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, 2000
{ } 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, 2000 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>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
INDEX
<TABLE>
<CAPTION>
Page No.
Part I. Financial Information
Item 1. Financial Statements
<S> <C>
Balance Sheets 1
Statements of Operations 2
Statements of Partners' Capital (Deficit) 3
Statements of Cash Flows 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk 7
Part II. Other Information
Item 1. through Item 6. 7
Signatures 8
</TABLE>
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
(Unaudited)
---------------- ----------------
Assets
<S> <C> <C>
Investment in real estate $ 12,912,429 $ 13,597,059
Cash and cash equivalents 651,570 541,297
Other assets
Accounts receivable, net 13,946 157,015
Prepaid expenses 9,790 15,416
Escrow for real estate taxes 179,241 273,763
Loan fees, less accumulated amortization
of $67,179 and $51,681, respectively 36,183 51,681
---------------- ----------------
Total other assets 239,160 497,875
---------------- ----------------
Total assets $ 13,803,159 $ 14,636,231
================ ================
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable and accrued expenses $ 487,686 $ 599,642
Tenant security deposits 130,896 143,657
Due to affiliates 7,892 7,661
Mortgage loans payable 13,774,031 13,953,098
---------------- ----------------
Total liabilities 14,400,505 14,704,058
---------------- ----------------
Partners' Capital (Deficit)
General Partners (225,550) (214,960)
Assignor Limited Partner:
Assignment of Limited Partnership
Interests - $25 stated value per
unit, 500,000 units outstanding (286,953) 231,934
Limited Partnership Interests -
$25 stated value per unit,
40 units outstanding (84,943) (84,901)
Subordinated Limited Partners 100 100
---------------- ----------------
Total partners' capital (deficit) (597,346) (67,827)
---------------- ----------------
Total liabilities and partners' capital (deficit) $ 13,803,159 $ 14,636,231
================ ================
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
--------------------------------- ---------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
---------------- --------------- ---------------- ----------------
Revenues
<S> <C> <C> <C> <C>
Rental income $ 1,015,124 1,010,919 $ 3,075,189 $ 2,993,822
Interest income 6,995 3,283 19,378 11,014
---------------- --------------- ---------------- ----------------
1,022,119 1,014,202 3,094,567 3,004,836
---------------- --------------- ---------------- ----------------
Expenses
Compensation and benefits 113,029 109,876 334,622 324,119
Utilities 75,103 73,835 233,334 219,305
Property taxes 91,326 92,589 273,978 277,767
Maintenance and repairs 137,607 89,007 315,638 272,317
Property management fee 45,704 45,963 138,273 135,154
Advertising 12,322 12,027 33,295 35,869
Insurance 8,625 8,153 25,875 26,154
Other 13,668 11,527 38,794 36,745
Administrative and professional fees 23,358 13,417 65,035 47,390
Interest expense 266,303 270,798 802,357 815,113
Depreciation of property and
equipment 257,787 257,787 773,361 773,361
Amortization of loan fees 5,166 4,098 15,498 12,294
---------------- --------------- ---------------- ----------------
1,049,998 989,077 3,050,060 2,975,588
---------------- --------------- ---------------- ----------------
Net income (loss) $ (27,879) 25,125 $ 44,507 $ 29,248
================ =============== ================ ================
Net income(loss) per unit of assignee
limited partnership interest - basic $ (0.05) 0.05 $ 0.09 $ 0.06
================ =============== ================ ================
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Statements of Partners' Capital (Deficit) For the nine
months ended September 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Assignor Limited Partner
-----------------------------
Assignment
of Limited Limited Subordinated
General Partnership Partnership Limited
Partners Interests Interests Partners Total
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1999 $ (214,960) $ 231,934 (84,901) $ 100 $ (67,827)
Net income 891 43,613 3 - 44,507
Distributions to partners (11,481) (562,500) (45) - (574,026)
-------------- -------------- -------------- -------------- --------------
Balance at September 30, 2000 $ (225,550) $ (286,953) (84,943) $ 100 $ (597,346)
============== ============== ============== ============== ==============
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)
============== ============== ============== ============== ==============
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Statements of Cash Flows
For the nine months ended September 30,
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---------------- ----------------
Cash flows from operating activities
<S> <C> <C>
Net income $ 44,507 $ 29,248
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 15,498 12,294
Changes in assets and liabilities
Decrease in accounts receivable 143,069 2,883
Decrease in prepaid expenses 5,626 6,920
Decrease in escrow for real estate taxes 94,522 16,763
Decrease in accounts payable and accrued expenses (111,956) (49,292)
Increase in due to affiliates 231 3,060
(Decrease) increase in tenant security deposits (12,761) 4,722
---------------- ----------------
Net cash provided by operating activities 952,097 799,959
---------------- ----------------
Cash flows from investing activities-
additions to investment in real estate (88,731) (144,077)
---------------- ----------------
Cash flows from financing activities
Distributions to partners (574,026) (574,026)
Mortgage loan principal reduction (179,067) (166,310)
---------------- ----------------
Net cash used in financing activities (753,093) (740,336)
---------------- ----------------
Net increase (decrease) in cash and cash equivalents 110,273 (84,454)
Cash and cash equivalents
Beginning of period 541,297 668,208
---------------- ----------------
End of period $ 651,570 $ 583,754
================ ================
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to Financial Statements
September 30, 2000 and 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 financial position,
operating results and cash flows 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 1999 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, 2000 December 31, 1999
<S> <C> <C>
Land $ 1,257,000 $ 1,257,000
Buildings 21,416,568 21,416,568
Furniture, fixtures
and equipment 2,535,844 2,447,113
--------- ---------
25,209,412 25,120,681
Less accumulated depreciation 12,296,983 11,523,622
---------- ----------
Total $12,912,429 $13,597,059
=========== ===========
</TABLE>
NOTE 3 - CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist solely of cash and money market accounts,
stated at cost, which approximates market value at September 30, 2000 and
December 31, 1999.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Administrative General Partner earned $7,892 and $8,504 during the quarters
ended September 30, 2000 and 1999, 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 $45,704 and
$45,963 during the three months ended September 30, 2000 and 1999, respectively,
and $138,273 and $135,154 during the nine months ended September 30, 2000 and
1999, respectively.
NOTE 5 - MORTGAGE LOANS PAYABLE
The mortgage loans on the Properties bear interest at 7.7% and are due June 1,
2002. Monthly payments are based on a 25-year amortization schedule with a
balloon payment due at maturity.
NOTE 6 - NET INCOME PER UNIT OF ASSIGNEE LIMITED PARTNERSHIP INTEREST
Net income per Unit of assignee limited partnership interest is disclosed on the
Statement of Operations and is based upon average units outstanding of 500,000
during the three and nine months ended September 30, 2000 and 1999.
-5-
<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 in 2000.
On November 13, 2000, the Partnership will make a cash distribution to
its partners totaling $191,342, representing an annualized return of 6% on
invested capital. This distribution is generated primarily from third quarter
operations of the three apartment properties, along with Partnership reserves.
Based on the operating results through the third quarter, and the budget for the
remainder of the year, operating cash flow during 2000 is expected to fully fund
a distribution rate of 6%.
The Partnership does not anticipate an outlay for any significant
capital improvements or repair costs that might adversely impact its liquidity
in 2000.
Results of Operations
Third quarter 2000 revenues increased by $7,917 (1%) when compared to
revenues during the third quarter of 1999. Through the third quarter of 2000,
revenues increased by $89,731 (3%) when compared to those revenues through the
third quarter of 1999. The increase in revenues through the third quarter of the
year is a result of higher rental rates achieved at the properties as the
aggregate occupancy level of the portfolio was unchanged at approximately 94%.
Third quarter operating expenses, excluding interest charges,
depreciation and amortization costs, increased $64,348 (14%) versus similar
expenses incurred during the third quarter of 1999. Through the first nine
months of the year, similar expenses have increased $84,024 (6%), versus 1999.
These increases are due primarly to exterior painting of the properties in the
third quarter of 2000.
Through the first nine months of the year, the aggregate net operating
income of the three properties (defined as revenues less operating expenses
excluding interest charges, depreciation and amortization costs) was essentially
flat when compared to the first nine months of 1999. The increase in revenues
through September 2000, was largely offset by increased operating expenses
(mainly related to the exterior painting).
Occupancy levels at Woodhills, in Dayton, Ohio, averaged 92% during the
third quarter of 2000. Revenues through the first nine months of the year were
$45,450 (5%) higher than those in 1999 due to lower rental concessions and
modest rental rate increases. The Dayton apartment rental market has improved
and rental rates have increased as a result. Market rental rates have increased
from $566 during the third quarter of 1999 to $599 during the third quarter of
2000, representing an increase of approximately 6%. Management will continue to
implement rate increases as the market allows.
The rental market in Cincinnati remains strong. The average occupancy
level at the Deerfield property was 94% during the third quarter of 2000. The
average rental rate at the community has increased from $626 during the third
quarter of 1999 to $642 in the third quarter of 2000, representing an increase
of 3%. Due to occupancy and rental rate increases, revenues through the first
nine months of 2000 increased $36,853 when compared to the first nine months of
1999. The Cincinnati market continues to be strong and rents will be increased
as the market allows.
At Oakbrook, in Columbus, Ohio, occupancy levels decreased to 90%
during the third quarter, down from 95% during the second quarter of 2000.
Management has been successful in improving the occupancy trend recently and we
expect the property's fourth quarter occupancy level to rise to 93%. While the
rental market in Columbus remains competitive, the average rental rates have
increased from $581 during the third quarter of 1999 to $599 during the third
quarter of 2000, representing an increase of 3%. Revenues through the first nine
months of 2000 decreased $936 when compared to 1999 due to lower occupancy
levels. Management's focus during the fourth quarter will be on improving
occupancy levels while maintaining current rental rates.
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<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.
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<PAGE>
<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: 11/10/00 By: /s/ John M. Prugh
John M. Prugh
President and Director
Brown-Benchmark AGP, Inc.
Administrative General Partner
DATE: 11/10/00 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Brown-Benchmark AGP, Inc.
Administrative General Partner
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