UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 2005
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 _____0-13402_______________
__________Brauvin Real Estate Fund L.P. 4_______________
(Name of small business issuer as specified in its charter)
Delaware 36-3304339________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 North LaSalle Street, Chicago, Illinois 60602____
(Address of principal executive offices) (Zip Code)
_______________(312)759-7660_________________________
(Issuer's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
which registered
None None___________
Securities registered pursuant to Section 12(g) of the Act:
___________Limited Partnership Interests________________
(Title of class)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the issuer was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
..
Brauvin Real Estate Fund L.P. 4
(a Delaware limited partnership)
INDEX
PART I
Page
Item 1. Financial Statements 3
Statement of Net Assets in Liquidation
as of September 30, 2005(Liquidation Basis) 4
Statement of Changes in Net Assets
in Liquidation for the period January 1, 2005 to
September 30, 2005 (Liquidation Basis) 5
Statement of Changes in Net Assets
in Liquidation for the period January 1, 2004 to
September 30, 2004 (Liquidation Basis) 6
Statements of Operations for the
nine months ended September 30, 2005 and 2004
(Liquidation Basis) 7
Statements of Operations for the
three months ended September 30, 2005 and 2004
(Liquidation Basis) 8
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis or Plan
of Operation 22
Item 3. Controls and Procedures 30
PART II
Item 1. Legal Proceedings 31
Item 2. Changes in Securities 31
Item 3. Defaults Upon Senior Securities 31
Item 4. Submission of Matters to a Vote of Security
Holders 31
Item 5. Other Information 31
Item 6. Exhibits, and Reports on Form 8-K 31
Signatures 32
Brauvin Real Estate Fund L.P. 4
(a Delaware limited partnership)
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
The following Statement of Net Assets in Liquidation as of
September 30, 2005 (Liquidation Basis), Statement of Changes in
Net Assets in Liquidation for the period January 1, 2005 to
September 30, 2005 (Liquidation Basis), Statement of Changes in
Net Assets in Liquidation for the period January 1, 2004 to
September 30, 2004 (Liquidation Basis), Statements of Operations
for the nine months ended September 30, 2005 and 2004
(Liquidation Basis), and Statements of Operations for the three
months ended September 30, 2005 and 2004 (Liquidation Basis) for
Brauvin Real Estate Fund L.P. 4 (the "Partnership") are unaudited
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 financial statements should be read in conjunction with
the financial statements and notes thereto included in the
Partnership's 2004 Annual Report on Form 10-KSB.
Brauvin Real Estate Fund L.P. 4
(a Delaware limited partnership)
STATEMENT OF NET ASSETS IN LIQUIDATION AS OF
SEPTEMBER 30, 2005 (LIQUIDATION BASIS)
(Unaudited)
ASSETS
Real estate held for sale $6,026,500
Investment in Sabal
Joint Venture (Note 6) 292,841
Cash and cash equivalents 25,144
Tenant receivables 20,098
Utility deposits 2,370
Other assets 29,136
----------
Total Assets 6,396,089
----------
LIABILITIES
Mortgage notes payable (Note 4) 3,924,567
Accounts payable and accrued expenses 187,614
Deferred gain on sale of real estate (Note 2) 464,312
Reserve for estimated costs during
the period of liquidation 157,125
Tenant security deposits 15,812
Due to affiliates 5,458
----------
Total Liabilities 4,754,888
----------
Net Assets in Liquidation $1,641,201
==========
See accompanying notes to financial statements.
Brauvin Real Estate Fund L.P. 4
(a Delaware limited partnership)
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION FOR
THE PERIOD JANUARY 1, 2005 TO SEPTEMBER 30, 2005
(LIQUIDATION BASIS)
(Unaudited)
Net assets in liquidation at January 1, 2005 $1,824,095
Loss from operations (182,894)
----------
Net assets in liquidation at September 30, 2005 $1,641,201
==========
See accompanying notes to financial statements.
Brauvin Real Estate Fund L.P. 4
(a Delaware limited partnership)
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION FOR
THE PERIOD JANUARY 1, 2004 TO SEPTEMBER 30, 2004
(LIQUIDATION BASIS)
(Unaudited)
Net assets in liquidation at January 1, 2004 $1,880,062
Income from operations 357,239
----------
Net assets in liquidation at September 30, 2004 $2,237,301
==========
See accompanying notes to financial statements.
Brauvin Real Estate Fund L.P. 4
(a Delaware limited partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(LIQUIDATION BASIS)
(Unaudited)
2005 2004
--------- ----------
INCOME
Rental $ 550,650 $ 427,340
Lease termination fee -- 1,400,000
Interest 801 1,279
Other, primarily tenant
expense reimbursements 110,994 114,744
--------- ----------
Total income 662,445 1,943,363
--------- ----------
EXPENSES
Interest 328,743 313,054
Real estate taxes 90,134 98,150
Repairs and maintenance 18,766 7,422
Management fees (Note 5) 39,217 116,963
Other property operating 32,062 30,570
General and administrative 322,036 947,519
--------- ----------
Total expenses 830,958 1,513,678
--------- ----------
(Loss) income before
equity interests (168,513) 429,685
Equity interest in Sabal
Palm Joint Venture's
net loss (14,381) (72,446)
--------- ----------
Net (loss) income $(182,894) $ 357,239
========= ==========
Net (loss) income allocated
to the General Partners $ (1,829) $ 3,572
========= ==========
Net (loss) income allocated
to the Limited Partners $(181,065) $ 353,667
========= ==========
Net (loss) income per
Limited Partnership
Interest (9,550 units
outstanding) $ (18.96) $ 37.03
========= =========
See accompanying notes to financial statements.
Brauvin Real Estate Fund L.P. 4
(a Delaware limited partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(LIQUIDATION BASIS)
(Unaudited)
2005 2004
-------- ----------
INCOME
Rental $185,533 $ 119,952
Lease termination fee -- 1,400,000
Interest 28 625
Other, primarily tenant
expense reimbursements 41,089 39,656
-------- ----------
Total income 226,650 1,560,233
-------- ----------
EXPENSES
Interest 128,462 104,989
Real estate taxes 30,310 32,716
Repairs and maintenance 12,565 2,833
Management fees (Note 5) 13,186 97,267
Other property operating 9,593 9,534
General and administrative 51,973 839,193
-------- ----------
Total expenses 246,089 1,086,532
-------- ----------
(Loss) income before
equity interests (19,439) 473,701
Equity interest in Sabal
Palm Joint Venture's
net income (loss) 21,305 (41,510)
-------- ---------
Net income $ 1,866 $ 432,191
======== =========
Net income allocated
to the General Partners $ 19 $ 4,322
======== =========
Net income allocated
to the Limited Partners $ 1,847 $ 427,869
======== =========
Net income per
Limited Partnership
Interest (9,550 units
outstanding) $ 0.19 $ 44.80
======== =========
See accompanying notes to financial statements.
Brauvin Real Estate Fund L.P. 4
(a Delaware limited partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements consolidate the accounts of Brauvin
Real Estate Fund L.P. 4 (the "Partnership") and a 47% interest in
another joint venture, which is accounted for using the equity
method of accounting.
The Partnership is a Delaware limited partnership organized
for the purpose of acquiring, operating, holding for investment
and disposing of existing office buildings, medical office
centers, shopping centers and industrial and retail commercial
buildings of a general purpose nature, all in metropolitan areas.
The General Partners of the Partnership are Brauvin Ventures,
Inc. and Jerome J. Brault. Mr. Cezar M. Froelich resigned as a
director of the corporate general partner in December 1994, and
resigned as an Individual General Partner effective 90 days from
August 14, 1997. Brauvin Ventures, Inc. is owned by A.G.E. Realty
Corporation Inc.(50%), and by Messrs. Brault (beneficially) (25%)
and Froelich (25%). A. G. Edwards & Sons, Inc. and Brauvin
Securities, Inc., affiliates of the General Partners, were the
selling agents of the Partnership. The Partnership is managed by
an affiliate of the General Partners.
The General Partners of the Partnership filed a Registration
Statement on Form S-11 with the Securities and Exchange
Commission which became effective on February 16, 1984. The sale
of 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 30, 1984 and the
Partnership was formed. The Partnership's offering closed on
December 31, 1984. A total of $9,550,000 of Units were
subscribed and issued between February 16, 1984 and December 31,
1984 pursuant to the Partnership's public offering.
Properties acquired by the Partnership either directly or
indirectly through affiliated joint ventures were: (a) Fortune
Professional Building (which was sold February 2003); (b) Raleigh
Springs Marketplace; (c) Strawberry Fields Shopping Center(which
was sold in July 2001 and terminated in 2002) and (d) Sabal Palm
Shopping Center.
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 those estimates.
Basis of Presentation
As a result of the July 12, 1999 authorization by a majority
of the Limited Partners to sell the Partnership's properties, the
Partnership has begun the liquidation process and, in accordance
with generally accepted accounting principles, the Partnership's
financial statements for periods subsequent to July 12, 1999 have
been prepared on the liquidation basis of accounting.
Accordingly, the carrying values of assets are presented at their
net realizable amounts and liabilities are presented at estimated
settlement amounts, including estimated costs associated with
carrying out the liquidation. Preparation of the financial
statements on a liquidation basis requires significant
assumptions by management, including the estimate of liquidation
costs and the resolution of any contingent liabilities. There
may be differences between the assumptions and the actual results
because events and circumstances frequently do not occur as
expected. Those differences, if any, could result in a change in
the net assets recorded in the statement of net assets as of
September 30, 2005.
Accounting Method
The accompanying consolidated financial statements have been
prepared using the accrual method of accounting.
Tenant Receivables
Tenant receivables are comprised of (a) billed but
uncollected amounts due for monthly rents and other charges and
(b) estimated unbilled amounts due for tenant reimbursement of
common area maintenance charges and property taxes. Receivables
are recorded at management's estimate of the amounts that will
ultimately be collected. An allowance for doubtful accounts of
$50,992 is based on specific identification of uncollectible
accounts and the Partnership's historical collection experience.
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 financial statements.
Investment in Joint Venture Partnership
The Partnership owns a 47% equity interest in Sabal Palm
Joint Venture (see Note 6). Sabal Palm is reported as an
investment in an affiliated joint venture. The accompanying
financial statements include the investment in Sabal Palm Joint
Venture at estimated net realizable value using the equity method
of accounting.
Investment in Real Estate
Prior to the preparation of the financial statements on the
liquidation basis of accounting, the operating properties
acquired by the Partnership were stated at cost including
acquisition costs, leasing commissions, tenant improvements and
net of impairment. Depreciation and amortization expense were
computed on a straight-line basis over approximately 31.5 years
and the term of the applicable leases, respectively. All of the
Partnership's properties were subject to liens under first
mortgages (see Note 4).
Subsequent to the adoption of the liquidation basis of
accounting (see Note 2), the Partnership adjusted its investment
in real estate to estimated net realizable value, which is
recorded as real estate held for sale. Additionally, the
Partnership suspended recording any further depreciation expense.
The Partnership has adopted Statement of Financial Accounting
Standards No. 141, "Business Combinations" ("SFAS 141"). SFAS
141 requires the purchase method of accounting for business
combinations initiated after June 30, 2001 and eliminates the
pooling-of-interests method. In July 2001, the FASB issued
Statement of Financial Accounting Standards No. 142, "Goodwill
and Other Intangible Assets" ("SFAS 142"), which is effective
January 1, 2002. SFAS 142 requires, among other things, the
discontinuance of goodwill amortization. In addition, the
standard includes provisions for the reclassification of certain
existing intangibles, reassessment of the useful lives of
existing intangibles, reclassification of certain intangibles out
of previously reported goodwill and the identification of
reporting units for purposes of assessing potential future
impairments of goodwill.
Application of the statements to future acquisitions, if any,
could result in the recognition, upon acquisition of additional
intangible assets (acquired in-place lease origination costs and
acquired above market leases) and liabilities (acquired below
market leases), which would be amortized over the remaining terms
of the acquired leases.
The Partnership has adopted Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS 144"). SFAS 144 retains the
recognition and measurement requirements of its predecessor, but
resolves significant implementation issues. In addition, it
applies to a segment of a business accounted for as a
discontinued operation.
SFAS 144 has not had a significant impact on the
Partnership's financial statements.
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.
The Partnership maintains its cash in bank deposit accounts,
which, at times, may exceed federally insured limits. The
Partnership has not experienced any losses in such accounts.
Management believes the Partnership is not exposed to any
significant credit risk related to cash or cash equivalents.
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 September 30, 2005, 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.
In connection with the adoption of the liquidation basis of
accounting, which approximates fair value at September 30, 2005,
assets were adjusted to net realizable value, and liabilities
were adjusted to estimated settlement amounts.
Derivatives and Hedging Instruments
In June 1998, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"), which requires that all derivatives be
recognized as assets and liabilities in the balance sheet and be
measured at fair value. SFAS 133 also requires changes in fair
value of derivatives to be recorded each period in current
earnings or comprehensive income depending on the intended use of
the derivatives. In June, 2000, the FASB issued SFAS 138, which
amends the accounting and reporting standards of SFAS 133 for
certain derivatives and certain hedging activities. SFAS 133 and
SFAS 138 were adopted by the Partnership effective January 1,
2001. The Partnership had no derivatives in 2005 and 2004.
Recent Accounting Pronouncements
In January 2003, FASB issued interpretation No. 46,
"Consolidation of Variable Interest Entities" (FIN 46). FIN 46
addresses consolidation by business enterprises of certain
variable interest entities in which the equity investors do not
have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance
its activities without additional subordinated financial support
from other parties. This interpretation was revised in December
2003 and for calendar year end entities, is effective as of
December 31, 2003. The Partnership does not own any "special
purpose entities."
In May 2003, FASB issued Statement of Financial Accounting
Standards No. 150, "Accounting for Certain Financial Instruments
with the Characteristics of both Liabilities and Equity" ("SFAS
150"), which is effective for all financial instruments entered
into or modified after May 31, 2003, and is otherwise effective
beginning July 1, 2003. SFAS 150 establishes standards for how
an entity classifies and measures certain financial instruments
with characteristics of both liabilities and equity.
The adoption of SFAS 150 and FIN 46 has not had a significant
impact on the Partnership's financial statements.
(2) ADJUSTMENT TO LIQUIDATION BASIS
On July 12, 1999, in accordance with the liquidation basis of
accounting, assets were adjusted to estimated net realizable
value and liabilities were adjusted to estimated settlement
amounts, including estimated costs associated with carrying out
the liquidation.
(3) PARTNERSHIP AGREEMENT
The Partnership Agreement (the "Agreement") provides that 99%
of the net profits and losses from operations of the Partnership
for each fiscal year shall be allocated to the Limited Partners
and 1% of net profits and losses from operations shall be
allocated to the General Partners. The net profit of the
Partnership from the sale or other disposition of a Partnership
property shall be allocated as follows: first, there shall be
allocated to the General Partners the greater of: (i) 1% of such
net profits; or (ii) the amount distributable to the General
Partners as Net Sale Proceeds from such sale or other disposition
in accordance with paragraph 2, section K of the Agreement; and
second, all remaining profits shall be allocated to the Limited
Partners. The net loss of the Partnership from any sale or other
disposition of a Partnership property shall be allocated as
follows: 99% of such net loss shall be allocated to the Limited
Partners and 1% of such net loss shall be allocated to the
General Partners.
The Agreement provides that distributions of Operating Cash
Flow, as defined in the Agreement, shall be distributed 99% to
the Limited Partners and 1% to the General Partners. The receipt
by the General Partners of such 1% of Operating Cash Flow shall
be subordinated to the receipt by the Limited Partners of
Operating Cash Flow equal to a 10% per annum, cumulative,
non-compounded return on their Adjusted Investment (the
"Preferential Distribution"), as such term is defined in the
Agreement. In the event the full Preferential Distribution is
not made in any year (herein referred to as a "Preferential
Distribution Deficiency") and Operating Cash Flow is available in
following years in excess of the Preferential Distribution for
said year, then the Limited Partners shall be paid such excess
Operating Cash Flow until they have been paid any unpaid
Preferential Distribution Deficiency from prior years. Net Sale
Proceeds, as defined in the Agreement, received by the
Partnership shall be distributed as follows: (a) first, to the
Limited Partners until such time as the Limited Partners have
been paid an amount equal to the amount of their Adjusted
Investment; (b) second, to the Limited Partners until such time
as the Limited Partners have been paid an amount equal to any
unpaid Preferential Distribution Deficiency; and (c) third, 85%
of any remaining Net Sale Proceeds to the Limited Partners, and
the remaining 15% of the Net Sale Proceeds to the General
Partners.
At September 30, 2005, the Preferential Distribution
Deficiency equaled $18,037,565.
(4) MORTGAGE NOTES PAYABLE
Mortgage notes payable at September 30, 2005 consist of the
following:
Interest Date
Balance Rate Due
Raleigh Springs
Marketplace $ 3,924,567 10% 04/07
Maturities of the mortgage notes payable are as follows:
2005 $ 76,829
2006 219,646
2007 3,628,092
----------
$3,924,567
==========
Raleigh Springs Marketplace serves as collateral under the
respective nonrecourse debt obligations.
Raleigh Springs Marketplace
Monthly principal and interest payments are based on a 25-
year amortization schedule. In the first quarter of 2001, the
mortgage holder agreed to extend the maturity of the mortgage
until April 1, 2002. On March 11, 2002, the Partnership accepted
a proposal to modify the Raleigh Springs Marketplace mortgage
loan. Under the terms of the proposal, the maturity date was
extended to April 1, 2007. The loan, which continues to bear
interest at 10% per annum, requires monthly installments of
principal and interest of $46,839(based upon a 25 year
amortization schedule) with a final payment of unpaid interest
and principal on April 1, 2007. Based on the lenders recent
approval of the termination of the Toys "R" Us lease, the loan
will require additional lump sum principal payments of $8,500 on
or before December 1, 2004 and then commencing December 1, 2005
annual lump sum principal payments of $34,000. The carrying
value of Raleigh Springs Marketplace at September 30, 2005 was
approximately $6,026,500.
In the fourth quarter of 2004, the Partnership commenced the
process of refinancing the existing debt. Subsequent to December
31, 2004, the Partnership received a proposal from a potential
lender to refinance the existing debt as well as provide for the
funding of additional improvement dollars for Raleigh Springs.
This lender did not approve the proposal as originally submitted.
In the second quarter of 2005, the Partnership executed a letter
of intent with a national lender to refinance the existing debt
and to provide for additional tenant improvements. The proposed
loan requires payments of interest only and has a twenty four
month maturity. The lender is currently completing its
documentation for the loan and the Partnership anticipates the
refinancing to be completed in the fourth quarter of 2005;
however, there can be no assurance the Partnership will be
successful in completing the refinancing.
(5) TRANSACTIONS WITH AFFILIATES
Fees and other expenses incurred or payable to the General
Partners or their affiliates for the nine months ended September
30, 2005 and 2004 were as follows:
2005 2004
------- --------
Management fees $39,217 $116,963
Reimbursable office expenses 57,150 60,022
As of September 30, 2005, the Partnership had made all
payments to affiliates except for $5,458 for management fees.
(6) EQUITY INVESTMENT
The Partnership owns a 47% interest in Sabal Palm Joint
Venture ("Sabal Palm") and accounts for its investment under the
equity method.
The following are condensed financial statements for Sabal
Palm:
Liquidation Basis
September 30,2005
Real estate held for sale $3,028,375
Other assets 332,395
----------
3,360,770
----------
Mortgage note payable 2,600,000
Other liabilities 134,029
----------
2,734,029
----------
Net assets in liquidation $ 626,741
==========
Liquidation Basis
For the nine months ended September 30,
2005 2004
-------- ---------
Rental income $367,765 $ 310,359
Other income 86,828 82,523
-------- ---------
454,593 392,882
-------- ---------
Mortgage and
other interest 123,887 97,438
Operating and
administrative expenses 361,303 449,584
-------- ---------
485,190 547,022
-------- ---------
Net loss $(30,597) $(154,140)
======== =========
The original First Mortgage Loan bore interest at the rate of
8.93% per annum, was to be amortized over a 25-year period, with
required monthly payments of principal and interest of
approximately $26,700 and matured on March 26, 2002. A portion
of the proceeds of the First Mortgage Loan, approximately
$3,077,000, was used to retire Sabal Palm's existing mortgage
from Lincoln National Pension Insurance Company. Subsequent to
the end of the first quarter of 2003, this loan was repaid and
replaced with a new facility described below.
On August 7, 2000, Sabal Palm was given notice that Walgreens
will vacate the space prior to its lease termination of April 30,
2005. Walgreens moved out, however, it remains liable for rental
payments under its lease with Sabal Palm. The joint venture and
Walgreens reached an agreement with a subtenant for the occupancy
of this space through the initial term ending in April 2005.
Subsequently, the joint venture entered into a new direct lease
with the replacement tenant for this space through June 30, 2007.
In the second quarter of 1998, Winn-Dixie vacated its space
at the center (which was approximately 42,000 square feet). Winn-
Dixie failed to timely pay its rental obligation for November and
December 2001 and January through March 2002.
As a result of Winn-Dixie's lease default, in the third
quarter of 2001, Sabal Palm recorded an adjustment to liquidation
basis of $114,367 related to an other than temporary decline in
the value of real estate for Sabal Palm.
In the fourth quarter of 2001, Sabal Palm recorded a further
adjustment to liquidation basis of $7,508 related to an other
than temporary decline in the value of real estate at Sabal Palm.
Due to non-payment of Winn-Dixie's rental obligations, the
joint venture did not make its mortgage payments for Sabal Palm
in November and December 2001 and January through March 2002 thus
resulting in a default on its loan. In April 2002, the joint
venture and the lender agreed to a twelve month extension of the
existing mortgage loan. The loan extension was subject to the
lease termination of Winn-Dixie and Winn-Dixie's payment of a
$300,000 termination fee and payment of all past due amounts thus
curing the default. As a requirement of the extension, the joint
venture and the lender agreed to use the proceeds from the
termination to redemize the former Winn-Dixie space into three
spaces as well as certain other improvements to the center. The
joint venture signed a lease with Sav A Lot, a national grocery
chain, for 14,350 square feet (one of the demized spaces). Sav A
Lot took occupancy of its space in October, 2002. In addition,
in the first quarter of 2004 the joint venture executed a lease
with Family Dollar (a national discount retailer) to lease
approximately 10,675 square feet (another one of the demized
spaces). Family Dollar has taken occupancy in the center.
Separately, the Partnership has made a number of cosmetic
improvements to the center in preparation for its sale. However,
the property was recently damaged by two of the hurricanes that
struck the Palm Bay area in the third quarter of 2004 and will
likely delay the sale of the property. The property's damage was
primarily cosmetic and we do not believe the structural integrity
or economic viability of the building has diminished. Temporary
repair work has been completed. However due to the extensive
damage elsewhere in the area, permanent repairs were not able to
commence until the first quarter of 2005.
On March 17, 2003, the joint venture obtained a loan
commitment from AmSouth Bank in the amount of $3,250,000. The
loan proposal provides for payment of interest only for a 24-
month term subject to various tests to be met at a six-month
period from close and a nine-month period from close. If these
tests are not met the joint venture can be required to reduce the
principal outstanding by a cumulative amount ranging from
$250,000 to $500,000 depending on the test.
On April 29, 2003, the Sabal Palm joint venture closed on a
$3,250,000 mortgage with AmSouth Bank (subject to a reduction not
to exceed $500,000 if certain conditions of the loan are not
met). The joint venture repaid the prior outstanding first
mortgage loan on the property in the amount of $2,957,941,
accrued interest of $22,100 and paid loan costs and fees of
approximately $46,100 at closing. The joint venture expects to
use the remaining proceeds primarily to finance certain tenant
improvements and leasing costs.
The AmSouth loan bears interest at LIBOR plus 2.85% and is
payable interest only monthly until maturity (February 3, 2006)
at which time all unpaid interest and principal is due. The loan
is secured by a first mortgage lien on the property and
collateral assignment of rents and leases as well as the
management agreement. The partners of the joint venture have
each guaranteed the repayment of 50% of the joint venture
obligations under the loan documents and the manager has agreed
to subordinate payment of the management fee to the payment of
the loan obligations.
Additionally, the lender required that $1,000,000 in aggregate
unencumbered liquid assets be maintained (but not pledged) during
the term of the loan as well as requiring the Partnership and
BREF 5 to maintain a minimum combined tangible net worth of not
less than $1,000,000.
In January 2004, Sabal Palm was not in compliance with the net
operating income requirement established in the loan and as a
result the lender had a right to require a repayment of principal
from the joint venture in an amount not to exceed $500,000. In
the second quarter of 2004, pursuant to the existing loan
agreement, the lender requested repayment of principal in the
amount of $250,000. The lender agreed to allow for this payment
to be made from the $1,000,000 on deposit with the lender and
further agreed to reduce the liquidity requirement to $500,000.
Additionally, the lender agreed to fund from the deposit with the
lender certain improvements (up to $245,000) that the joint
venture is contemplating making in order to facilitate the sale
of the property.
Due to the fact that damage caused by the hurricanes in 2004
was being repaired in the first and second quarter of 2005, the
joint venture did not believe it would be able to repay the loan
in May 2005. Therefore, the joint venture requested an extension
of the mortgage loan. On April 13, 2005, the joint venture and
the lender agreed to terms for a nine month extension of the
current mortgage note. The lender required that the joint
venture make a principal reduction in the amount of $400,000,
which the lender has agreed will be paid from the cash deposit
held by the lender. Additionally, the joint venture was required
to pay an extension fee in the amount of $5,000. Further, as
part of the extension, the lender agreed to release the
unencumbered liquid asset requirement of the mortgage loan. All
other terms and conditions remain the same.
A requirement of the Family Dollar lease was that the joint
venture reimburse the tenant approximately $127,000 for the
substantial improvements made by the tenant to the existing
space. The joint venture reimbursed Family Dollar in September
2004. In addition, the joint venture will be making a number of
other repairs and improvements to the center to improve its
marketability for sale. These improvements will include roof
repair (and repainting) and parking lot repairs including
restriping.
In September 2005, the Sabal Palm joint venture entered into
a contract to sell the Sabal Palm shopping center to an
unaffiliated third party. The contract calls for a due diligence
investigation period of 45 days with closing to follow 45 days
thereafter. The due diligence period has expired and the
property has been approved by the purchaser. The joint venture
expects to complete the sale in the fourth quarter of 2005.
However, there can be no assurance that this purchaser will
complete the transaction.
Brauvin Real Estate Fund L.P. 4
(a Delaware limited partnership)
ITEM 2. Management's Discussion and Analysis or Plan of
Operation.
General
Certain statements in this Quarterly Report that are not
historical fact constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Without limiting the foregoing, words such as
"anticipates," "expects," "intends," "plans" and similar
expressions are intended to identify forward-looking statements.
These statements are subject to a number of risks and
uncertainties. Actual results could differ materially from those
projected in the forward-looking statements. The Partnership
undertakes no obligation to update these forward-looking
statements to reflect future events or circumstances.
Liquidity and Capital Resources
The Partnership intends to satisfy its short-term liquidity
needs through cash flow from the properties. Mortgage notes
payable are expected to be satisfied through property sales.
The General Partners determined to pursue the disposition of
the Partnership's assets. In 1999, the Partnership solicited and
received the votes of the Limited Partners to approve a sale of
all the Partnership's properties, either on an individual or
group basis, and to subsequently liquidate the Partnership. The
solicitation, which was approved by the Limited Partners in the
third quarter of 1999, stated that the Partnership's properties
may be sold individually or in any combination provided that the
total sales price for the properties included in the transaction
equals or exceeds 70% of the aggregate appraised value for such
properties, which valuation was conducted by an independent third
party appraisal firm.
The Partnership intends to sell the properties under a closed
bid process which will include identification of target buyers
with proven financing ability and performance of certain
evaluations of the properties, such as environmental testing.
Potential buyers will be requested to sign confidentiality
agreements to safeguard the Partnership's confidential
proprietary information. The General Partners have determined
that each bid must be all cash, completely unconditional and
accompanied by a substantial deposit.
Property Status
Raleigh Springs Marketplace
T.J. Maxx, a former anchor tenant, vacated its space in
January 1996. During the third quarter of 1996 a health group
signed a $9.00 per square foot lease for approximately 40% of the
T.J. Maxx space. In the fourth quarter of 2001, the Partnership
leased 13,400 square feet of space to Sav A Lot, a national
grocery chain. In the third quarter of 2004, Sav A Lot exercised
its first option and extended the lease maturity through 2008.
In the first quarter of 2002, the health group gave notice to the
Partnership that it would vacate the 9,500 square feet it
occupied at the expiration of its base term which occurred in
April, 2002. As a result of these vacancies, Raleigh Springs was
in a negative cash flow position. In the first quarter of 2004,
the Partnership reached an agreement in principle with AJ Wright,
a national clothing retailer to take approximately 25,000 square
feet of part of the space then leased to Toys "R" Us. The
Partnership negotiated a lease with the tenant that required
substantial reconfiguration to the existing space and tenant
improvements. This lease was subject to a successful termination
and buyout of the existing Toys "R" Us lease. The Partnership
reached an agreement with Toys "R" Us for the termination and a
substantial buyout payment by Toys "R" Us to the Partnership
(such payment in the amount of $1,400,000 having been received in
September 2004). The Partnership anticipates the payment will
cover all of the conversion and tenant build out costs required
by the new tenant. The buyout of the lease was subject to the
approval of the property's lender and the lender agreed to the
transaction. In addition, the Partnership leased approximately
10,000 square feet of the former medical space to the Veterans
Administration (the "VA"). The VA lease also required a
significant build out. The Partnership has incurred the cost of
the build out and funded the expense through a portion of the
Toys "R" Us lease buyout. In addition, the VA will make
additional lease payments to the Partnership in an amount that
will amortize the cost of the improvements over a five-year
period. AJ Wright and the VA took occupancy in the fourth
quarter of 2004. Further, in the fourth quarter of 2004, the
Partnership leased three additional suites containing a total of
7,500 square feet of space.
In November 1992, the Partnership negotiated a modification
of the terms of the mortgage on Raleigh Springs with the lender
(the "Modified Loan"). In October 1992, the interest rate was
reduced from 12.75% to 10.00%. Since November 1992 and through
September 1999, principal and interest payments were based on a
25-year amortization schedule. The Modified Loan capitalized the
August, September and October 1992 mortgage payments. The
Partnership negotiated an extension of the terms of the mortgage
on August 26, 1999 and August 30, 2000. On March 11, 2002, the
Partnership accepted a proposal to modify the Raleigh Springs
mortgage loan. Under the terms of the proposal, the maturity
date was extended to April 1, 2007. The loan, which continues to
bear interest at 10% per annum, requires monthly installments of
principal and interest of $46,839 (based upon a 25 year
amortization schedule) with a final payment of unpaid interest
and principal due on April 1, 2007. Based on the lender's recent
approval of the termination of the Toys "R" Us lease, the loan
will require additional lump sum principal payments of $8,500 on
or before December 1, 2004 and then commencing December 1, 2005
annual lump sum principal payments of $34,000.
In the fourth quarter of 2004, the Partnership commenced the
process of refinancing the existing debt. Subsequent to December
31, 2004, the Partnership received a proposal from a potential
lender to refinance the existing debt as well as provide for the
funding of additional improvement dollars for Raleigh Springs.
This lender did not approve the proposal as originally submitted.
In the second quarter of 2005, the Partnership executed a letter
of intent with a national lender to refinance the existing debt
and to provide for additional tenant improvements. The proposed
loan requires payments of interest only and has a twenty four
month maturity. The lender is currently completing its
documentation for the loan and the Partnership anticipates the
refinancing to be completed in the fourth quarter of 2005;
however, there can be no assurance the Partnership will be
successful in completing the refinancing.
Sabal Palm Shopping Center
Sabal Palm was required to make a balloon mortgage payment in
February 1997. Prior to the scheduled maturity of the First
Mortgage Loan, the lender granted Sabal Palm an extension until
April 1, 1997. On March 31, 1997, Sabal Palm obtained a first
mortgage loan in the amount of $3,200,000 (the "First Mortgage
Loan"), secured by its real estate, from NationsBanc Mortgage
Capital Corporation. Prior to April 29, 2003 the First Mortgage
Loan bore interest at the rate of 8.93% per annum, was amortized
over a 25-year period, required monthly payments of principal and
interest of approximately $26,700 and was scheduled to mature on
March 26, 2002 (later extended to April 2003). A portion of the
proceeds of the First Mortgage Loan, approximately $3,077,000,
was used to retire Sabal Palm's existing mortgage from Lincoln
National Pension Insurance Company.
On August 7, 2000, Sabal Palm was given notice that Walgreens
will vacate the space prior to its lease termination of April 30,
2005. Walgreens moved out, however, it remains liable for rental
payments under its lease with Sabal Palm. The joint venture and
Walgreens reached an agreement with a subtenant for the occupancy
of this space through the initial term ending in April 2005.
Subsequently, the joint venture entered into a new direct lease
with the replacement tenant for this space through June 30, 2007.
In the second quarter of 1998, Winn-Dixie vacated its space
at the center (which was approximately 42,000 square feet). Winn-
Dixie failed to timely pay its rental obligation for November and
December 2001 and January through March 2002.
As a result of Winn-Dixie's lease default, in the third
quarter of 2001, Sabal Palm recorded an adjustment to liquidation
basis of $114,367 related to an other than temporary decline in
the value of real estate for Sabal Palm.
In the fourth quarter of 2001, Sabal Palm recorded a further
adjustment to liquidation basis of $7,508 related to an other
than temporary decline in the value of real estate at Sabal Palm.
Due to non-payment of Winn-Dixie's rental obligations, the
joint venture did not make its mortgage payments for Sabal Palm
in November and December 2001 and January through March 2002 thus
resulting in a default on its loan. In April 2002, the joint
venture and the lender agreed to a twelve month extension of the
existing mortgage loan. The loan extension was subject to the
lease termination of Winn-Dixie and Winn-Dixie's payment of a
$300,000 termination fee and payment of all past due amounts thus
curing the default. As a requirement of the extension, the joint
venture and the lender agreed to use the proceeds from the
termination to redemize the former Winn-Dixie space into three
spaces as well as certain other improvements to the center. The
joint venture signed a lease with Sav A Lot, a national grocery
chain, for 14,350 square feet (one of the demized spaces). Sav A
Lot took occupancy of its space in October, 2002. In addition,
in the first quarter of 2004 the joint venture executed a lease
with Family Dollar (a national discount retailer) to lease
approximately 10,675 square feet (another one of the demized
spaces). Family Dollar has taken occupancy in the center.
Separately, the joint venture has made a number of cosmetic
improvements to the center in preparation for its sale. However,
the property was recently damaged by two of the hurricanes that
struck the Palm Bay area in the third quarter of 2004 and will
likely delay the sale of the property. The property's damage was
primarily cosmetic and we do not believe the structural
integrity or economic viability of the
building has diminished. Temporary repair work has been
completed. However due to the extensive damage elsewhere in the
area, permanent repairs were not able to commence until the first
quarter of 2005.
On March 17, 2003, the joint venture obtained a loan
commitment from AmSouth Bank in the amount of $3,250,000. The
loan proposal provides for payment of interest only for a 24-
month term subject to various tests to be met at a six-month
period from close and a nine-month period from close. If these
tests are not met the joint venture can be required to reduce the
principal outstanding by a cumulative amount ranging from
$250,000 to $500,000 depending on the test.
On April 29, 2003, the Sabal Palm joint venture closed on a
$3,250,000 mortgage with AmSouth Bank (subject to a reduction not
to exceed $500,000 if certain conditions of the loan are not
met). The joint venture repaid the prior outstanding first
mortgage loan on the property in the amount of $2,957,941,
accrued interest of $22,100 and paid loan costs and fees of
approximately $46,100 at closing. The joint venture expects to
use the remaining proceeds primarily to finance certain tenant
improvements and leasing costs.
The AmSouth loan bears interest at LIBOR plus 2.85% and is
payable interest only monthly until maturity (May 3, 2005) at
which time all unpaid interest and principal is due. The loan is
secured by a first mortgage lien on the property and collateral
assignment of rents and leases as well as the management
agreement. The partners of the joint venture have each
guaranteed the repayment of 50% of the joint venture obligations
under the loan documents and the manager has agreed to
subordinate payment of the management fee to the payment of the
loan obligations.
Additionally, the lender required that $1,000,000 in aggregate
unencumbered liquid assets be maintained (but not pledged) during
the term of the loan as well as requiring the Partnership and
BREF 5 to maintain a minimum combined tangible net worth of not
less than $1,000,000.
In January 2004, Sabal Palm was not in compliance with the net
operating income requirement established in the loan and as a
result the lender had a right to require a repayment of principal
from the joint venture in an amount not to exceed $500,000. In
the
second quarter of 2004, pursuant to the existing loan agreement,
the lender requested repayment of principal in the amount of
$250,000. The lender agreed to allow for this payment to be made
from the $1,000,000 on deposit with the lender and further agreed
to reduce the liquidity requirement to $500,000. Additionally,
the lender agreed to fund from the deposit with the lender
certain improvements (up to $245,000) that the joint venture is
contemplating making in order to facilitate the sale of the
property.
Due to the fact that damage caused by the hurricanes in 2004
was being repaired in the first and second quarter of 2005, the
joint venture did not believe it would be able to repay the loan
in May. Therefore, the joint venture requested an extension of
the mortgage loan. On April 13, 2005, the joint venture and the
lender agreed to terms for a nine month extension of the current
mortgage note. The lender required that the joint venture make a
principal reduction in the amount of $400,000, which the lender
has agreed will be paid from the cash deposit held by the lender.
Additionally, the joint venture is required to pay an extension
fee in the amount of $5,000. Further, as part of the extension,
the lender agreed to release the unencumbered liquid asset
requirement of the mortgage loan. All other terms and conditions
remain the same.
A requirement of the Family Dollar lease was that the joint
venture reimburse the tenant approximately $127,000 for the
substantial improvements made by the tenant to the existing
space. The joint venture reimbursed Family Dollar in September
2004. In addition, the joint venture will be making a number of
other repairs and improvements to the center to improve its
marketability for sale. These improvements will include roof
repair (and repainting) and parking lot repairs including
restriping.
In September 2005, the Sabal Palm joint venture entered into
a contract to sell the Sabal Palm shopping center to an
unaffiliated third party. The contract calls for a due diligence
investigation period of 45 days with closing to follow 45 days
thereafter. The due diligence period has expired and the
property has been approved by the purchaser. The joint venture
expects to complete the sale in the fourth quarter of 2005.
However, there can be no assurance that this purchaser will
complete the transaction.
Results of Operations
The Partnership's revenue and expenses are affected primarily
by the operations of the properties. Property operations, and in
particular the components of income, demand for space and rental
rates are, to a large extent, determined by local and national
market conditions.
These conditions have generally adversely impacted the
Partnership's property economics.
The General Partners conduct an in-depth assessment of each
property's physical condition as well as a demographic analysis
to assess opportunities for increasing occupancy and rental rates
and decreasing operating costs. In all instances, decisions
concerning restructuring of loan terms, reversions and subsequent
operation of the property are made with the intent of maximizing
the potential proceeds to the Partnership and, therefore, return
of investment and income to Limited Partners.
In certain instances and under limited circumstances,
management of the Partnership entered into negotiations with
lenders for the purpose of restructuring the terms of loans to
provide for debt service levels that could be supported by
operations of the properties. When negotiations are
unsuccessful, management of the Partnership considers the
possibility of reverting the properties to the first mortgage
lender. Foreclosure proceedings may require 6 to 24 months to
conclude.
Results of Operations - Nine months ended September 30, 2005 and
2004 (Liquidation Basis)
As a result of the Partnership's adoption of the liquidation
basis of accounting, and in accordance with generally accepted
accounting principles, the Partnership's financial statements for
periods subsequent to July 12, 1999 have been prepared on a
liquidation basis.
The Partnership generated net loss of $183,000 for the period
ended September 30, 2005 as compared to net income of $357,000
for the same period in 2004. The $540,000 decrease in net income
is primarily a result of a decrease in lease termination fees of
$1,400,000 partially offset by an increase in rental income of
$123,000 and decreases in general and administrative expense of
$626,000 and management fees of $78,000. The Partnership's share
of Sabal Palm's net loss decreased $58,000.
Total income for the period ended September 30, 2005 was
$662,000 as compared to $1,943,000 for the same period in 2004.
The $1,281,000 decrease in total income was primarily a result of
a $1,400,000 decrease in lease termination fees.
Total expenses for the period ended September 30, 2005 were
$831,000 as compared to $1,514,000 for the same period in 2004.
The $683,000 decrease in total expense was primarily due to a
decrease in general and administration expense of $626,000 and a
decrease of $78,000 in management fee expense. General and
administrative expense decreased as a result of the completions
of the buildout of several of the previously vacant tenant
spaces. Management fees decreased primarily as a result of
expenses associated with the 2004 lease termination payment.
Results of Operations - Three months ended September 30, 2005 and
2004 (Liquidation Basis)
The Partnership generated net income of $2,000 for the period
ended September 30, 2005 as compared to net income of $432,000
for the same period in 2004. The $430,000 decrease in net income
is primarily a result of a decrease in total income of
$1,334,000, partially offset by decreases in general and
administrative expenses of $787,000 and management fees of
$84,000. The Partnership's share of Sabal Palm's net income
increased $63,000.
Total income for the period ended September 30, 2005 was
$227,000 as compared to $1,560,000 for the same period in 2004.
The $1,333,000 decrease in total income was primarily a result of
a $1,400,000 decrease in lease termination fees. Rental income
increased $66,000 primarily due to the increased occupancy at
Raleigh.
Total expenses for the period ended September 30, 2005 were
$246,000 as compared to $1,087,000 for the same period in 2004.
The $840,000 decrease in total expense was primarily due to
decreases in general and administration expense of $787,000 and
management fees of $84,000. General and administration expense
decreased primarily as a result of expenses associated with the
completion of several of the previously vacant spaces in 2004.
Management fees decreased primarily as a result of expenses
associated with the 2004 lease termination payment.
ITEM 3. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer, of
the corporate general partner, have reviewed and evaluated the
effectiveness of the Partnership's disclosure controls and
procedures (as defined in Exchange Act Rules 240.13a-14(c) and
15d-14(c)) as of a date within 90 days before the filing date of
this Annual Report. Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer have concluded that
the Partnership's current disclosure controls and procedures are
effective and timely, providing all material information relating
to the Partnership required to be disclosed in reports filed or
submitted under the Exchange Act.
Changes in Internal Controls
There have not been any significant changes in the
Partnership's internal controls or in other factors that could
significantly affect these controls subsequent to the date of
their evaluation. We are not aware of any significant
deficiencies or material weaknesses, therefore no corrective
actions were taken.
Brauvin Real Estate Fund L.P. 4
(a Delaware limited partnership)
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
None.
ITEM 2. Changes in Securities.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
ITEM 4. Submission of Matters to a Vote of Security
Holders.
None.
ITEM 5. Other Information.
None.
ITEM 6. Exhibits and Reports On Form 8-K.
Exhibit 99. Certification of Officers
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BY: Brauvin Ventures, Inc.
Corporate General Partner of
Brauvin Real Estate Fund L.P. 4
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of
Directors and President
DATE: November 15, 2005
BY: /s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer and
Treasurer
DATE: November 15, 2005
CERTIFICATION FOR SARBANES-OXLEY SECTION 302(A)
CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER
OF
BRAUVIN VENTURES, INC.
CORPORATE GENERAL PARTNER
OF
BRAUVIN REAL ESTATE FUND L.P. 4
I, Jerome J. Brault, Chief Executive Officer of the Company,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
Brauvin Real Estate Fund L.P. 4;
2. Based on my knowledge, this report does not contain any
untrue statement of material fact or omit to state a
material fact necessary to make the statements made, in
light of the circumstances under which such statements were
made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly
present in all material respects the consolidated financial
condition, results of operations and statement of changes in
net assets in liquidation of the small business issuer as
of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer and I
are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)for the small business issue and have:
a) Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material
information relating to the small business issuer,
including its consolidated subsidiaries, is made known
to us by others within those entities, particularly
during the period in which this quarterly report is
being prepared;
b) Designed such internal control over financial
reporting, or caused such internal control over
financial reporting to be designed under our
supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the
preparation of financial statements for external
purposes in accordance with generally accepted
accounting principles
c) Evaluated the effectiveness of the small business
issuer's disclosure controls and procedures and
presented in this report our conclusions about the
effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this
report based on such evaluation; and
d) Disclosed in this report any change in the small
business issuer's internal control over financial
reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business
issuer's fourth quarter in the case of an annual
report) that has materially affected, or is reasonably
likely to materially affect, the small business
issuer's internal control over financial reporting; and
5. The small business issuer's other certifying officer and I
have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the small
business issuer's auditors and the audit committee of small
business issuer's board of directors (or persons performing
the equivalent function):
a) All significant deficiencies and material weaknesses in
the design or operation of internal control over
financial reporting which are reasonably likely to
aversely affect the small business issuer's ability to
record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves
management or other employees who have a significant
role in the small business issuer's internal controls
over financial reporting.
BY: Brauvin Ventures, Inc.
Corporate General Partner of
Brauvin Real Estate Fund L.P. 4
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of
Directors and President
DATE: November 15, 2005
CERTIFICATION FOR SARBANES-OXLEY SECTION 302(A)
CERTIFICATE OF THE CHIEF FINANCIAL OFFICER
OF
BRAUVIN VENTURES, INC.
CORPORATE GENERAL PARTNER
OF
BRAUVIN REAL ESTATE FUND L.P. 4
I, Thomas E. Murphy, Chief Financial Officer of the Company,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
Brauvin Real Estate Fund L.P 4.;
2. Based on my knowledge, this report does not contain any
untrue statement of material fact or omit to state a
material fact necessary to make the statements made, in
light of the circumstances under which such statements were
made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly
present in all material respects the consolidated financial
condition, results of operations and statement of changes in
net assets in liquidation of the small business issuer as
of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer and I
are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)for the small business issue and have:
a) Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material
information relating to the small business issuer,
including its consolidated subsidiaries, is made known
to us by others within those entities, particularly
during the period in which this quarterly report is
being prepared;
b) Designed such internal control over financial
reporting, or caused such internal control over
financial reporting to be designed under our
supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the
preparation of financial statements for external
purposes in accordance with generally accepted
accounting principles
c) Evaluated the effectiveness of the small business
issuer's disclosure controls and procedures and
presented in this report our conclusions about the
effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this
report based on such evaluation; and
d) Disclosed in this report any change in the small
business issuer's internal control over financial
reporting that occurred during the small business
issuer's most recent fiscal quarter (the small business
issuer's fourth quarter in the case of an annual
report) that has materially affected, or is reasonably
likely to materially affect, the small business
issuer's internal control over financial reporting; and
5. The small business issuer's other certifying officer and I
have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the small
business issuer's auditors and the audit committee of small
business issuer's board of directors (or persons performing
the equivalent function):
a) All significant deficiencies and material weaknesses in
the design or operation of internal control over
financial reporting which are reasonably likely to
aversely affect the small business issuer's ability to
record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves
management or other employees who have a significant
role in the small business issuer's internal controls
over financial reporting.
BY: Brauvin Ventures, Inc.
Corporate General Partner of
Brauvin Real Estate Fund L.P. 4
BY: /s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer and
Treasurer
DATE: November 15, 2005
Exhibit 99
SECTION 906 CERTIFICATION
The following statement is provided by the undersigned to
accompany the Quarterly Report on Form 10-QSB for the quarter
ended September 30, 2005, pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 and shall not be deemed filed pursuant to any
provisions of the Securities Exchange Act of 1934 or any other
securities law:
Each of the undersigned certifies that the foregoing Report on
Form 10-QSB fully complies with the requirements of Section 13(a)
of the Securities Exchange Act of 1934 (15 U.S.C. 78m) and that
the information contained in the Form 10-QSB fairly presents, in
all material respects, the financial condition and results of
operations of Brauvin Real Estate Fund L.P. 4.
BY: Brauvin Ventures, Inc.
Corporate General Partner of
Brauvin Real Estate Fund L.P. 4
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of
Directors and President
DATE: November 15, 2005
BY: /s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer and
Treasurer
DATE: November 15, 2005