10-K 1 dw123101_yieldplus-10k.txt ANNUAL REPORT 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, 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 0-18148 DEAN WITTER REALTY YIELD PLUS, L.P. ----------------------------------- (Exact name of registrant as specified in its charter) Delaware 13-3426531 -------------------------------------------------------------------------------- (State of (IRS Employer organization) Identification No.) 1221 Avenue of the Americas, New York, NY 10020 ------------------------------------------- ---------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (800) 829-8585 -------------- Securities registered pursuant to Section 12(b) of the Act: Title of each class Name 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 non-affiliates of the registrant. N/A DOCUMENTS INCORPORATED BY REFERENCE None PART I. ITEM 1. BUSINESS The Registrant, Dean Witter Realty Yield Plus, L.P. (the "Partnership"), is a limited partnership organized in January 1987 under the Uniform Limited Partnership Act of the State of Delaware for the purpose of investing in income-producing properties. The Managing General Partner of the Partnership is Dean Witter Realty Yield Plus Inc. (the "Managing General Partner"), a Delaware corporation which is wholly owned by Dean Witter Realty Inc. ("Realty"). The Associate General Partner is Dean Witter Realty Yield Plus Associates, L.P. (the "Associate General Partner"), a Delaware limited partnership, the general partner of which is the Managing General Partner. The Managing General Partner manages and controls all aspects of the business of the Partnership. The terms of transactions between the Partnership and its affiliates are set forth below in Note 6 to the consolidated financial statements included in Item 8 and in Item 13. The Partnership issued 8,909,969 units of limited partnership interest (the "Units") for $178,199,380. The offering has been terminated and no additional Units will be sold. The proceeds from the offering were used to make investments in six participating mortgage loans and land leases secured by interests in real property. Additionally, proceeds were used to make an investment in a short-term loan secured by eleven partnership interests. The Partnership subsequently acquired equity interests in the real estate securing all of the loans through foreclosure or through transfers of ownership in lieu of foreclosure. As of December 22, 2000, all of the properties in which the Partnership had an interest had either been sold to unaffiliated purchasers or lost through foreclosure. The Partnership Agreement provides that the Partnership shall dissolve 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 dissolved pursuant to the terms of its Partnership Agreement, effective December 22, 2000, the date on which the Partnership sold the Deptford Crossing shopping center. However, the Partnership will not wind up its operations until its outstanding litigation with respect to the 401 East Ontario Street property (see Note 4 to the consolidated financial statements in Item 8 below) is resolved. The timing of such resolution is uncertain. The Partnership considered its business to include one industry segment, investment in real property. Financial information regarding the Partnership is in the Partnership's consolidated financial statements. 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 1221 Avenue of the Americas, New York, New York 10020. The Partnership has no other offices. As of December 31, 2001, the Partnership did not own any property interests. On December 22, 2000, the Partnership sold its Deptford Crossing Shopping Center, which is located in Deptford, New Jersey. An affiliate of Realty was the property manager of the Deptford Crossing property until December 31, 1999. The One Congress Street property, which is located in Boston, Massachusetts and primarily consists of office space and an income producing parking garage, was sold on August 31, 2000. The Partnership owned a 58% interest in the joint venture which owned the general partnership interest in the property owner. Dean Witter Realty Yield Plus II, L.P., an affiliate, owned the remaining 42% interest in the joint venture. On February 14, 2000, the Partnership sold its Military Crossing land, which is located in Norfolk, Virginia. Further information relating to the Partnership's properties is included in Notes 4 and 5 to the consolidated financial statements in Item 8 below. ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted during the fourth quarter of the fiscal year to a vote of Unit holders. PART II. ITEM 5. MARKET FOR 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 4, 2002, there were 14,086 holders of limited partnership interests. The Partnership does not pay dividends. It does, however, make distributions of cash to its partners. Pursuant to the Partnership Agreement, distributable cash, as defined, is paid 90% to the Limited Partners and 10% to the general partners (the "General Partners"). Pursuant to the Partnership Agreement, $1,239,345 of the General Partners' share of such net cash flow distributable to them through December 31, 1990 was deferred subject to receipt by the Limited Partners of an 8% annual return on their invested capital through that date. Sale or financing proceeds will be distributed, to the extent available: first, 97% to the Limited Partners and 3% to the General Partners until each Limited Partner has received a return of their invested capital plus an amount sufficient to provide a 10% cumulative annual return on their adjusted capital contribution; second, 100% to the General Partners until they have received the amount of any net cash flow previously deferred and not distributed; and third, 85% to the Limited Partners and 15% to the General Partners. However, if the Limited Partners don't receive a return of their invested capital and a 10% cumulative annual return on their adjusted capital contribution by the termination of the Partnership, then the General Partners must contribute the sale proceeds they received from the Partnership back to the Partnership. In lieu of this contribution, the General Partners have not received distributions of sale proceeds from the Partnership. On January 30, 2002, the Partnership paid a distribution of approximately $0.34 per Unit (including $0.08 per unit from the remaining undistributed proceeds from the December 2000 sale of the Deptford Crossing property and $0.26 per Unit of cash reserves). The Deptford sale proceeds were distributed 100% to the Limited Partners. Total distributions were $3,246,114 with $2,993,750 distributed to the Limited Partners and $252,364 distributed to the General Partners. During the year ended December 31, 2001, the Partnership paid a distribution, to Limited Partners only, of approximately $13.4 million ($1.50 per Unit), consisting of approximately $10.2 million ($1.14 per Unit) from a portion of the net proceeds received from the December 2000 sale of the Deptford Crossing property and $3.2 million ($0.36 per Unit) from the remaining undistributed proceeds from the August 2000 sale of the One Congress Street property. During the year ended December 31, 2000, the Partnership paid a cash distribution, to Limited Partners only, of approximately $42.3 million ($4.75 per Unit), consisting of $0.3 million ($0.03 per Unit) from the net proceeds from the February 2000 sale of the Military Crossing land and $42.0 million ($4.72 per Unit) from a portion of the Partnership's share of the net proceeds from the sale of One Congress Street. The Partnership plans to make its final distribution of its cash reserves when the Partnership concludes winding up its affairs. The timing of such windup is uncertain. Taxable income generally will be allocated to the partners in proportion to the distribution of distributable cash or sale or financing proceeds, as the case may be (or 90% to the Limited Partners and 10% to the General Partners if there is no distributable cash or sale or financing proceeds). At a minimum, the General Partners must be allocated at least 1% of the taxable income from a sale or financing. Tax losses, if any, will be allocated 90% to the Limited Partners and 10% to the General Partners. ITEM 6. SELECTED FINANCIAL DATA The following sets forth a summary of selected financial data for the Partnership:

1. Total revenues and net loss include a loss of $27,599 from the 2000 sale of the Deptford Crossing shopping center. 2. Total revenues and net income include the gain on sale of the One Congress Street property ($26.7 million in equity in earnings of joint venture) and the net gain ($0.1 million) on the sales of the Deptford Crossing and Military Crossing properties. 3. Total revenues include gains on the sales of the Michelson property ($25.2 million), the 401 East Ontario property ($39.8 million) and the Pine Ridge land ($0.4 million). Net income includes these gains, reduced by the minority interest share ($12.7 million) of the gain on the sale of the Michelson property. 4. Total revenues, income before extraordinary item and net income include the $5.2 million gain on the sale of the Greenway Pointe property, and are all net of $1.6 million of reserves of accrued but unpaid interest on the One Congress Street participating mortgage loan. 5. Represents a gain on extinguishment of debt resulting from the foreclosure of the Genessee Crossing property. 6. Distributions paid to Limited Partners for the years ended December 31, 2000, 1999 and 1998 included returns of capital of $1.67, $0.13 and $7.14 per Unit, respectively, calculated as the excess of cash distributed per Unit over accumulated earnings per Unit not previously distributed. All distributions paid to Limited Partners in 2001 and 1997 represent returns of capital. 7. Consists of $1.14 per Unit from a portion of the proceeds from the 2000 sale of the Deptford Crossing shopping center and $0.36 per Unit from the remaining undistributed proceeds from the 2000 sale of the One Congress Street property. 8. Consists of $4.72 per Unit from a portion of the proceeds from the sale of the One Congress Street property and $0.03 per Unit from the proceeds from the sale of the Military Crossing land. 9. Includes approximately $0.16 per Unit of proceeds from the 1998 sales of the 401 East Ontario and Pine Ridge properties. 10. Includes approximately $10.58 per Unit of proceeds from the sales of the Michelson and 401 East Ontario properties. 11. Includes approximately $1.19 per Unit of proceeds from the sale of the Greenway Pointe property. 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 AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES As a result of the September 11, 2001 destruction of the World Trade Center, the Partnership changed the location of its principal offices to 1221 Avenue of the Americas, New York, NY 10020. The 2 World Trade Center address was the location of management and administration of the Partnership; the Partnership did not hold any of its assets at this location. The Managing General Partner does not expect that the tragedy will adversely affect the operations of the Partnership. The Partnership completed a $178,199,380 public offering in 1987. The Partnership has no plans to raise additional capital. The Partnership originally invested in seven loans and land leases. Due to the past weakness in real estate markets, the properties securing the loans did not generate sufficient cash flow to fully service their debt. As a result, the Partnership acquired equity interests in all of the properties in which it originally invested, through foreclosure or transfers of ownership in lieu of foreclosure. No additional investments are planned. On December 22, 2000, the Partnership sold its last remaining property interest, the Deptford Crossing shopping center. As a result of this sale, all of the properties in which the Partnership had an interest have either been sold to unaffiliated purchasers or lost through foreclosure. The Partnership Agreement provides that the Partnership shall dissolve 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 dissolved pursuant to the terms of its Partnership Agreement, effective December 22, 2000, the date the Partnership sold the Deptford Crossing property. However, the Partnership will not wind up its operations until its outstanding litigation with respect to the 401 East Ontario Street property (see Note 4 to the consolidated financial statements) is resolved. The timing of such resolution is uncertain. As discussed in Item 5, the Partnership paid distributions of $0.34 per Unit in January 2002 and $1.50 per Unit during the year ended December 31, 2001. The Partnership's other assets at December 31, 2001 primarily consisted of the following receivables: a) $111,000 of the remaining proceeds from the sale of the One Congress Street property which had been placed in escrow to secure the Partnership's obligation to repair the parking lot at the property and b) $41,000 of normal tenant receivables relating to the period that the Partnership owned the Deptford Crossing property. The Deptford property receivables were collected in March 2002. At December 31, 2000, the Partnership's other assets primarily consisted of approximately $440,000 of receivables relating to the Deptford sale; all such amounts were collected in 2001. The Partnership may have to use some of its remaining cash reserves to fund professional fees as it continues to pursue the above-mentioned litigation regarding the 401 East Ontario Street property. The Partnership plans to make its final distribution of its cash reserves when the litigation is resolved and the Partnership has concluded winding up its affairs. The Managing General Partner believes that the Partnership's cash reserves are adequate to fund all Partnership cash requirements while the Partnership winds up its affairs. Except as discussed above and in the consolidated financial statements, the Managing General Partner is not aware of any trends or events, commitments or uncertainties that may have a material impact on liquidity. OPERATIONS Fluctuations in the Partnership's operating results for the year ended December 31, 2001 compared to 2000 and 2000 compared to 1999 are primarily attributable to the following: The loss on sale of real estate in 2001 was due to additional costs that the Partnership incurred in connection with the December 2000 sale of the Deptford Crossing shopping center. The net gain on sales of real estate in 2000 primarily resulted from the $130,000 gain from the sale of the Deptford Crossing property. This gain was partially offset by the $15,000 loss from the February 2000 sale of the Military Crossing land. The absence of rental revenues and deprecation and amortization expenses in 2001 and the decrease in property operating expenses in 2001 compared to 2000 were due to the sale of the Deptford Crossing property in December 2000. During the year ended December 31, 2001, property operating expenses primarily consisted of approximately $105,000 in connection with the above-mentioned 401 East Ontario Street litigation and $73,000 in connection with the wind-up of the Partnership's operation of the Deptford Crossing property. The decrease in the Partnership's equity in earnings of joint venture in 2001 compared to 2000 was primarily due to the absence in 2001 of the Partnership's share of the gain on the August 2000 sale of the One Congress Street property (approximately $26.7 million). The increase in equity in earnings of joint venture in 2000 compared to 1999 is primarily due to the Partnership's share (approximately $26.7 million) of the gain on the sale of the One Congress Street property. This gain was partially offset by the Partnership's share of repair costs ($1.3 million) on the parking lot of the property in 2000 and the loss of its share of four months of operating income from One Congress Street in 2000 after the sale of the property. Interest and other income decreased in 2001 compared to 2000 because interest earned on the proceeds from the One Congress Street sale in September 2000 before such proceeds were distributed to the Limited Partners was greater than the interest earned on the Deptford sale in January 2001 before such proceeds were distributed. Interest and other income was greater in 2000 than in 1999 primarily due to the interest earned in September 2000 on the proceeds from the sale of the One Congress Street property before such proceeds were distributed to Limited Partners. Property operating expenses increased in 2000 compared to 1999 primarily due to $498,000 for the parking lot repairs at the Deptford Crossing property in 2000. Also, partial settlements received from the 401 East Ontario litigation (which reduce property operating expenses) were greater in 1999 ($700,000) than 2000 ($48,000). See Note 4 to the consolidated financial statements. General and administrative expenses decreased in 2001 compared to 2000 because the Partnership began to wind up its affairs in 2001. There were no other individually significant factors which caused changes to revenues or expenses. INFLATION Inflation 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 YIELD PLUS, L.P. INDEX (a) Financial statements Independent Auditors' Report Consolidated Balance Sheets at December 31, 2001 and 2000 Consolidated Statements of Operations for the years ended December 31, 2001, 2000 and 1999 Consolidated Statements of Partners' Capital for the years ended December 31, 2001, 2000 and 1999 Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999 Notes to Consolidated Financial Statements (b) Financial statement schedule Real Estate and Accumulated Depreciation III ------------------- All schedules other than those indicated above have been omitted because either the required information is not applicable or the information is shown in the consolidated financial statements or notes thereto. INDEPENDENT AUDITORS' REPORT To the Partners of Dean Witter Realty Yield Plus, L.P.: We have audited the accompanying consolidated balance sheets of Dean Witter Realty Yield Plus, L.P. and consolidated partnerships (the "Partnership") as of December 31, 2001 and 2000, and the related consolidated statements of operations, partners' capital and cash flows for each of the three years in the period ended December 31, 2001. Our audits also included financial statement schedule III. These financial statements and the financial statement schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements and the financial statement schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Dean Witter Realty Yield Plus, L.P. and consolidated partnerships as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule III, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. As discussed in Note 1 to the consolidated financial statements, during the year ended December 31, 2000, the Partnership's remaining property investments were sold, and these sales have effectuated the dissolution of the Partnership. The Partnership is in the process of winding up its affairs, and it plans to terminate. Deloitte & Touche LLP /s/Deloitte & Touche LLP New York, New York March 19, 2002 DEAN WITTER REALTY YIELD PLUS, L.P. CONSOLIDATED BALANCE SHEETS December 31, 2001 and 2000 2001 2000 -------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $5,321,246 $18,589,178 Other assets 152,532 523,640 -------------------------------------------------------------------------------- $5,473,778 $19,112,818 ================================================================================ LIABILITIES AND PARTNERS' CAPITAL Accounts payable and other liabilities $105,026 $310,310 -------------------------------------------------------------------------------- Partners' capital (deficiency): General partners (7,312,194) (7,308,074) Limited partners ($20 per Unit, 8,909,969 issued and outstanding) 12,680,946 26,110,582 -------------------------------------------------------------------------------- Total partners' capital 5,368,752 18,802,508 -------------------------------------------------------------------------------- $5,473,778 $19,112,818 ================================================================================ See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements. DEAN WITTER REALTY YIELD PLUS, L.P. CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL Years ended December 31, 2001, 2000 and 1999 Limited General Partners Partners Total -------------------------------------------------------------------------------- Partners' capital (deficiency) at January 1, 1999 $42,105,378 $(7,405,208) $34,700,170 Net income 3,574,986 397,221 3,972,207 Cash distributions (4,722,284) (368,328) (5,090,612) -------------------------------------------------------------------------------- Partners' capital (deficiency) at 40,958,080 (7,376,315) 33,581,765 December 31, 1999 Net income 27,474,855 68,241 27,543,096 Cash distributions (42,322,353) - (42,322,353) -------------------------------------------------------------------------------- Partners' capital (deficiency) at December 31, 2000 26,110,582 (7,308,074) 18,802,508 Net loss (64,683) (4,120) (68,803) Cash distributions (13,364,953) - (13,364,953) -------------------------------------------------------------------------------- Partners' capital (deficiency) at December 31, 2001 $12,680,946 $(7,312,194) $5,368,752 ================================================================================ See accompanying notes to consolidated financial statements. DEAN WITTER REALTY YIELD PLUS, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 2001, 2000 and 1999 ------------------------------------------------------------------------------ 2001 2000 1999 ------------------------------------------------------------------------------ Cash flows from operating activities: Net (loss) income $ (68,803) $27,543,096 $3,972,207 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Equity in loss (earnings) of joint venture 29,393 (26,872,818) (2,474,464) Depreciation and amortization - 246,835 309,732 Net loss (gains) on sales of real estate 27,599 (115,367) - Decrease (increase) in other assets 371,108 (68,615) (110,642) (Decrease) increase in accounts payable and other liabilities (205,284) 83,342 (155,464) ------------------------------------------------------------------------------ Net cash provided by operating activities 154,013 816,473 1,541,369 ------------------------------------------------------------------------------ Cash flows from investing activities: Net proceeds from sales of real estate (27,599) 10,921,710 - Additions to real estate - (503,295) (147,967) Distributions from joint venture 11,893 48,224,929 3,475,816 Contributions to joint venture (41,286) (1,344,633) (1,537,519) ------------------------------------------------------------------------------ Net cash (used in) provided by investing activities (56,992) 57,298,711 1,790,330 ------------------------------------------------------------------------------ Cash flows from financing activities: Cash distributions (13,364,953) (42,322,353) (5,090,612) ------------------------------------------------------------------------------ (Decrease) increase in cash and cash equivalents (13,267,932) 15,792,831 (1,758,913) Cash and cash equivalents at beginning of year 18,589,178 2,796,347 4,555,260 ------------------------------------------------------------------------------ Cash and cash equivalents at end of year $5,321,246 $18,589,178 $2,796,347 ============================================================================== See accompanying notes to consolidated financial statements. DEAN WITTER REALTY YIELD PLUS, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001, 2000 and 1999 1. The Partnership Dean Witter Realty Yield Plus, L.P. (the "Partnership") is a limited partnership organized under the laws of the State of Delaware in 1987 to invest in participating mortgage loans collateralized by income-producing properties. The Managing General Partner of the Partnership is Dean Witter Realty Yield Plus Inc., which is wholly-owned by Dean Witter Realty Inc. ("Realty"). The Partnership issued 8,909,969 units of limited partnership interests (the "Units") for $178,199,380. No additional Units will be sold. The Partnership's last property investments were sold in 2000 (See Notes 4 and 5). The sale of the Deptford Crossing property on December 22, 2000 has effectuated the dissolution of the Partnership. Accordingly, the Partnership is in the process of winding up its affairs, and it plans to terminate. However, the Partnership will not terminate until the litigation with respect to the 401 East Ontario property (see Note 4) is resolved. 2. Summary of Significant Accounting Policies The financial statements include the accounts of the Partnership, and the partnerships which owned the Deptford Crossing, Military Crossing and 401 East Ontario Street properties on a consolidated basis. The Partnership used the equity method to account for its 58% interest in the corporate joint venture which owned the general partnership interest in GCGA Limited Partnership ("GCGA"), the owner of the One Congress Street property (sold August 2000). 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 accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Real estate and the investment in joint venture, all of which were acquired in settlement of loans, were recorded at the lower of the carrying value of the original loan or the estimated fair value of the real estate investment acquired at the date of foreclosure or in-substance foreclosure. Costs of improvements to real estate were capitalized and repairs were expensed. Depreciation was recorded on the straight-line method until a property was reclassified as real estate held for sale. At least annually, and more often if circumstances dictated, the Partnership evaluated the recoverability of the net carrying value of its real estate and any related assets, including the real estate and related assets owned by the joint venture. As part of this evaluation, the Partnership assessed, among other things, whether there had been a significant decrease in the market value of any of its properties. If events or circumstances indicated that the net carrying value of a property was not recoverable, the expected future net cash flows from the property were estimated for a period of approximately five years (or a shorter period if the Partnership expected that the property would be disposed of sooner), along with estimated sales proceeds at the end of the period. If the total of these future undiscounted cash flows was less than the carrying amount of the property, the property was 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. The cash flows used to evaluate the recoverability of the assets and to determine fair value were based on good faith estimates and assumptions developed by the Managing General Partner. Cash and cash equivalents consist of cash and highly liquid investments with maturities, when purchased, of three months or less. Deferred leasing commissions were amortized over the applicable lease terms. Tenant leases were accounted for as operating leases. Rental income was recognized on a straight-line basis over the lives of the respective leases. Expense reimbursements paid by tenants pursuant to their leases were included in rental revenues. Net (loss) income per Unit amounts are calculated by dividing net (loss) income allocated to Limited Partners, by the weighted average number of Units outstanding. No provision for income taxes has been made in the consolidated financial statements, since the liability for such taxes is that of the partners rather than the Partnership. The accounting policies used for tax reporting purposes differ from those used for financial reporting purposes. For tax purposes, the Partnership's subsidiaries are not consolidated, and properties acquired by the subsidiaries were not treated as real estate owned by the Partnership. Instead, the Partnership recognized taxable interest income on its original participating mortgage loans. For all subsidiaries owned by the Partnership through interests in partnerships, the Partnership also recognized its share of the subsidiaries' taxable income (which was net of interest expense on the Partnership's participating mortgage loans). In addition, the Partnership's offering costs are treated differently for tax and financial reporting purposes. Primarily as a result of the differing treatments of the offering costs, the tax basis of the Partnership's assets and liabilities is approximately $16.6 million higher than the amounts reported for financial statement purposes at December 31, 2001. The policies used by the subsidiary partnerships to account for property operations for tax reporting purposes differed from those used by the Partnership for financial reporting purposes as follows: (a) depreciation was calculated using accelerated methods, (b) rental income was recognized based on the payment terms in the applicable leases, and (c) write-downs for impairments of real estate were not deductible. 3. Partnership Agreement The Partnership Agreement provides that net cash flow, as defined, will be paid 90% to the Limited Partners and 10% to the General Partners. Pursuant to the Partnership Agreement, $1,239,345 of the General Partners' share of such net cash flow distributable to them through December 31, 1990 was deferred, subject to receipt by the Limited Partners of an 8% annual return on their invested capital through that date. Sale or financing proceeds will be distributed, to the extent available: first, 97% to the Limited Partners and 3% to the General Partners until each Limited Partner receives a return of their invested capital plus an amount sufficient to provide a 10% cumulative annual return on their adjusted capital contribution; second, 100% to the General Partners until they have received the amount of any net cash flow previously deferred and not distributed; and third, 85% to the Limited Partners and 15% to the General Partners. However, if the Limited Partners don't receive a return of their invested capital and a 10% cumulative annual return on their adjusted capital contribution by the termination of the Partnership, then the General Partners must contribute the sale proceeds they received from the Partnership back to the Partnership. In lieu of this contribution, the General Partners have not received distributions of sale proceeds from the Partnership. Taxable income generally will be allocated to the partners in proportion to the distribution of distributable cash or sale or financing proceeds, as the case may be (or 90% to the Limited Partners and 10% to the General Partners if there is no distributable cash or sale or financing proceeds). At a minimum, the General Partners must be allocated at least 1% of the taxable income from a sale or financing. Tax losses, if any, are allocated 90% to the Limited Partners and 10% to the General Partners. Distributions paid to Limited Partners in 2001, 2000 and 1999 included returns of capital of $1.50, $1.67 and $0.13 per Unit, respectively, calculated as the excess of cash distributed per Unit over accumulated earnings per Unit not previously distributed. 4. Real Estate Sold Deptford Crossing, Deptford, NJ In December 2000, the Partnership sold the land and building which comprise the Deptford Crossing shopping center to the Hutensky Group, LLC, an unaffiliated third party, for a negotiated sale price of $11.5 million. The Partnership recognized a gain on this sale of approximately $130,000 in 2000 and a subsequent loss of $28,000 in 2001. The gain and loss were allocated 100% to the Limited Partners. At closing, the Partnership received sale proceeds of approximately $10.6 million, net of a $270,000 escrow deposit to secure the Partnership's obligations, if any, pursuant to its representations and warranties in the sale agreement, closing costs and other deductions. The Partnership received the escrow deposit, plus interest, in 2001. The Partnership distributed, to Limited Partners only, sales proceeds of $10.2 million ($1.14 per Unit) and $0.7 million ($0.08 per Unit) in 2001 and 2002 (see Note 8), respectively. Military Crossing, Norfolk, VA In February 2000, the Partnership sold the Military Crossing land to an unaffiliated third party for a negotiated sale price of $350,000. At closing, the Partnership received proceeds, net of closing costs, of approximately $285,000; such proceeds ($0.03 per Unit) were distributed, to Limited Partners only, in 2000. The Partnership recognized a loss on this sale of approximately $15,000, which was allocated 100% to the Limited Partners. 401 East Ontario Street, Chicago, IL In July 1998, the Partnership sold the 401 East Ontario Street property. In 1995 and 1996, the Partnership incurred a total of $5.6 million, net of a $0.1 million insurance settlement, to repair cracking and spalling of the concrete exterior of the 401 East Ontario building. Reports by three independent engineering firms in 1995 noted that the cracking and spalling were highly unusual for a building of the age of this property, and attributed the problems to both defective design and construction of the building. In 1996 and 1997, the Partnership also incurred a total of $3.6 million to repair the interior walls of the 401 East Ontario Street building so that the building's fire and life safety systems would properly comply with the fire code requirements of the City of Chicago. In addition to the repair costs, the Partnership also had to offer free rent and rent concessions to the building's residents in 1997 while the repairs were being performed. The Partnership initiated litigation against all parties it deemed responsible for all of the building's defects. In May 1999, the Partnership negotiated a settlement with the building's testing agency from which the Partnership received cash of approximately $700,000 and $48,000 in 1999 and 2000, respectively. In March 1998, the Partnership received $1.2 million pursuant to a settlement with the architect and engineer of the building. The Partnership is continuing its litigation against the general contractor and others it deems responsible for defects in the building. The Managing General Partner continues to seek trial on its claims, and intends to ask the new judge assigned to the case to set the earliest possible trial date. In the years the settlements were received, the Partnership offset the settlement amounts against property operating expenses. The Partnership incurred legal fees of approximately $105,000, $90,000 and $273,000 in 2001, 2000 and 1999, respectively, in connection with the litigation. 5. Investment in Joint Venture One Congress Street, Boston, Massachusetts Before the Partnership, through its joint venture investment, owned a general partnership interest in GCGA, the Partnership and Dean Witter Yield Plus II, L.P. ("Yield Plus II") (collectively, the "Lender") made a $59.2 million participating second mortgage loan on the One Congress Street building (the "Loan") to GCGA. In 1997, GCGA, which had filed for bankruptcy in 1996, entered into a settlement agreement with the Lender (the "Agreement"), whereby a new corporate joint venture, which was jointly owned by the Partnership (58%) and Yield Plus II (42%), became the sole general partner of GCGA (the "New General Partner"), with an aggregate 19.81% ownership interest in the property. The Partnership and Yield Plus II agreed to make all decisions concerning the property jointly, and retained an affiliate of GCGA`s original general partner as property manager. The Agreement effectively changed the Lender from a participating lender to GCGA into the general partner of a partnership which owned the One Congress Street property. The Partnership, through the New General Partner, owned a 11.5% general partnership interest in GCGA. However, the Partnership and Yield Plus II recognized all of GCGA's profit and losses in proportion to their ownership of the New General Partner because the Partnership and Yield Plus II controlled GCGA and were entitled to receive substantially all the cash flow and other economic benefits from the property. In August 2000, GCGA sold the land and building which comprise the One Congress Street property to One Congress Street JV LLC (the "Purchaser"), an unaffiliated third party, for a negotiated sale price of $118.5 million. At closing, approximately $37.8 million of the sale proceeds were used to settle GCGA's first mortgage loan, $1.3 million was used to fund all tenant improvements that GCGA incurred in renting out the remaining vacant space at the property prior to the sale and $1.4 million was used to pay the sale-related closing costs (collectively, the "Sale Proceeds Reductions"). The sale proceeds that GCGA received at closing, net of the Sale Proceeds Reductions, were approximately $78.1 million; GCGA paid this amount to the Partnership and Yield Plus II in settlement of the Loan and accrued interest thereon. Accordingly, on August 31, 2000, the Partnership received approximately $45.2 million, representing its 58% share of the net sale proceeds GCGA received at closing. The Partnership paid, 100% to Limited Partners, cash distributions of approximately $42.0 million ($4.72 per Unit) and $3.2 million ($0.36 per Unit) in 2000 and 2001 respectively. The Partnership's share of GCGA's gain on sale of the One Congress Street property was approximately $26.7 million; such gain was allocated 100% to the Limited Partners. The summarized statements of operations of GCGA are as follows: YEARS ENDED DECEMBER 31, ------------------------------------------- 2001 2000 1999 -------------------------------------------------------------------------------- Revenues: Rental $20,505 $10,023,247 $16,405,741 Gain on sale of real estate - 55,227,589 - -------------------------------------------------------------------------------- 20,505 65,250,836 16,405,741 -------------------------------------------------------------------------------- Expenses: Interest on second mortgage loan - 5,694,891 8,346,614 Other interest - 2,877,814 3,785,371 Property operating 71,183 6,282,296 6,498,471 Depreciation and amortization - 1,506,742 2,738,548 -------------------------------------------------------------------------------- 71,183 16,361,743 21,369,004 -------------------------------------------------------------------------------- (Loss) income before extraordinary item: (50,678) 48,889,093 (4,963,263) -------------------------------------------------------------------------------- Extraordinary item: Gain on extinguishment of debt - 8,946,154 - -------------------------------------------------------------------------------- Net (loss) income $(50,678) $57,835,247 $(4,963,263) ================================================================================ GCGA's second mortgage loan consisted of the Loan. The accounting policies of GCGA were consistent with those of the Partnership. The balance of the Loan at the date of closing of the sale was approximately $88.1 million. GCGA used its net proceeds from the sale of the One Congress Street property and remaining cash reserves to repay $79.2 million of the Loan. Since GCGA had no remaining assets at December 31, 2000, GCGA was not able to repay the Loan in full. As a result, the Partnership and Yield Plus II jointly forgave the unpaid Loan balance (approximately $8.9 million; the Partnership's share of this balance is $5.2 million). The Partnership did not recognize interest income and a loss on extinguishment of debt on its share of the Loan; instead, the Partnership recognized its share of GCGA's earnings exclusive of all Loan activity. 6. Related Party Transactions An affiliate of Realty provided property management services for the Deptford Crossing property through December 31, 1999. The Partnership paid the affiliate property management fees (included in property operating expenses) of approximately $63,000 for the year ended December 31, 1999. Realty performs administrative functions, and processes certain investor and tax information on behalf of the Partnership. For the years ended December 31, 2001, 2000 and 1999, Realty was reimbursed approximately $23,000, $36,000 and $68,000, respectively, for these services (included in general and administrative expenses). 7. Summary of Quarterly Results (Unaudited) ---------------------------------------- Net (Loss) Income Net (Loss) Per Unit of Limited Revenue Income Partnership Interest -------------------------------------------------------------------------------- 2001: March 31 $ 125,539 $ (34,688) $ 0.00 June 30 63,255 39,298 0.00 September 30 6,501 (27,144) 0.00 December 31 (1,927) (46,269) (0.01) -------------------------------------------------------------------------------- Total $193,368 $(68,803) $ (0.01) ================================================================================ 2000: March 31 $ 989,958 $ 638,101 $ 0.07 June 30 878,399 110,732 0.01 September 30 26,748,379 26,410,260 2.96 December 31 821,252 384,003 0.04 -------------------------------------------------------------------------------- Total $29,437,988 $27,543,096 $ 3.08 ================================================================================ 8. Subsequent Event On January 30, 2002, the Partnership paid a distribution of approximately $0.34 per Unit (including $0.08 per Unit from the remaining undistributed proceeds from the December 2000 sale of the Deptford Crossing property and $0.26 per Unit of cash reserves). The Deptford sale proceeds were distributed 100% to the Limited Partners. Total distributions were $3,246,114 with $2,993,750 distributed to the Limited Partners and $252,364 distributed 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 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 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 58, has been an Advisory Director of Morgan Stanley & Co., Incorporated since July 2000. From June 1997 until July 2000, Mr. Smith was a Managing Director of Morgan Stanley & Co. Incorporated and co-head of Morgan Stanley Realty Incorporated. Prior to June 1997, Mr. Smith was an Executive Vice President of Morgan Stanley DW Inc. and Director of its Investment Banking Department for more than five years. E. Davisson Hardman, Jr., age 52, has been an Advisory Director of Morgan Stanley & Co. Incorporated since September 2001. From June 1997 until September 2001, he was a Managing Director of Morgan Stanley Asia, Ltd. For more than five years before June 1997, Mr. Hardman was a Managing Director of Dean Witter Realty Inc. Ronald T. Carman, age 50, has been an Assistant Secretary of Morgan Stanley Dean Witter & Co. since June 1997 and a Managing Director of Morgan Stanley & Co. Inc. since July 1998. Previously, he was a Senior Vice President and Associate General Counsel of Morgan Stanley DW 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 in Item 5 above. The General Partners received cash distributions totaling $368,328 during the year ended December 31, 1999. The General Partners did not receive any distributions during the years ended December 31, 2000 and 2001. The General Partners have not received any distributions of proceeds from property sales to date. The General Partners and their affiliates were paid certain fees and reimbursed for certain expenses. Information concerning such fees and reimbursements is contained in Note 6 to the consolidated financial statements in Item 8 above. The directors and executive officers of the Partnership's Managing General Partner received no remuneration from the Partnership. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (a) The following table sets forth certain information regarding each person or group of persons known to the Partnership to be the beneficial owner of more than 5% of the Units. UNITS BENEFICIALLY OWNED NAME OF BENEFICIAL OWNERS NUMBER PERCENT ------------------------- ------ ------- Madison Investment Partners 11, LLC (MIP 11") Madison Value Fund, LLC ("MVF") Madison Avenue Investment Partners, LLC ("MAIP"); First Equity Realty, LLC ("FER"); The Harmony Group II, LLC ("Harmony"); Ronald M. Dickerman; Bryan E. Gordon (collectively the "Reporting Persons") 538,592 6.0% The information set forth in this Item (12) (a) is based on Amendment No. 3 to a Schedule 13G Information Statement filed for the year ended December 31, 2001 by the Reporting Persons. Such Amendment discloses that each Reporting Person has shared voting and shared dispostive power over 538,592 Units. MAIP is the controlling person of various entitles that are the nominee owners of, or the successors by merger to the assets of nominee owners of, Units of Limited Partnership Interests (the "Units") of the Issuer. These nominees, none of which owns more than 5% or more of the Units, are ISA Partnership Liquidity Investors, a Delaware general partnership; Madison/AG Partnership Value Partners I, a Delaware general partnership; Madison/WP Value Fund IV, LLC, a Delaware limited liability company; Madison Liquidity Investors 103, LLC, a Delaware limited liability company; and Madison Liquidity Investors III, LLC, a Delaware limited liability company. Madison Liquidity Investors 114, LLC, a Delaware limited liability company, is the nominee holder of approximately 0.0% of the Units and is controlled by MVF. The controlling members of MAIP are First Equity, of which Mr. Dickerman is Managing Member, and Harmony, of which Mr. Gordon is the Managing Member. The controlling member of MVF is MIP 11. The controlling member of MIP 11 is MAIP. The business address of each of the Reporting Persons except First Equity and Mr. Dickerman is P.O. Box 7533, Incline Village, Nevada 89452. The business address of First Equity and Mr. Dickerman is 555 Fifth Avenue, 9th Floor, New York 10017. (b) The executive officers and directors of the Managing General Partner own the following Units as of February 28, 2002: AMOUNT AND NATURE OF TITLE OF CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP -------------- ------------------------ -------------------- Limited Partnership All directors and executive * Interests officers of the Managing 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 LSYP 87, L.P., a Delaware limited partnership. Realty and certain current and former officers and directors of the Managing General Partner are partners of LSYP 87, L.P. Additional information with respect to the directors and executive officers and compensation of the Managing General Partner and affiliates is contained in Items 10 and 11 above. The 401 East Ontario Street property was developed by a joint venture between a third party developer and an entity comprised of former and current Realty executives, several of whom are former or current executive officers of the Managing General Partner. In January 1994, the Partnership obtained ownership of the property by deed-in-lieu of foreclosure. The One Congress Street property was developed by a partnership between a Maryland-based developer and an entity comprised of former Realty executives, some of whom were formerly executive officers of the Managing General Partner. This entity withdrew as a partner of the borrower in September 1993, so the borrower partnership was controlled solely by the Maryland-based developer until control of the borrower was transferred to the Partnership and Yield Plus II in 1997. The General Partners and their affiliates were paid certain fees and reimbursed for certain expenses. Information concerning such fees and 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 Schedule (see Index to Financial Statements filed as part of Item 8 of this Annual Report). 3. Exhibits (3)(a) Amended and Restated Agreement of Limited Partnership dated as of April 29, 1987 set forth in Exhibit A to the Prospectus included in Registration Statement Number 33-11648 is incorporated herein by reference. (3)(b) Certificate of Limited Partnership dated as of April 29, 1987 incorporated by reference in Registration Statement Number 33-11648 is incorporated herein by reference. (4)(a) Amended and Restated Agreement of Limited Partnership dated as of April 29, 1987 set forth in Exhibit A to the Prospectus included in Registration Statement Number 33-11648 is incorporated herein by reference. (4)(b) Certificate of Limited Partnership dated as of April 29, 1987 incorporated by reference in Registration Statement Number 33-11648 is incorporated herein by reference. (10)(a) Partnership Agreement for DW Michelson Associates dated March 14, 1988. Incorporated by reference to Exhibit 10(a) to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. (10)(b) First Mortgage Promissory Note, dated April 26, 1989, between the Government Center Garage Realty Trust (Maker) and Dean Witter Realty Yield Plus, L.P. (Holder) was filed as Exhibit to Amendment No. 2 to Current Report on Form 8-K on April 26, 1989 and is incorporated herein by reference. (10)(c) Construction Loan Agreement, dated April 26, 1989, between Government Center Garage Realty Trust, as Borrower and Dean Witter Realty Yield Plus, L.P. and Dean Witter Realty Yield Plus II, L.P., as Lender was filed as Exhibit to Amendment No. 2 to Current Report on Form 8-K on April 26, 1989 and is incorporated herein by reference. (10)(d) Intercreditor Agreement among Dean Witter Realty Yield Plus, L.P., Dean Witter Realty Yield Plus II, L.P., and Realty Management Services Inc. dated as of April 26, 1989 was filed as Exhibit to Amendment No. 2 to Current Report on Form 8-K on April 26, 1989 and is incorporated herein by reference. (10)(e) First Amendment to Construction Loan Agreement dated October 12, 1989 between Government Center Garage Realty Trust, as Borrower and Dean Witter Realty Yield Plus, L.P. and Dean Witter Realty Yield Plus II, L.P., as Lender. Incorporated by reference to Exhibit 10(e) to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. (10)(f) Amended and Restated Construction Loan/Office Loan Promissory Note dated October 12, 1989 between Government Center Garage Realty Trust (Maker) and Dean Witter Realty Yield Plus, L.P. (Holder). Incorporated by reference to Exhibit 10(f) to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. (10)(g) Second Amendment to Construction Loan Agreement dated June 22, 1990 between Government Center Garage Realty Trust, as Borrower and Dean Witter Realty Yield Plus, L.P. and Dean Witter Realty Yield Plus II, L.P., as Lender. Incorporated by reference to Exhibit 10(g) to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. (10)(h) First Amendment to Amended and Restated Construction Loan/Office Loan Promissory Note dated June 22, 1990 between Government Center Garage Realty Trust (Maker) and Dean Witter Realty Yield Plus, L.P. (Holder). Incorporated by reference to Exhibit 10(h) to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. (10)(i) Supplemental Loan Agreement dated September 20, 1993 between Government Center Garage Realty Trust, as Borrower and Dean Witter Realty Yield Plus, L.P. and Dean Witter Realty Yield Plus II, L.P., as Lender. Incorporated by reference to Exhibit 10(i) to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. (10)(j) Second Amendment to Notes dated September 20, 1993 between Government Center Garage Realty Trust (Maker) and Dean Witter Realty Yield Plus, L.P. and Dean Witter Realty Yield Plus II, L.P., (Holders). Incorporated by reference to Exhibit 10(j) to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995. (10)(k) Supplement and Amendment to Construction Loan Agreement dated October 27, 1997 between Government Center Garage Realty Trust (Borrower) and Dean Witter Realty Yield Plus, L.P. and Dean Witter Realty Yield Plus II, L.P. (Lenders) was filed as an Exhibit to Form 8-K on October 27, 1997 and is incorporated herein by reference. (10)(l) Third Amendment to Notes dated October 27, 1997 between Government Center Garage Realty Trust (Maker) and Dean Witter Realty Yield Plus, L.P. and Dean Witter Realty Yield Plus II, L.P. (Holder) was filed as an Exhibit to Form 8-K on October 27, 1997 and is incorporated herein by reference. (10)(m) Purchase and Sale Agreement dated as of December 26, 1997 among DW Michelson Associates as Seller, Michelson Company Limited Partnership as Acquired Partnership and SC Enterprises as Purchaser, First Amendment to Purchase and Sale Agreement dated as of February 3, 1998 and Assignment and Assumption Agreement dated as of April 3, 1998 were collectively filed as an Exhibit to Form 8-k on April 3, 1998 and is incorporated herein by reference. (10)(n) Purchase and Sale Agreement among DW Lakeshore Associates, L.P., a Delaware Limited Partnership, as Seller and Streeterville Development Associates, LLC, an Illinois Limited Liability Company, as Purchaser dated July 17, 1997 was filed as an Exhibit to Form 8-k on July 17, 1998 and is incorporated herein by reference. (10)(o) Purchase and Sale Agreement as of June 14, 2000 between Government Center Garage Realty Trust as Seller and One Congress Street JV LLC, as Purchaser, First Amendment to Purchase and Sale Agreement as of July 27, 2000 and Second Amendment to Purchase and Sale Agreement were collectively filed as an exhibit to Form 8-K on August 31, 2000 and are incorporated herein by reference. (10)(p) Purchase and Sale Agreement as of October 4, 2000 between Deptford Crossing Associates, L.P. as Seller and the Hutensky Group, L.L.C. as Purchaser and Reinstatement Agreement and First Amendment to Purchase and Sale Agreement dated as December 22, 2000 were collectively filed as an exhibit to Form 8-K on December 22, 2000 and are incorporated herein by reference. (21) Subsidiaries: Deptford Crossing Associates, a New Jersey limited partnership. DW Lakeshore Associates, an Illinois limited partnership. DW Community Centers Limited Partnership, a Delaware limited partnership. DW Maplewood Inc. (b) Reports on Form 8-K Report on Form 8-K dated September 11, 2001, disclosing the change of the address of the Partnership's executive office due to the destruction of the World Trade Center. (c) Financial Statement Schedule SCHEDULE III DEAN WITTER REALTY YIELD PLUS, L.P. Real Estate and Accumulated Depreciation December 31, 2001 (A) Reconciliation of real estate owned: -------------------------------------------------------------------------------- 2001 2000 1999 -------------------------------------------------------------------------------- $ - $12,498,014 $12,650,047 Balance at beginning of period Additions during period: Additions - 503,295 147,967 Sale of real estate - (13,001,309) - Reclassification of real estate held for sale - - (300,000) -------------------------------------------------------------------------------- Balance at end of period $ - $ - $12,498,014 ================================================================================ (B) Reconciliation of accumulated depreciation: Balance at beginning of year $ - $ 2,248,131 $1,954,876 Depreciation expense - 231,794 293,255 Sale of real estate - (2,479,925) - -------------------------------------------------------------------------------- Balance at end of period $ - $ - $2,248,131 ================================================================================ SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DEAN WITTER REALTY YIELD PLUS, L.P. By: Dean Witter Realty Yield Plus Inc. Managing General Partner By: /s/ E. Davisson Hardman, Jr. Date: March 27, 2002 ---------------------------------- E. Davisson Hardman, Jr. President By: /s/ Jeffrey D. Hahn Date: March 27, 2002 ---------------------------------- Jeffrey D. Hahn Vice President Principal Financial and Accounting Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. DEAN WITTER REALTY YIELD PLUS INC. Managing General Partner /s/ William B. Smith Date: March 27, 2002 --------------------------------------- William B. Smith Chairman of the Board of Directors /s/ E. Davisson Hardman, Jr. Date: March 27, 2002 --------------------------------------- E. Davisson Hardman, Jr. Director /S/ Ronald T. Carman Date: March 27, 2002 --------------------------------------- Ronald T. Carman Director

DEAN WITTER REALTY YIELD PLUS L P 10-K