<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
(Mark one)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1996 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 0-20103
----------------------------------------------------
Wells Real Estate Fund IV, L.P.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1915128
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3885 Holcomb Bridge Road, Norcross, Georgia 30092
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
- -------------------------------------------------------------------------------
Registrant's telephone number, including area code (770) 449-7800
----------------------------
(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
------ -----
<PAGE>
Form 10-Q
---------
Wells Real Estate Fund IV, L.P.
-------------------------------
INDEX
-----
Page No.
--------
PART 1. FINANCIAL INFORMATION
- ------ ----------------------
Item 1. Financial Statements
Balance Sheets - September 30, 1996
and December 31, 1995..................................... 3
Statements of Income for the Three Months and Nine Months
Ended September 30, 1996 and 1995......................... 4
Statement of Partners' Capital for the Year Ended
December 31, 1995 the Nine Months Ended
September 30, 1996....................................... 5
Statements of Cash Flows for the Nine
Months Ended September 30, 1996 and 1995................. 6
Condensed Notes to Financial Statements.................. 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................................. 11
PART II. OTHER INFORMATION........................................ 16
<PAGE>
WELLS REAL ESTATE FUND IV, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets September 30, 1996 December 31, 1995
------ ------------------ -----------------
<S> <C> <C>
Investment in joint venture (Note 2) $10,741,560 $11,047,207
Cash and cash equivalents 154,632 148,494
Due from affiliates 219,576 211,281
Other assets 0 1,042
----------- -----------
Total assets =========== ===========
$11,115,768 $11,408,024
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Accounts payable $ 219 $ 0
Partnership distribution payable 237,345 223,131
----------- -----------
Total liabilities 237,564 223,131
----------- -----------
Partners' capital:
Limited partners 0 0
Class A - 1,322,909 units 10,878,204 11,184,893
outstanding
Class B - 38,551 units outstanding 0 0
----------- -----------
Total partners' capital 10,878,204 11,184,893
----------- -----------
Total liabilities and $11,115,768 $11,408,024
partners' capital =========== ===========
</TABLE>
See accompanying condensed notes to financial statements.
3
<PAGE>
WELLS REAL ESTATE FUND IV, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- ----------------------------
Sept 30, 1996 Sept 30, 1995 Sept 30, 1996 Sept 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Equity in income of joint ventures (Note 2) $134,486 180,899 $416,143 $574,491
Interest income 2,022 2,606 6,833 8,193
-------- -------- -------- --------
136,508 183,505 422,976 582,684
-------- -------- -------- --------
Expenses:
Legal and accounting 621 3534 21,513 10,414
Computer costs 1,404 431 3,236 5,270
Partnership administration 7,355 10,897 35,422 34,046
Amortization 0 1,563 1,042 4,688
-------- -------- -------- --------
9,380 16,425 61,213 54,418
-------- -------- -------- --------
Net income $127,128 $167,080 $361,763 $528,266
======== ======== ======== ========
Net income allocated to Class A
Limited Partners $127,128 $167,080 $361,763 $528,266
Net loss allocated to Class B
Limited Partners $ 0 $ 0 $ 0 $ 0
Net income per Class A
Limited Partner unit $ 0.10 $ 0.13 $ 0.27 $ 0.40
Net loss per Class B
Limited Partner unit $ 0 $ 0 $ 0 $ 0
Cash distribution per Class A
Limited Partner unit $ 0.18 $ 0.19 $ 0.51 $ 0.54
</TABLE>
See accompanying condensed notes to financial statements.
4
<PAGE>
WELLS REAL ESTATE FUND IV, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1995
AND NINE MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Limited Partners
----------------
Class A Class B Total
----------------------------- ------------------ Partners'
Units Amounts Units Amounts Capital
---------- ----------- --------- ------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1994 1,322,909 $11,497,678 38,551 $0 $11,497,678
Net Income 0 623,867 0 0 623,867
Partnership distributions 0 (936,652) 0 0 (936,652)
--------- ----------- ------ -- -----------
BALANCE, December 31, 1995 1,332,909 11,184,893 38,551 0 11,184,893
Net Income 0 361,763 0 0 361,763
Partnership distributions 0 (668,452) 0 0 (668,452)
--------- ----------- ------ -- -----------
BALANCE, September 30, 1996 1,322,909 $10,878,204 38,551 0 $10,878,204
========= =========== ====== == ===========
</TABLE>
See accompanying condensed notes to financial statements.
5
<PAGE>
WELLS REAL ESTATE FUND IV, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
----------------------------------
Sept 30, 1996 Sept 30, 1995
------------------ --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 361,763 $ 528,266
--------- ---------
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in income of joint ventures (416,143) (574,491)
Distributions received from joint ventures 713,495 742,952
Distributions to partners from accumulated
earnings (654,238) (672,006)
Amortization 1,042 4,688
Changes in assets and liabilities:
Accounts payable 219 (3,000)
--------- ---------
Total Adjustments (355,625) (501,857)
--------- ---------
Net cash provided by (used by)
operating activities (6,138) 26,409
--------- ---------
Cash flows from investing activities:
Investment in joint ventures 0 (13,541)
--------- ---------
Net increase in cash and cash equivalents 6,138 12,868
--------- ---------
Cash and cash equivalents, beginning of year 148,494 165,648
--------- ---------
Cash and cash equivalents, end of period $ 154,632 $ 178,516
========= =========
Supplemental disclosure of noncash
investing activities: $ 0 $ 1,068
========= =========
</TABLE>
See accompanying condensed notes to financial statements.
6
<PAGE>
WELLS REAL ESTATE FUND IV, L.P.
(A Georgia Public Limited Partnership)
Condensed Notes to Financial Statements
September 30, 1996
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) General
- -----------
Wells Real Estate Fund IV, L.P. (the "Partnership") is a Georgia public limited
partnership having Leo F. Wells, III and Wells Partners, L.P., as General
Partners. The Partnership was formed on October 25, 1990, for the purpose of
acquiring, developing, constructing, owning, operating, improving, leasing and
otherwise managing for investment purposes income-producing commercial
properties.
On March 4, 1991, the Partnership commenced an offering of up to $25,000,000 of
Class A or Class B limited partnership units ($10.00 per unit) pursuant to a
Registration Statement on Form S-11 under the Securities Act of 1933. The
Partnership did not commence active operations until it received and accepted
subscriptions for 125,000 units which occurred on May 13, 1991. The offering
was terminated on February 29, 1992, at which time the Partnership had obtained
total contributions of $13,614,652 representing subscriptions from 1,285 Limited
Partners.
As of September 30, 1996, the Partnership owned interests in the following
properties: (i) the Stockbridge Village Shopping Center, a retail shopping
center located in Stockbridge, Georgia, southeast of Atlanta; (ii) the G.E.
Office Building, a two-story office building located in Richmond, Virginia;
(iii) The Medical Center Project, two substantially identical two-story office
buildings located in Clayton County, Georgia; and (iv) The Jacksonville Project,
a four-story office building located in Jacksonville, Florida. All of the
foregoing properties were acquired on an all cash basis.
(b) Basis of Presentation
---------------------
The financial statements of Wells Real Estate Fund IV, L.P. (the "Partnership")
have been prepared in accordance with instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. These quarterly
statements have not been examined by independent accountants, but in the opinion
of the General Partners, the statements for the unaudited interim periods
presented include all adjustments, which are of a normal and recurring nature,
necessary to present a fair presentation of the results for such periods. For
further information, refer to the financial statements and footnotes included in
the Partnership's Form 10-K for the year ended December 31, 1995.
(c) Employees
---------
The Partnership has no direct employees. The employees of Wells Capital, Inc.,
the sole general partner of Wells Partners, L.P., a General Partner of the
Partnership, perform a full range of real estate services including leasing and
property management, accounting, asset management and investor relations for the
Partnership.
7
<PAGE>
(d) Insurance
---------
Wells Management Company, Inc., an affiliate of the General Partners, carries
comprehensive liability and extended coverage with respect to all the properties
owned directly or indirectly by the Partnership. In the opinion of management,
the properties are adequately insured.
(e) Competition
-----------
The Partnership will experience competition for tenants from owners and managers
of competing projects which may include the General Partners and their
affiliates. As a result, the Partnership may be required to provide free rent,
reduced charges for tenant improvements and other inducements, all of which may
have an adverse impact on results of operations. At the time the Partnership
elects to dispose of its properties, the Partnership will also be in competition
with sellers of similar properties to locate suitable purchasers for its
properties.
(2) Investment in Joint Ventures
----------------------------
The following describes the properties in which the Partnership owns an interest
as of September 30, 1996. The Partnership does not have control over the
operations of the joint ventures; however, it does exercise significant
influence. Accordingly, investment in joint ventures is recorded on the equity
method.
Fund III - Fund IV Joint Ventures
- ---------------------------------
On March 27, 1991, the Partnership and Wells Real Estate Fund III, L.P. ("Wells
Fund III"), a Georgia public limited partnership having Leo F. Wells, III and
Wells Capital, Inc., a Georgia corporation, as General Partners, formed a joint
venture known as Fund III and Fund IV Associates (the "Fund III-Fund IV Joint
Venture"). The investment objectives of Wells Fund III are substantially
identical to those of the Partnership. The Partnership holds an approximate 43%
of equity interest in the Fund III-Fund IV Joint Venture which owns and operates
a multi-tenant retail center and an office building. As of September 30, 1996,
the Partnership had contributed $6,131,677 and Wells Fund III had contributed
$8,119,603 for total contributions of $14,251,280 to the Fund III-Fund IV Joint
Venture. The Partnership owns interests in the following two properties through
the Fund III-Fund IV Joint Venture:
The Stockbridge Property / Fund III - Fund IV Joint Venture
- -----------------------------------------------------------
On April 4, 1991, the Fund III-Fund IV Joint Venture purchased 13.62 acres of
real property located in Clayton County, Georgia for the purchase price of
$3,057,729, including acquisition costs, for the purpose of developing,
constructing and operating a shopping center known as the Stockbridge Village
Shopping Center (the "Stockbridge Property"). The Stockbridge Property consists
of a multi-tenant shopping center containing approximately 113,011 square feet
of which approximately 64,097 square feet is occupied by the Kroger Company, a
retail grocery chain. This is the only tenant which occupies more than ten
percent of the rentable square feet. The lease with Kroger Company is for an
initial term of 20 years commencing November 14, 1991, with an option to extend
for four consecutive five year periods at the same rental rate as the original
lease. The annual base rent payable under the Kroger lease during the initial
term is $492,692. The remaining 48,914 square feet is comprised of 12 separate
8
<PAGE>
retail spaces and a 3 free standing retail buildings. As of September 30,
1996, the Partnership had contributed a total of $5,047,132 and Wells Fund III
had contributed a total of $4,515,042 to fund the total costs of approximately
$9,562,000 to fund the acquisition and development of the Stockbridge Property.
The occupancy rates at the Stockbridge Property for the quarters ended September
30 were 93% in 1996, 100% in 1995, 99% in 1994 and 1993, and 94% in 1992. The
average effective annual rental per square foot at the Stockbridge Property was
$9.56 for 1996, $10.16 for 1995, $10.26 for 1994, $9.13 for 1993, and $7.34 for
1992.
The G.E. Building/Richmond / Fund III - fund IV Joint Venture
- -------------------------------------------------------------
The G.E. Building is a two-story office building containing approximately 43,000
square feet located in Richmond, Virginia which was acquired by the Fund III-
Fund IV Joint Venture on July 1, 1992, for a purchase price of $4,687,600. As
of September 30, 1996, a total of $4,689,106 had been incurred for the
acquisition of the G.E. Building. Of this amount, the Partnership contributed
$1,084,545 and Wells Fund III contributed $3,604,561 to the Fund III-Fund IV
Joint Venture.
The entire G.E. Building is currently under a net lease to General Electric
("G.E."), a corporate office for the lighting division. The annual base rent
payable is currently $530,742 with annual base increases of 2%. The G.E. lease
expires March 31, 2000, with an option to extend the lease for one additional
five-year period at the same rental rate as the original lease.
The occupancy rate at the G.E. Building for the quarters ended September 30 was
100% for 1996, 1995, 1994, 1993 and 1992. The average effective annual rental
per square foot at the G.E. Building is $12.27 for 1996, 1995, 1994, 1993, and
1992.
Fund IV-Fund V Joint Venture
- ----------------------------
On April 14, 1992, the Partnership and Wells Real Estate Fund V, L.P. ("Wells
Fund V"), a Georgia public limited partnership affiliated with the Partnership
through common general partners, formed a joint venture known as Fund IV and
Fund V Associates (the "Fund IV-Fund V Joint Venture"). The investment
objectives of Wells Fund V are substantially identical to those of the
Partnership. The Partnership holds an approximate 38% equity interest in the
Fund IV-Fund V Joint Venture which owns and operates the two office buildings
described below. As of September 30, 1996, the Partnership had contributed
$4,736,173 and Wells Fund V had contributed $7,719,249 for total contributions
of $12,455,422 to the Fund IV-Fund V Joint Venture. The Partnership owns
interests in the following two properties through the Fund IV-Fund V Joint
Venture:
The Jacksonville Property / Fund IV and Fund V Joint Venture
- ------------------------------------------------------------
On June 8, 1992, the Fund IV-Fund V Joint Venture acquired 5.676 acres of real
property located in Jacksonville, Florida for a purchase price of $1,360,000
for development of the Jacksonville Property. The Jacksonville Property
consists of a four-story office building containing approximately 88,600
rentable square feet leased primarily by International Business Machines
Corporation ("IBM"), a computer sales and service corporation, and Customized
9
<PAGE>
Transportation, Inc. ("CTI"), a division of CSX Railroad, a transportation
corporation.
The initial term of the IBM lease for 68,100 square feet is 9 years and 11
months and commenced upon completion of the building in June 1993. IBM has the
option to extend the initial lease for two consecutive five-year periods at 90%
of the prevailing market values and rates for those periods. The annual base
rent payable under the IBM lease during the initial term is $1,122,478 payable
in equal monthly installments of $93,540. IBM is also required to pay
additional rent equal to its share of operating expenses during the lease term.
The term of the CTI lease for 11,780 square feet is five years and commenced in
March, 1994. The annual base rent payable under the CTI lease is $325,965.
The occupancy rates at the Jacksonville Property were 100% in 1996, 1995 and
1994, and 85% in 1993, the first year of occupancy. The average effective
annual rental per square foot at the Jacksonville Property was $16.71 for 1996,
$16.53 for 1995, $16.22 for 1994 and $16.38 for 1993.
The Medical Center Property / Fund IV - Fund V Joint Venture
- ------------------------------------------------------------
On September 14, 1992, the Fund IV-Fund V Joint Venture acquired 2.655 acres of
real property in Stockbridge, Georgia for $440,000 for the purpose of
constructing two substantially identical two-story office buildings containing
approximately 17,847 rentable square feet each (the "Medical Center Property").
As of September 30, 1996, the Partnership had contributed $1,296,226 and Wells
Fund V had contributed $2,757,540 to the Fund IV-Fund V Joint Venture for the
acquisition and development of the Medical Center Property. It is currently
anticipated that approximately $146,000 of additional fundings will be required
for the completion of the Medical Center Property. Wells Fund V has reserved
funds for this purpose, with any excess costs which may be required to be funded
out of operating cash flow.
Construction on the first building was completed in March, 1993, and the
building shell of the second building was completed in April, 1994. Georgia
Baptist, a medical health care and urgent care facility, has leased
approximately 14,669 square feet in the first building for a term of six years
and has the option to extend the initial term of the lease for one five-year
period beginning at $18.50 per square foot with $.50 per square foot annual
increases. The base rent payable per square foot ranges from $16.00 per month
during the first year to $18.50 during the sixth year. In addition, Georgia
Baptist has leased approximately 3,376 square feet in the second building for a
term of five years commencing in December, 1994 at an annual rental rate of
$55,704, increasing to $57,392 in the fourth year and $59,080 in the fifth year.
The occupancy rate at the Medical Center Property for the quarters ended
September 30 was 69% in 1996 and 1995, 58% in 1994 the year the second building
opened and 69% in 1993, the first year of occupancy of the first building. The
average effective annual rental per square foot at the Medical Center Property
was $11.89 for 1996, $10.43 for 1995, $7.59 for 1994 and $11.25 for 1993.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
The following discussion and analysis should be read in conjunction with the
accompanying financial statements of the Partnership and notes thereto. This
Report contains forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1993 and 21E of the Securities Exchange Act of 1934,
including discussion and analysis of the financial condition of the Partnership,
anticipated capital expenditures required to complete certain projects, amounts
of cash distributions anticipated to be distributed to Limited Partners in the
future and certain other matters. Readers of this Report should be aware that
there are various factors that could cause actual results to differ materially
from any forward-looking statement made in the Report, which include
construction costs which may exceed estimates, construction delays, lease-up
risks, inability to obtain new tenants upon the expiration of existing leases,
and the potential need to fund tenant improvements or other capital expenditures
out of operating cash flow.
RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS
- ---------------------------------------------------------
(a) General
- -----------
Gross revenues of the Partnership were $136,508 for the three months ended
September 30, 1996, as compared to $183,505 for the three months ended September
30, 1995, and $422,976 for the nine months ended September 30, 1996, as compared
to $582,684 for the nine months ended September 30, 1995. This decrease in gross
revenues was due to decreased equity in income of joint ventures, which was
primarily due to the increased depreciation expenses described below.
Depreciation expenses for the joint ventures increased from 1995 to 1996 due to
a change in the estimated useful lives of all buildings and improvements in
which the Partnership owns interest, effective December 31, 1995, from 40 years
to 25 years.
Expenses of the Partnership increased for the nine months ended September 30,
1996 over the same period in 1995 due primarily to an increase in accounting
expenses.
The Partnership's net cash provided by (used by) operating activities decreased
due to lowered net income and decreased distributions from the joint ventures.
Net cash used in investing activities decreased to zero in 1996 due to the fact
that all funds available for investment in properties have now been invested.
Cash and cash equivalents remained relatively stable for the periods ending
September 30, 1996 and 1995. The Partnership distributes cash available less
reserves, and as a result, the level of cash remains stable.
The Partnership made cash distributions to the Limited Partners holding Class A
Units of $.51 per Unit for the nine months ended September 30, 1996 of which
$.28 was from investment income and $.23 was a return of capital, and $.54 for
the nine months ended September 30, 1995 of which $.40 was from investment
income and $.14 was a return of capital. No cash distributions were made to the
Limited Partners holding Class B Units or to the General Partners.
11
<PAGE>
Property Operations
- -------------------
As of September 30, 1996, the Partnership owned interests in the following
properties through joint ventures:
The Stockbridge Property / Fund III - Fund IV Joint Venture
- -----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------------- ----------------------------------
Sept 30, 1996 Sept 30, 1995 Sept 30, 1996 Sept 30, 1995
-------------- ------------------- -------------- ------------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $271,532 300,453 $809,874 $896,724
Interest Income 3,526 3,760 10,218 12,302
-------- -------- -------- --------
275,058 304,213 820,092 909,026
-------- -------- -------- --------
Expenses:
Depreciation 84,747 55,355 254,243 165,947
Management and leasing expenses 24,114 29,567 75,434 88,833
Other expenses 26,243 18,715 74,605 49,282
-------- -------- -------- --------
135,104 103,637 404,282 304,062
-------- -------- -------- --------
Net income $139,954 $200,576 $415,810 $604,964
======== ======== ======== ========
Occupied % 93% 100% 93% 100%
Partnership's Ownership % 42.7% 42.7% 42.7% 42.7%
Cash Distributed to the Partnership $100,912 $113,789 $301,020 $341,727
Net Income Allocated to the Partnership $ 59,737 $ 85,613 $177,482 $258,219
</TABLE>
Rental income decreased for the three and the nine months ended September 30,
1996, as compared to the same period in 1995, due to the a decrease in occupancy
resulting from the early termination of a lease for 8,025 square feet. Although
no leases have been signed, as yet, every effort is being made to re-lease this
space. Expenses of the property increased from $304,062 in 1995 to $404,282 in
1996 due primarily to the increase in depreciation expenses as a result of the
change in the estimated useful lives of buildings and improvements as previously
discussed under the "General" section of "Results of Operations and Changes in
Financial Condition," timing differences in billing tenant expense reimbursement
and an extraordinary painting expenditures.
12
<PAGE>
The G.E. Building/Richmond / Fund III - Fund IV Joint Venture
- --------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
Sept 30, 1996 Sept 30, 1995 Sept 30, 1996 Sept 30, 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $131,857 131,857 $395,569 $395,569
Expenses:
Depreciation 49,056 28,159 147,162 84,479
Management and leasing expenses 9,965 9,965 29,895 29,856
Other expenses 708 1,440 7,890 6,345
-------- -------- -------- --------
59,729 39,564 184,947 120,680
-------- -------- -------- --------
Net income $ 72,128 $ 92,293 $210,622 $274,889
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % 42.7% 42.7% 42.7% 42.7%
Cash Distributed to the Partnership $ 51,544 $ 50,999 $152,693 $151,135
Net Income Allocated to the Partnership $ 30,787 $ 39,394 $ 89,901 $117,332
</TABLE>
Rental income remained constant for 1996 and 1995. Total expenses increased in
1996 over 1995, and accordingly, net income decreased in 1996, as compared to
1995, due primarily to the increase in depreciation expenses as a result of the
change in the estimate useful lives of buildings and improvements as previously
discussed under the "General" section of "Results of Operations and Changes in
Financial Condition".
13
<PAGE>
The Jacksonville Property / Fund IV - Fund V Joint Venture
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
Sept 30, 1996 Sept 30, 1995 Sept 30, 1996 Sept 30, 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $365,992 $358,214 $1,097,977 $1,097,062
Expenses:
Depreciation 79,296 47,484 237,888 142,452
Management and leasing expenses 43,977 45,385 137,731 136,157
Other expenses 138,511 140,937 324,912 357,680
-------- -------- ---------- ----------
261,784 233,806 700,531 636,289
-------- -------- ---------- ----------
Net income $104,208 $124,408 $ 397,446 $ 460,773
======== ======== ========== ==========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % 38.1% 38.1% 38.1% 38.1%
Cash Distributed to the Partnership $ 70,962 $ 64,722 $ 221,586 $ 228,316
Net Income Allocated to the Partnership $ 39,730 $ 47,508 $ 151,526 $ 176,517
</TABLE>
Rental income remained relatively stable in 1996 as compared to 1995. Expenses
increased in 1996 as compared to 1995 due primarily to increased depreciation
caused by the change in the estimated useful lives of buildings and
improvements as previously discussed under the "General" section of "Results of
Operations and Changes in Financial Condition". The increase in depreciation
was partially offset by reductions in operating expenses resulting primarily
from timing differences in billing tenant expense reimbursements.
14
<PAGE>
The Medical Center Property / Fund IV - Fund V Joint Venture
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
Sept 30, 1996 Sept 30, 1995 Sept 30, 1996 Sept 30, 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $105,470 $103,424 $316,050 $289,868
Interest income 3,727 3,440 9,468 9,850
-------- -------- -------- --------
109,197 106,864 325,518 299,718
-------- -------- -------- --------
Expenses:
Depreciation 39,882 25,238 119,646 74,829
Management and leasing expenses 13,227 13,846 38,108 37,091
Other expenses 44,985 45,810 175,017 129,182
-------- -------- -------- --------
98,094 84,894 332,771 241,102
-------- -------- -------- --------
Net income loss $ 11,103 $ 21,970 $ (7,253) $ 58,616
======== ======== ======== ========
Occupied % 69% 67.8% 69% 67.8%
Partnership's Ownership % 38.1% 38.1% 38.1% 38.1%
Cash Distributed to the Partnership $ 21,159 $ 13,449 $ 46,492 $ 43,011
Net Income (loss) Allocated to the Partnership $ 4,233 $ 8,385 $ (2,765) $ 22,424
</TABLE>
Rental income increased for the nine month period ending September 30, 1996, as
compared to the same period in 1995, due to increased lease up at the Medical
Center Property during 1995. Leases are being actively pursued on the
remaining 11,000 rentable square feet of vacant space. Expenses have increased
in 1996 over 1995 levels due primarily to increased operating expenses of the
buildings, the increase in depreciation expenses caused by the change in the
estimated useful lives of buildings and improvements as previously discussed
under the "General" section of "Results of Operations and Changes in Financial
Condition" and timing differences in operating expense billings to tenants.
15
<PAGE>
PART II - OTHER INFORMATION
Item 6(b). No reports on Form 8-K were filed during the third quarter of 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
WELLS REAL ESTATE FUND IV, L.P.
(Registrant)
Dated: November 11, 1996 By: /s/Leo F. Wells, III
---------------------------------------------
Leo F. Wells, III, as Individual General
Partner and as President, Sole Director
and Chief Financial Officer of
Wells Capital, Inc.,
the General Partner of Wells Partners, L.P.
16
<TABLE> <S> <C>
<PAGE>
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