UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 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
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the act: $13,220,000
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 (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-K
or any amendment to this form 10-K. [ ]
GRIFFIN REAL ESTATE FUND-IV, A LIMITED PARTNERSHIP
TABLE OF CONTENTS
PAGE
PART I
Item 1 Business............................................... 1-2
Item 2 Properties............................................. 3
Item 3 Legal Proceedings...................................... 3
Item 4 Submission of Matters to a Vote
of Limited Partners.................................... 3
PART II
Item 5 Market for the Partnership's Limited Partnership
Interests and Related Limited Partner Matters.......... 3
Item 6 Selected Financial Data................................ 4-5
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations.......... 5-7
Item 8 Financial Statements and Supplementary Data............ 7
Item 9 Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................... 7
PART III
Item 10 The General Partner of the Partnership................. 8-10
Item 11 Management Remuneration and Transactions...............10-11
Item 12 Limited Partnership Ownership of Certain
Beneficial Owners and Management....................... 11
Item 13 Certain Relationships and Related
Transactions........................................... 11
PART IV
Item 14 Exhibits, Financial Statement Schedules
and Reports on Form 8-K................................ 11
SIGNATURES ....................................................... 12
GRIFFIN REAL ESTATE FUND-IV, A LIMITED PARTNERSHIP
PART I
Item 1. Business
The registrant, Griffin Real Estate Fund-IV, A Limited Partnership
(the "Partnership"), was organized on March 13, 1984 under the laws of the State
of Minnesota. The Partnership was formed by the general partner, Griffin
Associates-IV, a Minnesota limited partnership, to acquire existing,
income-producing real properties for rental purposes. On December 23, 1983 the
Partnership commenced an offering of $15,000,000 pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933. The offering terminated
December 22, 1984 upon the acceptance of 13,220 units ($13,220,000).
The Partnership is engaged solely in the business of real estate
investment, and is limiting its investment to the real property acquired at its
inception plus reasonable repairs and capital improvements. The goal of these
investments is to generate both capital gain income and current income from cash
flow. The Partnership does not invest in real estate mortgages, securities of or
interests in persons primarily engaged in real estate activities, or in other
securities. A presentation of information about industry segments is not
applicable and would not be material to an understanding of the Partnership's
business taken as a whole.
The General Partner manages and controls all of the affairs of the
Partnership, including deciding when and on what terms properties should be sold
or refinanced.
As of December 31, 1996 the Partnership has made the real property
investments set forth in the following table:
<TABLE>
<CAPTION>
Name, type of property Date of Type of
and location (a) Size Purchase Ownership (b)
------------ ---- -------- ---------
<S> <C> <C> <C>
1. Presidential Estates Apts. 244 units & 2 2/10/84 Mortgage Note
Indianapolis, Indiana office buildings
2. Brooklane Apartments 278 units 12/27/84 Mortgage Note
Brown Deer, Wisconsin
3. Ravenwood Apts. (c) 192 units 4/30/85 Mortgage Note
Cincinnati, Ohio
</TABLE>
(a) Reference is made to Schedule III of this annual report.
(b) Reference is made to Note 3 of Notes to Financial Statements filed with
this annual report for the current outstanding principal balances and a
description of the long-term indebtedness secured by the Partnership's
real property investments;
(c) The Partnership has a 30% interest in this property. The other 70%
interest is owned by Griffin Real Estate Fund-V, A Limited Partnership.
Reference is made to Note 8 to the financial statements.
The Partnership's real property investments are subject to competition
from similar types of properties in the vicinities in which they are located.
The Terms of Transactions between the Partnership and affiliates of the
General Partner are described in Item 11 to which reference is hereby made.
It is the Partnership's policy to conduct its business activities in
accordance with the Partnership Agreement which may not be changed without a
vote of a majority of the Limited Partnership units outstanding. Pursuant to the
Partnership Agreement, the Partnership may not issue senior securities, make
loans to other persons, invest in the securities of other entities for the
purposes of exercising control, underwrite the securities of others or offer
securities in exchage for property.
As circumstances dictate, the Partnership has the right under the
Partnership Agreement to borrow money, and to use its investments in real
property as collateral for that debt. The amount of debt for acquisitions was
subject to a maximum of 75% loan to value. Although not required, the General
Partner intends to maintain this limit with any subsequent refinancings. No
refinancings occurred in 1996, 1995, or 1994. There is no limit on the number of
mortgages that may be taken out on any one piece of the Partnership's real
properties.
The Partnership Agreement provides for the redemption of limited
partnership units under certain circumstances. In 1996, 1995 and 1994 the
Partnership redeemed zero, zero and ten units respectively.
It is the policy of the General Partner to report on a quarterly basis
to the limited partners. Each interim report contains limited financial
reporting with a management discussion of operations and goals for the
Partnership. The annual report contains financial statements that are audited by
independent public accountants, and is accompanied by a management discussion of
operations and goals.
<TABLE>
<CAPTION>
AVERAGE EFFECTIVE ANNUAL
RENTAL PER UNIT
BROOKLANE PRESIDENTIAL
APARTMENTS ESTATES RAVENWOOD KRISTOPHER MOUNTAIN CREEK
BROWN DEER, WI INDIANAPOLIS, APARTMENTS WOODS APARTMENTS APARTMENTS STONE
IN CINCINNATI, OH CLARKSTON, GA MTN., GA
- ----------- ----------------------- ---------------------- ------------------------ ---------------------- ----------------------
<C> <C> <C> <C>
1996 $ 6,848 $ 5,542 $ 4,508 * *
- ----------- ----------------------- ---------------------- ------------------------ ---------------------- ----------------------
1995 6,718 5,359 4,637 * *
- ----------- ----------------------- ---------------------- ------------------------ ---------------------- ----------------------
1994 6,397 4,972 4,634 * *
- ----------- ----------------------- ---------------------- ------------------------ ---------------------- ----------------------
1993 5,952 4,865 4,547 * *
- ----------- ----------------------- ---------------------- ------------------------ ---------------------- ----------------------
1992 5,787 4,921 4,463 $ 6,013 $ 4,522
</TABLE>
* Indicates the Partnership did not own the property at any time during
the year.
<TABLE>
<CAPTION>
SCHEDULE OF REAL
ESTATE TAXES
BROOKLANE PRESIDENTIAL
APARTMENTS ESTATES RAVENWOOD (b) KRISTOPHER MOUNTAIN CREEK
BROWN DEER, INDIANAPOLIS APARTMENTS WOODS APARTMENTS APARTMENTS STONE
WI IN CINCINNATI, OH CLARKSTON, GA MTN., GA
- ------------------ ------------------ -------------------- ------------------------ ---------------------- -----------------------
<S> <C> <C> <C> <C> <C>
1996
TAX RATE 29.78 (a) 20.99 * *
ASSESSMENT $265,046 (a) $75,889 * *
- ------------------ ------------------ -------------------- ------------------------ ---------------------- -----------------------
1995
TAX RATE 38.59 24.04 20.57 * *
ASSESSMENT $289,404 $148,181 $73,026 * *
- ------------------ ------------------ -------------------- ------------------------ ---------------------- -----------------------
1994
TAX RATE 37.28 26.24 18.89 * *
ASSESSMENT $279,600 $142,861 $66,989 * *
- ------------------ ------------------ -------------------- ------------------------ ---------------------- -----------------------
1993
TAX RATE 35.41 25.85 18.60 * *
ASSESSMENT $290,383 $148,552 $66,063 * *
- ------------------ ------------------ -------------------- ------------------------ ---------------------- -----------------------
1992
TAX RATE 33.52 25.46 20.22 40.03 40.03
ASSESSMENT $274,904 $138,607 $71,304 $55,579 $53,584
</TABLE>
* Indicates the Partnership did not own the property at any time during the
year.
(a) Data not yet availabale
(b) The Partnership is allocated 30% of the
stated assessment. Griffin Real Estate Fund-V, A Limited Partnership is
allocated the remaining 70%.
Item 2. Properties
The Partnership owns the real properties referred to in Item 1 to which
reference is hereby made.
Item 3. 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 126 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.
Item 4. Submission of Matters to a Vote of Limited Partners
There were no matters submitted to a vote of the Limited Partners.
Item 5. Market for the Partnership's Limited Partnership Interests and Related
Limited Partner Matters
There are approximately 1,436 holders of record of units of the
Partnership. There is no public market for units and it is not anticipated that
a public market for units will develop. The General Partner will not redeem or
repurchase units except upon death of the original limited partner.
Reference is made to Item 6 in this annual report for a discussion of
cash distributions made to the Limited Partners.
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
Griffin Real Estate Fund-IV, A Limited Partnership
For the Years Ended December 31, 1996, 1995, 1994, 1993, and 1992
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total revenues $ 3,665,258 $ 3,600,899 $ 3,394,914 $ 3,244,941 $ 3,836,340
Income (Loss) before
extra-ordinary item 12,823 (37,252) (103,729) (768,243) (816,561)
Income (Loss) before
extra-ordinary item per
limited partner unit (c) 1 (3) (8) (57) (61)
Extraordinary Items:
Gain on foreclosure
of property - - - - 171,728
Loss on extinguishment
of debt - - - (78,215) -
Extraordinary items:
Gain on foreclosure of
property per limited
partner unit (c) - - - - 13
Loss on extinguishment
of debt per limited
partner unit (c) - - - (6) -
Net income (loss) 12,823 (37,252) (103,729) (846,458) (644,833)
Net income (loss) per
limited partner unit (c) 1 (3) (8) (63) (48)
Total assets $10,637,967 $ 10,885,194 $ 11,049,378 $ 11,508,304 $11,359,546
Mortgages and
contracts for deed 12,267,599 12,363,382 12,453,362 12,558,350 11,871,516
Cash distributions
per limited
partner unit (b)(c) 5 - - - -
</TABLE>
(a) The above selected financial data should be read in conjunction with the
financial statements and the related notes appearing in Exhibit 13 in this
annual report.
(b) Cash distributions of $181 per limited partnership unit have been made to
the Limited Partners since the inception of the Partnership. These distributions
have not resulted in taxable income to such Limited Partners and have therefore
all represented a return of capital under Generally Accepted Accounting
Principles. Each Partner's taxable income (or loss) from the Partnership in each
year is equal to his allocable share of the taxable income (loss) of the
Partnership, without regard to cash generated or distributed by the Partnership.
The Partnership's Taxable Income and Tax Losses (including net income and losses
from operations but not interest income earned on cash reserves and investments)
as well as Profit or Loss on the Sale of Properties will constitute passive
activity income and losses under the 1986 Act with respect to those taxpayers to
which the passive activity rules apply.
(c) The net income (loss) and cash distribution per limited partnership unit are
based upon the weighted average number of limited partnership units outstanding
during the period.
(d) The 1992 figures reflect the foreclosures of Mountain Creek Apartments and
Kristopher Woods Apartments.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
Summary of Operations - 1996 Compared to 1995
Rental rates of the property portfolio increased an average of 3.1%.
Individually, rental rates decreased 1.2% at Ravenwood Apartments due to lower
market rates, and increased 4.3% and 2.9% at Presidential Estates Apartments and
Brooklane Apartments respectively.
Average physical occupancy declined at all three properties, with the
largest drop at Ravenwood Apartments where the average occupancy rate went from
88.1% to 86.7%. Rent loss due to vacancy rose by approximately $41,800. As a
result of the overall increase in rental rates and despite a decrease in other
income, total revenues increased approximately $64,400.
Interest expense dropped slightly for all three properties since
payments are being made on steadily declining principal balances. Interest rates
averaged about the same throughout 1996 as they did for 1995.
Excluding the interest expense and the depreciation and amortization
expenses which are non-cash expenditures, total expenses increased slightly by
about $8,500. The improved revenue and stable expenses combined to increase Net
Income by about $50,000.
During 1996, the Partnership invested approximately $302,900 in
physical improvements to the properties. Most of these funds were spent on the
pool HVAC system and hall remodeling at Brooklane Apartments, and on the parking
lot and roofs at Presidential Estates Apartments.
The overall performance of the Partnership's properties in 1996 added
approximately $255,600 to its cash reserves before distributions to the limited
partners.
An improved cash position has enabled the Partnership to resume
distributions to limited partners of record on September 30,1996 at $5 per unit.
This equates to an annual return of $20 or 2% per partnership unit. Unitholders
of record on December 31, 1996 were paid $10 per unit on January 24, 1997
consisting of the normal distribution of $5 and a bonus distribution of an
additional $5 per unit.
During 1996 the Partnership commenced the active sale of Ravenwood
Apartments. A formal agreement for the sale was executed on February 11, 1997.
Currently the purchase is contingent upon the satisfactory approval of the due
diligence by the purchaser. Although there can be no assurance a closing will
take place, if all goes according to schedule a sale of the property will be
concluded during the month of April 1997.
Summary of Operations -- 1996 Compared to 1995
Rental rates of the property portfolio increased an average of 4.4%.
Individually, rental rates increased by the smallest amount of 2.5% at Ravenwood
Apartments and the largest amount of 5.5% at Presidential Estates Apartments.
Average physical occupancy improved at two of the three properties
with the physical occupancy at Ravenwood Apartments declining. Occupancy rates
averaged increases from 92.1% to 93.2%. Rent loss due to vacancy declined by
approximately $26,700. As a result of increased rental rates and improved
occupancy, plus the increase in interest and other income, revenue increased
approximately $206,000.
Interest expense increased at all three properties with a total
increase of approximately $187,300. The terms of all three mortgage notes
includes an adjustable rate of interest. Rates that were at 7.1% at the
beginning of 1994 rose throughout 1994 and 1995 to a high of 9.5% by the end of
1995.
Excluding the interest expense and the depreciation and amortization
expenses which are non-cash expenditures, total other operating expenses
declined by approximately $60,700.
As a result of improved revenue, and a smaller increase in expenses,
Net Loss was reduced by approximately $66,500.
During the year, the Partnership invested approximately $199,300 in
physical improvements to the properties. The majority of these expenditures
related to the completion of the exterior renovations and landscaping of
Presidential Estates Apartments.
As a result of the overall performance of the Partnership's properties
in 1995 the Partnership added approximately $326,100 to its cash reserve
balance.
LIQUIDITY
The Partnership has approximately $609,754 of cash reserves on hand at
December 31, 1996. This should provide the Partnership with ample liquidity with
which to operate the Partnership and provide funds for capital improvements to
the properties in the near term and into the future. The Partnership has
committed approximately $150,000 to capital improvements at Brooklane Apartments
and approximately $130,000 at Presidential Estates Apartments.
Although there can be no assurance of continuing cash flow from
property operations, if anticipated cash flow is realized, the Partnership
intends to continue distributions in 1997 at an annual rate of $20 or 2% per
partnership unit.
Although there can be no assurance that a sale will ultimately be
completed, the Partnership intends on selling its share of Ravenwood Apartments
during 1997. Upon a successful completion of a sale, the proceeds will be
distributed. The Partnership has no other plans for property sales in the near
term.
OCCUPANCY TABLE
Approximate occupancy levels of the Partnership's investment property
by quarter.
<TABLE>
<CAPTION>
Brooklane Presidential Ravenwood Kristopher Mtn. Creek
Apts. Estates Apts. Apts. Woods Apts. Apts.
Brown Deer Indianapolis Cincinnati Clarkston Stone Mtn.
Wisconsin Indiana Ohio Georgia Georgia
----------- ------------- ---------- ------------ -------
<S> <C> <C> <C> <C> <C>
3/31/96 92% 92% 87% * *
6/30/96 98% 88% 87% * *
9/30/96 99% 92% 87% * *
12/31/96 96% 89% 85% * *
3/31/95 95% 89% 86% * *
6/30/95 99% 95% 91% * *
9/30/95 98% 93% 91% * *
12/31/95 96% 90% 86% * *
3/31/94 93% 83% 91% * *
6/30/94 99% 85% 92% * *
9/30/94 96% 94% 90% * *
12/31/94 97% 91% 88% * *
3/31/93 89% 91% 92% * *
6/30/93 99% 93% 96% * *
9/30/93 99% 90% 94% * *
12/31/93 96% 87% 90% * *
3/31/92 93% 93% 92% 88% 82%
6/30/92 92% 96% 91% * *
9/30/92 91% 93% 96% * *
12/31/92 83% 90% 96% * *
</TABLE>
* Indicates the Partnership did not own the property at the end of the
quarter.
Item 8. Financial Statements and Supplementary Data
The Table of Contents to Financial Statements, Financial Statements
and Supplementary Data listed in Item 14 are referenced herein as included in
the exhibits attached to this report and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There have been no changes in independent auditors and as of the date
of the filing, there were no material disagreements with the current independent
auditors (Larson, Allen, Weishair & Co.,LLP) regarding any of the following:
1) Accounting principles or practices
2) Extent and quality of financial statement disclosure
3) Auditing scope or procedures
PART III
Item 10. The General Partner of the Partnership
The General Partner of the Partnership is Griffin Associates-IV, A
Limited Partnership, a Minnesota limited partnership formed in August of 1983 by
certain directors and officers of Griffin Companies for the sole purpose of
acting as General Partner of the Partnership. As General Partner, Griffin
Associates-IV manages and controls the affairs of the Partnership and has
general responsibility and authority in all matters affecting its business.
Griffin Companies, A Minnesota corporation organized in 1969, and its
affiliates are engaged in real estate brokerage, real estate investment
counseling, and management of commercial and residential real estate. Griffin
Companies and its Affiliates have organized and served as general partners in
thirty-two privately placed partnerships and six publicly offered partnerships,
which were formed for the purpose of real estate investment.
The General Partner and its Affiliates provide executive, supervisory
and certain administrative services for the Partnership's operations and the
General Partner is responsible for determining whether, when and on what terms
properties should be sold or refinanced. In addition, the books and records of
the Partnership are maintained by Griffin Companies, and are subject to audit by
independent certified public accountants. The partners of the General Partner
intend to devote only as much of their time to the business of the Partnership
as they determine to be reasonably required. Limited Partners have no right to
participate in the management of the Partnership.
Effective December 31, 1994, James R. Wadsworth, one of the partners
of the General Partner, withdrew as a partner.
The identity and business experience of each of the partners of the
General Partner is as follows:
Larry D. Fransen (age 56) founded Griffin Companies in 1969. He is a
Director and senior officer of each of its operating entities, in addition to
serving as Chairman.
Since 1969, he has acted as general partner in many partnerships
investing in apartments, office buildings, warehouses, land and motels.
Acting on behalf of Griffin Companies' clients, Mr. Fransen has
negotiated the acquisition and disposition of more than one billion dollars in
investment real estate properties nationwide.
He is a member of numerous professional organizations, including the
Greater Minneapolis Area Board of Realtors, the Minnesota Association of
Realtors, the National Association of Realtors (NAR), Minnesota Multi Housing
Association (MHA), National Multi-Housing Council (NMHC), the National Apartment
Association (NAA), Commercial and Investment Institute, National Association of
Real Estate Investment Trusts (NAREIT), and the Pension Real Estate Association
(PREA).
Mr. Fransen holds the CCIM (Certified Commercial Investment Member)
designation of the Commercial Investment Institute, as well as the SRS
(Specialist in Real Estate Securities) designation. For 13 years, he was an
instructor for the Commercial Investment Institute and served as the group's
national president in 1983. He has been awarded the Omega Tau Rho Medal of
Service for his years of service to the National Association of Realtors.
Robert S. Dunbar (age 57) is Chief Executive Officer of Griffin
Companies. Following several years with Control Data Corporation where he held
various administrative and management positions, he was named Executive Vice
President of the U.S. Jaycees in 1970, with responsibility for planning,
budgeting and administration of the national organization. In 1972, he joined
Ed. Phillips & Sons Company in Minneapolis, Minnesota as a sales manager. In
1975 he was elected President of Westland Capital Corporation, a Minneapolis
venture capital firm, where he was responsible for analyzing various companies
for potential investment opportunities. He joined Griffin Companies in 1977.
Mr. Dunbar is a member of the Institute of Real Estate Management
(IREM) and the Minnesota Multi Housing Association (MHA). He holds the Certified
Apartment Manager (CAM) designation of the National Apartment Association and is
a Certified Property Manager (CPM) as designated by the National Association of
Realtors. Mr. Dunbar also holds a Minnesota Real Estate Broker's License and has
completed the necessary course work for their prestigious Certified Commercial
Investment Member (CCIM) designation conferred by the Commercial Investment
Institute. He is a member of the National Multi-Housing Council and The
Executive Committee (T.E.C.). He also serves on the Board of Trustees of
Northwestern College.
Robert E. Christenson (age 60) served as a Senior Vice President of
Griffin Companies from April 1982 to March 1985. Since 1970 Mr. Christenson has
been active in the brokerage of commercial investment real estate at two
regional mortgage banking and investment real estate firms based in Minneapolis,
Minnesota.
Mr. Christenson holds the professional designation CCIM and is past
President of the Upper Midwest CCIM Chapter. He is a member of the Greater
Minneapolis Area Board of Realtors, the Minnesota Association of Realtors and
the National Association of Realtors where he currently serves on the Commercial
Investment Council. Mr. Christenson received the National Service Medal from the
National Association of Realtors in September 1980, and was awarded the William
J. Campbell Trophy for the National Commercial Transaction of the Year for 1982
by the Realtors National Marketing Institute.
Mr. Christenson is a member of the Real Estate Securities Syndication
Institute and serves as a member of its National Syndication Forum. He is a
member of the International Association for Financial Planning and is a member
and Director of the Twin Cities Association for Financial Planning.
Thomas A. Robeson (age 65) served as a Senior Vice President of
Griffin Companies, which he joined in April 1980, until his departure on
February 29, 1988.
Mr. Robeson's previous business experience includes service in the
Investment Division of a national insurance company, from 1955 to 1957, and from
1957 to 1972, with IBM Corporation, where he held various sales and management
positions.
Mr. Robeson entered the real estate field in 1972 when he joined a
real estate firm in St. Paul, Minnesota. His responsibilities included
brokerage, management and syndication of various types of real estate. In 1975,
Mr. Robeson joined a Minneapolis investment company where he was involved in the
brokerage of a wide range of commercial, industrial, and investment real estate.
In 1978, he was promoted to Vice President and Manager of the
Commercial-Investment Division of that company. He has experience in the
acquisition and disposition of shopping centers, apartment buildings, commercial
office buildings, motels, net leased industrial warehouse and manufacturing
facilities, and industrial, commercial and residential unimproved property.
Mr. Robeson holds the professional designation CCIM (Certified
Commercial Investment Member of the Realtors National Marketing Institute). He
is a member of the International Association for Financial Planning and of
several real estate organizations, including the National Association of
Industrial and Office Parks, the Upper Midwest Chapter of the Realtors National
Marketing Institute, the Greater Minneapolis Area Board of Realtors, the
Minnesota Association of Realtors and the National Association of Realtors.
Messrs. Fransen and Dunbar together own 100% of the issued and
outstanding shares of common stock of Griffin Companies. The partners of the
General Partner represent and warrant that they have a collective personal net
worth on an unaudited cost basis and on an unaudited estimated current value
basis (measured as total assets at estimated current value less all liabilities)
in excess of $1,500,000. The assets of the partners of the General Partner are
largely invested in interests in real property and in Griffin Companies.
Therefore, it may be difficult to precisely value such assets or to liquidate
such assets expeditiously or on terms favorable to the seller.
Item 11. Management Remuneration and Transactions
Partners of the General Partner receive no current or proposed direct
remuneration in such capacity. The Partnership is required to pay a management
fee to Griffin Companies and the General Partner is entitled to receive a share
of cash distributions, when and as cash distributions are made to the Limited
Partners, and a share of profits or losses as described below:
. Profits, losses, other than from refinancing or from the sale of
Partnership properties, are allocated 99% to the limited partners
and 1% to the general partner.
. Cash flow distributions, other than from refinancing or from the
sale of Partnership properties, are allocated 95% to the limited
partners and 5% to the general partner.
. Net proceeds from refinancing or from the sale of property other
than upon liquidation, less any necessary liability reserves or
debt payments, will be distributed in the following order subject
to the general partner receiving at least 1% of the
distributions:
.. First, to the limited partners to the extent that prior
distributions are less than the original capital
contribution plus 6% per annum (as defined in the
Partnership Agreement);
.. Second, any unpaid real estate commissions due to the
general partner on the resale of the Partnership properties;
.. Third, any remaining balance, 85% to the limited partners
and 15% to the general partner.
The Partnership is entitled to engage in various transactions
involving affiliates of the General Partner of the Partnership.
Griffin Companies ("Griffin"), an affiliate of the General Partner,
may be reimbursed for direct expenses relating to the administration of the
Partnership and operation of the Partnership real property investments. Griffin
received approximately $11,756, $ 11,781 and $11,097 in 1996, 1995, and 1994
respectively, for these expenses.
Reference is made to Note 5 of Notes to Financial Statements appearing elsewhere
in this annual report for a description of related party transactions.
Item 12. Limited Partnership Ownership of Certain Beneficial Owners and
Management
No person or any "group" is known by the Partnership to own
beneficially more than 5% of the outstanding units of the Partnership.
The individual general partners of the General Partner as a group have
the following interest in the Partnership:
Amount and Nature Percent of Class
of Beneficial Outstanding at
Title of Class Ownership December 31, 1996
-------------- --------- -----------------
Limited Partnership Units 100 units purchased at .8%
$1,000 per unit
No partner of the General Partner possesses a right to acquire
beneficial ownership of interest of the Partnership. There exists no
arrangement, known to the Partnership, the operation of which may at subsequent
date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions
The partners of Griffin Associates-IV, the general partner of the
Partnership, are also owners and employees of Griffin Companies, a Minnesota
corporation. Accounts payable - affiliates consists of unpaid management fees to
and advances from Griffin Companies The following is a summary of approximate
fees incurred for the years ended December 31:
1996 1995 1994
---- ---- ----
Property management fees $195,590 $ 192,305 $ 183,022
Major improvement
supervisory fees 41,901 33,296 70,414
On April 26, 1985, Griffin Real Estate Fund-IV entered into a joint
venture with Griffin Real Estate Fund-V for the purpose of purchasing Ravenwood
Apartments, with Griffin Real Estate Fund-V designated as the managing partner.
Griffin Real Estate Fund-IV contributed $330,000 (30%) and Griffin Real Estate
Fund-V contributed $770,000 (70%) to the venture. All allocations of cash flow,
tax consequences, expenses, and future contributions are to be in the ratio of
30% to 70%, respectively. There are no remunerations between Griffin Real Estate
Fund-IV and Griffin Real Estate Fund-V in relation to the Ravenwood Joint
Venture.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
The following documents are filed as part of this report:
Exhibit 13: Financial Statements and Schedules
Exhibit 27: Financial Data Schedule
No annual report or proxy material for the fiscal year 1996 has been
sent to the Partners of the Partnership. An annual report will be sent to the
Partners subsequent to this filing substantially similar to this form 10K.
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 25, 1997 Griffin Real Estate Fund-IV,
A Limited Partnership
By: Larry Fransen \s\
----------------------------------
Larry Fransen
for the General Partner
Griffin Associates-IV,
A Limited Partnership
Pursuant to the requirements of the Securities and Exchange Act of
1934, this Report has been signed below by the following person on behalf of the
Registrant and in the capacity and on the date indicated.
Dated: March 25, 1997 By: Larry Fransen \s\
----------------------------------
Larry Fransen
Managing General Partner
of the General Partner
Griffin Associates-IV
A Limited Partnership
EXHIBIT 13
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
INCLUDED IN ANNUAL REPORT (FORM 10-K)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
TABLE OF CONTENTS
Page
Independent Auditor's Report.......................................... 1
Balance Sheets, December 31, 1996 and 1995............................ 2
Statements of Operations for the Years Ended
December 31, 1996, 1995 and 1994...................................... 3
Statements of Cash Flows for the Years
Ended December 31, 1996, 1995 and 1994................................ 4
Statements of Changes in Partners' Deficit
for the Years Ended December 31, 1996, 1995 and 1994.................. 5
Notes to Financial Statements......................................... 6-10
Financial Statement Schedules......................................... 11
III Real Estate and Accumulated Depreciation,
December 31, 1996....................................... 11
All schedules other than those indicated in the Table of Contents have
been omitted as the required information is inapplicable or the
information is presented in the financial statements or related notes.
INDEPENDENT AUDITOR'S REPORT
Griffin Real Estate Fund-IV,
A Limited Partnership
Minneapolis, Minnesota
We have audited the accompanying balance sheets of Griffin Real Estate Fund-IV,
A Limited Partnership, as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' deficit, and cash flows for each
of the years in the three-year period ended December 31, 1996. Our audits also
included the financial statement schedules listed in the table of contents at
Exhibit 13. These financial statements and financial statement schedules are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these 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 audits to obtain
reasonable assurance about whether the financial statments 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 financial statements referred to above present fairly, in
all material respects, the financial position of Griffin Real Estate Fund-IV, A
Limited Partnership, as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1996 in conformity with generally accepted accounting
principles. Also, in our opinion, the financial statement schedules, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
LARSON, ALLEN, WEISHAIR & CO., LLP
Minneapolis, Minnesota
March 14, 1997
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 609,754 $ 423,615
Real estate tax, replacement and repair, and
insurance escrow deposits 411,931 515,751
Receivables and other assets 49,028 50,088
------------ ------------
Total 1,070,713 989,454
------------ ------------
PROPERTY AND EQUIPMENT:
Land 1,203,093 1,203,093
Buildings and improvements 14,715,385 14,417,914
Furniture and equipment 1,009,394 1,003,999
------------ ------------
Total 16,927,872 16,625,006
Less accumulated depreciation 7,628,555 7,035,942
------------ ------------
Property and equipment - net 9,299,317 9,589,064
------------ ------------
Deferred expenses (net of accumulated
amortization - 1996, $119,444;
1995, $80,705) 267,937 306,676
------------ ------------
TOTAL ASSETS $ 10,637,967 $ 10,885,194
============ ============
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES:
Accounts payable:
Affiliate $ 2,299 $ 18,816
Other 90,445 105,744
Security deposits 88,396 92,795
Accrued expenses:
Real estate taxes 439,051 456,450
Interest 96,863 97,619
Notes payable -- 40,421
Mortgage notes payable 12,267,599 12,363,382
------------ ------------
Total liabilities 12,984,653 13,175,227
------------ ------------
PARTNERS' DEFICIT:
General Partner (224,576) (221,228)
Limited Partners (2,122,110) (2,068,805)
------------ ------------
Total Partners' Deficit (2,346,686) (2,290,033)
------------ ------------
TOTAL LIABILITIES AND PARTNERS'
DEFICIT $ 10,637,967 $ 10,885,194
============ ============
See Notes to Financial Statements
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
---- ---- ----
REVENUES:
Rent (less vacancies: 1996, $293,423;
1995, $251,583; 1994, $278,236) $ 3,514,289 $ 3,440,993 $ 3,257,280
Interest 25,518 25,407 11,040
Other 125,451 134,499 126,594
----------- ----------- -----------
Total revenues 3,665,258 3,600,899 3,394,914
----------- ----------- -----------
EXPENSES:
Interest 1,148,724 1,160,354 973,102
Depreciation and amortization 631,352 625,432 612,525
Real estate taxes 449,127 426,059 455,828
Repairs and maintenance 331,065 322,587 394,775
Utilities 271,304 259,116 276,616
Salaries and employee benefits 416,257 412,491 382,719
Management fees:
Related parties 195,590 192,305 183,022
Administrative 109,610 111,913 117,830
Insurance 75,746 80,061 73,907
Bad debts 10,408 16,406 6,794
Other 13,252 31,427 21,525
----------- ----------- -----------
Total expenses 3,652,435 3,638,151 3,498,643
----------- ----------- -----------
NET INCOME (LOSS) $ 12,823 $ (37,252) $ (103,729)
=========== =========== ===========
NET INCOME (LOSS) ALLOCATED
TO GENERAL PARTNER $ 128 $ (373) $ (1,037)
=========== =========== ===========
NET INCOME (LOSS) ALLOCATED
TO LIMITED PARTNERS $ 12,695 $ (36,879) $ (102,692)
=========== =========== ===========
PER UNIT:
NET INCOME (LOSS) $ 1 $ (3) $ (8)
=========== =========== ===========
See Notes to Financial Statements
<TABLE>
<CAPTION>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 12,823 $ (37,252) $ (103,729)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and amortization 631,352 625,432 612,525
Decrease in:
Receivables, escrows and
other assets 104,880 64,176 364,644
Increase (decrease) in:
Accounts payable (31,816) 17,056 (2,859)
Security deposits (4,399) (5,588) (6,746)
Accrued expenses (18,155) 18,247 76,293
----------- ----------- -----------
Net cash provided by
operating activities 694,685 682,071 940,128
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property
and equipment (302,866) (199,278) (500,422)
----------- ----------- -----------
Net cash used by
investing activities (302,866) (199,278) (500,422)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (69,476) -- --
Payments on mortgage notes (95,783) (89,980) (104,988)
Payments on notes payable (40,421) (66,667) (308,412)
Redemption of Partnership units -- -- (8,485)
----------- ----------- -----------
Net cash used by financing
activities (205,680) (156,647) (421,885)
----------- ----------- -----------
INCREASE IN CASH AND CASH EQUIVALENTS 186,139 326,146 17,821
CASH AND CASH EQUIVALENTS
- BEGINNING OF YEAR 423,615 97,469 79,648
----------- ----------- -----------
CASH AND CASH EQUIVALENTS
- END OF YEAR $ 609,754 $ 423,615 $ 97,469
=========== =========== ===========
CASH PAID FOR INTEREST $ 1,149,480 $ 1,146,795 $ 890,509
=========== =========== ===========
</TABLE>
See Notes to Financial Statements
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
GENERAL LIMITED
PARTNER'S PARTNERS'
DEFICIT DEFICIT TOTAL
----------- ----------- -----------
PARTNERS' DEFICIT
DECEMBER 31, 1993 $ (219,818) $(1,920,749) $(2,140,567)
NET LOSS (1,037) (102,692) (103,729)
REDEMPTION OF TEN UNITS -- (8,485) (8,485)
----------- ----------- -----------
PARTNERS' DEFICIT
DECEMBER 31, 1994 (220,855) (2,031,926) (2,252,781)
NET LOSS (373) (36,879) (37,252)
----------- ----------- -----------
PARTNERS' DEFICIT
DECEMBER 31, 1995 (221,228) (2,068,805) (2,290,033)
NET INCOME 128 12,695 12,823
DISTRIBUTIONS (3,476) (66,000) (69,476)
----------- ----------- -----------
PARTNERS' DEFICIT
DECEMBER 31, 1996 $ (224,576) $(2,122,110) $(2,346,686)
=========== =========== ===========
See Notes to Financial Statements
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of the Partnership - Griffin Real Estate Fund-IV, A Limited
Partnership (the Partnership), was organized 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. At December 31, 1996, there are 13,220 limited partnership units
authorized and 13,200 limited partnership units outstanding.
Sale of Property - Griffin Ravenwood Joint Venture is currently under a
$3,450,000 purchase agreement dated February 11, 1997 for the sale of
Ravenwood Apartments. The Partnership's share of this purchase price will
be $1,035,000. The anticipated closing date of this purchase agreement is
April 15, 1997. Estimated closing costs of $140,500 are associated with
this purchase agreement, of which the Partnership's obligation would be
$42,150.
Statements of Cash Flows - For the purpose of the statements of cash flows,
the Partnership considers all highly liquid debt instruments with an
original maturity of three months or less to be cash equivalents. Cash and
cash equivalents of $609,754 and $423,615 at December 31, 1996 and 1995
respectively, consist of deposits in bank and government money market
portfolios and are recorded at cost which approximates market value. The
Partnership places its temporary cash investments with high credit quality
financial institutions. At times such investments may be in excess of the
FDIC insurance limit.
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 the financial statements. Estimates also affect the reported
amounts of revenue and expense during the reported period. Actual results
could differ from those estimates.
Financial Instruments - The carrying amounts for all financial instruments
approximates fair value. The carrying amounts for cash, receivables,
accounts payable and accrued liabilities, and loans payable approximate
fair value because of the short maturity of these instruments. The fair
value of long-term debt approximates the current rates at which the
Partnership could borrow funds with similar remaining maturities.
Properties and Depreciation - Properties are stated at cost including
capitalized acquisition fees and are depreciated using a straight-line
method over the estimated useful lives of the related assets (buildings,
25 years; land improvements, 15 years; furnishings and equipment, 5
years). For income tax purposes, the Partnership depreciates the buildings
over 15 to 19 years using the Accelerated Cost Recovery System. Building
improvements made subsequent to January 1, 1987 are depreciated over 27.5
years using the Modified Cost Recovery System for tax purposes.
Prior to their refinancing in December of 1993, two of the properties'
mortgages and contracts for deed included contractual interest rates
which were below market for similar obligations and therefore were
discounted to reflect prevailing market rates at the date of property
acquisitions. These discounts are being amortized over the life of the
obligations using the interest method.
Leases - Apartment leases are generally renewable on a six month to one year
basis.
Offering Costs - Expenses incurred in connection with the registration and
offering of the partnership units, syndication costs, including selling
commissions and advertising, are recorded as a reduction of Partners'
Equity. Such costs are not deductible for income tax purposes by the
Partnership nor its partners.
Income Taxes - The financial statements of the Partnership do not include a
provision for income taxes as the income and losses of the Partnership are
allocated to the individual partners for inclusion in their income tax
returns.
Net Income (Loss) Per Limited Partnership Unit - The net income (loss) per
limited partnership unit is computed by dividing the net income (loss)
allocated to limited partners by the weighted average number of limited
partnership units outstanding during the year.
2. ORGANIZATION
The Partnership was formed by the general partner, Griffin Associates-IV, a
Limited Partnership, to acquire existing, income-producing real properties
for rental purposes. Griffin Associates-IV is not required to make any
capital contributions to the Partnership.
The Limited Partnership Agreement and Certificate of Limited Partnership
(Partnership Agreement) contains certain provisions, among others,
described as follows:
. The management and general responsibility of operating the
Partnership business shall be vested exclusively in the general
partner.
. Profits and losses, other than from refinancing or from the sale of
Partnership properties, are allocated 99% to the limited partners
and 1% to the general partner.
. Cash flow distributions, other than from refinancing or from the
sale of Partnership properties, are allocated 95% to the limited
partners and 5% to the general partner.
. Net proceeds from refinancing or from the sale of property other
than upon liquidation, less any necessary liability reserves or debt
payments, will be distributed in the following order subject to the
general partner receiving at least 1% of the distributions:
.. First, to the limited partners to the extent that prior
distributions are less than the original capital contribution
plus 6% per annum (as defined in the Partnership Agreement);
.. Second, any unpaid real estate commissions due to the general
partner on the resale of the Partnership properties;
.. Third, any remaining balance, 85% to the limited partners and
15% to the general partner.
. The Partnership will terminate on December 31, 2024 or earlier upon
the sale of substantially all of the properties or the occurrence of
certain other events as stated in the Partnership Agreement.
3. MORTGAGE NOTES PAYABLE
Mortgage notes payable consist of the following at December 31:
1996 1995
----------- -----------
Mortgage note (Presidential Estates
Apartments), monthly installments of
principal and interest (9.475% at
December 31, 1996) due January 2004 $ 4,879,063 $ 4,917,157
Mortgage note (Brooklane Apartments),
monthly installments of principal and
interest (9.475% at December 31, 1996)
due January 2004 6,478,456 6,529,039
Mortgage note (Ravenwood Apartments),
monthly installments of principal and
interest (9.475% at December 31, 1996)
due January 2004 910,080 917,186
----------- -----------
Total mortgage notes payable $12,267,599 $12,363,382
=========== ===========
All property is pledged as collateral to the mortgage notes payable.
Future principal maturities are as follows:
1997 $ 106,496
1998 117,170
1999 128,448
2000 140,812
2001 154,365
Later 11,620,308
-----------
Total $12,267,599
===========
On December 9, 1993, the Partnership refinanced Brooklane Apartments,
Presidential Estates Apartments and Ravenwood Apartments. Terms of these
refinancings are as follows:
Presidential Estates: Loan amount of $4,994,700 with monthly installments of
principal and interest of $33,566 beginning February 1, 1994 with possible
interest rate adjustments every six months limited to 1% per adjustment
date, due 2004.
Brooklane Apartments: Loan amount of $6,632,000 with monthly installments of
principal and interest of $44,569 beginning February 1, 1994 with possible
interest rate adjustments every six months, due 2004.
Ravenwood: Loan amount of $3,105,500 with monthly installments of principal
and interest of $20,870 beginning February 1, 1994 with possible interest
rate adjustments every six months limited to 1% per adjustment date, due
2004. (The Partnership share of the debt is 30% - see note 8).
All of the above debt is non-recourse to the individual partners.
4. NOTES PAYABLE
In 1993 the Partnership entered into three separate promissory notes totaling
$415,500 to pay for some of the cost of the refinancings. These three
notes contain various repayment terms.
Two of these notes totalling $115,500 were paid prior to March 15, 1994. The
remaining note in the amount of $300,000 required interest only payments
of 8% through July 1, 1994. Commencing August 1, 1994, monthly principal
and interest payments were required with the entire balance due and
payable December 31, 1996. This note was paid off on September 1, 1996.
The weighted average balance of these loans during 1996, 1995 and 1994 was
$13,924, $73,755, and $261,857, respectively. The weighted average
interest rate during 1996, 1995 and 1994 was 10.31%, 10.84%, and 4.16%,
respectively.
5. RELATED PARTY TRANSACTIONS
The partners of Griffin Associates-IV, the general partner of the
Partnership, are also owners and employees of Griffin Companies, a
Minnesota corporation. Accounts payable - affiliates consists of unpaid
management fees to and advances from Griffin Companies. The following is a
summary of approximate fees incurred for the years ended December 31:
1996 1995 1994
--------- --------- ---------
Property management fees $ 195,590 $ 192,305 $ 183,022
Major improvement
supervisory fees 41,901 33,296 70,414
6. TAXABLE LOSS
The net loss shown on the financial statements is reconciled to the taxable
loss as follows:
1996 1995 1994
--------- --------- ---------
Net income (loss) per
financial statements $ 12,823 $ (37,252) $(103,729)
Excess of tax depreciation
over financial statement
depreciation (239,560) (236,392) (240,445)
Accrued real estate taxes not
deducted for tax purposes 11,383 10,942 9,894
Real estate tax expense for tax
purposes in excess of financial
statement expense (10,942) (9,894) (10,585)
Prepaid rent recognized as
income for tax purposes 5,393 10,124 9,325
Rental income not recognized
for tax purposes (10,124) (9,325) (9,581)
Other 1 -- 4
--------- --------- ---------
Taxable loss $(231,026) $(271,797) $(345,117)
========= ========= =========
7. PARTNERS' DEFICIT RECONCILIATION
Reconciliation of financial statement deficit to tax return deficit is as
follows:
1996 1995 1994
----------- ----------- -----------
Deficit per
financial statements $(2,346,686) $(2,290,033) $(2,252,781)
Cumulative excess of tax
depreciation over financial
statement depreciation (3,729,970) (3,490,410) (3,254,018)
Accrued real estate taxes not
deducted for tax purposes 11,383 10,942 9,875
Prepaid rent recognized as
income for tax purposes 36,672 31,279 21,155
Rental income not recognized
for tax purposes (31,653) (21,529) (12,204)
Other 270 269 288
----------- ----------- -----------
Deficit per tax return $(6,059,984) $(5,759,482) $(5,487,685)
=========== =========== ===========
8. JOINT VENTURE
On April 26, 1985, Griffin Real Estate Fund-IV entered into a joint venture
with Griffin Real Estate Fund-V for the purpose of purchasing Ravenwood
Apartments, with Griffin Real Estate Fund-V designated as the managing
partner. Griffin Real Estate Fund-IV contributed $330,000 (30%) and Griffin
Real Estate Fund-V contributed $770,000 (70%) to the venture. All allocations
of cash flow, tax consequences, expenses, and future contributions are to be
in the ratio of 30% to 70%. Summarized financial information for the
Ravenwood Joint Venture for the years ended December 31,:
1996 1995 1994
----------- ----------- -----------
Balance Sheet-
Property and equipment - net $ 2,432,944 $ 2,587,018 $ 2,721,963
Other Assets 253,408 259,306 293,503
----------- ----------- -----------
Total Assets $ 2,686,352 $ 2,846,324 $ 3,015,466
=========== =========== ===========
Mortgage notes payable $ 3,033,601 $ 3,057,287 $ 3,079,538
Other liabilities 146,975 142,275 120,178
Partners' deficit (494,224) (353,238) (184,250)
----------- ----------- -----------
Total Liabilities and
Partners' Deficit $ 2,686,352 $ 2,846,324 $ 3,015,466
=========== =========== ===========
Statements of Operations
Operating revenues $ 885,376 $ 908,745 $ 933,863
Operating expenses 1,056,362 1,077,735 998,383
----------- ----------- -----------
Net Loss $ (170,986) $ (168,990) $ (64,520)
=========== =========== ===========
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
The Partnership accounts for its 30% interest in the joint venture by
including its 30% share of the joint venture assets, liabilities and
operations in the Partnership financial statements. Such pro rata
accounting is appropriate since the controlling majority of each of the
general partners of the joint venture owners consists of the same
individuals.
<TABLE>
<CAPTION>
SCHEDULE III
Costs
Capitalized
Subsequent
Initial Cost to to Gross Amount at Which Carried
Partnership (a) Acquisition at Close of Period (b)(c)
--------------------------------- --------------------------------------
Bldgs/ Land/Bldg Buildings
Description Encumbrances Land Improve Improve Land & Improve Total
- ----------- ------------ ---- ------- ------- ---- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
INDIANAPOLIS, IN
Presidential
Estates Apts $ 4,879,063 $ 231,093 $ 6,765,021 $1,135,808 $ 231,093 $ 7,900,829 $ 8,131,922
BROWN DEER, WI
Brooklane Apts 6,478,456 834,000 7,487,670 1,145,374 834,000 8,633,044 9,467,044
CINCINNATI, OH
Ravenwood Apts 910,080 138,000 1,064,925 138,238 138,000 1,203,163 1,341,163
Discounts -- -- -- -- -- (2,012,257) (2,012,257)
----------- ---------- ----------- ---------- ---------- ----------- -----------
Total $12,267,599 $1,203,093 $15,317,616 $2,419,420 $1,203,093 $15,724,779 $16,927,872
=========== ========== =========== ========== ========== =========== ===========
</TABLE>
[WIDE TABLE CONTINUED FROM ABOVE]
Date
Accumulated of Date
Deprec.(d) Const Acquired
---------- ----- --------
INDIANAPOLIS, IN
Presidential
Estates Apts $ 3,947,632 1978 2/10/84
BROWN DEER, WI
Brooklane Apts 4,077,519 1969 12/27/84
CINCINNATI, OH
Ravenwood Apts 611,279 1973 4/30/85
Discounts (1,007,875)
-----------
Total $ 7,628,555
===========
(a) The cost to the Partnership represents the original purchase price of
the properties.
(b) The aggregate cost of real estate owned at December 31, 1996 for
federal income tax purposes is $18,940,129.
(c) Reconciliation of property:
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of period $15,925,306 $16,425,728 $16,625,006
Additions during period
Improvements 500,422 199,278 302,866
Balance at end of period $16,425,728 $16,625,006 $16,927,872
=========== =========== ===========
(d) Reconciliation of accumulated depreciation:
Balance at beginning of period $ 5,875,460 $ 6,449,249 $ 7,035,942
Depreciation expense for period 573,789 586,693 592,613
----------- ----------- -----------
Balance at end of period $ 6,449,249 $ 7,035,942 $ 7,628,555
=========== =========== ===========
</TABLE>
Depreciation calculated on 5-27.5 year lives using the straight-line
method on real property and accelerated for personal property.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 609,754
<SECURITIES> 0
<RECEIVABLES> 49,028
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,070,713
<PP&E> 16,927,872
<DEPRECIATION> 7,628,555
<TOTAL-ASSETS> 10,637,967
<CURRENT-LIABILITIES> 717,054
<BONDS> 12,267,599
0
0
<COMMON> 0
<OTHER-SE> (2,346,686)<F1>
<TOTAL-LIABILITY-AND-EQUITY> 10,637,967
<SALES> 0
<TOTAL-REVENUES> 3,639,740
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,503,711
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,123,206
<INCOME-PRETAX> 12,823
<INCOME-TAX> 0
<INCOME-CONTINUING> 12,823
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,823
<EPS-PRIMARY> 1<F2>
<EPS-DILUTED> 0
<FN>
<F1>THIS ENTITY IS A LIMITED PARTNERSHIP. THE OTHER STOCKHOLDERS EQUITY LINE
REPRESENTS TOTAL PARTNERSHIP EQUITY.
<F2>THE EPS-PRIMARY LINE REPRESENTS NET INCOME PER LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
