<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, 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 June 30, 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>
June 30, December 31,
1997 1996
Assets
<S> <C> <C>
Investment in real estate $15,443,339 $ 15,918,923
Cash and cash equivalents 928,046 402,707
Other assets
Accounts receivable, net 74,467 74,999
Prepaid expenses 24,721 15,084
Escrow for real estate taxes 217,918 234,714
Loan fees, less accumulated amortization
of $80,680 and $72,484, respectively 104,672 89,256
Total other assets 421,779 414,053
Total assets $16,793,165 $ 16,735,683
Liabilities and Partners' Capital
Liabilities
Accounts payable and accrued expenses $ 589,223 $ 493,855
Due to affiliates -- 8,039
Tenant security deposits 139,285 141,606
Mortgage loans payable 14,483,995 14,202,270
Total liabilities 15,212,502 14,845,770
Partners' Capital
General Partners (181,991) (175,806)
Assignor Limited Partner
Assignment of Limited Partnership
Interests - $25 stated value per
unit, 500,000 units outstanding 1,847,326 2,150,367
Limited Partnership Interests -
$25 stated value per unit
40 units outstanding (84,772) (84,748)
Subordinated Limited Partners 100 100
Total partners' capital 1,580,663 1,889,913
Total liabilities and partners' capital $16,793,165 $ 16,735,683
</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 Six months ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
Revenues
<S> <C> <C> <C> <C>
Rental income $ 958,288 $ 914,680 $1,912,779 $1,794,883
Interest income 8,049 3,072 10,857 5,440
966,337 917,752 1,923,635 1,800,323
Expenses
Compensation and benefits 103,048 87,710 192,089 170,681
Utilities 72,192 67,784 149,166 157,837
Property taxes 88,311 88,941 176,622 177,882
Maintenance and repairs 83,412 99,724 124,585 157,978
Property management fee 43,157 41,111 85,962 80,685
Advertising 7,588 7,547 14,555 14,473
Insurance 8,001 7,974 16,002 15,948
Other 10,595 10,758 19,226 20,498
Administrative & professional fees 28,293 12,045 50,677 29,280
Interest expense 310,542 322,370 625,111 645,755
Depreciation of property and
equipment 257,787 259,506 515,574 519,012
Amortization of loan fees 4,098 4,098 8,196 8,196
1,017,023 1,009,568 1,977,765 1,998,225
Net loss $ (50,686) $ (91,816) $ (54,129) $ (197,902)
Net loss per unit of assignee
limited partnership interest $ (0.10) $ (0.18) $ (0.11) $ (0.39)
</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, 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 (1,083) (53,042) (4) - (54,129)
Distributions to partners (5,102) (249,999) (20) - (255,121)
Balance at June 30, 1997 $ (181,991) $ 1,847,326 $ (84,772) $ 100 $1,580,663
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
</TABLE>
See accompanying notes to financial statements
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BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
Cash flows from operating activities
<S> <C> <C>
Net loss $ (54,129) $ (197,902)
Adjustments to reconcile net loss
to net cash provided by operating activities
Depreciation of property and equipment 515,574 519,012
Amortization of loan fees 8,196 8,196
Change in assets and liabilities
Decrease in accounts receivable 532 75,281
Increase in prepaid expenses (9,637) (17,927)
Decrease in escrow for real estate taxes 16,796 64,924
Increase(decrease) in accounts payable and accrued expenses 95,365 (14,904)
(Decrease)increase in due to affiliates (8,039) 712
(Decrease) increase in tenant security deposits (2,321) 3,544
Net cash provided by operating activities 562,337 440,936
Cash flows from investing activities-
additions to investment in real estate (39,990) (23,056)
Cash flows from financing activities
Financing costs (23,612) --
Distributions to partners (255,121) (255,121)
Mortgage loan principal reduction (14,218,275) (90,542)
Proceeds from issuance of margage loans payable 14,500,000 --
Net cash provided by (used in) financing activities 2,992 (345,663)
Net increase in cash and cash equivalents 525,339 72,217
Cash and cash equivalents
Beginning of period 402,707 342,171
End of period $ 928,046 $ 414,388
</TABLE>
See accompanying notes to financial statements
- -4-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to the Financial Statements
June 30, 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>
June 30, 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 2,046,290 2,013,514
24,485,453 24,445,462
Less: accumulated depreciation 9,042,114 8,526,539
Total $15,443,339 $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 June 30, 1997 and December 31,
1996.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Administrative General Partner earned $14,200 and $8,321 during the quarters
ended June 30, 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 $43,157 and
$41,111 during the quarters ended June 30, 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 became effective on June 1, 1997 and provide for a term of five
years at an interest rate of 7.70%. Monthly payments are based on a 25-year
amortization schedule with a balloon payment due at the end of the 5-year term.
Prior to 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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<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to the Financial Statements
June 30, 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 three and six months ended June 30, 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 August 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 June and the budget for the
remainder of the year, operating cash flow during 1997 is expected to yield
approximately 6% on invested capital. After a 4% distribution rate in the first
and second quarters, the Partnership anticipates increasing the distribution
rate 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 became 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
provided 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, re-surfacing
parking lots and enhancing the curb appeal 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
Second quarter revenues generated from the operation of the three
apartment communities increased 5.29% when compared to revenues collected during
the second quarter of 1996. Through the first half of 1997, operating revenues
increased 6.85% when compared to revenues received during the first half of
1996. The gross rent potential for the three communities increased $34,068 or
approximately 2%, from $1,972,581 to $2,006,649 and the average aggregate
occupancy level of the properties increased from 91% during the first half of
1996 to 94% during the first half of 1997. We anticipate these improved levels
of occupancy to be sustained for the remainder of 1997.
Second quarter operating expenses excluding interest charges,
depreciation and amortization costs, increased $21,002 versus similar expenses
incurred during the second quarter of 1996. Through the first half of the year,
similar expenses increased approximately $3,600, or less than 1%, versus 1996.
Through the first half of 1997 operating costs are on budget and we expect
operating costs to remain on budget for the second half of the year.
Due to the increase in revenues, coupled with stable expenses
(excluding interest charges, depreciation and amortization costs) in the first
half of 1997 as compared to 1996, the net operating income of the property
increased $119,691 or approximately 12%.
Occupancy levels at Woodhills, in Dayton, Ohio, averaged 94% during the
second quarter of 1997 up slightly from the 93% average in the first quarter.
Rental rates on all units increased modestly during the second quarter. Revenues
received through the first half of 1997 increased $24,958, or 4.5%, when
compared to 1996 first half revenues.
Operating expenses are stable and are approximately $12,000 under budget.
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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 first and second quarter was stable at 94%. As a result of this stable and
strong occupancy, first half of 1997 revenues at Deerfield increased $56,137, or
approximately 8.2% when compared to revenues collected during the same period in
1996. Operating expenses are slightly above budget. Management remains committed
to its goal of achieving a 3% rent increase in 1997 while maintaining occupancy
high occupancy.
At Oakbrook in Columbus, Ohio, occupancy levels averaged 96% during the
first and second quarter of 1997. As a result of this consistently high
occupancy, revenues received at Oakbrook in the first six months of 1997
increased $36,801, or 6.6% when compared to revenues received during the first
half of 1996. Operating expenses are stable and remain 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.
-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: 8/7/97 By: /s/ John M. Prugh
John M. Prugh
President and Director
Brown-Benchmark AGP, Inc.
Administrative General Partner
DATE: 8/7/97 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Brown-Benchmark AGP, Inc.
Administrative General Partner
<PAGE>
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with legend, if applicable)
</LEGEND>
<CIK> 0000818084
<NAME> BROWN-BENCHMARK PROPERTIES LP
<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> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 928,046
<SECURITIES> 0
<RECEIVABLES> 74,467
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,245,152
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,793,163
<CURRENT-LIABILITIES> 589,220
<BONDS> 14,483,995
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 16,793,163
<SALES> 0
<TOTAL-REVENUES> 1,923,636
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,352,654
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 625,111
<INCOME-PRETAX> (54,129)
<INCOME-TAX> 0
<INCOME-CONTINUING> (54,129)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (54,129)
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
