceeds in an amount
sufficient to provide a 9% cumulative annual return on the
Limited Partner's adjusted capital contribution. Thereafter, any
remaining sale or financing proceeds will be distributed 85% to
the Limited Partners and 15% to the General Partners after the
Managing General Partner receives a brokerage fee, if earned, of
up to 3% of the selling price of any equity investment.
Taxable income generally is allocated in the same proportions as
distributions of distributable cash or sale or financing proceeds
(except that the General Partners must be allocated at least 1%
of taxable income from sales or financings). In the event there
is no distributable cash or sale or financing proceeds, taxable
income is allocated 90% to the Limited Partners and 10% to the
General Partners. Any tax loss is allocated 90% to the Limited
Partners and 10% to the General Partners.
All distributions paid to Limited Partners during 1997, 1996 and
1995 represented returns of capital, calculated as the excess of
cash distributed per Unit over accumulated earnings per Unit not
previously distributed.
4. Real Estate
Pasadena Financial Center
The Partnership owns a 56% general partnership interest in
Pasadena Lake Associates ("PLA"); the remaining general
partnership interest in PLA is held by LS Lake Associates, an
affiliate of the Managing General Partner. PLA owns an 85%
general partnership interest in Lake Colorado Associates ("LCA");
the remaining general partnership interest in LCA is held by an
affiliate of the original seller of the property ("PFC").
On April 10, 1997, LCA sold the property to an unaffiliated party
for $26,700,000. The sale price was received in cash at closing.
The Partnership received approximately $14.7 million of such
cash, representing its 56% share of the cash received by PLA, net
of closing costs. In accordance with LCA's partnership
agreement, all of the income, gain and cash from the property
were allocated to PLA. The Partnership distributed the net sales
proceeds ($48.41 per Unit), 100% to Limited Partners.
In 1995, the Partnership concluded that, based on a revised
expectation as to the holding period of Pasadena Financial
Center, the Partnership would be unable to recover its
investment. Accordingly, the Partnership wrote the property down
to fair value (based on an independent appraisal) and recorded a
loss on impairment of approximately $7.8 million ($4.4 million
after minority interest).
Technology Park Reston
The Partnership owns a 65% general partnership interest in
Technology Park Associates ("TPA"), which owned three office
buildings in the Technology Park Reston office park. The
remaining general partnership interest is held by an affiliate of
the Partnership, Dean Witter Realty Income Partnership III, LP.
The partners received cash flow and profits and losses according
to their percentage ownerships interests.
On December 31, 1996, TPA and an affiliate of the Managing
General Partner (the "Affiliate"), which owned the fourth
building at the property, sold the office park to Sprint
Communications Company, L.P., which was the sole tenant at the
property, for a negotiated sales price of $76,300,000.
$51,483,000 of the sales price was allocated to TPA and
$24,817,000 was allocated to the Affiliate, based on the relative
square footage of the buildings each owned at the property.
The sale price was received in cash at closing. The Partnership
received $32,881,031 of such cash, representing its 65% share of
the cash received by TPA, net of closing costs. The Partnership
distributed the net sales proceeds ($108.01 per Unit), 100% to
Limited Partners.
5. Investments in Joint Ventures
Chesterbrook Corporate Center, Valley Forge, Pennsylvania
In 1987, the Partnership and Dean Witter Realty Income
Partnership III, L.P. (through a partnership), and an affiliate
of the Managing General Partner acquired 41.2%, 26.7% and 32.1%
interests, respectively, in DWR Chesterbrook Associates, the
general partnership which owns the property. The partners receive
cash flow and profits and losses according to their interests.
Pursuant to a Purchase and Sale Agreement dated as of February
10, 1998, DWR Chesterbrook Associates agreed to sell the property
to an unaffiliated party. As part of the Agreement, Dean Witter
Realty Income Partnership III, L.P. and Dean Witter Realty Income
Partnership II, L.P. agreed to sell certain properties. The
aggregate sale price of the properties to be sold is
approximately $173 million, of which $129,362,500 is allocated in
the Agreement to Chesterbrook Corporate Center. The purchase
price is payable in cash at closing, which is expected to occur
in the second quarter. Cash flow of the Chesterbrook Corporate
Center was approximately $9.3 million in 1997. The carrying
value of the Partnership's investment is approximately $26.4
million at December 31, 1997.
Summarized financial information of DWR Chesterbrook Associates
is as follows:
<TABLE>
<CAPTION>
December 31,
1997 1996
<S> <C> <C>
Land and buildings, net $61,345,220
$63,746,527
Other 2,802,758
3,482,813
Total assets $64,147,978
$67,229,340
Liabilities $ 1,964,881 $
2,323,803
Partners' capital 62,183,097
64,905,537
Total liabilities and capital $64,147,978
$67,229,340
Years ended December 31,
1997 1996 1995
Rental income $13,625,596 $13,590,397
$ 13,286,086
Other income 47,097 52,854
25,255
13,672,693 13,643,251
13,311,341
Property operating expenses 4,418,602 4,681,584
4,684,258
Depreciation and amortization 3,217,884 3,161,268
4,663,290
Loss on impairment of real estate - -
38,901,405
7,636,486 7,842,852
48,248,953
Net income $ 6,036,207 $ 5,800,399
$(34,937,612)
</TABLE>
In 1995, the general partners in DWR Chesterbrook Associates
concluded that the property's value was impaired. Accordingly,
in accordance with its policy for evaluating the recoverability
of its real estate, which is the same as the Partnership's, DWR
Chesterbrook Associates recorded a loss on impairment of the
property of approximately $38.9 million. The Partnership's share
of this loss (approximately $16 million) was included in equity
in earnings (losses) of joint ventures in 1995.
Taxter Corporate Park, Westchester County, New York
The general partnership which owns the property is owned 40.6% by
the Partnership. Dean Witter Realty Income Partnership II, L.P.,
and Dean Witter Realty Income Partnership III, L.P., own the
remaining interests. The partners receive cash flow and profits
and losses according to their interests.
Summarized financial information of the Taxter joint venture is
as follows:
<TABLE>
<CAPTION>
December 31,
1997 1996
<S> <C> <C>
Land and buildings, net $17,185,315
$17,709,794
Other 1,545,107
1,817,522
Total assets $18,730,422
$19,527,316
Liabilities $ 281,092 $
273,240
Partners' capital 18,449,330
19,254,076
Total liabilities and capital $18,730,422
$19,527,316
Years ended December 31,
1997 1996 1995
Rental income $5,568,140 $ 5,741,566
$ 6,078,785
Other income 114,082 270,626
94,757
5,682,222 6,012,192
6,173,542
Property operating expenses 3,168,784 3,204,335
3,197,884
Depreciation and amortization 1,259,841 1,203,375
1,095,519
4,428,625 4,407,710
4,293,403
Net income $1,253,597 $ 1,604,482
$ 1,880,139
</TABLE>
Activity in Investments in Joint Ventures is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Investments at beginning of year $36,899,178
$37,325,849 $ 55,074,536
Equity in earnings (losses) 2,995,878 3,041,184
(13,630,960)
Distributions (4,935,902) (4,745,191)
(5,368,592)
Contributions 490,712 1,277,336
1,250,865
Investments at end of year $35,449,866 $36,899,178
$ 37,325,849
</TABLE>
6. Related Party Transactions
An affiliate of the Managing General Partner provided property
management services for Taxter Corporate Park and Pasadena
Financial Center (until Pasadena Financial Center was sold in
1997) and for five buildings at Chesterbrook Corporate Center.
The Partnership paid the affiliate management fees of
approximately $125,000, $161,000 and $172,000 for the years ended
December 31, 1997, 1996 and 1995, respectively. These amounts
are included in property operating expenses.
Another affiliate of the Managing General Partner performs
administrative functions, processes investor transactions and
prepares tax information for the Partnership. The Partnership
incurred approximately $276,000, $400,000 and $402,000 for such
services in each of the years ended December 31, 1997, 1996 and
1995. These amounts are included in general and administrative
expenses.
As of December 31, 1997, the affiliates were owed approximately
$18,000 in total for these services.
7. Litigation
Various public partnerships sponsored by Dean Witter Realty Inc.
(including the Partnership and its Managing General Partner) are
defendants in a number of class action lawsuits pending in state
and federal courts. The complaints allege a variety of claims,
including breach of fiduciary duty, fraud, misrepresentation and
related claims, and seek compensatory and other damages and
equitable relief. The defendants intend to vigorously defend the
actions. It is impossible to predict the effect, if any, the
outcome of these actions might have on the Partnership's
financial statements.
8. Distributions After Year-End
On January 28, 1998 the Partnership paid the fourth quarter, 1997
distribution of $3.66 per Unit to the Limited Partners. The
total cash distribution amounted to $1,238,044, with $1,114,240
distributed to the Limited Partners and $123,804 to the General
Partners.
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
executive 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
Lawrence Volpe Controller and Director
Ronald T. Carman Secretary and 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 54, has been a Managing Director of Morgan
Stanley and co-Head of Morgan Stanley Realty Incorporated since
1997, and a Managing Director of Dean Witter Realty Inc., which
he joined in 1982. He is an Executive Vice President of Dean
Witter Reynolds Inc.
E. Davisson Hardman, Jr., age 48, has been a Managing Director of
Morgan Stanley, Asia, Ltd. since 1997, and is a Managing Director
of Dean Witter Realty Inc., which he joined in 1982.
Lawrence Volpe, age 50, is a Director and the Controller of Dean
Witter Realty Inc. He is a Senior Vice President and Controller
of Dean Witter Reynolds Inc., which he joined in 1983.
Ronald T. Carman, age 46, is a Director and the Secretary of Dean
Witter Realty Inc. He is an Assitant Secretary of Morgan
Stanley, Dean Witter & Co., and a Senior Vice President and
Associate General Counsel of Dean Witter, Discover & Co. and Dean
Witter Reynolds Inc., which he joined in 1984.
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 contained in Item 5 above. The
General Partners received cash distributions of $849,270,
$803,223 and $676,528 during the years ended December 31, 1997,
1996 and 1995.
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 6 to the
Consolidated Financial Statements in Item 8 above.
The directors and executive officers of the Managing General
Partner received no renumeration from the Partnership.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND
MANAGEMENT
(a) No person is known to the Partnership to be the beneficial
owner of more than five percent of the Units.
(b) The executive officers and directors of the Managing General
Partner own the following Units as of December 31, 1997:
Amount and
Nature of
Title of ClassName of Beneficial Owner Beneficial Ownership
Limited All directors and executive *
Partnership officers of the Managing
Interests General Partner, as a group
______________________
*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 LSA 87 L.P., a Delaware limited partnership.
Realty and certain current and former officers and directors of
the Managing General Partner are partners of LSA 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 General Partners and their affiliates were paid certain fees
and reimbursed for certain expenses. Information concerning such
fees and reimbursements is contained in Note 6 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.
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 Certificate of Limited Partnership included in the
Registration Statement Number 33-16054 is
incorporated by reference.
(3)b Amended and Restated Agreement of Limited Partnership
dated as of October 22, 1987 set forth in Exhibit
A to the Prospectus included in the
Registration Statement Number 33-16054 is
incorporated herein by reference.
(4)a Certificate of Limited Partnership included in the
Registration Statement Number 33-16054 is
incorporated by reference.
(4)b Amended and Restated Agreement of Limited Partnership
dated as of October 22, 1987 set forth in Exhibit
A to the Prospectus included in the
Registration Statement Number 33-16054 is
incorporated herein by reference.
(10)a Purchase and Sale Agreement between Technology Park
Associates, Dean Witter/Technology Park II
Associates, L.P., and Spring Communications
Company, L.P., a Delaware Limited Partnership
filed as exhibit 2 to the Registrant's Report on Form 8-K on
December 31, 1996 is incorporated herein by reference.
b Purchase and Sale Agreement between Lake Colorado
Associates, L.P., and Spieker Properties, L.P.,
and unaffiliated party filed as exhibit to the
Registrant's Report on Form 8-K on April 10,
1997 is incorporated herein by reference.
(21) Subsidiaries: Technology Park Associates, a Virginia
general partnership.
Lake Colorado Associates, a California
general partnership.
(27) Financial Data Schedule
(d) (1) See paragraph (a) (2) above.
(2) Financial statements of DWR Chesterbrook Associates, the
joint venture which owns Chesterbrook Corporate
Center.
(3) Financial statements of Taxter Park Associates, the joint
venture which owns Taxter Corporate Park.
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 INCOME PARTNERSHIP IV, L.P.
By: Dean Witter Realty Fourth Income Properties Inc.
Managing General Partner
By: /s/E. Davisson Hardman, Jr. Date: March 27, 1998
E. Davisson Hardman, Jr.
President
By: /s/Lawrence Volpe Date: March 27, 1998
Lawrence Volpe
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 FOURTH INCOME PROPERTIES INC.
Managing General Partner
/s/William B. Smith Date: March 27,
1998
William B. Smith
Chairman of the Board of Directors
/s/E. Davisson Hardman, Jr. Date: March 27,
1998
E. Davisson Hardman, Jr.
Director
/s/Lawrence Volpe Date: March 27,
1998
Lawrence Volpe
Director
/s/Ronald T. Carman Date: March 27,
1998
Ronald T. Carman
Director
Independent Auditors' Report
To The Partners of
DWR Chesterbrook Associates
We have audited the accompanying balance sheets of DWR
Chesterbrook Associates (the "Partnership") as of December
31, 1997 and 1996, and the related statements of operations,
partners' capital, and cash flows for each of the three
years in the period ended December 31, 1997. 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 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 financial statements present fairly, in
all material respects, the financial position of DWR
Chesterbrook Associates as of December 31, 1997 and 1996,
and the results of its operations and its cash flows for
each of the three years in the period ended December 31,
1997 in conformity with generally accepted accounting
principles.
/s/Deloitte & Touche
LLP
DELOITTE & TOUCHE LLP
New York, New York
March 24, 1998
<TABLE>
DWR CHESTERBROOK ASSOCIATES
BALANCE SHEETS
December 31, 1997 and 1996
<CAPTION>
1997 1996
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 261,366 $
778,240
Real estate held for sale 61,345,220 -
Real estate:
Land -
6,420,000
Buildings and improvements - 87,891,077
- 94,311,077
Accumulated depreciation - 30,564,550
-
63,746,527
Deferred leasing commissions, net 778,237
1,046,485
Other assets 1,763,155
1,658,088
$64,147,978
$67,229,340
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $ 551,739
$ 910,636
Due to affiliate 1,413,167
1,413,167
1,964,906
2,323,803
Partners' capital 62,183,072
64,905,537
$64,147,978
$67,229,340
See accompanying notes to financial statements.
</TABLE>
<TABLE>
DWR CHESTERBROOK ASSOCIATES
STATEMENTS OF OPERATIONS
Years ended December 31, 1997, 1996 and 1995
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Revenue:
Rental $13,625,596 $13,590,397
$ 13,286,086
Interest and other 47,097 52,854
25,255
13,672,693 13,643,251
13,311,341
Expenses:
Property operating 4,418,602 4,681,584
4,684,258
Depreciation 2,923,255 2,843,848
4,395,918
Amortization 294,629 317,420
267,372
Loss on impairment of real estate - -
38,901,405
7,636,486 7,842,852
48,248,953
Net income (loss) $ 6,036,207 $ 5,800,399
$(34,937,612)
See accompanying notes to financial statements.
</TABLE>
<TABLE>
DWR CHESTERBROOK ASSOCIATES
STATEMENTS OF PARTNERS' CAPITAL
Years ended December 31, 1997, 1996, and 1995
<CAPTION>
<S>
<C>
Partners' capital at January 1, 1995
$108,292,544
Net loss
(34,937,612)
Capital contributions
1,894,550
Cash distributions
(9,673,082)
Partners' capital at December 31, 1995
65,576,400
Net income
5,800,399
Capital contributions
2,745,738
Cash distributions
(9,217,000)
Partners' capital at December 31, 1996
64,905,537
Net income
6,036,207
Capital contributions
548,328
Cash distributions
(9,307,000)
Partner's capital at December 31, 1997 $
62,183,072
See accompanying notes to financial statements.
</TABLE>
<TABLE>
DWR CHESTERBROOK ASSOCIATES
STATEMENTS OF CASH FLOWS
Years ended December 31, 1997, 1996, and 1995
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 6,036,207 $
5,800,399 $(34,937,612)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation 2,923,255
2,843,848 4,395,918
Amortization 294,629
317,420 267,372
Loss on impairment of real estate - -
38,901,405
(Increase) decrease in operating assets:
Deferred expenses (26,381)
(385,764) (353,169)
Other assets (105,067)
120,753 535,335
(Decrease) increase in operating liabilities:
Accounts payable and accrued liabilities
(358,897) 81,541
608,158
Net cash provided by operating
activities 8,763,746
8,778,197 9,417,407
Cash flows from investing activities:
Additions to real estate (521,948)
(2,359,975) (1,337,571)
Cash flows from financing activities:
Cash distributions (9,307,000)
(9,217,000) (9,673,082)
Capital contributions 548,328
2,745,738 1,894,550
Net cash used in financing activities (8,758,672)
(6,471,262) (7,778,532)
Increase (decrease) in cash and cash equivalents
(516,874) (53,040)
301,304
Cash and cash equivalents at beginning of year
778,240 831,280
529,976
Cash and cash equivalents at end of year $ 261,366 $
778,240 $ 831,280
See accompanying notes to financial statements.
</TABLE>
DWR CHESTERBROOK ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
1. Organization
DWR Chesterbrook Associates (the "Partnership") was formed
in 1987 under the laws of the Commonwealth of Pennsylvania,
to purchase eight of nine office buildings, a parking lot
and 75 acres of underlying land in the Chesterbrook
Corporate Center in Valley Forge, Pennsylvania. The
buildings consist of 621,271 net rentable square feet. The
property is not encumbered by debt.
The general partners of the Partnership are Chesterbrook
Investment Partners, L.P. (67.9%) (which is owned 60.7% by
Dean Witter Realty Income Partnership IV, L.P. and 39.3% by
Dean Witter Realty Income Partnership III, L.P.) and
Duportail Investment Partners, L.P. (32.1%).
The Partnership Agreement provides that all cash flow,
profits, losses and credits of the Partnership shall be
allocated in proportion to the Partners' original capital
contributions.
Pursuant to a Purchase and Sale Agreement (the "Agreement")
dated as of February 10, 1998, the Partnership agreed to
sell the property to an unaffiliated party. As part of the
Agreement, Dean Witter Realty Income Partnership III, L.P.
and Dean Witter Realty Income Partnership II, L.P., an
affiliated partnership, agreed to sell certain properties.
The aggregate sale price of the properties to be sold is
approximately $173 million, of which $129,362,500 is
allocated in the Agreement to Chesterbrook Corporate Center.
The purchase price is payable in cash at closing, which is
expected to occur in the second quarter of 1998.
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.
Cash and cash equivalents consist of cash and highly liquid
investments with maturities, when purchased, of three months
or less.
The carrying value of real estate includes the purchase
price paid by the Partnership and acquisition fees and
expenses. Costs of improvements to the properties 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.
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,
1997. 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 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 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.
The accounting policies used for tax reporting purposes
differ from those used for financial reporting as follows:
(a) depreciation is calculated using accelerated methods;
(b) rental income is recognized based on the payment terms
in the applicable leases; (c) payments made by the seller of
the property in prior years under a rental income guaranty
were accounted for as rental income; and (d) writedowns for
impairment of real estate are not deductible. The tax basis
of the Partnership's assets and liabilities is approximately
$36.6 million higher than the amount reported for financial
statement purposes.
The Financial Accounting Standards Board ("FASB") has
recently issued several new accounting pronouncements.
Statement No. 130, "Reporting Comprehensive Income"
establishes standards for reporting and display of
comprehensive income and its components. Statement No. 131,
"Disclosures about Segments of an Enterprise and Related
Information" establishes standards for the way that public
business enterprises report information about operating
segments in annual financial statements and requires that
those enterprises report selected information about
operating segments in interim financial reports issued to
shareholders. It also establishes standards for related
disclosure about products and services, geographic areas,
and major customers. These two standards are effective for
the Partnership's 1998 financial statements, but the
Partnership does not believe that they will have any effect
on the Partnership's computation or presentation of net
income or other disclosures.
The implementation in 1997 of FASB Statement No. 128,
"Earnings per Share" and Statement No. 129, "Disclosure of
Information about Capital Structure" effective for the
Partnership's 1997 year-end financial statements did not
have any impact on the Partnership's financial statements.
3. Real Estate
In 1995, the Partnership re-leased a substantial amount of
space as a result of the departure of the property's largest
tenant, which had occupied approximately 36% of the
property's space. Although office vacancy levels in the
suburban Philadelphia market had been stagnant for several
years, the high quality of the Chesterbrook property had
made it possible to re-lease substantially all of the
vacated space. However, at the time of the re-leasing
market rents were lower than previous rents received at the
property, which were expected to result in reduced future
cash flow therefrom. Also, because of its amenities, size
and configuration, the Chesterbrook property had been able
to command a rental premium over other properties in the
market; however, this premium was substantially eroded
because of the continuing high vacancy in the market. As a
result, the general partners of the Partnership concluded
that the property's value was impaired and, in accordance
with its policy for evaluating the recoverability of its
real estate, the Partnership wrote the property down to its
fair value (based on an independent appraisal) and recorded
a loss on impairment of approximately $38.9 million in 1995.
4. Related Party Transactions
An affiliate of the partners co-manages five buildings at
the property. The Partnership paid the affiliate management
fees of approximately $62,000, $37,000 and $63,000 in 1997,
1996 and 1995, respectively, for such services.
Another affiliate of the general partners earned a fee in
1987 for the acquisition of the properties in the amount of
$4,258,703. Of this amount, $1,413,167 remains unpaid.
Independent Auditors' Report
To The Partners of
Taxter Park Associates
We have audited the accompanying balance sheet of Taxter
Park Associates
(the "Partnership") as of December 31, 1997, and the related
statements of operations, partners' capital, and cash flows
for the year ended December 31, 1997. 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 audit.
We conducted our audit 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 audit provides
a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in
all material respects, the financial position of Taxter Park
Associates as of December 31, 1997, and the results of its
operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/Deloitte & Touche
LLP
DELOITTE & TOUCHE LLP
New York, New York
March 24, 1998
<TABLE>
TAXTER PARK ASSOCIATES
BALANCE SHEETS
December 31, 1997 and 1996
<CAPTION>
1997 1996
(unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 43,477 $
19,947
Real estate, at cost:
Land 1,798,825
1,798,825
Buildings and improvements 27,121,440
26,628,146
28,920,265
28,426,971
Accumulated depreciation 11,734,950
10,717,177
17,185,315
17,709,794
Deferred leasing commissions, net 306,070
389,214
Other assets 1,195,560
1,408,361
$18,730,422
$19,527,316
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $
281,092 $ 273,240
Partners' capital 18,449,330
19,254,076
$18,730,422
$19,527,316
See accompanying notes to financial statements.
</TABLE>
<TABLE>
TAXTER PARK ASSOCIATES
INCOME STATEMENTS
Years ended December 31, 1997, 1996 and 1995
<CAPTION>
1997 1996 1995
(unaudited)
(unaudited)
<S> <C> <C>
<C>
Revenue:
Rental $5,676,522 $6,005,538
$6,166,784
Interest 5,700 6,654
6,758
5,682,222 6,012,192
6,173,542
Expenses:
Property operating 3,168,784 3,204,334
3,197,884
Depreciation 1,093,264 1,049,794
972,155
Amortization 166,577 153,581
123,364
4,428,625 4,407,709
4,293,403
Net income $1,253,597 $1,604,483
$1,880,139
See accompanying notes to financial statements.
</TABLE>
<TABLE>
TAXTER PARK ASSOCIATES
STATEMENTS OF PARTNERS' CAPITAL
Years ended December 31, 1997, 1996, and 1995
<CAPTION>
<S>
<C>
Partners' capital at January 1, 1995 (unaudited)
$19,988,218
Net income
1,880,139
Capital contributions
1,158,398
Cash distributions
(3,404,715)
Partners' capital at December 31, 1995 (unaudited)
19,622,040
Net income
1,604,483
Capital contributions
359,831
Cash distributions
(2,332,278)
Partners' capital at December 31, 1996 (unaudited)
19,254,076
Net income
1,253,597
Capital contributions
652,219
Cash distributions
(2,710,562)
Partner's capital at December 31, 1997
$18,449,330
See accompanying notes to financial statements.
</TABLE>
<TABLE>
TAXTER PARK ASSOCIATES
STATEMENTS OF CASH FLOWS
Years ended December 31, 1997, 1996, and 1995
<CAPTION>
1997 1996 1995
(unaudited)
(unaudited)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,253,597 $
1,604,483 $ 1,880,139
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation 1,093,264
1,049,794 972,155
Amortization 166,577
153,581 123,364
(Increase) decrease in operating assets:
Other assets 212,801
(492,440) 463,041
Increase (decrease) in operating liabilities:
Accounts payable and accrued liabilities
7,852 (12,626) (47,406)
Net cash provided by operating
activities 2,734,091
2,302,792 3,391,293
Cash flows from investing activities:
Additions to real estate (652,218)
(338,267) (1,123,641)
Cash flows from financing activities:
Capital contributions 652,219
359,831 1,158,398
Cash distributions (2,710,562)
(2,332,278) (3,404,715)
Net cash used in financing activities (2,058,343)
(1,972,447) (2,246,317)
Increase (decrease) in cash and cash equivalents
23,530 (7,922) 21,335
Cash and cash equivalents at beginning of year
19,947 27,869 6,534
Cash and cash equivalents at end of year $ 43,477 $
19,947 $ 27,869
See accompanying notes to financial statements.
</TABLE>
TAXTER PARK ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
1. Organization
Taxter Park Associates the "Partnership") was formed in 1986
under the laws of the State of New York, to acquire
interests in the Taxter Corporate Park in Westchester
County, New York. The buildings consist of 344,741 net
rentable square feet. The property is not encumbered by
debt.
The general partners of the Partnership are Dean Witter
Realty Income Partnership II, L.P. (14.8%), Dean Witter
Realty Income Partnership III, L.P. (44.6%) and Dean Witter
Realty Income Partnership IV, L.P. (40.6%).
The Partnership Agreement provides that all cash flow,
profits, losses and credits of the Partnership shall be
allocated in proportion to the Partners' original capital
contributions.
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.
The carrying value of real estate includes the purchase
price paid by the Partnership and acquisition fees and
expenses. Costs of improvements to the properties 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.
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,
1997. 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.
Deferred 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.
Cash and cash equivalents consist of cash and highly liquid
investments with maturities, when purchased, of three months
or less.
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.
The accounting policies used for tax reporting purposes
differ from those used for financial reporting as follows:
(a) depreciation is calculated using accelerated methods;
(b) rental income is recognized based on the payment terms
in the applicable leases; (c) payments made by the seller of
the property in prior years under a rental income guaranty
were accounted for as rental income; and (d) writedowns for
impairment of real estate are not deductible. The tax basis
of the Partnership's assets and liabilities is approximately
$19 million higher than the amount reported for financial
statement purposes.
The Financial Accounting Standards Board ("FASB") has
recently issued several new accounting pronouncements.
Statement No. 130, "Reporting Comprehensive Income"
establishes standards for reporting and display of
comprehensive income and its components. Statement No. 131,
"Disclosures about Segments of an Enterprise and Related
Information" establishes standards for the way that public
business enterprises report information about operating
segments in annual financial statements and requires that
those enterprises report selected information about
operating segments in interim financial reports issued to
shareholders. It also establishes standards for related
disclosure about products and services, geographic areas,
and major customers. These two standards are effective for
the Partnership's 1998 financial statements. The
Partnership does not believe that these new standards will
have any effect on the Partnership's computation or
presentation of net income or net income per Unit of limited
partnership interest, or its disclosures of capital
structure.
The implementation in 1997 of FASB Statement No. 128,
"Earnings Per Share" and Statement No. 129, "Disclosure of
Information about Capital Structure", effective for the
Partnership's 1997 year-end, did not have any impact on the
Partnership's financial statements.
3. Lease Commitments
Minimum future rental income under noncancellable operating
leases as of December 31, 1997 is as follows:
<TABLE>
<CAPTION>
Year ending December 31:
<S> <C> <C>
1998 $ 4,803,175
1999 4,079,388
2000 3,739,199
2001 1,819,036
2002 942,768
Thereafter 120,137
Total $15,503,703
</TABLE>
The Partnership has determined that all leases relating to
the Property are operating leases. The terms range from
three to ten years, and generally provide for fixed minimum
rents with rental escalation and/or expense reimbursement
clauses.
4. Related Party Transactions
An affiliate of the partners co-manages the buildings at the
property. The Partnership paid the affiliate management
fees of approximately $73,000, $61,000 and $76,000 in 1997,
1996 and 1995, respectively, for such services.
[ARTICLE] 5
[LEGEND]
Registrant is a limited partnership which invests in real estate and real
estate joint ventures. In accordance with industry practice, its balance
sheet is unclassified. For full information, refer to the accompanying
unaudited financial statements.
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-END] DEC-31-1997
[CASH] 1,868,422
[SECURITIES] 0
[RECEIVABLES] 164,238
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 0
[PP&E] 0
[DEPRECIATION] 0
[TOTAL-ASSETS] 37,482,526<F1>
[CURRENT-LIABILITIES] 0
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 0
[OTHER-SE] 37,092,899<F2>
[TOTAL-LIABILITY-AND-EQUITY] 37,482,526<F3>
[SALES] 0
[TOTAL-REVENUES] 8,574,341<F4>
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 3,899,617
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] 4,674,724
[INCOME-TAX] 0
[INCOME-CONTINUING] 4,674,724
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 4,674,724
[EPS-PRIMARY] 14.30<F5>
[EPS-DILUTED] 0
<FN>
<F1>In addition to cash and receivables, total assets include investments in
joint ventures of $35,449,866.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and accrued liabilities of $389,627.
<F4>Total revenues include rent of $1,019,935, gain on sale of real estate of
$4,184,529, equity in earning of joint ventures of $2,995,878 and interest
and other revenue of $373,999.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
