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, 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
September 30, 1997 and December 31, 1996...................... 1
Condensed Statements of Operations
for the three months and the nine months ended
September 30, 1997 and 1996................................... 2
Condensed Statements of Cash Flows
for the nine months ended
September 30, 1997 and 1996................................... 3
Condensed Statements of Changes
in Partners' Equity for the
nine months ended September 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)
September 30, December 31,
1997 1996
------------ ------------
ASSETS
- ------
Cash and cash equivalents $ 160,941 $ 609,754
Receivables and other assets 690,550 728,896
------------ ------------
Total 851,491 1,338,650
------------ ------------
PROPERTY:
Land 1,065,093 1,203,093
Buildings and improvements 13,788,752 14,715,385
Furniture and equipment 889,787 1,009,394
------------ ------------
Total 15,743,632 16,927,872
Less accumulated depreciation 7,428,801 7,628,555
------------ ------------
Property - net 8,314,831 9,299,317
------------ ------------
TOTAL ASSETS $ 9,166,322 $ 10,637,967
============ ============
LIABILITIES AND PARTNERSHIP EQUITY
- ----------------------------------
LIABILITIES:
Accounts payable and accrued liabilities $ 544,714 $ 628,658
Security deposits 76,975 88,396
Mortgage notes payable 11,279,530 12,267,599
------------ ------------
Total liabilities 11,901,219 12,984,653
------------ ------------
PARTNERS' DEFICIT:
General partner (239,572) (224,576)
Limited partners (2,495,325) (2,122,110)
------------ ------------
Total partners' deficit (2,734,897) (2,346,686)
------------ ------------
TOTAL LIABILITIES AND PARTNERS' DEFICIT $ 9,166,322 $ 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 Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES
Rental income $ 821,409 $ 896,050 $ 2,541,246 $ 2,615,762
Interest income 4,183 5,250 16,688 14,451
Other income 24,952 29,850 74,916 84,618
Gain on sale of property (2,269) -- 288,818 --
------------ ------------ ------------ ------------
Total revenues 848,275 931,150 2,921,668 2,714,831
------------ ------------ ------------ ------------
OPERATING EXPENSES
Operating expenses 694,196 463,390 1,641,234 1,458,178
Interest expense 260,386 281,740 825,082 848,264
Depreciation and
amortization 145,874 156,215 485,670 468,647
------------ ------------ ------------ ------------
Total operating expenses 1,100,456 901,345 2,951,986 2,775,089
------------ ------------ ------------ ------------
NET INCOME (LOSS) (252,181) 29,805 (30,318) (60,258)
NET INCOME (LOSS) ALLOCATED
TO GENERAL PARTNER (2,522) 298 (303) (603)
------------ ------------ ------------ ------------
NET INCOME (LOSS) ALLOCATED
TO LIMITED PARTNERS $ (249,659) $ 29,507 $ 30,015 $ (59,655)
============ ============ ============ ============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ (18.91) $ 2.23 $ (2.27) $ (4.52)
(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 Nine Months
Ended September 30,
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (30,318) $ (60,258)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Gain on sale of property (288,818) --
Depreciation and amortization 485,670 468,647
Increase in other assets-net (15,024) (1,887)
Decrease in accounts payable
and accrued liabilities (83,944) (81,332)
Increase (decrease) in security deposits (11,421) 515
----------- -----------
Net cash provided by operating activities 56,145 325,685
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property (156,922) (103,565)
Proceeds from sale of property & equipment 997,926 --
----------- -----------
Net cash provided (used) by investing activities 841,004 (103,565)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction in notes payable -- (40,421)
Reduction in mortgage payable (988,069) (78,146)
Distributions to partners (357,893) --
----------- -----------
Net cash used by financing activities (1,345,962) (118,567)
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (448,813) 103,553
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 609,754 423,615
----------- -----------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 160,941 $ 527,168
=========== ===========
CASH PAID DURING THE PERIOD FOR INTEREST $ 835,233 $ 852,080
=========== ===========
See notes to condensed financial statements.
<PAGE>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(unaudited)
GENERAL LIMITED TOTAL
PARTNER PARTNERS PARTNERSHIP
----------- ----------- -----------
PARTNERS' DEFICIT
JANUARY 1, 1997 $ (224,576) $(2,122,110) $(2,346,686)
NET LOSS (303) (30,015) (30,318)
DISTRIBUTIONS (14,693) (343,200) (357,893)
----------- ----------- -----------
PARTNERS' DEFICIT $ (239,572) $(2,495,325) $(2,734,897)
SEPTEMBER 30, 1997 =========== ============= =============
See notes to condensed financial statements.
<PAGE>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 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 September
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
September 30, 1997 and December 31, 1996 and the results of its operations
for the three months and nine months ended June 30, 1997 and 1996 and its
cash flows for the nine months ended September 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 nine months ended September 30, 1997 and 1996
relating to the Griffin Companies and its affiliates:
1997 1996
---- ----
Management fees $ 142,625 $ 146,156
Supervisory fees $ 47,284 $ 29,999
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,
1997 1996
---- ----
Net loss per statement of operations $ 30,318 $ 60,258
Excess of tax depreciation over
book depreciation 62,652 118,210
---------- ----------
Taxable loss $ 92,970 $ 178,468
========== ==========
<PAGE>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Griffin Real Estate Fund-IV, A Limited Partnership (the "Partnership") is a
limited partnership formed in 1983 to invest in and operate income-producing
real property. The Partnership raised $13,220,000 through the sale of Limited
Partnership interests and utilized these proceeds to acquire four real property
investments and a minority joint venture interest in one additional real
property. Prior to 1997, title to two of these properties was relinquished
through foreclosure. The joint venture property, Ravenwood Apartments, was sold
on June 16, 1997. The sale was reported on form 8-K to the SEC.
The Partnership continues to operate its two remaining properties.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1996 for a more complete understanding of the
Partnership's financial position.
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.
1997 Compared to 1996
With a property sale occuring before the end of the second quarter of 1997,
results of operations are not easily comparable for the Partnership as a whole.
Comparisons are only meaningful either on a property by property basis or by
comparing the combined results of the two remaining properties.
A dip in occupancy at Brooklane Apartments caused a drop in third quarter net
operating income of about $32,000 from the third quarter of 1996, and a year to
date drop of about $36,000 from the same period last year. Some factors
adversely influencing occupancy were the construction of a senior housing
project nearby, job transfers and new home purchases spurred on by lower
mortgage rates. Presidential Estates on the other hand had an excellent third
quarter with an average occupancy rate in excess of 92%. Capital improvements
completed in the third quarter at Presidential Estates included parking lot
improvements, roof replacements and decks. Combined operating expenses for the
third quarter are unusually high because they reflect flood damage expenses at
Brooklane Apartments before the insurance reimbursement which is expected in the
fourth quarter. Anticipated insurance proceeds will total approximately
$195,000.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, the Partnership had cash and cash equivalents of $160,941
which will be used for working capital requirements of the Partnership and its
<PAGE>
GRIFFIN REAL ESTATE FUND-IV,
A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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
each of the first two quarters and again following the third quarter of 1997 to
unitholders of record on September 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.
OCCUPANCY TABLE
Approximate occupancy levels of the Partnership's investment property by
quarter.
1996 1997
------------------------- -------------------------
at at
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% 92% 95%
2. Brooklane Apts.
Brown Deer, WI 92% 98% 99% 96% 94% 89% 90%
3. Ravenwood Apts.
Cincinnati, OH 87% 87% 87% 85% 85% * *
* 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) 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: November 14, 1997 By /s/ Larry D. Fransen
--------------------
Larry D. Fransen, for the
General Partner, Griffin
Associates-IV, A Limited
Partnership
Date: November 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 160,941
<SECURITIES> 0
<RECEIVABLES> 690,550
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 851,491
<PP&E> 15,743,632
<DEPRECIATION> 7,428,801
<TOTAL-ASSETS> 9,166,322
<CURRENT-LIABILITIES> 621,689
<BONDS> 11,279,530
0
0
<COMMON> 0
<OTHER-SE> (2,734,897)<F1>
<TOTAL-LIABILITY-AND-EQUITY> 9,166,322
<SALES> 0
<TOTAL-REVENUES> 2,904,980
<CGS> 0
<TOTAL-COSTS> 2,126,904
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 808,394
<INCOME-PRETAX> (30,318)
<INCOME-TAX> 0
<INCOME-CONTINUING> (30,318)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (30,318)
<EPS-PRIMARY> (2.27)<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>
