<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 March 31, 1997
{ } 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 March 31, 1997 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>
March 31, December 31,
1997 1996
Assets
<S> <C> <C>
Investment in real estate $15,680,539 $15,918,923
Cash and cash equivalents 876,136 402,707
Other assets
Accounts receivable, net 80,752 74,999
Prepaid expenses 36,841 15,084
Escrow for real estate taxes 106,733 234,714
Loan fees, less accumulated amortization
of $76,582 and $72,484, respectively 108,770 89,256
Total other assets 333,096 414,053
Total assets $16,889,771 $16,735,683
Liabilities and Partners' Capital
Liabilities
Accounts payable and accrued expenses $ 479,903 $ 493,855
Due to affiliates 12,648 8,039
Tenant security deposits 138,311 141,606
Mortgage loans payable 14,500,000 14,202,270
Total liabilities 15,130,862 14,845,770
Partners' Capital
General Partners (178,426) (175,806)
Assignor Limited Partner
Assignment of Limited Partnership
Interests - $25 stated value per
unit, 500,000 units outstanding 2,021,993 2,150,367
Limited Partnership Interests -
$25 stated value per unit
40 units outstanding (84,758) (84,748)
Subordinated Limited Partners 100 100
Total partners' capital 1,758,909 1,889,913
Total liabilities and partners' capital $16,889,771 $16,735,683
</TABLE>
See accompanying notes to financial statements
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BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Operations For the three months ended March 31,
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
Revenues
<S> <C> <C>
Rental income $954,490 $ 880,203
Interest income 2,808 2,489
957,298 882,692
Expenses
Compensation and benefits 89,041 82,971
Utilities 76,974 90,054
Property taxes 88,311 88,941
Maintenance and repairs 41,173 58,253
Property management fee 42,805 39,575
Advertising 6,967 6,926
Insurance 8,001 7,974
Other 8,631 9,740
Administrative & professional fees 22,384 17,234
Interest expense 314,569 323,385
Depreciation of property and
equipment 257,787 259,506
Amortization of loan fees 4,098 4,098
960,741 988,657
Net loss $ (3,443) $ (105,965)
Net loss per unit of assignee
limited partnership interest $ (0.01) $ (0.21)
</TABLE>
See accompanying notes to financial statements
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<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Partners' Capital
For the Three Months Ended March 31, 1997 and 1996
(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, 1996$ (175,806) $2,150,367 $ (84,748) $ 100 $1,889,913
Net loss (69) (3,374) (0) - (3,443)
Distributions to partners (2,551) (125,000) (10) - (127,561)
Balance at March 31, 1997 $ (178,426) $2,021,993 $ (84,758) $ 100 $1,758,909
Balance at December 31, 1995$ (161,521) $2,850,280 $ (84,692) $ 100 $2,604,167
Net loss (2,119) (103,837) (8) - (105,964)
Distributions to partners (2,551) (124,999) (10) - (127,560)
Balance at March 31, 1996 $ (166,191) $2,621,444 $ (84,710) $ 100 $2,370,643
</TABLE>
See accompanying notes to financial statements
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BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Cash Flows
For the Three Months Ended March 31,
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
Cash flows from operating activities
<S> <C> <C>
Net loss $ (3,443) $ (105,965)
Adjustments to reconcile net loss
to net cash provided by operating activities
Depreciation of property and equipment 257,787 259,506
Amortization of loan fees 4,098 4,098
Change in assets and liabilities
(Increase) decrease in accounts receivable (5,753) 56,176
(Increase) decrease in prepaid expenses (21,757) 6,275
Decrease in escrow for real estate taxes 127,981 71,309
(Decrease) increase in accounts payable and accrued expenses (13,952) 45,529
Increase in due to affiliates 4,609 1,597
(Decrease) increase in tenant security deposits (3,295) 1,201
Net cash provided by operating activities 346,275 339,726
Cash flows from investing activities-
additions to investment in real estate (19,403) (9,323)
Cash flows from financing activities
Financing costs (23,612) --
Distributions to partners (127,561) (127,561)
Repayment of mortgage loans payable (14,202,270) (44,764)
Proceeds from issuance of mortgage loans payable 14,500,000 --
Net cash provided by (used in) financing activities 146,557 (172,325)
Net increase in cash and cash equivalents 473,429 158,078
Cash and cash equivalents
Beginning of period 402,707 342,171
End of period $ 876,136 $ 500,249
</TABLE>
See accompanying notes to financial statements
- -4-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to the Financial Statements
March 31, 1997
(Unaudited)
NOTE 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 1996 Annual Report.
NOTE 2 - INVESTMENT IN REAL ESTATE
Investment in real estate is stated at cost, net of accumulated
depreciation, and is summarized as follows:
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
<S> <C> <C>
Land $ 1,257,000 $ 1,257,000
Buildings 21,182,163 21,174,948
Furniture, fixtures
and equipment 2,025,703 2,013,514
24,464,866 24,445,462
Less: accumulated depreciation 8,784,327 8,526,539
Total $15,680,539 $15,918,923
</TABLE>
NOTE 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 March 31, 1997 and December
31, 1996.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Administrative General Partner earned $12,648 and $9,206 during the quarters
ended March 31, 1997 and 1996, 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 $42,805 and
$39,575 during the quarters ended March 31, 1997 and 1996, respectively.
NOTE 5 - MORTGAGE LOANS PAYABLE
The Partnership has closed its mortgage loan refinancing with The Canada Life
Assurance Company for loans totaling $14,500,000 on February 28, 1997. The
renewal terms become effective on June 1, 1997 and provide for a term of five
years at an interest rate of 7.70%. Monthly payments will be based on a 25-year
amortization schedule with a balloon payment due at the end of the 5-year term.
Until the effective date of the new loan terms on June 1, 1997, the mortgage
loan terms provide for interest only at 9%.
The Partnership incurred financing fees totaling $103,362. These costs were
capitalized as financing fees and will be amortized over the new term of the
loans commencing in 1997.
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BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to the Financial Statements
March 31, 1997
(Unaudited)
NOTE 6 - NET LOSS PER UNIT OF ASSIGNED LIMITED PARTNERSHIP INTEREST
Net loss per Unit of assigned limited partnership interest is disclosed on the
Statement of Operations and is based upon average units outstanding of 500,000
during the quarters ended March 31, 1997 and 1996.
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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 May 13, 1997, 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 March and the budget for the
remainder of the year, operating cash flow during 1997 is expected to yield
approximately 6% on invested capital. We expect a 4% distribution rate will be
in place during the first and second quarters and will increase to 6% in the
third and fourth quarters of 1997.
On February 28, 1997, the Partnership closed its mortgage loan
refinancing with its existing lender, The Canada Life Assurance Company. The new
loans totaling $14,500,000 were sufficient to retire the existing debt, pay the
costs and fees associated with the refinancing and establish a capital
improvement reserve of approximately $285,000. The renewal term for the new
loans become effective on June 1, 1997 and provide for a term of 5 years with an
interest rate of 7.70% with monthly payments based on a 25 year amortization
schedule. Until the effective date of June 1, 1997, the mortgage loan terms
provide for interest only at 9%. Although the loan amounts have increased, the
annual debt service payments will decrease by approximately $164,000 due to the
lower interest rate on the new loans.
The Partnership is currently working on a capital improvement plan that
will utilize all of the $285,000 reserve established from excess refinancing
proceeds. The funds will primarily be used for replacing roofs and re-surfacing
parking lots throughout all three properties in 1997 and 1998.
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
Revenues at all three properties increased in the first quarter of 1997
compared to the same period in 1996. Through the first quarter of 1997,
operating revenues increased by $74,606 or 8.45% when compared to revenues
received during the first quarter of 1996. The gross rent potential for the
three communities increased $16,610 or approximately 2%, from $982,136 to
$998,746 and the average aggregate occupancy level of the properties increased
from 90% during the first quarter of 1996 to 95% during the first quarter of
1997. We anticipate these improved levels of occupancy to be sustained for the
remainder of 1997.
First quarter operating expenses excluding interest charges,
depreciation and amortization costs, decreased $17,381 versus similar expenses
incurred during the first quarter of 1996. Through the first quarter of 1997,
operating expenses are on budget with no significant variances.
Due to the increase in revenues, coupled with the decrease in expenses
(excluding interest charges, depreciation and amortization costs) in the first
quarter of 1997 as compared to 1996, the net operating income of the property
increased $91,987 or approximately 19%.
Occupancy levels at Woodhills, in Dayton, Ohio, averaged 93%, up from
90% experienced during the first quarter of 1996. Revenues received through the
first quarter of 1997 increased $15,201, or 5.6%, when compared to 1996 first
quarter revenues. Operating expenses are stable and are approximately $2,500
under budget. Management's goal in 1997 is to increase rents by approximately
2.5% while maintaining occupancy at 94% or better.
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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 (continued)
At Deerfield, in Cincinnati, Ohio, the average occupancy level during
the first quarter was 94%, a significant increase from the 87% average in the
first quarter of 1996. As a result of this favorable trend in occupancy, first
quarter revenues at Deerfield increased $30,257, or 9.07% when compared to
revenues collected during the first quarter of 1996. Occupancy levels have
trended positively since the third quarter of 1996. Occupancy has not dropped
below 92% since July of 1996. Management's goal in 1997 at Deerfield is to
increase rents by 3% and to maintain an occupancy of 95%.
Operating expenses are on budget.
At Oakbrook in Columbus, Ohio, occupancy levels averaged 96% during the
first quarter of 1997 representing an increase from the first quarter, 1996
average of 92%. As a result of this positive trend, revenues received during the
first quarter increased $26,168 or 9.62% when compared to the same period in
1996. Oakbrook's occupancy has been very stable and has not decreased below 94%
in 1997. Management's 1997 budget for Oakbrook is aggressive in that it calls
for a 4.6% rent increase while maintaining occupancy at 95%. Operating expenses
are on budget.
Management is committed to sustaining the recent positive trend in
occupancy levels experienced at each of the properties. We are optimistic that
positive trends in occupancy and increasing rents can be maintained in 1997.
These trends combined with the decrease in debt service payments in the second
half of the year should enable the Partnership to increase its distribution rate
in the third and fourth quarter.
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<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.
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<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: 5/9/97 By: /s/ John M. Prugh
John M. Prugh
President and Director
Brown-Benchmark AGP, Inc.
Administrative General Partner
DATE: 5/9/97 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 876,136
<SECURITIES> 0
<RECEIVABLES> 80,752
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,100,462
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,889,771
<CURRENT-LIABILITIES> 492,551
<BONDS> 14,500,000
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 16,889,771
<SALES> 0
<TOTAL-REVENUES> 957,298
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 646,172
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 314,569
<INCOME-PRETAX> (3,443)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,443)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,443)
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
