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: 0-18146 DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. ----------------------------------------------- (Exact name of registrant as specified in governing instrument) Delaware 13-3293754 --------------------- --------------------------------- (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

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

See accompanying notes to financial statements. DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. STATEMENT OF PARTNERS' CAPITAL Nine months ended July 31, 2001 Limited General Partners Partners Total -------------------------------------------------------------------------------- Partners' capital (deficiency) at November 1, 2000 $ 9,952,035 $(8,621,309) $ 1,330,726 Net loss (121,750) (13,528) (135,278) Distributions (881,133) (32,547) (913,680) -------------------------------------------------------------------------------- Partners' capital (deficiency) at July 31, 2001 $ 8,949,152 $(8,667,384) $ 281,768 ================================================================================ See accompanying notes to financial statements. DEAN WITTER REALTY INCOME PARTNERSHIP III, 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 III, L.P. Notes to Financial Statements 1. The Partnership --------------- Dean Witter Realty Income Partnership III, L.P. (the "Partnership") is a limited partnership organized under the laws of the State of Delaware in 1985. The Partnership's fiscal year ends on October 31. The Partnership's last remaining property investment was its 44.6% interest in the partnership ("TPA") which owned Taxter Corporate Park. TPA sold the Taxter property on May 23, 2000, and this sale has effectuated the dissolution of the Partnership. However, the Partnership can't wind up its affairs and distribute the balance of the Partnership's cash reserves until TPA terminates its operations (see Note 2). The Managing General Partner plans to terminate the Partnership in 2001. The Partnership's interest in TPA was accounted for using the equity method. The Partnership's records are maintained on the accrual basis of accounting for financial reporting and tax reporting purposes. Net (loss)income per Unit of limited partnership interest amounts are calculated by dividing net (loss)income allocated to 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 period. Except for the 2000 loss on sale of real estate and the gain on the sale of the Taxter property included in equity in earnings of joint venture in 2000, 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. DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. Notes to Financial Statements 2. Investment in Joint Venture --------------------------- The Partnership understands that TPA has certain operating issues that TPA must resolve, both with the buyer of the Taxter property and other third parties, before TPA can terminate its operations. Resolution of these issues is not anticipated to require any significant funding from the Partnership. Summarized income statements of TPA are as follows: Three months Nine months ended July 31, ended July 31, 2001 2000 2001 2000 -------------------------------------------------------------------------------- Operating income $ -- $ 395,751 $ 544 $ 3,065,210 Gain on sale of real estate -- 15,551,472 -- 15,551,472 -------------------------------------------------------------------------------- -- 15,947,223 544 18,616,682 Expenses -- 291,300 -- 2,103,527 -------------------------------------------------------------------------------- Net income $ -- $15,655,923 $ 544 $16,513,155 -------------------------------------------------------------------------------- 3. Related Party Transactions -------------------------- An affiliate of the Managing General Partner performs administrative functions, processes investor transactions and prepares tax information for the Partnership. For the nine months ended July 31, 2001 and 2000, the Partnership incurred approximately $63,000 and $113,000, respectively, for these services. These amounts are included in general and administrative expenses. The 2001 fees are also included in accounts payable and accrued liabilities as of July 31, 2001. 4. Cash Distribution ----------------- On February 27, 2001, the Partnership distributed, 100% to Limited Partners, approximately $881,000($1.65 per Unit). This distribution consisted of approximately $588,000($1.10 per Unit) of previously undistributed proceeds from the sale of the Taxter property and cash reserves of $293,000($0.55 per Unit). The DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. Notes to Financial Statements General Partners deferred receipt of their share of the cash reserves distribution (approximately $32,500) to ensure that the Partnership would have cash on hand to cover all liabilities that may arise while the Partnership winds up its affairs. The amounts deferred were charged against partners' capital and recorded as distributions payable. DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND ------- ---------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- Liquidity and Capital Resources ------------------------------- As discussed in Note 1 to the Financial Statements, the partnership ("TPA") which owned the Taxter office property sold the property on May 23, 2000. The Partnership's interest in TPA was the Partnership's only remaining property interest. The Partnership dissolved pursuant to the terms of its Partnership Agreement, effective May 23, 2000, the date on which the Taxter property was sold. The Partnership plans to wind up its affairs, distribute its remaining cash reserves and terminate its existence by filing a certificate of cancellation in the office of the Delaware Secretary of State in 2001. As discussed in Note 4 to the Financial Statements, on February 27, 2001, the Partnership paid, to Limited Partners only, a distribution of $1.65 per Unit. The Partnership believes that its cash reserves are adequate for its needs until the Partnership is terminated. Except as described above and in the financial statements, the Managing General Partner is not aware of any trends or events, commitments or uncertainties that may impact liquidity in a material way. Operations ---------- Fluctuations in the Partnership's operating results for the three and nine month periods ended July 31, 2001 compared to 2000 were primarily attributable to the following: The decreases in equity in earnings of joint venture in 2001 are due to the loss of operating income from TPA after it sold the Taxter property in May 2000. Also, the Partnership's share of the gain on sale of the Taxter property (approximately $7.6 million) was included in the equity in earnings of joint venture amounts in 2000. The loss on sale of real estate in fiscal 2000 was generated by the November 1999 sale of the Westland Crossing shopping center. The absence of rental revenues and positive property operating expenses in 2001 was due to the fiscal 2000 sale of the Westland Crossing property. DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. The decreases in interest and other revenues in 2001 compared to 2000 were primarily due to the absence in 2001 of the first quarter 2000 interest earned on the Westland Crossing sale proceeds and the third quarter 2000 interest earned on the Taxter sale proceeds until such proceeds were distributed to the Limited Partners. The negative property operating expenses in 2001 were primarily caused by the collection of tenant receivables which were previously written off by the Partnership. There were no other individually significant factors which caused changes in revenues and 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 III, L.P. PART II - OTHER INFORMATION --------------------------- Item 6. Exhibits & Reports on form 8-K ------- ------------------------------ (a) Exhibits. None (b) Reports on Form 8-K None DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. 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 III, L.P. By: Dean Witter Realty Income Properties III 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)

DEAN WITTER REALTY INCOME PARTNERSHIP III LP 10-Q