** **

**U.S.SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20459**

** **

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**FORM 10–QSB**

**(Mark One)**

 

| **ý**                                             | ** ** | **QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934**        |
|--------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------|
| ** **                                             | ** ** | ** **                                                                                    |
| **For the  quarterly period ended September 30, 2004** |
| ** **                                             | ** ** | ** **                                                                                    |
| **OR**                                                 |
| ** **                                             | ** ** | ** **                                                                                    |
| **o**                                                  | ** ** | **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 0–20273**

 

**1999Broadway Associates Limited Partnership**

(Exactname of small business issuer as specified in its charter)

 
| **Delaware**                                                                     | ** ** | **04–6613783**                   |
|----------------------------------------------------------------------------------|------------|---------------------------------------|
| (State  or other jurisdiction of incorporation or organization)                  |       | (I.R.S.  Employer Identification No.) |
|                                                                             |       |                                  |
| **7 Bulfinch Place, Suite 500, P.O. Box 9507,  Boston, Massachusetts**           | ** ** | **02114–9507**                   |
| (Address  of principal executive office)                                         |       | (Zip  Code)                           |
|                                                                             |       |                                  |
| Registrant’s  telephone number, including area code **(617) 570–4600** |

 

Indicate by check mark whether the Registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theRegistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days. Yes ý    No o

 

 

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**1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP**

 

**FORM 10–QSB SEPTEMBER 30, 2004**

** **

**PART 1 – FINANCIAL INFORMATION**

 

***Item 1. Consolidated Financial Statements***

 

***Consolidated Balance Sheets (Unaudited)***

 

***(In Thousands, Except Unit Data)***

 
| ** **                                                                                        | ** **   | **September 30, 2004** | ** **   | **December 31, 2003** | *** *** |
|---------------------------------------------------------------------------------------------------|--------------|------------------------|--------------|-----------------------|--------------|
| *** ***                                                                                      | *** *** | *** ***           | *** *** |
| *Assets*                                                                                          |         |                   |         |                  |         |
|                                                                                              |         |                   |         |                  |         |
| Real estate, at cost:                                                                             |         |                   |         |                  |         |
|                                                                                              |         |                   |         |                  |         |
| Land                                                                                              |         | $                      | 1,700        |                  | $            | 1,700 |   |
| Buildings and improvements, net of accumulated depreciation of  $29,548 (2004) and $28,019 (2003) |         | 25,582                 |         | 26,828                |         |
|                                                                                              |         |                   |         |                  |         |
|                                                                                              |         | 27,282                 |         | 28,528                |         |
| Other Assets:                                                                                     |         |                   |         |                  |         |
|                                                                                              |         |                   |         |                  |         |
| Cash and cash equivalents                                                                         |         | 2,022                  |         | 1,619                 |         |
| Restricted cash                                                                                   |         | 3,099                  |         | 2,840                 |         |
| Other assets                                                                                      |         | 428                    |         | 531                   |         |
| Deferred rent receivable                                                                          |         | 3,065                  |         | 2,749                 |         |
| Deferred costs, net of accumulated amortization of $3,298 (2004) and  $2,952 (2003)               |         | 2,153                  |         | 2,345                 |         |
|                                                                                              |         |                   |         |                  |         |
| Total assets                                                                                      |         | $                      | 38,049       |                  | $            | 38,612 |   |
|                                                                                              |         |                   |         |                  |         |
| *Liabilities and Partners’ Deficit*                                                          |         |                   |         |                  |         |
|                                                                                              |         |                   |         |                  |         |
| Liabilities:                                                                                      |         |                   |         |                  |         |
|                                                                                              |         |                   |         |                  |         |
| Mortgage loan payable                                                                             |         | $                      | 48,441       |                  | $            | 48,774 |   |
| Accrued interest payable                                                                          |         | 322                    |         | 335                   |         |
| Accounts payable and accrued expenses                                                             |         | 1,188                  |         | 1,449                 |         |
| Deferred lease termination fee                                                                    |         | 165                    |         | 413                   |         |
| Payable to related party                                                                          |         | 231                    |         | 301                   |         |
| Security deposits                                                                                 |         | 113                    |         | 110                   |         |
|                                                                                              |         |                   |         |                  |         |
| Total liabilities                                                                                 |         | 50,460                 |         | 51,382                |         |
|                                                                                              |         |                   |         |                  |         |
| Partners’ Deficit:                                                                           |         |                   |         |                  |         |
|                                                                                              |         |                   |         |                  |         |
| Investor limited partners’ deficit (460 units outstanding)                                   |         | (10,738                | )            | (11,086               | )            |
| General Partner’s deficit                                                                    |         | (1,673                 | )            | (1,684                | )            |
|                                                                                              |         |                   |         |                  |         |
| Total Partners’ Deficit                                                                      |         | (12,411                | )            | (12,770               | )            |
|                                                                                              |         |                   |         |                  |         |
| Total Liabilities and Partners’ Deficit                                                      |         | $                      | 38,049       |                  | $            | 38,612 |   |

 

See notes to consolidated financial statements.

 

 

2

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**1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP**

 

**FORM 10–QSB SEPTEMBER 30, 2004**

 

***Consolidated Statements of Operations(Unaudited)***

 

***(In Thousands, Except Unit Data)***

 
| ** **                                 | ** ** | **For the Nine Months Ended** | *** *** |
|--------------------------------------------|------------|-------------------------------|--------------|
| ** **                                 | ** ** | **September 30, 2004**        | ** **   | **September 30, 2003** | *** *** |
|                                       |       |                          |         |
| *Revenues:*                                |       |                          |         |   |   |
|                                       |       |                          |         |   |   |
| Rental                                     |       | $                             | 9,050        |   | $ | 8,617 |   |
| Other                                      |       | 175                           |         | 247 |   |
|                                       |       |                          |         |   |   |
| Total revenues                             |       | 9,225                         |         | 8,864 |   |
|                                       |       |                          |         |   |   |
| *Expenses:*                                |       |                          |         |   |   |
|                                       |       |                          |         |   |   |
| Real estate taxes                          |       | 658                           |         | 630 |   |
| Payroll and payroll expense reimbursements |       | 529                           |         | 509 |   |
| Operating expenses                         |       | 486                           |         | 486 |   |
| Repairs and maintenance                    |       | 814                           |         | 815 |   |
| Utilities                                  |       | 649                           |         | 634 |   |
| Management and other fees                  |       | 616                           |         | 598 |   |
| General and administrative costs           |       | 133                           |         | 97 |   |
| Insurance                                  |       | 175                           |         | 189 |   |
| Depreciation                               |       | 1,529                         |         | 1,611 |   |
| Amortization                               |       | 320                           |         | 295 |   |
|                                       |       |                          |         |   |   |
| Total expenses                             |       | 5,909                         |         | 5,864 |   |
|                                       |       |                          |         |   |   |
| Operating income                           |       | 3,316                         |         | 3,000 |   |
|                                       |       |                          |         |   |   |
| Non–operating income (expense):       |       |                          |         |   |   |
| Interest income                            |       | 16                            |         | 19 |   |
| Interest expense                           |       | (2,973                        | )            | (2,988 | ) |
|                                       |       |                          |         |   |   |
| Net income                                 |       | $                             | 359          |   | $ | 31 |   |
|                                       |       |                          |         |   |   |
| Net income allocated:                      |       |                          |         |   |   |
|                                       |       |                          |         |   |   |
| General Partner                            |       | $                             | 11           |   | $ | 1 |   |
|                                       |       |                          |         |   |   |
| Investor Limited Partners                  |       | 348                           |         | 30 |   |
|                                       |       |                          |         |   |   |
|                                       |       | $                             | 359          |   | $ | 31 |   |
|                                       |       |                          |         |   |   |
| Net income allocated per unit:             |       |                          |         |   |   |
|                                       |       |                          |         |   |   |
| Investor Limited Partners                  |       | $                             | 756.52       |   | $ | 65.22 |   |

 

See notes to consolidated financial statements.

 

 

3

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**1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP**

 

**FORM 10–QSB SEPTEMBER 30, 2004**

 

***Consolidated Statements of Operations(Unaudited)***

 

***(In Thousands, Except Unit Data)***

 
| ** **                                 | ** ** | **For the Three Months Ended** | *** *** |
|--------------------------------------------|------------|--------------------------------|--------------|
| ** **                                 | ** ** | **September 30, 2004**         | ** **   | **September 30, 2003** | *** *** |
|                                       |       |                           |         |
| *Revenues:*                                |       |                           |         |   |   |
|                                       |       |                           |         |   |   |
| Rental                                     |       | $                              | 3,018        |   | $ | 2,896 |   |
| Other                                      |       | 69                             |         | 91 |   |
|                                       |       |                           |         |   |   |
| Total revenues                             |       | 3,087                          |         | 2,987 |   |
|                                       |       |                           |         |   |   |
| *Expenses:*                                |       |                           |         |   |   |
|                                       |       |                           |         |   |   |
| Real estate taxes                          |       | 219                            |         | 210 |   |
| Payroll and payroll expense reimbursements |       | 168                            |         | 159 |   |
| Operating expenses                         |       | 150                            |         | 158 |   |
| Repairs and maintenance                    |       | 252                            |         | 275 |   |
| Utilities                                  |       | 210                            |         | 220 |   |
| Management and other fees                  |       | 203                            |         | 196 |   |
| General and administrative costs           |       | 32                             |         | 48 |   |
| Insurance                                  |       | 58                             |         | 50 |   |
| Depreciation                               |       | 516                            |         | 561 |   |
| Amortization                               |       | 117                            |         | 114 |   |
|                                       |       |                           |         |   |   |
| Total expenses                             |       | 1,925                          |         | 1,991 |   |
|                                       |       |                           |         |   |   |
| Operating income                           |       | 1,162                          |         | 996 |   |
|                                       |       |                           |         |   |   |
| Non–operating income (expense):       |       |                           |         |   |   |
| Interest income                            |       | 7                              |         | 5 |   |
| Interest expense                           |       | (996                           | )            | (1,004 | ) |
|                                       |       |                           |         |   |   |
| Net income (loss)                          |       | $                              | 173          |   | $ | (3 | ) |
|                                       |       |                           |         |   |   |
| Net income (loss) allocated:               |       |                           |         |   |   |
|                                       |       |                           |         |   |   |
| General Partners                           |       | $                              | 5            |   | $ | — |   |
|                                       |       |                           |         |   |   |
| Investor Limited Partners                  |       | 168                            |         | (3 | ) |
|                                       |       |                           |         |   |   |
|                                       |       | $                              | 173          |   | $ | (3 | )  |
| Net income (loss) allocated per unit:      |       |                           |         |   |   |
|                                       |       |                           |         |   |   |
| Investor Limited Partners                  |       | $                              | 365.22       |   | $ | (6.52 | ) |

 

See notes to consolidated financial statements.

 

 

4

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**1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP**

 

**FORM 10–QSB SEPTEMBER 30, 2004**

 

***Consolidated Statement of Partners’ Deficit(Unaudited)***

 

***(In Thousands,Except Unit Data)***

 
| *** ***                      | *** *** | **Units of Limited Partnership Interest** | ** ** | **Investor Limited Partners’ Deficit** | ** ** | **General Partner’s Deficit** | ** ** | **Total** | *** *** |
|-----------------------------------|--------------|-------------------------------------------|------------|---------------------------------------------|------------|------------------------------------|------------|-----------|--------------|
|                              |         |                                      |       |
| Balance – January 1, 2004    |         | 460                                       |       | $                                           | (11,086    | )                                  | $          | (1,684    | )            | $ | (12,770 | ) |
|                              |         |                                      |       |                                        |       |                               |       |      |         |
| Net income                        |         | —                                    |       | 348                                         |       | 11                                 |       | 359       |         |
|                              |         |                                      |       |                                        |       |                               |       |      |         |
| Balance – September 30, 2004 |         | 460                                       |       | $                                           | (10,738    | )                                  | $          | (1,673    | )            | $ | (12,411 | ) |
|                                   |              |                                           |            |                                             |            |                                    |            |           |              |  |  |  |  |

 

Seenotes to consolidated financial statements.

 

 

5

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**1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP**

 

**FORM 10–QSB SEPTEMBER 30, 2004**

 

***Consolidated Statements of Cash Flows(Unaudited)***

 

***(In Thousands)***

 
| ** **                                                                          | ** ** | **For the Nine Months Ended** | *** *** |
|-------------------------------------------------------------------------------------|------------|-------------------------------|--------------|
| ** **                                                                          | ** ** | **September 30, 2004**        | ** **   | **September 30, 2003** | *** *** |
| ** **                                                                          | ** ** | ** **                    | *** *** |
| *Cash Flows from Operating Activities:*                                             |       |                          |         |   |   |
|                                                                                |       |                          |         |   |   |
| Net income                                                                          |       | $                             | 359          |   | $ | 31 |   |
| Adjustments to reconcile net income to net cash provided by operating  activities:  |       |                          |         |   |   |
| Depreciation and amortization                                                       |       | 1,875                         |         | 1,932 |   |
| Amortization of deferred lease termination fee                                      |       | (248                          | )            | (247 | ) |
| Deferred rent receivable                                                            |       | (316                          | )            | (321 | ) |
| Changes in assets and liabilities:                                                  |       |                          |         |   |   |
| Other assets                                                                        |       | 103                           |         | 163 |   |
| Accrued interest payable                                                            |       | (13                           | )            | (13 | ) |
| Accounts payable, accrued expenses, payable to related party and  security deposits |       | (328                          | )            | (164 | ) |
|                                                                                |       |                          |         |   |   |
| Net cash provided by operating activities                                           |       | 1,432                         |         | 1,381 |   |
|                                                                                |       |                          |         |   |   |
| *Cash Flows from Investing Activities:*                                             |       |                          |         |   |   |
|                                                                                |       |                          |         |   |   |
| Additions to buildings and improvements                                             |       | (284                          | )            | (686 | ) |
| Additions to restricted cash                                                        |       | (1,758                        | )            | (1,643 | ) |
| Restricted cash released                                                            |       | 1,499                         |         | 1,905 |   |
| Deferred costs                                                                      |       | (153                          | )            | (396 | ) |
|                                                                                |       |                          |         |   |   |
| Net cash used in investing activities                                               |       | (696                          | )            | (820 | ) |
|                                                                                |       |                          |         |   |   |
| *Cash Flows from Financing Activities:*                                             |       |                          |         |   |   |
|                                                                                |       |                          |         |   |   |
| Principal payments on mortgage loan                                                 |       | (333                          | )            | (317 | ) |
|                                                                                |       |                          |         |   |   |
| Cash used in financing activities                                                   |       | (333                          | )            | (317 | ) |
|                                                                                |       |                          |         |   |   |
| Net Increase in Cash and Cash Equivalents                                           |       | 403                           |         | 244 |   |
|                                                                                |       |                          |         |   |   |
| Cash and Cash Equivalents, Beginning of Period                                      |       | 1,619                         |         | 2,292 |   |
|                                                                                |       |                          |         |   |   |
| Cash and Cash Equivalents, End of Period                                            |       | $                             | 2,022        |   | $ | 2,536 |   |
|                                                                                |       |                          |         |   |   |
| Supplemental Disclosure of Cash Flow Information:                                   |       |                          |         |   |   |
| Cash Paid For Interest                                                              |       | $                             | 2,960        |   | $ | 2,975 |   |

 

See notes to consolidatedfinancial statements.

 

 

6

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**1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP**

 

**FORM 10–QSB SEPTEMBER 30, 2004**

** **

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

** **

1.             ***General***

 

Theaccompanying consolidated financial statements reflect the accounts of 1999Broadway Associates Limited Partnership (the “Investor Partnership”), 1999Broadway Partnership (the “Operating Partnership”) and 1999 Broadway LLC (the “OperatingCompany”).  The Investor Partnership, theOperating Partnership and the Operating Company are collectively referred to asthe “Partnerships”.  These consolidatedfinancial statements, footnotes and discussions should be read in conjunctionwith the consolidated financial statements, related footnotes and discussionscontained in the Investor Partnership’s Annual Report on Form 10–KSB for theyear ended December 31, 2003.

 

Thefinancial information contained herein is unaudited.  In the opinion of management, all adjustmentsnecessary for a fair presentation of such financial information have beenincluded.  All adjustments are of anormal recurring nature.  The balancesheet at December 31, 2003 was derived from audited financial statements atsuch date.

 

Theresults of operations for the nine and three months ended September 30, 2004and 2003 are not necessarily indicative of the results to be expected for thefull year.

 

*Reclassification*

 

Certainreclassifications have been made to the 2003 balances to conform to the 2004presentation.

 

2.             ***Related Party Transactions***

 

ThePartnership has incurred charges and made commitments to companies affiliatedby common ownership and management with Winthrop Financial Associates, ALimited Partnership, the managing general partner of the Investor Partnership(the “General Partner”).  Related partytransactions with the General Partner and its affiliates include the following:

 

a.                                       The Partnershipaccrues to an affiliate of the General Partner an annual property managementfee equal to 5% of cash receipts.  Forthe nine months ended September 30, 2004 and 2003, management fees of $436,000and $428,000, respectively, were incurred.

 

b.                                      The Partnershippays or accrues to the General Partner an annual partnership administration andinvestor service fee, as provided for in the partnership agreement, of$100,000, which, since 1990, has been increased annually by 6% to its presentlevel of approximately $240,000 per annum. Fees of $180,000 and $170,000 were paid or accrued during the periodsended September 30, 2004 and 2003, respectively.

 

c.                                       The Partnershippays or accrues to an affiliate of the General Partner a constructionmanagement fee equal to 5% of the aggregate cost of each applicableconstruction project.  Fees of $14,000and $33,000 were incurred during the nine months ended September 30, 2004 and2003, respectively, and have been capitalized to the cost of buildings andimprovements.

 

 

7

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3.             ***Allocation of Loss andDistribution of Cash Flow***

 

In accordance with thepartnership agreement losses are allocated 1% to the General Partner and 99% tothe limited partners.  Net income isallocated 3% to the General Partner and 97% to the limited partners.  Cash flow is distributed 99% to the limitedpartners and 1% to the General Partner until the limited partners have receivedan amount equal to an annual 6% per annum noncumulative, noncompounded returnon their invested capital and the balance, if any, 97% to the limited partners,and 3% to the General Partner.

 

4.             ***Segment Information***

 

The Partnership has tworeportable segments, the Office Tower and the Garage.  The Partnership evaluates performance basedon net operating income, which is income before depreciation, amortization,interest and non–operating items.

 

Segment information for thenine months ended September 30, 2004 and 2003 is shown in the tables below (inthousands).  The “Other” column includespartnership administrative items and income and expense not allocated to areportable segment.

 

 
|                          |   | **Office Tower** | ** ** | **Parking Garage** | ** ** | **Other** | ** ** | **Total** |   |
|-------------------------------|--------|------------------|------------|--------------------|------------|-----------|------------|-----------|--------|
| 2004                          |   |             |       |               |       |      |       |      |   |
|                          |   |             |       |               |       |      |       |      |   |
| Rental income                 |   | $                | 9,050      |               | $          | —    |       | $         | — |   | $ | 9,050 |   |
| Other income                  |   | 31               |       | 144                |       | —    |       | 175       |   |
| Interest income               |   | 16               |       | —             |       | —    |       | 16        |   |
| Interest expense              |   | 2,881            |       | 92                 |       | —    |       | 2,973     |   |
| Depreciation and amortization |   | 1,814            |       | 35                 |       | —    |       | 1,849     |   |
| Segment profit (loss)         |   | 545              |       | 17                 |       | (203      | )          | 359       |   |
| Total assets                  |   | 37,169           |       | 880                |       | —    |       | 38,049    |   |
| Capital expenditures          |   | 284              |       | —             |       | —    |       | 284       |   |
|                          |   |             |       |               |       |      |       |      |   |
| 2003                          |   |             |       |               |       |      |       |      |   |
|                          |   |             |       |               |       |      |       |      |   |
| Rental income                 |   | $                | 8,617      |               | $          | —    |       | $         | — |   | $ | 8,617 |   |
| Other income                  |   | 54               |       | 193                |       | —    |       | 247       |   |
| Interest income               |   | 17               |       | —             |       | 2         |       | 19        |   |
| Interest expense              |   | 2,894            |       | 94                 |       | —    |       | 2,988     |   |
| Depreciation and amortization |   | 1,871            |       | 35                 |       | —    |       | 1,906     |   |
| Segment profit (loss)         |   | 162              |       | 64                 |       | (195      | )          | 31        |   |
| Total assets                  |   | 36,666           |       | 926                |       | 1,088     |       | 38,680    |   |
| Capital expenditures          |   | 686              |       | —             |       | —    |       | 686       |   |
|                               |        |                  |            |                    |            |           |            |           |        |  |  |  |  |  |

 

 

 

8

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***Item 2.******Management’sDiscussion and Analysis or Plan of Operation***

 

The matters discussed in this Form 10–QSBcontain certain forward–looking statements and involve risks and uncertainties(including changing market conditions, competitive and regulatory matters,etc.) detailed in the disclosures contained in this Form 10–QSB and otherfilings with the Securities and Exchange Commission made by the Registrant fromtime to time. The discussion of the Registrant’s liquidity, capital resourcesand results of operations, including forward–looking statements pertaining tosuch matters, does not take into account the effects of any changes to theRegistrant’s operations. Accordingly, actual results could differ materiallyfrom those projected in the forward–looking statements as a result of a numberof factors, including those identified herein.

 

*Liquidity and Capital Resources*

 

The Registrant, through its effectively 99.9%ownership interest in 1999 Broadway LLC (the “Operating Company”), owns a 42–storyoffice tower located in Denver, Colorado together with a parking garage locatedone and one–half blocks northeast of the office tower (collectively, the “Property”).The Operating Company generates rental revenue from the Property and isresponsible for the Property’s operating expenses as well as its administrativecosts.

 

The Registrant’s level of liquidity based oncash and cash equivalents increased by $403,000 for the nine months endedSeptember 30, 2004, as compared to December 31, 2003. The increase is due to$1,432,000 of net cash provided by operating activities, partially offset by$696,000 of cash used in investing activities and $333,000 of cash used forprincipal payments on the mortgage loan (financing activities). Net cash usedin investing activities consisted of a $259,000 increase in restricted cash,$284,000 of cash used for improvements to real estate, primarily tenantimprovements, and $153,000 of cash expended on leasing costs and commissions. TheProperty is 92% leased as of September 30, 2004 as compared to 87% at September30, 2003. At September 30, 2004, the Registrant had $2,022,000 in cash and cashequivalents, of which approximately $1,709,000 was invested primarily in moneymarket mutual funds.

 

The Property has a heavy concentration oftenants in the technology and telecommunications industries, both of which havebeen experiencing severe decline. Notably, Lucent Technologies, which leases inexcess of 10% of the Property, has vacated its space and is marketing it forsublease.  Lucent’s lease expires on December 31, 2005 and Lucentcontinues to make required lease payments. Lucent has been experiencingfinancial difficulties for the past few years and it is possible that if thesefinancial difficulties continue Lucent could stop making lease payments. Further,Encoda (formerly JDS Columbine) has placed five floors of its space in thesublease market, which accounts for approximately 14% of the Property. Encoda’slease expires in 2008 and Encoda continues to make required lease payments. Becauseof the recent decline in the Denver real estate market, the Registrant may beunable to find a new tenant or tenants at rental rates sufficient to generatecash flow in excess of its debt service obligations.

 

The Registrant’s only significant criticalaccounting policy relates to the evaluation of the fair value of real estate. TheRegistrant evaluates the need for an impairment loss on its real estate assetswhen indicators of impairment are present and the undiscounted cash flows arenot sufficient to recover the asset’s carrying amount. The impairment loss ismeasured by comparing the fair value of the asset to its carrying amount. Theevaluation of the fair value of real estate is an estimate that is susceptibleto change and actual results could differ from those estimates.

 

 

9

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The sufficiency of existing liquid assets tomeet future liquidity and capital expenditure requirements is directly relatedto the level of capital expenditures required at the Property to adequatelymaintain the physical assets and the other operating needs of the OperatingCompany. Such assets are currently thought to be sufficient for any near–termneeds of the Operating Company. The Registrant anticipates spending anadditional $590,000 for capital and tenant improvements to the Property for theremainder of the year. As of September 30, 2004, the Registrant made nodistributions to the partners.

 

The Registrant could be affected by decliningeconomic conditions as a result of various factors that affect the real estatebusiness including the financial condition of tenants, competition, andincreased operating costs.

 

At this time, it appears that the originalinvestment objective of capital growth from the inception of the Registrantwill not be attained and that the limited partners will not receive a completereturn of their invested capital. The extent to which invested capital isrefunded to the limited partners is dependent upon the performance of theProperty and the market in which it is located.

 

None of the recently issued accountingstandards had an effect on the Registrant’s consolidated financial statements.

 

*Results of Operations*

 

Net income for the nine months endedSeptember 30, 2004 was $359,000 as compared to a net income of $31,000 for thenine months ended September 30, 2003. The increase in net income was primarilydue to an increase in operating income. Operating results, before non–operatingincome (expense) increased by $316,000 for the nine months ended September 30,2004, as compared to 2003, due to an increase in revenue of $361,000, which waspartially offset by an increase in expenses of $45,000. Operating results,before non–operating income (expense) increased by $166,000 for the threemonths ended September 30, 2004 as compared to 2003.

 

Revenue increased by $361,000 for the ninemonths ended September 30, 2004, as compared to 2003, due to an increase inrental income of $433,000, which was partially offset by a decrease in otherincome of $72,000. Rental income increased due to an increase in rental ratesand occupancy. Other income decreased due to a decrease in volume of otherbillable services provided by the Property, including the Garage operation.

 

Expenses increasedby $45,000 for the nine months ended September 30, 2004, as compared to 2003,primarily due to increases in all expenses other than insurance, depreciation,and repairs and maintenance.

 

 

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*Quantitativeand Qualitative Disclosures of Market Risk*

 

The Registrant does not have any financialinstruments that would expose it to market risk associated with the risk ofloss arising from adverse changes in market rates and prices. The Registrant’smortgage note payable at September 30, 2004 is at a fixed rate of interest.

 

***Item 3. Controls andProcedures***

 

The Registrant’s management, with theparticipation of the Registrant’s Chief Executive Officer and Chief FinancialOfficer, has evaluated the effectiveness of the Registrant’s disclosurecontrols and procedures (as such term is defined in Rules 13a–15(e) under theSecurities Exchange Act of 1934, as amended) as of the end of the periodcovered by this report.Based on such evaluation, the Registrant’s ChiefExecutive Officer and Chief Financial Officer have concluded that, as of theend of such period, the Registrant’s disclosure controls and procedures areeffective.

 

There have not been any changes in theRegistrant’s internal control over financial reporting (as defined in Rule 13a–15(f)under the Securities and Exchange Act of 1934, as amended) during the fiscalquarter to which this report relates that have materially affected, or arereasonably likely to materially affect, the Registrant’s internal control overfinancial reporting.

 

 

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***Part II – Other Information***

 

***Item 6. Exhibits***

 

Exhibits required by Item601 of Regulation S–B are filed herewith and are listed in the attached ExhibitIndex.

 

 

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**SIGNATURES**

 

Pursuant to the requirements of theSecurities and Exchange Act of 1934, the Registrant has duly caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized.

 

 
|                           | **1999 BROADWAY ASSOCIATES  LIMITED PARTNERSHIP** |
|--------------------------------|---------------------------------------------------|
|                           |                                              |   |
|                           | BY:                                               | WINTHROP FINANCIAL  ASSOCIATES, A LIMITED PARTNERSHIP MANAGING GENERAL PARTNER |
|                           |                                              |   |
|                           | BY:                                               | /s/ Michael L. Ashner |
|                           |                                              | Michael L. Ashner |
|                           |                                              | Chief Executive Officer |
|                           |                                              |   |
|                           | BY:                                               | /s/ Thomas Staples |
|                           |                                              | Thomas Staples |
|                           |                                              | Chief Financial Officer |
|                           |                                              |   |
| DATED:  November 10, 2004 |                                              |

 

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*Exhibit Index*

 
| **Exhibit** | ** **                                                                                                                                                                             | ** ** | ** ** |
|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|
|        |                                                                                                                                                                                   |       |       |
| 31.1        | Chief Executive Officer’s  Certification, pursuant to Section 302 of the Sarbanes–Oxley Act of 2002.                                                                         |       |       |
|        |                                                                                                                                                                                   |       |       |
| 31.2        | Chief Financial Officer’s  Certification, pursuant to Section 302 of the Sarbanes–Oxley Act of 2002.                                                                         |       |       |
|        |                                                                                                                                                                                   |       |       |
| 32          | Certification of Chief  Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section  1350, as adopted pursuant to Section 906 of the Sarbanes–Oxley Act of 2002. |       |       |

 

 

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