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, 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 March 31, 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 5-6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk 8
Part II. Other Information
Item 1. through Item 6. 8
Signatures 9
</TABLE>
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
(Unaudited)
---------------- ----------------
Assets
<S> <C> <C>
Investment in real estate $ 13,364,437 $ 13,597,059
Cash and cash equivalents 652,539 541,297
Other assets
Accounts receivable, net 112,440 157,015
Prepaid expenses 15,503 15,416
Escrow for real estate taxes 166,504 273,763
Loan fees, less accumulated amortization
of $56,847 and $51,681, respectively 46,515 51,681
---------------- ----------------
Total other assets 340,962 497,875
---------------- ----------------
Total assets $ 14,357,938 $ 14,636,231
================ ================
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable and accrued expenses $ 498,130 $ 599,642
Tenant security deposits 147,709 143,657
Due to affiliates 13,551 7,661
Mortgage loans payable 13,894,551 13,953,098
---------------- ----------------
Total liabilities 14,553,941 14,704,058
---------------- ----------------
Partners' Capital (Deficit)
General Partners (217,524) (214,960)
Assignor Limited Partner:
Assignment of Limited Partnership
Interests - $25 stated value per
unit, 500,000 units outstanding 106,332 231,934
Limited Partnership Interests -
$25 stated value per unit,
40 units outstanding (84,911) (84,901)
Subordinated Limited Partners 100 100
---------------- ----------------
Total partners' capital (deficit) (196,003) (67,827)
---------------- ----------------
Total liabilities and partners' capital (deficit) $ 14,357,938 $ 14,636,231
================ ================
</TABLE>
See accompanying notes to financial statements.
-1-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Statements of Operations
For the three months ended March 31,
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---------------- ----------------
Revenues
<S> <C> <C>
Rental income $ 1,023,282 $ 984,111
Interest income 4,825 3,950
---------------- ----------------
1,028,107 988,061
---------------- ----------------
Expenses
Compensation and benefits 104,332 94,719
Utilities 80,014 78,503
Property taxes 91,326 92,589
Maintenance and repairs 59,399 68,918
Property management fee 45,889 44,040
Advertising 10,019 11,917
Insurance 8,625 9,002
Other 11,978 10,338
Administrative and professional fees 21,812 17,333
Interest expense 268,594 272,572
Depreciation of property and equipment 257,787 257,787
Amortization of loan fees 5,166 4,098
---------------- ----------------
964,941 961,816
---------------- ----------------
Net income $ 63,166 $ 26,245
================ ================
Net income per unit of assignee limited
partnership interest - basic $ 0.12 $ 0.05
============== ==============
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Statements of Partners' Capital (Deficit)
For the three months ended March 31, 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 1,263 61,898 5 - 63,166
Distributions to partners (3,827) (187,500) (15) - (191,342)
-------------- -------------- -------------- -------------- --------------
Balance at March 31, 2000 $ (217,524) $ 106,332 $ (84,911) $ 100 $ (196,003)
============== ============== ============== ============== ==============
Balance at December 31, 1998 $ (202,910) $ 822,367 $ (84,854) $ 100 $ 534,703
Net income 525 25,718 2 - 26,245
Distributions to partners (3,827) (187,500) (15) - (191,342)
-------------- -------------- -------------- -------------- --------------
Balance at March 31, 1999 $ (206,212) $ 660,585 $ (84,867) $ 100 $ 369,606
============== ============== ============== ============== ==============
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Statements of Cash Flows
For the three months ended March 31,
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---------------- ----------------
Cash flows from operating activities
<S> <C> <C>
Net income $ 63,166 $ 26,245
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation of property and equipment 257,787 257,787
Amortization of loan fees 5,166 4,098
Changes in assets and liabilities
Decrease (increase) in accounts receivable 44,575 (5,248)
Decrease (increase) in prepaid expenses (87) 939
Decrease (increase) in escrow for real estate taxes 107,259 (47,889)
(Decrease) increase in accounts payable and accrued expenses (101,512) 3,049
Increase in due to affiliates 5,890 3,764
Increase in tenant security deposits 4,052 1,364
---------------- ----------------
Net cash provided by operating activities 386,296 244,109
---------------- ----------------
Cash flows from investing activities-
additions to investment in real estate (25,165) (36,385)
---------------- ----------------
Cash flows from financing activities
Distributions to partners (191,342) (191,342)
Mortgage loan principal reduction (58,547) (54,568)
---------------- ----------------
Net cash used in financing activities (249,889) (245,910)
---------------- ----------------
Net increase (decrease) in cash and cash equivalents 111,242 (38,186)
Cash and cash equivalents
Beginning of period 541,297 668,208
---------------- ----------------
End of period $ 652,539 $ 630,022
================ ================
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to Financial Statements
March 31, 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>
March 31, 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 2,472,278 2,447,113
25,145,846 25,120,681
Less: accumulated depreciation 11,781,409 11,523,622
Total $13,364,437 $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 March 31, 2000 and December
31, 1999.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Administrative General Partner earned $13,551 and $9,208 during the quarters
ended March 31, 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
$45,889 and $44,040 during the quarters ended March 31, 2000 and 1999,
respectively. At March 31, 2000, accounts receivable includes short-term
advances to an affiliate of the Development General Partner of $89,160.
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.
-5-
<PAGE>
BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP
Notes to Financial Statements
March 31, 2000 and 1999
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 quarters ended March 31, 2000 and 1999.
-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 or about May 11, 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 from the operations of the three
apartment properties. Based on the operating results through March, 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
First quarter 2000 revenues increased by approximately $40,000 or (4%)
when compared to revenues for the first quarter of 1999. The increase in
revenues is a result of an increase in rental income at all three properties.
The most significant revenue increase was achieved at the Cincinnati property.
First quarter 2000 operating expenses, excluding interest charges,
depreciation and amortization costs, increased approximately $6,000 or (1%)
versus similar expenses for the first quarter of 1999.
Due to the proportionately larger increase in revenues versus operating
expenses through the first quarter of 2000, the aggregate net operating income,
increased $34,011 or 6% when compared to the first quarter of 1999.
Occupancy levels at Woodhills, in Dayton, Ohio, averaged 91% through
the first quarter of 2000, unchanged from the first quarter of 1999. The
apartment sub-market where Woodhills is located has an average occupancy of 90%.
Revenues for the first quarter of 2000 were $9,914 higher than in 1999 due to
slightly lower rental concessions and modest rental rate increases. Market rents
have increased from $514 in the first quarter of 1999 to $531 in the first
quarter of 2000. The Dayton apartment rental market remains competitive and no
significant rental rate increases are expected in the immediate future.
The rental market in Cincinnati remains strong. The average occupancy
level at the Deerfield property was 95% through the first quarter of 2000, which
is a 1% increase when compared to the first quarter of 1999. The average rental
rate at the community has increased from $578 in the first quarter of 1999 to
$616 in the first quarter of 2000. Due to occupancy and rental rate increases,
revenues for the first quarter of 2000 increased $25,099 when compared to the
first quarter 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 averaged 97% through
the first quarter of 2000, unchanged from the first quarter of 1999. The average
rental rates increased from $570 in the first quarter of 1999 to $578 in the
first quarter of 2000. Revenues for the first quarter of 2000 increased $4,158
when compared to 1999, due primarily to selective rental increases on certain
unit types. Management's focus during the second quarter of the year will be on
increasing rents on all unit types and keeping expenses at or below budget.
Management achieved positive financial performance at all three
properties. The 6% increase in net operating income, along with the ability to
stay within operating budgets has allowed the properties to show some marked
gains in the first quarter of 2000 over the similar period in 1999. Management
is committed to sustaining these improved financial gains, while examining new
ways to exceed budgeted results.
-7-
<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
On May 8, 2000, the Partnership received a copy of the Tender
Offer Statement on Schedule TO, filed with the SEC on May 5, 2000, relating to
the offer by certain entities controlled by McKenzie Patterson, Inc. to purchase
for cash up to 125,000 assignee units of limited partnership interests ("Units")
in the Partnership at a purchase price of $12 per Unit. Such tender offer is
currently under consideration by the Partnership's administrative general
partners.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits: Financial Data Schedule.
b) Reports on Form 8-K: None.
-8-
<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: 5/11/00 By: /s/ John M. Prugh
John M. Prugh
President and Director
Brown-Benchmark AGP, Inc.
Administrative General Partner
DATE: 5/11/00 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 652,539
<SECURITIES> 0
<RECEIVABLES> 112,440
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 946,986
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,357,938
<CURRENT-LIABILITIES> 659,390
<BONDS> 13,894,551
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14,357,938
<SALES> 0
<TOTAL-REVENUES> 1,028,107
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 696,347
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 268,594
<INCOME-PRETAX> 63,166
<INCOME-TAX> 0
<INCOME-CONTINUING> 63,166
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,166
<EPS-BASIC> 0.120
<EPS-DILUTED> 0.000
</TABLE>
