<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 0-18147
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
<PAGE>
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 investments in real property.
All properties but the Taxter Corporate Park
property were sold prior to 1999. The Taxter
property is described in Item 2 below.
As of April 1, 1998, the Partnership's interest in
the Taxter property is the Partnership's sole
property interest. The partnership which owns
the property (the "Taxter Partnership") has
accepted a bid from an unaffiliated third party to
purchase the property, and the parties are currently
negotiating the terms of a purchase and sale
agreement. However, there can be no assurance
that the property will be sold.
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.
<PAGE>
The Partnership's real property investment is
subject to
competition from similar office properties in the
market in which it is located. Further
information regarding competition and market
conditions 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,
through a partnership interest, the following
property interest, which is
not encumbered by indebtedness. The leases of
space in the property provide for pass-throughs
to the tenants of their pro-rata share of certain
operating expenses. In the opinion of the Managing
General Partner, the property is adequately covered
by insurance.
Year Acquisition Net
Rentable
Type of
Completed/ Cost
Area Ownership of Land
Property and Location Acquired ($000) (000
sq. ft.) and Improvements
Taxter Corporate Park, 1987-1988/1988
$21,002 345 40.6% General
Westchester, NY
Partnership interest1
2 Office buildings
________________________
1. 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%), affiliated public partnerships.
The total cost of the property was $51.8
million.
The property was built with on-site parking
facilities.
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 in Item 8.
ITEM 3. LEGAL PROCEEDINGS
None.
<PAGE>
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 10, 2000, there were 16,100 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").
During the year ended December 31, 1999, the
Partnership did not make any distributions and
does not anticipate making regular distributions in
the future. Generally, future cash distributions and
any remaining capital expenditures will be paid
from cash reserves and from proceeds received from
the sale of the Taxter Corporate Park property.
During the year ended December 31, 1998, the
Partnership paid cash distributions aggregating
$2,164,885, with $1,948,397 ($6.40 per Unit)
distributed to the Limited Partners and $216,488 to
General Partners. In addition, the Partnership
distributed $51,431,587 ($168.94 per Unit) from its
share of the net proceeds from the sale of the
Chesterbrook Corporate Park. The sales proceeds
distribution was paid 100% to Limited Partners.
Sale 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
<PAGE>
<TABLE>
contribution plus cumulative distributions of
distributable cash and sale proceeds in an
amount sufficient to provide a 9% cumulative
annual return on the Limited Partner's adjusted
capital contribution. Thereafter, any remaining
sale 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 proceeds (except that
the General Partners must be allocated at least 1%
of taxable income from sales). In the event there is
no distributable cash or sale 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:
<CAPTION>
For the years ended
December 31,
<S> <C> <C> <C> <C>
<C>
19991 19982
19973
19964 1995
Total revenues $ 549,437 $26,768,386
$
8,574,341 $ 15,185,608 $ (4,999,134)5
Net income $ 362,727 $26,464,164 $
4,674,724
$ 7,977,890 $ (15,490,563)5,6
Net income (loss)
per Unit of
limited partner-
ship interest $ 1.10 $
86.36 $
14.30 $ 24.32 $ (45.79)
Cash distributions
paid per Unit
of limited
partnership
interest7 $ - $
175.34 $
181.52 $ 23.75 $
20.00
Total assets of
December 31 $10,432,514
$10,104,468 $37,482,526 $115,446,796
$115,021,277 __________________
</TABLE>
<PAGE>
1. Revenues and net income include the
Partnership's share ($81,152) of gain on sale of the
Chesterbrook property due to the release of
escrows.
2. Revenues and net income include the
Partnership's share ($24.7 million) of gain on sale
of the Chesterbrook property.
3. Revenues and net income include
$4.2 million
gain on sale of Pasadena Financial Center.
4. Revenues and net income include
$3.2 million
gain on sale of Tech Park Reston office park.
5. Includes the Partnership's
share ($16.0
million) of loss on impairment of the Chesterbrook
property.
6. Includes loss on impairment of Pasadena
Financial
Center ($4.3 million, net of minority interest).
7. Distributions paid to Limited Partners include
returns of capital per Unit of limited partnership
interest of $96.15, $181.52, $23.75, and $20.00,
for the years ended December 31, 1998, 1997, 1996,
and 1995, 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 and the
related notes 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. Three of the partnerships sold their
properties in 1996, 1997 and 1998. The Partnership's
acquisition program has been completed. No
additional investments are planned.
As of April 1, 1998, the Partnership's interest in
the Taxter Corporate Park office property is the
Partnership's sole property interest. The partnership
which owns the property (the "Taxter Partnership") has
accepted a bid from an unaffiliated third party to
purchase the property, and the parties are
currently negotiating the terms of a purchase and sale
agreement. However, there can be no assurance that the
property will be sold.
On February 8, 1999, an affiliate of the
Managing General Partner, as an accommodation to the
Taxter Partnership, purchased the leasehold interest
of
<PAGE>
KLM Royal Dutch Airlines in approximately 20% of
the property's space. See Note 5 to the consolidated
financial statements.
The Taxter Partnership expects to buy and
immediately sell the former KLM leasehold interest
at the time the property is sold, using a portion
of the proceeds from the sale of the Taxter
property.
The office markets in Westchester County, New York
and the west Westchester sub-market in which Taxter
Corporate Park is located, are improving as both
occupancy levels and rental rates increased during
the last three months of 1999. During the year
ended December 31, 1999 average occupancy was
approximately 82% and at December 31, 1999 the
property was 74% occupied as compared to 98% at
December 31, 1998. The property is leased to 17
tenants. Subsequent to December 31, 1999, the
Taxter Partnership leased 16% of the property's
space to Nextel Communication Inc. (a new tenant
who will occupy approximately 14% of the space for
five years) and two existing tenants. These
tenants will begin to occupy their new spaces
during the first and second quarter of 2000.
The Partnership also extended its lease with Fuji
Photo
Film (for approximately 30% of the property's space)
from 2001 to 2003.
As of December 31, 1999, the Partnership had
commitments to fund approximately $1,334,000 for its
share of tenant improvements and leasing commissions
at the property. The Taxter Partnership may incur
material capital expenditures to lease additional
vacant space. The amount of such expenditures
cannot be determined at this time. Any unfunded
costs at the time the property is sold may be
deducted from sale proceeds.
During 1999, the Taxter property generated positive
cash flow from operations, and it is anticipated
that it will continue to do so during the period
that the Partnership continues to own its interest in
it.
During 1999, the Partnership did not make any cash
distributions. The Partnership's distributions
received from the Taxter joint venture exceeded
contributions thereto. Generally, future cash
distributions will be paid from proceeds received
from the sale of the Taxter property and cash
reserves.
The Partnership believes that its cash reserves will
be adequate for its needs in 2000.
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.
<PAGE>
Operations
Fluctuations in the Partnership's operating results
for the year ended December 31, 1999 compared to
1998 and for 1998 compared to 1997 are primarily
attributable to the following:
The Partnership's equity in earnings of joint
ventures included gains on the sale of the
Chesterbrook property of $81,000 (due to release of
escrows) and $24.7 million in 1999 and 1998,
respectively, and earnings from the property of
$66,000, $1.0 million and $2.5 million,
respectively in 1999, 1998 and 1997.
Equity in earnings also included equity in earnings
of the Taxter partnership of approximately
$323,000, $745,000 and $509,000, respectively in
1999, 1998 and 1997. 1998 equity in earnings
included the Partnership's share ($217,000) of a
refund of prior year real estate taxes. Equity in
earnings decreased in 1999 due to the Partnership's
share of a $229,000 bad debt reserve.
The gain on sale of real estate in 1997 and the
absence of rental income, property operating
expenses, depreciation and amortization expenses
and minority interest after 1997 was due to the April
10, 1997 sale of the Pasadena Financial Center.
Interest income was lower in 1999 than in 1998 and
1997 because the Partnership earned interest on the
proceeds from sales of properties in 1998 and 1997
(including one property sold in 1996) until such
proceeds were distributed to Limited Partners.
General and administrative expenses decreased in 1999
compared to 1998 and 1998 compared to 1997
primarily because of property sales.
Inflation
Inflation has been consistently low during the
periods presented in the consolidated financial
statements and, as a result, has not had a
significant effect on the operations of the
Partnership or its properties.
<PAGE>
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
DEAN WITTER REALTY INCOME PARTNERSHIP IV, 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
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.
<PAGE>
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, 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.
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 consolidated 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, 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.
/s/Deloitte &
Touche LLP
DELOITTE & TOUCHE
LLP
New York, New York
March 20, 2000
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP
IV, L.P.
CONSOLIDATED BALANCE SHEETS
December 31, 1999 and 1998
<CAPTION>
1999
1998 <S> <C>
<C>
ASSETS
Cash and cash equivalents $
2,225,631
$1,531,647
Investments in joint ventures
8,111,989
8,552,095
Other assets 94,894
20,726
$10,432,514 $10,104,468
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $
109,196
$ 143,877
Partners' capital (deficiency):
General partners
(5,432,367)
(5,460,525)
Limited partners
($500 per Unit, 304,437 Units issued)
15,755,685 15,421,116
10,323,318
9,960,591
$10,432,514 $10,104,468
See accompanying notes to consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
CONSOLIDATED INCOME STATEMENTS
Years ended December 31, 1999, 1998 and 1997
<CAPTION>
1999
1998 1997 <S>
<C> <C> <C>
Revenues:
Equity in earnings of joint
ventures $ 470,468
$26,491,104 $2,995,878
Rental -
-
1,019,935
Gain on sale of real estate -
- -
4,184,529
Interest and other 78,969
277,282
373,999
549,437 26,768,386
8,574,341
Expenses:
Property operating -
-
420,334
Amortization -
-
6,279
General and administrative
186,710
304,222
493,830
186,710 304,222
920,443
Income before minority interests
362,727
26,464,164
7,653,898
Minority interests
- - -
2,979,174
Net income $
362,727
$26,464,164 $
4,674,724
Net income allocated to:
Limited partners $
334,569
$26,291,055 $
4,354,778
General partners
28,158
173,109
319,946
$
362,727 $26,464,164 $
4,674,724
Net income per Unit of limited
partnership interest $ 1.10
$
86.36 $ 14.30
See accompanying notes to consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, 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 $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
Net income 26,291,055
173,109
26,464,164
Cash distributions
(53,379,984) (216,488)
(53,596,472)
Partners' capital (deficiency)
at December 31, 1998 15,421,116
(5,460,525) 9,960,591
Net income 334,569
28,158
362,727
Partners capital (deficiency)
at December 31, 1999 $ 15,755,685
$(5,432,367)
$10,323,318
See accompanying notes to consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, 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: 362,727
26,464,16 4,674,724
Net income 4
Adjustments to reconcile net
income to
Net cash (used in) provided by (470,468
(2,995,878
operating activities: ) (26,491,1
) Equity in earnings of joint - 04)
ventures -
(4,184,529
Gain on sale of land and - )
buildings - -
Minority interests in -
earnings of (74,168) 2,979,174
consolidated joint ventures 143,512
6,279
Amortization
(45,810
(Increase) decrease in other (34,681) )
assets (245,750)
(Decrease) increase in
accounts payable
157,694
and accrued liabilities
Net cash (used in)
provided by operating
activities (216,590
(129,178) 591,654
)
Cash flows from investing
activities:
Distributions from joint 1,036,91
53,961,85 4,935,902
ventures 5 7
Investments in joint ventures
(490,712)
Proceeds from sale of real (126,341
(572,982)
estate ) -
26,372,099
-
Net cash provided by
investing activities 910,574 53,388,87
30,817,289
5
Cash flows from financing
activities: -
Cash distributions - (53,596,4
(56,110,87
Additional investments by 72) 9)
minority interests - -
Minority interests in 263,494
distributions from -
consolidated joint ventures
(
2
9
,
8
9
2
,
2
0
8
)
Net cash used in -
financing activities (53,596,4
(85,739,59
72) 3)
Increase (decrease) in cash and
cash equivalents 693,984 (336,775)
(54,330,65
0)
Cash and cash equivalents at
beginning of year 1,531,64 1,868,422
7
56,199,072
Cash and cash equivalents at end $ $ $
of year 2,225,63 1,531,647
1,868,422
1
See accompanying notes to consolidated financial
statements.
</TABLE>
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, LP
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. 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.
The Partnership expects its joint venture to sell its
investment in Taxter Corporate Park in 2000.
Pursuant to the Partnership Agreement, the sale of
the Partnership's last investment will cause the
dissolution of the Partnership. Thereafter, the
Partnership will wind up its affairs, make a
final cash distribution, and terminate.
2. Summary of Significant Accounting Policies
The consolidated financial statements include the
accounts of the Partnership and its majority-
controlled subsidiaries, Technology
Park Associate (sold in 1996) and Lake Colorado
Associates, the former owner of Pasadena Financial
Center (sold in 1997).
The Partnership's 40.6% general partnership interest
in Taxter Corporate Park and 41.2% general
partnership interest in the partnership which
owned interests in Chesterbrook Corporate Center
until its sale in April 1998 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.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 investor
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,
1999. 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.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 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 $25 million higher than the amounts
reported for financial statement purposes.
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 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 in an
amount sufficient to provide a 9% cumulative annual
return on the Limited Partner's adjusted capital
contribution. Thereafter, any remaining sale
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.
<PAGE>
Taxable income generally is allocated in the same
proportions as distributions of distributable cash
or sale proceeds (except that the General Partners
must be allocated at least 1% of taxable income
from sales). In the event there is
DEAN WITTER REALTY INCOME PARTNERSHIP IV, LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
no distributable cash or sale 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.
There were no distributions in 1999. $96.15
per Unit of distributions in 1998 and all
distributions during 1997 represented returns of
capital, calculated as the excess of cash
distributed per Unit over accumulated earnings
per Unit not previously distributed.
4. Real Estate Sold
Pasadena Financial Center
On April 10, 1997, the Partnership which owned
the Pasadena Financial Center property, in which
the Partnership had an indirect interest, sold the
property to an unaffiliated party for $26.7 million.
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
proceeds, net of closing costs. The Partnership's
$2.3 million share of the gain on the sale (after
minority interest) was allocated 100% to the Limited
Partners. The Partnership distributed the net
sales proceeds ($48.41 per Unit), 100% to Limited
Partners in 1997.
5. Investments in Joint Ventures
Taxter Corporate Park, Westchester County, New York
The joint venture which owns the Taxter Corporate
Park (the "Taxter Partnership") is a general
partnership which is owned 40.6% by the
Partnership. Dean Witter Realty Income Partnership
II, L.P., and Dean Witter Realty Income Partnership
III, L.P., affiliated public partnerships, own the
remaining interests. The partners receive cash flow
and profits and losses according to their
interests.
<PAGE>
In 1987, the Taxter Partnership sold a leasehold
interest in approximately 20% of the property's
space to KLM. In 1998, KLM accepted a $6.75
million purchase offer for the leasehold
interest, which the Taxter Partnership had the right
to
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
match. The partners of the Taxter Partnership
believe that inclusion of the KLM space improves
the value and salability of the property;
however, the partners did not have sufficient
cash to fund the purchase. Therefore, an
affiliate of the Managing General Partner (the
"Affiliate"), as an accommodation, purchased the
leasehold interest on February 8, 1999 for $6.75
million and assumed the rights and obligations of KLM
thereunder.
On February 4, 1999, the Taxter Partnership and KLM
entered into a new lease (the "Lease") which allows
KLM to continue to occupy 50% of the space subject
to the leasehold interest. On February 8, 1999, the
Affiliate also assumed the rights and obligations of
the Taxter Partnership under the Lease.
As part of the purchase of the leasehold interest,
the Taxter Partnership received an option to
purchase the leasehold interest and assume the Lease
from the Affiliate for a purchase price of $6.75
million plus any tenant improvements, leasing
commissions and capital expenditures incurred by the
Affiliate in connection with the leasehold interest
(collectively, the "Resale Price"). The Taxter
Partnership also granted the Affiliate an option to
require the Taxter Partnership to purchase the
leasehold interest and assume the Lease for the
Resale Price. When the property is sold, the
Taxter Partnership will be obligated to purchase the
leasehold interest and assume the Lease from the
Affiliate for the Resale Price.
Summarized financial information of the Taxter joint
venture is
as follows:
<CAPTION>
December 31,
1999 1998
<S> <C> <C>
Land and buildings, net
$15,238,168
$16,337,983
Other 1,291,984
1,516,564
Total assets
$16,530,152
$17,854,547
Liabilities $
399,638 $
640,028
Partners' capital
16,130,514
17,214,519
Total liabilities and partners' capital
$16,530,152
$17,854,547
DEAN WITTER REALTY INCOME PARTNERSHIP IV, LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years
endedDecember 31,
1999 1998 1997
Rental income $ 5,269,027
$5,684,312
$ 5,568,140
Other income 39,476
68,706
114,082
5,308,503
5,753,018
5,682,222
Property operating expenses
3,144,567 2,439,845
3,168,784
Depreciation and amortization
1,368,026 1,478,048
1,259,841
4,512,593
3,917,893
4,428,625
Net income $ 795,910
$1,835,125 $
1,253,597
</TABLE>
Chesterbrook Corporate Center, Valley Forge,
Pennsylvania
On April 1, 1998, the partnership which owned the
Chesterbrook Corporate Park (the "Property") sold
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., affiliated public
partnerships, sold certain other properties. The
aggregate negotiated sales price of the properties
sold was approximately $168 million, of which
approximately $126.1 million was allocated in the
Agreement to the Property. The purchase price was
received in cash at closing. The Partnership's
share of the cash received, net of closing costs,
was approximately $51.4 million; such proceeds
were distributed 100% to the Limited Partners
($168.94 per Unit) on April 30, 1998. The
Partnership's share of the gain on this sale was
approximately $24.7 million; such gain was allocated
100% to the Limited Partners in accordance
with the Partnership
Agreement.
Pursuant to the sale agreement, escrows were
established for the costs of certain building
improvements and tenant improvements. In addition
to payment of the purchase price, at closing, the
purchaser deposited approximately $2.3 million which
related to the Property. The escrowed sale proceeds
were not included in the calculation of the gain on
the sale of the property because of the
uncertainty of their realization. During 1999, the
joint venture which owned the property received
approximately $232,000 from the escrow (including
$35,000 of interest earned thereon), and
approximately $125,000 in settlement
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
of prior year pass-through income. The
Partnership's share of these amounts, approximately
$147,000, was recorded in equity in earnings of
joint venture.
The Partnership, Dean Witter Realty Income
Partnership III, L.P. and an affiliate of the
Managing General Partner owned 41.2%, 26.7% and
32.1% interests, in the Partnership which owned the
property.
Summarized results of operations of the
Chesterbrook joint venture are as follows:
[CAPTION]
Years ended
December 31, 1999
1998 1997
Rental income $ 125,413
$ 3,619,970
$13,625,596
Other income 35,211
23,204
47,097
Gain on sale of land and building
196,971 61,917,072 -
357,595
65,560,246 13,672,693
Property operating expenses -
1,117,711
4,418,602
Depreciation and amortization -
66,803
3,217,884
-
1,184,514 7,636,486
Net income $ 357,595
$64,375,732
$ 6,036,207
The accounting policies of both the above joint
ventures are consistent with those of the
Partnership.
Activity in Investments in Joint Ventures is as
follows:
1999 1998
1997
Investments at beginning of year
$8,552,095
$35,449,866 $36,899,178
Equity in earnings 470,468
26,491,104
2,995,878
Distributions (1,036,915)
(53,961,857) (4,935,902)
Contributions 126,341
572,982
490,712
Investments at end of year $8,111,989
$ 8,552,095 $35,449,866
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Related Party Transactions
An affiliate of the Managing General Partner
provided property management services for Taxter
Corporate Park through December 31, 1998, for
Pasadena Financial Center until it was sold in
1997, and for five buildings at Chesterbrook
Corporate Center until it was sold in April 1998.
The Partnership paid the affiliate management
fees of approximately $80,000 and $125,000
for the years ended December 31, 1998 and
1997, 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 $72,000, $213,000 and
$276,000 for such services in the years ended
December 31, 1999, 1998 and 1997. These amounts
are included in general and administrative
expenses.
As of December 31, 1999, the affiliates were owed
approximately $15,000 in total for these services.
<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 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
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 and Co-Head of Morgan
Stanley Realty Incorporated since the merger of
Morgan Stanley and Dean Witter Discover & Co. in
1997. Prior to the merger, Mr. Smith was an
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 Inc.
E. Davisson Hardman, Jr., age 50, has been a Managing
Director of Morgan Stanley, Asia, Ltd. since 1997,
and a Managing Director of Dean Witter Realty Inc.,
which he joined in 1982.
<PAGE>
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 Deann 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.
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 of 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 contained in
Item 5 above. There were no distributions in
1999. The General Partners received cash
distributions of $216,488 and $849,270 during the
years ended December 31, 1998 and 1997.
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.
<PAGE>
(b) The executive officers and directors of the
Managing General Partner own the following Units as
of December 31, 1999:
Amo
unt
and
Nat
ure
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.
<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 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 Sprint
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, LP, 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.
<PAGE>
(c) Purchase and Sale Agreement, dated as
of February
10, 1998 between DWR
Chesterbrook Associates, Glenhardie
Corporation, Dean Witter Realty Income
Partnership II, L.P., Dean Witter Realty
Income Partnership III, L.P. and Part six
Associates as seller and FV Office
Partners, L.P. as Buyer, filed as exhibit 2
to the Registrant's Report on Form 8-K on
April 1, 1998 is incorporated herein by
reference.
(d) Assignment and Option Agreement dated
February 8,
1999 between Taxter Park Associates and DW
Taxter Special Corp, filed as exhibit 10(d)
to the Registrant's Report on Form 10-K for
the year end December 31, 1998 is
incorporated herein by reference.
(21) Subsidiaries: Technology Park Associates, a
Virginia general partnership.
(27) Financial Data Schedule
(d) (1) See paragraph (a) (2) above.
(2) Financial statements of Taxter Park
Associates, the joint
venture which owns Taxter Corporate Park.
<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 INCOME PARTNERSHIP IV, L.P.
By: Dean Witter Realty Fourth Income Properties Inc.
Managing General Partner
By: _____________________________ Date:
March 29, 2000 E. Davisson Hardman, Jr.
President
By: _____________________________Date: March 29,
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 FOURTH INCOME PROPERTIES INC.
Managing General Partner
__________________________________ Date: March
29, 2000 William B. Smith
Chairman of the Board of Directors
__________________________________ Date: March
29, 2000
E. Davisson Hardman, Jr.
Director
__________________________________ Date: March
29, 2000 Ronald T. Carman
Director
__________________________________
Date: March 29, 2000
Lewis A. Raibley, III
Director
<PAGE>
Independent Auditors' Report
To The Partners of
Taxter Park Associates
We have audited the accompanying balance sheets
of Taxter Park Associates
(the "Partnership") as of December 31, 1999 and
1998, and the related statements of income,
partners' capital,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 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 Taxter Park Associates 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.
/s/Deloitte & Touche
LLP
DELOITTE &
TOUCHE LLP
New York, New York
March 20, 2000
<PAGE>
<TABLE>
TAXTER PARK
ASSOCIAT
ES
BALANCE
SHEETS
December 31,
1999 and 1998 <CAPTION>
1999 1998
<S> <C>
<C>
ASSETS
Cash and cash equivalents $
450,933 $
35,847
Real estate, at cost:
Land 1,798,825
1,798,825
Buildings and improvements 26,982,320
27,558,482
28,781,145
29,357,307
Accumulated depreciation 13,542,977
13,019,324
15,238,168
16,337,983
Deferred leasing commissions, net 238,115
193,292
Other assets 602,936
1,287,425
$16,530,152 $17,854,547
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities
$ 399,638 $ 640,028
Partners' capital 16,130,514
17,214,519
$16,530,152
$17,854,547
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
TAXTER PARK ASSOCIATES
INCOME STATEMENTS
Years ended December 31, 1999, 1998 and 1997
<CAPTION>
1999 1998 1997
<S> <C>
<C> <C>
Revenues:
Rental $ 5,269,027 $5,684,312
$5,568,140
Interest and other 39,476 68,706
114,082
5,308,503 5,753,018
5,682,222
Expenses:
Property operating 3,144,567 2,439,845
3,168,784
Depreciation 1,238,389 1,311,491
1,093,264
Amortization 129,637 166,557
166,577
4,512,593 3,917,893
4,428,625
Net income $ 795,910 $1,835,125
$1,253,597
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
TAXTER PARK ASSOCIATES
STATEMENTS OF PARTNERS' CAPITAL
Years ended December 31, 1999, 1998, and 1997
<CAPTION>
<S>
<C>
Partners' capital at January
1, 1997
$19,254,076
Net income
1,253,597
Capital contributions
652,219
Cash distributions
(2,710,562)
Partners' capital at December
31, 1997
18,449,330
Net income
1,835,125
Capital contributions
517,939
Cash distributions
(3,587,875)
Partners' capital at December
31, 1998
17,214,519
Net income
795,910
Capital contributions
311,184
Cash distributions
(2,191,099)
Partner's capital at December
31, 1999
$16,130,514
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
TAXTER PARK ASSOCIATES
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 $ 795,910
$
1,835,125 $
1,253,597
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation
1,238,389
1,311,491 1,093,264
Amortization 129,637
166,557 166,577
Decrease (increase) other assets 684,489
(91,865) 212,801
(Decrease) increase accounts payable
and accrued liabilities
(240,390)
358,936 7,852
Net cash provided by operating
activities
2,608,035 3,580,244
2,734,091
Cash flows from investing activities:
Additions to real estate
(313,034)
(517,938) (652,218)
Cash flows from financing activities:
Capital contributions 311,184
517,939 652,219
Cash distributions
(2,191,099)
(3,587,875) (2,710,562)
Net cash used in financing activities
(1,879,915) (3,069,936)
(2,058,343)
Increase (decrease) in cash and cash
equivalents
415,086 (7,630)
23,530
Cash and cash equivalents at beginning
of year
35,847 43,477
19,947
Cash and cash equivalents at end of year $
450,933 $ 35,847 $ 43,477
See accompanying notes to financial statements.
</TABLE>
<PAGE>
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.
The joint venture expects to sell the property in
2000.
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
<PAGE>
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.
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.
<PAGE>
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 $20 million higher
than the amount reported for financial statement
purposes.
3. Lease Commitments
Minimum future rental income under
noncancellable operating leases as of December 31,
1999 is as follows:
Year ending December 31:
2000 4,427,923
2001 2,876,074
2002 1,983,000
2003 401,676
2004 540,852
Thereafter 1,086,577
Total $11,316,102
The Partnership has determined that all leases
relating to the property are operating leases.
The terms range from two 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-managed the
buildings at the property until December 31,
1998. The Partnership paid the affiliate
management fees of approximately $175,700 and
$179,000 in 1998 and 1997, respectively, for such
services.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Registrant is a limited partnership which invests in a real estate joint
ventures. In accordance with industry practice, its balance sheet is
unclassified. For full information, refer to the accompanying unaudited
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,225,631
<SECURITIES> 0
<RECEIVABLES> 94,894
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,432,514<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 10,323,318<F2>
<TOTAL-LIABILITY-AND-EQUITY> 10,432,514<F3>
<SALES> 0
<TOTAL-REVENUES> 549,437<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 186,710
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 362,727
<INCOME-TAX> 0
<INCOME-CONTINUING> 362,727
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 362,727
<EPS-BASIC> 1.07<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include an investment
in joint venture of $8,111,989.
<F2>Represents partners' capital.
<F3>Liablities include accounts payable and accrued liabilities of
$109,196.
<F4>Total revenues include equity in earnings of joint venture of $470,468
and interest and other revenue of $78,969.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
