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+ ACCESSION NUMBER: 0000752744-01-000001
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+ CONFORMED SUBMISSION TYPE: 10-K
15
+ PUBLIC DOCUMENT COUNT: 1
16
+ CONFORMED PERIOD OF REPORT: 20001031
17
+ FILED AS OF DATE: 20010126
18
+
19
+ FILER:
20
+
21
+ COMPANY DATA:
22
+ COMPANY CONFORMED NAME: WITTER DEAN REALTY INCOME PARTNERSHIP II LP
23
+ CENTRAL INDEX KEY: 0000752744
24
+ STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500]
25
+ IRS NUMBER: 133244091
26
+ STATE OF INCORPORATION: DE
27
+ FISCAL YEAR END: 1031
28
+
29
+ FILING VALUES:
30
+ FORM TYPE: 10-K
31
+ SEC ACT:
32
+ SEC FILE NUMBER: 000-18150
33
+ FILM NUMBER: 1516176
34
+
35
+ BUSINESS ADDRESS:
36
+ STREET 1: 2 WORLD TRADE CENTER
37
+ STREET 2: 46TH FLOOR
38
+ CITY: NEW YORK
39
+ STATE: NY
40
+ ZIP: 10048
41
+ BUSINESS PHONE: 2123921054
42
+
43
+ MAIL ADDRESS:
44
+ STREET 1: 2 WORLD TRADE CENTER
45
+ STREET 2: 46TH FLOOR
46
+ CITY: NEW YORK
47
+ STATE: NY
48
+ ZIP: 10048
49
+ </SEC-HEADER>
50
+ <DOCUMENT>
51
+ <TYPE>10-K
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+ <SEQUENCE>1
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+ <FILENAME>0001.txt
54
+ <TEXT>
55
+
56
+ UNITED STATES
57
+ SECURITIES AND EXCHANGE
58
+ COMMISSION Washington,
59
+ D.C. 20549
60
+
61
+ FORM 10-K
62
+
63
+ [ X ]ANNUAL REPORT PURSUANT TO SECTION 13
64
+ OR 15(d) OF
65
+ THE SECURITIES EXCHANGE ACT OF
66
+ 1934
67
+ For the fiscal year ended October
68
+ 31, 2000
69
+ OR
70
+ [ ]TRANSITION REPORT PURSUANT TO SECTION 13
71
+ OR 15(d) OF
72
+ THE SECURITIES EXCHANGE ACT OF
73
+ 1934
74
+ For the transition period from ________ to
75
+ ________.
76
+
77
+ Commission File Number 0-18150
78
+
79
+ DEAN WITTER REALTY INCOME PARTNERSHIP
80
+ II, L.P. (Exact name of registrant as
81
+ specified in its charter)
82
+
83
+ Delaware 13-
84
+ 3244091
85
+ (State of organization) (IRS Employer
86
+ Identification No.)
87
+
88
+ 2 World Trade Center, New York, NY
89
+ 10048
90
+ (Address of principal executive offices)(Zip
91
+ Code)
92
+
93
+ Registrant's telephone number, including area
94
+ code: (212) 392-2974
95
+
96
+ Securities registered pursuant to Section 12(b)
97
+ of the Act:
98
+
99
+ Title of each className of each exchange on which registe
100
+ r
101
+ e
102
+ d
103
+ N
104
+ o
105
+ n
106
+ e
107
+ None
108
+
109
+ Securities registered pursuant to Section 12(g)
110
+ of the Act:
111
+
112
+ Units of Limited Partnership Interest
113
+ (Title of Class)
114
+
115
+ Indicate by check mark whether the registrant
116
+ (1) has filed all reports required to be filed
117
+ by Section 13 or 15(d) of the Securities
118
+ Exchange Act of 1934 during the preceding 12
119
+ months (or for such shorter period that the
120
+ registrant was required to file such reports),
121
+ and (2) has been subject to such filing
122
+ requirements for the past 90 days.
123
+ Yes X No
124
+ Indicate by check mark if disclosure of
125
+ delinquent filers pursuant to Item 405 of
126
+ Regulation S-K is not contained herein, and will not
127
+ be contained, to the best of
128
+ registrant's knowledge, in definitive proxy or
129
+ information statements incorporated by
130
+ reference in Part III of this Form 10-K or
131
+ any amendment to this Form 10-K. [X]
132
+
133
+ State the aggregate market value of the voting
134
+ stock held by nonaffiliates of the registrant.
135
+ Not Applicable
136
+
137
+
138
+ DOCUMENTS INCORPORATED BY REFERENCE
139
+
140
+ None
141
+
142
+
143
+ <PAGE>
144
+ PART I.
145
+ ITEM 1. BUSINESS
146
+ The Registrant, Dean Witter Realty Income
147
+ Partnership II, L.P. (the "Partnership"), is a
148
+ limited partnership formed in September 1984
149
+ under the Uniform Limited Partnership Act of
150
+ the State of Delaware for the purpose of
151
+ investing primarily in income-producing office
152
+ and retail properties.
153
+ The Managing General Partner of the
154
+ Partnership is Dean Witter Realty Income
155
+ Properties II Inc. (the "Managing General
156
+ Partner"), a Delaware corporation which is
157
+ whollyowned by Dean Witter Realty Inc.
158
+ ("Realty"). The Associate General Partner is
159
+ Dean Witter Realty Income Associates II, L.P.
160
+ (the "Associate General Partner"), a Delaware
161
+ limited partnership, the general partner of
162
+ which is Dean Witter Realty Income
163
+ Associates II Inc., a wholly-owned subsidiary of
164
+ the Managing General Partner. The Managing
165
+ General Partner manages and controls all aspects
166
+ of the business of the Partnership. The
167
+ terms of transactions between the Partnership
168
+ and its affiliates are set forth in Note 6 to
169
+ the consolidated financial statements in Item 8
170
+ and in Item 13 below.
171
+ The Partnership issued 177,023 units of limited
172
+ partnership interest (the "Units") with gross
173
+ proceeds from the offering of $177,023,000.
174
+ The offering has been terminated and no
175
+ additional Units will be sold.
176
+ The proceeds from the offering were used to
177
+ make equity investments in five office
178
+ properties and three retail properties, all
179
+ of which were acquired without mortgage debt.
180
+ The last Partnership property investment (in
181
+ Taxter Corporate Park) was sold on May 23, 2000.
182
+ The Partnership Agreement provides that the
183
+ Partnership shall terminate upon the sale of
184
+ the Partnership's last property investment,
185
+ and that dissolution shall be effective on the
186
+ day on which the event arises giving rise to
187
+ the dissolution. Accordingly, the Partnership
188
+ dissolved pursuant to the terms of its
189
+ Partnership Agreement, effective May 23, 2000,
190
+ the date on which the Taxter property was sold. As
191
+ soon as possible in fiscal year 2001, the
192
+ Partnership plans to wind up its
193
+ affairs, distribute the previously
194
+ undistributed property sale proceeds and cash
195
+ reserves, and terminate its existence by
196
+ filing a certificate of
197
+ cancellation in the office of the Delaware
198
+ Secretary of State.
199
+
200
+ <PAGE>
201
+ The Partnership considered its business to
202
+ include one industry segment, investment in
203
+ real property. Financial information
204
+ regarding the Partnership is in the
205
+ Partnership's consolidated financial statements
206
+ in Item 8 below.
207
+
208
+ The Partnership has no employees.
209
+
210
+ All of the Partnership's business is conducted
211
+ in the United States.
212
+
213
+ ITEM 2. PROPERTIES
214
+
215
+ The Partnership's principal offices are located
216
+ at Two World Trade Center, New York, New York
217
+ 10048. The Partnership has
218
+ no other offices.
219
+ As of October 31, 2000, the Partnership did
220
+ not own any property investments.
221
+ In May 2000, the partnership which owned
222
+ the Taxter Corporate Park sold the property,
223
+ which is located in Westchester, New York.
224
+ An affiliate of the Partnership was the property
225
+ manager for Taxter Corporate Park through
226
+ December 31, 1998.
227
+ Further information relating to the
228
+ Partnership's properties is included in Item
229
+ 7 and footnotes 4 and 5 to the
230
+ consolidated financial statements included in
231
+ Item 8 below.
232
+ ITEM 3. LEGAL PROCEEDINGS
233
+ None.
234
+ ITEM 4. SUBMISSION OF MATTERS TO A VOTE
235
+ OF SECURITY HOLDERS
236
+ No matter was submitted during the fourth
237
+ quarter of the fiscal year to a vote of Unit
238
+ holders.
239
+ <PAGE>
240
+ PART II.
241
+
242
+ ITEM 5. MARKET FOR THE REGISTRANT'S COMMON
243
+ EQUITY AND RELATED STOCKHOLDER MATTERS
244
+
245
+ An established public trading market for the
246
+ Units does not exist, and it is not
247
+ anticipated that such a market will develop
248
+ in the future. Accordingly, information as to
249
+ the market value of a Unit at any given date is
250
+ not available. However, the Partnership does
251
+ allow its limited partners (the "Limited
252
+ Partners") to transfer their Units if a
253
+ suitable buyer can be located.
254
+
255
+ As of December 31, 2000, there were 24,196
256
+ holders of limited partnership interests.
257
+
258
+ The Partnership is a limited partnership and,
259
+ accordingly, does not pay dividends. It
260
+ does, however, make distributions of cash
261
+ to its partners. Pursuant to the partnership
262
+ agreement, distributable cash, as defined, is
263
+ paid 90% to the Limited Partners and 10% to
264
+ the general partners (the "General Partners").
265
+
266
+ Sale proceeds will be distributed, to the
267
+ extent available, first, to each Limited
268
+ Partner, until there has been a return of
269
+ the Limited Partner's capital contribution plus
270
+ cumulative distributions of distributable
271
+ cash and sale proceeds in an amount
272
+ sufficient to provide a 9% cumulative annual
273
+ return on the Limited Partner's adjusted
274
+ capital contribution. Thereafter, any remaining
275
+ sale proceeds will be distributed 85% to the
276
+ Limited Partners and 15% to the General
277
+ Partners after the Managing General Partner
278
+ receives a brokerage fee, if earned, of up to 3%
279
+ of the selling price of any equity investment.
280
+
281
+ As discussed in Item 1, the Partnership plans
282
+ to make its final distribution of previously
283
+ undistributed sale proceeds and cash reserves in
284
+ fiscal year 2001.
285
+
286
+ The Partnership paid cash distributions
287
+ during the year
288
+ ended October 31, 2000 aggregating $29.00
289
+ per Unit, consisting of $26.76 per Unit from
290
+ the Partnership's share of the net proceeds
291
+ from the sale of the Taxter Corporate Park
292
+ property and $2.24 per Unit from
293
+ previously
294
+ undistributed proceeds from the sales of the
295
+ Pavilions at East Lake (1999) and Glenhardie
296
+ (1998) properties. The
297
+ total distribution, paid 100% to the
298
+ Limited Partners, amounted to $5,133,667.
299
+
300
+
301
+ <PAGE>
302
+ The Partnership paid cash distributions
303
+ during the year ended October 31, 1999
304
+ aggregating $82.92 per Unit, consisting of
305
+ $75.13 per Unit from the proceeds from the
306
+ sale of the Pavilions at East Lake property
307
+ and $7.79 per Unit from the repayment of the
308
+ Wallkill Plaza promissory note plus interest
309
+ (see Note 4 to the consolidated financial
310
+ statements). The total distribution, paid
311
+ 100% to the
312
+ Limited Partners, amounted to $14,678,747.
313
+
314
+ Taxable income generally is allocated in
315
+ the same proportions as distributions of
316
+ distributable cash or sale proceeds (except
317
+ that the General Partners must be allocated at
318
+ least 1% of taxable income from sales). In
319
+ the event there is no distributable cash or
320
+ sale proceeds, taxable income is allocated 90%
321
+ to the Limited Partners and 10% to the General
322
+ Partners. Any tax loss will be allocated 90% to
323
+ the Limited Partners and 10% to the General
324
+ Partners.
325
+
326
+ ITEM 6. SELECTED FINANCIAL DATA
327
+
328
+ The following sets forth a summary of
329
+ selected financial data for the Partnership:
330
+
331
+ For the years ended
332
+ October 31,
333
+ 20001 19992 19983 19974 1996
334
+ Total revenues $2,819,0 $ $22,214, $29,219,9
335
+ $17,414,6
336
+ 20 5,443,81 571 73 07
337
+ 7
338
+
339
+ Net income $2,598,7 $ $20,110, $19,021,1
340
+ $(7,812,70
341
+ (loss) 17 4,861,24 183 29 6)5
342
+ 7
343
+ $14.67 $ $ $ 105.21 $(39.72)
344
+ Net income 27.29 113.03
345
+ (loss)
346
+ per Unit of
347
+ limited
348
+ partner-
349
+ ship interest
350
+ $29.00 $ $ $ 390.23 $ 99.24
351
+ Cash 82.92 261.71
352
+ distributions
353
+ paid per Unit
354
+ of
355
+ limited
356
+ partner-
357
+ ship interest
358
+ 6,7
359
+ $1,332,3 $ $13,797, $40,963,8
360
+ $100,319,
361
+ Total assets 44 3,797,81 232 45 056
362
+ at 4
363
+ October 31
364
+
365
+ 1. Revenues and net income include $2.5 million,
366
+ the
367
+ Partnership's share of the gain on the sale of
368
+ the Taxter property and $0.1 million, an
369
+ additional gain on the 1999 sale of the
370
+ Pavilions at East Lake property.
371
+
372
+ 2. Revenues and net income include gains of $2.8
373
+ million
374
+ on the sale of the Pavilions at East Lake
375
+ property and
376
+ additional gains totaling $1.5 million from the
377
+ sales of the Wallkill Plaza and Glenhardie
378
+ properties (sold in prior years).
379
+
380
+
381
+ (Continued)
382
+ <PAGE>
383
+ 3. Revenues and net income include gains of
384
+ $19.1 million
385
+ on the sales of the Framingham and Glenhardie
386
+ properties.
387
+
388
+ 4. Revenues and net income include gains of
389
+ $17.2 million
390
+ on the sales of the United Services Life
391
+ Building and the Century Square office
392
+ building.
393
+
394
+ 5. Includes $11.9 million loss on impairment
395
+ recorded for
396
+ the Framingham, Glenhardie and Pavilions at
397
+ East Lake properties.
398
+
399
+ 6. Distributions paid to limited partners
400
+ include returns
401
+ of capital per Unit of limited partnership
402
+ interest of $14.32, $55.63, $148.68, $332.99,
403
+ and $99.24 for the years ended October 31,
404
+ 2000, 1999, 1998, 1997 and 1996, respectively,
405
+ calculated as the excess of cash distributed
406
+ per Unit over accumulated earnings per Unit
407
+ not previously distributed.
408
+
409
+ 7. Include distributions of proceeds from
410
+ sales of real
411
+ estate as follows: 2000 - $29.00; 1999 -
412
+ $82.92; 1998 $251.01; 1997 - $356.04; 1996 -
413
+ $60.65.
414
+
415
+ The above financial data should be read in
416
+ conjunction with the consolidated financial
417
+ statements and the related notes in Item 8.
418
+
419
+ ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
420
+ OF FINANCIAL
421
+ CONDITION AND RESULTS OF OPERATIONS
422
+ Liquidity and Capital Resources
423
+ The Partnership raised $177,023,000 in a
424
+ public offering which was terminated in 1985.
425
+ The Partnership has no plans to raise additional
426
+ capital.
427
+ The Partnership purchased five properties and
428
+ made three investments in partnerships on
429
+ an all-cash basis. No additional investments
430
+ are planned.
431
+ In fiscal year 2000, the Partnership's
432
+ last property
433
+ investment, Taxter Corporate Park, was sold on
434
+ May 23, 2000 (see Note 5 to the consolidated
435
+ financial statements).
436
+
437
+ The Partnership Agreement provides that the
438
+ Partnership shall terminate upon the sale of
439
+ the Partnership's last property investment,
440
+ and that dissolution shall be effective on the
441
+ day on which the event arises giving rise to
442
+ the dissolution. Accordingly, the Partnership
443
+ dissolved pursuant to the terms of its
444
+ Partnership Agreement, effective May 23, 2000,
445
+ the date on which the Taxter property was sold.
446
+ As soon as possible in fiscal year 2001, the
447
+ Partnership plans
448
+ to wind up its affairs, distribute the
449
+ previously undistributed property sale proceeds
450
+ and cash reserves, and terminate its
451
+ <PAGE>
452
+ existence by filing a certificate of
453
+ cancellation in the office of the Delaware
454
+ Secretary of State.
455
+
456
+ As discussed in Item 5, during the year ended
457
+ October 31, 2000, the Partnership paid, to
458
+ Limited Partners only, a distribution of
459
+ sale proceeds of $29.00 per Unit. The
460
+ Partnership retained a portion of the Taxter
461
+ sale proceeds it received to cover any
462
+ contingencies that may arise while the
463
+ Partnership winds up its affairs.
464
+
465
+ Because of the sales of the Taxter and
466
+ Pavilions at East Lake (sold 1999)
467
+ properties, Partnership cash flow from
468
+ operations decreased in fiscal year 2000 as
469
+ compared to 1999.
470
+
471
+ In fiscal 2000, the Partnership's
472
+ distributions received from the Taxter joint
473
+ venture (excluding the distribution of sale
474
+ proceeds) and cash provided by operations
475
+ exceeded the Partnership's contributions to
476
+ fund its share of tenant improvements and
477
+ leasing commissions at the Taxter property. The
478
+ Partnership used this surplus and a portion
479
+ of cash reserves to pay previously
480
+ undistributed sale proceeds to Limited Partners
481
+ only (see Item 5).
482
+
483
+ Except as discussed above and in the
484
+ consolidated financial statements, the Managing
485
+ General Partner is not aware of any trends or
486
+ events, commitments or uncertainties that may
487
+ have a material impact on liquidity.
488
+
489
+ Operations
490
+
491
+ Fluctuations in the Partnership's operating
492
+ results for the year ended October 31, 2000
493
+ compared to 1999 and for the year ended
494
+ October 31, 1999 compared to 1998 are primarily
495
+ attributable to the following:
496
+
497
+ The increase in equity in earnings of joint
498
+ venture in 2000 compared to 1999 is primarily
499
+ due to the Partnership's share of the gain on
500
+ sale of the Taxter property (approximately $2.5
501
+ million).
502
+
503
+ In 2000, the gain on sale of real estate
504
+ resulted from contingent proceeds received in
505
+ 2000 from the 1999 sale of the Pavilions at
506
+ East Lake property.
507
+
508
+ In 1999, the gains on sales of real estate
509
+ resulted from the sale of the Pavilions at
510
+ East Lake property (approximately $2,827,000),
511
+ the receipt of proceeds from the contingent
512
+ promissory note in connection with the 1996
513
+ sale of the Wallkill Plaza property
514
+ ($1,200,000) and the return of the <PAGE>
515
+ escrow deposit resulting from the 1998
516
+ sale of the
517
+ Glenhardie properties ($293,000). See Note
518
+ 4 to the
519
+ consolidated financial statements.
520
+
521
+ In 1998, the gains on sales of real estate
522
+ resulted from the sales of the Framingham
523
+ Corporate Center (approximately $11,018,000)
524
+ and Glenhardie ($8,079,000) properties (the
525
+ "1998 Properties Sold").
526
+
527
+ As a result of the sale of the Pavilions at
528
+ East Lake property, there was no rental income,
529
+ property expenses and
530
+ depreciation and amortization expenses in 2000.
531
+ Rental income, property operating expenses, and
532
+ depreciation and amortization expenses decreased
533
+ in 1999 compared to 1998 as a result of the
534
+ sales of the Pavilions at East Lake property
535
+ and the 1998 Properties Sold.
536
+ Interest and other income in 1999 was higher
537
+ than such income in 2000 and 1998 because of
538
+ the interest received on the Wallkill Plaza
539
+ promissory note and the Glenhardie escrow
540
+ deposit in 1999.
541
+ General and administrative expenses
542
+ decreased in 1999 compared to 1998
543
+ primarily due to the elimination of
544
+ expenses relating to properties sold in 1999 and
545
+ 1998.
546
+ There were no other individually significant
547
+ factors which caused changes in revenue and
548
+ expenses.
549
+ Inflation
550
+ Inflation has been consistently low during
551
+ the periods presented in the consolidated
552
+ financial statements and, as a result, has not
553
+ had a significant effect on the operations of
554
+ the Partnership or its properties.
555
+ ITEM 7A. QUANTITATIVE AND QUALITITATIVE
556
+ DISCLOSURES ABOUT MARKET RISK
557
+ Not applicable.
558
+ <PAGE>
559
+ ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
560
+ DATA
561
+
562
+
563
+ DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
564
+
565
+ INDEX
566
+
567
+
568
+
569
+
570
+ (a) Financial Statements
571
+
572
+ Independent Auditors' Report
573
+ Consolidated Balance Sheets at October 31, 2000
574
+ and 1999 Consolidated Income Statements for the
575
+ years ended
576
+ October 31, 2000, 1999 and 1998
577
+ Consolidated Statements of Partners'
578
+ Capital for the years ended October
579
+ 31, 2000, 1999 and 1998
580
+ Consolidated Statements of Cash Flows
581
+ for the years ended October 31, 2000,
582
+ 1999 and 1998
583
+ Notes to Consolidated Financial
584
+
585
+ Statements
586
+
587
+
588
+
589
+
590
+
591
+ (b) Financial Statement Schedule
592
+
593
+ III. Real Estate and Accumulated
594
+
595
+ Depreciation
596
+
597
+
598
+
599
+
600
+
601
+
602
+
603
+
604
+
605
+
606
+ All schedules other than that indicated above
607
+ have been omitted because either the
608
+ required information is not applicable or
609
+ the information is shown in the consolidated
610
+ financial statements or notes thereto.
611
+ <PAGE>
612
+ Independent Auditors' Report
613
+
614
+
615
+
616
+
617
+
618
+ To The Partners of
619
+ Dean Witter Realty Income Partnership II, L.P.:
620
+
621
+
622
+ We have audited the accompanying consolidated
623
+ balance sheets of Dean Witter Realty Income
624
+ Partnership II,
625
+ L.P. and consolidated partnership (the
626
+ "Partnership") as of October 31, 2000
627
+ and 1999 and the related consolidated
628
+ statements of income, partners' capital,
629
+ and cash flows for each of the three
630
+ years in the period ended October 31,
631
+ 2000. Our audits also included the
632
+ financial statement schedule listed in the
633
+ Index at Item 8. These financial
634
+ statements and financial statement
635
+ schedule are the responsibility of the
636
+ Partnership's management. Our
637
+ responsibility is to express an opinion on
638
+ the financial statements and the financial
639
+ statement schedule based on our audits.
640
+
641
+ We conducted our audits in accordance
642
+ with auditing standards generally
643
+ accepted in the United States of America. Those standards
644
+ require that we plan and
645
+ perform the audit to obtain reasonable
646
+ assurance about whether the financial
647
+ statements are free of material
648
+ misstatement. An audit includes examining,
649
+ on a test basis, evidence supporting the
650
+ amounts and disclosures in the financial
651
+ statements. An audit also includes
652
+ assessing the accounting principles
653
+ used and
654
+ significant estimates made by management,
655
+ as well as evaluating the overall
656
+ financial statement presentation. We
657
+ believe that our audits provide a
658
+ reasonable basis for our opinion.
659
+
660
+ In our opinion, such consolidated
661
+ financial statements present fairly, in all
662
+ material respects, the financial position
663
+ of Dean Witter Realty Income Partnership
664
+ II, L.P. and consolidated partnership as
665
+ of October 31, 2000 and 1999 and the
666
+ results of their operations and their
667
+ cash flows for each of the three years in
668
+ the period ended October 31, 2000 in
669
+ conformity with accounting principles
670
+ generally accepted in the United States
671
+ of America. Also, in our opinion,
672
+ such financial statement schedule, when
673
+ considered in relation to the basic
674
+ consolidated financial statements <PAGE>
675
+ taken as a whole, presents fairly in
676
+ all material respects the information set
677
+ forth therein.
678
+
679
+ As discussed in Note 1 to the
680
+ consolidated financial statements, during
681
+ the year ended October 31, 2000, the
682
+ Partnership sold its remaining property
683
+ investment, which effectuated the
684
+ dissolution of the Partnership.
685
+ The Partnership is in the process of
686
+ winding up its affairs, and it plans to
687
+ distribute the Partnership's previously
688
+ undistributed sale proceeds and cash
689
+ reserves, and terminate.
690
+ /s/Deloitte &
691
+ Touche LLP
692
+ DELOITTE & TOUCHE LLP
693
+ New York, New York
694
+ January 16, 2001
695
+ <PAGE>
696
+ <TABLE>
697
+ DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
698
+
699
+ CONSOLIDATED BALANCE SHEETS
700
+ <CAPTION>
701
+
702
+ Octob
703
+ er
704
+ 31,
705
+ 2000
706
+ 1999
707
+ ASSETS
708
+ <S>
709
+ <C> <C>
710
+ Cash and cash equivalents $
711
+ 1,316,641 $
712
+ 1,409,281
713
+
714
+ Investment in joint venture
715
+ 13,637
716
+ 2,331,352
717
+
718
+ Other assets
719
+ 2,066
720
+ 57,181
721
+
722
+ $
723
+ 1,332,344 $ 3,797,814
724
+
725
+ LIABILITIES AND PARTNERS' CAPITAL
726
+ <S>
727
+ <C> <C>
728
+ Accounts payable and other liabilities $
729
+ 263,462 $
730
+ 193,982
731
+
732
+ Partners' capital (deficiency)
733
+ General partners
734
+ (5,431,688)
735
+ (5,433,238)
736
+ Limited partners ($1,000 per Unit, 177,023 units
737
+ issued)
738
+ 6,500,570
739
+ 9,037,070
740
+
741
+ Total partners' capital
742
+ 1,068,882
743
+ 3,603,832
744
+
745
+ $
746
+ 1,332,344 $ 3,797,814
747
+
748
+ See accompanying notes to consolidated financial
749
+ statements.
750
+ </TABLE>
751
+ <PAGE>
752
+ <TABLE>
753
+ DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
754
+
755
+ CONSOLIDATED INCOME STATEMENTS
756
+
757
+ For the years ended October 31, 2000, 1999 and 1998
758
+ <CAPTION>
759
+
760
+ 2000 1999
761
+ 1998
762
+
763
+ <S> <C>
764
+ <C> <C>
765
+
766
+ Revenues:
767
+ Rental $ - $551,241
768
+ $2,722,329
769
+ Gains on sales of real estate 54,657 4,320,001
770
+ 19,097,127
771
+ Equity in earnings of joint venture2,667,882238,583
772
+ 226,269
773
+ Interest and other 96,481 333,992
774
+ 168,846
775
+
776
+ 2,819,020 5,443,817
777
+ 22,214,571
778
+ Expenses:
779
+ Property operating - 248,910
780
+ 985,746
781
+ Depreciation - 113,395
782
+ 548,902
783
+ Amortization - 17,074
784
+ 94,228
785
+ General and administrative 220,303 203,191
786
+ 475,512
787
+
788
+ 220,303 582,570
789
+ 2,104,388
790
+
791
+ Net income $2,598,717
792
+ $4,861,247 $
793
+ 20,110,183
794
+
795
+ Net income allocated to:
796
+ Limited partners $2,597,167 $4,831,745
797
+ $
798
+ 20,008,877
799
+ General partners 1,550 29,502
800
+ 101,306
801
+
802
+ $2,598,717
803
+ $4,861,247 $ 20,110,183
804
+
805
+ Net income per Unit of limited
806
+ partnership interest $ 14.67 $ 27.29
807
+ $ 113.03
808
+
809
+
810
+
811
+
812
+ See accompanying notes to consolidated financial
813
+ statements.
814
+ </TABLE>
815
+ <PAGE>
816
+ <TABLE>
817
+ DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
818
+
819
+ CONSOLIDATED STATEMENTSOF PARTNERS' CAPITAL
820
+
821
+ For the years ended October 31, 2000, 1999 and 1998
822
+
823
+ <CAPTION>
824
+
825
+
826
+ Limited General
827
+ Partners Partners
828
+ Total
829
+
830
+ <S> <C> <C>
831
+ <C>
832
+
833
+ Partners' capital (deficiency) at
834
+ November 1, 1997 $45,203,885 $(5,353,586) $
835
+ 39,850,299
836
+
837
+ Net income 20,008,877 101,306
838
+ 20,110,183
839
+
840
+ Cash distributions (46,328,690)
841
+ (210,460)(46,539,150)
842
+
843
+ Partners' capital (deficiency) at
844
+ October 31, 1998 18,884,072 (5,462,740)
845
+ 13,421,332
846
+
847
+ Net income 4,831,745 29,502
848
+ 4,861,247
849
+
850
+ Cash distributions (14,678,747) -
851
+ (14,678,747)
852
+
853
+ Partners' capital (deficiency) at
854
+ October 31, 1999 9,037,070 (5,433,238) 3,603,832
855
+
856
+ Net income 2,597,167 1,550 2,598,717
857
+ Cash distributions (5,133,667) - (5,133,667)
858
+ Partners' capital (deficiency) at
859
+ October 31, 2000 $6,500,570 $(5,431,688) $
860
+ 1,068,882
861
+
862
+
863
+
864
+
865
+ See accompanying notes to consolidated financial statements.
866
+ </TABLE>
867
+ <PAGE>
868
+ <TABLE>
869
+ DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
870
+ CONSOLIDATED STATEMENTS OF CASH FLOWS
871
+ For the years ended October 31, 2000, 1999 and 1998
872
+ <CAPTION>
873
+
874
+ 2000 1999 1998
875
+ <S> <C> <C> <C>
876
+ Cash flows from operating activities:
877
+ Net income $2,598,717 $4,861,247 $
878
+ 20,110,183
879
+ Adjustments to reconcile net income
880
+ to net cash provided by operating
881
+ activities:
882
+ Gains on sales of real estate (54,657) (4,320,001)
883
+ (19,097,127)
884
+ Depreciation - 113,395 548,902
885
+ Amortization - 17,074 94,228
886
+ Equity in earnings of Taxter joint
887
+ venture (2,667,882) (238,583) (226,269)
888
+ Decrease (increase) in operating
889
+ assets:
890
+ Deferred leasing commissions - (60,767)
891
+ (231,865)
892
+ Other assets 55,115 172,818 373,626
893
+ Increase (decrease) in accounts
894
+ payable and other liabilities 69,480 (181,918)
895
+ (709,107)
896
+
897
+ Net cash provided by operating
898
+ activities 773 363,265 862,571
899
+
900
+ Cash flows from investing activities:
901
+ Proceeds from sales of real estate 54,657 15,009,113
902
+ 44,623,521
903
+ Distributions from Taxter joint venture5,176,175 321,292 521,385
904
+ Investments in Taxter joint venture (190,578)
905
+ (40,885) (95,492)
906
+ Additions to real estate - (189,072)
907
+ (489,976)
908
+
909
+ Net cash provided by
910
+ investing activities 5,040,254
911
+ 15,100,44844,559,438
912
+
913
+ Cash flows from financing activities:
914
+ Cash distributions to partners
915
+ (5,133,667)(14,678,747)(46,539,150)
916
+
917
+ (Decrease)increase in cash and
918
+ cash equivalents (92,640)
919
+ 784,966(1,117,141)
920
+
921
+ Cash and cash equivalents at
922
+ beginning of year 1,409,281 624,315 1,741,456
923
+ Cash and cash equivalents at end of year $ 1,316,641 $1,409,281
924
+ $ 624,315
925
+ See accompanying notes to consolidated financial statements.
926
+ </TABLE>
927
+ <PAGE>
928
+ DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
929
+
930
+ NOTES TO CONSOLIDATED FINANCIAL
931
+
932
+ STATEMENTS October 31, 2000, 1999
933
+
934
+ and 1998
935
+
936
+ 1. The Partnership
937
+
938
+ Dean Witter Realty Income Partnership II,
939
+ L.P. (the
940
+ "Partnership") is a limited partnership
941
+ organized under the laws of the State of
942
+ Delaware in 1984. The Partnership is managed
943
+ by Dean Witter Realty Income Properties II Inc.
944
+ (the "Managing General Partner"). The
945
+ Partnership's fiscal year ends on October 31.
946
+
947
+ In 1985, the Partnership issued 177,023 units
948
+ of limited partnership interest (the "Units")
949
+ for $177,023,000. No additional Units will be
950
+ sold. The proceeds of the offering were used
951
+ to make equity investments in income-producing
952
+ office and retail properties which were not
953
+ encumbered by debt when acquired.
954
+
955
+ In fiscal year 2000, the Partnership's
956
+ last remaining property investment, Taxter
957
+ Corporate Park, was sold on May 23, 2000 (see
958
+ Note 4). The sale of the Taxter property has
959
+ effectuated the dissolution of the
960
+ Partnership.
961
+ Accordingly, the Partnership is in the process
962
+ of winding up its affairs, and it plans to
963
+ distribute the Partnership's previously
964
+ undistributed sales proceeds and cash
965
+ reserves,and terminate in fiscal year 2001.
966
+
967
+ 2. Summary of Significant Accounting Policies
968
+
969
+ The financial statements include the
970
+ accounts of the Partnership and the
971
+ Framingham Corporate Center joint venture
972
+ on a consolidated basis. The Partnership owned
973
+ a 95% interest in the Framingham Corporate
974
+ Center property until its sale in December
975
+ 1997.
976
+
977
+ The equity method of accounting has been
978
+ applied to the Partnership's 14.8% interest
979
+ in the general partnership which owned the
980
+ Taxter Corporate Park property ("TPA")
981
+ because of the Partnership's continuing
982
+ ability to exert significant influence.
983
+ Affiliates of the Partnership, Dean Witter
984
+ Realty Income Partnership III, L.P. and Dean
985
+ Witter Realty Income Partnership IV, L.P. own
986
+ the remaining 44.6% and 40.6% interests,
987
+ respectively, in TPA.
988
+
989
+
990
+ <PAGE>
991
+ The Partnership's records are maintained on
992
+ the accrual basis of accounting for
993
+ financial reporting and tax purposes. The
994
+ preparation of financial statements in
995
+ conformity with accounting principles generally
996
+ accepted in the United States of America
997
+ requires management to make estimates and
998
+ assumptions that affect the reported amounts of
999
+ assets and liabilities and disclosure of
1000
+ contingent assets and liabilities at the
1001
+ date of the financial statements and the
1002
+ reported amounts of revenues and expenses
1003
+ during the reporting period. Actual results
1004
+ could differ from those estimates.
1005
+ Cash and cash equivalents consist of cash and
1006
+ highly liquid investments with maturities, when
1007
+ purchased, of three months or less.
1008
+ The carrying value of real estate included
1009
+ the purchase price paid by the Partnership
1010
+ and acquisition fees and expenses. Costs of
1011
+ improvements to the properties were
1012
+ capitalized, and repairs were expensed.
1013
+ Depreciation was recorded on the straight-
1014
+ line method. The Partnership stopped
1015
+ recording depreciation on a property when it
1016
+ was reclassified as held for sale.
1017
+ At least annually, and more often if
1018
+ circumstances dictated, the Partnership
1019
+ evaluated the recoverability of the net
1020
+ carrying value of its real estate (and
1021
+ related assets), including the real estate (and
1022
+ related assets) owned by TPA. As part of this
1023
+ evaluation, the Partnership assessed, among
1024
+ other things, whether there had been a
1025
+ significant decrease in the market value of any
1026
+ of its properties. If events or circumstances
1027
+ indicated that the net carrying value of a
1028
+ property was not recoverable, the expected
1029
+ future net cash flows from the property were
1030
+ estimated for a period of approximately five
1031
+ years (or a shorter period if the
1032
+ Partnership expected that the property would be
1033
+ disposed of sooner), along with estimated sales
1034
+ proceeds at the end of the period. If the
1035
+ total of these future undiscounted cash flows
1036
+ was less than the carrying amount of the
1037
+ property, the property was written down to its
1038
+ fair value as determined (in some cases with
1039
+ the assistance of outside real estate
1040
+ consultants) based on discounted cash flows, and
1041
+ a loss on impairment recognized by a charge to
1042
+ earnings.
1043
+ The cash flows used to evaluate the
1044
+ recoverability of the properties and to
1045
+ determine fair value were based on good faith
1046
+ estimates and assumptions developed by the
1047
+ Managing General Partner.
1048
+ <PAGE>
1049
+ Deferred leasing commissions were amortized
1050
+ over the
1051
+ applicable lease terms.
1052
+
1053
+ Rental income was accrued on a straight-line
1054
+ basis over the terms of the leases. Accruals
1055
+ in excess of amounts payable by tenants
1056
+ pursuant to their leases (resulting from rent
1057
+ concessions or rents which periodically
1058
+ increased over the term of a lease) were
1059
+ recorded as receivables and included in other
1060
+ assets.
1061
+
1062
+ Net income per Unit amounts are calculated by
1063
+ dividing net income allocated to Limited
1064
+ Partners, in accordance with the Partnership
1065
+ Agreement, by the weighted average number of
1066
+ Units outstanding.
1067
+
1068
+ No provision for income taxes has been made in
1069
+ the financial statements, since the liability
1070
+ for such taxes is that of the partners rather
1071
+ than the Partnership.
1072
+
1073
+ For income tax purposes, Partnership results
1074
+ are reported for the calendar year. The
1075
+ accounting policies used for tax reporting
1076
+ purposes differed from those used for
1077
+ financial reporting as follows: (a) depreciation
1078
+ was calculated using accelerated methods, (b)
1079
+ rental income was recognized based on the
1080
+ payment terms in the applicable leases, and
1081
+ (c)
1082
+ writedowns for impairment of real estate
1083
+ were not deductible. In addition, offering
1084
+ costs are treated
1085
+ differently for tax and financial reporting
1086
+ purposes. The tax basis of the Partnership's
1087
+ assets and liabilities is approximately $17.3
1088
+ million higher than the amounts reported for
1089
+ financial statement purposes.
1090
+
1091
+ 3. Partnership Agreement
1092
+
1093
+ The Partnership Agreement provides that
1094
+ distributable cash, as defined, is paid 90% to
1095
+ the Limited Partners and 10% to the General
1096
+ Partners.
1097
+
1098
+ Sale proceeds will be distributed, to the
1099
+ extent available, first, to each Limited
1100
+ Partner, until there has been a return of
1101
+ the Limited Partner's capital contribution plus
1102
+ cumulative distributions of distributable
1103
+ cash and sale proceeds in an amount
1104
+ sufficient to provide a 9% cumulative annual
1105
+ return on the Limited Partner's
1106
+ adjusted capital
1107
+ contribution. Thereafter, any remaining sale
1108
+ proceeds will be distributed 85% to the
1109
+ Limited Partners and 15% to the General
1110
+ Partners after the Managing General Partner
1111
+ receives a brokerage fee, if earned, of up to 3%
1112
+ of the selling price of any equity investment.
1113
+ <PAGE>
1114
+ <TABLE>
1115
+ Taxable income generally is allocated in
1116
+ the same
1117
+ proportions as distributions of distributable
1118
+ cash or sale proceeds (except that the
1119
+ General Partner must be allocated at least 1%
1120
+ of taxable income from sales). In the event
1121
+ there is no distributable cash or sale
1122
+ proceeds, taxable income will be allocated 90%
1123
+ to the Limited Partners and 10% to the General
1124
+ Partners. Any tax loss will be allocated 90% to
1125
+ the Limited Partners and 10% to the General
1126
+ Partners.
1127
+
1128
+ Distributions paid to limited partners include
1129
+ returns of capital per Unit of limited
1130
+ partnership interest of $14.32, $55.63 and
1131
+ $148.68 for the years ended October 31, 2000,
1132
+ 1999 and 1998, respectively, calculated as the
1133
+ excess of cash distributed per Unit over
1134
+ accumulated earnings per Unit not previously
1135
+ distributed.
1136
+
1137
+ 4. Sales of Real Estate
1138
+ <CAPTION>
1139
+ 000's
1140
+ Date of Negotiated Net Gain on
1141
+ Property Sale Sale Price
1142
+ Proceeds Sale
1143
+ From
1144
+ Sale
1145
+
1146
+ Fiscal 1999:
1147
+ <S> <C> <C> <C>
1148
+ Pavilions at East 03/01/9 $14,000
1149
+ $13,516 $2,827
1150
+ Lake 9
1151
+
1152
+ Collection of
1153
+ Wallkill
1154
+ 1,200 1,200
1155
+ Plaza note
1156
+ receivable
1157
+
1158
+ Return of Glenhardie
1159
+ escrow balance
1160
+ 293 293
1161
+
1162
+ $15,009 $4,320
1163
+
1164
+ Fiscal 1998 Sales:
1165
+ Framingham
1166
+ Corporate Center 12/03/9 $26,050
1167
+ $25,342 $11,018
1168
+ 7
1169
+ Glenhardie
1170
+ Corporate Center
1171
+ I and II 04/01/9 19,700
1172
+ 19,282 8,079
1173
+ 8
1174
+ $45,750
1175
+ $44,624 $19,097
1176
+
1177
+ In 2000, the gain on sale of real estate
1178
+ resulted from contingent proceeds received in
1179
+ 2000 from the 1999 sale of the Pavilions at
1180
+ East Lake Property.
1181
+
1182
+ All of the properties were sold to unaffiliated
1183
+ buyers.
1184
+
1185
+ The net proceeds from the sales are net of
1186
+ closing costs.
1187
+
1188
+ As of October 31, 2000, all of the net sales
1189
+ proceeds were distributed except for
1190
+ approximately $430,000 from the sales of the
1191
+ Glenhardie and Pavilions at East Lake
1192
+ properties, which were added to the
1193
+ Partnership's cash reserves.
1194
+
1195
+ As part of the Partnership's agreement to sell
1196
+ the Pavilions at East Lake property, Dean Witter
1197
+ Realty Income Partnership III, L.P., an
1198
+ affiliate of the Partnership, also sold a
1199
+ property to the same unaffiliated buyer.
1200
+ The aggregate purchase price of the
1201
+ properties sold was approximately $24.2
1202
+ million, of which $14.0 million was allocated in
1203
+ the Agreement to the Pavilions at East Lake
1204
+ property.
1205
+
1206
+ As a part of the Purchase and Sale
1207
+ Agreement for the Glenhardie properties (the
1208
+ "Agreement") Dean Witter Realty Income
1209
+ Partnership III, L.P. and Dean Witter Realty
1210
+ Income Partnership IV, L.P., affiliated public
1211
+ partnerships, also sold certain other
1212
+ properties. The aggregate negotiated sale
1213
+ price of the properties sold was approximately
1214
+ $168 million, of which approximately $19.7
1215
+ million was allocated in the Agreement to the
1216
+ Partnership's Glenhardie properties.
1217
+
1218
+ Pursuant to the Agreement, escrows were
1219
+ established for the cost of certain building
1220
+ improvements (the "Improvements"). In addition
1221
+ to payment of the purchase price, at closing,
1222
+ the Purchaser deposited into these escrows
1223
+ approximately $3.9 million, of which
1224
+ approximately $1.6 million related to Glenhardie
1225
+ II. The Partnership did not include the amount
1226
+ of the escrowed sales proceeds in its
1227
+ calculation of the gain on the sale of the
1228
+ property because of the uncertainty of its
1229
+ realization. In October 1999, the
1230
+ Partnership received approximately $344,000,
1231
+ the remaining balance of the escrow deposit
1232
+ (including interest of approximately $51,000)
1233
+ after all costs of the Glenhardie II
1234
+ Improvements had been funded.
1235
+
1236
+ In fiscal 1996, the Partnership sold the
1237
+ Wallkill Plaza shopping center. A portion
1238
+ of the sale price was
1239
+ represented by a $1.2 million promissory
1240
+ note from the purchaser, payment of which was
1241
+ contingent on the outcome of the bankruptcy
1242
+ proceedings of Bradlees Department Stores, an
1243
+ anchor tenant at the shopping center. In
1244
+ 1996 the
1245
+ Partnership did not include the $1.2 million
1246
+ note in the calculation of the gain on the
1247
+ sale of the property because of uncertainty
1248
+ of the realization. In April 1999, the
1249
+ purchaser paid the Partnership approximately
1250
+ $1.4 million, representing payment of the note
1251
+ in the full, plus interest at 4.5%.
1252
+
1253
+ All distributed net sale proceeds (plus
1254
+ related interest) were paid 100% to the
1255
+ Limited Partners. All gains from property
1256
+ sales (plus related interest) were allocated
1257
+ 100% to the Limited Partners.
1258
+
1259
+
1260
+ 5. Investment in Joint Venture
1261
+
1262
+ Taxter Corporate Park, Westchester County, New
1263
+ York
1264
+
1265
+ Pursuant to a Purchase and Sale Agreement dated
1266
+ as of April 4, 2000, as amended, on May 23,
1267
+ 2000, TPA sold the land and buildings which
1268
+ comprise the Taxter property to a subsidiary of Mack-Cali Realty
1269
+ Corporation (the "Purchaser"), an
1270
+ unaffiliated party, for a negotiated sale price
1271
+ of $42.725 million. In connection with the
1272
+ sale, TPA acquired from an affiliate and
1273
+ conveyed to the Purchaser certain interests in
1274
+ the Taxter property, including interests that
1275
+ the affiliate had acquired from KLM Royal
1276
+ Dutch Airlines, for $6.75 million, in
1277
+ February 1999. Of the $42.725 million, TPA
1278
+ remitted $6.75 million of the sale proceeds to
1279
+ the affiliate in connection with the
1280
+ transaction.
1281
+
1282
+ The purchase price was paid in cash at closing.
1283
+ At closing, the Partnership received
1284
+ approximately $4.9 million representing its
1285
+ 14.8% share of the cash received by TPA, net
1286
+ of its share of TPA's closing cost, the amount
1287
+ of the obligation owed to the affiliate and
1288
+ other deductions.
1289
+
1290
+ On June 29, 2000, the Partnership paid, 100% to
1291
+ the Limited Partners, a cash distribution
1292
+ which included Taxter sale proceeds of
1293
+ approximately $4.7 million ($26.76 per Unit).
1294
+ The Partnership retained a portion of the sale
1295
+ proceeds to cover any contingencies that may
1296
+ arise pursuant to the sale and if required, pay
1297
+ administrative expenses and liabilities that
1298
+ may arise while the Partnership winds up its
1299
+ affairs. Any sale proceeds remaining,
1300
+ subsequent to the payment of any
1301
+ contingencies, will be distributed to Limited
1302
+ Partners only.
1303
+
1304
+ The Partnership's share of TPA's gain on the
1305
+ sale of the Taxter property was approximately
1306
+ $2.5 million; such gain was allocated 100% to
1307
+ Limited Partners.
1308
+
1309
+ The partners of TPA each receive cash flow and
1310
+ profits and losses according to their ownership
1311
+ interests.
1312
+ <PAGE>
1313
+
1314
+ </TABLE>
1315
+ <TABLE>
1316
+ Summarized balance sheet information of TPA is
1317
+ as follows: <CAPTION>
1318
+
1319
+ October
1320
+ 31, 2000
1321
+ 1999
1322
+ <S>
1323
+ <C> <C>
1324
+ Land and buildings, net $ -
1325
+ $15,680,607
1326
+ Other 103,101
1327
+ 1,670,760
1328
+
1329
+ Total assets $ 103,101
1330
+ $17,351,367
1331
+
1332
+ Liabilities $ 10,968 $
1333
+ 214,272
1334
+ Partners' capital 92,133
1335
+ 17,137,095
1336
+
1337
+ Total liabilities and capital $ 103,101
1338
+ $17,351,367
1339
+
1340
+ Summarized income statements of TPA are as
1341
+ follows:
1342
+ Years ended
1343
+ October 31,
1344
+ 2000 1999
1345
+ 1998
1346
+ <S> <C> <C>
1347
+ <C>
1348
+ Gain on sale of real estate $15,700,138 $
1349
+ - - $ -
1350
+ Rental income 3,056,084 5,860,022
1351
+ 5,158,170
1352
+ Other income 10,398 45,245
1353
+ 67,779
1354
+
1355
+ 18,766,620 5,905,267
1356
+ 5,225,949
1357
+
1358
+ Property operating expenses 1,775,441 3,054,679
1359
+ 2,455,628 Depreciation and amortization 349,669
1360
+ 1,238,539 1,241,470
1361
+
1362
+ 2,125,110 4,293,218
1363
+ 3,697,098
1364
+
1365
+ Net income $16,641,510
1366
+ $ 1,612,049
1367
+ $ 1,528,851
1368
+
1369
+ Activity in the Partnership's investment in
1370
+ TPA is as follows:
1371
+
1372
+ Years ended
1373
+ October 31,
1374
+ 2000 1999
1375
+ 1998
1376
+
1377
+ <S> <C> <C>
1378
+ <C>
1379
+
1380
+ Investment at beginning of year $
1381
+ 2,331,352 $2,373,176
1382
+ $ 2,572,800
1383
+ Equity in earnings 2,667,882 238,583
1384
+ 226,269
1385
+ Distributions (5,176,175)(321,292)
1386
+ (521,385)
1387
+ Additional investments 190,578 40,885
1388
+ 95,492
1389
+
1390
+ Investment at end of year $ 13,637
1391
+ $2,331,352 $
1392
+ 2,373,176
1393
+
1394
+ The accounting policies of TPA are the same as
1395
+ those of the Partnership.
1396
+ </TABLE>
1397
+ <PAGE>
1398
+ <TABLE>
1399
+ 6. Related Party Transactions
1400
+
1401
+ An affiliate of the Managing General
1402
+ Partner provided property management services
1403
+ for Taxter Corporate Park (through December
1404
+ 31, 1998), Glenhardie I and II (sold April
1405
+ 1998)and Framingham Corporate Center (sold
1406
+ December 1997). The Partnership paid the
1407
+ affiliate management fees (included in
1408
+ property operating expenses) of approximately
1409
+ $3,000 and $52,000 for the years ended October
1410
+ 31, 1999 and 1998, respectively.
1411
+
1412
+ Another affiliate of the Managing General
1413
+ Partner performs administrative functions and
1414
+ processes certain investor transactions and
1415
+ prepares tax information for Partnership. For
1416
+ the years ended October 31, 2000, 1999 and
1417
+ 1998, the affiliate was reimbursed
1418
+ approximately $61,000, $109,000 and $290,000,
1419
+ respectively, for these services. These
1420
+ amounts have been recorded in general and
1421
+ administrative expenses. The 2000 fees are
1422
+ also included in accounts payable and other
1423
+ liabilities as of October 31, 2000.
1424
+ <CAPTION>
1425
+ 7. Summary of Quarterly Results (Unaudited)
1426
+
1427
+ Net
1428
+ I
1429
+ n
1430
+ c
1431
+ o
1432
+ m
1433
+ e
1434
+ (
1435
+ L
1436
+ o
1437
+ s
1438
+ s
1439
+ )
1440
+ Per
1441
+ U
1442
+ n
1443
+ i
1444
+ t
1445
+ o
1446
+ f
1447
+ l
1448
+ i
1449
+ m
1450
+ i
1451
+ t
1452
+ e
1453
+ d
1454
+ Revenue Net Income partnership
1455
+ (Loss) interest
1456
+ <S> <C> <C>
1457
+ <C>
1458
+ 2000
1459
+ January 31 $ 65,371 $ 14,398 $ 0.07
1460
+ April 30 95,262 25,793 0.13
1461
+ July 31 2,568,022 2,525,797 14.26
1462
+ October 31 90,365 32,729 0.21
1463
+ Total $2,819,0 $2,598,717 $ 14.67
1464
+ 20
1465
+
1466
+ <S> <C> <C>
1467
+ <C>
1468
+
1469
+ 1999
1470
+ January 31 $507,528 $ 225,703 $ 1.15
1471
+ April 30 4,477,257 4,279,280 24.14
1472
+ July 31 28,697 (3,511) (0.04)
1473
+ October 31 430,335 359,775 2.04
1474
+ Total $5,443,8 $4,861,247 $ 27.29
1475
+ 17
1476
+ </TABLE>
1477
+ <PAGE>
1478
+ ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
1479
+ ACCOUNTANTS ON
1480
+ ACCOUNTING AND FINANCIAL DISCLOSURE
1481
+
1482
+ None.
1483
+
1484
+ PART III.
1485
+
1486
+ ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF
1487
+ THE REGISTRANT The Partnership is a limited
1488
+ partnership which has no directors or
1489
+ officers.
1490
+
1491
+
1492
+ The directors and executive officers of the
1493
+ Managing General Partner are as follows:
1494
+ Position
1495
+ with the Name
1496
+ Managing General Partner
1497
+
1498
+ William B.
1499
+ Smith
1500
+ Chairman of the
1501
+ Board of
1502
+ Directors
1503
+ E. Davisson Hardman, Jr. President and
1504
+ Director
1505
+ Ronald T. Carman Secretary and
1506
+ Director
1507
+
1508
+ All of the directors have been elected to
1509
+ serve until the next annual meeting of the
1510
+ shareholder of the Managing General Partner
1511
+ or until their successors are elected
1512
+ and
1513
+ qualify. Each of the executive officers has
1514
+ been elected to serve until his successor is
1515
+ elected and qualifies.
1516
+
1517
+ William B. Smith, age 57, has been an Advisory
1518
+ Director of Morgan Stanley Dean Witter & Co.,
1519
+ Inc. since July 2000.
1520
+ From June 1997 to July 2000, Mr. Smith was a Managing
1521
+ Director of Morgan Stanley & Co., Inc. and Co-
1522
+ head of Morgan Stanley Realty Incorporated.
1523
+ Prior to June 1997, Mr. Smith was an
1524
+ Executive Vice President of Dean Witter
1525
+ Reynolds, Inc. and Director of its Investment
1526
+ Banking Department for more than five years.
1527
+
1528
+ E. Davisson Hardman, Jr., age 51, has been a Managing
1529
+ Director of Morgan Stanley Asia, Ltd. since June
1530
+ 1997. For more than five years before June
1531
+ 1997, Mr. Hardman was a Managing Director of
1532
+ Dean Witter Realty Inc.
1533
+ Ronald T. Carman, age 49, has been an Assistant
1534
+ Secretary of Morgan Stanley Dean Witter & Co.
1535
+ since June 1997and a Managing Director of
1536
+ Morgan Stanley & Co. Inc. since July 1998.
1537
+ Previously, he was a Senior Vice President
1538
+ and Associate General Counsel of Dean Witter
1539
+ Reynolds Inc., which he joined in 1984.
1540
+ <PAGE>
1541
+ There is no family relationship among any of
1542
+ the foregoing persons.
1543
+
1544
+ ITEM 11. EXECUTIVE COMPENSATION
1545
+
1546
+ The General Partners are entitled to
1547
+ receive cash distributions, when and as cash
1548
+ distributions are made to the Limited
1549
+ Partners, and a share of taxable income or tax
1550
+ loss. Descriptions of such distributions and
1551
+ allocations are in Item 5 above. The
1552
+ General Partners received cash distributions
1553
+ of $210,460 for the year ended October 31,
1554
+ 1998. There were no cash distributions paid to
1555
+ the General Partners for the years ended
1556
+ October 31, 2000 and 1999.
1557
+
1558
+ The General Partners and their affiliates were
1559
+ paid certain fees and reimbursed for certain
1560
+ expenses. Information concerning such fees and
1561
+ reimbursements is contained in Note 6 to
1562
+ consolidated financial statements in Item 8
1563
+ above.
1564
+ The directors and officers of the
1565
+ Partnership's Managing General
1566
+ Partner received no remuneration from
1567
+ the
1568
+ partnership.
1569
+ <PAGE>
1570
+ ITEM 12. SECURITY OWNERSHIP OF CERTAIN
1571
+ BENEFICIAL OWNERS
1572
+ AND
1573
+ MANAGEMENT
1574
+ (a) No person is known to the Partnership to
1575
+ be the
1576
+ beneficial owner of more than five percent of
1577
+ the Units.
1578
+
1579
+ (b) The directors and executive officers of
1580
+ the Managing General Partner own the following
1581
+ Units as of January 1, 2001:
1582
+
1583
+ (1) (2)
1584
+ (3)
1585
+
1586
+ Amount and
1587
+ Title of Name of
1588
+ Nature of
1589
+ Class Beneficial Owner
1590
+ Beneficial Ownership
1591
+
1592
+ Limited All directors and executive
1593
+ *
1594
+ Partnership officers of the Managing
1595
+ Interests General Partner, as a group
1596
+
1597
+
1598
+ * Own, by virtue of ownership of Limited
1599
+ Partnership
1600
+ interests in the Associate General Partner, less
1601
+ than 1% of the Units of the Partnership.
1602
+
1603
+ ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
1604
+ TRANSACTIONS
1605
+
1606
+ As a result of their being partners of a limited
1607
+ partnership which is the limited partner of
1608
+ the Associate General Partner, certain
1609
+ current and former officers and directors of
1610
+ the Managing General Partner also own indirect
1611
+ general
1612
+ partnership interests in the Partnership. The
1613
+ Partnership Agreement of the Partnership
1614
+ provides that cash distributions and
1615
+ allocations of income and loss to the
1616
+ General Partners be distributed or allocated
1617
+ 50% to the Managing General Partner and 50%
1618
+ to the Associate General Partner. The General
1619
+ Partners' share of cash distributions and income
1620
+ or loss is described in Item 5 above.
1621
+ All of the outstanding shares of common
1622
+ stock of the Managing General Partner are
1623
+ owned by Realty, a Delaware corporation which
1624
+ is a wholly-owned subsidiary of Morgan Stanley
1625
+ Dean Witter & Co. The general partner of
1626
+ the Associate General Partner is Dean Witter
1627
+ Realty Income Associates II Inc., which is a
1628
+ wholly-owned subsidiary of the Managing
1629
+ General Partner. The limited partner of the
1630
+ Associate General Partner is LSA 84 II L.P.,
1631
+ a Delaware limited partnership. Realty and
1632
+ certain current and former officers and
1633
+ directors of
1634
+ <PAGE>
1635
+ Realty are partners of LSA 84 II L.P.
1636
+ Additional information
1637
+ with respect to the directors and officers and
1638
+ compensation of the Managing General Partner
1639
+ and affiliates is contained in Items 10 and 11
1640
+ above.
1641
+
1642
+ The General Partners and their affiliates were
1643
+ paid certain fees and reimbursed for certain
1644
+ expenses. Information concerning such fees and
1645
+ reimbursements is contained in Note 6 to the consolidated
1646
+ financial statements in Item 8 above.
1647
+ The Partnership believes that the payment of
1648
+ fees and the reimbursement of expenses to the
1649
+ General Partners and their affiliates are on
1650
+ terms as favorable as would be obtained from
1651
+ unrelated third parties.
1652
+ <PAGE>
1653
+ DEAN WITTER REALTY INCOME PARTNERSHIP II,
1654
+ L.P.
1655
+ PART IV
1656
+
1657
+ ITEM 14. EXHIBITS, FINANCIAL STATEMENT
1658
+ SCHEDULES, AND
1659
+ REPORTS ON FORM 8-K
1660
+ (a) The following documents are filed as
1661
+ part of this
1662
+ Annual Report:
1663
+
1664
+ 1. Financial Statements (see Index
1665
+ to Financial
1666
+ Statements filed as part of Item 8 of
1667
+ this Annual Report).
1668
+
1669
+ 2. Financial Statement Schedules
1670
+ (see Index to
1671
+ Financial Statements filed as part of Item
1672
+ 8 of this Annual Report).
1673
+
1674
+ 3. Exhibits
1675
+ (3) (a) Amended and Restated
1676
+ Agreement of Limited Partnership
1677
+ dated as of September 6, 1984
1678
+ set forth in Exhibit A to the
1679
+ Prospectus included in Registration
1680
+ Statement Number
1681
+ 2-93207 is incorporated herein by
1682
+ reference.
1683
+
1684
+ (b) Certificate of Limited
1685
+ Partnership included in
1686
+ Registration Statement Number 2-
1687
+ 93207 is incorporated herein by
1688
+ reference.
1689
+
1690
+ (4) (a) Amended and Restated
1691
+ Agreement of Limited Partnership
1692
+ dated as of September 6, 1984
1693
+ set forth in Exhibit A to the
1694
+ Prospectus
1695
+ included in Registration
1696
+ Statement Number
1697
+ 2-93207 is incorporated herein by
1698
+ reference.
1699
+
1700
+ (b) Certificate of Limited
1701
+ Partnership included
1702
+ in Registration Statement Number
1703
+ 2-93207 is incorporated herein by
1704
+ reference.
1705
+
1706
+ (10) (a) Purchase and Sale
1707
+ Agreements for
1708
+ properties purchased were filed as
1709
+ Exhibits to Form 8-K on May 24,
1710
+ 1985, July 15, 1985, October 29,
1711
+ 1985, November 15, 1985, February
1712
+ 27, 1986, August 29, 1986,
1713
+ September 4, 1986, December 18,
1714
+ 1986 and December 30, 1986 and are
1715
+ incorporated herein by reference.
1716
+
1717
+ (b) Purchase and Sale Agreement,
1718
+ dated as of
1719
+ October 19, 1995, between Dean
1720
+ Witter Income Partnership II,
1721
+ L.P., Midway Crossing Limited
1722
+ Partnership, Dean Witter Income
1723
+ Partnership III, L.P., Genesee
1724
+ <PAGE>
1725
+ Crossing Limited Partnership,
1726
+ Farmington/9 Mile Associates, a
1727
+ Michigan Limited Partnership, Hampton
1728
+ Crossing Associates, Rochester
1729
+ Hills Limited Partnership, Dean
1730
+ Witter Realty Yield Plus, L.P.
1731
+ and New Plan Realty Trust (including
1732
+ Exhibit J thereto) was filed as an
1733
+ exhibit to Form 8-K on December 11,
1734
+ 1995 and is
1735
+ incorporated herein by reference.
1736
+
1737
+ (c) First Amendment to Purchase
1738
+ and Sale
1739
+ Agreement, dated as of October 19,
1740
+ 1995, between Dean Witter Income
1741
+ Partnership II, L.P., Midway
1742
+ Crossing Limited Partnership, Dean
1743
+ Witter Income Partnership III,
1744
+ L.P., Genesee Crossing Limited
1745
+ Partnership, Farmington/9 Mile
1746
+ Associates, a Michigan Limited
1747
+ Partnership, Hampton Crossing
1748
+ Associates, Rochester Hills Limited
1749
+ Partnership, Dean Witter Realty
1750
+ Yield Plus, L.P. and New Plan Realty
1751
+ Trust was filed as an exhibit to Form
1752
+ 8-K on December 11, 1995 and is
1753
+ incorporated herein by reference.
1754
+
1755
+ (d) Purchase and Sale Agreement
1756
+ dated as of
1757
+ December 19, 1996, between Dean
1758
+ Witter Realty Income Partnership
1759
+ II, L.P., a Delaware limited
1760
+ partnership, as Seller and Office
1761
+ Opportunity Fund III, a California
1762
+ limited partnership, as Purchaser
1763
+ was filed as an Exhibit to Form 8-K
1764
+ on February 27, 1997 and is
1765
+ incorporated herein by reference.
1766
+
1767
+ (e) Purchase and Sale Agreement,
1768
+ dated as of
1769
+ February 28, 1997, between
1770
+ Century Square
1771
+ Venture, a California general
1772
+ partnership, as Seller and
1773
+ Speiker Properties, L.P., a
1774
+ California limited partnership, as
1775
+ Purchaser was filed as an Exhibit
1776
+ to Form 8-K on April 10, 1997 and
1777
+ is incorporated herein by reference.
1778
+
1779
+ (f) Purchase and Sale Agreement, dated as of
1780
+ October 22, 1997, between Framingham
1781
+ Corporate Center Limited Partnership as
1782
+ Seller and Massachusetts Mutual Life
1783
+ Insurance Company as Purchaser was filed
1784
+ as an Exhibit to Form 8-K on December 3,
1785
+ 1997 and is incorporated herein by
1786
+ reference.
1787
+
1788
+ (g) Purchase and Sale Agreement, dated as of
1789
+ February 10, 1998, between DWR
1790
+ Chesterbrook Associates, Glenhardie
1791
+ Corporation, the
1792
+ <PAGE>
1793
+ Partnership, Dean Witter Realty
1794
+ Income Partnership III, L.P., and Part
1795
+ Six Associates,
1796
+ as Sellers, and FV Office Partners, L.P.,
1797
+ as Purchaser was filed as an exhibit to Form 8-k
1798
+ on April 1, 1998 and is incorporated herein
1799
+ by reference.
1800
+
1801
+ (h) Purchase and sale Agreement Dated as of
1802
+ February 16,
1803
+ 1999 between the Partnership, Dean Witter Realty Income
1804
+ Partnership III, L.P., and New Plan Excel Realty Trust.
1805
+ Inc. was filed as exhibit to Form 10Q for the period ended
1806
+ January 31, 1999 and is incorporated herein by reference.
1807
+
1808
+ (i) Assignment and Option Agreement dated February
1809
+ 8, 1999 between Taxter Park Associates and DW
1810
+ Taxter Special Corp. was filed as an Exhibit to
1811
+ Form 10-Q for the period ended January 31, 1999
1812
+ and is incorporated herein by reference
1813
+
1814
+ (j) (I) Purchase and Sale Agreement Dated as of April 4,
1815
+ 2000, First Amendment to Purchase and Sale
1816
+ Agreement Dated as of May 3, 2000, Second
1817
+ Amendment to Purchase and Sale Agreement Dated
1818
+ as of May 11, 2000, Third Amendment to Purchase
1819
+ and Sale Agreement Dated as of May 17, 2000, and
1820
+ Forth Amendment to Purchase and Sale Agreement
1821
+ Dated as of May 18, 2000 all between Taxter Park
1822
+ Associates as Seller, DW Taxter Special Corp. as
1823
+ Sublandlord and Mack-Cali Realty Acquisition
1824
+ Corp. as purchaser, (II) Termination, Assignment
1825
+ and Recognition Agreement as of May 23, 2000
1826
+ between Taxter Park Associates, DW Taxter
1827
+ Special Corp, Mack-Cali Realty Acquisition Corp.
1828
+ and KLM Royal Dutch Airlines and (III)
1829
+ Termination Agreement as of May 23, 2000 between
1830
+ Taxter Park Associates and DW Taxter Special
1831
+ Corp., all filed as exhibits to the Registrant's
1832
+ Report on Form 8-K on May 23, 2000 are
1833
+ incorporated herein by reference.
1834
+
1835
+ (21) Subsidiaries: Framingham Corporate Center LP,
1836
+ a Massachusetts limited partnership.
1837
+
1838
+
1839
+ (b)Reports on Form 8-K -
1840
+ No Forms 8-K were filed by the Partnership
1841
+ during the
1842
+ last quarter of the period covered by this
1843
+ report.
1844
+ <PAGE>
1845
+ DEAN WITTER REALTY INCOME PARTNERSHIP II,
1846
+ L.P. SCHEDULE III
1847
+
1848
+ (A) Reconciliation of real estate owned at
1849
+ October 31:
1850
+
1851
+
1852
+ 2000 1999 1998
1853
+ Balance at beginning of period $ - $
1854
+ 15,073,698 $ 33,923,086
1855
+ Additions (deletions) during period:
1856
+ Improvements - 189,072
1857
+ 489,976
1858
+ Real estate sold - (15,262,770)
1859
+ (
1860
+ 19,339,364)
1861
+
1862
+ Balance at end of period $ - $ -
1863
+ $15,073,698
1864
+
1865
+ (B) Reconciliation of accumulated depreciation:
1866
+ 2000 1999 1998
1867
+ Balance at beginning of period $ - $ 4,727,834$
1868
+ 12,757,533
1869
+ Additions (deletions) during
1870
+ period:
1871
+ Depreciation expense - 113,395 548,902
1872
+ Real estate sold - (4,841,229)
1873
+ (8,578,601)
1874
+
1875
+ Balance end of period $ - $ - $4,727,834
1876
+
1877
+
1878
+ <PAGE>
1879
+ DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
1880
+ SIGNATURES
1881
+ Pursuant to the requirements of Section 13 or 15(d) of
1882
+ the
1883
+ Securities Exchange Act of 1934, the registrant has
1884
+ duly caused this report to be signed on its
1885
+ behalf by the undersigned, thereunto duly
1886
+ authorized.
1887
+
1888
+
1889
+
1890
+ By: Dean Witter Realty Income Properties II Inc.
1891
+ Managing General Partner
1892
+
1893
+ By: /s/E. Davisson Hardman, Jr. Date:
1894
+ January 26, 2001
1895
+ E. Davisson Hardman, Jr.
1896
+ President
1897
+
1898
+ By: /s/Raymond E. Koch Date:
1899
+ January 26,
1900
+ 2001 Raymond E. Koch
1901
+ Controller
1902
+ (Principal Financial and Accounting Officer)
1903
+
1904
+ Pursuant to the requirements of the Securities
1905
+ Exchange Act of 1934, this report has been signed
1906
+ below by the following persons on behalf of the
1907
+ registrant and in the capacities and on the dates
1908
+ indicated.
1909
+
1910
+ DEAN WITTER REALTY INCOME PROPERTIES II INC.
1911
+ Managing General Partner
1912
+
1913
+ /s/William B. Smith Date:
1914
+ January 26,
1915
+ 2001
1916
+ William B. Smith
1917
+ Chairman of the Board of Directors
1918
+
1919
+ /s/E. Davisson Hardman, Jr. Date:
1920
+ January 26, 2001
1921
+ E. Davisson Hardman, Jr.
1922
+ Director
1923
+
1924
+ /s/Ronald T. Carman Date:
1925
+ January 26,
1926
+ 2001
1927
+ Ronald T. Carman
1928
+ Director
1929
+
1930
+
1931
+
1932
+ </TEXT>
1933
+ </DOCUMENT>
1934
+ </SEC-DOCUMENT>
1935
+ -----END PRIVACY-ENHANCED MESSAGE-----