<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 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 0-21536
Brauvin Corporate Lease Program IV L. P.
(Exact name of registrant as specified in its charter)
Delaware 36 -3800611
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 South Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
(312) 443-0922
(Registrant's telephone number, including area code)
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>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
INDEX
Page
PART I Financial Information
Item 1. Consolidated Financial Statements. . . . . . . . . . . 3
Consolidated Balance Sheets at March 31, 1996
and December 31, 1995. . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations for the
three months ended March 31, 1996 and 1995 . . . . . . 5
Consolidated Statements of Partners' Capital for
the periods January 1, 1995 to March 31, 1996. . . . . 6
Consolidated Statements of Cash Flows for the
three months ended March 31, 1996 and 1995 . . . . . . 7
Notes to Consolidated Financial Statements . . . . . . 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . 16
PART II Other Information
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . 19
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . 19
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . 19
Item 4. Submissions of Matters to a Vote of Security Holders . 19
Item 5. Other Information. . . . . . . . . . . . . . . . . . . 20
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 20
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
Except for the December 31, 1995 Consolidated Balance Sheet, the
following Consolidated Balance Sheet as of March 31, 1996, Consolidated
Statements of Operations for the three months ended March 31, 1996 and
1995, Consolidated Statements of Partners' Capital for the periods
January 1, 1995 to March 31, 1996 and Consolidated Statements of Cash
Flows for the three months ended March 31, 1996 and 1995 for Brauvin
Corporate Lease Program IV L.P. (the "Partnership") are unaudited and
have not been examined by independent public accountants but reflect, in
the opinion of the management, all adjustments necessary to present
fairly the information required. All such adjustments are of a normal
recurring nature.
These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Partnership's 1995 Annual Report on Form 10-K.
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1996 1995
ASSETS
Investment in real estate, at cost:
Land $ 4,315,540 $ 4,315,540
Buildings and improvements 9,993,090 9,993,090
14,308,630 14,308,630
Less: accumulated depreciation (704,513) (638,479)
Net investment in real estate 13,604,117 13,670,151
Cash and cash equivalents 698,052 711,167
Tenant receivables 259 --
Deferred rent receivable 271,344 241,119
Due from affiliates -- 7,627
Prepaid offering costs 175,163 175,983
Organization costs (net of
accumulated amortization of
$23,500 and $22,000, respectively) 6,500 8,000
Other assets 40,688 36,901
Total Assets $14,796,123 $14,850,948
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Accounts payable and accrued
expenses $ 39,688 $ 33,660
Rent received in advance 73,072 67,205
Total Liabilities 112,760 100,865
MINORITY INTERESTS IN BRAUVIN
GWINNETT COUNTY VENTURE 709,019 711,056
PARTNERS' CAPITAL:
General Partners 10,794 10,794
Limited Partners 13,963,550 14,028,233
Total Partners' Capital 13,974,344 14,039,027
Total Liabilities and
Partners' Capital $14,796,123 $14,850,948
See accompanying notes to consolidated financial statements.
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31,
1996 1995
INCOME:
Rental $388,593 $401,447
Interest 8,272 4,757
Other 1,578 13,193
Total income 398,443 419,397
EXPENSES:
General and administrative 49,772 32,936
Management fees (Note 3) 3,645 4,370
Amortization of organization costs 1,500 1,500
Depreciation 66,034 66,035
Total expenses 120,951 104,841
Income before minority interests
in joint venture 277,492 314,556
Minority interests' share in Brauvin
Gwinnett County Venture's net income (15,843) (14,687)
Net income $261,649 $299,869
Net income allocated to the
Limited Partners $261,649 $299,869
Net income per Unit outstanding (a) $ 0.16 $ 0.19
(a) Net income per Unit was based on the average Units outstanding during
the period since they were of varying dollar amounts and percentages based
upon the dates Limited Partners were admitted to the Partnership and
additional Units were purchased through the distribution reinvestment plan
(the "Plan").
See accompanying notes to consolidated financial statements.
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
For the periods from January 1, 1995 through March 31, 1996
General Limited
Partners Partners* Total
Balance, January 1, 1995 $10,794 $14,003,907 $14,014,701
Contributions, net -- 136,937 136,937
Selling commissions and other
offering costs (Note 1) -- (19,395) (19,395)
Net income -- 1,203,510 1,203,510
Cash distributions -- (1,296,726) (1,296,726)
Balance, December 31, 1995 10,794 14,028,233 14,039,027
Contributions, net -- 5,982 5,982
Selling commissions and other
offering costs (Note 1) -- (4,917) (4,917)
Net income -- 261,649 261,649
Cash distributions -- (327,397) (327,397)
Balance, March 31, 1996 $10,794 $13,963,550 $13,974,344
*Total Units sold, including those raised through the Plan, at March 31,
1996 and December 31, 1995 were 1,632,510 and 1,631,872, respectively. Cash
distributions to Limited Partners per Unit were $0.20 and $0.80 for the
three months ended March 31, 1996 and the year ended December 31, 1995,
respectively. Cash distributions to Limited Partners per Unit are based on
the average Units outstanding during the period since they were of varying
dollar amounts and percentages based upon the dates Limited Partners were
admitted to the Partnership and additional Units were purchased through the
Plan.
See accompanying notes to consolidated financial statements.
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31,
1996 1995
Cash flows from operating activities:
Net income $261,649 $ 299,869
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 67,534 67,535
Minority interests in Brauvin Gwinnett
County Venture's net income 15,843 14,687
(Increase) decrease in tenant receivable (259) 10,494
Increase in deferred rent receivable (30,225) (28,148)
Decrease in due from affiliates 7,627 7,299
Increase in other assets (3,787) (1,441)
Increase in accounts payable and
accrued expenses 6,028 29,830
Increase (decrease) in rent received in
advance 5,867 (50,006)
Increase in due to affiliates -- 4,872
Net cash provided by operating activities 330,277 354,991
Cash flows from investing activities:
Cash distribution to minority interests
in Brauvin Gwinnett County Venture (17,880) (23,840)
Cash used in investing activities (17,880) (23,840)
Cash flows from financing activities:
Sale of Units, net of liquidations, selling
commissions and other offering costs 1,885 20,658
Cash distributions to Limited Partners (327,397) (324,567)
Net cash used in financing activities (325,512) (303,909)
Net (decrease) increase in cash and
cash equivalents (13,115) 27,242
Cash and cash equivalents at beginning
of period 711,167 569,244
Cash and cash equivalents at end of period $ 698,052 $ 596,486
See accompanying notes to consolidated financial statements.
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Brauvin Corporate Lease Program IV L.P. (the "Partnership") is
a Delaware limited partnership formed on August 7, 1991 for the
purpose of acquiring debt-free ownership of existing,
income-producing retail and other commercial properties predominantly
all of which will be subject to "triple-net" leases. It is
anticipated that these properties will be leased primarily to
corporate lessees of national and regional retail businesses, service
providers and other users consistent with "triple-net" lease
properties. The leases will provide for a base minimum annual rent
and increases in rent such as through participation in gross sales
above a stated level, fixed increases on specific dates or indexation
of rent to indices such as the Consumer Price Index. The General
Partners of the Partnership are Brauvin Realty Advisors IV, Inc.,
Jerome J. Brault and Cezar M. Froelich. Brauvin Realty Advisors IV,
Inc. is owned by Messrs. Brault (beneficially)(50%) and Froelich
(50%). Brauvin Securities, Inc., an affiliate of the General
Partners, is the selling agent of the Partnership.
The Partnership filed a Registration Statement on Form S-11 with
the Securities and Exchange Commission which was declared effective
on December 12, 1991. Per the terms of the Restated Limited
Partnership Agreement of the Partnership (the "Agreement"), the
minimum of $1,200,000 of limited partnership interests of the
Partnership (the "Units") necessary for the Partnership to commence
operations was achieved on April 27, 1992. The Partnership's
offering was anticipated to close on December 11, 1992 but the
Partnership obtained an extension until December 11, 1993. A total
of 1,600,831 Units were sold to the public through the offering at
$10 per Unit ($16,008,310). Through March 31, 1996 and
December 31, 1995 the Partnership has sold $16,443,810 and
$16,402,428 of Units, respectively. These totals include $435,100
and $394,118 of Units, respectively, raised by Limited Partners who
utilized their distributions of Operating Cash Flow to purchase
additional Units through the Partnership's distribution reinvestment
plan (the "Plan"). Units valued at $118,706 and $83,706 have been
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
purchased by the Partnership from Limited Partners liquidating their
investment in the Partnership and have been retired as of March 31,
1996 and December 31, 1995, respectively. As of March 31, 1996, the
Plan participants own Units which approximate 3% of the total Units
sold.
The Partnership has acquired the land and buildings underlying
a Steak n Shake restaurant, a Children's World Learning Center, two
Chuck E. Cheese's restaurants, a Mrs. Winner's Chicken and Biscuit
restaurant, a House of Fabrics store, a Volume ShoeSource store, an
East Side Mario's Restaurant, a Blockbuster Video Store, and a Walden
Books Store. In addition, the Partnership has acquired a 70.2%
equity interest in a joint venture with two entities affiliated with
the Partnership. This venture owns the land and building underlying
a CompUSA store.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Management's Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from these estimates.
Accounting Method
The accompanying financial statements have been prepared using
the accrual method of accounting.
Rental Income
Rental income is recognized on a straight-line basis over the
life of the related leases. Differences between rental income earned
and amounts due per the respective lease agreements are credited or
charged, as applicable, to deferred rent receivable.
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Federal Income Taxes
Under the provisions of the Internal Revenue Code, the
Partnership's income and losses are reportable by the partners on
their respective income tax returns. Accordingly, no provision is
made for Federal income taxes in the consolidated financial
statements. However, in certain instances, the Partnership has been
required under applicable state law to remit directly to the tax
authorities amounts representing withholding from distributions paid
to partners.
Consolidation of Joint Venture
The Partnership owns a 70.2% equity interest in a joint venture,
which owns the land and the buildings underlying one CompUSA store.
The accompanying financial statements have consolidated 100% of the
assets, liabilities, operations and partners' capital of Brauvin
Gwinnett County Venture. All significant intercompany accounts have
been eliminated.
Investment in Real Estate
The operating properties acquired by the Partnership are stated
at cost including acquisition costs. Depreciation expense is computed
on a straight-line basis over approximately 39 years.
In 1995, the Partnership adopted Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets" (SFAS 121). In conjunction with the adoption of SFAS
121, the Partnership performed an analysis of its long-lived assets,
and the Partnership's management determined that there were no events
or changes in circumstances that indicated that the carrying amount
of the assets may not be recoverable. Accordingly, no impairment
loss has been recorded in the accompanying financial statements.
Organization and Offering Costs
Organization costs represent costs incurred in connection with
the organization and formation of the Partnership. Organization
costs are amortized over a period of five years using the straight-
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BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
line method. Offering costs represent costs incurred in selling
Units, such as the printing of the Prospectus and marketing materials
have been recorded as a reduction of Limited Partners' capital.
The General Partners have guaranteed payment of any organization
and offering costs that exceed 2% of the gross proceeds of the
Partnership's offering. Prepaid offering costs represent amounts in
excess of the defined percentages of the gross proceeds.
Subsequently, gross proceeds are expected to increase due to the
purchase of additional Units through the Plan and the prepaid
offering costs will be transferred to offering costs and treated as
a reduction in Partners' Capital.
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid debt
instruments with an original maturity within three months from date
of purchase.
Estimated Fair Value of Financial Instruments
Disclosure of the estimated fair value of financial instruments
is made in accordance with the requirements of Statement of Financial
Accounting Standards No. 107, "Disclosures About Fair Value of
Financial Instruments." The estimated fair value amounts have been
determined by using available market information and appropriate
valuation methodologies. However, considerable judgement is
necessarily required in interpreting market data to develop estimates
of fair value.
The fair value estimates presented herein are based on
information available to management as of March 31, 1996 and December
31, 1995, but may not necessarily be indicative of the amounts that
the Partnership could realize in a current market exchange. The use
of different assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts. Although
management is not aware of any factors that would significantly
affect the estimated fair value amounts, such amounts have not been
comprehensively revalued for purposes of these financial statements
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
since that date, and current estimates of fair value may differ
significantly from amounts presented herein.
The carrying amounts of the following items are a reasonable
estimate of fair value: cash and cash equivalents; due from
affiliates; accounts payable and accrued expenses; and rent received
in advance.
(2) PARTNERSHIP AGREEMENT
Distributions
All Operating Cash Flow, as defined in the Partnership Agreement
(the "Agreement"), during the period commencing with the date the
Partnership accepts subscriptions for Units totaling $1,200,000 and
terminating on the Termination Date, as defined in the Prospectus,
shall be distributed to the Limited Partners on a quarterly basis.
Distributions of Operating Cash Flow, if available, shall be made
within 45 days following the end of each calendar quarter or are paid
monthly within 15 days of the end of the month, depending upon the
Limited Partner's preference, commencing with the first quarter
following the Termination Date. Operating Cash Flow during such
period shall be distributed as follows: (a) first, to the Limited
Partners until the Limited Partners receive an amount equal to a 9%
non-cumulative, non-compounded annual return on Adjusted Investment,
as defined in the Agreement, commencing on the last day of the
calendar quarter in which the Unit was purchased (the "Current
Preferred Return"); and (b) thereafter, any remaining amounts will be
distributed 98% to the Limited Partners (on a pro rata basis) and 2%
to the General Partners.
The net proceeds of a sale or refinancing of a Partnership
property shall be distributed as follows:
first, pro rata to the Limited Partners until each Limited
Partner has received an amount equal to a 10% cumulative,
non-compounded, annual return of Adjusted Investment (the
"Cumulative Preferred Return");
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BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
second, to the Limited Partners until each Limited Partner has
received an amount equal to the amount of his Adjusted
Investment, apportioned pro rata based on the amount of the
Adjusted Investment; and
thereafter, 95% to the Limited Partners (apportioned pro rata
based on Units) and 5% to the General Partners.
Profits and Losses
Net profits and losses from operations of the Partnership
[computed without regard to any allowance for depreciation or cost
recovery deductions under the Internal Revenue Code of 1986, as
amended (the "Code")] for each taxable year of the Partnership shall
be allocated to each Partner in the same ratio as the cash
distributions received by such Partner attributable to that period
bears to the total cash distributed by the Partnership. In the event
that there are no cash distributions, net profits and losses from
operations of the Partnership (computed without regard to any
allowance for depreciation or cost recovery deductions under the
Code) shall be allocated 99% to the Limited Partners and 1% to the
General Partners. Notwithstanding the foregoing, all depreciation
and cost recovery deductions allowed under the Code shall be
allocated 2% to the General Partners and 98% to the Class A
Investors, as defined in the Agreement.
The net profit of the Partnership from any sale or other
disposition of a Partnership property shall be allocated (with
ordinary income being allocated first) as follows: (a) first, an
amount equal to the aggregate deficit balances of the Partners'
Capital Accounts, as such term is defined in the Agreement, shall be
allocated to each Partner who or which has a deficit Capital Account
balance in the same ratio as the deficit balance of such Partner's
Capital Account bears to the aggregate of the deficit balances of all
Partners' Capital Accounts; (b) second, to the Limited Partners
until the Capital Account balances of the Limited Partners are equal
to any unpaid Cumulative Preferred Return as of such date; (c)
third, to the Limited Partners until the Capital Account balances of
the Limited Partners are equal to the sum of the amount of their
Adjusted Investment plus any unpaid Cumulative Preferred Return; (d)
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
fourth, to the General Partners until their Capital Account balances
are equal to any previously subordinated fees; and (e) thereafter,
95% to the Limited Partners and 5% to the General Partners. The net
loss of the Partnership from any sale or other disposition of a
Partnership property shall be allocated as follows: (a) first, an
amount equal to the aggregate positive balances in the Partners'
Capital Accounts, to each Partner in the same ratio as the positive
balance in such Partner's Capital Account bears to the aggregate of
all Partners' positive Capital Accounts balances; and (b) thereafter,
95% to the Limited Partners and 5% to the General Partners.
(3) TRANSACTIONS WITH RELATED PARTIES
The Partnership pays an affiliate of the General Partners an
acquisition fee in the amount of up to 5% of the gross proceeds of
the Partnership's offering for the services rendered in connection
with the process pertaining to the acquisition of a property.
Acquisition fees related to the properties not ultimately purchased
by the Partnership are expensed as incurred.
The Partnership paid an affiliated entity a non-accountable
selling expense allowance in an amount equal to 2% of the gross
proceeds of the Partnership's offering, a portion of which may be
reallowed to participating dealers.
In the event that the Partnership does not use more than 2% of
the gross proceeds of the offering for the payment of legal,
accounting, escrow, filing and other fees incurred in connection with
the organization or formation of the Partnership, the Partnership may
pay the General Partners any unused portion of the 2% of the gross
proceeds of the offering allowed for organization and offering
expenses, not to exceed 1/2% of the gross proceeds of the offering.
The General Partners will use such funds to pay certain expenses of
the offering incurred by them not covered by the definition of
organization and offering expenses.
An affiliate of the General Partners provides leasing and
re-leasing services to the Partnership in connection with the
management of Partnership properties. The property management fee
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
payable to an affiliate of the General Partners is 1% of the gross
revenues of each Partnership property.
An affiliate of the General Partners or the General Partners
will receive a real estate brokerage commission in connection with
the disposition of Partnership properties. Such commission will be
in an amount equal to the lesser of: (i) 3% of the sale price of the
property; or (ii) 50% of the real estate commission customarily
charged for similar services in the locale of the property being
sold; provided, however, that receipt by the General Partners or one
of their affiliates of such commission is subordinated to receipt by
the Limited Partners of their Current Preferred Return.
An affiliate of one of the General Partners provides securities
and real estate counsel to the Partnership.
Fees, commissions and other expenses paid or payable to the
General Partners or its affiliates for the three months ended March
31, 1996 and 1995 were as follows:
1996 1995
Selling commissions $ 4,098 $ 4,016
Management fees 3,645 4,370
Reimbursable operating expense 19,500 17,400
Legal fees 254 1,050
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Liquidity and Capital Resources
The Partnership commenced an offering to the public on December
12, 1991 of 3,300,000 Units, 300,000 of which are available only
through the Partnership's distribution reinvestment plan (the
"Plan"). The offering was anticipated to close on December 11, 1992,
but was extended until December 11, 1993 with the appropriate
governmental approvals. None of the Units were subscribed and issued
between December 12, 1991 and December 31, 1991, pursuant to the
Partnership's public offering. The offering was conditioned upon the
sale of $1,200,000, which was achieved on April 27, 1992. The
Partnership raised a total of $16,008,710 through the initial
offering and an additional $435,100 through the distribution
reinvestment plan through March 31, 1996. As of March 31, 1996 Units
valued at $118,706 have been purchased by the Partnership from
Limited Partners liquidating their original investment and have been
retired.
The Partnership has acquired the land and buildings underlying
a Steak n Shake restaurant, a Children's World Learning Center, two
Chuck E. Cheese's restaurants, a Mrs. Winner's Chicken and Biscuit
restaurant, a House of Fabrics store, a Volume ShoeSource store, an
East Side Mario's Restaurant, a Blockbuster Video Store, and a Walden
Books Store. In addition, the Partnership has acquired a 70.2%
equity interest in a joint venture with two entities affiliated with
the Partnership. This venture owns the land and building underlying
a CompUSA store.
The Partnership is fully invested in properties with the
exception of funds raised through the Plan. These operating
properties are expected to generate cash flow for the Partnership
after deducting certain operating and general and administrative
expenses from their rental income.
In October 1994 House of Fabrics filed for protection under
Chapter 11 of the United States Bankruptcy Code. At the time of the
filing the tenant was over one month in arrears. From October 1994
until January 1996, House of Fabrics occupied the Joliet property and
paid all rents and occupancy expenses on a timely basis.
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
In August 1995, House of Fabrics notified the Partnership that,
under the provisions of the bankruptcy code, they had rejected the
lease and indicated that they would vacate the property at the end of
January 1996. House of Fabrics vacated the property on January 31,
1996. The Partnership has engaged a national brokerage firm to
assist in re-leasing this property.
Below is a table summarizing the historical data for
distribution rates per annum:
Distribution
Date 1996 1995 1994 1993 1992
February 15 8.00% 8.00% 6.50% 6.00% --
May 15 7.50 8.00 7.00 6.00 3.68%
August 15 8.00 8.00 5.00 7.00
November 15 8.00 10.00 5.50 6.00
Future increases in the Partnership's distributions will depend
on increased sales at the Partnership's properties, resulting in
additional percentage rent. Rental increases, to a lesser extent,
may occur due to increases in receipts from certain leases based upon
increases in the Consumer Price Index or scheduled increases of base
rent.
Results of Operation - Three months Ended March 31, 1996 and 1995
Results of operations for the three months ended March 31, 1996
reflected net income of $261,649 compared to net income of $299,869
for the three months ended March 31, 1996, a decrease of
approximately $38,200.
Total income was $398,443 in 1996 as compared to $419,397 in
1995, a decrease of approximately $21,000. The decrease in total
income is due to 1996 rental income reflecting a month of operations
of the House of Fabrics property, while 1995 reflects a full three
month period.
<PAGE>
BRAUVIN CORPORATE LEASE PROGRAM IV L.P.
(a Delaware limited partnership)
Total expenses were $120,951 in 1996 as compared to $104,841 in
1995, an increase of approximately $16,100. The increase in
expenses was due to an increase in general and administrative expense
related to the Partnership hiring an independent real estate company
to conduct property valuations.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
On October 14, 1993, an affiliate of the Partnership, Brauvin,
Inc., brought a lawsuit against an unaffiliated seller due to the
seller's alleged refusal to proceed under the terms of a purchase and
sale agreement Brauvin, Inc. entered into to acquire three properties
in Jacksonville, Florida. In this lawsuit, Brauvin, Inc. has sought
specific performance of the purchase and sale agreement to require
the unaffiliated seller to sell the subject properties to Brauvin,
Inc. Brauvin, Inc. subsequently amended its complaint to add the
tenant of the properties, Rally's, Inc., as an additional defendant
seeking an unspecified amount of damages. Rally's, Inc. was added
because of its activities which Brauvin, Inc. alleges have tortiously
interfered with the business relations between Brauvin, Inc. and the
seller.
In response to the lawsuit, the seller made a counterclaim
against Brauvin, Inc. with counts for slander of title, tortious
interference with an advantageous business relationship, conspiracy
and to quiet title. The seller has also sued a former employee of
Brauvin, Inc. and the Partnership. The counterclaim is seeking
damages in an amount in excess of $2,000,000, together with punitive
damages. The Partnership filed a motion to dismiss as the
Partnership believes the Florida court does not have jurisdiction
over the Partnership. During 1994, the motion to dismiss was denied.
The Partnership made attempts to settle but did not succeed. The
Partnership intends to vigorously defend itself in this action.
During the first quarter of 1996 there has been no change in the
legal proceedings.
ITEM 2. Changes in Securities.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
<PAGE>
ITEM 4. Submission Of Matters To a Vote of Security Holders.
None.
ITEM 5. Other Information.
As previously reported, the Partnership has engaged a nationally
known real estate firm to perform a valuation of the Partnership's
properties. The stated unit value used for both liquidations and
the purchase of new units through the dividend reinvestment program
will change as a result of program will change as a result of this
valuation. At the time of the distribution, the valuation had not
been completed. Once the valuation has been completed, the new
stated unit value will be communicated to all partners.
The General Partners have determined that, for the current
distribution, all investors, including those who had selected the
dividend reinvestment option, will receive their distributions in
the form of a check. When the unit valuation process has been
completed and the new stated unit value communicated to all partners,
each partner will be able to determine if they wish to enter or
continue in the dividend reinvestment program.
Similarly, the General Partners have determined that unit liquidations
will be temporarily suspended until the valuation has been completed.
At that time, pending liquidation requests will be processed according
to the terms of the prospectus and liquidated at the then current
stated unit value.
ITEM 6. Exhibits and Reports On Form 8-K.
Exhibit 27. Financial Data Schedule
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
BY: Brauvin Realty Advisors IV, Inc.
Corporate General Partner of
Brauvin Corporate Lease Program IV L.P.
BY: /S/ Jerome J. Brault
Chairman of the Board of Directors,
President and Chief Executive Officer
DATE: May 15, 1996
BY: /s/ Thomas J. Coorsh
Chief Financial Officer and Treasurer
DATE: May 15, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 698,052
<SECURITIES> 0
<RECEIVABLES> 271,603
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14,308,630 <F1>
<DEPRECIATION> 704,513
<TOTAL-ASSETS> 14,796,123
<CURRENT-LIABILITIES> 0
<BONDS> 709,019 <F2>
0
0
<COMMON> 13,974,344 <F3>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14,796,123
<SALES> 0
<TOTAL-REVENUES> 398,443 <F4>
<CGS> 0
<TOTAL-COSTS> 120,951 <F5>
<OTHER-EXPENSES> 15,843 <F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 261,649
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> "PP&E" REPRESENTS INVESTMENT IN REAL ESTATE [LAND AND
BUILDING]
<F2> "BONDS" REPRESENTS MINORITY INTEREST IN JOINT VENTURE
<F3> "COMMON" REPRESENTS TOTAL PARTNERS CAPITAL
<F4> "TOTAL REVENUES" REPRESENTS RENTAL, INTEREST, AND OTHER
INCOME
<F5> "TOTAL COSTS" REPRESENTS TOTAL EXPENSES
<F6> "OTHER EXPENSES" REPRESENTS MINORITY INTEREST IN JOINT
VENTURES' NET INCOME
</FN>
</TABLE>
