<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Mark One)
{ X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended June 30, 1996 Commission file number 000-16698
Brown-Benchmark Properties Limited Partnership
(Exact Name of Registrant as Specified in its Charter)
Delaware 31-1209608
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
225 East Redwood Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (410) 727-4083
N/A
(Former Name, Former Address, and Former Fiscal Year,
if Changed Since Last Report.)
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
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BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets 1
Statements of Operations 2
Statements of Partners' Capital 3
Statements of Cash Flows 4
Notes to Financial Statements 5-6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-8
Part II. Other Information
Item 1. through Item 6. 9
Signatures 10
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
Assets
<S> <C> <C>
Investment in real estate $16,350,078 $ 16,846,034
Cash and cash equivalents 414,388 342,171
Other assets
Accounts receivable, net 49,154 124,435
Prepaid expenses 33,105 15,178
Escrow for real estate taxes 171,328 236,252
Loan fees, less accumulated amortization
of $64,288 and $56,091, respectively 17,703 25,899
Total other assets 271,290 401,764
Total assets $17,035,756 $ 17,589,969
Liabilities and Partners' Capital
Liabilities
Accounts payable and accrued expenses $ 438,572 $ 453,476
Due to affiliates 8,321 7,609
Tenant security deposits 140,755 137,211
Mortgage loans payable 14,296,964 14,387,506
Total liabilities 14,884,612 14,985,802
Partners' Capital
General Partners (170,581) (161,521)
Assignor Limited Partner
Assignment of limited partnership
interests - $25 stated value per
unit, 500,000 units outstanding 2,406,353 2,850,280
Limited partnership interests -
$25 stated value per unit
40 units outstanding (84,728) (84,692)
Subordinated Limited Partners 100 100
Total partners' capital 2,151,144 2,604,167
Total liabilities and partners' capital$17,035,756 $ 17,589,969
See accompanying notes to financial statements
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</TABLE>
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
Revenues
<S> <C> <C> <C> <C>
Rental income $ 914,680 $ 902,905 $1,794,883 $1,780,643
Interest income 3,072 2,811 5,440 6,035
917,752 905,716 1,800,323 1,786,678
Expenses
Compensation and benefits 87,710 90,011 170,681 166,486
Utilities 67,784 78,150 157,837 155,981
Property taxes 88,941 83,430 177,882 166,860
Maintenance and repairs 99,724 119,291 157,978 150,307
Property management fee 41,111 40,280 80,685 79,409
Advertising 7,547 7,134 14,473 14,720
Insurance 7,974 8,538 15,948 17,076
Other 10,758 8,982 20,498 15,590
Administrative & professional fees 12,045 14,054 29,280 37,522
Interest expense 322,370 326,296 645,755 653,520
Depreciation of property and
equipment 259,506 254,979 519,012 509,958
Amortization of loan fees 4,098 7,314 8,196 14,628
1,009,568 1,038,459 1,998,225 1,982,057
Net loss $ (91,816)$ (132,743) $ (197,902)$ (195,379)
Net loss per unit of assignee
limited partnership interest $ (0.18)$ (0.26) $ (0.39)$ (0.38)
</TABLE>
See accompanying notes to financial statements
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<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Partners' Capital
For the Six Months Ended June 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Assignor Limited Partner
Assignment
of Limited Limited Subordinated
General Partnership Partnership Limited
Partners Interest Interest Partners Total
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995$ (161,521)$ 2,850,280 $ (84,692)$ 100 $2,604,167
Net loss (3,958) (193,928) (16) - (197,902)
Distributions to partners (5,102) (249,999) (20) - (255,121)
Balance at June 30, 1996 $ (170,581)$ 2,406,353 $ (84,728)$ 100 $2,151,144
Balance at December 31, 1994$ (147,045)$ 3,559,548 $ (84,635)$ 100 $3,327,968
Net loss (3,908) (191,456) (15) - (195,379)
Distributions to partners (4,465) (218,750) (17) - (223,232)
Balance at June 30, 1995 $ (155,418)$ 3,149,342 $ (84,667)$ 100 $2,909,357
</TABLE>
See accompanying notes to financial statements
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<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
Cash flows from operating activities
<S> <C> <C>
Net loss $ (197,902) $ (195,379)
Adjustments to reconcile net loss
to net cash provided by operating activities
Depreciation of property and equipment 519,012 509,958
Amortization of loan fees 8,196 14,628
Change in assets and liabilities
Decrease (increase) in accounts receivable 75,281 (24,676)
(Increase) decrease in prepaid expenses (17,927) 974
Decrease in escrow for real estate taxes 64,924 3,465
(Decrease) increase in accounts payable and accrued expenses (14,904) 105,790
Increase (decrease) in due to affiliates 712 (1,319)
Increase in tenant security deposits 3,544 5,009
Net cash provided by operating activities 440,936 418,450
Cash flows used in investing activities-
additions to investment in real estate (23,056) (39,676)
Cash flows from financing activities
Distributions to partners (255,121) (223,232)
Mortgage loan principal reduction (90,542) (82,777)
Net cash used in financing activities (345,663) (306,009)
Net increase in cash and cash equivalents 72,217 72,765
Cash and cash equivalents
Beginning of period 342,171 338,316
End of period $ 414,388 $ 411,081
</TABLE>
See accompanying notes to financial statements
-4-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to the Financial Statements
June 30, 1996
(Unaudited)
(1) The Fund and Basis of Preparation
The accompanying financial statements of Brown-Benchmark Properties
Limited Partnership (the "Partnership") do not include all of the information
and note disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles. The unaudited interim
consolidated financial statements reflect all adjustments which are, in the
opinion of management, necessary to a fair statement of the results for the
interim periods presented. All such adjustments are of a normal recurring
nature. The unaudited interim financial information should be read in
conjunction with the financial statements contained in the 1995 Annual Report.
(2) Investment in Real Estate
Investment in real estate is stated at cost, net of accumulated
depreciation, and is summarized as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
<S> <C> <C>
Land $ 1,257,000 $ 1,257,000
Buildings 21,121,285 21,120,535
Furniture, fixtures
and equipment 1,972,663 1,950,358
24,350,948 24,327,893
Less: accumulated depreciation 8,000,870 7,481,859
Total $16,350,078 $16,846,034
</TABLE>
(3) Cash and Cash Equivalents
Cash and cash equivalents consist solely of cash and money market
accounts, stated at cost, which approximate market value at June 30, 1996 and
December 31, 1995.
(4) Related Party Transactions
The Administrative General Partner earned $8,321 and $6,562 during the
quarters ended June 30, 1996 and 1995, respectively, for reimbursement of costs
associated with administering the Partnership, including clerical services,
investor communication services, and reports and filings made to regulatory
authorities.
Benchmark Properties, Inc., an affiliate of the Development General
Partner, the managing agent for the properties, earned a management fee of
$41,111 and $40,280 during the quarters ended June 30, 1996 and 1995
respectively.
(5) Mortgage Loans Payable
Each of the properties owned by the Partnership are secured as
collateral for the mortgage loans payable outstanding at June 30, 1996 and
December 31, 1995. Effective August 1, 1992, the existing mortgage loans were
renewed with the current lender for a term of 5 years with an interest rate of
9.0%. Monthly payments are based on a 27-year amortization schedule with a
balloon payment due at the end of the 5-year term.
-5-
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BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to the Financial Statements
June 30, 1996
(Unaudited)
(6) Net Loss per Unit of Assigned Limited Partnership Interest
Net loss per Unit of assigned limited partnership interest is disclosed
on the Statements of Operations and is based upon average units outstanding of
500,000 during the three and six months ended June 30, 1996 and 1995.
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<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
The Partnership's liquidity is largely dependent on its ability to
maintain reasonably high occupancy levels, achieve rental rate increases as the
respective markets allow and to control operating expenses. The Partnership
currently has sufficient liquid assets from its rental revenues to satisfy its
anticipated operating expenditures and debt service obligations.
On August 12, 1996, the Partnership made a cash distribution to its
partners totaling $127,561, representing an annualized return of 4% on invested
capital. Based upon the operating results through June and the budget for the
remainder of the year, operating cash flow during 1996 is expected to yield
approximately 4.7% on invested capital. While operations were slightly behind
budget for the first half of the year due to lower than expected occupancy
levels, improved occupancy trends experienced at each property during July are
expected to be sustained throughout the second half of the year and as a result,
we expect operating results will be on budget for the second half of the year.
We expect a 4% distribution rate will be in place throughout 1996 and will
review Partnership reserves with respect to distribution levels at the end of
the year.
The Partnership does not anticipate an outlay for any other significant
capital improvements or repair costs that might adversely impact its liquidity.
Results of Operations
Second quarter revenues generated from the operation of the three
apartment communities increased marginally when compared to revenues collected
during the second quarter of 1995. Through the first half of 1996, operating
revenues increased less than 1% when compared to revenues received during the
first half of 1995. While collections increased at both the Dayton and Columbus
properties, revenues received at the Cincinnati property decreased due to higher
vacancy levels experienced in 1996. While the gross rent potential for the three
communities increased $85,225 or (4.5%), from $1,887,356 to $1,972,581 the
average aggregate occupancy level of the properties decreased from 93% during
the first half of 1995 to 91% during the first half of 1996. Since the end of
the second quarter occupancy levels have improved at each community (all
properties' occupancy levels are currently 95% or higher) and we expect these
improved levels to be sustained for the remainder of the year. As a result,
revenues are expected to increase throughout the remainder of the year.
Second quarter operating expenses excluding interest charges,
depreciation and amortization costs, decreased $26,276 versus similar expenses
incurred during the second quarter of 1995. Through the first half of the year,
similar expenses increased approximately $21,000, or 3%, versus 1995. Through
the first half of 1996, operating expenses exceeded budget by approximately
$24,000 due primarily to higher maintenance costs. We expect operating costs
throughout the year to remain slightly over budget due to higher than
anticipated lease-up expenditures.
Due to only a marginal increase in revenues, coupled with the increase
in expenses (excluding interest charges, depreciation and amortization costs)
through the first half of 1996 as compared to 1995, the net operating income of
the property decreased $7,666 or approximately 1%.
Payments of principal and interest on the permanent loans were $736,297
during the first half of both 1996 and 1995 and included principal reductions of
$90,542 and 82,777 respectively.
Occupancy levels at Woodhills, in Dayton, Ohio, averaged 90% during the
second quarter of 1996 essentially unchanged from the first quarter of the year.
Rental rates on selected units increased modestly during the second quarter.
Revenues received through the first half of 1996 increased $25,565, or 4.8%,
when compared to 1995 first half revenues. Since the end of the second quarter,
occupancy levels have steadily increased and currently the community is 95%
occupied. Operating expenses are within 3% of budget. Higher than projected
maintenance expenses due to apartment turnover costs resulted in the modest
overage in operating costs. Management believes occupancy levels in the
mid-nineties will be maintained for the remainder of the year.
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<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations (continued)
At Deerfield, in Cincinnati, Ohio, the average occupancy level during
the second quarter was 92% up 5% from the first quarter average of 87%. As a
result of this favorable trend in occupancy, second quarter revenues at
Deerfield increased $16,500, or 5% when compared to revenues collected during
the first quarter of the year. As a result of the first quarter's low occupancy
however, revenues received through the first half of the year remain $15,647
below those collected during the first half of 1995. Occupancy levels have
trended positively since June and currently the community is 95% occupied. Based
on available market information and leasing trends, we expect occupancy levels
will remain at or above 95% throughout 1996. Due to higher than budgeted
maintenance expenses associated with apartment lease-up costs, operating
expenses exceeded budget by approximately 3% during the first half of the year.
At Oakbrook in Columbus, Ohio, occupancy levels averaged 96% during the
second quarter of 1996 up 4% from the first quarter average of 92%. As a result
of this favorable trend, revenues received during the second quarter increased
$16,209 or 6% when compared to the first quarter of the year. Through the first
six months, revenues received at Oakbrook increased $15,657, or 2% when compared
to revenues received during the first half of 1995. Throughout July, occupancy
levels continued to increase and currently the community is 97% occupied.
Maintenance costs associated with the lease-up of units resulted in operating
expenses exceeding the budget by approximately 4% through the first half of the
year.
Management is committed to sustaining the recent positive trend in
occupancy levels experienced at each of the properties. We believe rental rates
will remain essentially unchanged throughout the remainder of the year and are
striving to achieve and maintain a 95% average aggregate occupancy level for the
portfolio. As such, we expect revenues and operating income for the Fund to
increase during each of the last two quarters of the year.
-8-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Inapplicable
Item 2. Changes in Securities
Inapplicable
Item 3. Defaults upon Senior Securities
Inapplicable
Item 4. Submission of Matters to a Vote of Security Holders
Inapplicable
Item 5. Other Information
Inapplicable
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits: None.
b) Reports on Form 8-K: None.
-9-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
BROWN-BENCHMARK PROPERTIES
LIMITED PARTNERSHIP
DATE: 8/6/96 By: /s/ John M. Prugh
John M. Prugh
President and Director
Brown-Benchmark AGP, Inc.
Administrative General Partner
DATE: 8/6/96 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Brown-Benchmark AGP, Inc.
Administrative General Partner
-10-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with legend, if applicable)
</LEGEND>
<CIK> 0000818084
<NAME> BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 414,388
<SECURITIES> 0
<RECEIVABLES> 49,154
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 685,678
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,035,756
<CURRENT-LIABILITIES> 446,893
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 17,035,756
<SALES> 0
<TOTAL-REVENUES> 1,800,323
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,352,470
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 645,755
<INCOME-PRETAX> (197,902)
<INCOME-TAX> 0
<INCOME-CONTINUING> (197,902)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (197,902)
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
