10-Q 1 bbnworking10q901.txt FORM 10-Q FOR QUARTER ENDED 9/30/01 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, 2001 { } 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, 2001 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 BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP INDEX

BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP Balance Sheets

See accompanying notes to financial statements. -1- BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP Statements of Operations (Unaudited)

See accompanying notes to financialstatements. -2- BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP Statements of Partners' Capital (Deficit) Nine months ended September 30, 2001 and 2000 (Unaudited)

See accompanying notes to financial statements. -3- BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP Statements of Cash Flows Nine months ended September 30, (Unaudited)

See accompanying notes to financial statements. -4- BROWN-BENCHMARK PROPERTIES LIMITED PARTNERSHIP Notes to Financial Statements September 30, 2001 and 2000 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 accounting principles generally accepted in the United States of America. The unaudited interim 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 2000 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: September 30, 2001 December 31, 2000 Land $ 1,257,000 $ 1,257,000 Buildings 21,416,568 21,416,568 Furniture, fixtures and equipment 2,647,988 2,570,262 --------- --------- 25,321,556 25,243,830 Less accumulated depreciation 13,156,964 12,456,944 ---------- ---------- Total $12,164,592 $12,786,886 =========== =========== 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, 2001 and December 31, 2000. NOTE 4 - RELATED PARTY TRANSACTIONS The Administrative General Partner earned $7,107 and $7,892 for the three months ended September 30, 2001 and 2000, respectively, and $23,193 and $35,231 for the nine months ended September 30, 2001 and 2000, 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 $46,124 and $45,704 for the three months ended September 30, 2001 and 2000, respectively, and 139,581 and $138,273 for the nine months ended September 30, 2001 and 2000, respectively. NOTE 5 - MORTGAGE LOANS PAYABLE The mortgage loans 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. The mortgage loan interest paid was $788,932 and $802,357 for the nine months ended September 30, 2001 and 2000, respectively. -5- 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 periods ended September 30, 2001 and 2000. -6- 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 markets allow and to control operating expenses. The Partnership has sufficient liquid assets from its rental revenues to satisfy its anticipated operating expenditures and debt service obligations in 2001. On November 12, 2001, the Partnership will make a cash distribution to its partners totaling $191,342, representing an annualized return of 6% on invested capital. This distribution will be funded from the operations of the three apartment properties during the third quarter of the year and reserves of $46,294. Based on the operating results through the third quarter, and the budget for the remainder of the year, operating cash flow during 2001 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 2001. Results of Operations Third quarter 2001 revenues increased by $6,271 (.6%) when compared to revenues during the third quarter of 2000. Through the third quarter of 2001, revenues increased by $24,485 (.8%) when compared to revenues during the first three quarters of 2000. The increase in revenues through the first three quarters of 2001 is a result of marginally higher rental rates achieved at the properties as the aggregate occupancy level of the portfolio decreased from 94% in 2000 to 92% in 2001. Third quarter operating expenses, excluding interest charges, depreciation and amortization costs increased $8,578 (2%) versus similar expenses incurred during the third quarter of 2000. Through the first nine months of 2001, similar expenses have increased $42,707 (3%), versus 2000. Operating costs are expected to decrease modestly during the fourth quarter of 2001 as a majority of the budgeted repairs have been completed. Due to the larger increase in operating expenses versus revenues through the third quarter of 2001, the aggregate net operating income of the Partnership (defined as revenues less operating expenses excluding interest charges, depreciation and amortization costs) decreased $18,222 (1%) when compared to 2000. The average occupancy levels at Woodhills, in Dayton, Ohio during the third quarter was 90%, unchanged from the second quarter of 2001. Rental revenues through the first nine months of 2001were approximately $2,600 higher than those received in 2000 due to marginal rental rate increases. The average rental rate at Woodhills increased 1% from $599 during the third quarter of 2000 to $605 during the third quarter of 2001. Improvements to the community completed during the third quarter included exterior painting as well as concrete and asphalt repairs. The Dayton apartment rental market remains competitive and management is focused on achieving a 1.5% occupancy increase during the fourth quarter of 2001. The average occupancy level at the Deerfield property during the third quarter was 93%; down slightly from the 95% level sustained throughout the first half of 2001. The average rental rate at the community increased from $642 during the third quarter of 2000 to $650 during the third quarter of 2001, representing a 1.25% increase. Rental revenues received during the first three quarters of 2001 increased approximately $10,020 (.8%) when compared to revenues received during the first three quarters of 2000. Throughout the remainder of 2001, management will strive to return the property's occupancy level to 95%. The exterior painting of the community, begun during the third quarter of 2001 will be completed by November. At Oakbrook, in Columbus, Ohio, occupancy levels decreased from 94% during the second quarter of 2001 to 90% during the third quarter of 2001. In an effort to improve the curb appeal of the property, the drive paths were seal coated and the community's exterior was painted. Management continues to work diligently to increase occupancy levels at the Columbus property. Rental revenues through the third quarter of 2001 increased by $19,500 when compared to 2000 due to an increase in the average rental rate from $599 to $622. -7- 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) Reports on Form 8-K: None. -8- 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: 11/9/01 By: /s/ John M.Prugh John M. Prugh President and Director Brown-Benchmark AGP, Inc. Administrative General Partner DATE: 11/9/01 By: /s/ Timothy M.Gisriel Timothy M. Gisriel Treasurer Brown-Benchmark AGP, Inc. Administrative General Partner -9-

BROWN BENCHMARK PROPERTIES LIMITED PARTNERSHIP 10-Q