UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
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: 0-13329
HUTTON/CONAM REALTY INVESTORS 4
Exact name of Registrant as specified in its charter
Califonia 11-26845746
State or other I.R.S. Employer Identification No.
jurisdiction of incorporation
3 World Financial Center, 29th Floor, New York, New York 10285
Address of principal executive offices zip code
Registrant's telephone number, including area code: (212) 526-3237
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
DEPOSITARY UNITS OF LIMITED PARTNERSHIP INTEREST
Title of Class
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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. (X)
Documents Incorporated by Reference:
Portions of Prospectus of the Registrant dated January 13, 1984
(included in Amendment No. 1 to Registration Statement No. 2-84863, filed
January 13, 1984) are incorporated by reference into Part III of this report.
Portions of Parts I, II, III and IV are incorporated by reference to the
Partnership's Annual Report to Unitholders for the year ended December 31, 1994.
PART I
Item 1. Business
General Development of Business
Hutton/ConAm Realty Investors 4 (the "Registrant" or the "Partnership") is a
California limited partnership of which RI 3-4 Real Estate Services Inc.
("RI 3-4 Services," formerly Hutton Real Estate Services VIII, Inc.), a
Delaware corporation, and ConAm Property Services IV, Ltd., a California
limited partnership ("ConAm Services"), are the general partners (together,
the "General Partners").
Commencing January 13, 1984, the Registrant began offering through E.F.
Hutton & Company Inc., an affiliate of the Registrant ("Hutton"), up to a
maximum of 130,000 units of limited partnership interest (the "Units") at
$500 per Unit. Investors who purchased the Units (the "Limited Partners") are
not required to make any additional capital contributions. The Units were
registered under the Securities Act of 1933, as amended (the "Act"), under
Registration Statement No. 2-84863, which Registration Statement was declared
effective on January 13, 1984. The offering of Units was terminated on October
11, 1984. Upon termination of the offering, the Registrant had accepted
subscriptions for 128,110 Units for an aggregate of $64,055,000.
Narrative Description of Business
The Registrant is engaged in the business of acquiring, operating and holding
for investment multifamily residential properties, which by virtue of their
location and design and the nature of the local real estate market have the
potential for capital appreciation and generation of current income. As of
December 31, 1994, all of the proceeds available for investment in real estate
were invested in three residential apartment properties and three limited
partnerships, each of which owns a specified property. Funds held as a working
capital reserve are invested in unaffiliated money market funds or other highly
liquid short-term investments where there is appropriate safety of principal in
accordance with the Registrant's investment objectives and policies.
The Registrant's principal investment objectives with respect to its interests
in real property are:
(1) capital appreciation;
(2) distributions of net cash from operations attributable to rental
income; and
(3) preservation and protection of capital.
Distributions of net cash from operations will be the Registrant's objective
during its operational phase, while preservation and appreciation of capital
will be the Registrant's long-term objectives. The attainment of the
Registrant's objectives will depend on many factors, including future economic
conditions in the United States as a whole and, in particular, in the
localities in which the Registrant's properties are located, especially with
regard to achievement of capital appreciation.
From time to time the Registrant expects to sell its real property investments
taking into consideration such factors as the amount of appreciation in value,
if any, to be realized and the possible risks of continued ownership. In
consideration of these factors and improving market conditions, the General
Partners have begun marketing certain of the properties for sale and recently
entered into preliminary negotiations with an institutional buyer to sell
Trails at Meadowlakes and Cypress Lakes. There can be no assurance that a
sale will be completed or that any particular price for the properties can be
obtained. No property will be sold, financed or refinanced by the Registrant
without the agreement of both General Partners. Proceeds from any future
sale, financing or refinancing of the properties will not be reinvested and
may be distributed to the Limited Partners and the General Partners (sometimes
referred to together herein as the "Partners"), so that the Registrant will,
in effect, be self-liquidating. If deemed necessary, the Registrant may
retain a portion of the proceeds from any sale, financing or refinancing as
capital reserves. As partial payment for properties sold, the Registrant may
receive purchase money obligations secured by mortgages or deeds of trust. In
such cases, the amount of such obligations will not be included in Net
Proceeds From Sale or Refinancing (distributable to the Partners) until and
only to the extent the obligations are realized in cash, sold or otherwise
liquidated.
Since inception, the Registrant has acquired six residential apartment
complexes (collectively, the "Properties"), either directly or through
investments in limited partnerships or joint ventures. As of December 31,
1994, the Registrant had interests in the Properties as follows: (1) Trails at
Meadowlakes, a 189-unit apartment complex located in Deerfield Beach, Florida;
(2) Pelican Landing, a 204-unit apartment complex located in Clearwater,
Florida; (3) Village at the Foothills II, a 120-unit apartment complex located
in Tucson, Arizona; (4) River Hill Apartments, a 192-unit apartment complex
located in the Las Colinas area of Irving, Texas; (5) Shadowood Village, a
110-unit apartment complex located in Jacksonville, Florida; and (6) Cypress
Lakes Apartments, a 176-unit apartment complex located in Fort Lauderdale,
Florida. See Item 2 of this report and Note 4 to the Consolidated Financial
Statements incorporated herein by reference to the Partnership's Annual Report
to Unitholders for the year ended December 31, 1994, which is included as an
exhibit under Item 14, for further information on each of the Properties.
The acquisition of Trails at Meadowlakes was originally made on an all-cash
basis without the use of mortgage financing. During the third quarter of 1985,
the Registrant obtained mortgage financing on such property. The resulting
proceeds from the financing were combined with the remaining offering proceeds
available for investment to fund the purchase of Cypress Lakes Apartments.
Competition
The Registrant's real property investments are subject to competition from
similar types of properties in the vicinities in which they are located and
such competition has increased since the Registrant's investment in the
Properties due principally to the addition of newly-constructed apartment
complexes offering increased residential and recreational amenities. The
Properties have also been subject to competition from condominiums and
single-family properties, especially during periods of low mortgage interest
rates. The Registrant competes with other real estate owners and developers in
the rental and leasing of its Properties by offering competitive rental rates
and, if necessary, leasing incentives. Such competition may affect the
occupancy levels and revenues of the Properties. The occupancy levels at the
Properties in Arizona and Florida reflect some seasonality, which is also
reflected in the markets. In some cases, the Registrant may compete with other
partnerships affili ated with either General Partner of the Registrant.
For a discussion of current market conditions in each of the areas where the
Partnership's Properties are located, see Item 2 below.
Employees
The Registrant has no employees. General services are performed by RI 3-4
Services, ConAm Services, ConAm Management Corporation ("ConAm Management"), an
affiliate of ConAm Services, as well as Service Data Corporation and The
Shareholder Services Group, both unaffiliated companies. The Registrant has
entered into management agreements pursuant to which ConAm Management provides
management services with respect to the Properties. The Shareholder Services
Group has been retained by the Registrant to provide all accounting and
investor communication functions, while Service Data Corporation provides
transfer agent services. See Item 13 for a further description of the service
and management agreements between the Registrant and affiliated entities.
Item 2. Properties
Below is a description of the Properties and a discussion of current market
conditions in each of the areas where the Properties are located. For
information on the purchase of the Properties, reference is made to Note 4 to
the Consolidated Financial Statements on page 8 of the Partnership's Annual
Report to Unitholders for the year ended December 31, 1994, which is filed as
an exhibit under Item 14. Appraised values of the Partnership's real estate
investments are incorporated by reference to page 14 of the Partnership's
Annual Report to Unitholders. Average occupancy rates at each property are
incorporated by reference to page 2 of the Partnership's Annual Report to
Unitholders.
River Hill Apartments - Irving, Texas
Situated approximately 15 miles northwest of Dallas, this 192-unit apartment
complex is located in the Las Colinas area of Irving. The local apartment
market, although competitive, evidenced improvement during 1994, and many area
complexes, including River Hill, were able to increase rental rates during the
year, despite the lease-up of several recently constructed properties. The Las
Colinas submarket reported average occupancy of 96% as of the third quarter of
1994, up from 93% in 1993, and area apartment complexes averaged rental rate
increases of 2% during 1994. Only 40 new apartment units were constructed
during 1994, however, two projects are nearing completion which will add 763
units to the market, and several other complexes are in the planning stages.
Absorption in this attractive area remains the highest among Dallas submarkets
and is likely to temper the increased competition from this new supply.
Shadowood Village - Jacksonville, Florida
This 110-unit apartment complex is situated in southeast Jacksonville, in the
Baymeadows/Deerwood community. Significant prior period overbuilding has left
the Baymeadows/Deerwood area highly competitive for rental properties.
Although market conditions have improved steadily over the past two years, many
complexes continue to offer rental concessions to attract tenants. A survey of
the Baymeadows/Deerwood submarket indicated average occupancy of area
apartments has climbed to 93% as of the second quarter of 1994, and average
rental rates had increased approximately 5% from a year earlier. The
Jacksonville market is experiencing a slow yet steady recovery, witnessed by
the rising average occupancy rate. New construction, however, has remained
limited, with no new permits issued in 1992 or 1993, and only 370 units
permitted in 1994.
Village at the Foothills II - Tucson, Arizona
This 120-unit apartment community is situated in the prestigious "foothills"
section of Tucson. Tucson continues to experience brisk population and job
growth, which have fueled strong demand for apartment housing in recent years.
A local survey of metropolitan Tucson conducted in the fourth quarter of 1994
showed an average occupancy rate of 96% among multifamily properties with five
or more units. While construction of new units has been minimal during the
past four years, eight new complexes commenced construction in 1994. When
completed, these projects can be expected to compete with Village at the
Foothills II.
Cypress Lakes Apartments - Fort Lauderdale, Florida
This 176-unit community is located in the northwest section of Fort Lauderdale,
in the Pompano Beach submarket. Market conditions for multi-family properties
in this area remain strong, with high occupancies and average rental rates
among the highest in Broward County. A local survey of the Pompano Beach
submarket reported average occupancy of 98% as of August 1994, and rental rate
increases averaging 4% from August 1993 to August 1994. Construction of new
units has remained sparse in recent years, with no new units permitted in this
submarket in 1994, and little room for future development.
Trails at Meadowlakes - Deerfield Beach, Florida
Situated eight miles north of Fort Lauderdale, this 189-unit apartment complex
is located in the North Pompano/Deerfield Beach submarket. Rental conditions
in this submarket remain strong, with average occupancy of 96% as of August
1994, according to a local survey. Area rental rates increased significantly
in 1993 following Hurricane Andrew, but slowed in 1994 as the market adjusted
and construction of new units began. Leasing has begun at one nearby project
under construction containing 212 units, which competes directly with the
Trails at Meadow Lakes. Area job and population growth, however, are expected
to keep pace with the new supply.
Pelican Landing - Clearwater, Florida
This 204-unit apartment complex is situated in southeast Clearwater in the
Tampa Bay Area. The Clearwater apartment market remains strong, with an
overall average occupancy of 95% during the fourth quarter of fiscal 1994.
High occupancy has permitted increases in rental rates at many complexes, and
the limited availability of vacant land for new construction has constrained
new development in the area.
One of the Partnership's properties is encumbered by mortgage loans. See Note
5 to the consolidated Financial Statements for a description of such mortgage
financing.
Item 3. Legal Proceedings
The Registrant is not subject to, nor is any of the Properties the subject of,
any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
During the fourth quarter of the year ended December 31, 1994, no matter was
submitted to a vote of security holders through the solicitation of proxies or
otherwise.
PART II
Item 5. Market for the Partnership's Limited Partnership Units and Related
Security Holder Matters
As of December 31, 1994, the number of Unitholders of record was 7,123.
No established public trading market has developed for the Units, and it is not
anticipated that such a market will develop in the future.
Distributions of Net Cash Flow From Operations, when made, are paid on a
quarterly basis, with distributions generally occurring approximately 45 days
after the end of each quarter. Such distributions have been made primarily
from net operating income with respect to the Registrant's investment in the
Properties and from interest on short-term investments, and partially from
excess cash reserves. For a full accounting of the cash distributions paid to
the Limited Partners during the past two years, reference is made to page 3 of
the Partnership's Annual Report to Unitholders for the year ended December 31,
1994, which is filed as an exhibit under Item 14.
Quarterly cash distributions to Limited Partners were suspended commencing with
the third quarter of 1994 in consideration of the upcoming maturity of the note
secured by a mortgage on the Trails at Meadow Lakes (see Item 7 of this report
for a discussion of the maturing mortgage). It is likely that distributions
will remain suspended until the debt is repaid from sales proceeds or
Partnership cash reserves. Once the debt is resolved, the General Partners
will evaluate the Partnership's cash flow from operations, cash reserves and
future cash requirements to determine when and at what level cash distributions
may be reinstated.
Item 6. Selected Financial Data
Incorporated by reference to page 3 of the Partnership's Annual Report to
Unitholders for the year ended December 31, 1994, which is filed as an exhibit
under Item 14.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
At December 31, 1994, the Partnership had cash of $3,234,383 which was invested
in unaffiliated money market funds, compared to cash of $2,201,276 at December
31, 1993. The increase reflects higher net cash from operations and the
suspension of cash distributions commencing with the third quarter of 1994.
The Partnership expects sufficient cash flow to be generated from operations to
meet its current operating expenses.
The promissory note secured by a mortgage on the Trails at Meadowlakes matures
on July 19, 1995, at which time the Partnership will be required to pay
$5,025,984 to the mortgage lender. The General Partners have determined that
refinancing the property's mortgage loan is not an attractive option at this
time, given rising interest rates and the high expenses associated with a
refinancing. Furthermore, as a result of improving market conditions, the
General Partners have begun marketing some of the properties, and recently
entered into preliminary negotiations with an institutional buyer to sell
Trails at Meadowlakes and Cypress Lakes. There is no assurance that a sale
will be completed or that any particular price for the properties can be
obtained. Should a sale of one or both properties close prior to the July 19th
maturity date, net sale proceed will be first be applied to repay the loan.
The balance will be distributed to the Partners as a return of capital. In
addition, afte r the sale closes, the General partners expect to make a special
cash distribution from excess cash reserves.
The General Partners suspended the payment of cash distributions commencing
with the third quarter of 1994 to build cash reserves in the event the loan has
to be partially repaid at maturity. After the loan issue is resolved, the
General Partners will reevaluate the Partnership's reserve requirements and
determine at what level cash distributions can be reinstated.
Results of Operations
1994 versus 1993
Partnership operations for the year ended December 31, 1994 resulted in net
income of $984,628, compared with net income of $723,510 for the year ended
December 31, 1993. After adding back depreciation, a non-cash expense, and
subtracting mortgage amortization, operations generated cash flow of $2,979,656
and $2,719,425, respectively, for the years ended December 31, 1994 and 1993.
The increase in net income and cash flow is primarily attributable to an
increase in rental income.
Rental income for the year ended December 31, 1994 was $7,552,784, compared
with $7,249,001 for the year ended December 31, 1993. The 4% increase in 1994
reflects higher revenues at all six properties due to rental rate increases
instituted during the past year. Interest income for the year ended December
31, 1994 was $79,860, compared with $50,212 in 1993. The increase in 1994 is
due primarily to higher Partnership cash balances and higher interest rates.
Property operating expenses for the year ended December 31, 1994 were
$3,927,435, compared with $3,860,345 in 1993. The increase is primarily
attributable to expenditures related to utilities and general repairs at the
properties. Total expenses for the year ended December 31, 1994 were
$6,648,016, compared with $6,575,703 for 1993. All components of total
expenses remained relatively in line with 1993 levels.
1993 versus 1992
Partnership operations for the year ended December 31, 1993 resulted in net
income of $723,510, compared with net income of $718,725 for the year ended
December 31, 1992. After adding back depreciation, a non-cash expense, and
subtracting mortgage amortization, operations generated cash flow of $2,719,425
and $2,716,005, respectively, for the years ended December 31, 1993 and 1992.
Both net income and cash flow were largely unchanged from 1992, as an increase
in rental income was offset by higher operating expenses.
Rental income for the year ended December 31, 1993 was $7,249,001, compared
with $6,968,820 for 1992. The 4% increase in rental income reflects higher
rental revenues at all properties, particularly River Hill and Cypress Lakes,
due primarily to increased average occupancy, increased rental rates and the
reduced use of rental concessions in 1993.
Property operating expenses for the year ended December 31, 1993 were
$3,860,345, compared with $3,540,118 in 1992. The increase is primarily
attributable to routine carpet and appliance replacement, as well as upgraded
landscaping at several properties, particularly Cypress Lakes and Pelican
Landing. General and administrative expenses were $166,066 for the year ended
December 31, 1993, compared with $210,939 for 1992. The decrease in 1993 is
primarily attributable to lower postage, mailing and printing costs.
The average occupancy levels at each of the properties for the years ended
December 31, 1994, 1993 and 1992 were as follows:
Twelve Months Ended December 31,
Property 1994 1993 1992
Trails at Meadowlakes 96% 96% 96%
Pelican Landing 97% 96% 97%
Cypress Lakes Apartments 96% 97% 96%
Village at the Foothills II 95% 95% 95%
River Hill Apartments 96% 96% 96%
Shadowood Village 96% 96% 95%
Item 8. Financial Statements and Supplementary Data
The financial statements are Incorporated by reference to pages 4 - 13 of the
Partnership's Annual Report to Unitholders for the year ended December 31,
1994, which is filed as an exhibit under Item 14. Supplementary Data is
incorporated by reference to page F - 1 of this report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Registrant has no officers or directors. RI 3-4 Services and ConAm
Services, the co-General Partners of the Registrant, jointly manage and control
the affairs of the Registrant and have general responsibility and authority in
all matters affecting its business.
RI 3-4 Services
RI 3-4 Services (formerly Hutton Real Estate Services VIII, Inc.) is a Delaware
corporation formed on October 30, 1980, and is an affiliate of Lehman Brothers
Inc. See the section captioned "Certain Matters Involving Affiliates of RI
3-4 Services" for a description of the Hutton Group's acquisition by Shearson
Lehman Brothers, Inc. ("Shearson") and the subsequent sale of certain of
Shearson's domestic retail brokerage and asset management businesses to Smith
Barney, Harris Upham & Co. Incorporated ("Smith Barney"), which was followed by
a change in name to RI 3-4 Services.
Certain officers and directors of RI 3-4 Services are now serving (or in the
past have served) as officers or directors of entities which act as general
partners of a number of real estate limited partnerships which have sought
protection under the provisions of the Federal Bankruptcy Code. The
partnerships which have filed bankruptcy petitions own real estate which has
been adversely affected by the economic conditions in the markets in which the
real estate is located and, consequently, the partnerships sought the
protection of the bankruptcy laws to protect the partnerships' assets from loss
through foreclosure.
The names and ages of, as well as the positions held by, the directors and
executive officers of RI 3-4 Services are set forth below. There are no family
relationships between any executive officers or directors.
Name Age Office
Paul L. Abbott 49 Director, President, Chief Financial
Officer and Chief Executive Officer
Janet M. Hoynes 30 Vice President
Kate D. Hobson 28 Vice President
Paul L. Abbott is a Managing Director of Lehman Brothers. Mr. Abbott joined
Lehman Brothers in August 1988, and is responsible for investment management of
residential, commercial and retail real estate. Prior to joining Lehman
Brothers, Mr. Abbott was a real estate consultant and a senior officer of a
privately held company specializing in the syndication of private real estate
limited partnerships. From 1974 through 1983, Mr. Abbott was an officer of two
life insurance companies and a director of an insurance agency subsidiary. Mr.
Abbott received his formal education in the undergraduate and graduate schools
of Washington University in St. Louis.
Janet M. Hoynes is a Vice President at Lehman Brothers in the Diversified Asset
Group and is responsible for asset management of residential real estate.
Prior to joining Shearson in July 1989, she was employed as an analyst in a
public real estate investment trust based in California. Ms. Hoynes received a
B.A. in Economics from the State University of New York at Stony Brook in 1986.
Kate D. Hobson is an Assistant Vice President of Lehman Brothers and has been a
member of the Diversified Asset Group since 1992. Prior to joining Lehman
Brothers, Ms. Hobson was associated with Cushman & Wakefield serving as a real
estate accountant from 1990 to 1992. Prior to that, Ms. Hobson was employed by
Cambridge Systematics, Inc. as a junior land planner. Ms. Hobson received a
B.A. degree in sociology from Boston University in 1988.
ConAm Services
ConAm Services is a California limited partnership organized on August 30,
1982. The sole general partner of ConAm Services is Continental American
Development, Inc. ("ConAm Development"). The names and ages of, as well as the
positions held by, the directors and executive officers of ConAm Development
are set forth below. There are no family relationships between any executive
officers or directors.
Name Age Office
Daniel J. Epstein 55 President and Director
Nancie Larimore 55 Secretary/Treasurer and Director
E. Scott Dupree 44 Vice President
Robert J. Svatos 36 Vice President
Ralph W. Tilley 40 Vice President
Daniel J. Epstein has been the President and a Director of ConAm Development
and ConAm Management (or its predecessor firm) and a general partner of
Continental American Properties, Ltd. ("ConAm"), an affiliate of ConAm
Services, since their inception. Prior to that time Mr. Epstein was Vice
President and a Director of American Housing Guild, which he joined in 1969.
At American Housing Guild, he was responsible for the formation of the
Multi-Family Division and directed its development and property management
activities. Mr. Epstein holds a Bachelor of Science degree in Engineering from
the University of Southern California.
Nancie Larimore has been employed by ConAm Management or its affiliates since
1976 and has been a Vice President of ConAm Management (or its predecessor
firm) and the Secretary/Treasurer and a Director of ConAm Development since
their inception. Ms. Larimore's responsibilities include leasing, consumer
relations, advertising and promotion. From 1972 to 1975, she held a similar
position with American Housing Guild. From 1969 to 1972, she was Director of
Property Management for Larwin Group, Inc. Ms. Larimore is a graduate of the
University of California at Los Angeles and holds a Master of Business
Administration degree from the University of California at Los Angeles.
E. Scott Dupree is a Vice President and general counsel of ConAm Management
responsible for negotiation, documentation, review and closing of acquisition,
sale and financing proposals. Mr. Dupree also acts as principal legal advisor
on general legal matters ranging from issues and contracts involving the
management company to supervision of litigation and employment issues. Prior
to joining ConAm Management in 1985, he was corporate counsel to Trusthouse
Forte, Inc., a major international hotel and restaurant corporation. Mr.
Dupree holds a B.A. from United States International University and a Juris
Doctorate degree from the University of San Diego.
Robert J. Svatos is a Vice President and Chief Financial Officer of ConAm
Management, and has been with the company since 1988. His responsibilities
include the accounting, treasury and data processing functions of the
organization. Mr. Svatos is part of the firm's due diligence team, analyzing a
broad range of projects for ConAm Management's fee client base. Prior to
joining ConAm Management, he was the Chief Financial Officer for AmeriStar
Financial Corporation, a nationwide mortgage banking firm. Mr. Svatos holds an
M.B.A. in Finance from the University of San Diego and a Bachelor of Science
degree in Accounting from the University of Illinois. Mr. Svatos is a
Certified Public Accountant.
Ralph W. Tilley is a Vice President and Treasurer of ConAm Management. He is
responsible for the financial aspects of syndications and acquisitions, and
ConAm Management's asset management portfolio and risk management activities.
Prior to joining ConAm Management in 1980, he was a senior accountant with KPMG
Peat Marwick, specializing in real estate. He holds a Bachelor of Science
degree in Accounting from San Diego State University and is a Certified Public
Accountant.
Certain Matters Involving Affiliates of RI 3-4 Services
On January 13, 1988, SLBP Acquisition Corp. (the "Purchaser"), a wholly-owned
subsidiary of Shearson Lehman Brothers Holding Inc., acquired the right to
purchase 29,610,000 shares of stock of the Hutton Group pursuant to a cash
tender offer commenced on December 7, 1987. On January 21, 1988, the Purchaser
assigned its right to purchase the shares so accepted to Shearson. Shearson
purchased the 29,610,000 shares which constituted approximately 90% of the
outstanding shares of the Hutton Group. Shearson has subsequently acquired the
remaining shares of the Hutton Group. Thus, the Hutton Group is now a
wholly-owned subsidiary of Shearson.
On July 31, 1993, Shearson sold certain of its domestic retail brokerage and
asset management businesses to Smith Barney. Subsequent to this sale, Shearson
changed its name to "Lehman Brothers Inc." The transaction did not affect the
ownership of the Partnership's General Partners. However, the assets acquired
by Smith Barney included the name "Hutton." Consequently, the Hutton Real
Estate Services general partner changed its name to "RI 3-4 Real Estate
Services, Inc." and the Hutton Group changed its name to "LB I Group Inc." to
delete any references to "Hutton."
Item 11. Executive Compensation
Neither of the General Partners nor any of their directors or executive
officers received any compensation from the Registrant. See Item 13 below with
respect to a description of certain transactions between the General Partners
or their affiliates and the Registrant.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of December 31, 1994, no person was known by the Registrant to be the
beneficial owner of more than five percent of the Units of the Registrant.
Daniel J. Epstein, President and Director of ConAm Services, owned twenty Units
as of December 31, 1994. No other directors or executive officers of the
General Partners own any Units.
Item 13. Certain Relationships and Related Transactions
RI 3-4 Services and ConAm Services each received $64,055 as its allocable share
of Net Cash From Operations with respect to the year ended December 31, 1994,
pursuant to the Amended and Restated Certificate and Agreement of Limited
Partnership of the Registrant. Pursuant to the Amended and Restated
Certificate and Agreement of Limited Partnership of the Registrant, for the
year ended December 31, 1994, $712,746 of the Registrant's net income was
allocated to the General Partners ($470,412 to RI 3-4 Services and $242,334 to
ConAm Services). For a description of the share of Net Cash From Operations
and the allocation of income and loss to which the General Partners are
entitled, reference is made to the material contained on pages 48 through 51 of
the Prospectus of the Registrant dated January 13, 1984 (the "Prospectus"),
contained in Amendment No. 1 to Registrant's Registration Statement No.
2-84863, filed January 13, 1984, under the section captioned "Distributions and
Allocations ," which section is incorporated herein by reference thereto.
The Registrant has entered into property management agreements with ConAm
Management pursuant to which ConAm Management has assumed direct responsibility
for day-to-day management of the Properties. It is the responsibility of ConAm
Management to select resident managers and local property managers, where
appropriate, and monitor their performance. ConAm Management's services also
include the supervision of leasing, rent collection, maintenance, budgeting,
employment of personnel, payment of operating expenses, and related services.
For such services, ConAm Management is entitled to receive a management fee as
described on pages 32 and 33 of the Prospectus under the caption "Investment
Objectives and Policies - Management of Properties," which description is
herein incorporated by reference. A summary of property management fees earned
by ConAm Management during the past three fiscal years is incorporated by
reference to Note 6 to the Consolidated Financial Statements included in the
Partnership's Annual Report to Unitholders for the year ended December 31,
1994, which is filed as an exhibit under Item 14.
Pursuant to Section 12(g) of Registrant's Amended and Restated Certificate and
Agreement of Limited Partnership, the General Partners and their affiliates may
be reimbursed by the Registrant for certain of their costs as described on page
16 of the Prospectus, which description is incorporated herein by reference.
The Shareholder Services Group provides partnership accounting and investor
relations services for the Registrant. Prior to May 1993, these services were
provided by an affiliate of a general partner. The Registrant's transfer agent
and certain tax reporting services are provided by Service Data Corporation, an
unaffiliated company. A summary of amounts paid to the General Partners or
their affiliates during the past three years is incorporated by reference to
Note 6 to the Consolidated Financial Statements, included in the Partnership's
Annual Report to Unitholders for the year ended December 31, 1994, which is
filed as an exhibit under Item 14.
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
(a)(1) Financial Statements: Page
Consolidated Balance Sheets - December 31, 1994 and 1993 (1)
Consolidated Statements of Partners' Capital (Deficit) -
For the years ended December 31, 1994, 1993 and 1992 (1)
Consolidated Statements of Operations - For the years ended
December 31, 1994, 1993 and 1992 (1)
Consolidated Statements of Cash Flows - For the years ended
December 31, 1994, 1993 and 1992 (1)
Notes to the Consolidated Financial Statements (1)
Report of Independent Accountants (1)
(a)(2) Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation F-1
Report of Independent Accountants F-2
(1)Incorporated by reference to the Partnership's Annual Report to
Unitholders for the year ended December 31, 1994, filed as an exhibit
under Item 14.
(a)(3) Exhibits:
(4)(A) Certificate and Agreement of Limited Partnership (included as,
and incorporated herein by reference to, Exhibit A to the Prospectus of
Registrant dated January 13, 1984 (the "Prospectus"), contained in
Amendment No. 1 to Registration Statement No. 2-84863 of Registrant,
filed January 13, 1984 (the "1984 Registration Statement")).
(B) Subscription Agreement and Signature Page (included as,
and incorporated herein by reference to, Exhibit 3.1 to the
Prospectus).
(10)(A) Purchase Agreement relating to Trails at Meadowlakes between
the Registrant and Radice Corporation and American Modular Communities,
Inc., and the exhibits thereto (included as, and incorporated herein by
reference to, Exhibit (10)(A) to Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1984 (the "1984 Annual
Report")).
(B) Purchase Agreement relating to Pelican Landing
(formerly Feather Sound Apartments), between the Registrant and
Feather Sound, Inc., and the exhibits thereto (included as, and
incorporated herein by reference to, Exhibit (10)(B) to the 1984
Annual Report).
(C) Purchase Agreement relating to River Hill Apartments
(formerly Oxbow Ridge I), between the Registrant and Tres Titan
Investors, and the exhibits thereto (included as, and
incorporated herein by reference to, Exhibit (10)(D) to the 1984
Annual Report).
(D) Purchase Agreement relating to Village at the Foothills
II (formerly Ina Village Apartments), between the Registrant and
Epoch Properties, Inc. and the exhibits thereto (included as, and
incorporated herein by reference to, Exhibit (10)(E) to the 1984
Annual Report).
(E) Documents relating to Shadowood Village (included as,
and incorporated herein by reference to, Exhibit (10)(A) to
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1985 (the "1985 Quarterly Report" (Commission File
No. 0-13329)).
(F) Purchase and Development Agreement and amendments
thereto relating to Cypress Lake Apartments (included as, and
incorporated herein by reference to, Exhibit (19)(A) to the 1985
Quarterly Report (Commission File No. 0-13329)).
(G) Financing documents relating to Trails at Meadowlakes
(included as, and incorporated herein by reference to, Exhibit
(19)(A) to the 1985 Quarterly Report (Commission File No.
0-13329)).
(H) Settlement Agreement by and among the Managing Joint
Venturers and the Epoch Joint Venturers dated July 1, 1992
(included as, and incorporated herein by reference to Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1992 (Commission File No. 0-13329)).
(I) Amended and Restated Agreement of Limited Partnership
of Village at the Foothills II Joint Venture Limited Partnership
dated as of July 1, 1992 (included as, and incorporated herein by
reference to Exhibit 10.2 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1992 (Commission
File No. 0-13329)).
(J) Certificate and Agreement of Limited Partnership of
River Hill Apartments, Ltd (included as, and incorporated herein
by reference to Exhibit 10(I) to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991
(Commission File No. 0-13329)).
(K) Amended and Restated Agreement of Limited Partnership
of Shadowood Village, Ltd., dated as of July 1, 1992 (included
as, and incorporated herein by reference to Exhibit 10.2 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1992 (Commission File No. 0-13329)).
(L) Property Management Agreements between Hutton/ConAm
Realty Investors 4 and ConAm Management Corporation for the
Cypress Lakes property (included as, and incorporated herein by
reference to Exhibit 10-L to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993 (Commission File
No. 0-13329)).
(M) Property Management Agreement between Hutton/ConAm
Realty Investors 4 and ConAm Management Corporation for the
Pelican Landing property (included as, and incorporated herein by
reference to Exhibit 10-M to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993 (Commission File
No. 0-13329)).
(N) Property Management Agreement between Hutton/ConAm
Realty Investors 4 and ConAm Management Corporation for the River
Hill property (included as, and incorporated herein by reference
to Exhibit 10-N to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1993 (Commission File No.
0-13329)).
(O) Property Management Agreements between Hutton/ConAm
Realty Investors 4 and ConAm Management Corporation for the
Shadowood Village property (included as, and incorporated herein
by reference to Exhibit 10-O to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993 (Commission File
No. 0-13329)).
(P) Property Management Agreement between Hutton/ConAm
Realty Investors 4 and ConAm Management Corporation for the
Trails at Meadowlakes property (included as, and incorporated
herein by reference to Exhibit 10-P to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1993
(Commission File No. 0-13329)).
(Q) Property Management Agreement between Hutton/ConAm
Realty Investors 4 and ConAm Management Corporation for the
Village at the Foothills II property (included as, and
incorporated herein by reference to Exhibit 10-Q to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993 (Commission File No. 0-13329)).
(13) Annual Report to Unitholders for the year ended December 31,
1994.
(21) List of Subsidiaries, Joint Ventures or Limited Partnerships
(included as, and incorporated herein by reference to Exhibit 22 of the
Registrant's Annual Report on Form 10-K filed March 27, 1992
(Commission File No. 0-13329)).
(27) Financial Data Schedule.
(99) Portions of the Prospectus of Registrant dated January 13, 1984
(included as, and incorporated herein by reference to Exhibit 28 to the
Registrant's 1988 Annual Report on Form 10-K for the fiscal year ended
December 31, 1988 (Commission File No. 0-13329)).
(b) Reports on Form 8-K:
No reports on Form 8-K were filed in the fourth quarter
of 1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: May 2, 1995
HUTTON/CONAM REALTY INVESTORS 4
BY: RI 3-4 Real Estate Services Inc.
A General Partner
BY: /S/ Paul L. Abbot
Name: Paul L. Abbott
Title: Director, President, Chief Executive Officer
and Chief Financial Officer
BY: ConAm Property Services IV, Ltd.
General Partner
BY: Continental American Development, Inc.
General Partner
BY: /S/ Daniel J. Epstein
Name: Daniel J. Epstein
Title: President, Director and Principal Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant in the capabilities and on the dates indicated.
RI 3-4 REAL ESTATE SERVICES INC.
A General Partner
Date: May 2, 1995
BY: /S/ Paul L. Abbott
Paul L. Abbott
Director, President, Chief Executive Officer and
Chief Financial Officer
Date: May 2, 1995
BY: /S/ Janet Hoynes
Janet Hoynes
Vice President
Date: May 2, 1995
BY: /S/ Kate Hobson
Kate Hobson
Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
CONAM PROPERTY SERVICES IV, LTD.
A General Partner
By: Continental American Development, Inc.
A General Partner
Date: May 2, 1995
BY: /S/ Daniel J. Epstein
Daniel J. Epstein
Director and President
Date: May 2, 1995
BY: /S/ Nancie Larimore
Nancie Larimore
Secretary/Treasurer and Director
Date: May 2, 1995
BY: /S/ E. Scott Dupree
E. Scott Dupree
Vice President
Date: May 2, 1995
BY: /S/ Robert J. Svatos
Robert J. Svatos
Vice President
Date: May 2, 1995
BY: /S/ Ralph W. Tilley
Ralph W. Tilley
Vice President
Hutton/ConAm Realty Investors 4
Exhibit 13
Hutton/ConAm Realty Investors 4
Annual Report 1994
Hutton/ConAm Realty Investors 4 is a California limited partnership formed in
1984 to acquire, operate and hold for investment multifamily housing
properties. At December 31, 1994, the Partnership's portfolio consisted of six
apartment properties located in Arizona, Florida and Texas.
Average Occupancy
Property Location 1994 1993
Cypress Lakes Apartments Fort Lauderdale, Florida 96% 97%
Pelican Landing Clearwater, Florida 97% 96%
River Hill Apartments Irving, Texas 96% 96%
Shadowood Village Jacksonville, Florida 96% 96%
Trails at Meadowlakes Deerfield Beach, Florida 96% 96%
Village at the Foothills II Tucson, Arizona 95% 95%
Administrative Inquires Performance Inquires/Form 10-Ks
Address Changes/Transfers The Shareholder Services Group
Service Data Corporation P.O. Box 1527
2424 South 130th Circle Boston, Massachusetts 02104-1527
Omaha, Nebraska 68144 Attn: Financial Communications
(800) 223-3464 (800) 223-3464
Contents
1 Message to Investors
2 Performance Summary
3 Financial Highlights
4 Consolidated Financial Statements
7 Notes to Consolidated Financial Statements
13 Report of Independent Accountants
14 Net Asset Valuation
Presented for your review is the 1994 Annual Report for Hutton/ConAm Realty
Investors 4. In this report, we review Partnership operations and discuss
general market conditions affecting the Partnership's properties. We have also
included a performance summary which addresses operating results at each of the
properties and financial highlights for the year.
As we discussed in the Partnership's third quarter report, the loan secured by
a mortgage on the Trails at Meadowlakes matures on July 19, 1995, at which
time the Partnership will be required to pay $5,025,984 to the mortgage
lender. The General Partners have determined that refinancing the property's
mortgage loan is not an attractive option at this time, given rising interest
rates and the high expenses associated with a refinancing. Furthermore, as a
result of improving market conditions, the General Partners have begun
marketing some of the properties, and recently entered into preliminary
negotiations with an institutional buyer to sell Trails at Meadowlakes and
Cypress Lakes. There can be no assurance, however, that a sale will be
completed or that any particular price for the properties can be obtained.
Should a sale of one or both properties close prior to the July 19th maturity
date, net sale proceeds will first be applied to repay the loan. The balance
will be distributed to the Partners as a return of capital. In addition,
after the sale closes, the General Partners expect to make a special cash
distribution from excess cash reserves. As you know, cash distributions were
suspended in the third quarter of 1994 to build cash reserves in the event the
loan has to be partially repaid at maturity. After the loan issue is
resolved, the General Partners will reevaluate the Partnership's reserve
requirements and determine at what level cash distributions can be reinstated.
Operations Overview
The past year has witnessed a solid recovery of multifamily housing in most
regions of the country. The improving economy and limited new construction in
most areas have boosted occupancy levels and rental rates, while rising
mortgage rates have curtailed renters from purchasing condominiums and single
family homes. These favorable conditions are especially prevalent in the
sunbelt states, which continue to benefit from long-term population growth.
Operating results at the Partnership's properties reflect these strengthening
market conditions. Occupancy rates remained at or above 95% during 1994, and
all of the properties were able to institute rental rate increases on lease
renewals resulting in a 4% increase in rental income. While construction of
new units has picked up in several areas, positive demographic trends,
especially in the Florida markets, are expected to keep pace with new supply.
The General Partners intend to closely monitor these conditions and will
continue to make select capital improvements and age-related repairs to keep
the Partnership's properties competitive with newer units.
Summary
The healthy market conditions and strong performance of the Partnership's
properties during 1994 bode well for their eventual sale. As discussed above,
the General Partners have entered into preliminary negotiations to sell two of
the properties. However, there can be no assurance that a sale of these
properties will be completed. In the interim, the General Partners will
continue to effectively manage the Partnership's properties by seeking to
maintain high occupancy levels and implementing rental rate increases as
conditions permit. We will keep you updated on developments affecting your
investment in future reports.
Very truly yours,
Paul L. Abbott Daniel J. Epstein
President President
RI 3-4 Real Estate Services, Inc. Continental American Development Inc.
General Partner of ConAm Property
Services IV, Ltd.
March 29, 1995
Performance Summary
Cypress Lakes Apartments, Fort Lauderdale, Florida
This 176-unit complex is located in the northwest section of Fort Lauderdale.
Occupancy remained high at Cypress Lakes throughout 1994, averaging 96% for the
year, slightly above the local average of 95%. Improving market conditions
allowed rental rate increases on all turnovers and lease renewals during the
year, resulting in a 5% increase in rental income. Although the Fort
Lauderdale apartment market remains competitive, the area's strong population
growth and limited new construction are expected to sustain strong demand for
rental properties. Property improvements at Cypress Lakes during the year
included roof repairs and replacement of carpets and fixtures in selected
units.
Pelican Landing, Clearwater, Florida
Situated in southeast Clearwater, on Florida's Gulf Coast in the Tampa Bay
area, this 204-unit complex recorded average occupancy of 97% in 1994. Rental
income increased 5% from 1993, despite competition from two recently
constructed complexes in the area, reflecting the success of an aggressive
marketing campaign and a corporate outreach program. Property improvements
consisted primarily of carpet and appliance replacement in selected units.
River Hill Apartments, Irving, Texas
This 192-unit apartment complex is located in the Las Colinas area of Irving,
approximately 15 miles northwest of Dallas. The local apartment market,
although competitive, evidenced steady improvement and many area complexes,
including River Hill, were able to increase rental rates on renewals during the
year. The increases were achieved despite increased competition resulting from
the lease-up of recently constructed properties. Average occupancy at River
Hill was 96% in 1994, unchanged from 1993, while rental income increased 4%.
Property expenditures in 1994 consisted of costs associated with the
refurbishment of units as they are re-leased as well as ongoing stairwell
repairs.
Shadowood Village, Jacksonville, Florida
This 110-unit apartment complex is located in the prestigious
Baymeadows/Deerwood residential area in southeast Jacksonville. Shadowood
Village reported stable average occupancy of 96% in 1994. Significant prior
period overbuilding has left the Baymeadows/Deerwood area highly competitive
for rental properties. Although market conditions have improved steadily over
the past two years, many complexes continue to offer rental concessions to
attract tenants. Despite these conditions, Shadowood Village was able to
increase rental rates on certain units, resulting in a 3% increase in rental
income from 1993. Property improvements during the year included exterior
painting and replacement of porches on selected units.
Trails at Meadowlakes, Deerfield Beach, Florida
Located eight miles north of Fort Lauderdale in the Meadowlakes community, this
189-unit apartment complex achieved stable occupancy of 96% in 1994, unchanged
from 1993. Rental income increased 3% from 1993, as rental rate increases were
instituted on lease renewals and turnovers. Although the Fort Lauderdale
apartment market remains competitive, the area's strong population growth and
limited new construction are expected to sustain strong demand for rental
properties. Property improvements consisted primarily of carpet replacement
in selected units.
Village at the Foothills II, Tucson, Arizona
This 120-unit apartment and townhouse community is located in the scenic
Catalina Foothills, overlooking Tucson. The property maintained an average
occupancy rate of 95% in 1994, and rental income increased 5% due to rental
increases instituted on all renewals and units with high turnover. While
market conditions have improved notably in Tucson in recent years, eight new
apartment complexes in the Foothills region recently commenced construction
which are likely to provide strong competition when completed. Property
improvements in 1994 included carpet replacement and shower repairs in selected
units, as well as roof repairs.
Selected Financial Data
For the periods ended December 31,
(dollars in thousands, except per Unit data)
1994 1993 1992 1991 1990
Total Income $ 7,633 $ 7,299 $ 7,020 $ 6,821 $ 6,667
Net Income 985 724 719 456 702
Net Cash
Provided by
Operating
Activities 3,034 2,778 2,706 2,187 2,714
Long-term
Obligations 5,051 5,091 5,127 5,159 5,200
Total Assets
at Year End 44,686 45,646 47,463 49,387 54,506
Net Income
per
Limited
Partnership
Unit 2.12 2.30 1.31 1.78 4.93
Distributions
per Limited
Partnership
Unit 9.00 18.00 17.00 21.20 21.20
The 5% increase in total income from 1993 to 1994 is primarily
attributable to rent increases implemented at each of the properties during
1994.
The increase in net income and net cash provided by operating
activities is primarily attributable to the increase in rental income.
Expenses remained in line with 1993 levels.
Quarterly Cash Distributions
Per Limited Partnership Unit
1994 1993
First Quarter $ 4.50 $ 4.50
Second Quarter 4.50 4.50
Third Quarter - 4.50
Fourth Quarter - 4.50
Total 9.00 18.00
Consolidated Balance Sheets
December 31, 1994 and 1993
Assets 1994 1993
Investments in real estate:
Land $ 12,088,984 $ 12,088,984
Buildings and improvements 48,236,772 48,197,685
60,325,756 60,286,669
Less- accumulated
depreciation (18,896,846) (16,862,076)
41,428,910 43,424,593
Cash and cash equivalents 3,234,383 2,201,276
Other assets 22,527 20,322
Total Assets $ 44,685,820 $ 45,646,191
Liabilities and Partners' Capital
Liabilities:
Mortgage payable $ 5,051,086 $ 5,090,828
Security deposits 288,335 273,191
Accounts payable and
accrued expenses 137,009 138,609
Due to general partners
and affiliates 54,369 51,520
Distribution payable - 640,550
Total Liabilities 5,530,799 6,194,698
Partners' Capital (Deficit):
General Partners - (584,636)
Limited Partners 39,155,021 40,036,129
Total Partners' Capital 39,155,021 39,451,493
Total Liabilities and
Partners' Capital $ 44,685,820 $ 45,646,191
Consolidated Statements of Partners' Capital (Deficit)
For the years ended December 31, 1994, 1993 and 1992
General Limited
Partners Partners Total
Balance at January 1, 1992 $ (1,065,807) $ 44,057,121 $ 42,991,314
Net income 550,321 168,404 718,725
Cash distributions (241,986) (2,177,870) (2,419,856)
Balance at December 31, 1992 (757,472) 42,047,655 1,290,183
Net income 429,056 294,454 723,510
Cash distributions (256,220) (2,305,980) (2,562,200)
Balance at December 31, 1993 (584,636) 40,036,129 39,451,493
Net income (loss) 712,746 271,882 984,628
Cash distributions (128,110) (1,152,990) (1,281,100)
Balance at December 31, 1994 $ - $ 39,155,021 $ 39,155,021
See accompanying notes to the consolidated financial statements.
Consolidated Statements of Operations
For the years ended December 31, 1994, 1993 and 1992
Income 1994 1993 1992
Rental $ 7,552,784 $ 7,249,001 $ 6,968,820
Interest 79,860 50,212 51,619
Total Income 7,632,644 7,299,213 7,020,439
Expenses
Property operating 3,927,435 3,860,345 3,540,118
Depreciation 2,034,770 2,031,845 2,029,764
Interest 513,636 517,447 520,893
General and
administrative 172,175 166,066 210,939
Total Expenses 6,648,016 6,575,703 6,301,714
Net income $ 984,628 $ 723,510 $ 718,725
Net Income Allocated:
To the General Partners $ 712,746 $ 429,056 $ 550,321
To the Limited Partners 271,882 294,454 168,404
Net income $ 984,628 $ 723,510 $ 718,725
Per limited partnership unit
(128,110 outstanding) $ 2.12 $ 2.30 $ 1.31
See accompanying notes to the consolidated financial statements.
Consolidated Statements of Cash Flows
For the years ended December 31, 1994, 1993 and 1992
Cash Flows from Operating Activities: 1994 1993 1992
Net income $ 984,628 $ 723,510 $ 718,725
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation 2,034,770 2,031,845 2,029,764
Increase (decrease) in cash
arising from changes in operating
assets and liabilities:
Other assets (2,205) - (1,277)
Accounts payable and
accrued expenses (1,600) (18,919) (50,246)
Due to general partners and
affiliates 2,849 (2,323) 2,116
Security deposits 15,144 43,524 6,829
Net cash provided by
operating activities 3,033,586 2,777,637 2,705,911
Cash Flows from Investing Activities:
Additions to real estate (39,087) (63,188) (5,522)
Acquisition of joint
venture partner interest - - (23,067)
Net cash used for investing activities (39,087) (63,188) (28,589)
Cash Flows from Financing Activities:
Distributions (1,921,650) (2,526,614) (2,569,318)
Mortgage principal payments (39,742) (35,930) (32,484)
Net cash used for
financing activities (1,961,392) (2,562,544) (2,601,802)
Net increase in cash and
cash equivalents 1,033,107 151,905 75,520
Cash and cash equivalents at
beginning of year 2,201,276 2,049,371 1,973,851
Cash and cash equivalents
at end of year $ 3,234,383 $ 2,201,276 $ 2,049,371
Supplemental Disclosure of
Cash Flow Information:
Cash paid during the
year for interest $ 513,636 $ 517,447 $ 520,893
Supplemental Disclosure of Cash Investing Activities:
During the year ended December 31, 1992, the Partnership purchased the Joint
Venture Partner interests of Village at the Foothills (Phase II) Joint Venture
and Shadowood Village Ltd. Total consideration of $14,000 was paid for the
purchase of such interests. In addition, $9,067 of legal costs were incurred
as a result of this transaction, resulting in a building basis adjustment of
$23,067.
See accompanying notes to the consolidated financial statements.
Notes to the Consolidated Financial Statements
For the years ended December 31, 1994, 1993 and 1992
1. Organization
Hutton/ConAm Realty Investors 4 (the "Partnership") was organized as a limited
partnership under the laws of the State of California pursuant to a Certificate
and Agreement of Limited Partnership (the "Partnership Agreement") dated May
10, 1984. The Partnership was formed for the purpose of acquiring and
operating certain types of residential real estate. The general partners of
the Partnership are RI 3-4 Real Estate Services, Inc., an affiliate of Lehman
Brothers (see below), and ConAm Property Services IV, Ltd. ("ConAm"), an
affiliate of Continental American Properties, Ltd (the "General Partners").
The Partnership will continue until December 31, 2010 unless sooner terminated
pursuant to the terms of the Partnership Agreement.
On July 31, 1993, Shearson Lehman Brothers Inc. sold certain of its domestic
retail brokerage and asset management business to Smith Barney, Harris Upham &
Co. Incorporated ("Smith Barney"). Subsequent to the sale, Shearson Lehman
Brothers Inc. changed its name to Lehman Brothers Inc. ("Lehman Brothers").
The transaction did not affect the ownership of the General Partners. However,
the assets acquired by Smith Barney included the name "Hutton". Consequently,
effective October 8, 1993, the Hutton Real Estate Services VIII, Inc. General
Partner changed its name to RI 3-4 Real Estate Services, Inc.
2. Significant Accounting Policies
Financial Statements The consolidated financial statements include the
accounts of the Partnership and its affiliated ventures. The effect of
transactions between the Partnership and its ventures have been eliminated in
consolidation.
Real Estate Investments Real estate investments are recorded at the lower of
cost or net realizable value and include the initial purchase price of the
property, legal fees, acquisition and closing costs.
Leases are accounted for under the operating method. Under this method,
revenue is recognized as rentals are earned and expenses (including
depreciation) are charged to operations when incurred. Leases are generally
for terms of one year or less.
Depreciation is computed using the straight-line method based upon the
estimated useful lives of the properties. Maintenance and repairs are charged
to operations as incurred. Significant betterments and improvements are
capitalized and depreciated over their estimated useful lives.
For assets sold or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts, and any resulting gain or loss is
reflected in income for the period.
Offering Costs Costs relating to the sale of limited partnership units were
deferred during the offering period and charged to the limited partners'
capital accounts upon the consummation of the public offering.
Income Taxes No provision for income taxes has been made in the financial
statements since income, losses and tax credits are passed through to the
individual partners.
Cash and Cash Equivalents Cash equivalents consist of short-term highly liquid
investments which have maturities of three months or less from the date of
issuance. Cash and cash equivalents include security deposits of $232,692 and
$221,816 at December 31, 1994 and 1993, respectively, restricted under certain
state statutes.
Concentration of Credit Risk Financial instruments which potentially subject
the Partnership to a concentration of credit risk principally consist of cash
and cash equivalents in excess of the financial institutions' insurance limits.
The Partnership invests available cash with high credit quality financial
institutions.
3. The Partnership Agreement
The Partnership Agreement provides that net cash from operations, as defined,
will be distributed quarterly, 90% to the limited partners and 10% to the
General Partners.
Net loss and all depreciation for any fiscal year will be allocated 99% to the
limited partners and 1% to the General Partners.
Net income before depreciation will be allocated as follows:
(a) To the extent that net income before depreciation does not exceed the
amount of net cash from operations distributable to the partners with respect
to such fiscal year, net income before depreciation shall be allocated among
the partners, pro rata in accordance with the amount of net cash from
operations distributable to each partner with respect to such fiscal year to
the extent thereof; and
(b) To the extent that net income before depreciation exceeds the amount of net
cash from operations distributable to the partners with respect to such fiscal
year, such excess shall be allocated (1) first, 100% to the General Partners,
pro rata, in an amount equal to the excess, if any, of the General Partners'
deficits, if any, in their capital accounts, over an amount equal to 1% of the
aggregate capital contributions to the Partnership as reduced by the amount of
the General Partners' capital contributions, and (2) second, 99% to the limited
partners and 1% to the General Partners. For the years ended December 31, 1994
and 1993, net income before depreciation exceeded net cash from operations
distributable to the partners by $1,738,298 and $193,155, respectively.
For the years ended December 31, 1994 and 1993, net income before depreciation
exceeded net cash from operations distributable to the partners by $1,738,298
and $193,155, respectively. Pursuant to the Partnership Agreement and (b)(1)
above, $597,962 and $193,155 of this excess was allocated to the General
Partners for the years ended December 31, 1994 and 1993, respectively.
Net proceeds from sales or refinancing will be distributed 100% to the limited
partners until each limited partner has received an amount equal to his
adjusted capital value (as defined) and an annual, cumulative 7% return
thereon. The balance, if any, will be distributed 85% to the limited partners
and 15% to the General Partners. Generally, all gain from sales will be
allocated in the same manner as net proceeds from sales or refinancing.
4. Real Estate Investments Real estate investments consist of six residential
apartment complexes acquired either directly or through investments in joint
ventures and limited partnerships as follows:
Property Apartment Date Purchase
Name Units Location Aquired Price
Trails at
Meadowlakes 189 Deerfield Beach, FL 11/14/84 $10,590,925
Pelican Landing 204 Clearwater, FL 3/28/85 12,179,329
Village at the
Foothills II 120 Tucson, AZ 5/30/85 7,216,400
River Hill
Apartments 192 Irving, TX 6/12/85 11,488,015
Shadowood
Village 110 Jacksonville, FL 7/3/86 5,400,000
Cypress Lake
Apartments 176 Ft. Lauderdale, FL 3/11/87 10,337,100
Trails at Meadowlakes, Pelican Landing and Cypress Lake Apartments were
acquired directly by the Partnership. Village at the Foothills II was acquired
through a joint venture with an unaffiliated developer and River Hill
Apartments and Shadowood Village were acquired through limited partnerships
with unaffiliated developers. To each limited partnership and joint venture,
the Partnership assigned its rights to acquire the above properties and
contributed cash equal to the purchase price of the properties. The
Partnership's partners did not make initial capital contributions to these
limited partnerships and joint ventures.
On July 1, 1992, a Settlement Agreement was executed by and among the
Partnership and Hutton/ConAm Realty Investors 81, Hutton/ConAm Realty
Investors 2, Hutton/ConAm Realty Investors 3, and Hutton/ConAm Realty Investors
5, as the Managing Joint Venturers, and Epoch Properties, Inc., James H. Pugh,
Jr. and John H. McClintock, Jr., as the Epoch Joint Venturers (the Epoch Joint
Venturers being collectively referred to herein as "Epoch"), the Partnership's
partners and co-venturers in Village at the Foothills (Phase II) and Shadowood
Village Apartments.
Pursuant to the Settlement Agreement, the Partnership paid $14,000 to Epoch.
Epoch withdrew as a partner in the respective Joint Ventures which owned
Village at the Foothills II and Shadowood Village Apartments. General Releases
were executed between the Partnership, the Joint Ventures, Epoch and Epoch
Management Corporation.
In the case of Shadowood Village Apartments, the limited partnership form was
retained to hold title to the property. The Partnership has entered into an
Amended and Restated Agreement of Limited Partnership, dated as of July 1, 1992
with its two corporate General Partners, RI 3-4 Real Estate Services, Inc. and
ConAm Property Services IV, Ltd. In the case of Village at the Foothills II,
the joint venture has been converted into a limited partnership. The
Partnership has entered into an Amended and Restated Agreement of Limited
Partnership, dated July 1, 1992 with its two corporate General Partners, RI 3-4
Real Estate Services, Inc. and ConAm Property Services IV, Ltd., as the general
partners and the Partnership as the sole limited partner. There has been no
interruption in either management or operating activities of the Partnership as
a result of this Agreement.
The initial joint venture and limited partnership agreements of Village at the
Foothills II, River Hill Apartments and Shadowood Village substantially provide
that:
a. Net cash from operations of Village at the Foothills II and River
Hill Apartments will be distributed 100% to the Partnership until it
has received an annual, noncumulative return of 10% and 12%,
respectively, on its adjusted capital contribution. Any remaining
balance will be distributed 60% to the Partnership and 40% to the
co-venturer. Net cash from operations of Shadowood Village will be
distributed 100% to the Partnership.
b. Net income of the joint ventures and limited partnerships will be
allocated to the Partnership and the co-venturers basically in
accordance with the distribution of net cash from operations. All net
losses and depreciation will be allocated to the Partnership.
c. Net proceeds from a sale or refinancing of Village at Foothills II
will be distributed 100% to the Partnership, until it has received an
amount equal to 120% of its adjusted capital contribution.
Distributions will then be made 75% to the Partnership and 25% to the
co-venturer, until the Partnership has received an additional 120% of
the Partnership's adjusted capital contribution. Any remaining balance
will be distributed 50% to the Partnership and 50% to the co-venturer.
Net proceeds from a sale or refinancing of River Hill Apartments will
be distributed 100% to the Partnership, until it has received an amount
equal to 110% of its adjusted capital contribution. Distributions will
then be made 75% to the Partnership and 25% to the co-venturer, until
the Partnership has received an additional 110% of the Partnership's
adjusted capital contribution. Any remaining balance will be
distributed 50% to the Partnership and 50% to the co-venturer.
Net proceeds from a sale or refinancing of Shadowood Village will be
distributed 100% to the Partnership, until it has received an amount
equal to 120% of its adjusted capital contribution. Any remaining
balance will be distributed 50% to the Partnership and 50% to the
co-venturer.
The amended joint venture and limited partnership agreements of Village at the
Foothills II and Shadowood Village substantially provide that:
a. Available cash from operations will be distributed 100% to the
Partnership until it has received its annual, noncumulative preferred
return, as defined. Any remaining balance will be distributed 99% to
the Partnership and 1% to the corporate General Partners.
b. Net income will be allocated first, proportionately to partners with
negative capital accounts, as defined, until such capital accounts, as
defined, have been increased to zero; then, to the Partnership up to
the amount of any payments made on account of its preferred return;
thereafter, 99% to the Partnership and 1% to the corporate General
Partners. All losses will be allocated first to the partners with
positive capital accounts, as defined, until such accounts have been
reduced to zero and, then, 99% to the Partnership and 1% to the
corporate General Partners.
c. Income from a sale will be allocated to the Partnership until the
Partnership's capital accounts, as defined, are equal to the fair
market value of the venture's assets at the date of the amendments;
then, any remaining balance will be allocated 99% to the Partnership
and 1% to the corporate General Partners. Net proceeds from a sale or
refinancing will be distributed first to the partners with a positive
capital account balance, as defined; thereafter, 99% to the Partnership
and 1% to the corporate General Partners.
5. Mortgage Payable On July 19, 1985, the Partnership obtained financing of
$5,200,000, collateralized by a first mortgage encumbering Trails at
Meadowlakes. The loan had an initial term of five years bearing interest at an
annual rate of 12.50% with monthly payments of interest only. The loan was
extended in 1990 for an additional five years bearing interest at a rate of
10.125% with monthly principal and interest payments. The mortgage matures in
July, 1995 in the amount of $5,025,984. As a result of this future maturity,
the General Partners have begun marketing certain of the properties for sale
and recently entered into preliminary negotiations with an institutional buyer
to sell Trails at Meadowlakes and Cypress Lakes. Both properties have
estimated market values in excess of the outstanding mortgage balance. There
is no assurance that the sales will be completed or that any particular price
for the properties can be obtained. The General Partners suspended the payment
of cash distributions c ommencing with the third quarter of 1994 to build cash
reserves in the event the loan has to be partially repaid at maturity.
6. Transactions with Related Parties The following is a summary of fees earned
and reimbursable expenses paid for the years ended December 31, 1994, 1993 and
1992, and the unpaid portion at December 31, 1994:
Unpaid at
December 31, Earned
1994 1994 1993 1992
Reimbursement of:
Out-of-pocket expenses$ - $ 2,227 $ 2,465 $ 896
Administrative salaries
and expenses 22,778 41,693 33,019 42,198
Property operating salaries - 610,064 581,922 585,131
Property management fees 31,591 378,727 363,258 348,772
$ 54,369 $ 1,032,711 $ 980,664 $ 976,997
The above amounts have been paid and/or accrued to the General Partners and
affiliates as follows:
Unpaid at
December 31, Earned
1994 1994 1993 1992
RI 3-4 Real Estate
Services, Inc. $ 22,778 $ 43,920 $ 35,484 $ 43,094
ConAm and affiliates 31,591 988,791 945,180 933,903
$ 54,369 $ 1,032,711 $ 980,664 $ 976,997
7. Reconciliation of Financial Statement and Tax Information
The following is a reconciliation of the net income for financial statement
purposes to net income for federal income tax purposes for the years ended
December 31, 1994, 1993 and 1992:
1994 1993 1992
Net income per financial statements $ 984,628 $ 723,510 $ 718,725
Depreciation deducted for tax
purposes in excess of
depreciation expense per
financial statements (159,133) (386,409) (430,111)
Tax basis joint venture net loss
in excess of GAAP basis joint
venture net income (106,637) (105,138) (187,217)
Other (25,567) 34,227 4,165
Taxable net income $ 693,291 $ 266,190 $ 105,562
The following is a reconciliation of partners' capital for financial statement
purposes to partners' capital for federal income tax purposes as of December
31, 1994, 1993 and 1992:
1994 1993 1992
Partners' capital per
financial statements $ 39,155,021 $ 39,451,493 $ 41,290,183
Adjustment for cumulative
difference between tax basis
net income and net income
per financial statements (7,209,641) (6,918,304) (6,460,984)
Partners' capital per
tax return $ 31,945,380 $ 32,533,189 $ 34,829,199
8. Distributions Paid
Cash distributions, per the consolidated statements of partners' capital
(deficit), are recorded on the accrual basis, which recognizes specific record
dates for payments within each calendar year. The consolidated statements of
cash flows recognize actual cash distributions paid during the calendar year.
The following table discloses the annual amounts as presented on the
consolidated financial statements:
Distributions Distributions
Payable Distributions Distributions Payable
Beginning of Year Declared Paid December 31,
1994 $ 640,550 $ 1,281,100 $ 1,921,650 $ -
1993 604,964 2,562,200 2,526,614 640,550
1992 754,426 2,419,856 2,569,318 604,964
9. Supplementary Information
Maintenance and repairs, advertising costs and real estate taxes included in
property operating expenses for the years ended December 31, 1994, 1993 and
1992, are as follows:
1994 1993 1992
Maintenance and repairs $ 1,187,713 $ 1,196,156 $ 984,284
Advertising costs 104,391 128,701 114,347
Real estate taxes 873,196 833,866 867,175
Report of Independent Accountants
To the Partners of
Hutton/ConAm Realty Investors 4:
We have audited the accompanying balance sheets of Hutton/ConAm Realty
Investors 4, a California limited partnership, and Consolidated Ventures, as of
December 31, 1994 and 1993, and the related consolidated statements of
operations, partners' capital (deficit) and cash flows for each of the three
years in the period ended December 31, 1994. These consolidated financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Hutton/ConAm Realty Investors 4, a California limited partnership, and
Consolidated Ventures as of December 31, 1994 and 1993, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1994, in conformity with generally accepted
accounting principles.
As discussed in Note 5 to the consolidated financial statements, the
Partnership's nonrecourse mortgage payable matures in July 1995. The
Partnership is actively marketing the property which collateralizes the
mortgage and another property which each have estimated market values in excess
of the loan obligation. The Partnership is also discussing alternatives with
the existing mortgage lender, the results of which cannot be determined at this
time. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
March 9, 1995
Comparison of Acquisition Costs to Appraised Value and Determination of
Net Asset Value Per $500 Unit at December 31, 1994 (Unaudited)
Acquisition Cost
(Purchase Price Partnership's
Plus General Share of
Partners' December 31,
Date of Acquisition 1994 Appraised
Property Acquisition Fees) Value (1)
The Trails
at Meadowlakes 11-14-84 $ 11,092,973 $ 9,500,000
Pelican Landing 03-28-85 12,700,000 10,800,000
Village at the
Foothills II 05-30-85 7,376,000 4,900,000
River Hill
Apartments 06-12-85 12,016,575 6,900,000
Shadowood Village 07-03-86 5,649,540 4,000,000
Cypress Lakes
Apartments 03-11-87 10,816,106 8,900,000
$ 59,651,194 $ 45,000,000
Cash and cash equivalents 3,234,383
Other assets 22,527
48,256,910
Less:
Total liabilities (5,530,799)
Partnership Net Asset Value (2) $ 42,726,111
Net Asset Value Allocated:
Limited Partners $ 42,726,111
General Partners -
$ 42,726,111
Net Asset Value Per Unit (128,110 units outstanding) $ 333.51
(1) This represents the Partnership's share of the December 31, 1994
Appraised Values which were determined by an independent property appraisal
firm.
(2) The Net Asset Value assumes a hypothetical sale at December 31, 1994 of
all the Partnership's properties at a price based upon their value as a rental
property as determined by an independent property appraisal firm, and the
distribution of the proceeds of such sale, combined with the Partnership's cash
after liquidation of the Partnership's liabilities, to the Partners.
Limited Partners should note that appraisals are only estimates of current
value and actual values realizable upon sale may be significantly different. A
significant factor in establishing an appraised value is the actual selling
price for properties which the appraiser believes are comparable. In
addition, the appraised value does not reflect the actual costs which would be
incurred in selling the properties. As a result of these factors and the
illiquid nature of an investment in Units of the Partnership, the variation
between the appraised value of the Partnership's properties and the price at
which Units of the Partnership could be sold is likely to be significant.
Fiduciaries of Limited Partners which are subject to ERISA or other provisions
of law requiring valuations of Units should consider all relevant factors,
including, but not limited to Net Asset Value per Unit, in determining the fair
market value of the investment in the Partnership for such purposes.
HUTTON/CONAM REALTY INVESTORS 4
Schedule III - Real Estate and Accumulated Depreciation
December 31, 1994
Cost Capitalized
Subsequent
Initial Cost to Partnership To Acquisition
Buildings and Buildings and
Description Encumbrances Land Improvements Improvements
Residential Property:
Partnership Owned:
Trails at Meadowlakes
Deerfield Beach, FL $ 5,051,086 $ 1,447,523 $ 9,690,749 $ 70,599
Pelican Landing
Clearwater, FL - 3,484,946 9,422,260 (23,595)
Cypress Lakes Apts.
Ft. Lauderdale, FL - 1,930,000 8,993,734 65,162
5,051,086 6,862,469 28,106,743 112,166
Consolidated Ventures:
River Hill Apts.
Irving, TX - 3,059,866 9,060,195 (44,800)
Village at Foothills II
Tucson, AZ - 1,584,049 5,838,595 11,134
Shadowood Village
Jacksonville, FL - 566,000 5,125,065 44,274
$ 5,051,086 $ 12,072,384 $ 48,130,598 $ 122,774
HUTTON/CONAM REALTY INVESTORS 4
Schedule III - Real Estate and Accumulated Depreciation
(continued)
December 31, 1994
Gross Amount at Which Carried at Close of Period
Buildings and Accumulated
Description Land Improvements Total Depreciation
Residential Property:
Partnership Owned:
Trails at Meadowlakes
Deerfield Beach, FL 1,458,681 9,750,190 11,208,871 4,131,159
Pelican Landing
Clearwater, FL 3,474,525 9,409,086 12,883,611 3,892,441
Cypress Lakes Apts.
Ft. Lauderdale, FL 1,941,729 9,047,167 10,988,896 2,978,868
6,874,935 28,206,443 35,081,378 11,002,468
Consolidated Ventures:
River Hill Apts.
Irving, TX 3,060,810 9,014,451 12,075,261 3,654,215
Village at Foothills II
Tucson, AZ 1,583,965 5,849,813 7,433,778 2,367,545
Shadowood Village
Jacksonville, FL 569,274 5,166,065 5,735,339 1,872,618
$ 12,088,984 $ 48,236,772 $60,325,756 $ 18,896,846
(1) (2)
HUTTON/CONAM REALTY INVESTORS 4
Schedule III - Real Estate and Accumulated Depreciation
(continued)
December 31, 1994
Life on which
Depreciation
in Latest
Date of Date Income Statements
Description Construction Acquired is Computed
Residential Property:
Partnership Owned:
Trails at Meadowlakes
Deerfield Beach, FL 1984 11/14/84 (3)
Pelican Landing
Clearwater, FL 1984 - 1985 3/11/87 (3)
Cypress Lakes Apts.
Ft. Lauderdale, FL 1986 - 1987 3/11/87 (3)
Consolidated Ventures:
River Hill Apts.
Irving, TX 1984 - 1985 6/12/85 (3)
Village at Foothills II
Tucson, AZ 1984 - 1985 5/30/85 (3)
Shadowood Village
Jacksonville, FL 1985 - 1986 7/3/86 (3)
(1) Represents aggregate cost for both financial reporting and Federal income
tax purposes.
(2) The amount of accumulated depreciation for Federal income tax purposes is
$32,738,821.
(3) Buildings and improvements - 25 years; personal property - 10 years.
HUTTON/CONAM REALTY INVESTORS 4
Schedule III - Real Estate and Accumulated Depreciation
December 31, 1994
A reconciliation of the carrying amount of real estate and accumulated
depreciation for the years ended December 31, 1994, 1993 and 1992:
Real Estate investments: 1994 1993 1992
Beginning of year $ 60,286,669 $ 60,223,481 $ 60,194,892
Additions 39,087 63,188 28,589
End of year $ 60,325,756 $ 60,286,669 $ 60,223,481
Accumulated Depreciation:
Beginning of year $ 16,862,076 $ 14,830,231 $ 12,800,467
Depreciation expense 2,034,770 2,031,845 2,029,764
End of year $ 18,896,846 $ 16,862,076 $ 14,830,231
Report of Independent Accountants
Our report on the consolidated financial statements of Hutton/ConAm Realty
Investors 4, a California limited partnership, and Consolidated Ventures has
been incorporated by reference in this Form 10-K from the Annual Report to
unitholders of Hutton/ConAm Realty Investors 4 for the year ended December 31,
1994. In connection with our audits of such financial statements, we have also
audited the related financial statement schedule listed in the index of this
Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
March 9, 1995