|UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 
For the quarterly period ended September 30, 2006
[  ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _________ to _____________
Commission File Number 000-50258
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Belrose Capital Fund LLC
(Exact Name of Registrant as Specified in Its Charter)
|-------------------------------------------------------------------------------

Delaware
     
     04-3613468(State of Organization)
     
     (I.R.S. Employer Identification No.)The Eaton Vance Building255 State StreetBoston, Massachusetts
     
     02109(Address of Principal Executive Offices)
     
     (Zip Code)Registrants Telephone Number, Including Area Code:
     
     617-482-8260




|None
(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 (the Act) 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 __
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the 
Act).     Large Accelerated    Filer  X       Accelerated Filer __     Non-Accelerated Filer __
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes __   No X
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Belrose Capital Fund LLC
Index to Form 10-Q
|-------------------------------------------

PART I.
     
     FINANCIAL INFORMATION
     
     PageItem
     
     1.
     
     Financial Statements.Condensed Consolidated Statements of Assets and Liabilities as ofSeptember 30, 2006 (Unaudited) and December 31, 2005
     
     3Condensed Consolidated Statements of Operations (Unaudited) for theThree Months Ended September 30, 2006 and 2005 and for theNine Months Ended September 30, 2006 and 2005
     
     4Condensed Consolidated Statements of Changes in Net Assets for theNine Months Ended September 30, 2006 (Unaudited) and theYear Ended December 31, 2005
     
     6Condensed Consolidated Statements of Cash Flows (Unaudited) for theNine Months Ended September 30, 2006 and 2005
     
     7Financial Highlights for the Nine Months Ended September 30, 2006 (Unaudited)and the Year Ended December 31, 2005
     
     9Notes to Condensed Consolidated Financial Statementsas of September 30, 2006 (Unaudited)
     
     10Item
     
     2.
     
     Managements Discussion and Analysis of Financial Conditionand Results of Operations (MD&A).
     
     17Item
     
     3.
     
     Quantitative and Qualitative Disclosures About Market Risk.
     
     21Item
     
     4.
     
     Controls and Procedures.
     
     24PART II.
     
     OTHER INFORMATIONItem
     
     1.
     
     Legal Proceedings.
     
     25Item
     
     1A.
     
     Risk Factors.
     
     25Item
     
     2.
     
     Unregistered Sales of Equity Securities and Use of Proceeds.
     
     25Item
     
     3.
     
     Defaults Upon Senior Securities.
     
     25Item
     
     4.
     
     Submission of Matters to a Vote of Security Holders.
     
     25


Item
     
     5.
     
     Other Information.
     
     25Item
     
     6.
     
     Exhibits.
     
     26SIGNATURES
     
     27EXHIBIT INDEX
     
     28




|PART I. FINANCIAL INFORMATIONItem 1. Financial Statements.
|----------------------------------------------------------

|BELROSE CAPITAL FUND LLC                                             |  |                    |  |                   |  |   |  |              
|-------------------------------------------------------------------- |  | ------------------ |  | ----------------- |  | - |  | -------------
|Condensed Consolidated Statements of Assets and Liabilities          |  |                    |  |                   |  |   |  |              
|                                                                    
|                                                                     |  | September 30, 2006 |  |                   |  |  
|                                                                     |  | (Unaudited)        |  | December 31, 2005
|                                                                     |  |                    |  |                  
|Assets:                                                              |  |                    |  |                   |  |   |  |              
|Investment in Belvedere Capital Fund Company LLC                     |  |                    |  |                   |  |   |  |              
|(Belvedere Company)                                                  |  | $                  |  | 1,869,622,324     |  | $ |  | 1,783,649,094
|Investment in Partnership Preference Units                           |  |                    |  | 172,803,969       |  |   |  | 185,594,116  
|Investment in other real estate                                      |  |                    |  | 549,557,759       |  |   |  | 385,224,033  
|Short-term investments                                               |  |                    |  | 5,146,000         |  |   |  | 4,797,347    
|                                                                     |  |                    |  |                  
|Total investments                                                    |  | $                  |  | 2,597,130,052     |  | $ |  | 2,359,264,590
|Cash                                                                 |  |                    |  | 7,100,311         |  |   |  | 51,271,803   
|Distributions and interest receivable                                |  |                    |  | 483,956           |  |   |  | 285,450      
|Swap interest receivable                                             |  |                    |  | -                 |  |   |  | 68,131       
|Open interest rate swap agreements, at value                         |  |                    |  | 6,490,128         |  |   |  | 6,134,292    
|Escrow deposits  restricted                                         |  |                    |  | 2,905,749         |  |   |  | 29,764,909   
|Other assets                                                         |  |                    |  | 3,300,477         |  |   |  | 5,251,863    
|                                                                     |  |                    |  |                  
|Total assets                                                         |  | $                  |  | 2,617,410,673     |  | $ |  | 2,452,041,038
|                                                                     |  |                    |  |                   |  |  
|                                                                    
|Liabilities:                                                         |  |                    |  |                   |  |   |  |              
|Loan payable  Credit Facility                                       |  | $                  |  | 424,500,000       |  | $ |  | 393,500,000  
|Mortgage notes payable                                               |  |                    |  | 307,491,679       |  |   |  | 238,850,000  
|Payable to affiliate for investment advisory and administrative fees |  |                    |  | 412,393           |  |   |  | 365,900      
|Payable to affiliate for distribution and servicing fees             |  |                    |  | 580,095           |  |   |  | 572,971      
|Notes payable to minority shareholder                                |  |                    |  | 2,911,069         |  |   |  | 20,788,024   
|Security deposits                                                    |  |                    |  | 1,214,032         |  |   |  | 1,229,116    
|Accrued expenses:                                                    |  |                    |  |                   |  |   |  |              
|Swap interest expense                                                |  |                    |  | 457,768           |  |   |  | -            
|Interest expense                                                     |  |                    |  | 1,825,632         |  |   |  | 1,622,241    
|Property taxes                                                       |  |                    |  | 2,854,388         |  |   |  | 1,856,924    
|Other expenses and liabilities                                       |  |                    |  | 2,933,425         |  |   |  | 2,461,869    
|Minority interests in controlled subsidiaries                        |  |                    |  | 42,410,834        |  |   |  | 37,783,593   
|                                                                     |  |                    |  |                  
|Total liabilities                                                    |  | $                  |  | 787,591,315       |  | $ |  | 699,030,638  
|                                                                     |  |                    |  |                  
|                                                                    
|Net assets                                                           |  | $                  |  | 1,829,819,358     |  | $ |  | 1,753,010,400
|                                                                     |  |                    |  |                  
|Shareholders Capital                                                |  | $                  |  | 1,829,819,358     |  | $ |  | 1,753,010,400
|                                                                     |  |                    |  |                  
|                                                                    
|Shares outstanding (unlimited number of shares authorized)           |  |                    |  | 15,818,135        |  |   |  | 16,186,813   
|                                                                     |  |                    |  |                  
|                                                                    
|Net asset value and redemption price per share                       |  | $                  |  | 115.68            |  | $ |  | 108.30       
|                                                                     |  |                    |  |                  

See notes to unaudited condensed consolidated financial statements

3



|BELROSE CAPITAL FUND LLC
Condensed Consolidated Statements of Operations (Unaudited)
|------------------------------------------------------------------------------------

|                                                |  | Three Months Ended |  | Nine Months Ended 
|----------------------------------------------- |  | ------------------ |  | ------------------
|                                                |  |                    |  |                   
|                                                |  | September 30, 2006 |  | September 30, 2005
|                                                |  |                    |  |                   
|Investment Income:                              |  |                    |  |                   
|Dividends allocated from Belvedere Company      |  |                    |  |                   
|(net of foreign taxes, $54,485, $44,908,        |  |                    |  |                   
|$421,676 and $363,998, respectively)            |  | $                  |  | 8,538,996         
|Interest allocated from Belvedere Company       |  |                    |  | 51,720            
|Security lending income allocated               |  |                    |  |                   
|from Belvedere Company, net                     |  |                    |  | 9,042             
|Expenses allocated from Belvedere Company       |  |                    |  | (2,760,892)       
|                                                |  |                    |  |                   
|Net investment income allocated from            |  |                    |  |                   
|Belvedere Company                               |  | $                  |  | 5,838,866         
|Rental income                                   |  |                    |  | 10,532,608        
|Distributions from Partnership Preference Units |  |                    |  | 3,060,141         
|Interest                                        |  |                    |  | 656,414           
|Other income                                    |  |                    |  | -                 
|                                                |  |                    |  |                   
|Total investment income                         |  | $                  |  | 20,088,029        
|                                                |  |                    |  |                   
|                                               
|Expenses:                                       |  |                    |  |                   
|Investment advisory and administrative fees     |  | $                  |  | 1,627,533         
|Property management and administrative fees     |  |                    |  | 463,047           
|Distribution and servicing fees                 |  |                    |  | 872,206           
|Interest expense on mortgage notes              |  |                    |  | 4,116,937         
|Interest expense on Credit Facility             |  |                    |  | 5,813,339         
|Property and maintenance expenses               |  |                    |  | 2,322,183         
|Property taxes and insurance                    |  |                    |  | 1,741,173         
|Miscellaneous                                   |  |                    |  | 201,422           
|                                                |  |                    |  |                   
|Total expenses                                  |  | $                  |  | 17,157,840        
|Deduct                                         |  |                    |  |                   
|Reduction of investment advisory                |  |                    |  |                   
|and administrative fees                         |  |                    |  | 442,212           
|                                                |  |                    |  |                   
|Net expenses                                    |  | $                  |  | 16,715,628        
|                                                |  |                    |  |                   
|Net investment income before                    |  |                    |  |                   
|minority interests in net income of             |  |                    |  |                   
|controlled subsidiaries                         |  | $                  |  | 3,372,401         
|Minority interests in net income                |  |                    |  |                   
|of controlled subsidiaries                      |  |                    |  | (281,586)         
|                                                |  |                    |  |                   
|Net investment income                           |  | $                  |  | 3,090,815         
|                                                |  |                    |  |                   

See notes to unaudited condensed consolidated financial statements

4



| | BELROSE CAPITAL FUND LLC
Condensed Consolidated Statements of Operations (Unaudited) (Continued)
| | ------------------------------------------------------------------------------------------------

|                                                     |  | Three Months Ended |  | Nine Months Ended 
|---------------------------------------------------- |  | ------------------ |  | ------------------
|                                                     |  |                    |  |                   
|                                                     |  | September 30, 2006 |  | September 30, 2005
|                                                     |  |                    |  |                   
|Realized and Unrealized Gain (Loss)                  |  |                    |  |                   
|Net realized gain (loss)                            |  |                    |  |                   
|Investment transactions, securities sold short and   |  |                    |  |                   
|foreign currency transactions allocated from         |  |                    |  |                   
|Belvedere Company (identified cost basis)            |  | $                  |  | 4,870,624         
|Investment transactions in Partnership               |  |                    |  |                   
|Preference Units (identified cost basis)             |  |                    |  | (636,124)         
|Investment transactions in other real estate         |  |                    |  |                   
|(net of minority interests in realized gain of       |  |                    |  |                   
|controlled subsidiaries of $826,600, $158,863,       |  |                    |  |                   
|$828,056 and $128,560, respectively)                 |  |                    |  | 1,883,562         
|Interest rate swap agreements (1)                    |  |                    |  | 658,750           
|                                                     |  |                    |  |                   
|Net realized gain                                    |  | $                  |  | 6,776,812         
|                                                     |  |                    |  |                   
|                                                    
|Change in unrealized appreciation (depreciation)    |  |                    |  |                   
|Investments, securities sold short and foreign       |  |                    |  |                   
|currency allocated from Belvedere Company            |  |                    |  |                   
|(identified cost basis)                              |  | $                  |  | 70,303,504        
|Investments in Partnership Preference Units          |  |                    |  |                   
|(identified cost basis)                              |  |                    |  | 6,142,314         
|Investments in other real estate (net of minority    |  |                    |  |                   
|interests in unrealized appreciation (depreciation)  |  |                    |  |                   
|of controlled subsidiaries of $(3,771,206),          |  |                    |  |                   
|$6,105,083, $2,417,196 and $16,309,839,              |  |                    |  |                   
|respectively)                                        |  |                    |  | 816,274           
|Interest rate swap agreements                        |  |                    |  | (4,461,888)       
|                                                     |  |                    |  |                   
|Net change in unrealized appreciation (depreciation) |  | $                  |  | 72,800,204        
|                                                     |  |                    |  |                   
|                                                    
|Net realized and unrealized gain                     |  | $                  |  | 79,577,016        
|                                                     |  |                    |  |                   
|                                                    
|Net increase in net assets from operations           |  | $                  |  | 82,667,831        
|                                                     |  |                    |  |                   

(1)Amounts represent net interest earned (incurred) in connection with interest rate swap agreements (Note 7).

See notes to unaudited condensed consolidated financial statements

5



|BELROSE CAPITAL FUND LLC
Condensed Consolidated Statements of Changes in Net Assets
|-----------------------------------------------------------------------------------

|                                                           |  | Nine Months Ended  |  |                   |  |  
|---------------------------------------------------------- |  | ------------------ |  | ----------------- |  | -
|                                                           |  | September 30, 2006 |  | Year Ended       
|                                                           |  | (Unaudited)        |  | December 31, 2005
|                                                           |  |                    |  |                  
|Increase (Decrease) in Net Assets:                         |  |                    |  |                   |  |  
|From Operations                                           |  |                    |  |                   |  |  
|Net investment income                                      |  | $                  |  | 11,006,734        |  | $
|Net realized gain from investment transactions, securities |  |                    |  |                   |  |  
|sold short, foreign currency transactions and              |  |                    |  |                   |  |  
|interest rate swap agreements                              |  |                    |  | 50,195,917        |  |  
|Net change in unrealized appreciation (depreciation) of    |  |                    |  |                   |  |  
|investments, securities sold short, foreign currency       |  |                    |  |                   |  |  
|and interest rate swap agreements                          |  |                    |  | 77,350,927        |  |  
|                                                           |  |                    |  |                  
|Net increase in net assets from operations                 |  | $                  |  | 138,553,578       |  | $
|                                                           |  |                    |  |                  
|                                                          
|Transactions in Fund Shares                               |  |                    |  |                   |  |  
|Net asset value of Fund Shares issued to Shareholders in   |  |                    |  |                   |  |  
|payment of distributions declared                          |  | $                  |  | 8,759,998         |  | $
|Net asset value of Fund Shares redeemed                    |  |                    |  | (49,926,873)      |  |  
|                                                           |  |                    |  |                  
|Net decrease in net assets from Fund Share transactions    |  | $                  |  | (41,166,875)      |  | $
|                                                           |  |                    |  |                  
|                                                          
|Distributions                                             |  |                    |  |                   |  |  
|Distributions to Shareholders                              |  | $                  |  | (20,577,745)      |  | $
|                                                           |  |                    |  |                  
|Total distributions                                        |  | $                  |  | (20,577,745)      |  | $
|                                                           |  |                    |  |                  
|                                                          
|Net increase in net assets                                 |  | $                  |  | 76,808,958        |  | $
|                                                          
|Net assets:                                                |  |                    |  |                   |  |  
|At beginning of period                                     |  | $                  |  | 1,753,010,400     |  | $
|                                                           |  |                    |  |                  
|At end of period                                           |  | $                  |  | 1,829,819,358     |  | $
|                                                           |  |                    |  |                  

See notes to unaudited condensed consolidated financial statements

6



|BELROSE CAPITAL FUND LLC
Condensed Consolidated Statements of Cash Flows (Unaudited)
|------------------------------------------------------------------------------------

|                                                                       |  | Nine Months Ended   
|---------------------------------------------------------------------- |  | --------------------
|                                                                       |  |                     
|                                                                       |  | September 30, 2006  
|                                                                       |  |                     
|Cash Flows From (For) Operating Activities                            |  |                     
|Net increase in net assets from operations                             |  | $    138,553,578    
|Adjustments to reconcile net increase in net assets from operations    |  |                     
|to net cash flows for operating activities                            |  |                     
|Net investment income allocated from Belvedere Company                 |  | (17,022,449)        
|Increase in short-term investments                                     |  | (348,653)           
|Increase in distributions and interest receivable                      |  | (198,506)           
|Decrease in interest receivable for open swap agreements               |  | 68,131              
|(Increase) decrease in escrow deposits                                 |  | 27,412,309          
|(Increase) decrease in other assets                                    |  | 2,716,658           
|Increase in payable to affiliate for investment advisory and           |  |                     
|administrative fees                                                    |  | 46,493              
|Increase in payable to affiliate for distribution and servicing fees   |  | 7,124               
|Increase in interest payable for open swap agreements                  |  | 457,768             
|Decrease in security deposits, accrued interest and accrued            |  |                     
|other expenses and liabilities                                         |  | (136,814)           
|Increase in accrued property taxes                                     |  | 997,464             
|Purchases of Partnership Preference Units                              |  | (20,187,070)        
|Proceeds from sales of Partnership Preference Units                    |  | 27,797,117          
|Payments for investments in other real estate                          |  | (102,548,017)       
|Proceeds from sales of investments in other real estate                |  | 23,365,198          
|Improvements to rental property                                        |  | (3,494,300)         
|Net interest earned (incurred) on interest rate swap agreements        |  | 1,380,311           
|Minority interests in net income of controlled subsidiaries            |  | 1,381,989           
|Net realized gain from investment transactions, securities sold short, |  |                     
|foreign currency transactions and interest rate swap agreements        |  | (50,195,917)        
|Net change in unrealized (appreciation) depreciation of investments,   |  |                     
|securities sold short, foreign currency and interest rate              |  |                     
|swap agreements                                                        |  | (77,350,927)        
|                                                                       |  |                     
|Net cash flows for operating activities                                |  | $     (47,298,513)  
|                                                                       |  |                     
|                                                                      
|Cash Flows From (For) Financing Activities                            |  |                     
|Proceeds from Credit Facility                                          |  | $     101,000,000   
|Repayments of Credit Facility                                          |  | (70,000,000)        
|Proceeds from mortgage notes                                           |  | 6,538,000           
|Repayments of mortgage notes                                           |  | (599,934)           
|Proceeds from notes payable to minority shareholder                    |  | 11,054,197          
|Repayment of notes payable to minority shareholder                     |  | (28,931,152)        
|Issuance of real estate joint venture preferred shares                 |  | -                   
|Payments for Fund Shares redeemed                                      |  | (4,116,343)         
|Distributions paid to minority shareholders                            |  | -                   
|Distributions paid to Shareholders                                     |  | (11,817,747)        
|                                                                       |  |                     
|Net cash flows from financing activities                               |  | $        3,127,021  
|                                                                       |  |                     
|                                                                      
|Net increase (decrease) in cash                                        |  | $     (44,171,492)  
|                                                                      
|Cash at beginning of period                                            |  | $        51,271,803 
|                                                                       |  |                     
|Cash at end of period                                                  |  | $          7,100,311
|                                                                       |  |                     

See notes to unaudited condensed consolidated financial statements

7



|BELROSE CAPITAL FUND LLC
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)
|------------------------------------------------------------------------------------------------

|                                                              |  | Nine Months Ended 
|------------------------------------------------------------- |  | ------------------
|                                                              |  |                   
|                                                              |  | September 30, 2006
|                                                              |  |                   
|Supplemental Disclosure and Non-cash Investing and            |  |                   
|Financing Activities                                         |  |                   
|Interest paid on loan  Credit Facility                       |  | $                 
|Interest paid on mortgage notes                               |  | $                 
|Interest paid (received) on swap agreements, net              |  | $                 
|Market value of securities distributed in payment of          |  |                   
|redemptions                                                   |  | $                 
|Market value of real property and other assets, net           |  |                   
|of current liabilities, assumed in conjunction                |  |                   
|with the acquisition of other real estate                     |  | $                 
|Mortgage note assumed in conjunction with the acquisition of  |  |                   
|other real estate                                             |  | $                 
|Non-cash change in working capital of real estate investments |  | $                 

See notes to unaudited condensed consolidated financial statements

8



|BELROSE CAPITAL FUND LLC
Condensed Consolidated Financial Statements (Continued)
|--------------------------------------------------------------------------------

|Financial Highlights                                          |  | Nine Months Ended  |  |           |  |                   |  |  
|------------------------------------------------------------- |  | ------------------ |  | --------- |  | ----------------- |  | -
|                                                              |  | September 30, 2006 |  |           |  | Year Ended       
|                                                              |  | (Unaudited)        |  |           |  | December 31, 2005
|                                                             
|Net asset value  Beginning of period                         |  | $                  |  | 108.300   |  |                   |  | $
|                                                             
|Income (loss) from operations                                 |  |                    |  |           |  |                   |  |  
|                                                             
|Net investment income(1)                                      |  | $                  |  | 0.688     |  |                   |  | $
|Net realized and unrealized gain                              |  |                    |  | 7.972     |  |                   |  |  
|                                                             
|Total income from operations                                  |  | $                  |  | 8.660     |  |                   |  | $
|                                                             
|Distributions                                                 |  |                    |  |           |  |                   |  |  
|                                                             
|Distributions to Shareholders                                 |  | $                  |  | (1.280)   |  |                   |  | $
|                                                             
|Total distributions                                           |  | $                  |  | (1.280)   |  |                   |  | $
|                                                             
|Net asset value  End of period                               |  | $                  |  | 115.680   |  |                   |  | $
|                                                             
|                                                             
|Total Return(2)                                               |  |                    |  | 8.08%     |  |                   |  |  
|                                                             
|                                                             
|Ratios as a percentage of average net assets(3)               |  |                    |  |           |  |                   |  |  
|                                                             
|Expenses of Consolidated Real Property Subsidiaries           |  |                    |  |           |  |                   |  |  
|Interest and other borrowing costs(4)                         |  |                    |  | 0.66%     |  | (9)               |  |  
|Operating expenses(4)                                         |  |                    |  | 0.72%     |  | (9)               |  |  
|Belrose Capital Fund LLC Expenses                             |  |                    |  |           |  |                   |  |  
|Interest and other borrowing costs(5)(6)                      |  |                    |  | 1.17%     |  | (9)               |  |  
|Investment advisory and administrative fees, distribution and |  |                    |  |           |  |                   |  |  
|servicing fees and other operating expenses (5)(7)            |  |                    |  | 1.11%     |  | (9)               |  |  
|                                                              |  |                   
|Total expenses                                                |  |                    |  | 3.66%     |  | (9)               |  |  
|                                                             
|Net investment income(6)                                      |  |                    |  | 0.83%     |  | (9)               |  |  
|                                                             
|                                                             
|Ratios as a percentage of average gross assets(3)(8)          |  |                    |  |           |  |                   |  |  
|                                                             
|Expenses of Consolidated Real Property Subsidiaries           |  |                    |  |           |  |                   |  |  
|Interest and other borrowing costs(4)                         |  |                    |  | 0.50%     |  | (9)               |  |  
|Operating expenses(4)                                         |  |                    |  | 0.54%     |  | (9)               |  |  
|Belrose Capital Fund LLC Expenses                             |  |                    |  |           |  |                   |  |  
|Interest and other borrowing costs(5)(6)                      |  |                    |  | 0.87%     |  | (9)               |  |  
|Investment advisory and administrative fees, distribution and |  |                    |  |           |  |                   |  |  
|servicing fees and other operating expenses (5)(7)            |  |                    |  | 0.83%     |  | (9)               |  |  
|                                                              |  |                   
|Total expenses                                                |  |                    |  | 2.74%     |  | (9)               |  |  
|                                                             
|Net investment income(6)                                      |  |                    |  | 0.62%     |  | (9)               |  |  
|                                                             
|Supplemental Data                                             |  |                    |  |           |  |                   |  |  
|                                                             
|Net assets, end of period (000s omitted)                     |  | $                  |  | 1,829,819 |  |                   |  | $
|Portfolio turnover of Tax-Managed Growth Portfolio(10)        |  |                    |  | 1%        |  |                   |  |  
|                                                             

|(1)  | Calculated using average shares outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(2)  | Returns are calculated by determining the percentage change in net asset value with all distributions reinvested. Total return is not computed on an annualized basis.                                                                                                                                                                                                                                                                                                     
|    
|(3)  | For the purpose of calculating ratios, the income and expenses of Belrose Realty Corporations (Belrose Realty) controlled subsidiaries are reduced by the proportionate interest therein of investors other than Belrose Realty.                                                                                                                                                                                                                                          
|    
|(4)  | Includes Belrose Realty's proportional share of expenses incurred by its controlled subsidiaries.                                                                                                                                                                                                                                                                                                                                                                          
|    
|(5)  | Includes the expenses of Belrose Capital Fund LLC (Belrose Capital) and Belrose Realty. Does not include expenses of Belrose Realty's controlled subsidiaries.                                                                                                                                                                                                                                                                                                             
|    
|(6)  | Ratios do not include net interest incurred or earned in connection with interest rate swap agreements. Had such amounts been included, ratios would be higher.                                                                                                                                                                                                                                                                                                            
|    
|(7)  | Includes Belrose Capital's share of Belvedere Capital Fund Company LLC's (Belvedere Company) allocated expenses, including those expenses allocated from the Portfolio.                                                                                                                                                                                                                                                                                                    
|    
|(8)  | Average gross assets is defined as the average daily amount of all assets of Belrose Capital (including Belrose Capital's interest in Belvedere Company and Belrose Capital's ratable share of the assets of its directly and indirectly controlled subsidiaries), without reduction by any liabilities. For this purpose, the assets of Belrose Realty's controlled subsidiaries are reduced by the proportionate interest therein of investors other than Belrose Realty.
|    
|(9)  | Annualized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    
|(10) | Excludes the value of portfolio securities contributed or distributed as a result of in-kind shareholder transactions. The total turnover rate of Tax-Managed Growth Portfolio including in-kind contributions and distributions was 4% and 6% for the nine months ended September 30, 2006 and the year ended December 31, 2005, respectively.                                                                                                                            
|    
|(11) | Amounts to less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    

See notes to unaudited condensed consolidated financial statements

9



|BELROSE CAPITAL FUND LLC as of September 30, 2006 
Notes to Condensed Consolidated Financial Statements (Unaudited)
|-------------------------------------------------------------------------------------------------------------------



|1 Basis of Presentation
|-----------------------

The condensed consolidated interim financial statements of Belrose Capital Fund LLC (Belrose Capital) and its subsidiaries (collectively, the Fund) have been prepared, without audit, in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes that the disclosures are adequate to present fairly the financial position, results of operations, cash flows and financial highlights as of the dates and for the periods presented. It is suggested that these interim financial statements be read in conjunction with the financial statements and the notes thereto included in the Funds latest annual report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the full fiscal year.

The balance sheet at December 31, 2005 and the statement of changes in net assets and the financial highlights for the year then ended have been derived from the December 31, 2005 audited financial statements but do not include all of the information and footnotes required by GAAP for complete financial statements as permitted by the instructions to Form 10-Q and Article 10 of Regulation S-X.

Certain amounts in the prior periods condensed consolidated financial statements have been reclassified to conform to the current period presentation.



|2 Recently Issued Accounting Pronouncements
|-------------------------------------------

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. Management is currently evaluating the impact the adoption of SFAS No. 157 will have on the Funds financial statement disclosures.

In June 2006, the FASB issued FASB Interpretation No. 48, (FIN 48) Accounting for Uncertainty in Income Taxes  an interpretation of SFAS No. 109. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with SFAS No. 109, Accounting for Income Taxes. This interpretation prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Fund is currently evaluating the impact of applying the various provisions of FIN 48. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Funds net assets, results of operations and financial statement disclosures.



|3 Estate Freeze
|---------------

Shareholders in Belrose Capital are entitled to restructure their Fund Shares under what is termed an Estate Freeze Election. Under this election, Fund Shares are divided into Preferred Shares and Common Shares. Preferred Shares have a preferential right over the corresponding Common Shares equal to (i) 95% of the original capital contribution made in respect of the undivided Shares from which the Preferred

10

Shares and Common Shares were derived, plus (ii) an annuity priority return equal to 7.75% of the Preferred Shares preferential interest in the original capital contribution of the undivided Fund Shares. The associated Common Shares are entitled to the remaining 5% of the original capital contribution in respect of the undivided Shares, plus any returns thereon in excess of the fixed annual priority of the Preferred Shares. The existence of restructured Fund Shares does not adversely affect Shareholders who do not make an election nor do the restructured Fund Shares have preferential rights to Fund Shares that have not been restructured. Shareholders who divide Fund Shares under this election sacrifice certain rights and privileges that they would otherwise have with respect to the Fund Shares so divided, including redemption rights and voting and consent rights. Upon the twentieth anniversary of the issuance of the associated undivided Fund Shares to the original holders thereof, Preferred and Common Shares will automatically convert into full and fractional undivided Fund Shares.

The allocation of Belrose Capitals net asset value per Share of $115.68 and $108.30 as of September 30, 2006 and December 31, 2005, respectively, between Preferred and Common shares that have been restructured is as follows:

|                     |  | Per Share Value at
|-------------------- |  | ------------------
|                     |  |                   
|                     |  | September 30, 2006
|                     |  |                   
|Date of Contribution |  | Preferred Shares  
|                    
|February 19, 2003    |  | $ 86.41           
|                    

4 Investment Transactions

The following table summarizes the Funds investment transactions, other than short-term obligations, for the nine months ended September 30, 2006 and 2005:

|                                                              |  | Nine Months Ended 
|------------------------------------------------------------- |  | ------------------
|                                                              |  |                   
|Investment Transactions                                       |  | September 30, 2006
|                                                             
|Decreases in investment in Belvedere Capital Fund Company LLC |  | $                 
|Acquisitions of other real estate (1)                         |  | $                 
|Sales of other real estate (2)                                |  | $                 
|Purchases of Partnership Preference Units (3)                 |  | $                 
|Sales of Partnership Preference Units (4)                     |  | $                 
|                                                             

|(1) | On September 20, 2006, Belrose Realty Corporation (Belrose Realty) purchased a direct investment in real property through a wholly owned subsidiary, Bel Marlborough Campus, LLC (Bel Marlborough). Bel Marlborough owns an office campus of approximately 530,000 square feet of rentable space and 126 acres of land. At the date of the transaction, the value of the real property was $135,031,025 and the mortgage loan balance assumed was $62,703,613. Transaction costs incurred of $229,040 were recognized as an unrealized loss upon acquisition.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | In June 2006, Katahdin Property Trust LLC (Katahdin) purchased a multifamily residential property for $29,469,821.                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(2) | In July 2006, Katahdin sold a multifamily residential property for which Belrose Realty recognized a gain of $1,886,961.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|    | In September 2005, Deerfield Property Trust (Deerfield) received compensation for its interest in property management contracts from an affiliate of the minority shareholder of Deerfield in the amount of $2,104,303 and for which Belrose Realty recognized a gain of $834,031. In April 2005, Deerfield sold an industrial distribution property for $3,105,985 for which Belrose Realty recognized a loss of $152,242.                                                                                                                                  
|   
|(3) | Purchases of Partnership Preference Units during the nine months ended September 30, 2006 include Partnership Preference Units purchased from the real estate investment affiliate of another investment fund advised by Boston Management and Research (Boston Management).                                                                                                                                                                                                                                                                                 
|   
|(4) | Sales of Partnership Preference Units for the nine months ended September 30, 2006 and 2005 represent Partnership Preference Units sold to real estate investment affiliates of other investment funds advised by Boston Management for which a net loss of $877,674 and a gain of $323,360 were recognized, respectively.                                                                                                                                                                                                                                   
|   

11



|5 Indirect Investment in the Portfolio
|--------------------------------------

The following table summarizes the Funds investment in Tax-Managed Growth Portfolio (the Portfolio) through Belvedere Capital Fund Company LLC (Belvedere Company) for the nine months ended September 30, 2006 and 2005, including allocations of income, expenses and net realized and unrealized gains (losses) for the respective periods then ended:

|                                                                |  | Nine Months Ended 
|--------------------------------------------------------------- |  | ------------------
|                                                                |  |                   
|                                                                |  | September 30, 2006
|                                                               
|Belvedere Companys interest in the Portfolio (1)               |  | $                 
|The Funds investment in Belvedere Company (2)                  |  | $                 
|Income allocated to Belvedere Company from the Portfolio        |  | $                 
|Income allocated to the Fund from Belvedere Company             |  | $                 
|Expenses allocated to Belvedere Company from the Portfolio      |  | $                 
|Expenses allocated to the Fund from Belvedere Company           |  | $                 
|Net realized gain from investment transactions, securities sold |  |                   
|short and foreign currency transactions allocated to            |  |                   
|Belvedere Company from the Portfolio                            |  | $                 
|Net realized gain from investment transactions, securities sold |  |                   
|short and foreign currency transactions allocated to the        |  |                   
|Fund from Belvedere Company                                     |  | $                 
|Net change in unrealized appreciation (depreciation) of         |  |                   
|investments, securities sold short and foreign currency         |  |                   
|allocated to Belvedere Company from the Portfolio               |  | $                 
|Net change in unrealized appreciation (depreciation) of         |  |                   
|investments, securities sold short and foreign currency         |  |                   
|allocated to the Fund from Belvedere Company                    |  | $                 
|                                                               

|(1) | As of September 30, 2006 and 2005, the value of Belvedere Companys interest in the Portfolio represents 72.6% and 69.3% of the Portfolios net assets, respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | As of September 30, 2006 and 2005, the Funds investment in Belvedere Company represents 13.3% and 13.6% of Belvedere Companys net assets, respectively.            
|   

A summary of the Portfolios Statement of Assets and Liabilities at September 30, 2006, December 31, 2005 and September 30, 2005 and its operations for the nine months ended September 30, 2006, for the year ended December 31, 2005 and for the nine months ended September 30, 2005 follows:

|                                 |  | September 30, 2006 |  | December 31, 2005 |  | September 30, 2005
|-------------------------------- |  | ------------------ |  | ----------------- |  | ------------------
|                                 |  |                   
|Investments, at value            |  | $                  |  | 19,439,239,888    |  | $                 
|Other assets                     |  |                    |  | 78,906,482        |  |                   
|                                
|Total assets                     |  | $                  |  | 19,518,146,370    |  | $                 
|                                
|Collateral for securities loaned |  | $                  |  | 73,528,000        |  | $                 
|Demand note payable              |  |                    |  | -                 |  |                   
|Management fee payable           |  |                    |  | 6,899,225         |  |                   
|Other liabilities                |  |                    |  | 766,434           |  |                   
|                                
|Total liabilities                |  | $                  |  | 81,193,659        |  | $                 
|                                
|Net assets                       |  | $                  |  | 19,436,952,711    |  | $                 
|                                

12

|                                      |  | September 30, 2006 |  | December 31, 2005 |  | September 30, 2005
|------------------------------------- |  | ------------------ |  | ----------------- |  | ------------------
|                                      |  |                   
|Dividends and interest                |  | $                  |  | 265,160,702       |  | $                 
|                                     
|Investment adviser fee                |  | $                  |  | 61,773,044        |  | $                 
|Other expenses                        |  |                    |  | 2,291,366         |  |                   
|Total expense reductions              |  |                    |  | (99)              |  |                   
|                                     
|Net expenses                          |  | $                  |  | 64,064,311        |  | $                 
|                                     
|Net investment income                 |  | $                  |  | 201,096,391       |  | $                 
|Net realized gain from investment     |  |                    |  |                   |  |                   
|transactions, securities sold short   |  |                    |  |                   |  |                   
|and foreign currency transactions     |  |                    |  | 511,100,262       |  |                   
|Net change in unrealized appreciation |  |                    |  |                   |  |                   
|(depreciation) of investments,        |  |                    |  |                   |  |                   
|securities sold short and foreign     |  |                    |  |                   |  |                   
|currency                              |  |                    |  | 697,368,140       |  |                   
|                                     
|Net increase in net assets from       |  |                    |  |                   |  |                   
|operations                            |  | $                  |  | 1,409,564,793     |  | $                 
|                                     

6 Rental Operations

The property held by Bel Marlborough is leased under fixed long-term operating leases. At September 30, 2006, the minimum lease payments expected to be received from leases with lease periods greater than one year are as follows:

Twelve Months Ending September 30,
     
     Amount2007
     
     $
     
     8,472,6662008
     
     
     
     8,085,9642009
     
     
     
     8,157,0022010
     
     
     
     7,826,5592011
     
     
     
     5,744,369Thereafter
     
     
     
     32,781,094$
     
     71,067,654




|7 Interest Rate Swap Agreements
|-------------------------------

Belrose Capital has entered into interest rate swap agreements with Merrill Lynch Capital Services, Inc. to fix the cost of a substantial portion of its borrowings under the Credit Facility and to mitigate in part the impact of interest rate changes on Belrose Capitals net asset value. Under such agreements, Belrose Capital has agreed to make periodic payments at fixed rates in exchange for payments at floating rates. The notional or contractual amounts of these instruments may not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these investments is meaningful only when considered in conjunction with all related assets, liabilities and agreements. Interest rate swap agreements in place at September 30, 2006 and December 31, 2005 are listed below.

|          |  | Notional |  |        |  |                     |  | Initial     |  |             |  | Unrealized Appreciation at
|--------- |  | -------- |  | ------ |  | ------------------- |  | ----------- |  | ----------- |  | --------------------------
|          |  | Amount   |  |        |  |                     |  | Optional    |  | Final       |  |                           
|Effective |  | (000s   |  | Fixed  |  | Floating            |  | Termination |  | Termination |  | September 30,             
|Date      |  | omitted) |  | Rate   |  | Rate                |  | Date        |  | Date        |  | 2006                      
|         
|10/03     |  | $ 31,588 |  | 4.180% |  | LIBOR + 0.30%       |  | 7/09        |  | 6/10        |  | $                         
|10/03     |  | 37,943   |  | 4.160% |  | LIBOR + 0.30%       |  | 11/09       |  | 6/10        |  |                           
|10/03     |  | 83,307   |  | 4.045% |  | LIBOR + 0.30%       |  | -           |  | 6/10        |  |                           
|06/04     |  | 40,000   |  | 4.875% |  | 3 mo. LIBOR + 0.00% |  | -           |  | 6/12        |  |                           
|         
|          |  |          |  |        |  |                     |  |             |  |             |  | $                         
|         

13



|8 Debt
|------

A Credit Facility  In June 2006, Belrose Capital amended its credit arrangement with DrKW Holdings, Inc. to increase the amount of the term loan by $24,000,000 to an aggregate principal amount of $266,500,000. Borrowings under this credit arrangement accrue interest at a rate of one-month LIBOR plus 0.30% per annum. As of September 30, 2006, outstanding borrowings under this credit arrangement totaled $266,500,000.

In June 2006, Belrose Capital amended its credit arrangement with Merrill Lynch Mortgage Capital, Inc. to increase the amount of the revolving loan facility by $60,000,000 to an aggregate principal amount of $242,000,000. Borrowings under this credit arrangement accrue interest at a rate of one-month LIBOR plus 0.38% per annum. A commitment fee of 0.10% per annum is paid on the unused commitment amount. As of September 30, 2006, outstanding borrowings under this credit arrangement totaled $158,000,000.

B Mortgage Notes  In September 2006, a wholly owned subsidiary of Belrose Realty, Bel Marlborough, assumed an existing mortgage note with a principal balance of $62,703,613, secured by the underlying property with a total fair market value of $135,031,025. The mortgage note provides for monthly payments of principal and interest of $351,728, at a fixed interest rate of 5.2075%, with the entire principal balance due at the maturity date, December 1, 2014. As of September 30, 2006 the principal balance of the mortgage note is $62,623,993. Scheduled principal payments of the mortgage note subsequent to September 30, 2006 are as follows:

Twelve Months Ending September 30,
     
     Amount2007
     
     $
     
     936,7752008
     
     
     
     978,2932009
     
     
     
     1,040,3702010
     
     
     
     1,096,6492011
     
     
     
     1,155,972Thereafter
     
     
     
     57,415,934$
     
     62,623,993


During March 2006, a mortgage note in the amount of $6,538,000 was secured for the acquisition of a property by Katahdin. The mortgage note provides for monthly payments of interest of $31,001, at a fixed interest rate of 5.69%, with the entire principal balance due at the maturity date, June 1, 2011.

C Notes Payable  Belrose Capital and the minority shareholder of Katahdin loaned amounts to the Katahdin real estate joint venture to fund the purchases of certain real property. The notes are expected to be repaid with proceeds from sales of real property held by Katahdin. The notes bear interest on the outstanding principal amount at the rate of 8.75% . The entire outstanding principal balance of the notes, plus all accrued unpaid interest thereon is due and payable at maturity, generally one year from the date of inception of each note. All balances and transactions related to the notes payable due to Belrose Capital have been eliminated through consolidation of the financial statements. The principal balances due to Belrose Capital and the minority shareholder of Katahdin at September 30, 2006 amount to $8,733,205 and $2,911,069, respectively. The accrued and unpaid interest at September 30, 2006 due to Belrose Capital and the minority shareholder of Katahdin amount to $62,807 and $20,938, respectively.

D Average Borrowings and Average Interest Rate  For the nine months ended September 30, 2006, the average balance of borrowings under the Credit Facility and mortgage notes payable was approximately $385,200,000 and $249,600,000 with a weighted average interest rate of 5.29% and 6.19%, respectively.

14



|9 Segment Information
|---------------------

Belrose Capital pursues its investment objective primarily by investing indirectly in the Portfolio through Belvedere Company. The Portfolio is a diversified investment company that emphasizes investments in common stocks of domestic and foreign growth companies that are considered by its investment adviser to be high in quality and attractive in their long-term investment prospects. The Funds revenue includes the Funds pro rata share of Belvedere Companys net investment income. Separate from its investment in Belvedere Company, Belrose Capital invests in real estate assets through its subsidiary, Belrose Realty. Belrose Realty invests directly and indirectly in Partnership Preference Units and indirectly in real property through its controlled subsidiaries, Katahdin, Deerfield and Bel Marlborough, and formerly invested in Bel Communities Property Trust (Bel Communities). The Funds revenues from the real estate assets primarily consist of consolidated rental income from Katahdin, Deerfield, Bel Marlborough and Bel Communities (for the period during which Belrose Realty maintained an interest in Bel Communities) and distribution income from Partnership Preference Units.

Belrose Capital evaluates performance of the reportable segments based on the net increase (decrease) in net assets from operations of the respective segment, which includes net investment income (loss), net realized gain (loss) and the net change in unrealized appreciation (depreciation). The Funds Credit Facility borrowings and related interest expense are centrally managed by the Fund. A portion of the Credit Facility borrowings and related interest expense have been allocated to the real estate segment for presentation purposes herein. Credit Facility borrowings allocated to the real estate segment primarily consist of net amounts borrowed to purchase the Funds interest in real estate investments. The Funds interest rate swap agreement balances are disclosed as part of the real estate segment. The accounting policies of the reportable segments are the same as those for Belrose Capital on a consolidated basis. No reportable segments have been aggregated. Reportable information by segment is as follows:

|                           |  | Three Months Ended   |  | Nine Months Ended     
|-------------------------- |  | -------------------- |  | ----------------------
|                           |  |                     
|                           |  | September 30, 2006   |  | September 30, 2005    
|                           |  |                      |  |                       
|Revenues                   |  |                      |  |                       
|The Portfolio*             |  | $                    |  | 5,838,866             
|Real Estate                |  |                      |  | 13,803,487            
|Unallocated                |  |                      |  | 445,676               
|                           |  |                      |  |                       
|Total revenues             |  | $                    |  | 20,088,029            
|                           |  |                      |  |                       
|                          
|Net increase (decrease) in |  |                      |  |                       
|net assets from operations |  |                      |  |                       
|The Portfolio*             |  | $                    |  | 80,608,072            
|Real Estate                |  |                      |  | 3,541,521             
|Unallocated(1)             |  |                      |  | (1,481,762)           
|                           |  |                      |  |                       
|Net increase in net assets |  |                      |  |                       
|from operations            |  | $                    |  | 82,667,831            
|                           |  |                      |  |                       
|                          
|                          
|                           |  | September 30, 2006   |  | December 31, 2005     
|                           |  |                      |  |                       
|Net assets                 |  |                      |  |                       
|The Portfolio*             |  | $      1,869,476,905 |  | $        1,783,532,107
|Real Estate                |  |                      |  | 41,245,854            
|Unallocated(2)             |  |                      |  | (80,903,401)          
|                           |  |                      |  |                       
|Net Assets                 |  | $    1,829,819,358   |  | $                     
|                           |  |                      |  |                       

* Belrose Capital invests indirectly in the Portfolio through Belvedere Company.

15

|(1) | Unallocated amounts pertain to the overall operation of Belrose Capital and do not pertain to either segment. Included in this amount are distribution and servicing fees and unallocated Credit Facility interest expense as follows:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

|                                 |  | Three Months Ended |  | Nine Months Ended 
|-------------------------------- |  | ------------------ |  | ------------------
|                                 |  |                    |  |                   
|                                 |  | September 30, 2006 |  | September 30, 2005
|                                 |  |                    |  |                   
|Distribution and servicing fees  |  | $                  |  | 872,206           
|Credit Facility interest expense |  | $                  |  | 968,970           

|(2) | Amount includes unallocated liabilities, net of unallocated assets. Unallocated liabilities primarily consist of outstanding unallocated Credit Facility borrowings. Such borrowings are used to finance ongoing operations of the Fund and are not allocable to reportable segments. As of September 30, 2006 and December 31, 2005, such borrowings totaled $86,831,458 and $66,644,485, respectively. Unallocated assets represent cash and short-term investments not invested in the Portfolio or real estate assets. As of September 30, 2006 and December 31, 2005, such amounts totaled $6,897,699 and $6,535,618, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   



|10 Contingencies
|----------------

Katahdin became party to a claim arising out of the ordinary course of business during 2005. In June 2006, the claim was settled and Katahdin recognized a loss of approximately $115,000 as a result of the claim.

As part of a legal settlement, the operating partner of Katahdin agreed to make capital improvements to two properties currently held by Katahdin.  The reasonableness of such expenditures will be reviewed by Katahdin's Board.  It is not determinable at this time as to whether costs will be incurred by Katahdin.  However, if costs are incurred by Katahdin, management does not expect that such capital improvements will have a significant impact to the Fund's net asset value.

16

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A).

The information in this report contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements typically are identified by use of terms such as may, will, should, might, expect, anticipate, estimate, and similar words, although some forward-looking statements are expressed differently. The actual results of Belrose Capital Fund LLC (the Fund) could differ materially from those contained in the forward-looking statements due to a number of factors. The Fund undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Factors that could affect the Funds performance include a decline in the U.S. stock markets or in general economic conditions, adverse developments affecting the real estate industry, or fluctuations in interest rates.

The following discussion should be read in conjunction with the Funds unaudited condensed consolidated financial statements and related notes in Item 1 above.

MD&A for the Quarter Ended September 30, 2006 Compared to the Quarter Ended September 30, 2005.

Performance of the Fund.(1)The Funds investment objective is to achieve long-term, after-tax returns for shareholders. Eaton Vance Management (Eaton Vance), as the Funds manager, measures the Funds success in achieving its objective based on the investment returns of the Fund, using the S&P 500 Index as the Funds primary performance benchmark. The S&P 500 Index is a broad-based, unmanaged market index of common stocks commonly used as a measure of U.S. stock market performance. Eaton Vances primary focus in pursuing total return is on the Funds common stock portfolio, which consists of its indirect interest in Tax-Managed Growth Portfolio (the Portfolio). The Fund invests in the Portfolio through its interest in Belvedere Capital Fund Company LLC (Belvedere Company). The Funds performance will differ from that of the Portfolio primarily due to its investments outside the Portfolio. In measuring the performance of the Funds real estate investments, Eaton Vance considers whether, through current returns and changes in valuation, the real estate investments achieve returns that over the long-term exceed the cost of the borrowing incurred to acquire such investments and thereby add to Fund returns. The Fund has entered into interest rate swap agreements to fix the cost of a substantial portion of its borrowings under the Credit Facility (described under "Liquidity and Capital Resources" below) and to mitigate in part the impact of interest rate changes on the Funds net asset value.

The Funds total return was 4.72% for the quarter ended September 30, 2006. This return reflects an increase in the Funds net asset value per share from $110.47 to $115.68 during the period. The total return of the S&P 500 Index was 5.66% over the same period. Last year, the Fund had a total return of 4.51% for the quarter ended September 30, 2005. This return reflected an increase in the Funds net asset value per share from $100.75 to $105.29 during the period. The S&P 500 Index had a total return of 3.60% over the same period.

Performance of the Portfolio.For the quarter ended September 30, 2006, the Portfolio had a total return of 4.57%, which compares to the 5.66% total return of the S&P 500 Index over the same period. An equity rally during the third quarter of 2006 was fueled by a double-digit drop in oil prices and a continued pause in interest rate hikes. Better than expected earnings results, positive consumer trends and encouraging merger and acquisition activity during the quarter also contributed to the rally, despite the existence of housing and economic concerns. During the quarter, large-cap and value investments were clear winners over small-cap and growth investments.

During the quarter, health care, telecommunications and information technology were top performing S&P 500 Index sectors, while the energy and materials sectors were the worst performing sectors. Market leading industries in the third quarter included software, diversified telecommunications and pharmaceuticals. In contrast, internet and catalog retailers and construction industries were among the weakest performing industries.

The Portfolio remained broadly diversified with no significant sector allocation changes during the quarter. The Portfolios underweighting of the strong-performing health care, utilities and telecommunications sectors detracted from relative returns during the quarter. While the Portfolios overweighting of the energy sector remained a positive contributor to its longer-term performance, commodity price declines during the quarter negatively impacted the Portfolios energy

|(1) | Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Total returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. The Portfolios total return for the period reflects the total return of another fund that invests in the Portfolio adjusted for non-Portfolio expenses of that fund. Performance is for the stated time period only and is not annualized; due to market volatility, the Funds current performance may be lower or higher. The performance of the Fund and the Portfolio is compared to that of their benchmark, the S&P 500 Index. It is not possible to invest directly in an Index.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

17

equipment and service holdings. Similarly, while the Portfolios long-term emphasis of the aerospace and defense and the air freight and logistics industries has been beneficial, price weaknesses during the quarter negatively impacted the Portfolios returns. Additionally, the Portfolios underweighted position versus the S&P 500 Index of software and office electronics stocks within the technology sector hindered quarterly results.

The Portfolios performance during the third quarter of 2006 benefited from its overweighting of the strong-performing consumer staples and financials sectors. The Portfolios investments within the household products, capital markets and diversified finance industries also were particularly beneficial during the period. In addition, the strong relative performance of the Portfolios holdings within multi-line retailers and construction stocks contributed positively to returns during the quarter.

Performance of Real Estate Investments.The Funds real estate investments are held through Belrose Realty Corporation (Belrose Realty). As of September 30, 2006, real estate investments included majority interests in two real estate joint ventures (Real Estate Joint Ventures), Deerfield Property Trust (Deerfield) and Katahdin Property Trust, LLC (Katahdin), a wholly owned property (Wholly Owned Property) held by Bel Marlborough Campus, LLC (Bel Marlborough), and a portfolio of income producing preferred equity interests in real estate operating partnerships that are affiliated with and controlled by real estate investment trusts (REITs) that are publicly traded (Partnership Preference Units). Katahdin owns multifamily properties, Deerfield owns industrial distribution properties and Bel Marlborough owns an office campus. As of September 30, 2006, the estimated fair value of the Funds real estate investments represented 27.6% of the Funds total assets on a consolidated basis. After adjusting for the minority interest in Deerfield and Katahdin, the Funds real estate investments represented 33.9% of the Funds net assets as of September 30, 2006.

In September 2006, Belrose Realty acquired a Wholly Owned Property consisting of approximately 530,000 square feet of rentable office space and 126 acres of land in suburban Boston, Massachusetts for a purchase price of approximately $135.0 million. The acquisition was financed through an assumed mortgage loan balance and borrowings under the Funds Credit Facility (described under Liquidity and Capital Resources below). At the time of the transaction, the mortgage loan balance was approximately $62.7 million. Belrose Realty owns this property through its wholly owned subsidiary, Bel Marlborough. Belrose Realty has retained a professional property management company to manage the Wholly Owned Property.

In July 2006, Katahdin sold a property to an unaffiliated third party for approximately $23.4 million, recognizing a gain of approximately $2.7 million on the transaction. Katahdin had acquired a replacement for this sold property in June 2006 for approximately $29.5 million.

During the quarter ended September 30, 2006, rental income from real estate operations was approximately $10.5 million compared to approximately $15.8 million for the quarter ended September 30, 2005, a decrease of $5.3 million or 34%. This decrease in rental income from real estate operations was principally due to Belrose Realtys ownership of interests in fewer multifamily properties in 2006 as a result of its October 2005 sale of its interest in a multifamily Real Estate Joint Venture, Bel Communities Property Trust (Bel Communities), which accounted for 38% of consolidated rental income for the quarter ended September 30, 2005, offset in part by modest increases in the rental income of Katahdin. During the quarter ended September 30, 2005, rental income decreased principally due to Belrose Realtys November 2004 sale of its interest in a Real Estate Joint Venture, Bel Apartment Properties Trust (Bel Apartment), offset in part by the rental income of Deerfield, which was acquired in June 2004.

During the quarter ended September 30, 2006, property operating expenses were approximately $4.5 million compared to approximately $6.5 million for the quarter ended September 30, 2005, a decrease of $2.0 million or 31%. The decrease in property operating expenses was due to the sale of Bel Communities referenced above, offset in part by increases in property operating expenses of Katahdin and Deerfield. Property operating expenses for the quarter ended September 30, 2005 decreased principally due to the sale of Bel Apartment referenced above. For most industrial distribution properties, rent levels are expected to see modest growth over the near term. Boston Management and Research (Boston Management), the Funds investment adviser, expects that improvements in industrial distribution property operating performance will occur over the long term. Improvements in multifamily property operating conditions are being seen in numerous markets around the country, reflecting a better supply/demand balance. Boston Management expects this favorable trend to continue, although higher operating expenses and capital expenditures are expected to offset a part of the improvement in rental income.

During the quarter ended September 30, 2006, the Fund saw net unrealized appreciation of the estimated fair value of its other real estate investments (which include Deerfield, Katahdin and Bel Marlborough) of approximately $0.8 million

18

compared to unrealized appreciation of approximately $9.2 million during the quarter ended September 30, 2005. Net unrealized appreciation of approximately $0.8 million during the quarter ended September 30, 2006 was primarily due to net increases in the estimated fair values of the properties held by Deerfield and Katahdin. Estimated fair values have increased due to both modest growth expected in near-term property earnings and to lower capitalization and discount rates applied in valuing properties. Net unrealized appreciation of approximately $9.2 million during the quarter ended September 30, 2005 was due to increases in the estimated fair values of properties held by Katahdin, Deerfield and Bel Communities.

During the quarter ended September 30, 2006, Belrose Realty sold certain of its Partnership Preference Units for approximately $19.8 million (representing sales to a real estate investment affiliate of another investment fund advised by Boston Management), recognizing a loss of approximately $0.6 million on the transactions. During the quarter ended September 30, 2006, the Fund saw net unrealized appreciation of the estimated fair value of its Partnership Preference Units of approximately $6.1 million compared to net unrealized depreciation of approximately $0.6 million during the quarter ended September 30, 2005. The net unrealized appreciation of approximately $6.1 million during the quarter ended September 30, 2006 consisted of approximately $5.2 million of unrealized appreciation as a result of increases in the per unit values of Partnership Preference Units during the period, and approximately $0.9 million of unrealized appreciation resulting from the recharacterization of previously recorded unrealized depreciation as realized losses due to the sales of Partnership Preference Units. During the quarter ended September 30, 2006, estimated fair values were positively impacted by declining interest rates. The net unrealized depreciation of approximately $0.6 million at September 30, 2005 resulted from decreases in the per unit values of Partnership Preference Units held, due primarily to increasing long-term interest rates.

Distributions from Partnership Preference Units for the quarter ended September 30, 2006 were approximately $3.1 million compared to approximately $1.1 million for the quarter ended September 30, 2005, an increase of $2.0 million or 182%. The increase was principally due to more Partnership Preference Units held on average during the quarter ended September 30, 2006. For the quarter ended September 30, 2005, the increase in distributions was due principally to more Partnership Preference Units held on average, offset in part by lower average distribution rates for the Partnership Preference Units held during the quarter.

Performance of Interest Rate Swap Agreements.For the quarter ended September 30, 2006, net realized and unrealized losses on the Funds interest rate swap agreements totaled approximately $3.8 million, compared to net realized and unrealized gains of approximately $3.9 million for the quarter ended September 30, 2005. Net realized and unrealized losses on swap agreements for the quarter ended September 30, 2006 consisted of $4.5 million of unrealized depreciation due to changes in swap agreement valuations offset in part by $0.7 million of periodic payments received pursuant to outstanding swap agreements (and classified as net realized gains on interest rate swap agreements in the Funds unaudited condensed consolidated financial statements). For the quarter ended September 30, 2005, net realized and unrealized gains on swap agreements consisted of unrealized appreciation of $4.1 million on swap agreement valuation changes offset in part by $0.2 million of swap agreement periodic payments. The negative impact on Fund performance for the quarter ended September 30, 2006 from changes in swap agreement valuations was attributable to a decrease in swap rates during the period. The positive contribution for the quarter ended September 30, 2005 from changes in swap agreement valuations was attributable to an increase in swap rates during the period.

MD&A for the Nine Months Ended September 30, 2006 Compared to the Nine Months Ended September 30, 2005.

Performance of the Fund.The Funds total return was 8.08% for the nine months ended September 30, 2006. This return reflects an increase in the Funds net asset value per share from $108.30 to $115.68 and a distribution of $1.28 per share during the period. The S&P 500 Index had a total return of 8.52% over the same period. Last year, the Fund had a total return of 4.55% for the nine months ended September 30, 2005. This return reflected an increase in the Funds net asset value per share from $102.03 to $105.29 and a distribution of $1.29 per share during the period. The S&P 500 Index had a total return of 2.77% over the same period.

Performance of the Portfolio.For the nine months ended September 30, 2006, the Portfolio had a total return of 7.68%, which compares to the 8.52% total return of the S&P 500 Index over the same period. In the first half of 2006, U.S. equity markets posted mixed results as positive earnings and corporate indicators were offset by economic, inflation and geopolitical concerns. In the third quarter, a continued pause in interest rate hikes and significant energy price declines fueled an equity rally. Better than expected earnings results, healthy consumer trends and increased merger and acquisition activity also positively influenced market activity during the period. During the first three quarters of 2006, style and market capitalization leadership trends remained unchanged from the same period last year as small-cap stocks

19

outperformed large-cap stocks and the performance of value stocks, particularly within the large-cap space, remained ahead of growth stocks.

During the nine months ended September 30, 2006, telecommunications, energy and financials were the top performing S&P 500 Index sectors, while information technology, materials and health care were the worst. Market leading industries in the first nine months of 2006 included diversified telecommunications services, automotive and independent power producers. In contrast, internet and catalog retailers, household durables and diversified consumer service industries were among the weakest performing industries.

The Portfolios sector allocation at September 30, 2006 remained broadly similar to that as of September 30, 2005, with a slight increase to the industrials, consumer discretionary and health care sectors and a slight decrease to the energy and telecommunications sectors. The Portfolios de-emphasis of the stronger-performing telecommunications and utilities sectors coupled with relatively weaker performance of the Portfolios energy and health care stocks were the primary detractors to the Portfolios relative returns versus the S&P 500 Index over the first three quarters of 2006. Sub-par performance of the Portfolios investments in biotechnology and multi-line retail industries also hurt relative returns.

The Portfolios overweighting of the strong-performing consumer staples and financials sectors and de-emphasis of the lagging information technology sector were beneficial to the Portfolio during the period. In addition, the Portfolio benefited from relatively stronger performance of its holdings within the machinery and metals and mining industries.

Performance of Real Estate Investments.During the nine months ended September 30, 2006, rental income from real estate operations was approximately $31.2 million compared to approximately $46.3 million for the nine months ended September 30, 2005, a decrease of $15.1 million or 33%. This decrease in rental income from real estate operations was principally due to Belrose Realtys ownership of interests in fewer multifamily properties in 2006 as a result of its October 2005 sale of its interest in Bel Communities, which accounted for 38% of consolidated rental income for the nine months ended September 30, 2005, offset in part by modest increases in the rental income of Katahdin. For the nine months ended September 30, 2005, rental income from real estate operations decreased principally due to Belrose Realtys sale of its interest in Bel Apartment in November 2004, offset in part by the rental income of Deerfield, which was acquired in 2004.

During the nine months ended September 30, 2006, property operating expenses were approximately $12.5 million compared to approximately $20.6 million for the nine months ended September 30, 2005, a decrease of $8.1 million or 39%. This decrease in property operating expenses was principally due to the sale of Bel Communities referenced above. During the nine months ended September 30, 2005, property operating expenses decreased principally due to Belrose Realtys sale of Bel Apartment referenced above.

The estimated fair value of the real properties indirectly held through Belrose Realty was approximately $549.0 million at September 30, 2006 compared to approximately $385.0 million at December 31, 2005, a net increase of $164.0 million or 43%. This net increase in the estimated fair values of the real properties for the nine months ended September 30, 2006 was principally due to the acquisition of Bel Marlborough and the acquisition by Katahdin of a multifamily property, offset in part by the sale of a multifamily property by Katahdin referenced above, and due to net increases in the estimated fair values in the properties held by Deerfield and Katahdin. Estimated fair values have increased due both to growth expected in near-term property earnings and to lower capitalization and discount rates applied in valuing the properties.

During the nine months ended September 30, 2006, the Fund saw net unrealized appreciation in the estimated fair values of its other real estate investments (which include Deerfield, Katahdin and Bel Marlborough) of approximately $14.3 million compared to approximately $38.4 million of unrealized appreciation for the nine months ended September 30, 2005, a decrease of $24.1 million. Net unrealized appreciation of $14.3 million during the nine months ended September 30, 2006 was due to net increases in the estimated fair values of the properties held by Deerfield and Katahdin. Net unrealized appreciation of $38.4 million during the nine months ended September 30, 2005 was due to increases in the estimated fair values of the properties held by Katahdin, Deerfield and Bel Communities.

During the nine months ended September 30, 2006, Belrose Realty acquired interests in additional Partnership Preference Units (including acquisitions from a real estate investment affiliate of another investment fund advised by Boston Management) for approximately $20.2 million. During the nine months ended September 30, 2006, Belrose Realty also sold certain of its Partnership Preference Units for approximately $27.8 million (representing sales to real estate investment affiliates of other investment funds advised by Boston Management), recognizing a net loss of approximately $0.9 million on the transactions. At September 30, 2006, the estimated fair value of Belrose Realtys Partnership Preference Units was approximately $172.8 million compared to approximately $185.6 million at December 31, 2005, a decrease of $12.8

20

million or 7%. The net decrease in the estimated fair values was principally due to fewer Partnership Preference Units held at September 30, 2006 and decreases in the per unit values of the Partnership Preference Units held. Estimated fair values for Partnership Preference Units were negatively impacted by rising interest rates for the nine months ended September 30, 2006.

The Fund saw net unrealized depreciation in the estimated fair value of its Partnership Preference Units of approximately $4.3 million during the nine months ended September 30, 2006 compared to net unrealized appreciation of approximately $1.0 million for the nine months ended September 30, 2005. The net unrealized depreciation of approximately $4.3 million during the nine months ended September 30, 2006 consisted of approximately $5.3 million of unrealized depreciation as a result of decreases in the per unit values of Partnership Preference Units during the period offset by approximately $1.0 million of unrealized appreciation resulting from the recharacterization of previously recorded unrealized depreciation as realized losses due to the sales of Partnership Preference Units. The net unrealized appreciation of approximately $1.0 million during the first nine months of 2005 consisted of approximately $0.9 million of unrealized appreciation as a result of increases in the per unit values of Partnership Preference Units held during the period and approximately $0.1 million of unrealized appreciation resulting from the recharacterization of previously recorded unrealized depreciation as realized losses due to the sales of Partnership Preference Units.

Distributions from Partnership Preference Units for the nine months ended September 30, 2006 were approximately $9.8 million compared to approximately $3.4 million for the nine months ended September 30, 2005, an increase of $6.4 million or 188%. The increase was principally due to more Partnership Preference Units held on average during the nine months ended September 30, 2006. Distributions from Partnership Preference Units decreased during the first nine months of 2005 principally due to lower average distribution rates during the nine months ended September 30, 2005.

Performance of Interest Rate Swap Agreements.For the nine months ended September 30, 2006, net realized and unrealized gains on the Funds interest rate swap agreements totaled approximately $1.7 million, compared to net realized and unrealized gains of approximately $2.7 million for the nine months ended September 30, 2005. Net realized and unrealized gains on swap agreements for the nine months ended September 30, 2006 consisted of $0.3 million of unrealized appreciation due to changes in swap agreement valuations and $1.4 million of periodic payments received pursuant to outstanding swap agreements (and classified as net realized gains on interest rate swap agreements in the Funds unaudited condensed consolidated financial statements). For the nine months ended September 30, 2005, net realized and unrealized gains on swap agreements consisted of unrealized appreciation of $4.1 million on swap agreement valuation changes offset in part by $1.4 million of swap agreement periodic payments. For the nine months ended September 30, 2006, swap rates for swaps with maturities comparable to the Funds swaps were modestly higher, resulting in a small positive impact to the Fund from changes in swap agreement valuations. The positive contribution to Fund performance for the nine months ended September 30, 2005 from changes in swap agreement valuations was attributable to an increase in swap rates during the period for swaps with maturities comparable to those of the Funds swaps.



|Liquidity and Capital Resources.
|--------------------------------

Outstanding Borrowings.The Fund has entered into credit arrangements with DrKW Holdings, Inc. and Merrill Lynch Mortgage Capital, Inc. (collectively, the Credit Facility) primarily to finance the Funds real estate investments. The Fund will continue to use the Credit Facility for such purpose in the future. The Credit Facility may also be used for other purposes, including any liquidity needs of the Fund. In the future, the Fund may increase the size of the Credit Facility (subject to lender consent) and the amount of outstanding borrowings thereunder. As of September 30, 2006, the Fund had outstanding borrowings of $424.5 million and unused loan commitments of $84.0 million under the Credit Facility.

The Fund has entered into interest rate swap agreements with respect to a substantial portion of its borrowings under the Credit Facility. Pursuant to these agreements, the Fund makes periodic payments to the counterparty at predetermined fixed rates in exchange for floating-rate payments that fluctuate with one-month and three-month LIBOR. During the terms of the outstanding interest rate swap agreements, changes in the underlying values of the agreements are recorded as unrealized appreciation or depreciation. As of September 30, 2006, the accumulated unrealized appreciation related to the interest rate swap agreements was approximately $6.5 million. As of December 31, 2005, the accumulated unrealized appreciation related to the interest rate swap agreements was approximately $6.1 million.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk.The Funds primary exposure to interest rate risk arises from its real estate investments that are financed by the Fund with floating rate borrowings under the Credit Facility and by fixed-rate secured mortgage debt

21

obligations of Deerfield, Katahdin and Bel Marlborough. Partnership Preference Units are fixed rate instruments whose values will generally decrease when interest rates rise and increase when interest rates fall. The interest rates on borrowings under the Credit Facility are reset at regular intervals based on one-month and three-month LIBOR. The Fund has entered into interest rate swap agreements to fix the cost of a substantial portion of its borrowings under the Credit Facility and to mitigate in part the impact of interest rate changes on the Funds net asset value. Under the terms of the interest rate swap agreements, the Fund makes cash payments at fixed rates in exchange for floating rate payments that fluctuate with one-month and three-month LIBOR. The Funds interest rate swap agreements will generally increase in value when interest rates rise and decrease in value when interest rates fall. In the future, the Fund may use other interest rate hedging arrangements (such as caps, floors and collars) to fix or limit borrowing costs. The use of interest rate hedging arrangements is a specialized activity that can expose the Fund to significant loss.

The following table summarizes the contractual maturities and weighted-average interest rates associated with the Funds significant non-trading financial instruments. The Fund has no market risk sensitive instruments held for trading purposes. This information should be read in conjunction with Notes 7 and 8 to the Funds unaudited condensed consolidated financial statements in Item 1 above.



|Interest Rate Sensitivity
Cost, Principal (Notional) Amount
by Contractual Maturity and Callable Date
for the Twelve Months Ended September 30,*
|------------------------------------------------------------------------------------------------------------------------------------------------

EstimatedFair Valueas ofSeptember2007
     
     2008
     
     2009
     
     2010
     
     2011
     
     Thereafter
     
     Total
     
     30, 2006Rate sensitive liabilities:Long-term debt:Fixed-rate mortgages
     
     $2,558,440
     
     $2,695,189
     
     $2,858,088
     
     $3,021,110
     
     $125,581,445
     
     $170,777,407
     
     $307,491,679
     
     $314,100,000Average interest rate
     
     5.53%
     
     5.53%
     
     5.53%
     
     5.53%
     
     6.68%
     
     5.55%
     
     6.01%Variable-rate CreditFacility
     
     
     
     
     
     
     
     $424,500,000
     
     
     
     
     
     $424,500,000
     
     $424,500,000Average interest rate
     
     
     
     
     
     
     
     5.65%
     
     
     
     
     
     5.65%Rate sensitive derivativefinancial instruments:Pay fixed/receive variableinterest rateswap agreements
     
     
     
     
     
     
     
     $152,838,000
     
     
     
     $40,000,000
     
     $192,838,000
     
     $6,490,128Average pay rate
     
     
     
     
     
     
     
     4.10%
     
     
     
     4.88%
     
     4.26%Average receive rate
     
     
     
     
     
     
     
     5.62%
     
     
     
     5.37%
     
     5.57%Rate sensitiveinvestments:Fixed-rate PartnershipPreference Units:Camden Operating, L.P.,7% Series B CumulativeRedeemable PerpetualPreferred Units,Callable 12/2/08,Current Yield: 7.32%
     
     
     
     
     
     $9,967,838
     
     
     
     
     
     
     
     $9,967,838
     
     $9,803,100


22

EstimatedFair Valueas ofSeptember2007
     
     2008
     
     2009
     
     2010
     
     2011
     
     Thereafter
     
     Total
     
     30, 2006Colonial Realty LimitedPartnership, 7.25% SeriesB CumulativeRedeemable PerpetualPreferred Units,Callable 8/24/09,Current Yield: 7.45%
     
     
     
     
     
     $19,419,240
     
     
     
     
     
     
     
     $19,419,240
     
     $19,476,000Essex Portfolio, L.P.,7.875% Series BCumulative RedeemablePreferred Units,Callable 12/31/09,Current Yield: 7.82%
     
     
     
     
     
     
     
     $26,643,900
     
     
     
     
     
     $26,643,900
     
     $26,429,655Essex Portfolio, L.P.,7.875% Series DCumulative RedeemablePreferred Units,Callable 7/28/10,Current Yield: 7.76%
     
     
     
     
     
     
     
     $12,642,150
     
     
     
     
     
     $12,642,150
     
     $12,683,050Kilroy Realty, L.P.,7.45% Series ACumulative RedeemablePreferred Units,Callable 9/30/09,Current Yield: 7.52%
     
     
     
     
     
     $10,444,812
     
     
     
     
     
     
     
     $10,444,812
     
     $10,406,676Liberty Property LimitedPartnership, 7.45% SeriesB CumulativeRedeemable PreferredUnits,Callable 8/31/09,Current Yield: 7.37%
     
     
     
     
     
     $16,678,810
     
     
     
     
     
     
     
     $16,678,810
     
     $16,425,500MHC Operating LimitedPartnership, 8.0625%Series D CumulativeRedeemable PerpetualPreference Units,Callable 3/24/10,Current Yield: 8.11%
     
     
     
     
     
     
     
     $25,186,560
     
     
     
     
     
     $25,186,560
     
     $24,860,000PSA InstitutionalPartners, L.P., 6.4%Series NN CumulativeRedeemable PerpetualPreferred Units,Callable 3/17/10,Current Yield: 7.00%
     
     
     
     
     
     
     
     $34,377,134
     
     
     
     
     
     $34,377,134
     
     $32,675,500


23

|                        |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  | Estimated  
|----------------------- |  | ---- |  | ---- |  | ---- |  | ---------- |  | ----------- |  | ---------- |  | ----------- |  | -----------
|                        |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  | Fair Value 
|                        |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  | as of      
|                        |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  | September  
|                        |  | 2007 |  | 2008 |  | 2009 |  | 2010       |  | 2011        |  | Thereafter |  | Total       |  | 30, 2006   
|                       
|                       
|PSA Institutional       |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|Partners, L.P., 7.25%   |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|Series J Cumulative     |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|Redeemable Perpetual    |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|Preferred Units,        |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|Callable 5/9/11,        |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|Current Yield: 7.18%    |  |      |  |      |  |      |  |            |  | $10,000,000 |  |            |  | $10,000,000 |  | $10,096,000
|                       
|Vornado Realty, L.P.,   |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|6.75% Series            |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|D-14 Cumulative         |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|Redeemable Preferred    |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|Units,                  |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|Callable 9/9/10,        |  |      |  |      |  |      |  |            |  |             |  |            |  |             |  |            
|Current Yield: 6.78%(1) |  |      |  |      |  |      |  | $9,458,459 |  |             |  |            |  | $9,458,459  |  | $9,948,488 

*    The amounts listed reflect the Funds positions as of September 30, 2006. The Funds current positions may differ.

(1)  Belrose Realtys interest in these Partnership Preference Units is held through Belvorn Holdings LLC.

Item 4. Controls and Procedures.

Fund Governance.As the Funds manager, the complete and entire management, control and operation of the Fund are vested in Eaton Vance. The Funds Chief Executive Officer and Chief Financial Officer intend to report to the Board of Directors of Eaton Vance, Inc. (the sole trustee of Eaton Vance) any significant deficiency in the design or operation of internal control over financial reporting which could adversely affect the Funds ability to record, process, summarize and report financial data, and any fraud, whether or not material, that involves management or other employees who have a significant role in the Funds internal control over financial reporting.

Disclosure Controls and Procedures.Eaton Vance, as the Funds manager, evaluated the effectiveness of the Funds disclosure controls and procedures (as defined by Rule 13a-15(e) of the 1934 Act) as of the end of the period covered by this report, with the participation of the Funds Chief Executive Officer and Chief Financial Officer. The Funds disclosure controls and procedures are the controls and other procedures that the Fund designed to ensure that it records, processes, summarizes and reports in a timely manner the information that the Fund must disclose in reports that it files or submits to the Securities and Exchange Commission. Based on that evaluation, the Funds Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2006, the Funds disclosure controls and procedures were effective.

Internal Control Over Financial Reporting.There were no changes in the Funds internal control over financial reporting that occurred during the quarter ended September 30, 2006 that have materially affected or are reasonably likely to materially affect the Funds internal control over financial reporting.

24



|PART II. OTHER INFORMATIONItem 1. Legal Proceedings.
|----------------------------------------------------

Although in the ordinary course of business the Fund and its directly and indirectly controlled subsidiaries may become involved in legal proceedings, the Fund is not aware of any material pending legal proceedings to which they are subject.



|Item 1A. Risk Factors.
|----------------------

There have been no material changes from risk factors as previously disclosed in the Funds Form 10-K for the year ended December 31, 2005 in response to Item 1A to Part 1 of Form 10-K. As described in Item 2 above, Belrose Realty acquired a Wholly Owned Property in September 2006. The Wholly Owned Property is subject to substantially the same risks as investing in Real Estate Joint Ventures and Net Leased Property, which are described in Item 7A of Part II of the Funds Form 10-K for the year ended December 31, 2005. The Wholly Owned Property is valued in the same manner as Net Leased Property, as described in Item 7(e) of Part II of the Funds Form 10-K for the year ended December 31, 2005.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

As described in the Funds Annual Report on Form 10-K for the year ended December 31, 2005, shares of the Fund may be redeemed by Fund shareholders on any business day. Redemptions are met at the net asset value per share of the Fund. The right to redeem is available to all shareholders and all outstanding Fund shares are eligible for redemption (except for shares subject to an estate freeze election as described in Item 5 of the Funds Annual Report on Form 10-K for the year ended December 31, 2005). During each month in the quarter ended September 30, 2006, the total number of shares redeemed and the average price paid per share were as follows:

Total No. of Shares
     
     Average Price PaidMonth Ended
     
     Redeemed(1)
     
     Per ShareJuly 31, 2006
     
     4,956.677
     
     $107.04August 31, 2006
     
     22,570.388
     
     $110.86September 30, 2006
     
     79,002.369
     
     $113.63Total
     
     106,529.434
     
     $112.97


|(1) | All shares redeemed during the periods were redeemed at the option of shareholders pursuant to the Funds redemption policy. The Fund has not announced any plans or programs to repurchase shares other than at the option of shareholders.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

No matters were submitted to a vote of security holders during the quarter ended September 30, 2006.

Item 5. Other Information.

None.

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Item 6. Exhibits.

(a) The following is a list of all exhibits filed as part of this Form 10-Q:

|31.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
|---- | -----------------------------------------------------------------------------------------------------------------------
|    
|31.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
|    
|32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002
|    
|32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002
|    

|(b) | Reports on Form 8-K: None.
|--- | --------------------------
|   

26



|SIGNATURES
|----------

Pursuant to the requirements 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 officer on November 9, 2006.

BELROSE CAPITAL FUND LLC/s/ Michelle A. GreenMichelle A. GreenChief Financial Officer(Duly Authorized Officer andPrincipal Financial Officer)


27



|EXHIBIT INDEX
|-------------

|31.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
|---- | -----------------------------------------------------------------------------------------------------------------------
|    
|31.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
|    
|32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002
|    
|32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002
|    

28