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, 1998
{ } 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, 1998 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
<PAGE>
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,
1998 1997
Assets
<S> <C> <C>
Investment in real estate $14,857,839 $ 15,076,301
Cash and cash equivalents 925,713 910,435
Other assets
Accounts receivable, net 69,782 73,196
Prepaid expenses 18,362 29,036
Escrow for real estate taxes 129,382 223,772
Loan fees, less accumulated amortization
of $14,434 and $10,336, respectively 88,928 93,026
Total other assets 306,454 419,030
Total assets $16,090,006 $ 16,405,766
Liabilities and Partners' Capital
Liabilities
Accounts payable and accrued expenses $ 508,546 $ 610,557
Tenant security deposits 142,536 139,429
Due to affiliates 10,864 10,892
Mortgage loans payable 14,335,244 14,385,782
Total liabilities 14,997,190 15,146,660
Partners' Capital
General Partners (191,748) (188,422)
Assignor Limited Partner
Assignment of Limited Partnership
Interests - $25 stated value per
unit, 500,000 units outstanding 1,369,274 1,532,225
Limited Partnership Interests -
$25 stated value per unit
40 units outstanding (84,810) (84,797)
Subordinated Limited Partners 100 100
Total partners' capital 1,092,816 1,259,106
Total liabilities and partners' capital $16,090,006 $ 16,405,766
</TABLE>
See accompanying notes to financial statements
-1-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Operations For the three months ended March 31,
(Unaudited) <TABLE> <CAPTION>
1998 1997
Revenues
<S> <C> <C>
Rental income $953,449 $954,490
Interest income 7,389 2,808
960,838 957,298
Expenses
Compensation and benefits 93,375 89,041
Utilities 77,671 76,974
Property taxes 92,361 88,311
Maintenance and repairs 44,750 41,173
Property management fee 42,936 42,805
Advertising 8,342 6,967
Insurance 8,205 8,001
Other 10,986 8,631
Administrative & professional fees 18,687 22,384
Interest expense 276,603 314,569
Depreciation of property and equipment 257,787 257,787
Amortization of loan fees 4,098 4,098
935,801 960,741
Net income(loss) $ 25,037 $ (3,443)
Net income(loss) per unit of assignee limited
partnership interest - basic $ 0.03 $ (0.01)
</TABLE>
See accompanying notes to financial statements
-2-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Partners' Capital
For the Three Months Ended March 31, 1998 and 1997
(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, 1997 $ (188,422) $ 1,532,225 $ (84,797) $ 100 $1,259,106
Net income 501 24,534 2 - 25,037
Distributions to partners (3,827) (187,485) (15) - (191,327)
Balance at March 31, 1998 $ (191,748) $ 1,369,274 $ (84,810) $ 100 $1,092,816
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
</TABLE>
See accompanying notes to financial statements
-3-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Cash Flows
For the Three Months Ended March 31,
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
Cash flows from operating activities
<S> <C> <C>
Net income(loss) $ 25,037 $ (3,443)
Adjustments to reconcile net income(loss)
to net cash provided by operating activities
Depreciation of property and equipment 257,787 257,787
Amortization of loan fees 4,098 4,098
Change in assets and liabilities
Decrease(increase) in accounts receivable 3,414 (5,753)
Decrease(increase) in prepaid expenses 10,674 (21,757)
Decrease in escrow for real estate taxes 94,390 127,981
Decrease in accounts payable and accrued expenses (102,011) (13,952)
(Decrease)increase in due to affiliates (28) 4,609
Increase(decrease) in tenant security deposits 3,107 (3,295)
Net cash provided by operating activities 296,468 346,275
Cash flows from investing activities-
additions to investment in real estate (39,325) (19,403)
Cash flows from financing activities
Financing costs -- (23,612)
Distributions to partners (191,327) (127,561)
Mortgage loan principal reduction (50,538) (14,202,270)
Proceeds from issuance of mortgage loans payable -- 14,500,000
Net cash provided by (used in) financing activities (241,865) 146,557
Net increase in cash and cash equivalents 15,278 473,429
Cash and cash equivalents
Beginning of period 910,435 402,707
End of period $ 925,713 $ 876,136
</TABLE>
See accompanying notes to financial statements
- -4-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
March 31, 1998
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 1997 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, 1997
<S> <C> <C>
Land $ 1,257,000 $ 1,257,000
Buildings 21,330,474 21,307,273
Furniture, fixtures
and equipment 2,107,100 2,090,976
24,694,574 24,655,249
Less: accumulated depreciation 9,836,735 9,578,948
Total $14,857,839 $15,076,301
</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, 1998 and December
31, 1997.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Administrative General Partner earned $10,864 and $12,648 during the
quarters ended March 31, 1998 and 1997, 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 $42,936 and
$42,805 during the quarters ended March 31, 1998 and 1997, respectively.
NOTE 5 - MORTGAGE LOANS PAYABLE
The Partnership 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 are being amortized over the new term of the
loans.
-5-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
March 31, 1998
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 quarter ended March 31, 1998 and 1997.
-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 May 14, 1998, the Partnership made a cash distribution to its partners
totaling $191,342, representing an annualized return of 6% on invested capital.
Based upon the operating results through March and the budget for the remainder
of the year, operating cash flow during 1998 is expected to fully fund a
distribution rate of 6% through 1998.
The Partnership anticipates utilizing approximately $250,000 in 1998 to enhance
the curb appeal and marketability of its properties. The funds will primarily be
used for roof repairs at the Deerfield property, resurfacing the parking lots at
the Deerfield and Woodhills properties and refurbishing the clubhouse/office at
the Oakbrook and Deerfield properties. The parking lot was re-surfaced at the
Oakbrook property in the fourth quarter of 1997 and the clubhouse at the
Woodhills property was refurbished in 1997.
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
Through the first quarter of 1998, revenues increased by $3,540 when compared to
revenues received during the first quarter of 1997. The gross rent potential for
the three communities increased $32,966 or approximately 3%, from $998,746 to
$1,031,712. Due to increased levels of competition from completion of new
apartment communities, the average aggregate occupancy level of the properties
decreased from 95% during the first quarter of 1997 to 92% during the first
quarter of 1998. We anticipate levels of occupancy to improve through 1998.
First quarter operating expenses excluding interest charges, depreciation and
amortization costs, increased $13,026 or approximately 3% versus similar
expenses incurred during the first quarter of 1997. Through the first quarter of
1998, operating expenses are on budget with no significant variances.
The slight increase in revenues, offset by an increase in expenses (excluding
interest charges, depreciation and amortization costs) resulted in a decrease in
the net operating income of the property of $9,486 or approximately 2% in the
first quarter of 1998 as compared to 1997.
Occupancy levels at Woodhills, in Dayton, Ohio, averaged 91%, a decrease from
the 93% experienced during the first quarter of 1997. As a result of the
decrease in occupancy, rental revenues received through the first quarter of
1998 decreased $3,819, or 1.31%, when compared to 1997 first quarter revenues.
The Dayton apartment rental market is very competitive due to the completion of
the construction of approximately 1,000 new apartments. The average occupancy in
the Dayton apartment market decreased from 93% in September 1997 to 90% in March
1998. Operating expenses are stable and are approximately $10,000 under budget.
Management's goal in 1998 is to increase rents by approximately 2.5% while
striving to increase occupancy to 94% or better.
At Deerfield, in Cincinnati, Ohio, the average occupancy level during the first
quarter was 94%, the same as the first quarter of 1997. However, because of
higher rental rates, first quarter rental revenues at Deerfield increased
$11,981, or 3.27% when compared to rental revenues earned during the first
quarter of 1997. On May 1, 1998, the rental rates were increased $10 per month
on each apartment. 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 1998 at Deerfield is to increase rents by 3% and to
increase occupancy to 95%. Operating expenses are on budget.
-7-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations (continued)
At Oakbrook in Columbus, Ohio, occupancy levels averaged 91% during the first
quarter of 1998 representing a decrease from the first quarter, 1997 average of
96%. As a result of this decrease in occupancy, rental revenues received during
the first quarter decreased $9,204 or 3.09% when compared to the same period in
1997. Although occupancy at Oakbrook has decreased, the average rental rate
increased from $559 in the first quarter of 1997 to $575 in the first quarter of
1998. Management's 1998 goals for Oakbrook are to achieve a 2% rent increase and
to increase and stabilize occupancy at 95%. Operating expenses are on budget.
Management is committed to increasing occupancy levels at each of the
properties. We are optimistic that occupancy levels can be increased and
stabilized in the 93% to 95% range at each of the Partnership's three
properties.
-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: 5/14/98 By: /s/ John M. Prugh
John M. Prugh
President and Director
Brown-Benchmark AGP, Inc.
Administrative General Partner
DATE: 5/14/98 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 PROPERTIE
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 925,713
<SECURITIES> 0
<RECEIVABLES> 69,782
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,143,239
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,090,006
<CURRENT-LIABILITIES> 651,082
<BONDS> 14,335,244
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 16,090,006
<SALES> 0
<TOTAL-REVENUES> 960,838
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 659,198
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 276,603
<INCOME-PRETAX> 25,037
<INCOME-TAX> 0
<INCOME-CONTINUING> 25,037
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,037
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
