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 JUNE 30, 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. [ ]
<PAGE>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
INDEX
PART 1. Financial Information
Condensed Balance Sheets
June 30, 1997 and December 31, 1996.................. 1
Condensed Statements of Operations
for the three months and the six months ended
June 30, 1997 and 1996............................... 2
Condensed Statements of Cash Flows
for the six months ended
June 30, 1997 and 1996............................... 3
Condensed Statements of Changes
in Partners' Equity for the
six months ended June 30, 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
<PAGE>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
(unaudited)
June 30, December 31,
1997 1996
------------ ------------
ASSETS
Cash and cash equivalents $ 595,634 $ 609,754
Receivables and other assets 667,694 728,896
------------ ------------
Total 1,263,328 1,338,650
------------ ------------
PROPERTY:
Land 1,065,093 1,203,093
Buildings and improvements 13,672,828 14,715,385
Furniture and equipment 889,787 1,009,394
------------ ------------
Total 15,627,708 16,927,872
Less accumulated depreciation 7,291,626 7,628,555
------------ ------------
Property - net 8,336,082 9,299,317
------------ ------------
TOTAL ASSETS $ 9,599,410 $ 10,637,967
============ ============
LIABILITIES AND PARTNERSHIP EQUITY
LIABILITIES:
Accounts payable and accrued liabilities $ 543,329 $ 628,658
Security deposits 79,787 88,396
Mortgage notes payable 11,309,536 12,267,599
------------ ------------
Total liabilities 11,932,652 12,984,653
------------ ------------
PARTNERS' DEFICIT:
General partner (235,545) (224,576)
Limited partners (2,097,697) (2,122,110)
------------ ------------
Total partners' deficit (2,333,242) (2,346,686)
------------ ------------
TOTAL LIABILITIES AND PARTNERS' DEFICIT $ 9,599,410 $ 10,637,967
============ ============
See notes to condensed financial statements.
<PAGE>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
---------- --------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES
Rental income $ 846,048 $ 856,767 $ 1,719,837 $ 1,719,712
Interest income 6,574 4,407 12,505 9,201
Other income 26,347 29,538 49,964 54,768
Gain on sale of property 291,087 -- 291,087 --
---------- --------- ----------- -----------
Total revenues 1,170,056 890,712 2,073,393 1,783,681
---------- --------- ----------- -----------
OPERATING EXPENSES
Operating expenses 451,730 525,660 947,038 994,788
Interest expense 282,162 282,764 564,696 566,524
Depreciation and
amortization 181,584 156,216 339,796 312,432
---------- --------- ----------- -----------
Total operating expenses 915,476 964,640 1,851,530 1,873,744
---------- --------- ----------- -----------
NET INCOME (LOSS) 254,580 (73,928) 221,863 (90,063)
NET INCOME (LOSS) ALLOCATED
TO GENERAL PARTNER 1,086 (740) (550) (901)
---------- --------- ----------- -----------
NET INCOME (LOSS) ALLOCATED
TO LIMITED PARTNERS $ 253,494 $ (73,188) $ 222,413 $ (89,162)
========== ========= =========== ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 19.20 $ (5.54) $ 16.85 $ (6.75)
========== ========= =========== ===========
(weighted average basis)
</TABLE>
See notes to condensed financial statements.
<PAGE>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
For the Six Months
Ended June 30,
1997 1996
----------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 221,863 $ (90,063)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Gain on sale of property (291,087) --
Depreciation and amortization 339,796 312,432
Decrease (Increase) in other assets-net 16,531 (48,943)
Decrease in accounts payable
and accrued liabilities (85,329) (59,888)
Increase (decrease) in security deposits (8,609) 2,470
----------- ---------
Net cash provided by operating activities 193,165 116,008
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property (40,998) (84,079)
Proceeds from sale of property & equipment 1,000,195 --
----------- ---------
Net cash used by investing activities 959,197 (84,079)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction in notes payable -- (33,333)
Reduction in mortgage payable (958,063) (47,732)
Distributions to partners (208,419) --
----------- ---------
Net cash used by financing activities (1,166,482) (81,065)
----------- ---------
DECREASE IN CASH AND CASH EQUIVALENTS (14,120) (49,136)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 609,754 423,615
----------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 595,634 $ 374,479
=========== =========
CASH PAID DURING THE PERIOD FOR INTEREST $ 574,617 $ 570,108
=========== =========
See notes to condensed financial statements.
<PAGE>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(unaudited)
GENERAL LIMITED TOTAL
PARTNER PARTNERS PARTNERSHIP
PARTNERS' DEFICIT
JANUARY 1, 1997 $(224,576) $(2,122,110) $(2,346,686)
NET INCOME (LOSS) (550) 222,413 221,863
DISTRIBUTIONS (10,419) (198,000) (208,419)
--------- ----------- -----------
PARTNERS' DEFICIT $(235,545) $(2,097,697) $(2,333,242)
JUNE 30, 1997 ========= =========== ==========
See notes to condensed financial statements.
<PAGE>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 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. As of June 30,
1997 there were 13,200 limited partnership units outstanding.
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 June
30, 1997 and December 31, 1996 and the results of its operations for the
three months and six months ended June 30, 1997 and 1996 and its cash
flows for the six months ended June 30, 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 six months ended June 30, 1997 and 1996 relating
to the Griffin Companies and its affiliates:
1997 1996
---- ----
Management fees $ 97,745 $ 96,563
Supervisory fees $ 20,189 $ 20,488
3. TAXABLE LOSS
The net loss shown on the statement of operations is reconciled to the
taxable loss as follows:
For the Six Months
Ended June 30,
1997 1996
---- ----
Net income (loss) per statement of operations $ 221,863 $ (90,063)
Excess of tax depreciation over
book depreciation (43,346) (78,807)
--------- --------
Taxable income (loss) $ 178,517 $ (168,870)
========= ========
<PAGE>
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 June 30, 1997, the Partnership had cash and cash equivalents of $595,634
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 to partners of $5 per Limited Partnership unit were made following
the first quarter and again following the second quarter of 1997 to unitholders
of record on June 30, 1997. In addition, distributions of $6 per unit were made,
together with the second quarter amount, representing the proceeds from the sale
of Ravenwood Apartments on June 16, 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.
The sale of Ravenwood Apartments on June 16, 1997 had a small impact on the
comparablity of results of operations form one period to the next. Excluding the
gain on the sale of Ravenwood, revenues and expenses for the three month and six
month periods ended June 30, 1997 are quite similar to the same periods a year
earlier. Capital improvements to the remaining properties total $40,998 so far
in 1997, which contributed to a decrease in cash of $14,120 from the beginning
of the year. This compares with a drop in cash of $49,136 in the first six
months of 1996.
On June 22, 1997 a severe storm struck the Milwaukee area, and due to water
runoff, a portion of the basements at Brooklane Apartments were flooded. The
damage was largely limited to the contents within the basement and the
subsequent cleanup. Insurance claims will cover the damage, except for the
deductible.
<PAGE>
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
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Presidential
Estates Apts.
Indianapolis, IN 92% 88% 92% 89% 88% 92%
2. Brooklane Apts.
Brown Deer, WI 92% 98% 99% 96% 94% 89%
3. Ravenwood Apts.
Cincinnati, OH 87% 87% 87% 85% 85% *
</TABLE>
* Indicates the Partnership did not own this property at the end of the
quarter
<PAGE>
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.
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. However, form 8-K was filed
on July 1, 1997 to report the sale of the Partnership's 30%
interest in Ravenwood Apartments on June 16, 1997.
<PAGE>
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: August 14, 1997 By /s/ Larry D. Fransen
--------------------
Larry D. Fransen, for the
General Partner, Griffin
Associates-IV, A Limited
Partnership
Date: August 14, 1997 By /s/ Larry D. Fransen
--------------------
Larry D. Fransen, for the
Managing General Partner
of the General Partner
Griffin Associates-IV
A Limited Partnership
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 595,634
<SECURITIES> 0
<RECEIVABLES> 667,694
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,263,328
<PP&E> 15,627,708
<DEPRECIATION> 7,291,626
<TOTAL-ASSETS> 9,599,410
<CURRENT-LIABILITIES> 623,116
<BONDS> 11,309,536
0
0
<COMMON> 0
<OTHER-SE> (2,333,242)<F1>
<TOTAL-LIABILITY-AND-EQUITY> 9,599,410
<SALES> 0
<TOTAL-REVENUES> 2,060,888
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,286,834
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 552,191
<INCOME-PRETAX> 221,863
<INCOME-TAX> 0
<INCOME-CONTINUING> 221,863
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 221,863
<EPS-PRIMARY> 16.85<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>
