<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended June 30, 1994
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OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to ____________________
Commission File Number: 0-15632
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FIRST CAPITAL INSTITUTIONAL REAL ESTATE, LTD. - 4
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(Exact name of registrant as specified in its charter)
Illinois 36-3441345
- - ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two North Riverside Plaza, Suite 950, Chicago, Illinois 60606-2607
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(Address of principal executive offices) (Zip Code)
(312) 207-0020
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(Registrant's telephone number, including area code)
Not applicable
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(Former name, former address and former fiscal year, if changed since last
report)
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
----- -----
DOCUMENTS INCORPORATED BY REFERENCE:
The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the Partnership's Prospectus dated November 5, 1986,
included in the Partnership's Registration Statement on Form S-11, is
incorporated herein by reference in Part I of this report.
<PAGE>
PART I. FINANCIAL INFORMATION
BALANCE SHEETS
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
June 30,
1994 December 31,
(Unaudited) 1993
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<S> <C> <C>
ASSETS
Investment in commercial rental properties:
Land $ 5,550,400 $ 6,180,400
Buildings and improvements 39,995,600 41,798,200
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45,546,000 47,978,600
Accumulated depreciation and amortization (6,996,100) (6,573,300)
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Total investment properties, net of accumulated
depreciation and amortization 38,549,900 41,405,300
Cash and cash equivalents 5,879,400 3,054,000
Restricted certificates of deposit 62,500 62,500
Rents receivable 236,000 296,500
Other assets 42,000 69,300
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$44,769,800 $44,887,600
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 535,800 $ 838,600
Due to Affiliates 140,500 125,300
Loan payable to General Partner 4,453,300 3,937,900
Security deposits 92,100 118,300
Distributions payable 2,222,500 639,900
Other liabilities 121,800 68,900
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7,566,000 5,728,900
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Partners' (deficit) capital:
General Partner (241,300) (240,800)
Limited Partners (750,000 Units authorized, 593,025
issued and outstanding) 37,445,100 39,399,500
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37,203,800 39,158,700
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$44,769,800 $44,887,600
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</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the six months ended June 30, 1994
and the year ended December 31, 1993
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
- - -------------------------------------------------------------------------------
<S> <C> <C> <C>
Partners' (deficit) capital,
January 1, 1993 $(241,100) $39,632,100 $39,391,000
Net income for the year ended
December 31, 1993 515,700 1,107,600 1,623,300
Distributions for the year ended December
31, 1993 (515,400) (1,340,200) (1,855,600)
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Partners' (deficit) capital,
December 31, 1993 (240,800) 39,399,500 39,158,700
Net income for the six months ended
June 30, 1994 93,100 678,600 771,700
Distributions for the six months ended
June 30, 1994 (93,600) (2,633,000) (2,726,600)
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Partners' (deficit) capital,
June 30, 1994 $(241,300) $37,445,100 $37,203,800
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</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended June 30, 1994 and 1993
(Unaudited)
(All dollars rounded to nearest 00s except per Unit amounts)
<TABLE>
<CAPTION>
1994 1993
- - ---------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $1,465,700 $1,548,100
Interest 36,200 24,700
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1,501,900 1,572,800
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Expenses:
Interest 95,600 85,600
Depreciation and amortization 385,700 330,800
Real estate taxes and insurance 200,800 157,500
Repairs and maintenance 147,400 165,800
Property operating 275,700 291,200
General and administrative 47,200 82,200
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1,152,400 1,113,100
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Income before (loss) on sale of property 349,500 459,700
(Loss) on sale of property (48,700)
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Net income $ 300,800 $ 459,700
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Net income allocated to General Partner $ 46,300 $ 42,500
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Net income allocated to Limited Partners $ 254,500 $ 417,200
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Net income allocated to Limited Partners per Unit
(593,025 Units authorized, issued and outstanding) $ 0.43 $ 0.70
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</TABLE>
STATEMENTS OF INCOME AND EXPENSES
For the six months ended June 30, 1994 and 1993
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1994 1993
- - -------------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $3,056,200 $ 3,103,100
Interest 59,300 47,300
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3,115,500 3,150,400
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Expenses:
Interest 183,100 170,200
Depreciation and amortization 780,900 652,600
Real estate taxes and insurance 380,300 361,600
Repairs and maintenance 296,500 331,700
Property operating 566,100 583,300
General and administrative 88,200 137,800
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2,295,100 2,237,200
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Income before (loss) on disposition of property,
(loss) on sale of property and extraordinary gain on
early extinguishment of debt 820,400 913,200
(Loss) on disposition of property (1,256,800)
(Loss) on sale of property (48,700) (152,300)
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Net income (loss) before extraordinary gain on early
extinguishment of debt 771,700 (495,900)
Extraordinary gain on early extinguishment of debt 1,464,000
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Net income $ 771,700 $ 968,100
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Net income allocated to General Partner $ 93,100 $ 85,600
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Net income allocated to Limited Partners $ 678,600 $ 882,500
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Net income (loss) before extraordinary gain on early
extinguishment of debt allocated to Limited Partners
per Unit (593,025 Units issued and outstanding) $ 1.14 $ (0.96)
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Net income allocated to Limited Partners per Unit
(593,025 Units authorized, issued and outstanding) $ 1.14 $ 1.49
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</TABLE>
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1994 and 1993
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
1994 1993
- - -----------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 771,700 $ 968,100
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 780,900 652,600
Loss on disposition of property 1,256,800
Loss on sale of property 48,700 152,300
Extraordinary (gain) on early extinguishment of
debt (1,464,000)
Changes in assets and liabilities:
Decrease in rents receivable 60,500 98,600
Decrease in other assets 26,800 26,600
(Decrease) in accounts payable and accrued
expenses (302,800) (50,800)
Increase in due to Affiliates 13,400 12,200
Increase in other liabilities 52,900 17,200
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Net cash provided by operating activities 1,452,100 1,669,600
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Cash flows from investing activities:
Proceeds from the sale or disposition of property 2,170,300 844,400
Payments for capital and tenant improvements (142,200) (1,734,100)
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Net cash provided by (used for) investing
activities 2,028,100 (889,700)
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Cash flows from financing activities:
Proceeds from loan payable to General Partner 515,400
(Decrease) in security deposits (26,200) (3,100)
Distributions paid to Partners (1,144,000) (966,600)
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Net cash (used for) financing activities (654,800) (969,700)
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Net increase (decrease) in cash and cash
equivalents 2,825,400 (189,800)
Cash and cash equivalents at the beginning of the
period 3,054,000 2,694,300
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Cash and cash equivalents at the end of the period $ 5,879,400 $ 2,504,500
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Supplemental information:
Interest paid during the period $ 180,400 $ 143,200
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</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
June 30, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
DEFINITION OF SPECIAL TERMS:
Capitalized terms used in this report have the same meaning as those terms have
in the Partnership's Registration Statement on Form S-11, filed with the
Securities and Exchange Commission. Definitions of these terms are contained in
Article III of the First Amended and Restated Certificate and Agreement of
Limited Partnership, which is incorporated herein by reference.
ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with generally
accepted accounting principles. Under this method of accounting, revenues are
recorded when earned and expenses are recorded when incurred.
The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the quarter and six months ended June 30, 1994, are not necessarily indicative
of the operating results for the year ending December 31, 1994.
Certain reclassifications have been made to the previously reported 1993
statements in order to provide comparability with the 1994 statements. These
reclassifications have no effect on income or Partners' capital.
The financial statements include the Partnership's 50% interest in three joint
ventures and its 75% interest in one joint venture. These joint ventures are
operated under the control of the General Partner. Accordingly, the
Partnership's pro rata share of the ventures' revenues, expenses, assets,
liabilities and capital is included in the financial statements.
Cash equivalents are considered all highly liquid investments purchased with a
maturity of three months or less.
Property sales or dispositions are recorded when title transfers and sufficient
consideration has been received by the Partnership. Upon disposition, the
related costs and accumulated depreciation and amortization are removed from
the respective accounts. Any gain or loss on sale or disposition is recognized
in accordance with generally accepted accounting principles.
Reference is made to the Partnership's annual report for the year ended
December 31, 1993, for a description of other accounting policies and
additional details of the Partnership's financial condition, results of
operations, changes in Partners' capital and changes in cash balances for the
year then ended. The details provided in the notes thereto have not changed
except as a result of normal transactions in the interim or as otherwise
disclosed herein.
2. RELATED PARTY TRANSACTIONS:
Subsequent to May 4, 1988, the Termination of the Offering, as compensation for
services rendered in managing the affairs of the Partnership, the General
Partner shall be entitled to receive a Partnership Management Fee payable
within 60 days following the end of each fiscal year. Such amount shall be
equal to the lesser of (i) 0.5% of the net value of the Partnership's assets as
of the end of such year as reflected on the Certificate of Value furnished to
the Holders, plus, the amount, if any, the Partnership Management Fee paid in
any prior year was less than 0.5% of the net value of the Partnership's assets
in such prior years, or (ii) an amount equal to the difference between (a) 10%
of the Partnership's aggregate Cash Flow from the Commencement of Operations to
the end of the year for which such Partnership Management Fee is payable, and
(b) the aggregate amount previously paid to the General Partner as a
Partnership Management Fee. In accordance with the Partnership Agreement, Net
Profits (exclusive of Net Profits from the sale or disposition of Partnership
properties) shall be allocated to the General Partner in an amount equal to the
greater of the General Partner's Partnership Management Fee for such year, or
1% of such Net Profits. The balance of Net Profits, if any, is allocated to the
Holders. Net Losses from the sale of Partnership properties shall be allocated
first, after giving effect to any distributions of Sale Proceeds, to the
General Partner and Holders with positive balances in their Capital Accounts,
pro rata in proportion to such respective positive balances, to the extent of
the total amount of such positive balances and the balance, if any, 1% to the
General Partner and 99% to the Holders. Notwithstanding, in all events, there
shall be allocated to the General Partner not less than 1% of all items of
Partnership income, gain, loss, deduction and credit allocated during the
existence of the Partnership. For the quarter and six months ended June 30,
1994, the General Partner was allocated a Partnership Management Fee and,
accordingly, Net Profits from operations of approximately $46,800 and $93,600,
respectively, and a Net Loss from the sale of a Partnership property of
approximately $500.
As set forth in the Partnership Agreement, the General Partner has agreed to
make available to the Partnership a line of credit in an amount equal to the
sum of the Partnership Management Fees and Acquisition Fees paid to the General
Partner or its Affiliates. This line of credit may be drawn upon for
distribution to the Holders on a pro rata basis to the extent that Cash Flow is
otherwise less than sufficient to distribute cash in amounts equal to the
Holders' Preferred Return (7.5% per annum noncompounding cumulative return on
the Holders' Capital Investment); provided, however, that the maximum amount
which shall be advanced to the Partnership by the General Partner for
distribution to the Holders shall be the amount of Acquisition Fees and
Partnership Management Fees actually paid to the General Partner or its
Affiliates. Amounts advanced shall bear interest at the rate of 8.5% per annum
simple interest, payable monthly. Repayment of amounts advanced shall be made
only from Cash Flow if and to the extent that Cash Flow is more than sufficient
to distribute cash to the Holders in amounts equal to the Holders' Preferred
Return and from Sale or Financing Proceeds. Per the Partnership Agreement,
whenever there is a sale, disposition or financing of a Partnership property,
the Sale or Financing Proceeds shall be distributed: 1) first, 75% to all
Holders and 25% to the General Partner until the earlier of (i) receipt by
Holders of cumulative distributions of Sale or Financing Proceeds in an amount
equal to 100% of their Original Capital Contribution, or (ii) receipt by the
General Partner of cumulative distributions of Sale or Financing Proceeds
sufficient to repay all outstanding advances under the Partnership line of
credit and 2) second, to the General Partner, until all outstanding advances
under the Partnership line of credit, if any, have been repaid. Due to the sale
of Wellington C (see Note 4), the Partnership will distribute to the General
Partner in late August 1994 approximately $541,600, which represents
approximately 25% of the net proceeds from the sale, as a partial repayment of
the outstanding loan payable to the General Partner of approximately
$4,453,300.
Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter and six months ended June 30, 1994 are as follows:
<TABLE>
<CAPTION>
Paid
Quarter Six Months Payable
- - ------------------------------------------------------------------------------
<S> <C> <C> <C>
Property management and leasing fees $ 86,600 $162,700 $ 61,900
Interest on loan payable to General Partner 122,700 180,400 31,500
Reimbursement of property insurance premiums, at
cost 10,800 34,300 None
Real estate commissions (a) None None 40,200
Reimbursement of expenses, at cost:
(1) Accounting 6,500 9,900 2,800
(2) Investor communication 4,600 7,400 2,300
(3) Legal 16,200 31,900 1,800
- - ------------------------------------------------------------------------------
$247,400 $426,600 $140,500
- - ------------------------------------------------------------------------------
</TABLE>
(a) As of June 30, 1994, $40,200 was due to the General Partner for real estate
commissions earned in connection with the disposition and sale of
Partnership property. These commissions have been accrued but not paid.
Under the terms of the Partnership Agreement, these commissions will not be
paid until such time as the Limited Partners have received cumulative
distributions of Sale or Financing Proceeds equal to 100% of their Original
Capital Contribution, plus a cumulative return (including all Cash Flow
which has been distributed to Limited Partners) of 6% simple interest per
annum on their Capital Investment from the initial date of investment.
3. RESTRICTED CERTIFICATES OF DEPOSIT:
Restricted certificates of deposit include negotiable certificates of deposit
in the amounts of $25,000 and $12,500 which have been pledged as collateral for
security deposits to the Houston Lighting & Power Company and $25,000 which has
been pledged as collateral for security deposits to the Florida Lighting &
Power Company.
4. PROPERTY SALE:
On June 8, 1994, Farmington Hills Associates, a joint venture in which the
Partnership and an Affiliated partnership each have a 50% interest, sold
Wellington C in the Wellington North Office Complex for the sale price of
$4,500,000. The Partnership's share of selling expenses was approximately
$81,500 including $1,800 of accrued legal expenses. The Partnership's share of
the net proceeds from this sale was approximately $2,170,300. The Partnership
recorded a total loss on the sale of this property of approximately $2,048,700
for financial statement purposes, of which $2,000,000 was recorded as of
December 31, 1992 as a provision for value impairment. For tax reporting
purposes the Partnership will record a total loss in 1994 of approximately
$1,980,000 on this sale.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the Partnership's annual report for the year ended
December 31, 1993, for a discussion of the Partnership's business.
OPERATIONS
One of the primary objectives of the Partnership is to provide cash
distributions to Limited Partners from Cash Flow generated by Partnership
operations. To the extent cash distributions exceed net income, such excess
distributions will be treated as a return of capital. The statements of cash
flows presented in the financial statements represent a reconciliation of the
changes in cash balances. Cash Flow, as defined in the Partnership Agreement,
is generally not equal to Partnership net income or cash flows as determined
under generally accepted accounting principles, since certain items are treated
differently under the Partnership Agreement than under generally accepted
accounting principles. Management believes that in order to facilitate a clear
understanding of the Partnership's operations, an analysis of Cash Flow (as
defined in the Partnership Agreement) should be examined in conjunction with an
analysis of net income or cash flows, as defined by generally accepted
accounting principles. The amount of Cash Flow and the return on Capital
Investment are not indicative of actual distributions and actual returns on
Capital Investment.
<TABLE>
<CAPTION>
Comparative Cash Flow Results
For the Six Months
For the Quarters Ended Ended
6/30/94 6/30/93 6/30/94 6/30/93
- - -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Amount of Cash Flow (as
defined in the Partnership
Agreement) $ 688,400 $ 748,000 $ 1,507,700 $ 1,480,700
Average Capital Investment $58,458,500 $59,021,600 $58,458,500 $59,161,800
Annualized return on average
Capital Investment
(Annualized Cash
Flow/average Capital
Investment) 4.71% 5.07% 5.16% 5.01%
- - -----------------------------------------------------------------------------
</TABLE>
As the Partnership enters the disposition phase of its life cycle, comparisons
of Cash Flow results between periods are complicated. Partnership Cash Flow is
generally expected to decline as real property interests are sold or disposed
since the Partnership no longer receives Cash Flow generated from such real
property interests. Accordingly, rental income, property operating expenses,
repairs and maintenance and real estate taxes are expected to decline as well,
but will continue to comprise the significant components of Cash Flow and
operating results until the final property is sold. Also, during the
disposition phase, cash and cash equivalents increase as Sale Proceeds are
received and decrease as the Partnership utilizes such proceeds for the
purposes of distributions to Limited Partners, repayment of the loan payable to
the General Partner or making improvements to the Partnership's remaining
properties. Prior to being utilized for such purposes, these funds are invested
in short-term money market instruments. Sale Proceeds are excluded from the
determination of Cash Flow. The dispositions of the three remaining buildings
at the Wellington North Office Complex ("Wellington") caused Cash Flow results
at Wellington to decrease during the quarter and six months ended June 30, 1994
when compared to the quarter and six months ended June 30, 1993 by
approximately $87,100 and $70,300, respectively.
Aside from the Wellington dispositions, Cash Flow results for the quarter and
six months ended June 30, 1994 increased when compared to the quarter and six
months ended June 30, 1993 by approximately $27,500 and $97,300, respectively.
Factors which contributed to the increases were: 1) increased rental revenues
at Carrollton Crossroads Shopping Center ("Carrollton") and 3120 Southwest
Freeway; 2) decreased general and administrative expenses due to Indiana state
and county income and sales taxes being assessed to the Partnership in 1993 for
the tax years 1989, 1990 and 1992 and 3) increased interest income earned on
short-term investments due to an increase in funds available for such
investments. Partially offsetting the increases in Cash Flow results were: 1)
decreased rental revenues at Indian Ridge Plaza Shopping Center ("Indian
Ridge") and Park Plaza Professional Building ("Park Plaza"); 2) increased
repair and maintenance expenses at Indian Ridge and 3120 Southwest Freeway and
3) increased interest expense due to an additional draw in 1994 on the
Partnership line of credit available from the General Partner.
Rental revenues at Indian Ridge for the six months ended June 30, 1994 and 1993
were approximately $1,051,400 and $1,082,600, respectively, and for the
quarters ended June 30, 1994 and 1993 were approximately $485,100 and $498,200,
respectively. Although both the quarterly and six-month average occupancy rates
increased from 96% in 1993 to 98% in 1994, rental revenues decreased in 1994 as
a result of having two prior years of tenant expense reimbursements included in
1993 rather than one prior year as in 1994.
Rental revenues at Park Plaza for the six months ended June 30, 1994 and 1993
were approximately $894,700 and $917,700, respectively, and for the quarters
ended June 30, 1994 and 1993 were approximately $448,600 and $460,900,
respectively. The decrease in rental revenues was due to decreased tenant
expense reimbursements and lower quarterly and six-month average occupancy
rates from 94% and 93%, respectively, in 1993 to 87% and 88%, respectively, in
1994.
Rental revenues at Carrollton for the six months ended June 30, 1994 and 1993
were approximately $549,900 and $468,500, respectively, and for the quarters
ended June 30, 1994 and 1993 were approximately $262,100 and $257,800,
respectively. The increase in rental revenues was due to the expansion of a
major tenant's leasable square footage in May 1993 from approximately 87,100
square feet to approximately 124,100 square feet.
Rental revenues at 3120 Southwest Freeway for the six months ended June 30,
1994 and 1993 were approximately $343,700 and $294,000, respectively, and for
the quarters ended June 30, 1994 and 1993 were approximately $171,800 and
$140,100, respectively. The increase in rental revenues was due to an increase
in the quarterly and six-month average occupancy rates from 84% and 81%,
respectively, in 1993 to 89% and 90%, respectively, in 1994 as well as an
increase in the real estate tax reimbursements billed to tenants.
Rental revenues at Wellington for the six months ended June 30, 1994 and 1993
were approximately $216,600 and $340,300, respectively, and for the quarters
ended June 30, 1994 and 1993 were approximately $98,200 and $191,200,
respectively. The decrease in 1994 rental revenues was due to the disposition
and sale of Wellington A and Wellington B on March 17 and March 23, 1993,
respectively, and the sale of Wellington C on June 8, 1994.
To increase and maintain occupancy levels at the Partnership's properties, the
General Partner, through its Affiliated asset and property management groups,
continues to take the necessary actions deemed appropriate for the properties
discussed above. Some of these actions include: 1) implementation of marketing
programs, including hiring of third-party leasing agents or providing on-site
leasing personnel, advertising, direct mail campaigns and development of
building brochures; 2) early renewal of existing tenants and addressing any
expansion needs these tenants may have; 3) promotion of local broker events and
networking with local brokers; 4) networking with national level retailers; 5)
cold-calling other businesses and tenants in the market area; and 6) providing
rental concessions or competitively pricing rental rates depending on market
conditions.
LIQUIDITY AND CAPITAL RESOURCES
The increase in the Partnership's cash position as of June 30, 1994 when
compared to December 31, 1993 was primarily the result of the net Sale Proceeds
received from the sale of Wellington C and net cash provided by operating
activities exceeding expenditures for capital and tenant improvements and
distributions paid to Partners. Liquid assets of the Partnership as of June 30,
1994 were comprised of Cash Flow retained for working capital purposes and
undistributed Sale Proceeds.
Net cash provided by operating activities decreased from $1,669,600 for the six
months ended June 30, 1993 to $1,452,100 for the six months ended June 30,
1994. This decrease was primarily due to the disposition and sale of Wellington
A and B, respectively in 1993, and therefore the loss of operations as well as
the timing of the payment of certain Partnership expenses and the collection of
rental revenues.
Net cash (used for) provided by investing activities changed from ($889,700)
for the six months ended June 30, 1993 to $2,028,100 for the six months ended
June 30, 1994. This change was primarily due to the fact that the proceeds
received from the sale of Wellington C in 1994 were greater than the proceeds
received on the disposition of Wellington A and sale of Wellington B in 1993
and the decrease in payments made in 1994 for capital and tenant improvements.
On June 8, 1994, Farmington Hills Associates, a joint venture in which the
Partnership and an Affiliated partnership each have a 50% interest, sold
Wellington C in the Wellington North Office Complex for the sale price of
$4,500,000. The Partnership's share of the net proceeds from this sale
approximated $2,170,300. The Partnership intends to distribute, in late August
1994, approximately 75%, or $1,624,900 of the proceeds to Limited Partners,
along with the Cash Flow distribution as discussed below, and approximately
25%, or $541,600 to the General Partner as a partial repayment of the
outstanding loan payable to the General Partner (see Note 2 in Notes to
Financial Statements).
During the six months ended June 30, 1994, the Partnership spent approximately
$142,200 for capital and tenant improvements and has budgeted to spend
approximately $570,000 during the remainder of 1994. Included in the remaining
budgeted amount is approximately $370,000 relating to anticipated capital and
tenant improvements and leasing costs expected to be incurred at Park Plaza.
The General Partner believes these improvements are necessary in order to
maintain the occupancy level in a very competitive market, as well as to
maximize rental rates charged to new and renewing tenants.
Net cash used for financing activities decreased from $969,700 for the six
months ended June 30, 1993 to $654,800 for the six months ended June 30, 1994.
This decrease was due to the proceeds from the loan made by the General Partner
exceeding the increase in the payment of cash distributions to Partners and a
decrease in security deposits.
On June 2, 1994, the Partnership cancelled the revolving line of credit it had
with a major New York bank originally scheduled to expire on November 5, 1996.
This line of credit required the bank to lend to the Partnership from time to
time up to $2,965,100 which was equal to approximately 5% of the gross proceeds
of the Offering. As of the date of cancellation, the Partnership did not have
an outstanding balance under this line of credit.
The General Partner continues to take a conservative approach to projections of
future rental income and to maintain higher levels of cash reserves for the
Partnership. The higher levels of cash reserves are needed due to the
anticipated capital and tenant improvements necessary to be made to the
Partnership's remaining properties during the next several years. As a result
of this, the Partnership continues to reserve amounts from Cash Flow to
supplement working capital reserves. For the quarter and six months ended June
30, 1994, Cash Flow retained to supplement working capital reserves
approximated $184,400 and $499,600, respectively. The General Partner believes
that the Partnership's current cash position along with any additional amounts
retained from future Cash Flow will be sufficient to cover budgeted
expenditures as well as any other requirements which may reasonably be
foreseen.
Distributions to Limited Partners for the quarter ended June 30, 1994 were
declared at an annualized rate of 3.45% of total Capital Investment. Cash
distributions are made 60 days after the quarter-end. The amount of Cash Flow
available for distributions to Partners is ultimately dependent upon the
performance of the Partnership's investments as well as the amount of Cash Flow
retained for future cash requirements. Therefore, there can be no assurance of
the amount of future Cash Flow available for distribution to Partners.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
- - ------- ---------------------------------
(a) Exhibits: None
(b) Reports on Form 8-K:
There were no reports filed on Form 8-K during the quarter ended June
30, 1994.
<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.
FIRST CAPITAL INSTITUTIONAL REAL ESTATE, LTD. - 4
BY: FIRST CAPITAL FINANCIAL CORPORATION
GENERAL PARTNER
Date: August 12, 1994 By: /s/ DOUGLAS CROCKER II
--------------- --------------------------------------------
DOUGLAS CROCKER II
President and Chief Executive Officer
Date: August 12, 1994 By: /s/ MICHAEL J. MCHUGH
--------------- ---------------------------------------------
MICHAEL J. MCHUGH
Senior Vice President and
Chief Financial Officer
