10-Q 1 d10q.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended July 31, 2001 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: 0-13260 DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. --------------------------------------------- (Exact name of registrant as specified in governing instrument) Delaware 13-3174553 -------------------- --------------------------------- (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: (800) 829-8585 -------------- Former name, former address and former fiscal year, if changed since last report: not applicable Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- ---------- PART I - FINANCIAL INFORMATION ------------------------------ Item 1. Financial Statements DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. BALANCE SHEETS

~~DEAN~~July ~~WITTER REALTY INCOME PARTNERSHIP I~~31, ~~L.P.~~October ~~STATEMENTS OF CASH FLOWS Six months ended April 30~~31, 2001 ~~and~~ 2000 ~~2001 2000~~ ---------------------------------------------------------------------------------------------------------------- ASSETS Cash ~~flows~~and ~~from~~cash ~~operating~~equivalents ~~activities: Net income~~ $ ~~362~~1,~~770~~534,952 $ ~~211~~2,~~692~~118,062 ~~Adjustments~~Real ~~to reconcile net income to net cash provided by operating activities~~estate: ~~Depreciation~~Land ~~and~~- ~~amortization 60~~2,~~951 117~~312,~~426~~300 ~~Increase~~Building ~~in other assets (38,993) (49,281) Decrease in accounts payable~~ and ~~other~~improvements ~~liabilities~~- ~~(42~~7,~~288) (12~~489,~~679)~~594 --------------------------------------------------------------------------------------- ~~Net cash provided by operating activities 342,440 267,158~~ ------------------------- - 9,801,894 Accumulated depreciation - (3,295,444) ------------------------------------------------------------ ~~Cash flows from financing activities: Cash distribution (997,385)~~ - --------------------------------------------------- - 6,506,450 ----------------------------------- ~~(Decrease) increase in cash and cash equivalents (654,945) 267,158 Cash and cash equivalents at beginning of period 2,118,062 1,355,995~~ -----------------------------------------------------------------------------~~----------~~ ~~Cash~~Real ~~and~~estate ~~cash~~held ~~equivalents~~for atsale ~~end~~6,451,004 of- ~~period~~Other $1assets 234,~~463,117~~081 $1132,~~623,153~~936 ================================================================================================================ ~~Supplemental~~$ ~~disclosure~~8,220,037 of$ ~~non-cash~~8,757,448 ~~investing~~LIABILITIES ~~activities:~~AND ~~Reclassification~~PARTNERS' ofCAPITAL ~~real~~Accounts ~~estate~~payable toand ~~real~~other ~~estate~~liabilities ~~held~~$ ~~for~~292,360 ~~sale~~$ 331,416 ---------------------------------------------------------------------------------------------------------------- Partners' capital (deficiency): ~~Land~~General $Partners 2(4,~~312~~296,~~300~~664) $(4,346,567) -Limited ~~Building~~Partners ~~and~~($1,000 ~~improvements~~per 7Unit,~~489~~ 92,~~594~~780 -Units ~~Accumulated~~issued) ~~depreciation~~12,224,341 (312,~~350~~772,~~890)~~599 - --------------------------------------------------------------------------------------------------------------- ~~Real~~Total ~~estate~~partners' ~~held~~capital ~~for~~7,927,677 ~~sale~~8,426,032 ---------------------------------------------------------------------------------------------------------------- $ 68,~~451~~220,~~004~~037 $ -8,757,448 ================================================================================================================

See accompanying notes to financial statements. DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. INCOME STATEMENTS Three and nine months ended July 31, 2001 and 2000

See accompanying notes to financial statements. DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. STATEMENT OF PARTNERS' CAPITAL Nine months ended July 31, 2001

See accompanying notes to financial statements. DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. STATEMENTS OF CASH FLOWS Nine months ended July 31, 2001 and 2000

See accompanying notes to financial statements. DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. Notes to Financial Statements 1. The Partnership --------------- Dean Witter Realty Income Partnership I, L.P. (the "Partnership") is a limited partnership organized under the laws of the State of Delaware in 1983. The Partnership's fiscal year ends on October 31. As discussed in Note 2, the Partnership is remarketing for sale the North Lake Plaza shopping center, its remaining real estate investment. Pursuant to the Partnership Agreement, the sale of the Partnership's last such investment will cause the dissolution of the Partnership. Thereafter, the Partnership plans to wind up its affairs and terminate. However, it is uncertain when the shopping center will be sold and when the Partnership will terminate. The Partnership's records are maintained on the accrual basis of accounting for financial reporting and tax purposes. Net income per Unit of limited partnership interest amounts are calculated by dividing net income allocated to the Limited Partners by the weighted average number of Units outstanding. In the opinion of management, the accompanying financial statements, which have not been audited, include all adjustments necessary to present fairly the results for the interim periods. Except for the reclassification of the North Lake Plaza property as real estate held for sale on January 31, 2001, such adjustments consist only of normal recurring accruals. These financial statements should be read in conjunction with the annual financial statements and notes thereto included in the Partnership's annual report on Form 10-K filed with the Securities and Exchange Commission for the year ended October 31, 2000. Operating results of interim periods may not be indicative of the operating results for the entire year. 2. Real Estate Held for Sale ------------------------- Pursuant to a Purchase and Sale Agreement executed February 15, 2001, the Partnership agreed to sell the North Lake Plaza shopping center to an unaffiliated third party. DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. Notes to Financial Statements In June 2001, the Agreement lapsed without closing of the sale. As a result, the Partnership is remarketing the property for sale. At January 31, 2001, the Partnership reclassified the North Lake Plaza property as real estate held for sale. Accordingly, the Partnership did not record depreciation on the property after the first quarter of 2001. Currently, the Partnership only earns rental revenues from the North Lake Plaza property. During the nine months ended July 31, 2001, the following two tenants at the property generated approximately 68% of the Partnership's rental revenues: Home Depot (54%) and Marshalls (14%). Expense reimbursements, paid by tenants of North Lake Plaza pursuant to their leases, are included in rental revenues. 3. Related Party Transactions -------------------------- An affiliate of the Managing General Partner provided property management services for the North Lake Plaza property until December 31, 1999. The Partnership paid the affiliate management fees of approximately $8,000 for the nine months ended July 31, 2000. This amount was included in property operating expenses in 2000. Another affiliate of the Managing General Partner performs administrative functions, processes certain investor transactions and prepares tax information for the Partnership. For the nine months ended July 31, 2001 and 2000, the Partnership incurred approximately $24,000 and $44,000, respectively, for these services. These amounts are included in general and administrative expenses. The 2001 fees are also included in accounts payable and other liabilities as of July 31, 2001. DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS ----------------------------------------------------------------------- OF OPERATIONS ------------- Liquidity and Capital Resources ------------------------------- As discussed in Note 2 to the financial statements, the Partnership is remarketing for sale the North Lake Plaza shopping center, the Partnership's last remaining property. There can be no assurance that the property will be sold in the near future. The Partnership Agreement provides that the Partnership shall terminate upon the sale of the Partnership's last investment, and that dissolution shall be effective on the day on which the event occurs giving rise to the dissolution. Accordingly, the Partnership will dissolve pursuant to the terms of its Partnership Agreement on the date on which the North Lake Plaza property is sold. Thereafter, the Partnership will wind up its affairs and terminate its existence by filing a certificate of cancellation in the office of the Delaware Secretary of State. The timing of such termination is uncertain at the current time. In November 2000, the Partnership paid a cash distribution of $10.75 per Unit to Limited Partners only. The amount distributed consisted of previously undistributed proceeds from the 1998 sale of the Harborgate property. Generally, future cash distributions will be paid from proceeds received from the sale of the North Lake Plaza property and cash reserves. Occupancy in the retail market in Altamonte Springs, the location of the North Lake Plaza shopping center, is approximately 92%. At July 31, 2000, occupancy at the shopping center was approximately 81%. The lease for Home Depot (for approximately 50% of the property's space) is schedule to expire in 2003. The Burlington Coat Factory, which subleased all the space leased to Home Depot, vacated the space in October 1999; however, both Home Depot and Burlington remain obligated, and continue to pay rent, under the lease. This vacancy is adversely impacting the sales of smaller tenants at the property, and, as a result, the Partnership is experiencing an increase in past due rent receivables from the smaller tenants (see "Operations"). However, the Managing General Partner believes that this DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. vacancy will not adversely affect its ability to sell the property because the Managing General Partner is remarketing the property so that it can be redeveloped. The lease of Marshalls Inc. (for approximately 21% of the space) is scheduled to expire in 2007. During the nine months ended July 31, 2001, the North Lake Plaza shopping center generated positive cash flow from operations, and it is anticipated that the property will continue to do so during the period the Partnership continues to own it. The Partnership added the cash generated by the property, during the nine months ended July 31, 2001, to the Partnership's cash reserves. The Partnership believes that its cash reserves are adequate for its needs until it is terminated. Except as discussed above and in the financial statements, the Managing General Partner is not aware of any trends or events, commitments or uncertainties that may have a material impact on liquidity. Operations ---------- Fluctuations in the Partnership's operating results for the three and nine month periods ended July 31, 2001 compared to 2000 are primarily attributable to the following: The decrease in property operating expenses during the nine months ended July 31, 2001, compared to 2000, was primarily due to the first quarter 2001 receipt of a real estate tax refund of approximately $35,000, relating to the Arlington Business Center property (sold October 1997), and the second quarter 2001 collection of a receivable of approximately $65,000 which was previously written off by the Partnership. The increase in property operating expenses during the three-month period ended July 31, 2001, compared to 2000, was primarily due to an increase in the reserve for uncollectible tenant receivables at the North Lake Plaza property. DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. The decreases in depreciation and amortization expenses in 2001 were due to the absence of depreciation expense on the North Lake Plaza property since February 1, 2001. The Partnership no longer records depreciation on this property because the Partnership reclassified North Lake Plaza as real estate held for sale on January 31, 2001. There were no other individually significant factors which caused changes in revenues or expenses. Inflation --------- Inflation has been consistently low during the periods presented in the financial statements and, as a result, has not had a significant effect on the operations of the Partnership or its properties. DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. PART II - OTHER INFORMATION --------------------------- Item 6. Exhibits & Reports on Form 8-K ------- ------------------------------ (a) Exhibits. Not Applicable (b) Reports on Form 8-K Report on Form 8-K dated August 9, 2001 disclosing that the North Lake Plaza property was not sold pursuant to the previously reported Purchase and Sale Agreement. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P. By: Dean Witter Realty Income Properties I, Inc. Managing General Partner Date: September 11, 2001 By: /s/ E. Davisson Hardman, Jr. ---------------------------- E. Davisson Hardman, Jr. President Date: September 11, 2001 By: /s/ Raymond E. Koch ---------------------------- Raymond E. Koch Vice President, Assistant Secretary and Controller (Principal Financial and Accounting Officer)

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