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, 1999
{ } 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, 1999 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
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 9
Part II. Other Information
Item 1. through Item 6. 9
Signatures 10
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
Unaudited
Assets
<S> <C> <C>
Investment in real estate $ 13,738,108 $ 14,367,392
Cash and cash equivalents 583,754 668,208
Other assets
Accounts receivable, net 85,456 88,339
Prepaid expenses 8,828 15,748
Escrow for real estate taxes 241,928 258,691
Loan fees, less accumulated amortization
of $43,303 and $31,009, respectively 60,059 72,353
Total other assets 396,271 435,131
Total assets $ 14,718,133 $ 15,470,731
Liabilities and Partners' Capital
Liabilities
Accounts payable and accrued expenses $ 565,315 $ 614,607
Tenant security deposits 143,021 138,299
Due to affiliates 8,504 5,444
Mortgage loans payable 14,011,368 14,177,678
Total liabilities 14,728,208 14,936,028
Partners' Capital
General Partners (213,806) (202,910)
Assignor Limited Partner
Assignment of Limited Partnership
Interests - $25 stated value per
unit, 500,000 units outstanding 288,530 822,367
Limited Partnership Interests -
$25 stated value per unit,
40 units outstanding (84,899) (84,854)
Subordinated Limited Partners 100 100
Total partners' capital (10,075) 534,703
Total liabilities and partners' capital $ 14,718,133 $ 15,470,731
</TABLE>
See accompanying notes to financial statements
-1-
<PAGE>
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,
1999 1998 1999 1998
Revenues
<S> <C> <C> <C> <C>
Rental income $ 1,010,919 $ 976,536 $ 2,993,822 $ 2,904,099
Interest income 3,283 5,271 11,014 20,209
1,014,202 981,807 3,004,836 2,924,308
Expenses
Compensation and benefits 109,876 122,571 324,119 299,157
Utilities 73,835 69,854 219,305 215,877
Property taxes 92,589 92,361 277,767 277,083
Maintenance and repairs 89,007 107,902 272,317 239,533
Property management fee 45,963 43,975 135,154 130,777
Advertising 12,027 15,995 35,869 33,656
Insurance 8,153 8,205 26,154 24,615
Other 11,527 13,691 36,745 36,196
Administrative 13,417 11,562 47,390 47,423
Interest expense 270,798 274,626 815,113 826,854
Depreciation of property and
equipment 257,787 257,787 773,361 773,361
Amortization of loan fees 4,098 4,098 12,294 12,294
989,077 1,022,627 2,975,588 2,916,826
Net income (loss) $ 25,125 $ (40,820) $ 29,248 $ 7,482
Net income(loss) per unit of assignee
limited partnership interest - basic $ 0.05 $ (0.08) $ 0.06 $ 0.01
</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, 1999 and 1998
(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, 1998 $ (202,910) $ 822,367 $ (84,854) $ 100 $ 534,703
Net income 585 28,663 - - 29,248
Distributions to partners (11,481) (562,500) (45) - (574,026)
Balance at September 30, 1999 $ (213,806) $ 288,530 $ (84,899) $ 100 $ (10,075)
Balance at December 31, 1997 $ (188,422) $ 1,532,225 $ (84,797) $ 100 $ 1,259,106
Net income 150 7,332 1 - 7,483
Distributions to partners (11,480) (562,486) (45) - (574,011)
Balance at September 30, 1998 $ (199,752) $ 977,071 $ (84,841) $ 100 $ 692,578
</TABLE>
See accompanying notes to financial statements
-3-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30,
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
Cash flows from operating activities
<S> <C> <C>
Net income $ 29,248 $ 7,482
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation of property and equipment 773,361 773,361
Amortization of loan fees 12,294 12,294
Changes in assets and liabilities
Decrease(increase) in accounts receivable 2,883 (10,201)
Decrease in prepaid expenses 6,920 19,825
Decrease in escrow for real estate taxes 16,763 60,194
(Decrease)increase in accounts payable and accrued expenses (49,292) 28,151
Increase(decrease) in due to affiliates 3,060 (3,920)
Increase in tenant security deposits 4,722 621
Net cash provided by operating activities 799,959 887,807
Cash flows (used in) investing activities-
additions to investment in real estate (144,077) (215,375)
Cash flows from financing activities
Distributions to partners (574,026) (574,011)
Mortgage loan principal reduction (166,310) (154,570)
Net cash used in financing activities (740,336) (728,581)
Net decrease in cash and cash equivalents (84,454) (56,149)
Cash and cash equivalents
Beginning of period 668,208 910,435
End of period $ 583,754 $ 854,286
</TABLE>
See accompanying notes to financial statements
-4-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
September 30, 1999
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 1998 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>
September 30, 1999 December 31, 1998
<S> <C> <C>
Land $ 1,257,000 $ 1,257,000
Buildings 21,416,568 21,413,355
Furniture, fixtures
and equipment 2,426,900 2,286,036
25,100,468 24,956,391
Less: accumulated depreciation 11,362,360 10,588,999
Total $13,738,108 $14,367,392
</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 September 30, 1999 and
December 31, 1998.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Administrative General Partner earned $8,504 and $7,348 during the quarters
ended September 30, 1999 and 1998, 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 $45,963 and
$43,975 during the quarters ended September 30, 1999 and 1998, respectively.
NOTE 5 - MORTGAGE LOANS PAYABLE
The mortgage loan terms 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 loan maturity in June 2002.
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
September 30, 1999
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 September 30, 1999 and 1998.
-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 8, 1999, 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 September and the budget for
the remainder of the year, operating cash flow is expected to fully fund a
distribution rate of 6% through 1999.
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
Third quarter revenues increased by $32,395 (3.3%) when compared to
revenues received during the third quarter of 1998. Although interest income
decreased through the third quarter of 1999, revenues increased by $80,528,
(2.8%) when compared to those received through the third quarter of 1998. The
increase in revenues is a result of an increase in rental income at all three
properties. This increase in rental income was due to a stable occupancy at the
Cincinnati property, an increase in occupancy at the Columbus and Dayton
properties, and an increase in average rental rates at all three properties.
Third quarter operating expenses excluding interest charges,
depreciation and amortization costs, decreased $29,722 versus similar expenses
incurred during the third quarter of 1998. Through the third quarter of the
year, similar expenses have increased $70,503, versus 1998, primarily due to
higher maintenance and compensation expenses at each of the properties. These
expenses have increased in an effort to improve the curb appeal and
marketability of each of the communities.
Due to marginal increases in both revenues and operating expenses
through the third quarter, the aggregate net operating income through the third
quarter of 1999, was essentially flat when compared to 1998.
Occupancy levels at Woodhills, in Dayton, Ohio, averaged 93% through
the third quarter, representing an increase from 89% through the third quarter
of 1998. The apartment sub-market where Woodhills is located has an average
occupancy of 91%. Rental income received through the first three quarters of the
year was $23,569 higher than that received in 1998 due to higher occupancy
levels and modest rental rate increases. While the street rents have increased
from $581 in the third quarter of 1998 to $591 in the third quarter of 1999,
rental concessions offered to new residents have offset a significant portion of
this gain. Management's immediate goal is to raise and stabilize the community's
occupancy level at 95%. No significant rental rate increases are expected in the
immediate future. The Dayton apartment rental market remains competitive. Rental
specials are currently offered at every community. Management has continued its
program to upgrade available units at Woodhills to include: new carpet and
vinyl, lighting fixtures, faucets, mirrors and fresh paint. We have repaired
fencing; power washed decks and landscaped to improve the curb appeal of the
community. We believe these efforts have assisted management in improving the
occupancy level of the community and expect fourth quarter occupancy and
operating trends to be positive.
The rental market in Cincinnati remains strong. The average occupancy
level at the Deerfield property was 96% through the third quarter, which is
stable when compared to the same period in 1998. The average rental rate at the
community has increased from $608 in the third quarter of 1998 to $627 in the
third quarter of 1999. Due to rate increases, rental income received through the
third quarter of 1999 increased $22,817 when compared to the third quarter of
1998. Operating expenses through the third quarter of 1999 are projected to be
$32,666 higher than budget as a result of higher maintenance costs and
compensation expenses associated with improvements made to the community.
Year-end cash flow from Deerfield is projected to increase by $6,644 when
compared to 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 96% through
the third quarter, an increase from the 93% average through the third quarter of
1998. The rental market remains strong although several new communities are
currently under construction, which will make the market more competitive. The
average rental rates increased from $578 in the third quarter of 1998 to $585 in
the third quarter of 1999. Rental income received at the property through the
third quarter of the year increased $43,336 when compared to 1998 due primarily
to the higher occupancy levels sustained at the community in 1999. Management's
focus during the fourth quarter of the year will be on increasing occupancy
levels and improving resident retention.
Management is pleased with the occupancy gains achieved at the
Woodhills community while maintaining strong performance levels at both the
Deerfield and Oakbrook properties. The 95% aggregate occupancy level achieved by
the three properties during the third quarter of 1999 is the highest level
achieved in years. Management is committed to sustaining these occupancy levels
and expects the operating performance of the portfolio to improve as a result.
-8-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
PART I. FINANCIAL INFORMATION
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Inapplicable
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Inapplicable
Item 2. Changes in Securities and Use of Proceeds
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: Financial Data Schedule.
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: 11/10/99 By: /s/ John M. Prugh
John M. Prugh
President and Director
Brown-Benchmark AGP, Inc.
Administrative General Partner
DATE: 11/10/99 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Brown-Benchmark AGP, Inc.
Administrative General Partner
-10-
<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-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 583,754
<SECURITIES> 0
<RECEIVABLES> 85,456
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 919,966
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,718,133
<CURRENT-LIABILITIES> 716,840
<BONDS> 14,011,368
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14,718,133
<SALES> 0
<TOTAL-REVENUES> 3,004,836
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,160,475
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 815,113
<INCOME-PRETAX> 29,248
<INCOME-TAX> 0
<INCOME-CONTINUING> 29,248
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,248
<EPS-BASIC> 0.060
<EPS-DILUTED> 0.000
</TABLE>
