<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 September 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 September 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>
September 30, December 31,
1996 1995
Assets
<S> <C> <C>
Investment in real estate $ 16,118,310 $ 16,846,034
Cash and cash equivalents 463,442 342,171
Other assets
Accounts receivable, net 98,724 124,435
Prepaid expenses 25,131 15,178
Escrow for real estate taxes 154,641 236,252
Loan fees, less accumulated amortization
of $68,386 and $56,091, respectively 13,605 25,899
Total other assets 292,101 401,764
Total assets $ 16,873,853 $ 17,589,969
Liabilities and Partners' Capital
Liabilities
Accounts payable and accrued expenses $ 494,789 $ 453,476
Due to affiliates 9,580 7,609
Tenant security deposits 145,516 137,211
Mortgage loans payable 14,250,148 14,387,506
Total liabilities 14,900,033 14,985,802
Partners' Capital
General Partners (174,128) (161,521)
Assignor Limited Partner
Assignment of limited partnership
interests - $25 stated value per
unit, 500,000 units outstanding 2,232,589 2,850,280
Limited partnership interests -
$25 stated value per unit
40 units outstanding (84,741) (84,692)
Subordinated Limited Partners 100 100
Total partners' capital 1,973,820 2,604,167
Total liabilities and partners' capital$ 16,873,853 $ 17,589,969
</TABLE>
See accompanying notes to financial statements
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BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
Revenues
<S> <C> <C> <C> <C>
Rental income $ 948,490 $ 909,206 $ 2,743,373 $ 2,689,849
Interest income 2,781 3,236 8,222 9,271
951,271 912,442 2,751,595 2,699,120
Expenses
Compensation and benefits 75,683 78,062 246,364 244,547
Utilities 71,526 72,268 229,363 228,249
Property taxes 88,941 82,845 266,823 249,705
Maintenance and repairs 92,089 41,519 250,066 191,827
Property management fee 42,598 40,662 123,283 120,070
Advertising 7,923 6,697 22,397 21,418
Insurance 7,974 8,538 23,922 25,614
Other 10,355 8,053 30,853 23,643
Administrative & professional fees 14,102 13,968 43,382 51,490
Interest expense 326,241 325,347 971,996 978,867
Depreciation of property and
equipment 259,506 254,979 778,518 764,937
Amortization of loan fees 4,098 6,464 12,294 21,092
1,001,036 939,402 2,999,261 2,921,459
Net loss $ (49,765) $ (26,960) $ (247,666) $ (222,339)
Net loss per unit of assignee
limited partnership interest $ (0.10) $ (0.05) $ (0.49) $ (0.44)
</TABLE>
See accompanying notes to financial statements
-2-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Partners' Capital
For the Nine Months Ended September 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 $2,604,167
Net loss (4,953) (242,693) (19) - (247,666)
Distributions to partners (7,654) (374,998) (30) - (382,681)
Balance at September 30, 1996$ (174,128)$ 2,232,589 $ (84,741)$ 100 $1,973,820
Balance at December 31, 1994 $ (147,045)$ 3,559,548 $ (84,635)$ 100 $3,327,968
Net loss (4,447) (217,875) (17) - (222,339)
Distributions to partners (6,697) (328,125) (26) - (334,848)
Balance at September 30, 1995$ (158,189)$ 3,013,548 $ (84,678)$ 100 $2,770,781
</TABLE>
See accompanying notes to financial statements
-3-
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BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Cash Flows
For the Six Months Ended September 30,
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
Cash flows from operating activities
<S> <C> <C>
Net loss $ (247,666) $ (222,339)
Adjustments to reconcile net loss
to net cash provided by operating activities
Depreciation of property and equipment 778,518 764,937
Amortization of loan fees 12,294 21,092
Change in assets and liabilities
Decrease (increase) in accounts receivable 25,712 (52,641)
(Increase) decrease in prepaid expenses (9,953) 9,512
Decrease (increase) in escrow for real estate taxes 81,611 (37,099)
Increase in accounts payable and accrued expenses 41,313 120,470
Increase in due to affiliates 1,971 587
Increase in tenant security deposits 8,305 8,587
Net cash provided by operating activities 692,105 613,106
Cash flows used in investing activities-
additions to investment in real estate (50,794) (62,250)
Cash flows from financing activities
Distributions to partners (382,682) (334,848)
Mortgage loan principal reduction (137,358) (125,578)
Net cash used in financing activities (520,040) (460,426)
Net increase in cash and cash equivalents 121,271 90,430
Cash and cash equivalents
Beginning of period 342,171 338,316
End of period $ 463,442 $ 428,746
</TABLE>
See accompanying notes to financial statements
-4-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to the Financial Statements
September 30, 1996
(Unaudited)
(1) The Fund and Basis of Preparation
The accompanying consolidated 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 consolidated 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>
September 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 2,000,401 1,950,358
24,378,686 24,327,893
Less: accumulated depreciation 8,260,376 7,481,859
Total $16,118,310 $16,846,034
</TABLE>
(3) Cash and Cash Equivalents
The Partnership considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. Cash and cash
equivalents consist solely of cash and money market accounts, stated at cost,
which approximate market value at September 30, 1996 and December 31, 1995.
(4) Related Party Transactions
The Administrative General Partner earned $9,580 and $8,468 during the
quarters ended September 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
$42,598 and $40,662 during the quarters ended September 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 September 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
September 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 September 30, 1996 and 1995.
-6-
<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 November 12, 1996, the Partnership made a cash distribution to its
partners totaling $127,560, representing an annualized return of 4% on invested
capital. Based upon the operating results through September and the budget for
the remainder of the year, operating cash flow during 1996 is expected to yield
approximately 5.2% 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 the third
quarter are expected to be sustained throughout the remainder of the year and as
a result, we expect operating results will be on budget in the fourth quarter.
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 any outlays for significant capital
improvements or repair costs that might adversely impact its liquidity.
Results of Operations
Third quarter revenues generated from the operation of the three
apartment communities increased $38,829 (4%) versus revenues collected during
the third quarter of 1995. Through the third quarter of 1996, revenues increased
$52,475 ( 2%) when compared to revenues received through the third quarter of
1995. Although revenues received at the Cincinnati property decreased due to
higher vacancy in the second quarter of 1996, revenues increased at all three
properties in the third quarter. While the gross rent potential for the nine
months ended September 30, 1996 at the three communities increased $125,801 or
(4.4%), from $2,842,590 to $2,968,391, at the same time the average aggregate
occupancy level of the properties decreased from 93% through the third quarter
of 1995 to 92% through the third quarter of 1996. Since the end of the second
quarter occupancy levels have improved at each community (all properties'
occupancy levels are currently 94% or higher) and these improved levels are
expected to be sustained for the remainder of the year. As a result, fourth
quarter revenues are expected to exceed the present quarter.
Third quarter operating expenses, excluding interest charges,
depreciation and amortization costs, increased $58,579 versus similar expenses
incurred during the third quarter of 1995. Through the third quarter, similar
expenses increased $79,890, or 6%, versus 1995 and exceeded budget by
approximately $41,000 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.
Payments of principal and interest on the permanent loans were
$1,104,446 through the third quarter 1996 and 1995 and included principal
reductions of $137,358 and $125,578 respectively.
Occupancy levels at Woodhills, in Dayton, Ohio, averaged 92% during the
third quarter of 1996, an increase from the average of 90% experienced in the
first two quarters of the year. Rental rates on selected units have increased
modestly during the year. Revenues through the third quarter of 1996 increased
$40,046, or 5%, when compared to the same period in 1995. Since the end of the
second quarter, occupancy levels have steadily increased and currently the
community is 96% occupied. Operating expenses are within 4% 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 third quarter was 93%, an increase from the average of 89% experienced in
the first two quarters of the year. As a result of this favorable trend in
occupancy, third quarter revenues at Deerfield increased $31,816, or 10% when
compared to revenues during the first quarter of the year. However, as a result
of the first quarter's low occupancy, revenues through the first nine months of
the year are flat compared to the same period in 1995. Occupancy levels have
trended positively since June and currently the community is 94% occupied. Based
on available market information and leasing trends, we expect occupancy levels
will remain at or above 94% throughout 1996. Due to higher than budgeted
maintenance expenses associated with apartment lease-up costs, operating
expenses exceeded budget by approximately 3% through the third quarter of the
year.
At Oakbrook in Columbus, Ohio, occupancy levels averaged 96% during the
second and third quarter of 1996 up 4% from the first quarter average of 92%. As
a result of this favorable trend, revenues during the third quarter increased
$21,874 or 8% when compared to the first quarter of the year. Through the first
nine months, revenues at Oakbrook increased $29,699, or 4% when compared to
revenues during the first nine months of 1995. Since July, occupancy levels have
not been below 95% and currently the community is 99% occupied. Maintenance
costs associated with the lease-up of units resulted in operating expenses
exceeding the budget by approximately 4% through the third quarter of the year.
Management is committed to sustaining the recent positive trend in
occupancy levels experienced at each of the properties, while maintaining a
vigilant watch over its expenses. 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 anticipated, the Fund's revenues and operating income increased during the
third quarter and this trend is expected to continue through the fourth quarter.
-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: 11/8/96 By: /s/ John M. Prugh
John M. Prugh
President and Director
Brown-Benchmark AGP, Inc.
Administrative General Partner
DATE: 11/8/96 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Brown-Benchmark AGP, Inc.
Administrative General Partner
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<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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 463,442
<SECURITIES> 0
<RECEIVABLES> 98,724
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 755,543
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,873,853
<CURRENT-LIABILITIES> 504,369
<BONDS> 14,250,148
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 16,873,853
<SALES> 0
<TOTAL-REVENUES> 2,751,595
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,027,265
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 971,996
<INCOME-PRETAX> (247,666)
<INCOME-TAX> 0
<INCOME-CONTINUING> (247,666)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (247,666)
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
