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 MARCH 31, 1997
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
March 31, 1997 and December 31, 1996....................... 1
Condensed Statements of Operations
for the three months ended
March 31, 1997 and 1996.................................... 2
Condensed Statements of Cash Flows
for the three months ended
March 31, 1997 and 1996.................................... 3
Condensed Statements of Changes
in Partners' Equity for the
three months ended March 31, 1997.......................... 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)
March 31, December 31,
1997 1996
------------ ------------
ASSETS
Cash and cash equivalents $ 513,080 $ 609,754
Receivables and other assets 717,294 728,896
------------ ------------
Total 1,230,374 1,338,650
------------ ------------
PROPERTY:
Land 1,203,093 1,203,093
Buildings and improvements 14,715,385 14,715,385
Furniture and equipment 1,009,394 1,009,394
------------ ------------
Total 16,927,872 16,927,872
Less accumulated depreciation 7,777,082 7,628,555
------------ ------------
Property - net 9,150,790 9,299,317
------------ ------------
TOTAL ASSETS $ 10,381,164 $ 10,637,967
============ ============
LIABILITIES AND PARTNERSHIP EQUITY
LIABILITIES:
Accounts payable and accrued liabilities $ 570,642 $ 628,658
Security deposits 86,691 88,396
Mortgage notes payable 12,242,179 12,267,599
------------ ------------
Total liabilities 12,899,512 12,984,653
------------ ------------
PARTNERS' EQUITY:
General partner (231,848) (224,576)
Limited partners (2,286,500) (2,122,110)
------------ ------------
Total partners' equity (2,518,348) (2,346,686)
------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 10,381,164 $ 10,637,967
============ ============
See notes to condensed financial statements.
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
For the Three Months
Ended March 31,
1997 1996
--------- ---------
REVENUES
Rental income $ 873,789 $ 862,945
Interest 5,931 4,794
Other income 23,617 25,230
--------- ---------
Total revenues 903,337 892,969
--------- ---------
OPERATING EXPENSES
Operating expenses 495,308 469,128
Interest expense 282,534 283,760
Depreciation and amortization 158,212 156,216
--------- ---------
Total operating expenses 936,054 909,104
--------- ---------
NET LOSS (32,717) (16,135)
NET LOSS ALLOCATED TO
GENERAL PARTNER (327) (161)
--------- ---------
NET LOSS ALLOCATED TO
LIMITED PARTNERS $ (32,390) $ (15,974)
========= =========
NET LOSS PER LIMITED PARTNERSHIP UNIT
(weighted average basis) $ (2.45) $ (1.21)
========= =========
See notes to condensed financial statements.
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
For the Three Months
Ended March 31,
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (32,717) $ (16,135)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization 158,212 156,216
(Increase) decrease in other assets-net 1,917 (20,920)
Decrease in accounts payable
and accrued liabilities (58,016) (75,241)
Decrease in security deposits (1,705) (294)
--------- ---------
Net cash provided by operating activities 67,691 43,626
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment -- (23,561)
--------- ---------
Net cash used by investing activities -- (23,561)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction in notes payable -- (16,666)
Distributions to partners (138,945) --
Reduction in mortgage payable (25,420) (23,361)
--------- ---------
Net cash used by financing activities (164,365) (40,027)
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (96,674) (19,962)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 609,754 423,615
--------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 513,080 $ 403,653
========= =========
CASH PAID DURING THE PERIOD FOR INTEREST $ 285,285 $ 287,157
========= =========
See notes to condensed financial statements.
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED March 31, 1997
(unaudited)
GENERAL LIMITED TOTAL
PARTNER PARTNERS PARTNERSHIP
----------- ----------- -----------
PARTNERS' EQUITY (DEFICIT)
JANUARY 1, 1997 $ (224,576) $(2,122,110) $(2,346,686)
DISTRIBUTIONS (6,945) (132,000) (138,945)
NET LOSS (327) (32,390) (32,717)
----------- ----------- -----------
PARTNERS' EQUITY (DEFICIT)
March 31, 1997 $ (231,848) $(2,286,500) $(2,518,348)
=========== =========== ===========
See notes to condensed financial statements.
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 1997
(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
March 31, 1997 and December 31, 1996 and the results of its operations for
the three months ended March 31, 1997 and 1996 and its cash flows for the
three months ended March 31, 1997 and 1996.
The accounting policies followed by the Partnership are set forth in Note
1 to the Partnership financial statements in the 1996 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 three months ended March 31, 1997 and 1996
relating to the Griffin Companies and its affiliates:
1997 1996
---- ----
Management fees $ 49,491 $ 48,181
Supervisory fees $ 13,359 $ 7,572
3. TAXABLE LOSS
The net loss shown on the statement of operations is reconciled to the
taxable loss as follows:
For the Three Months
Ended March 31,
1997 1996
---- ----
Net loss per statement of operations $ 32,717 $ 16,135
Excess of tax depreciation over
book depreciation 21,893 39,403
--------- ---------
Taxable loss $ 54,610 $ 55,538
========= =========
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 March 31, 1997, the Partnership had cash and cash equivalents of $513,080
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 1997.
Distributions of $5 per Limited Partnership unit to partners were made following
the first quarter of 1997 to unit holders of record on March 31, 1997. 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 $873,789 and $862,945 for the first
quarter of 1997 and 1996 respectively. This is an increase of $10,844 or 1.3%.
Operating expenses were $936,054 and $909,104 for the first quarter of 1997 and
1996 respectively. This is an increase in operating expenses of $26,950 or 3%.
No one expense category was responsible for this increase, but the more
significant increases were in the areas of payroll, carpet, appliances and real
estate taxes. The increased revenue was more than offset by the increase in
expenses resulting in a net loss of $32,717 for the first quarter of 1997 as
compared to a net loss of $16,135 for the first quarter of 1996. Overall,
operations of the Partnership and its properties resulted in an increase in cash
and cash equivalents before distributions to partners for the first quarter of
$42,271 in 1997 compared to a decrease of $19,962 for the same period in 1996.
Ravenwood Apartments is currently under a purchase agreement dated February 11,
1997. Although the last contingencies to the sale were removed by May 1, 1997
there can still be no definite assurance that a closing will take place. If a
closing takes place it would occur during the second quarter.
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
OCCUPANCY TABLE
Approximate occupancy levels of the Partnership's investment property by
quarter.
<TABLE>
<CAPTION>
1996 1997
------------------------------- ------------------------------
at at
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
1. Presidential
Estates Apts.
Indianapolis, IN 92% 88% 92% 89% 88%
2. Brooklane Apts.
Brown Deer, WI 92% 98% 99% 96% 94%
3. Ravenwood Apts.
Cincinnati, OH 87% 87% 87% 85% 85%
</TABLE>
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 March 31, 1997, 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: May 15, 1997 By /s/ Larry D. Fransen
--------------------
Larry D. Fransen, for the
General Partner, Griffin
Associates-IV, A Limited
Partnership
Date: May 15, 1997 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 513,080
<SECURITIES> 0
<RECEIVABLES> 717,294
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 717,294
<PP&E> 16,927,872
<DEPRECIATION> 7,777,082
<TOTAL-ASSETS> 10,381,164
<CURRENT-LIABILITIES> 657,333
<BONDS> 12,242,179
0
0
<COMMON> 0
<OTHER-SE> (2,518,348)<F1>
<TOTAL-LIABILITY-AND-EQUITY> 10,381,164
<SALES> 0
<TOTAL-REVENUES> 897,406
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 653,520
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 276,603
<INCOME-PRETAX> (32,717)
<INCOME-TAX> 0
<INCOME-CONTINUING> (32,717)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (32,717)
<EPS-PRIMARY> (2.45)<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 LOSS PER LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
