ITEM 1. BUSINESS
The Registrant, Dean Witter Realty Growth Properties, L.P. (the "Partnership") is a limited partnership formed in March 1985 under the Uniform Limited Partnership Act of the State of Delaware for the purpose of investing primarily in income-producing commercial and residential properties.
The Managing General Partner of the Partnership is Dean Witter Realty Growth Properties Inc., a Delaware corporation, which is wholly-owned by Dean Witter Realty Inc. ("Realty"). The Associate General Partner is Dean Witter Realty Growth Associates, L.P., a Delaware limited partnership (the "Associate General Partner"), the general partner of which is the Managing General Partner. The Managing General Partner manages and controls all aspects of the Partnership's operations. The terms of transactions between the Partnership and its affiliates are set forth in Item 13 below.
The Partnership issued 78,594 units of limited partnership interests (the "Units") with gross proceeds of $78,594,000. The offering has been terminated and no additional Units will be sold. The proceeds from the offering were used to make leveraged investments in three office properties (one of which was lost through foreclosure in 1992), an industrial park and a hotel. The properties are described in Item 2
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.
The Partnership owns, through partnership interests, the following property interests. Generally, the leases pertaining to the properties provide for pass-throughs to the tenants of their pro-rata share of certain operating expenses.
Each property has been built with on-site parking facilities.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
Neither the Partnership nor any of its properties is subject to any material pending legal proceedings.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted during the fourth quarter of the fiscal year to a vote of Unit holders.
PART II.
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
An established public trading market for the Units does not exist, and it is not anticipated that such a market will develop in the near future. Accordingly, information as to the market value of a Unit at any given date is not available. However, the Partnership does allow limited partners, (the "Limited Partners") to transfer their units.
As of December 31, 1994 there were 6,175 holders of limited partnership interests.
The Partnership is a limited partnership and, accordingly, does not pay dividends. However, the Partnership Agreement permits distributions of "Distributable Cash" to its partners. Pursuant to the Partnership Agreement, distributable cash from operations is to be paid 96% to the Limited Partners, after the Managing General Partner has received a management fee of 6.25% of distributable cash. The Managing General Partner did not receive a management fee in 1994, 1993 or 1992 because the Partnership did not pay a cash distribution in any of those years.
Sale or refinancing proceeds will generally be distributed (i) to the Limited Partners until they have received a return of their capital contributions; (ii) to the General Partners until they have received 1.01% of the amount distributed to the Limited Partners; (iii) 99% of any remaining amounts to the Limited Partners and 1% to the General Partners until the Limited Partners have received cumulative distributions in an amount sufficient to provide a 6% cumulative annual return on their adjusted capital contributions; and (iv) 85% to the Limited Partners and 15% to the General Partners after the Managing General Partner receives a brokerage fee, if earned, not in excess of 3% of the aggregate gross sales prices of all properties. During the year ended December 31, 1994 and December 31, 1993, the Partnership did not distribute any sale or refinancing proceeds.
Taxable income and tax loss generally are allocated to the partners in proportion to the distribution of distributable cash (after payment of the Managing General Partner's management fee) or sale or financing proceeds (or 96% to the Limited Partners and 4% to the General Partners if there is no distributable cash).
ITEM 7.
ITEM 7. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Liquidity and Capital Resources
The Partnership raised $78,594,000 in a public offering which was terminated in 1986. The Partnership has no plans to raise additional capital.
The Partnership used the proceeds from the offering to make leveraged investments in four properties (one of which was lost through foreclosure in July 1992). No additional investments are planned.
Many real estate markets are stabilizing or improving, primarily due to the continued absence of significant construction activity. However, the recovery of the office market has been and may continue to be slow because tenant demand is weak as a result of continued downsizing by many major corporations. Increases in import/export sales could provide support for continuing absorption of space. Improvement in the economy and lack of new construction in the hotel market is slowly resulting in increased occupancy and room rates.
Real estate markets are generally divided into sub-markets by geographic location and property type. Not all sub-markets have been affected equally by the above factors.
The Partnership's liquidity depends upon cash flow from operations of its properties, expenditures for tenant improvements and leasing commissions in connection with the leasing of vacant space. In 1994, all of the Partnership's property investments generated positive cash flow from operations.
The Partnership's current cash balances are being reserved primarily for (1) the replacement of certain furniture, fixture and equipment and working capital reserves at the hotel which it is required to maintain pursuant to the hotel management agreement and (2) the cost of tenant improvements and leasing commissions at the Peninsula Office Park investment and at Braker Center at which there are also required cash reserves. Other than these reserves, the Partnership's current cash reserves are nominal.
In May 1994, the partnerships that own the Peninsula Office Park properties completed an extension and modification agreement for mortgage loans on the properties. Under this agreement, the lender agreed to reduce the interest accrual and pay rates under the loans to 9.5%, and 8.25%, respectively, and to extend the maturity dates to December 1, 1996. The borrowers may further extend the maturity dates of the modified loans if they make partial paydowns of the mortgage debt. During the revised loan term, the borrowers are prohibited from making cash distributions to the Partnership and the Partnership's joint venture partner.
The Partnership has lent $170,222 to the Peninsula Office Park investment as of December 31, 1994. The loan bears interest at the prime rate plus 1%.
In October 1994, the Partnership completed an extension and modification agreement for the mortgage loan encumbering one of the warehouse facilities at Braker Center. See note 6 to the consolidated financial statements in Item 8.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None. PART III.
ITEM 10.
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, Assistant Secretary and Director Ronald T. Carman Secretary and Director
All of the directors have been elected to serve until the next annual meeting of the shareholder 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 51, is a Managing Director of Dean Witter Realty, Inc. and has been with Dean Witter Realty Inc. since 1982.
E. Davisson Hardman, Jr., age 45, is a Managing Director of Dean Witter Realty Inc, and has been with Dean Witter Realty Inc. since 1982.
Lawrence Volpe, age 47, 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 43, is a Director and the Secretary of Dean Witter Realty Inc. He is a Senior Vice President of Dean Witter, Discover & Co. and of Dean Witter Reynolds Inc., which he joined in 1984.
There is no family relationship among any of the foregoing persons.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
The General Partners are entitled to receive a share of 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 have not received a cash distribution for the period 1988 through 1993. As of December 31, 1994, the general partners have deferred receipt of cash distributions of $262,316.
The General Partners and their affiliates were paid certain fees and reimbursed for certain expenses. Information concerning such fees and reimbursements are contained in Note 9 of the Notes to the Consolidated Financial Statements in Item 8 above.
The directors and executive officers of the Partnership's Managing General Partner received no renumeration from the Partnership.
ITEM 12.
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, 1994:
Amount and Nature of Title of Class Name of Beneficial Owner Beneficial Ownership
Limited William B. Smith * Partnership Interests E. Davisson Hardman, Jr. *
All directors and executive * officers of the Managing General Partner, as a group
*Owns, by virture of ownership of limited partnership interests in the Associate General Partner, less than 1% of the Units of the Partnership.
ITEM 13.
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 executive 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 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 Dean Witter Realty Inc. ("Realty"), a Delaware corporation which is a wholly owned subsidiary of Dean Witter, Discover & Co. The general partner of the Associate General Partner is Dean Witter Realty Growth Properties Inc. The limited partner of the Associate General Partner is LSP, L.P., a Delaware limited partnership. Realty and certain current and former executive officers and directors of the Managing General Partner are partners of LSP, 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. In addition, affiliates of the General Partners have ownership interest in certain properties. Information concerning these transactions is contained in the Notes to Consolidated Financial Statements in Item 8 above.
PART IV
ITEM 14.
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 Schedule (see Index to Financial Statements filed as part of Item 8 of this Annual Report).
3. Exhibits (2) Not applicable.
(3)(a) Amended and Restated Agreement of Limited Partnership dated as of July 12, 1985 set forth in Exhibit A to the Prospectus included in Registration Statement Number 2- 96767 is incorporated herein by reference.
(3)(b) Certificate of Limited Partnership dated as of July 12, 1985 incorporated by reference in Registration Statement Number 2-96767 is incorporated herein by reference.
(4)(a) Amended and Restated Agreement of Limited Partnership dated as of July 12, 1985 set forth in Exhibit A to the Prospectus included in Registration Statement Number 2- 96767 is incorporated herein by reference.
(4)(b) Certificate of Limited Partnership dated as of July 12, 1985 incorporated by reference in Registration Statement Number 2-96767 is incorporated herein by reference.
(9) Not applicable.
(10) Not applicable.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(16) Letter regarding change in certifying accountant. Incorporated by reference in the Partnership's Current Report on Form 8-K dated December 31, 1994.
(18) Not applicable.
(19) Not applicable.
(21) Subsidiaries: TWC Eleven Limited Partnership, a Florida Limited Partnership. L.S. Braker Associates, a Texas Limited Partnership.
(22) Not applicable.
(23) Not applicable.
(24) Not applicable.
(27) Financial Data Schedule.
(28) Not applicable.
(99) Not applicable.
(b) Reports on Form 8-K Report dated December 15, 1994 of the change in the Partnership's Independent Auditor for the year ending December 31, 1994.
(c) See 3a. above.
(d) 1. Financial Statements of TWC Ten Limited Partnership an office building located in Tampa, Florida. To be filed by 10K/A when received from TWC Ten Limited Partnership.
2. Financial Statements of Peninsula Office Park, an office complex located in San Mateo, California. To be filed by 10-K/A when received from Peninsula Office 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 GROWTH PROPERTIES, L.P.
By: Dean Witter Realty Growth Properties Inc. Managing General Partner
By: /s/E. Davisson Hardman, Jr. Date: March 31, 1995 E. Davisson Hardman, Jr. President
By: /s/Lawrence Volpe Date: March 31, 1995 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 GROWTH PROPERTIES INC. Managing General Partner
/s/William B. Smith Date: March 31, 1995 William B. Smith Chairman of the Board of Directors
/s/E. Davisson Hardman, Jr. Date: March 31, 1995 E. Davisson Hardman, Jr. Director
/s/Lawrence Volpe Date: March 31, 1995 Lawrence Volpe Director
/s/Ronald T. Carman Date: March 31, 1995 Ronald T. Carman Director