<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
Commission File Number 0-17636
Exact Name of Registrant as Specified in Its Charter: T. ROWE
PRICE REALTY INCOME FUND IV, AMERICA'S SALES-COMMISSION-FREE REAL
ESTATE LIMITED PARTNERSHIP
State or Other Jurisdiction of Incorporation or Organization:
Delaware
I.R.S. Employer Identification No.: 95-4147931
Address and zip code of Principal Executive offices: 100 East
Pratt Street, Baltimore, Maryland 21202
Registrant's telephone number, including area code: 1-800-638-
5660
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
<PAGE>2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The financial statements of T. Rowe Price Realty Income Fund
IV, America's Sales-Commission-Free Real Estate Limited
Partnership ("Partnership") are set forth in Exhibit 19 hereto,
which statements are incorporated by reference herein.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Liquidity and Capital Resources and Results of Operations
The Partnership's liquidity and capital resources and
its results of operations are discussed in the Chairman's letter
to partners on pages 1-2 of Exhibit 19 hereto, the Partnership's
Quarterly Report to Security-Holders, which letter is hereby
incorporated by reference herein.
PART II - OTHER INFORMATION
Item 5. Other Information.
On July 28, 1997, the Partnership began mailing to the
Limited Partners a consent solicitation statement seeking their
consent to a sale of substantially all of the Partnership s
assets to Glenborough Realty Trust Incorporated and to complete
the liquidation of the Partnership. The solicitation will expire
on September 11, 1997, unless extended.
Item 6. Exhibits and Reports on Form 8-K:
(a)
Exhibits.
19 - Quarterly Report Furnished to Security-
Holders,including Financial Statements of the
Partnership.
27 - Financial Data Schedule
(b)Reports on Form 8-K
None.
All other items are omitted because they are not
applicable or the answers are none.
<PAGE>3
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.
T. ROWE PRICE REALTY INCOME FUND
IV, AMERICA'S SALES-COMMISSION-
FREE REAL ESTATE LIMITED
PARTNERSHIP
By: T. Rowe Price Realty Income
Fund IV Management, Inc.,
General Partner
Date: August 14, 1997 By: /s/ Lucy B. Robins
Lucy B. Robins
Vice President
Date: August 14, 1997 By: /Mark S. Finn
Mark S. Finn
Chief Accounting Officer
for the Partnership
The Quarterly Report to Limited Partners for the Quarter ended
June 30, 1997 should be inserted here.
T. ROWE PRICE
REALTY INCOME
FUND IV
AMERICA'S SALES-COMMISSION-FREE
REAL ESTATE LIMITED PARTNERSHIP
QUARTERLY REPORT
FOR THE PERIOD ENDED
JUNE 30, 1997
For information on your
Realty Income Fund account, call:
1-800-962-8300 toll free
410-625-6500 Baltimore area
For information on your
mutual fund account, call:
1-800-225-5132 toll free
410-625-6500 Baltimore area
T. Rowe Price Real Estate Group
100 East Pratt Street
Baltimore, Maryland 21202
Invest With Confidence(registered trademark)
T. Rowe Price
FELLOW PARTNERS:
By now you should have received materials requesting your
consent to sell T. Rowe Price Realty Income Fund IV's interests
in its remaining five properties to Glenborough Realty Trust
Incorporated for $23,877,000, and also to complete the
liquidation of the Fund. A majority of the Fund's outstanding
units must be voted in favor of the proposal for the transaction
to proceed.
As mentioned previously, the Fund has held the properties
for the period generally anticipated when the Fund was
organized, and current market conditions appear favorable for a
sale. The Fund expects to benefit substantially by selling all
of the properties in bulk instead of individually. In
particular, the costs of selling each property
individually-including sales commissions and other
closing-related costs-could be materially higher. Our experience
indicates that there could be more negative price adjustments as
a result of each buyer's due diligence activities. Also
considered was the advantage of limited partners receiving their
sales proceeds immediately rather than having them spread over
the next several years.
The price offered by Glenborough should allow the Fund to
liquidate its investment for an amount that exceeds the most
recent adjusted estimated aggregate value.
Under the heading "THE TRANSACTION-Recommendations of the
General Partner" in the consent materials you received, we
discussed in detail the advantages and disadvantages of the
Glenborough transaction. After carefully weighing the facts and
circumstances associated with this transaction against
alternative courses of action, we concluded that the bulk sale
to Glenborough and subsequent liquidation of the Fund is an
outstanding opportunity to maximize value for investors.
Therefore, we recommend that you consent to the proposed
transaction by voting now and returning the consent card in the
postage-paid envelope, if you have not already done so. Your
participation is extremely important, and your response to the
solicitation will save your Fund the substantial costs
associated with a follow-up mailing. If you have not received
your materials, or if you need an additional consent card,
please call one of our real estate representatives at
1-800-962-8300.
Real Estate Investments (Dollars in Thousands)
______________________________________________________________
Average Contri-
Leased Leased bution to
Status Status Net Income
_________ _______ _______
Six Six
Gross Months Months
Properties Leasable Ended Ended
Held for Area June 30, June 30, June 30,
Sale (Sq. Ft.) 1997 1996 1997 1996 1997
_______ ________ _____ ___ ___ ___ ___
Tierrasanta 104,200 62 100%% 62% $ 92 $ 70
Goshen
Plaza 45,500 88 75 88 28 185
Westbrook
Commons 121,600 98 94 98 166 296
Burnham
Building 71,200 100 100 100 91 118
Kent Sea
Park 138,200 100 99 98 159 219
________ ____ ____ ____ _____ ______
480,700 90 96 90 536 888
Property
Sold - - - - (14) -
Fund Expenses
Less Interest
Income - - - - (122) (115)
________ ____ ____ ____ _____ ______
Total 480,700 90% 96% 90% $ 400 $ 773
Cash Distributions
Pending the completion of the bulk sale to Glenborough, the Fund
has suspended cash distributions from operations. Assuming the
properties are sold during the next few months, the General
Partner will determine the amount it believes sufficient for the
payment of Fund liabilities; the balance of the assets will then
be promptly distributed. Based on the negotiated sale price and
other information currently available, we expect future
distributions to exceed the Fund's most recent estimated value
of $30.30.
Results of Operations
The Fund had net income of $773,000 for the six months ended
June 30, 1997, an increase of $373,000 over the comparable 1996
period. The increase was primarily attributable to a $231,000
decrease in depreciation expense as a result of stopping
depreciation of Fund properties now Held for Sale. Further,
higher average leased status at Westbrook Commons and Goshen
Plaza, coupled with lower legal fees and maintenance costs at
Goshen, also contributed to higher net income.
During the past three-month period, net income rose $297,000
from the second quarter of 1996, also due to ceased depreciation
expenses and lower legal and maintenance costs.
At the property level, the Fund's average leased status fell
six percentage points to 90% from the comparable 1996 period. A
new lease for 6% of Tierrasanta was executed after quarter-end,
and two other leases covering the rest of the vacancy at the
property are currently being negotiated.
Outlook
As the real estate market has been improving in recent years, we
have taken advantage of the opportunity to capture higher prices
for portfolio properties. We believe it is in the best interests
of investors to liquidate the Fund's portfolio while real estate
values continue to strengthen, since the Fund is nearing the end
of its planned lifespan. In the normal course of events, as the
real estate cycle runs its course, rising property prices
usually lead to an increased supply of new properties, which
could lead to softer prices sometime later.
No one can forecast exactly when the real estate market will
peak, but we believe current market conditions favor a sale of
Fund properties because of the benign interest rate environment,
increased availability of investor capital, and the improvement
of some markets in which the Fund owns properties.
Once again we urge you to read the consent solicitation
materials and return the card as quickly as possible so that we
can proceed with the orderly liquidation of your investment.
Thank you for your cooperation.
Sincerely,
James S. Riepe
Chairman
August 7, 1997
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands)
June 30, December 31,
1997 1996
___________ ____________
Assets
Real Estate Property
Investments
Land. . . . . . . . . . . . . . . $ 7,413
Buildings and Improvements
15,818
________
23,231
Less: Accumulated
Depreciation and
Amortization . . . . . . . . . (3,050)
________
20,181
Held for Sale. . . . . . . . . . . . $ 19,563 -
________ ________
19,563 20,181
Cash and Cash Equivalents . . . . . . . 1,987 1,769
Accounts Receivable (less
allowances of $46
and $28). . . . . . . . . . . . . 497 525
Other Assets. . . . . . . . . . . . . . 9 242
________ ________
$ 22,056 $ 22,717
________ ________
________ ________
Liabilities and Partners' Capital
Security Deposits and
Prepaid Rents. . . . . . . . . . . . $ 166 $ 209
Accrued Real Estate Taxes . . . . . . . 385 358
Accounts Payable and Other
Accrued Expenses . . . . . . . . . . 218 270
Minority Interest . . . . . . . . . . . - 688
________ ________
Total Liabilities . . . . . . . . . . . 769 1,525
Partners' Capital . . . . . . . . . . . 21,287 21,192
________ ________
$ 22,056 $ 22,717
________ ________
________ ________
See the accompanying notes to condensed consolidated financial
statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In thousands except per-unit amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
1997 1996 1997 1996
____ ____ ____ ____
Revenues
Rental Income . . . . . . $ 845 $ 854 $ 1,643 $ 1,716
Interest Income . . . . . 12 16 34 41
________ ________ ________ ________
857 870 1,677 1,757
________ ________ ________ ________
Expenses
Property Operating
Expenses . . . . . . 158 199 284 413
Real Estate
Taxes. . . . . . . . 143 144 280 291
Depreciation and
Amortization . . . . - 202 160 391
Management Fee
to General
Partner. . . . . . . (8) 31 34 103
Partnership Management
Expenses . . . . . . 68 95 146 159
________ ________ ________ ________
361 671 904 1,357
________ ________ ________ ________
Net Income. . . . . . . . $ 496 $ 199 $ 773 $ 400
________ ________ ________ ________
________ ________ ________ ________
Activity per Limited
Partnership Unit
Net Income. . . . . . . . $ 0.64 $ 0.25 $ 1.00 $ 0.51
________ ________ ________ ________
________ ________ ________ ________
Cash Distributions
Declared From
Operations . . . . . - $ 0.40 - $ 0.80
________ ________ ________ ________
________ ________ ________ ________
Weighted Average Number
of Units
Outstanding. . . . . 765,221 772,629 765,897 772,478
________ ________ ________ ________
________ ________ ________ ________
See the accompanying notes to condensed consolidated financial
statements.
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
Unaudited
(In thousands)
General Limited
Partner Partners Total
________ ________ ________
Balance, December 31,
1996 . . . . . . . . . . . . . $ (75)$ 21,267 $ 21,192
Net Income. . . . . . . . . . . . . 8 765 773
Redemptions of Units. . . . . . . . - (96) (96)
Cash Distributions. . . . . . . . . (6) (576) (582)
_______ _______ _______
Balance, June 30, 1997. . . . . . . $ (73)$ 21,360 $ 21,287
_______ _______ _______
_______ _______ _______
See the accompanying notes to condensed consolidated financial
statements.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(In thousands)
Six Months Ended
June 30,
1997 1996
_________ _________
Cash Flows from Operating
Activities
Net Income. . . . . . . . . . . . . . . . $ 773 $ 400
Adjustments to Reconcile Net
Income to Net Cash
Provided by Operating Activities
Depreciation and
Amortization. . . . . . . . . 160 391
Decrease in Accounts
Receivable, Net of
Allowances. . . . . . . . . . 28 133
Decrease in Other
Assets. . . . . . . . . . . . 43 31
Decrease in Security
Deposits and Prepaid
Rents . . . . . . . . . . . . (43) (13)
Increase in Accrued Real
Estate Taxes. . . . . . . . . 27 31
Decrease in Accounts
Payable and Other
Accrued Expenses. . . . . . . (52) (10)
________ ________
Net Cash Provided by Operating
Activities . . . . . . . . . . . . . . 936 963
________ ________
Cash Flows Used in Investing Activities
Investments in Real Estate. . . . . . . . (40) (232)
________ ________
Cash Flows from Financing Activities
Cash Distributions. . . . . . . . . . . . (582) (673)
Reinvestments in Units. . . . . . . . . . - 285
Redemptions of Units. . . . . . . . . . . (96) (237)
________ ________
Net Cash Used in Financing
Activities . . . . . . . . . . . . . . (678) (625)
________ ________
Cash and Cash Equivalents
Net Increase during Period. . . . . . . . 218 106
At Beginning of Year. . . . . . . . . . . 1,769 1,733
________ ________
At End of Period. . . . . . . . . . . . . $ 1,987 $ 1,839
________ ________
________ ________
See the accompanying notes to condensed consolidated financial
statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
The unaudited interim condensed consolidated financial
statements reflect all adjustments which are, in the opinion
of management, necessary for a fair statement of the results
for the interim periods presented. All such adjustments are of
a normal, recurring nature.
The unaudited interim financial information contained in
the accompanying condensed consolidated financial statements
should be read in conjunction with the consolidated financial
statements contained in the 1996 Annual Report to Partners.
NOTE 1 - TRANSACTIONS WITH RELATED PARTIES AND OTHER
As compensation for services rendered in managing the affairs
of the Partnership, the General Partner earns a partnership
management fee equal to 9% of net operating proceeds. The
General Partner earned a partnership management fee of $34,000
during the first six months of 1997.
In accordance with the partnership agreement, certain
operating expenses are reimbursable to the General Partner.
The General Partner's reimbursement of such expenses totaled
$37,000 for communications and administrative services
performed on behalf of the Partnership during the first six
months of 1997.
An affiliate of the General Partner earned a normal and
customary fee of $1,000 from the money market mutual funds in
which the Partnership made its interim cash investments during
the first six months of 1997.
LaSalle Advisors Limited Partnership ("LaSalle") is the
Partnership's advisor and is compensated for its advisory
services directly by the General Partner. LaSalle is
reimbursed by the Partnership for certain operating expenses
pursuant to its contract with the Partnership to provide real
estate advisory, accounting and other related services to the
Partnership. LaSalle's reimbursement for such expenses during
the first six months of 1997 totaled $43,000.
An affiliate of LaSalle earned $29,000 in the first six
months of 1997 as property manager for several of the
Partnership's properties.
NOTE 2 - PROPERTIES HELD FOR SALE
On April 11, 1997, the Partnership and its consolidated
ventures entered into contracts with a buyer for the sale of
all of its real estate property investments at a price of
$23,877,000 before selling expenses. The transactions are
subject to the approval of the Limited Partners. If the
transactions close, the Partnership will have sold all of its
real estate properties and will begin liquidation.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the unaudited condensed consolidated financial statements of
T. Rowe Price Realty Income Fund IV, America's
Sales-Commission-Free Real Estate Limited Partnership
included in the accompanying Form 10-Q for the period ended June
30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000826315
<NAME> T. ROWE PRICE REALTY INCOME FUND IV, AMERICA'S
SALES-COMMISS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,987,000
<SECURITIES> 0
<RECEIVABLES> 543,000
<ALLOWANCES> 46,000
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 19,563,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 22,056,000
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 21,287,000<F2>
<TOTAL-LIABILITY-AND-EQUITY> 22,056,000
<SALES> 0
<TOTAL-REVENUES> 1,677,000
<CGS> 0
<TOTAL-COSTS> 904,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 773,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 773,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 773,000
<EPS-PRIMARY> 0<F3>
<EPS-DILUTED> 0
<FN>
<F1>Not contained in registrants' unclassified balance sheet.
<F2>Partners' capital.
<F3>Not applicable. Net income per limited partnership unit is
$1.00.
</FN>
