UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from _____ to _____
Commission file number: 0-13329
HUTTON/CONAM REALTY INVESTORS 4
Exact name of Registrant as specified in its charter
California 11-2685746
State or other jurisdiction of
incorporation or organization I.R.S. Employer Identification No.
Attention: Andre Anderson
3 World Financial Center, 29th Floor,
New York, New York 10285
Address of principal executive offices zip code
Registrant's telephone number, including area code: (212) 526-3237
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
Title of Class
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (X)
Documents Incorporated by Reference:
Portions of Prospectus of the Registrant dated January 13, 1984 (included in
Amendment No. 1 to Registration Statement No. 2-84863, filed January 13, 1984)
are incorporated by reference into Part III of this report.
Portions of Parts I, II, III and IV are incorporated by reference to the
Partnership's Annual Report to Unitholders for the year ended December 31,
1995.
PART I
Item 1. Business
General Development of Business
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Hutton/ConAm Realty Investors 4 (the "Registrant" or the "Partnership") is a
California limited partnership of which RI 3-4 Real Estate Services Inc. ("RI
3-4 Services," formerly Hutton Real Estate Services VIII, Inc.), a Delaware
corporation, and ConAm Property Services IV, Ltd., a California limited
partnership ("ConAm Services"), are the general partners (together, the
"General Partners").
Commencing January 13, 1984, the Registrant began offering through E.F. Hutton
& Company Inc., an affiliate of the Registrant ("Hutton"), up to a maximum of
130,000 units of limited partnership interest (the "Units") at $500 per Unit.
Investors who purchased the Units (the "Limited Partners") are not required to
make any additional capital contributions. The Units were registered under the
Securities Act of 1933, as amended (the "Act"), under Registration Statement
No. 2-84863, which Registration Statement was declared effective on January 13,
1984. The offering of Units was terminated on October 11, 1984. Upon
termination of the offering, the Registrant had accepted subscriptions for
128,110 Units for an aggregate of $64,055,000.
Narrative Description of Business
- ---------------------------------
The Registrant is engaged in the business of acquiring, operating and holding
for investment multifamily residential properties which by virtue of their
location and design and the nature of the local real estate market have the
potential for long-term capital appreciation and generation of current income.
All of the proceeds available for investment in real estate were originally
invested in three residential apartment properties and three limited
partnerships, each of which owns a specified property. Funds held as a working
capital reserve are invested in bank certificates of deposit, unaffiliated
money market funds or other highly liquid short-term investments where there is
appropriate safety of principal in accordance with the Registrant's investment
objectives and policies.
The Registrant's principal investment objectives with respect to its interests
in real property are:
(1) capital appreciation;
(2) distributions of net cash from operations attributable to rental income;
and
(3) preservation and protection of capital.
Distributions of net cash from operations will be the Registrant's objective
during its operational phase, while preservation and appreciation of capital
continues to be the Registrant's longer term objectives. The attainment of the
Registrant's objectives will depend on many factors, including future economic
conditions in the United States as a whole and, in particular, in the
localities in which the Registrant's properties are located, especially with
regard to achievement of capital appreciation.
From time to time the Registrant expects to sell its real property interests
taking into consideration such factors as the amount of appreciation in value,
if any, to be realized and the possible risks of continued ownership. In
consideration of these factors and improving market conditions the General
Partners have commenced marketing certain of the properties for sale. See Item
7. No property will be sold, financed or refinanced by the Registrant without
the agreement of both General Partners. Proceeds from any future sale,
financing or refinancing of properties will not be reinvested and may be
distributed to the General Partners and Limited Partners (sometimes referred to
together herein as the "Partners"), so that the Registrant will, in effect, be
self-liquidating. If deemed necessary, the Registrant may retain a portion of
the proceeds from any sale, financing or refinancing as capital reserves. As
partial payment for properties sold, the Registrant may receive purchase mo ney
obligations secured by mortgages or deeds of trust. In such cases, the amount
of such obligations will not be included in Net Proceeds From Sale or
Refinancing (distributable to the Partners) until and only to the extent the
obligations are realized in cash, sold or otherwise liquidated.
Originally, the Registrant acquired six residential apartment complexes
(collectively, the "Properties"), either directly or through investments in
limited partnerships or joint ventures. Two of these, Trails at Meadowlakes
Apartments and Cypress Lakes Apartments were sold on July 20, 1995. As of
December 31, 1995, the Registrant had interests in the Properties as follows:
(1) Pelican Landing, a 204-unit apartment complex located in Clearwater,
Florida; (2) Village at the Foothills II, a 120-unit apartment complex located
in Tucson, Arizona; (3) River Hill Apartments, a 192-unit apartment complex
located in the Las Colinas area of Irving, Texas; (4) Shadowood Village, a
110-unit apartment complex located in Jacksonville, Florida. For further
information on each of the Properties, see Item 2 of this report and Note 4 to
the Consolidated Financial Statements incorporated herein by reference to the
Partnership's Annual Report to Unitholders for the year ended December 31,
1995, which i s included as an exhibit under Item 14. Reference is made to
Item 7 of this report for a more detailed discussion of the Trails at
Meadowlakes and Cypress Lakes sales.
Competition
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The Registrant's real property investments are subject to competition from
similar types of properties in the vicinities in which they are located and
such competition has increased since the Registrant's investment in the
Properties due principally to the addition of newly-constructed apartment
complexes offering increased residential and recreational amenities. The
Properties have also been subject to competition from condominiums and
single-family properties, especially during periods of low mortgage interest
rates. The Registrant competes with other real estate owners and developers in
the rental and leasing of its Properties by offering competitive rental rates
and, if necessary, leasing incentives. Such competition may affect the
occupancy levels and revenues of the Properties. The occupancy levels at the
Properties in Arizona and Florida reflect some seasonality, which is also
reflected in the markets. In some cases, the Registrant may compete with other
partnerships affili ated with either General Partner of the Registrant.
For a discussion of current market conditions in each of the areas where the
Partnership's Properties are located, see Item 2 below.
Employees
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The Registrant has no employees. General services are performed by RI 3-4
Services, ConAm Services, ConAm Management Corporation ("ConAm Management"), an
affiliate of ConAm Services, as well as Service Data Corporation and First Data
Investor Services Group, both unaffiliated companies. The Registrant has
entered into management agreements pursuant to which ConAm Management provides
management services with respect to the Properties. First Data Investor
Services Group has been retained by the Registrant to provide all accounting
and investor communication functions, while Service Data Corporation provides
transfer agent services. See Item 13 for a further description of the service
and management agreements between the Registrant and affiliated entities.
Item 2. Properties
Below is a description of the Properties and a discussion of current market
conditions in each of the areas where the Properties are located. For
information on the purchase of the Properties, reference is made to Note 4 to
the Consolidated Financial Statements in the Partnership's Annual Report to
Unitholders for the year ended December 31, 1995, which is filed as an exhibit
under Item 14. Average occupancy rates and appraised values of the
Partnership's real estate investments are incorporated by reference to the
Partnership's Annual Report to Unitholders.
River Hill Apartments - Irving, Texas
Situated approximately 15 miles northwest of Dallas, this 192-unit apartment
complex is located in the Las Colinas area of Irving. Limited new construction
and continuing population growth have allowed a general recovery in the
multifamily housing market in this area during the past few years. The Las
Colinas submarket reported average occupancy of 97% as of the third quarter of
1995, compared to 96% a year earlier, and area apartment complexes averaged
rental rate increases of 5% during 1995. These favorable market conditions
have resulted in an increase in the pace of new construction of multifamily
properties. Approximately 3,900 units have been approved for construction in
the Las Colinas submarket with approximately 1,200 units currently under
construction. While absorption in the market remains strong, demand for units
is not expected to keep pace with the new construction. As a result, the
property is expected to experience increasingly competitive market conditions.
Howe ver, a two-year building moratorium instituted in the market during 1995
should limit construction once the permitted projects are completed. Given
favorable market conditions, particularly in the Irving, Texas area, the
General Partners intend to begin marketing River Hill Apartments for sale.
There can be no assurances that a sale will be completed or that any particular
price for the property can be obtained. One factor which could hinder the
Partnership's ability to sell River Hill and the ultimate sales value of the
property are defects related to the original design and construction of the
property. The Partnership favorably settled claims against several parties
related to the defects in April 1991 and used the settlement proceeds to
correct the defective work, as previously disclosed. Nevertheless, the
presence of these original structural problems may have an adverse impact on
the Partnership's sales efforts.
Shadowood Village - Jacksonville, Florida
This 110-unit apartment complex is situated in southeast Jacksonville, in the
Baymeadows/Deerwood community. Market conditions in the Southeast submarket of
Jacksonville remain competitive, reflecting the lingering effects of prior
overbuilding, much of which was concentrated in this area. The use of rental
concessions has diminished in recent years, and average rental rates in the
Southeast submarket increased 1.7% from the second quarter of 1994 to the
second quarter of 1995. Average occupancy increased from 93.3% to 94.3%
during the same period. Construction of new units, relatively dormant in 1992
and 1993, has picked up since 1994, with 373 units permitted in 1994 and 593
units permitted as of June 30, 1995. The area's strong population and job
growth, however, are expected to absorb the new supply.
Village at the Foothills II - Tucson, Arizona
This 120-unit apartment community is situated in the prestigious "foothills"
section of Tucson. Village at the Foothills II competes with a number of
apartment complexes and condominium developments within the Tucson area.
Tucson's economy began to weaken as population and job growth slowed during
1995. Despite the economic slowdown, construction of multifamily properties
has increased significantly. As of the third quarter of 1995, 1,123 units were
under construction in the Catalina Foothills submarket with an additional 656
units not yet begun. These units are being added to the 7,226 completed units
in the market. There are an additional seven projects planned for the Catalina
Foothills market although all of these projects may not proceed to
constructions. In addition, the multifamily market has been unfavorably
impacted by a decline in interest rates which has made home ownership a viable
alternative for renters. As a result, vacancy rates are beginning to rise and
increas es in rental rates are moderating. A local survey of metropolitan
Tucson conducted in the fourth quarter of fiscal 1995 showed an average
occupancy rate of 92% among multifamily properties with five or more units,
down from 96% at the same period in 1994.
Pelican Landing - Clearwater, Florida
This 204-unit apartment complex is situated in southeast Clearwater in the
Tampa Bay Area. Overall occupancy in the Clearwater market was 97% in the
third quarter of 1995, compared with 96% in the third quarter of 1994. While
rental rates in the overall market declined by approximately 3% from 1994 to
1995, rates in the submarket where the Partnership's property is located
increased by approximately 3% from 1994 to 1995. It is not expected that there
will be much new construction in the market as most areas are built-up. The
minimal new construction coupled with continuing population growth are expected
to result in sustained strength in market conditions.
Item 3. Legal Proceedings
The Registrant is not subject to, nor is any of the Properties the subject of,
any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
During the fourth quarter of the year ended December 31, 1995, no matter was
submitted to a vote of security holders through the solicitation of proxies or
otherwise.
PART II
Item 5. Market for the Partnership's Limited Partnership Units and Related
Security Holder Matters
As of December 31, 1995, the number of Unitholders of record was 7,116.
No established public trading market has developed for the Units, and it is not
anticipated that such a market will develop in the future.
Distributions of Net Cash Flow From Operations, when made, are paid on a
quarterly basis, with distributions generally occurring approximately 45 days
after the end of each quarter. Such distributions have been made primarily
from net operating income with respect to the Registrant's investment in the
Properties and from interest on short-term investments, and partially from
excess cash reserves. Information on cash distributions paid by the
Partnership for the past two years is incorporated by reference to the
Partnership's Annual Report to Unitholders for the year ended December 31,
1995, which is filed as an exhibit under Item 14. The level of future
distributions will be evaluated on a quarterly basis and will depend on the
Partnership's operating results and future cash needs. Reference is made to
Item 7 for a discussion of the General Partners' expectations for future cash
distributions.
Item 6. Selected Financial Data
Incorporated by reference to the Partnership's Annual Report to Unitholders for
the year ended December 31, 1995, which is filed as an exhibit under Item 14.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
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At December 31, 1995, the Partnership had cash and cash equivalents of
$2,436,356, which were invested in unaffiliated money market funds, compared to
cash of $3,234,383 at December 31, 1994. The decrease is primarily
attributable to cash flow used for mortgage principal payments and
distributions exceeding the cash provided by operating activities and net sale
proceeds. The Partnership expects sufficient cash flow to be generated from
operations to meet its current operating expenses.
On July 20, 1995, the Partnership sold Trails at Meadowlakes and Cypress Lakes
for $8,940,000 and $8,825,000, respectively, to an institutional buyer. The
Partnership received net proceeds of $17,551,351 from the transaction of which
$5,057,952, representing outstanding principal and interest, was used to fully
satisfy the Partnership's mortgage obligation on Trails at Meadowlakes. On
August 22, 1995, the Partnership paid a special cash distribution of
$14,252,238 or $111.25 per Unit to the limited partners. The special
distribution was comprised of net proceeds from the sale of Trails at
Meadowlakes and Cypress Lakes and Partnership cash reserves. These sales were
primarily the reason behind decreases in investments in real estate, mortgage
payable and security deposits from December 31, 1994 to December 31, 1995.
Also contributing to the decline in investments in real estate was a reduction
in the carrying value of River Hill Apartments based upon management's
assessment of the estimated fair market value of the property. The
determination of the estimated fair market value of the property was based upon
the most recent appraisal of the property, which is conducted annually.
The General Partners reinstated quarterly cash distributions beginning with the
1995 second quarter distribution, paid in August. The fourth quarter
distribution, in the amount of $480,412 or $3.75 per Unit, was paid to limited
partners on February 7, 1996. Future cash distributions, if any, will be
determined on a quarterly basis and will be based on cash flow generated by the
Partnership.
During the remainder of 1996, the General Partners intend to implement an
extensive improvement program at Pelican Landing and Shadowood to upgrade the
properties. This program is intended to maintain the properties' position
within their respective markets, which are growing increasingly competitive
with the addition of new apartment properties. This is particularly true in
the Tucson and Jacksonville markets where Village at the Foothills II and
Shadowood Village, respectively, are located. It is also hoped that these
improvements will allow for greater increases in rental rates, thereby
improving each property's revenue and value, and making them better positioned
for eventual sale. It is possible that cash from reserves may be required to
fund a portion of distributions during 1996 as a result of the capital
expenditures required.
Given favorable market conditions, particularly in the Irving, Texas area, the
General Partners intend to begin marketing River Hill Apartments for sale.
There can be no assurances that a sale will be completed or that any particular
price for the property can be obtained.
On March 15, 1996, based upon, among other things, the advice of Partnership
counsel, Skadden, Arps, Slate, Meagher & Flom, the General Partners adopted a
resolution that states, among other things, if a Change of Control (as defined
below) occurs, the General Partners may distribute the Partnership's cash
balances not required for its ordinary course day-to-day operations. "Change
of Control" means any purchase or offer to purchase more than 10% of the Units
that is not approved in advance by the General Partners. In determining the
amount of the distribution, the General Partners may take into account all
material factors. In addition, the Partnership will not be obligated to make
any distribution to any partner and no partner will be entitled to receive any
distribution until the General Partners have declared the distribution and
established a record date and distribution date for the distribution. The
Partnership filed a Form 8-K disclosing this resolution on March 21, 1996.
Results of Operations
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1995 versus 1994
Partnership operations for the year ended December 31, 1995 resulted in net
income of $3,259,624, compared with net income of $984,628 for the year ended
December 31, 1994. The increase in net income is attributable to the
$2,854,884 gain recognized on the sale of Trails at Meadowlakes and Cypress
Lakes, partially offset by a decrease in rental income and the $477,170 loss
recognized on the write-down of River Hill Apartments. Excluding the gain
recognized on the sale of the properties, income from operations was down for
1995 compared to 1994, primarily as a result of the sale of Trails at
Meadowlakes and Cypress Lakes, write-down of River Hill Apartments, and, to a
lesser extent, from an increase in repairs and maintenance expenses at three of
the remaining properties and higher insurance expense.
Rental income for the year ended December 31, 1995 was $6,351,434, compared
with $7,552,784 for the year ended December 31, 1994. The decrease in 1995
reflects lower revenues primarily due to the sale of Trails at Meadowlakes and
Cypress Lakes, partially offset by increased rental income at the four
remaining properties. Interest income for the year ended December 31, 1995 was
$245,330, compared with $79,860 in 1994. The increase in 1995 is due primarily
to increased available cash balances resulting from the suspension of cash
distributions beginning in the third quarter of 1994, and higher interest rates
in 1995.
Total expenses for the year ended December 31, 1995 were $6,192,024, compared
with $6,648,016 for 1994. The decrease in 1995 reflects a decrease in interest
expense, depreciation and property operating expenses. All three expense
categories declined primarily as a result of the sale of Trails at Meadowlakes
and Cypress Lakes. Partially offsetting the reduction in property operating
expenses due to the sales, was the $477,170 loss on the write-down of River
Hill Apartments and an increase in repairs and maintenance at three of the
remaining properties and insurance expense. General and administrative
expenses for 1995 increased from 1994 as a result of increases in audit and
other partnership administration expenses.
1994 versus 1993
Partnership operations for the year ended December 31, 1994 resulted in net
income of $984,628, compared with net income of $723,510 for the year ended
December 31, 1993. The increase in net income is primarily attributable to an
increase in rental income.
Rental income for the year ended December 31, 1994 was $7,552,784, compared
with $7,249,001 for the year ended December 31, 1993. The 4% increase in 1994
reflects higher revenues at all six properties due to rental rate increases
instituted during the past year. Interest income for the year ended December
31, 1994 was $79,860, compared with $50,212 in 1993. The increase in 1994 is
due primarily to higher Partnership cash balances and higher interest rates.
Property operating expenses for the year ended December 31, 1994 were
$3,927,435, compared with $3,860,345 in 1993. The increase is primarily
attributable to expenditures related to utilities and general repairs at the
properties. Total expenses for the year ended December 31, 1994 were
$6,648,016, compared with $6,575,703 for 1993. All components of total
expenses remained relatively in line with 1993 levels.
The average occupancy levels at each of the properties for the years ended
December 31, 1995, 1994 and 1993 were as follows:
Twelve Months Ended December 31,
Property 1995 1994 1993
Pelican Landing 97% 97% 96%
Village at the Foothills II 95% 95% 95%
River Hill Apartments 96% 96% 96%
Shadowood Village 95% 96% 96%
Item 8. Financial Statements and Supplementary Data
The financial statements are incorporated by reference to the Partnership's
Annual Report to Unitholders for the year ended December 31, 1995, which is
filed as an exhibit under Item 14. Supplementary Data is incorporated by
reference to pages F-1 to F-4 of this report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Registrant has no officers or directors. RI 3-4 Services and ConAm
Services, the co-General Partners of the Registrant, jointly manage and control
the affairs of the Registrant and have general responsibility and authority in
all matters affecting its business.
RI 3-4 Services
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RI 3-4 Services (formerly Hutton Real Estate Services VIII, Inc.) is a Delaware
corporation formed on October 29, 1982, and is an affiliate of Lehman Brothers
Inc. See the section captioned "Certain Matters Involving Affiliates of RI
3-4 Services" for a description of the Hutton Group's acquisition by Shearson
Lehman Brothers, Inc. ("Shearson") and the subsequent sale of certain of
Shearson's domestic retail brokerage and asset management businesses to Smith
Barney, Harris Upham & Co. Incorporated ("Smith Barney"), which was followed by
a change in name to RI 3-4 Services.
Certain officers and directors of RI 3-4 Services are now serving (or in the
past have served) as officers or directors of entities which act as general
partners of a number of real estate limited partnerships which have sought
protection under the provisions of the Federal Bankruptcy Code. The
partnerships which have filed bankruptcy petitions own real estate which has
been adversely affected by the economic conditions in the markets in which the
real estate is located and, consequently, the partnerships sought the
protection of the bankruptcy laws to protect the partnerships' assets from loss
through foreclosure.
The names and ages of, as well as the positions held by, the directors and
executive officers of RI 3-4 Services are set forth below. There are no family
relationships between any executive officers or directors.
Name Office
Paul L. Abbott Director, President, Chief Financial
Officer and Chief Executive Officer
Donald E. Petrow Vice President
Kate D. Hobson Vice President
Paul L. Abbott, 50, is a Managing Director of Lehman Brothers. Mr. Abbott
joined Lehman Brothers in August 1988, and is responsible for investment
management of residential, commercial and retail real estate. Prior to joining
Lehman Brothers, Mr. Abbott was a real estate consultant and a senior officer
of a privately held company specializing in the syndication of private real
estate limited partnerships. From 1974 through 1983, Mr. Abbott was an officer
of two life insurance companies and a director of an insurance agency
subsidiary. Mr. Abbott received his formal education in the undergraduate and
graduate schools of Washington University in St. Louis.
Donald E. Petrow, 39, is a First Vice President of Lehman Brothers Inc. Since
March 1989, he has been responsible for the investment management and
restructuring of various investment portfolios, including but not limited to,
federal insured mortgages, tax exempt bonds, multifamily and commercial real
estate. From November 1981 to February 1989, Mr. Petrow, as Vice President of
Lehman, was involved in investment banking activities relating to partnership
finance and acquisitions. Prior to joining Lehman, Mr. Petrow was employed in
accounting and equipment leasing firms. Mr. Petrow holds a B.S. Degree in
accounting from Saint Peters College and an M.B.A in Finance from Pace
University.
Kate D. Hobson, 29, is an Assistant Vice President of Lehman Brothers and has
been a member of the Diversified Asset Group since 1992. Prior to joining
Lehman Brothers, Ms. Hobson was associated with Cushman & Wakefield serving as
a real estate accountant from 1990 to 1992. Prior to that, Ms. Hobson was
employed by Cambridge Systematics, Inc. as a junior land planner. Ms. Hobson
received a B.A. degree in sociology from Boston University in 1988.
ConAm Services
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ConAm Services is a California limited partnership organized on August 30,
1982. The sole general partner of ConAm Services is Continental American
Development, Inc. ("ConAm Development"). The names and ages of, as well as the
positions held by, the directors and executive officers of ConAm Development
are set forth below. There are no family relationships between any executive
officers or directors.
Name Office
Daniel J. Epstein President and Director
E. Scott Dupree Vice President/Director
Robert J. Svatos Vice President/Director
Ralph W. Tilley Vice President
J. Bradley Forrester Vice President
Daniel J. Epstein, 56, has been the President and a Director of ConAm
Development and ConAm Management (or its predecessor firm) and a general
partner of Continental American Properties, Ltd. ("ConAm"), an affiliate of
ConAm Services, since their inception. Prior to that time Mr. Epstein was Vice
President and a Director of American Housing Guild, which he joined in 1969.
At American Housing Guild, he was responsible for the formation of the
Multi-Family Division and directed its development and property management
activities. Mr. Epstein holds a Bachelor of Science degree in Engineering from
the University of Southern California.
E. Scott Dupree, 45, is a Vice President and general counsel of ConAm
Management responsible for negotiation, documentation, review and closing of
acquisition, sale and financing proposals. Mr. Dupree also acts as principal
legal advisor on general legal matters ranging from issues and contracts
involving the management company to supervision of litigation and employment
issues. Prior to joining ConAm Management in 1985, he was corporate counsel to
Trusthouse Forte, Inc., a major international hotel and restaurant corporation.
Mr. Dupree holds a B.A. from United States International University and a Juris
Doctorate degree from the University of San Diego.
Robert J. Svatos, 37, is a Vice President and Chief Financial Officer of ConAm
Management, and has been with the company since 1988. His responsibilities
include the accounting, treasury and data processing functions of the
organization. Mr. Svatos is part of the firm's due diligence team, analyzing a
broad range of projects for ConAm Management's fee client base. Prior to
joining ConAm Management, he was the Chief Financial Officer for AmeriStar
Financial Corporation, a nationwide mortgage banking firm. Mr. Svatos holds an
M.B.A. in Finance from the University of San Diego and a Bachelor of Science
degree in Accounting from the University of Illinois. Mr. Svatos is a
Certified Public Accountant.
Ralph W. Tilley, 41, is a Vice President and Treasurer of ConAm Management. He
is responsible for the financial aspects of syndications and acquisitions, and
ConAm Management's asset management portfolio and risk management activities.
Prior to joining ConAm Management in 1980, he was a senior accountant with KPMG
Peat Marwick, specializing in real estate. He holds a Bachelor of Science
degree in Accounting from San Diego State University and is a Certified Public
Accountant.
J. Bradley Forrester, 38, currently serves as a Senior Vice President of ConAm
Management Corporation. He is responsible for property acquisition and
disposition on a nationwide basis. Additionally, he is involved with the
company's real estate development activities. Prior to joining ConAm, Mr.
Forrester served as Senior Vice President - Commercial Real Estate for First
Nationwide Bank in San Francisco, where he was responsible for a $2 billion
problem asset portfolio including bank-owned real estate and non-performing
commercial real estate loans. His past experience includes significant
involvement in real estate development and finance, property acquisitions and
dispositions and owner's representation matters. Prior to entering the real
estate profession, he worked for KPMG Peat Marwick in Dallas, Texas. Mr.
Forrester holds a Bachelor of Science degree in Accounting from Louisiana State
University. He received his CPA certification in the State of Texas.
Certain Matters Involving Affiliates of RI 3-4 Services
- -------------------------------------------------------
On July 31, 1993, Shearson sold certain of its domestic retail brokerage and
asset management businesses to Smith Barney. Subsequent to this sale, Shearson
changed its name to "Lehman Brothers Inc." The transaction did not affect the
ownership of the Partnership's General Partners. However, the assets acquired
by Smith Barney included the name "Hutton." Consequently, the Hutton Real
Estate Services general partner changed its name to "RI 3-4 Real Estate
Services, Inc." and the Hutton Group changed its name to "LB I Group Inc." to
delete any references to "Hutton."
Item 11. Executive Compensation
Neither of the General Partners nor any of their directors or executive
officers received any compensation from the Registrant. See Item 13 of this
report for a description of certain transactions of the General Partners and
their affiliates with the Registrant.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of December 31, 1995, no person was known by the Registrant to be the
beneficial owner of more than five percent of the Units of the Registrant.
Daniel J. Epstein, President and Director of ConAm Services, owned twenty Units
as of December 31, 1995. No other directors or executive officers of the
General Partners own any Units.
Item 13. Certain Relationships and Related Transactions
RI 3-4 Services and ConAm Services each received $202,840 as its allocable
share of Net Cash From Operations with respect to the year ended December 31,
1995, pursuant to the Amended and Restated Certificate and Agreement of Limited
Partnership of the Registrant. Pursuant to the Amended and Restated
Certificate and Agreement of Limited Partnership of the Registrant, for the
year ended December 31, 1995, $405,680 of the Registrant's net income was
allocated to the General Partners ($243,765 to RI 3-4 Services and $161,915 to
ConAm Services). For a description of the share of Net Cash From Operations
and the allocation of income and loss to which the General Partners are
entitled, reference is made to the material contained on pages 48 through 51 of
the Prospectus of the Registrant dated January 13, 1984 (the "Prospectus"),
contained in Amendment No. 1 to Registrant's Registration Statement No.
2-84863, filed January 13, 1984, under the section captioned "Distributions and
Allocations, which section is incorporated herein by reference thereto.
Pursuant to property management agreements with the Registrant, ConAm
Management has assumed direct responsibility for day-to-day management of the
Properties. It is the responsibility of ConAm Management to select resident
managers and monitor their performance. ConAm Management's services also
include the supervision of leasing, rent collection, maintenance, budgeting,
employment of personnel, payment of operating expenses, and related services.
For such services, ConAm Management is entitled to receive a management fee as
described on pages 32 and 33 of the Prospectus under the caption "Investment
Objectives and Policies - Management of Properties," which description is
herein incorporated by reference. A summary of property management fees earned
by ConAm Management during the past three fiscal years is incorporated by
reference to Note 6 to the Consolidated Financial Statements included in the
Partnership's Annual Report to Unitholders for the year ended December 31,
1995, which is filed as an exhibit under Item 14.
Pursuant to Section 12(g) of Registrant's Amended and Restated Certificate and
Agreement of Limited Partnership, the General Partners and their affiliates may
be reimbursed by the Registrant for certain of their costs as described on page
16 of the Prospectus, which description is incorporated herein by reference.
First Data Investor Services Group provides partnership accounting and investor
relations services for the Registrant. Prior to May 1993, these services were
provided by an affiliate of a general partner. The Registrant's transfer agent
and certain tax reporting services are provided by Service Data Corporation.
Both First Data Investor Services Group and Service Data Corporation are
unaffiliated companies. A summary of amounts paid to the General Partners or
their affiliates during the past three years is incorporated by reference to
Note 6 to the Consolidated Financial Statements, included in the Partnership's
Annual Report to Unitholders for the year ended December 31, 1995, which is
filed as an exhibit under Item 14.
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
(a)(1) Financial Statements:
Page
Consolidated Balance Sheets - December 31, 1995 and 1994 (1)
Consolidated Statements of Partners' Capital (Deficit) -
For the years ended December 31, 1995,1994 and 1993 (1)
Consolidated Statements of Operations - For the years
ended December 31, 1995, 1994 and 1993 (1)
Consolidated Statements of Cash Flows - For the years
ended December 31, 1995, 1994 and 1993 (1)
Notes to the Consolidated Financial Statements (1)
Report of Independent Accountants (1)
(a)(2) Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation F-1
Report of Independent Accountants F-4
(1) Incorporated by reference to the Partnership's Annual Report to Unitholders
for the year ended December 31, 1995, filed as an exhibit under Item 14.
(a)(3) Exhibits:
(4)(A) Certificate and Agreement of Limited Partnership (included as, and
incorporated herein by reference to, Exhibit A to the Prospectus of
Registrant dated January 13, 1984 (the "Prospectus"), contained in
Amendment No. 1 to Registration Statement No. 2-84863 of Registrant,
filed January 13, 1984 (the "1984 Registration Statement")).
(B) Subscription Agreement and Signature Page (included as, and
incorporated herein by reference to, Exhibit 3.1 to the Prospectus).
(10)(A) Purchase Agreement relating to Pelican Landing (formerly Feather Sound
Apartments), between the Registrant and Feather Sound, Inc., and the
exhibits thereto (included as, and incorporated herein by reference to,
Exhibit (10)(B) to the 1984 Annual Report).
(B) Purchase Agreement relating to River Hill Apartments (formerly Oxbow
Ridge I), between the Registrant and Tres Titan Investors, and the
exhibits thereto (included as, and incorporated herein by reference to,
Exhibit (10)(D) to the 1984 Annual Report).
(C) Purchase Agreement relating to Village at the Foothills II (formerly
Ina Village Apartments), between the Registrant and Epoch Properties,
Inc. and the exhibits thereto (included as, and incorporated herein by
reference to, Exhibit (10)(E) to the 1984 Annual Report).
(D) Documents relating to Shadowood Village (included as, and incorporated
herein by reference to, Exhibit (10)(A) to Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1985 (the "1985
Quarterly Report" (Commission File No. 0-13329)).
(E) Settlement Agreement by and among the Managing Joint Venturers and the
Epoch Joint Venturers dated July 1, 1992 (included as, and incorporated
herein by reference to Exhibit 10.1 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1992
(Commission File No. 0-13329)).
(F) Amended and Restated Agreement of Limited Partnership of Village at the
Foothills II Joint Venture Limited Partnership dated as of July 1, 1992
(included as, and incorporated herein by reference to Exhibit 10.2 to
the Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1992 (Commission File No. 0-13329)).
(G) Certificate and Agreement of Limited Partnership of River Hill
Apartments, Ltd (included as, and incorporated herein by reference to
Exhibit 10(I) to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991 (Commission File No. 0-13329)).
(H) Amended and Restated Agreement of Limited Partnership of Shadowood
Village, Ltd., dated as of July 1, 1992 (included as, and incorporated
herein by reference to Exhibit 10.2 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1992
(Commission File No. 0-13329)).
(I) Property Management Agreement between Hutton/ConAm Realty Investors 4
and ConAm Management Corporation for the Pelican Landing property
(included as, and incorporated herein by reference to Exhibit 10-M to
the Registrant's Annual Report on Form 10-K for the year ended December
31, 1993 (Commission File No. 0-13329)).
(J) Property Management Agreement between Hutton/ConAm Realty Investors 4
and ConAm Management Corporation for the River Hill property (included
as, and incorporated herein by reference to Exhibit 10-N to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1993 (Commission File No. 0-13329)).
(K) Property Management Agreements between Hutton/ConAm Realty Investors 4
and ConAm Management Corporation for the Shadowood Village property
(included as, and incorporated herein by reference to Exhibit 10-O to
the Registrant's Annual Report on Form 10-K for the year ended December
31, 1993 (Commission File No. 0-13329)).
(L) Property Management Agreement between Hutton/ConAm Realty Investors 4
and ConAm Management Corporation for the Village at the Foothills II
property (included as, and incorporated herein by reference to Exhibit
10-Q to the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993 (Commission File No. 0-13329)).
(13) Annual Report to Unitholders for the year ended December 31, 1995.
(21) List of Subsidiaries, Joint Ventures or Limited Partnerships (included
as, and incorporated herein by reference to Exhibit 22 of the
Registrant's Annual Report on Form 10-K filed March 27, 1992
(Commission File No. 0-13329)).
(27) Financial Data Schedule.
(99) Portions of the Prospectus of Registrant dated January 13, 1984
(included as, and incorporated herein by reference to Exhibit 28 to the
Registrant's 1988 Annual Report on Form 10-K for the fiscal year ended
December 31, 1988 (Commission File No. 0-13329)).
(b) Reports on Form 8-K:
No reports on Form 8-K were filed in the fourth quarter of 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: March 27, 1996 HUTTON/CONAM REALTY INVESTORS 4
BY: RI 3-4 Real Estate Services Inc.
General Partner
BY: /S/ Paul L. Abbott
Name: Paul L. Abbott
Title: Director, President,
Chief Executive Officer
and Chief Financial Officer
BY: ConAm Property Services IV, Ltd.
General Partner
BY: Continental American Development, Inc.
General Partner
BY: /S/ Daniel J. Epstein
Name: Daniel J. Epstein
Title: President, Director and
Principal Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capabilities and on the dates indicated.
RI 3-4 REAL ESTATE SERVICES INC.
A General Partner
Date: March 27, 1996 BY: /S/ Paul L. Abbott
Paul L. Abbott
Director, President,
Chief Executive Officer
and Chief Financial Officer
Date: March 27, 1996 BY: /S/ Donald E. Petrow
Donald E. Petrow
Vice President
Date: March 27, 1996 BY: /S/ Kate Hobson
Kate Hobson
Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
CONAM PROPERTY SERVICES IV, LTD.
A General Partner
By: Continental American Development, Inc.
General Partner
Date: March 27, 1996 BY: /S/ Daniel J. Epstein
Daniel J. Epstein
Director and President
Date: March 27, 1996 BY: /S/ E. Scott Dupree
E. Scott Dupree
Vice President/Director
Date: March 27, 1996 BY: /S/ Robert J. Svatos
Robert J. Svatos
Vice President/Director
Date: March 27, 1996 BY: /S/ Ralph W. Tilley
Ralph W. Tilley
Vice President
Date: March 27, 1996 BY: /S/ J. Bradley Forrester
J. Bradley Forrester
Vice President
Exhibit 13
Hutton/ConAm Realty Investors 4
1995 Annual Report 1995
Hutton/ConAm Realty Investors 4 is a California limited partnership formed in
1984 to acquire, operate and hold for investment multifamily housing
properties. At December 31, 1995, the Partnership's portfolio consisted of
four apartment properties located in Arizona, Florida and Texas. Provided
below is a comparison of average occupancy levels for the years ended December
31, 1995 and 1994.
Average Occupancy
Property Location 1995 1994
____________________________________________________________________
Pelican Landing Clearwater, Florida 97% 97%
River Hill Apartments Irving, Texas 96% 96%
Shadowood Village Jacksonville, Florida 95% 96%
Village at the Foothills II Tucson, Arizona 95% 95%
____________________________________________________________________
Administrative Inquiries Performance Inquiries/Form 10-Ks
Address Changes/Transfers First Data Investor Services Group
Service Data Corporation P.O. Box 1527
2424 South 130th Circle Boston, Massachusetts 02104-1527
Omaha, Nebraska 68144-2596 Attn: Financial Communications
800-223-3464 (select option 1) 800-223-3464 (select option 2)
Contents
1 Message to Investors
2 Performance Summary
3 Financial Highlights
4 Consolidated Financial Statements
7 Notes to the Consolidated Financial Statements
13 Report of Independent Accountants
14 Net Asset Valuation
MESSAGE TO INVESTORS
Presented for your review is the 1995 Annual Report for Hutton/ConAm Realty
Investors 4. In this report, we review Partnership operations and discuss
market conditions affecting the Partnership's properties. We have also
included a performance summary which addresses operating results at each of the
properties and financial highlights for the year.
Trails at Meadowlakes and Cypress Lakes Sales
- ---------------------------------------------
The most significant event during 1995 was the sale of Trails at Meadowlakes
and Cypress Lakes on July 20, 1995 to an unaffiliated institutional buyer. The
Partnership received net sales proceeds of $17,551,351 and recorded a gain of
$2,854,884 on the sale. The Partnership utilized $5,057,952 of the sales
proceeds to repay the outstanding principal and interest balance on the
mortgage secured by Trails at Meadowlakes.
Cash Distributions
- ------------------
The Partnership paid cash distributions totaling $122.50 per Unit for the year
ended December 31, 1995, including the fourth quarter distribution of $3.75 per
Unit, which was credited to your brokerage account or sent directly to you on
February 7, 1996. This amount also includes the special distribution of
$111.25 per Unit which was paid on August 22, 1995 and resulted primarily from
the sale of Trails at Meadowlakes and Cypress Lakes. Since inception, the
Partnership has paid cumulative cash distributions totaling $318.01 per
original $500 Unit including $94 per Unit in return of capital payments. The
level of future distributions will be evaluated on a quarterly basis and will
depend on the Partnership's operating results and future cash needs. It is
anticipated that cash from reserves may be required to fund a portion of
distributions during 1996 as a result of the expenditures for improvements
required at two of the Partnership's properties which are discussed in this
report.
Operations Overview
- -------------------
The solid recovery of multifamily housing in most regions of the country began
to level off during 1995. New construction intensified competition in many
areas with building permits for multifamily units up almost 22% in 1995
compared to 1994 levels. In addition, falling interest rates induced many
renters to purchase homes. Despite these trends, strong population and job
growth in the areas where the Partnership's properties are located helped
strengthen the demand for multifamily housing, and brought about improved
performance at the Partnership's properties. All four properties sustained
average occupancy rates for the year at or above 95% and recorded higher
average rental income from the prior year.
During 1996, we intend to implement an extensive improvement program to upgrade
the properties. This program, which includes exterior painting and landscaping
at Pelican Landing and interior improvements at Pelican Landing and Shadowood
Village, is intended to maintain each property's position within their
respective markets, which are growing increasingly competitive with the
addition of new apartment properties. This is particularly true in the Tucson
and Jacksonville markets where Village at the Foothills II and Shadowood
Village, respectively, are located. It is also hoped that these improvements
will allow for greater increases in rental rates, thereby improving each
property's revenue and ultimately their sales value. Updates on the
improvements at each property will be included in future correspondence.
Summary
- -------
Given favorable market conditions, particularly in Irving, Texas, the General
Partners will begin marketing River Hill Apartments during the next several
months. There can be no assurances that a sale will be completed or that any
particular price for the property can be obtained. In addition, we will
continue to seek to maintain high occupancy levels, implement rental rate
increases as conditions permit, and make property improvements to upgrade the
properties. We will keep you apprised of significant developments affecting
your investment in future reports.
Very truly yours,
Paul L. Abbott Daniel J. Epstein
President President
RI 3-4 Real Estate Services, Inc. Continental American Development Inc.
General Partner of ConAm Property
Services IV, Ltd.
March 27, 1996
PERFORMANCE SUMMARY
Pelican Landing, Clearwater, Florida
- ------------------------------------
This 204-unit complex, located in southeast Clearwater, achieved average
occupancy of 97% in 1995, unchanged from 1994. The stable occupancy coupled
with increases in rental rates on renewal units resulted in the property's
rental income increasing approximately 5% from 1994. Conditions in the market
remain strong despite the addition of several new apartment properties over the
past several years. Overall occupancy in the Clearwater market was 97% in the
third quarter of 1995, compared with 96% in the third quarter of 1994.
Aggressive marketing has minimized the effect the new construction has had on
the Partnership's property. During 1995, improvements at the property included
the replacement of carpeting and vinyl flooring in several units.
River Hill Apartments, Irving, Texas
- ------------------------------------
Located in the Las Colinas area of Irving, Texas, this 192-unit apartment
complex reported stable occupancy of 96% during 1995. The property's average
occupancy rate has remained consistent at 96% for the past three years. The
property's rental income increased approximately 5% from 1994 to 1995 as a
result of rental rate increases instituted on renewal units during the year.
Property improvements during 1995 included carpet, tile and wallpaper
replacement in several units. Repairs on a retaining wall at the property are
currently underway. The Las Colinas submarket, where River Hill is located,
had an average occupancy rate of 97% as of the third quarter of 1995, compared
to 96% a year earlier. Strong local market conditions have resulted in an
increase in the pace of new construction of multifamily properties with several
expected to compete directly with the Partnership's property. Given favorable
market conditions, the General Partners will begin marketing River Hill
Apartments during the next several months. There can be no assurances that a
sale will be completed or that any particular price for the property can be
obtained.
Shadowood Village, Jacksonville, Florida
- ----------------------------------------
Shadowood Village, a 110-unit apartment community, is situated in the
Baymeadows-Deerwood neighborhood of southeast Jacksonville. The average
occupancy level at Shadowood Village was 95% in 1995 compared with 96% during
1994. The slight decline in occupancy was offset by rate increases instituted
during the year, and rental income remained in line with 1994. Minimal
property improvements were performed during 1995, largely consisting of carpet
replacement. Market conditions in the Baymeadows-Deerwood area remain
competitive, with a number of newer apartment properties offering greater
amenities and commanding higher rents. Additionally, two new properties are
scheduled to open in the area during 1996. Although the use of rental
concessions diminished considerably in the last two years, asking rental rates
increased only 2% in 1995 in this submarket. Average occupancy in the market
increased from 93% in the second quarter of 1994 to 94% in the second quarter
of 1995.
Village at the Foothills II, Tucson, Arizona
- --------------------------------------------
Village at the Foothills II is a 120-unit apartment and townhouse community,
located in the Catalina Foothills, overlooking Tucson. Occupancy at this
property averaged 95% in 1995 unchanged from 1994. Rental income increased 5%
from 1994, reflecting rental rate increases on renewals and turnover during the
year. Property improvements during 1995 were minimal and consisted primarily
of carpet replacement in selected units and sealing of the parking lot. The
property continued to perform well despite intensifying competition in the
metro Tucson area brought on by new construction. Competition for tenants is
also increasing as renters take advantage of low interest rates on mortgages
and opt to purchase homes. Evidence of the intensifying competition can be
seen in the area's vacancy rate which has reached 8%, its highest level since
1990.
FINANCIAL HIGHLIGHTS
Selected Financial Data
- -----------------------
For the periods ended December 31,
(dollars in thousands, except per Unit data)
1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------
Total Revenue $ 6,597 $ 7,633 $ 7,299 $ 7,020 $ 6,821
Gain on Sale of Properties 2,855 0 0 0 0
Net Income 3,260 985 724 719 456
Net Cash Provided by
Operating Activities 2,363 3,034 2,778 2,706 2,187
Long-term Obligations
at Year End 0 5,051 5,091 5,127 5,159
Total Assets at Year End 27,247 44,686 45,646 47,463 49,387
Net Income per
Limited Partnership Unit* 22.28 2.12 2.30 1.31 1.78
Distributions per
Limited Partnership Unit* 11.25 9.00 18.00 17.00 21.20
Special Distributions per
Limited Partnership Unit* 111.25 0 0 0 0
- ----------------------------------------------------------------------------
*128,110 Units outstanding
* Total revenue decreased from 1994 to 1995, primarily due to the July
1995 sale of Trails at Meadowlakes and Cypress Lakes. This was offset
partially by increased rental income at the four remaining properties
and higher interest income.
* The increase in net income from 1994 to 1995 is primarily attributable
to the gain recognized on the sale of Trails at Meadowlakes and Cypress
Lakes. The sales also resulted in decreases in nearly all major
expense categories.
Cash Distributions
Per Limited Partnership Unit
1995 1994
- ----------------------------------------------------------------------
Special Distributions* $ 111.25 $ 0
First Quarter 0 4.50
Second Quarter 3.75 4.50
Third Quarter 3.75 0
Fourth Quarter 3.75 0
------- ----
Total $ 122.50 $ 9.00
* On August 22, 1995, the Partnership paid a special cash distribution
totaling $111.25 per Unit, reflecting net proceeds received from the sale of
Trails and Meadowlakes and Cypress Lakes of $94 per Unit and excess cash
reserves of $17.25 per Unit which the General Partners determined could be
distributed since the loan secured by Trails at Meadowlakes was paid off.
Consolidated Balance Sheets
December 31, 1995 and 1994
Assets 1995 1994
- --------------------------------------------------------------------------
Investments in real estate:
Land $ 7,526,126 $ 12,088,984
Buildings and improvements 26,226,602 48,236,772
------------------------------
33,752,728 60,325,756
Less accumulated depreciation (8,958,549) (18,896,846)
------------------------------
24,794,179 41,428,910
Cash and cash equivalents 2,436,356 3,234,383
Other assets 16,206 22,527
------------------------------
Total Assets $ 27,246,741 $ 44,685,820
==============================
Liabilities and Partners' Capital
Liabilities:
Mortgage payable $ 0 $ 5,051,086
Distribution payable 587,171 0
Accounts payable and accrued expenses 168,831 137,009
Security deposits 143,040 288,335
Due to general partners and affiliates 32,209 54,369
------------------------------
Total Liabilities 931,251 5,530,799
------------------------------
Partners' Capital
General Partners 0 0
Limited Partners 26,315,490 39,155,021
------------------------------
Total Partners' Capital 26,315,490 39,155,021
------------------------------
Total Liabilities and
Partners' Capital $ 27,246,741 $ 44,685,820
==============================
Consolidated Statements of Partners' Capital
For the years ended December 31, 1995, 1994 and 1993
General Limited
Partners Partners Total
- -----------------------------------------------------------------------------
Balance at January 1, 1993 $ (757,472) $ 42,047,655 $ 41,290,183
Net income 429,056 294,454 723,510
Cash distributions (256,220) (2,305,980) (2,562,200)
------------------------------------------
Balance at December 31, 1993 (584,636) 40,036,129 39,451,493
Net income 712,746 271,882 984,628
Cash distributions (128,110) (1,152,990) (1,281,100)
------------------------------------------
Balance at December 31, 1994 0 39,155,021 39,155,021
Net income 405,680 2,853,944 3,259,624
Cash distributions (405,680) (15,693,475) (16,099,155)
-------------------------------------------
Balance at December 31, 1995 $ 0 $ 26,315,490 $ 26,315,490
===========================================
Consolidated Statements of Operations
For the years ended December 31, 1995, 1994 and 1993
Income 1995 1994 1993
- ------------------------------------------------------------------------------
Rental $ 6,351,434 $ 7,552,784 $ 7,249,001
Interest 245,330 79,860 50,212
------------------------------------------
Total Income 6,596,764 7,632,644 7,299,213
------------------------------------------
Expenses
Property operating 3,630,788 3,927,435 3,860,345
Loss on write-down of real estate 477,170 0 0
Depreciation 1,610,725 2,034,770 2,031,845
Interest 283,556 513,636 517,447
General and administrative 189,785 172,175 166,066
------------------------------------------
Total Expenses 6,192,024 6,648,016 6,575,703
------------------------------------------
Income from operations 404,740 984,628 723,510
Gain on sale of properties 2,854,884 0 0
Net Income $ 3,259,624 $ 984,628 $ 723,510
==========================================
Net Income Allocated:
To the General Partners $ 405,680 $ 712,746 $ 429,056
To the Limited Partners 2,853,944 271,882 294,454
------------------------------------------
Net Income $ 3,259,624 $ 984,628 $ 723,510
==========================================
Per limited partnership unit
(128,110 outstanding)
Income from operations $ 2.00 $ 2.12 $ 2.30
Gain on sale of property 20.28 0 0
------------------------------------------
Net Income $ 22.28 $ 2.12 $ 2.30
==========================================
Consolidated Statements of Cash Flows
For the years ended December 31, 1995, 1994 and 1993
Cash Flows from Operating Activities: 1995 1994 1993
- ------------------------------------------------------------------------------
Net income $ 3,259,624 $ 984,628 $ 723,510
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 1,610,725 2,034,770 2,031,845
Loss on write-down of real estate 477,170 0 0
Gain on sale of properties (2,854,884) 0 0
Increase (decrease) in cash arising
from changes in operating assets and
liabilities:
Other assets 6,321 (2,205) 0
Accounts payable and
accrued expenses 31,822 (1,600) (18,919)
Security deposits (145,295) 15,144 43,524
Due to general partners
and affiliates (22,160) 2,849 (2,323)
-----------------------------------
Net cash provided by operating activities 2,363,323 3,033,586 2,777,637
-----------------------------------
Cash Flows from Investing Activities:
Net proceeds from sale of properties 17,551,351 0 0
Additions to real estate (149,631) (39,087) (63,188)
-----------------------------------
Net cash provided by (used for)
investing activities 17,401,720 (39,087) (63,188)
-----------------------------------
Cash Flows from Financing Activities:
Mortgage principal payments (5,051,086) (39,742) (35,930)
Distributions (15,511,984) (1,921,650) (2,526,614)
-----------------------------------
Net cash used for financing activities (20,563,070) (1,961,392) (2,562,544)
-----------------------------------
Net increase (decrease) in cash and
cash equivalents (798,027) 1,033,107 151,905
Cash and cash equivalents at beginning
of year 3,234,383 2,201,276 2,049,371
-----------------------------------
Cash and cash equivalents at end of year $ 2,436,356 $3,234,383 $2,201,276
===================================
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest $ 283,556 $ 513,636 $ 517,447
-----------------------------------
Notes to the Consolidated Financial Statements
For the years ended December 31, 1995, 1994 and 1993
1. Organization
Hutton/ConAm Realty Investors 4 (the "Partnership") was organized as a limited
partnership under the laws of the State of California pursuant to a Certificate
and Agreement of Limited Partnership (the "Partnership Agreement") dated May
10, 1984. The Partnership was formed for the purpose of acquiring and
operating certain types of residential real estate. The general partners of
the Partnership are RI 3-4 Real Estate Services, Inc., an affiliate of Lehman
Brothers (see below), and ConAm Property Services IV, Ltd. ("ConAm"), an
affiliate of Continental American Properties, Ltd (the "General Partners").
The Partnership will continue until December 31, 2010 unless sooner terminated
pursuant to the terms of the Partnership Agreement.
On July 31, 1993, Shearson Lehman Brothers Inc. sold certain of its domestic
retail brokerage and asset management business to Smith Barney, Harris Upham &
Co. Incorporated ("Smith Barney"). Subsequent to the sale, Shearson Lehman
Brothers Inc. changed its name to Lehman Brothers Inc. ("Lehman Brothers").
The transaction did not affect the ownership of the General Partners. However,
the assets acquired by Smith Barney included the name "Hutton". Consequently,
effective October 8, 1993, the Hutton Real Estate Services VIII, Inc. General
Partner changed its name to RI 3-4 Real Estate Services, Inc.
On March 15, 1996, based upon, among other things, the advice of Partnership
counsel, Skadden, Arps, Slate, Meagher & Flom, the General Partners adopted a
resolution that states, among other things, if a Change of Control (as defined
below) occurs, the General Partners may distribute the Partnership's cash
balances not required for its ordinary course day-to-day operations. "Change
of Control" means any purchase or offer to purchase more than 10% of the Units
that is not approved in advance by the General Partners. In determining the
amount of the distribution, the General Partners may take into account all
material factors. In addition, the Partnership will not be obligated to make
any distribution to any partner and no partner will be entitled to receive any
distribution until the General Partners have declared the distribution and
established a record date and distribution date for the distribution. The
Partnership filed a Form 8-K disclosing this resolution on March 21, 1996.
2. Significant Accounting Policies
Financial Statements. The consolidated financial statements include the
accounts of the Partnership and its affiliated ventures. The effect of
transactions between the Partnership and its ventures have been eliminated in
consolidation.
Real Estate Investments. Real estate investments are recorded at the lower of
cost, less accumulated depreciation or fair value and includes the initial
purchase price of the property, legal fees, acquisition and closing costs.
Leases are accounted for under the operating method. Under this method,
revenue is recognized as rentals are earned and expenses (including
depreciation) are charged to operations when incurred. Leases are generally
for terms of one year or less.
Depreciation is computed using the straight-line method based upon the
estimated useful lives of the properties. Maintenance and repairs are charged
to operations as incurred. Significant betterments and improvements are
capitalized and depreciated over their estimated useful lives.
For assets sold or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts, and any resulting gain or loss is
reflected in income for the period.
Accounting for Impairment. In March 1995, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" ("FAS 121"), which requires impairment losses to be recorded on
long-lived assets in operations when indicators of impairment are present and
the undiscounted cash flows estimated to be generated by those assets are less
than the assets' carrying amount. FAS 121 also addresses the accounting for
long-lived assets that are expected to be disposed of. The Partnership has
adopted FAS 121 in the fourth quarter of 1995.
Offering Costs. Costs relating to the sale of limited partnership units were
deferred during the offering period and charged to the limited partners'
capital accounts upon the consummation of the public offering.
Income Taxes. No provision for income taxes has been made in the financial
statements since income, losses and tax credits are passed through to the
individual partners.
Cash and Cash Equivalents. Cash equivalents consist of short-term highly
liquid investments which have maturities of three months or less from the date
of issuance. The carrying amount approximates fair value because of the short
maturity of these instruments. Cash and cash equivalents include security
deposits of $87,579 and $232,692 at December 31, 1995 and 1994 respectively,
restricted under certain state statutes.
Concentration of Credit Risk. Financial instruments which potentially subject
the Partnership to a concentration of credit risk principally consist of cash
and cash equivalents in excess of the financial institutions' insurance limits.
The Partnership invests available cash with high credit quality financial
institutions.
Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
3. The Partnership Agreement
The Partnership Agreement provides that net cash from operations, as defined,
will be distributed quarterly, 90% to the limited partners and 10% to the
General Partners.
Net loss and all depreciation for any fiscal year will be allocated 99% to the
limited partners and 1% to the General Partners.
Net income before depreciation will be allocated as follows:
(a) To the extent that net income from operations before depreciation does
not exceed the amount of net cash from operations distributable to the
partners with respect to such fiscal year, net income from operations
before depreciation shall be allocated among the partners, pro rata in
accordance with the amount of net cash from operations distributable to
each partner with respect to such fiscal year to the extent thereof; and
(b) To the extent that net income from operations before depreciation exceeds
the amount of net cash from operations distributable to the partners with
respect to such fiscal year, such excess shall be allocated (1) first, 100%
to the General Partners, pro rata, in an amount equal to the excess, if
any, of the General Partners' deficits, if any, in their capital accounts,
over an amount equal to 1% of the aggregate capital contributions to the
Partnership as reduced by the amount of the General Partners' capital
contributions, and (2) second, 99% to the limited partners and 1% to the
General Partners.
For the years ended December 31, 1995 and 1994, net income from operations
before depreciation exceeded net cash from operations distributable to the
partners by $414,090 and $1,738,298 respectively. Pursuant to the Partnership
Agreement and (b)(1) above, $4,141 and $597,962 of this excess was allocated to
the General Partners for the years ended December 31, 1995 and 1994,
respectively.
Net proceeds from sales or refinancing will be distributed 100% to the limited
partners until each limited partner has received an amount equal to his
adjusted capital value (as defined) and an annual, cumulative 7% return
thereon. The balance, if any, will be distributed 85% to the limited partners
and 15% to the General Partners.
4. Real Estate Investments
Real estate investments consist of four residential apartment complexes
acquired either directly or through investments in joint ventures and limited
partnerships as follows:
Apartment Date Purchase
Property Name Units Location Acquired Price
- ---------------------------------------------------------------------
Pelican Landing 204 Clearwater, FL 3/28/85 $ 12,179,329
Village at the
Foothills II 120 Tucson, AZ 5/30/85 7,216,400
River Hill
Apartments 192 Irving, TX 6/12/85 11,488,015
Shadowood Village 110 Jacksonville, FL 7/3/86 5,400,000
- ---------------------------------------------------------------------
Pelican Landing Apartments was acquired directly by the Partnership. Village
at the Foothills II was acquired through a joint venture with an unaffiliated
developer and River Hill Apartments and Shadowood Village were acquired through
limited partnerships with unaffiliated developers. To each limited partnership
and joint venture, the Partnership assigned its rights to acquire the above
properties and contributed cash equal to the purchase price of the properties.
The Partnership's partners did not make initial capital contributions to these
limited partnerships and joint ventures. On July 20, 1995, the Partnership sold
Trails at Meadowlakes and Cypress Lakes (the "Properties"). Trails at
Meadowlakes and Cypress Lakes sold for $8,940,000 and $8,825,000, respectively,
to an institutional buyer (the "Buyer"), which is unaffiliated with the
Partnership. The selling price was determined by arm's length negotiations
between the Partnership and the Buyer. The Partnership received net proceeds
of $17,551,351 from the transaction of which $5,057,952, representing
outstanding principal and interest, was used to fully satisfy the Partnership's
mortgage obligation on Trails at Meadowlakes. The transaction resulted in a
gain on sale of $2,854,884 for financial statement purposes.
On August 22, 1995, the Partnership paid a special distribution of $14,252,238
to the limited partners. The special distribution was comprised of net
proceeds from the sale of the Properties and from Partnership cash reserves.
Based on the adoption of FAS 121, the Partnership recorded a write-down of
$477,170 to reduce the carrying value of River Hill Apartments to its estimated
fair value. The impairment was caused by the need for necessary property
improvements and changing market conditions.
The initial joint venture and limited partnership agreements of Village at the
Foothills II, River Hill Apartments and Shadowood Village substantially provide
that:
a. Net cash from operations of Village at the Foothills II and River Hill
Apartments will be distributed 100% to the Partnership until it has received
an annual, noncumulative return of 10% and 12%, respectively, on its
adjusted capital contribution. Any remaining balance will be distributed
60% to the Partnership and 40% to the co-venturer. Net cash from operations
of Shadowood Village will be distributed 100% to the Partnership.
b. Net income of the joint ventures and limited partnerships will be allocated
to the Partnership and the co-venturers basically in accordance with the
distribution of net cash from operations. All net losses and depreciation
will be allocated to the Partnership.
c. Net proceeds from a sale or refinancing of Village at Foothills II will be
distributed 100% to the Partnership, until it has received an amount equal
to 120% of its adjusted capital contribution. Distributions will then be
made 75% to the Partnership and 25% to the co-venturer, until the
Partnership has received an additional 120% of the Partnership's adjusted
capital contribution. Any remaining balance will be distributed 50% to the
Partnership and 50% to the co-venturer.
Net proceeds from a sale or refinancing of River Hill Apartments will be
distributed 100% to the Partnership, until it has received an amount equal
to 110% of its adjusted capital contribution. Distributions will then be
made 75% to the Partnership and 25% to the co-venturer, until the
Partnership has received an additional 110% of the Partnership's adjusted
capital contribution. Any remaining balance will be distributed 50% to the
Partnership and 50% to the co-venturer.
Net proceeds from a sale or refinancing of Shadowood Village will be
distributed 100% to the Partnership, until it has received an amount equal
to 120% of its adjusted capital contribution. Any remaining balance will be
distributed 50% to the Partnership and 50% to the co-venturer.
The amended joint venture and limited partnership agreements of Village at the
Foothills II and Shadowood Village substantially provide that:
a. Available cash from operations will be distributed 100% to the Partnership
until it has received its annual, noncumulative preferred return, as
defined. Any remaining balance will be distributed 99% to the Partnership
and 1% to the corporate General Partners.
b. Net income will be allocated first, proportionately to partners with
negative capital accounts, as defined, until such capital accounts, as
defined, have been increased to zero; then, to the Partnership up to the
amount of any payments made on account of its preferred return; thereafter,
99% to the Partnership and 1% to the corporate General Partners. All losses
will be allocated first to the partners with positive capital accounts, as
defined, until such accounts have been reduced to zero and, then, 99% to the
Partnership and 1% to the corporate General Partners.
c. Income from a sale will be allocated to the Partnership until the
Partnership's capital accounts, as defined, are equal to the fair market
value of the venture's assets at the date of the amendments; then, any
remaining balance will be allocated 99% to the Partnership and 1% to the
corporate General Partners. Net proceeds from a sale or refinancing will be
distributed first to the partners with a positive capital account balance,
as defined; thereafter, 99% to the Partnership and 1% to the corporate
General Partners.
5. Mortgage Payable
On July 19, 1985, the Partnership obtained financing of $5,200,000,
collateralized by a first mortgage encumbering Trails at MeadowLakes. The loan
had an initial term of five years bearing interest at an annual rate of 12.50%
with monthly payments of interest only. The loan was extended in 1990 for an
additional five years bearing interest at a rate of 10.125% with monthly
principal and interest payments. On July 20, 1995 the partnership closed on the
sale of Trails at Meadowlakes and used a portion of the sales proceeds to
satisfy the Partnership's outstanding mortgage obligation of $5,029,661.
6. Transactions with Related Parties
The following is a summary of fees earned and reimbursable expenses paid for
the years ended December 31, 1995 1994 and 1993, and the unpaid portion at
December 31, 1995:
Unpaid at
December 31, Earned
1995 1995 1994 1993
- ----------------------------------------------------------------------------
Reimbursement of:
Out-of-pocket expenses $ 0 $ 3,541 $ 2,227 $ 2,465
Administrative salaries
and expenses 12,607 54,959 41,693 33,019
Property operating salaries 0 411,731 610,064 581,922
Property management fees 19,602 322,934 378,727 363,258
------------------------------------------
$ 32,209 $793,165 $1,032,711 $ 980,664
==========================================
The above amounts have been paid and/or accrued to the General Partners and
affiliates as follows:
Unpaid at
December 31, Earned
1995 1995 1994 1993
- ------------------------------------------------------------------------------
RI 3-4 Real Estate Services, Inc. $ 12,607 $ 58,500 $ 43,920 $ 35,484
ConAm and affiliates 19,602 734,665 988,791 945,180
--------------------------------------------
$ 32,209 $ 793,165 $1,032,711 $ 980,664
============================================
7. Reconciliation of Financial Statement and Tax Information
The following is a reconciliation of the net income for financial statement
purposes to net income for federal income tax purposes for the years ended
December 31, 1995, 1994 and 1993:
1995 1994 1993
- -----------------------------------------------------------------------------
Net income per financial statements $ 3,259,624 $ 984,628 $ 723,510
Depreciation deducted for tax
purposes in excess of
depreciation expense per
financial statements (105,426) (159,133) (386,409)
Tax basis joint venture net loss
in excess of GAAP basis joint
venture net income (103,451) (106,637) (105,138)
Financial statement loss on
write-down of real estate over
tax basis loss on write-down of
real estate 477,170 0 0
Gain on sale of properties
for tax purposes in excess of
gain per financial statements 5,305,729 0 0
Other 470 (25,567) 34,227
------------------------------------
Taxable net income $ 8,834,116 $ 693,291 $ 266,190
====================================
The following is a reconciliation of partners' capital for financial statement
purposes to partners' capital for federal income tax purposes as of December
31, 1995, 1994 and 1993:
1995 1994 1993
- ------------------------------------------------------------------------------
Partners' capital per financial
statements $ 26,315,490 $ 39,155,021 $ 39,451,493
Adjustment for cumulative
difference between tax basis
net income and net income
per financial statements (1,635,149) (7,209,641) (6,918,304)
----------------------------------------
Partners' capital per tax return $ 24,680,341 $ 31,945,380 $ 32,533,189
========================================
8. Distributions Paid
Cash distributions, per the consolidated statements of partners' capital, are
recorded on the accrual basis, which recognizes specific record dates for
payments within each calendar year. The consolidated statements of cash flows
recognize actual cash distributions paid during the calendar year. The
following table discloses the annual amounts as presented on the consolidated
financial statements:
Distributions Distributions
Payable Distributions Distributions Payable
Beginning of Year Declared Paid December 31,
- ------------------------------------------------------------------------------
1995 $ 0 $ 16,099,155 $ 15,511,984 $ 587,171
1994 640,550 1,281,100 1,921,650 0
1993 604,964 2,562,200 2,526,614 640,550
- ------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Hutton/ConAm Realty Investors 4:
We have audited the consolidated balance sheets of Hutton/ConAm Realty
Investors 4, a California limited partnership, and Consolidated Ventures as of
December 31, 1995 and 1994, and the related consolidated statements of
operations, partners' capital (deficit) and cash flows for each of the three
years in the period ended December 31, 1995. These consolidated financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Hutton/ConAm Realty Investors 4, a California limited partnership, and
Consolidated Ventures as of December 31, 1995 and 1994, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1995, in conformity with generally accepted
accounting principles.
As discussed in Note 2 to the financial statements, the Partnership adopted the
provisions of Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of," in 1995.
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
February 1, 1996
Comparison of Acquisition Costs to Appraised Value and Determination of
Net Asset Value Per $406 Unit at December 31, 1995 (Unaudited)
Acquisition Cost
(Purchase Price Partnership's
Plus General Share of
Partners' December 31,
Acquisition 1995 Appraised
Property Date of Acquisition Fees) Value (1)
- ----------------------------------------------------------------------------
Pelican Landing 03-28-85 $ 12,700,000 $ 11,300,000
Village at the Foothills II 05-30-85 7,376,000 4,700,000
River Hill Apartments 06-12-85 12,016,575 7,700,000
Shadowood Village 07-03-86 5,649,540 4,350,000
--------------------------
$ 37,742,115 $ 28,050,000
--------------------------
Cash and cash equivalents 2,436,356
Other assets 16,206
----------
30,502,562
Less:
Total liabilities (931,251)
----------
Partnership Net Asset Value (2) $ 29,571,311
----------
Net Asset Value Allocated:
Limited Partners $ 29,571,311
General Partners 0
----------
$ 29,571,311
----------
Net Asset Value Per Unit (128,110 units outstanding) $230.83
=======
(1) This represents the Partnership's share of the December 31, 1995 Appraised
Values which were determined by an independent property appraisal firm.
(2) The Net Asset Value assumes a hypothetical sale at December 31, 1995 of
all the Partnership's properties at a price based upon their value as a
rental property as determined by an independent property appraisal firm,
and the distribution of the proceeds of such sale, combined with the
Partnership's cash after liquidation of the Partnership's liabilities, to
the Partners.
Limited Partners should note that appraisals are only estimates of current
value and actual values realizable upon sale may be significantly different. A
significant factor in establishing an appraised value is the actual selling
price for properties which the appraiser believes are comparable. In addition,
the appraised value does not reflect the actual costs which would be incurred
in selling the properties. As a result of these factors and the illiquid
nature of an investment in Units of the Partnership, the variation between the
appraised value of the Partnership's properties and the price at which Units of
the Partnership could be sold is likely to be significant. Fiduciaries of
Limited Partners which are subject to ERISA or other provisions of law
requiring valuations of Units should consider all relevant factors, including,
but not limited to Net Asset Value per Unit, in determining the fair market
value of the investment in the Partnership for such purposes.
HUTTON/CONAM REALTY INVESTORS 4
Schedule III - Real Estate and Accumulated Depreciation
December 31, 1995
Cost Capitalized
Subsequent
Initial Cost to Partnership To Acquisition
--------------------------- -------------
Land
Buildings and Buildings and
Description Encumbrances Land Improvements Improvements
- -----------------------------------------------------------------------------
Residential Property:
Partnership Owned:
Pelican Landing
Clearwater, FL $ 0 $ 3,484,946 $ 9,422,260 $ (23,595)
Consolidated Ventures:
River Hill Apts.
Irving, TX 0 3,059,866 9,060,195 78,572
Provision for loss
Village at Foothills II
Tucson, AZ 0 1,584,049 5,838,595 11,134
Shadowood Village
Jacksonville, FL 0 566,000 5,125,065 44,274
-----------------------------------------------------
$ 0 $ 8,694,861 $29,446,115 $ 110,385
=====================================================
Gross Amount at Which Carried at
Close of Period
---------------------------------
Buildings and Accumulated
Description Land Improvements Total Depreciation
- ------------------------------------------------------------------------------
Residential Property:
Partnership Owned:
Pelican Landing
Clearwater, FL $ 3,474,525 $ 9,409,086 $ 12,883,611 $ 4,262,993
Consolidated Ventures:
River Hill Apts.
Irving, TX 3,060,810 9,137,823 12,198,633 4,021,463
Provision for loss (1,162,447) (3,336,186) (4,498,633) 0
Village at Foothills II
Tucson, AZ 1,583,964 5,849,814 7,433,778 2,602,082
Shadowood Village
Jacksonville, FL 569,274 5,166,065 5,735,339 2,093,474
--------------------------------------------------------
$7,526,126 $ 26,226,602 $ 33,752,728 $ 8,958,549
========================================================
(1) (2)
Life on which
Depreciation
in Latest
Date of Date Income Statements
Description Construction Acquired is Computed
- -----------------------------------------------------------------------------
Residential Property:
Partnership Owned:
Pelican Landing
Clearwater, FL 1984 - 1985 3/11/87 (3)
Consolidated Ventures:
River Hill Apts.
Irving, TX 1984 - 1985 6/12/85 (3)
Village at Foothills II
Tucson, AZ 1984 - 1985 5/30/85 (3)
Shadowood Village
Jacksonville, FL 1985 - 1986 7/3/86 (3)
(1) Represents aggregate cost for both financial reporting and Federal
income tax purposes.
(2) The amount of accumulated depreciation for Federal income tax purposes
is $21,724,496.
(3) Buildings and improvements - 25 years; personal property - 10 years.
A reconciliation of the carrying amount of real estate and accumulated
depreciation for the years ended December 31, 1995, 1994 and 1993:
Real Estate investments: 1995 1994 1993
- -----------------------------------------------------------------------------
Beginning of year $ 60,325,756 $ 60,286,669 $ 60,223,481
Additions 149,631 39,087 63,188
Write-down (4,498,633) 0 0
Dispositions (22,224,026) 0 0
------------------------------------------
End of year $ 33,752,728 $ 60,325,756 $ 60,286,669
==========================================
Accumulated Depreciation:
Beginning of year $ 18,896,846 $ 16,862,076 $ 14,830,231
Dispositions (7,527,559) 0 0
Write-down (4,021,463) 0 0
Depreciation expense 1,610,725 2,034,770 2,031,845
------------------------------------------
End of year $ 8,958,549 $ 18,896,846 $ 16,862,076
==========================================
Report of Independent Accountants
Our report on the consolidated financial statements of Hutton/ConAm Realty
Investors 4, a California limited partnership, and Consolidated Ventures has
been incorporated by reference in this Form 10-K from the Annual Report to
unitholders of Hutton/ConAm Realty Investors 4 for the year ended December 31,
1995. In connection with our audits of such financial statements, we have also
audited the related financial statement schedule listed in the index of this
Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
February 1, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 2,436,356
<SECURITIES> 000
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 33,752,728
<DEPRECIATION> 8,958,549
<TOTAL-ASSETS> 27,246,741
<CURRENT-LIABILITIES> 000
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 000
<TOTAL-LIABILITY-AND-EQUITY> 27,246,741
<SALES> 000
<TOTAL-REVENUES> 6,596,764
<CGS> 000
<TOTAL-COSTS> 3,630,788
<OTHER-EXPENSES> 1,800,510
<LOSS-PROVISION> 477,170
<INTEREST-EXPENSE> 283,556
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 3,259,624
<EPS-PRIMARY> 22.28
<EPS-DILUTED> 22.28
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