UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
COMMISSION FILE NUMBER 0-13426
GRIFFIN REAL ESTATE FUND-IV, A LIMITED PARTNERSHIP
MINNESOTA 41-1470203
510 MARQUETTE AVENUE, SUITE 300
MINNEAPOLIS, MINNESOTA 55402
REGISTRANT'S TELEPHONE NUMBER (612) 338-2828
WATS NUMBER 800-328-3788
Indicate by check mark whether the registrant (1) has filed reports 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 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 (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-Q
or any amendment to this Form 10-Q. [ ]
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
INDEX
PART 1. Financial Information
Condensed Balance Sheets
September 30, 1996 and December 31, 1995...................... 1
Condensed Statements of Operations
for the three months and the nine months ended
September 30, 1996 and 1995................................... 2
Condensed Statements of Cash Flows
for the nine months ended
September 30, 1996 and 1995................................... 3
Condensed Statements of Changes
in Partners' Equity for the
nine months ended September 30, 1996.......................... 4
Notes to Financial Statements.................................... 5
Management's Discussion and Analysis of
Financial Conditions and Results
of Operations................................................. 6-7
PART II. Other Information................................................ 8
SIGNATURES.................................................................. 9
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
(unaudited)
September 30, December 31,
1996 1995
------------ ------------
ASSETS
Cash and cash equivalents $ 527,168 $ 423,615
Receivables and other assets 845,348 872,515
------------ ------------
Total 1,372,516 1,296,130
------------ ------------
PROPERTY:
Land 1,203,093 1,203,093
Buildings and improvements 14,521,479 14,417,914
Furniture and equipment 1,003,999 1,003,999
------------ ------------
Total 16,728,571 16,625,006
Less accumulated depreciation 7,475,535 7,035,942
------------ ------------
Property - net 9,253,036 9,589,064
------------ ------------
TOTAL ASSETS $ 10,625,552 $ 10,885,194
============ ============
LIABILITIES AND PARTNERSHIP EQUITY
LIABILITIES:
Accounts payable and accrued liabilities $ 597,297 $ 678,629
Security deposits 93,310 92,795
Notes payable -- 40,421
Mortgage notes payable 12,285,236 12,363,382
------------ ------------
Total liabilities 12,975,843 13,175,227
------------ ------------
PARTNERS' EQUITY:
General partner (221,831) (221,228)
Limited partners (2,128,460) (2,068,805)
------------ ------------
Total partners' equity (2,350,291) (2,290,033)
------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 10,625,552 $ 10,885,194
============ ============
See notes to condensed financial statements.
<TABLE>
<CAPTION>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES
Rental income $ 896,050 $ 876,043 $ 2,615,762 $ 2,550,487
Interest income 5,250 3,405 14,451 6,087
Other income 29,850 30,769 84,618 76,324
----------- ----------- ----------- -----------
Total revenues 931,150 910,217 2,714,831 2,632,898
----------- ----------- ----------- -----------
OPERATING EXPENSES
Operating expenses 463,390 516,652 1,458,178 1,440,447
Interest expense 281,740 283,718 848,264 854,205
Depreciation and
amortization 156,215 155,248 468,647 465,747
----------- ----------- ----------- -----------
Total operating expenses 901,345 955,618 2,775,089 2,760,399
----------- ----------- ----------- -----------
NET INCOME (LOSS) 29,805 (45,401) (60,258) (127,501)
NET INCOME (LOSS) ALLOCATED
TO GENERAL PARTNER 298 (454) (603) (1,275)
----------- ----------- ----------- -----------
NET INCOME (LOSS) ALLOCATED
TO LIMITED PARTNERS $ 29,507 $ (44,947) $ (59,655) $ (126,226)
=========== =========== =========== ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 2.23 $ (3.41) $ (4.52) $ (9.56)
(weighted average basis) =========== =========== =========== ===========
See notes to condensed financial statements.
</TABLE>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
For the Nine Months
Ended September 30,
1996 1995
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (60,258) $(127,501)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization 468,647 465,747
Decrease (Increase) in other assets-net (1,887) 113,258
Decrease in accounts payable
and accrued liabilities (81,332) (39,307)
Increase (decrease) in security deposits 515 (2,484)
--------- ---------
Net cash provided by operating activities 325,685 409,713
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property (103,565) (67,474)
--------- ---------
Net cash used by investing activities (103,565) (67,474)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction in notes payable (40,421) (50,000)
Reduction in mortgage payable (78,146) (75,851)
--------- ---------
Net cash used by financing activities (118,567) (125,851)
--------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 103,553 216,388
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 423,615 97,469
--------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 527,168 $ 313,857
========= =========
CASH PAID DURING THE PERIOD FOR INTEREST $ 852,080 $ 844,403
========= =========
See notes to condensed financial statements.
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(unaudited)
GENERAL LIMITED TOTAL
PARTNER PARTNERS PARTNERSHIP
------- -------- -----------
PARTNERS' EQUITY (DEFICIT)
JANUARY 1, 1996 $ (221,228) $(2,068,805) $(2,290,033)
NET LOSS (603) (59,655) (60,258)
----------- ----------- -----------
PARTNERS' EQUITY (DEFICIT)
SEPTEMBER 30, 1996 $ (221,831) $(2,128,460) $(2,350,291)
=========== =========== ===========
See notes to condensed financial statements.
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(unaudited)
1. Griffin Real Estate Fund-IV, A Limited Partnership (the Partnership) was
formed by Griffin Associates-IV, A Limited Partnership (the General
Partner) on March 13, 1984 under the laws of the State of Minnesota. The
limited partnership offering terminated on December 22, 1984 at which time
13,220 units had been sold at a value of $1,000 per unit.
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly Griffin
Real Estate Fund-IV, A Limited Partnership's financial position as of
September 30, 1996 and December 31, 1995 and the results of its operations
for the three months and nine months ended September 30, 1996 and 1995 and
its cash flows for the nine months ended September 30, 1996 and 1995.
The accounting policies followed by the Partnership are set forth in Note
1 to the Partnership financial statements in the 1995 Griffin Real Estate
Fund-IV, A Limited Partnership Form 10K.
2. RELATED PARTY TRANSACTIONS
The partners of Griffin Associates-IV, A Limited Partnership, the general
partner of the Partnership, are also owners, directors, and officers of
the Griffin Companies, A Minnesota corporation. The following is a summary
of fees incurred for the nine months ended September 30, 1996 and 1995
relating to the Griffin Companies and its affiliates:
1996 1995
---- ----
Management fees $ 146,156 $ 143,029
Supervisory fees $ 29,999 $ 21,396
3. TAXABLE LOSS
The net loss shown on the statement of operations is reconciled to the
taxable loss as follows:
For the Nine Months
Ended September 30,
1996 1995
---- ----
Net loss per statement of operations $ 60,258 $ 127,501
Excess of tax depreciation over
book depreciation 118,210 114,949
--------- ---------
Taxable loss 178,468 $ 242,450
========= =========
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996, the Partnership had cash and cash equivalents of $527,168
which will be used for working capital requirements of the Partnership and its
properties. It is anticipated that the Partnership will be able to meet current
obligations and commitments from cash on hand and from cash generated from
operations during 1996.
Distributions to partners were not made for the first two quarters of 1996.
However, a distribution was issued on October 25, 1996 of $5 per limited
partnership unit to holders of record on September 30, 1996. Future cash
distributions will depend on future property operations.
RESULTS OF OPERATIONS
The General Partner, after reasonable inquiry, is not aware of any material
factors relating to any of the Partnership's properties or the operations of the
Partnership that would cause the financial information of the Partnership not to
be indicative of future operating results or of future financial conditions.
Net rental income of the properties was $896,050 and $876,043 for the third
quarter of 1996 and 1995 respectively. This is an increase of $20,007 or 2%.
Operating expenses were $463,390 and $516,652 for the third quarter of 1996 and
1995 respectively. While this is a decrease in operating expenses of $53,262,
year to date expenses are quite comparable for the nine months ended September
30, 1996 and 1995. The combination of increased revenue and a decrease in
expenses resulted in income from operations of $29,805 for the third quarter of
1996 as compared to a net loss of $45,401 for the third quarter of 1995.
Overall, operations of the Partnership and its properties resulted in an
increase in cash and cash equivalents for the first three quarters of $103,553
in 1996 compared to an increase of $216,388 for the same period in 1995.
Ravenwood Apartments is currently being marketed for sale. A contract for the
sale of the property was executed on July 1, 1996. However, the agreement for
the sale was canceled by the buyer.
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
OCCUPANCY TABLE
Approximate occupancy levels of the Partnership's investment property by
quarter.
1995 1996
------------------------- --------------------------
at at
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
1 Presidential
Estates Apts
Indianapolis, IN 89% 95% 93% 90% 92% 88% 92%
2 Brooklane Apts.
Brown Deer, WI 95% 99% 98% 96% 92% 98% 99%
3 Ravenwood Apts.
Cincinnati, OH 86% 91% 91% 86% 87% 87% 87%
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
On September 20, 1995 Everest Investors, LLC ("Everest") filed
a lawsuit in Hennepin County Minnesota's Fourth Judicial District Court
against Griffin Associates IV ("General Partner"), the general partner
of Griffin Real Estate Fund-IV, A Limited Partnership ("Partnership").
The lawsuit alleged that the General Partner had wrongfully denied
Everest access to the books and records of the Partnership. The court
granted, in part, Everest's request for access to the books and records
and ordered the General Partner to provide Everest access to these
records. The General Partner complied with this court order. Everest
continued to seek access to additional books and records of the
Partnership beyond the scope of the court order. The General Partner
vigorously defended the Partnership's right to keep its proprietary
records from being reviewed by Everest, who has not been admitted as a
limited partner of the Partnership despite having been assigned a
financial interest in 649 units by some original limited partners. The
General Partner filed for a dismissal of the matter. The court heard
arguments on September 29, 1995, October 26, 1995 and November 17,
1995. On November 27, 1995 the court dismissed Everest's lawsuit.
Everest appealed the dismissal in the Minnesota Court of Appeals on
March 12, 1996. Briefs were filed and oral arguments were heard by the
court on July 1, 1996. On September 10, 1996 the court affirmed the
dismissal.
Also, as of September 30, 1996, an individual was pursuing a legal
action against the Partnership for injuries sustained in a fall. The
individual is attempting to recover monetary damages and to receive
reimbursement for medical costs. Any judgement against the Partnership
would be covered by insurance.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) No reports on Form 8-K have been filed during the quarter for
which this report is filed.
SIGNATURES
Pursuant to the requirements 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.
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
Date: November 15, 1996 By /s/ Larry D. Fransen
-------------------------------
Larry D. Fransen, for the
General Partner, Griffin
Associates-IV, A Limited
Partnership
Date: November 15, 1996 By /s/ Larry D. Fransen
-------------------------------
Larry D. Fransen, for the
General Partner, Griffin
Associates-IV, A Limited
Partnership
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 527,168
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 845,348
<PP&E> 16,728,571
<DEPRECIATION> 7,475,535
<TOTAL-ASSETS> 10,625,552
<CURRENT-LIABILITIES> 690,607
<BONDS> 12,285,236
0
0
<COMMON> 0
<OTHER-SE> (2,350,291)<F1>
<TOTAL-LIABILITY-AND-EQUITY> 10,625,552
<SALES> 0
<TOTAL-REVENUES> 2,700,380
<CGS> 0
<TOTAL-COSTS> 1,926,825
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 833,813
<INCOME-PRETAX> (60,258)
<INCOME-TAX> 0
<INCOME-CONTINUING> (60,258)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (60,258)
<EPS-PRIMARY> (4.52)<F2>
<EPS-DILUTED> 0
<FN>
<F1>This entity ia a limited partnership. The Other Stockholders Equity line
represents total Partnership equity.
<F2>The EPS - Primary line represents net loss per limited partnership unit.
</FN>
</TABLE>
