UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2013

o 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 000-53203

AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P.
(Exact Name of Registrant as Specified in Its Charter)


Delaware		20-5685431
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

8 Greenway Plaza, Suite 1000 Houston, Texas (Address of Principal Executive Offices)		77046 (Zip Code)

713-850-1400 (Registrant’s Telephone Number, Including Area Code)

Not applicable (Former Name, Former Address and Formal Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


	Large accelerated filer o	Accelerated filer o
	Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

TABLE OF CONTENTS

			Page
Definitions			ii
Part I – Financial Information
	Item 1.	Financial Statements.	1
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	1615
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	2120
	Item 4.	Controls and Procedures.	2120
Part II – Other Information
	Item 1.	Legal Proceedings.	2120
	Item 1A.	Risk Factors.	2120
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	21
	Item 3.	Defaults Upon Senior Securities.	21
	Item 4.	Mine Safety Disclosures.	2221
	Item 5.	Other Information.	2221
	Item 6.	Exhibits.	2221
Signatures			2322
Exhibit Index			2423

Table of Contents

DEFINITIONS

As used in this Quarterly Report, the following abbreviations and terms have the meanings as listed below. Additionally, the terms “we,” “our,” “MIG IV,” the “Partnership” and “us” refer collectively to AmREIT Monthly Income & Growth Fund IV, L.P. and its subsidiaries, including joint ventures, unless the context clearly indicates otherwise.

ABBREVIATION		DEFINITION
AmREIT		AmREIT, Inc., a Maryland corporation and parent of our General Partner.
ARIC		AmREIT Realty Investment Corporation and its consolidated subsidiaries, a wholly-owned taxable REIT subsidiary of AmREIT.
CEO		Chief Executive Officer.
CFO		Chief Financial Officer.
Exchange Act		Securities Exchange Act of 1934, as amended.
GAAP		U.S. generally accepted accounting principles.
General Partner		AmREIT Monthly Income & Growth IV Corporation, a wholly-owned subsidiary of AmREIT.
GLA		Gross leasable area.
LIBOR		London interbank offered rate.
Limited Partners		Owners / holders of our Units.
MIG III		AmREIT Monthly Income & Growth Fund III, Ltd., an affiliated entity.
NYSE		New York Stock Exchange.
Offering		Both the issuance and sale of our initial 40 Units pursuant to the terms of a private placement memorandum dated November 15, 2006, and the subsequent sale of Units through March 31, 2008 (a total of 1,991 Units).
Partners		Collectively our General Partner and Limited Partners.
REIT		Real Estate Investment Trust.
SEC		Securities and Exchange Commission.
Securities Act		Securities Act of 1933, as amended.
Units		Limited partnership units sold in our Offering.
Quarterly Report		Quarterly Report on Form 10-Q filed with the SEC for the three and ~~six~~nine months ended ~~June~~September 30, 2013.

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except Unit data)

	June 30, 2013			December 31, 2012
	September 30, 2013			December 31, 2012
	(unaudited)
ASSETS
Real estate investments at cost:
Land	$	7,~~529~~561		$	12,613
Buildings		12,~~923~~924			14,483
Tenant improvements		~~335~~345			4,678
		20,787			31,774
		20,830			31,774
Less accumulated depreciation and amortization		(2,~~598~~694	)		(2,408	)
		18,189			29,366
		18,136			29,366
Real estate held for sale, net		11,814			—
Investment in non-consolidated entities		7,166			9,222
Investment in non-consolidated entities		9,022			9,222
Acquired lease intangibles, net		24			35
Acquired lease intangibles, net		28			35
Net real estate investments		25,326			38,623
Net real estate investments		39,053			38,623
Cash and cash equivalents		5,495			129
Cash and cash equivalents		406			129
Tenant and accounts receivables, net		93			295
Tenant and accounts receivables, net		614			295
Accounts receivable - related party		304			75
Accounts receivable - related party		279			75
Notes receivable, net		8			—
Notes receivable, net		47			—
Deferred costs, net		53			576
Deferred costs, net		147			576
Other assets		291			138
Other assets		281			138
TOTAL ASSETS	$	31,570		$	39,836
TOTAL ASSETS	$	40,827		$	39,836
LIABILITIES AND CAPITAL
Liabilities:
Notes payable	$	5,~~843~~820		$	12,140
Notes payable, held for sale		6,688			—
Notes payable - related party		2,907			3,658
Notes payable - related party		4,791			3,658
Accounts payable and other liabilities		447			459
Accounts payable and other liabilities		578			459
Accounts payable - related party		301			405
Accounts payable - related party		295			405
Acquired below-market lease intangibles, net		4			6
Acquired below-market lease intangibles, net		5			6
Security deposits		43			41
Security deposits		48			41
TOTAL LIABILITIES		9,522			16,709
TOTAL LIABILITIES		18,248			16,709
Capital:
Partners’ capital:
General partner		—			—
Limited partners, 1,988 Units outstanding at June 30, 2013 and December 31, 2012, respectively		15,664			16,333
Limited partners, 1,988 Units outstanding at
TOTAL PARTNERS’ CAPITAL		15,664			16,333
September 30, 2013 and December 31, 2012		15,987			16,333
Non-controlling interests		6,915			6,794
TOTAL PARTNERS’ CAPITAL		15,987			16,333
TOTAL CAPITAL		22,579			23,127
Non-controlling interests		6,061			6,794
TOTAL LIABILITIES AND CAPITAL	$	40,827		$	39,836
TOTAL CAPITAL		22,048			23,127
TOTAL LIABILITIES AND CAPITAL	$	31,570		$	39,836

See Notes to Consolidated Financial Statements.

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AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per Unit data)
(unaudited)

	Three months ended June 30,						Six months ended June 30,
	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Revenues:
Rental income from operating leases	$	~~244~~265		$	~~244~~255		$	~~496~~761		$	~~562~~817
Total revenues		~~244~~265			~~244~~255			~~496~~761			~~562~~817
Expenses:
General and administrative		1530			2427			3767			4168
General and administrative - related party		6975			6678			~~133~~208			~~135~~213
Asset management fees - related party		3938			3938			77115			77115
Property expense		76158			84139			~~191~~349			~~250~~389
Property management fees - related party		12			1112			2335			2234
Legal and professional		5942			5744			~~116~~158			~~154~~198
Depreciation and amortization		~~130~~147			128			~~259~~406			~~259~~387
Total operating expenses		~~400~~502			~~409~~466			~~836~~1,338			~~938~~1,404
Operating loss		(~~156~~237	)		(~~165~~211	)		(~~340~~577	)		(~~376~~587	)
Other income (expense):
Interest and other income		111			—			112			—
Interest expense		(~~117~~115	)		(~~120~~127	)		(~~229~~344	)		(~~232~~358	)
Equity in losses from non-consolidated entities		(115	)		(314	)		(315	)		(552	)
Income (loss) from non-consolidated entities		1,565			(324	)		1,250			(876	)
Total other income (expense)		(231	)		(434	)		(543	)		(784	)
Margin tax benefit (expense)		6			—			6			—
Loss before discontinued operations		(387	)		(599	)		(883	)		(1,160	)
Total other income (expense)		1,467			(451	)		924			(1,234	)
Income (loss) from discontinued operations:
Income (loss) from continuing operations		1,230			(662	)		347			(1,821	)
Income (loss) from real estate operations		164			(5	)		189			(17	)
Loss from discontinued operations:
Income (loss) from discontinued operations		164			(5	)		189			(17	)
Income (loss) from real estate operations		170			(8	)		359			(25	)
Net loss, including non-controlling interests		(223	)		(604	)		(694	)		(1,177	)
Loss on sale of real estate		(576	)		—			(576	)		—
Net (income) loss attributable to non-controlling interests		(27	)		46			25			89
Loss from discontinued operations		(406	)		(8	)		(217	)		(25	)
Net loss attributable to partners	$	(250	)	$	(558	)	$	(669	)	$	(1,088	)
Net income (loss), including non-controlling interests		824			(670	)		130			(1,846	)
Net loss per Unit
Net (income) loss attributable to non-controlling interests		(501	)		42			(476	)		131
Loss before discontinued operations	$	(194.67	)	$	(301.31	)	$	(444.16	)	$	(583.50	)
Net income (loss) attributable to partners	$	323		$	(628	)	$	(346	)	$	(1,715	)
Income from discontinued operations		82.49			(2.52	)		95.07			(8.55	)
Income attributable to non-controlling interests		(13.58	)		23.14			12.58			44.77
Net loss	$	(125.75	)	$	(280.68	)	$	(336.52	)	$	(547.28	)
Weighted average Units outstanding		1,988			1,988			1,988			1,988
Net loss per Unit
Income (loss) from continuing operations	$	618.71		$	(333.00	)	$	174.55		$	(916.00	)
Loss from discontinued opertations	$	(204.23	)	$	(4.02	)	$	(109.15	)	$	(12.58	)
(Income) loss attributable to non-controlling interests	$	(252.01	)	$	21.13		$	(239.44	)	$	65.90
Net income (loss) attributable to partners	$	162.47		$	(315.90	)	$	(174.04	)	$	(862.68	)

See Notes to Consolidated Financial Statements.

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AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CAPITAL For the ~~six~~ nine months ended ~~June~~September 30, 2013 (in thousands) (unaudited)

	Partners’ Capital
	General Partner		Limited Partners			Non-Controlling Interests			Total
Balance at December 31, 2012	$	—	$	16,333		$	6,794		$	23,127
Net loss attributable to partners (1)		—		(669	)		(25	)		(694	)
Net income (loss) attributable to partners (1)		—		(346	)		476			130
Contributions from non-controlling interests		—		—			146			146
Balance at June 30, 2013	$	—	$	15,664		$	6,915		$	22,579
Distributions to non-controlling interests		—		—			(1,355	)		(1,355	)
Balance at September 30, 2013	$	—	$	15,987		$	6,061		$	22,048

(1) The allocation of net ~~loss~~income includes a curative allocation to increase the General Partner’s capital account by $73 for the period. The cumulative curative allocation since inception of the Partnership is $~~279~~276. The Partnership Agreement provides that no Partner shall be required to fund a deficit balance in their capital account.

See Notes to Consolidated Financial Statements.

Table of Contents

AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	Six months ended June 30,
	Nine months ended September 30,
	2013			2012
Cash flows from operating activities:
Net loss, including non-controlling interests	$	(694	)	$	(1,177	)
Net income (loss), including non-controlling interests	$	130		$	(1,846	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Bad debt (recovery) expense		(23	)		13
Loss on sale of property		576			—
Loss from non-consolidated entities		315			552
Bad debt expense		16			30
Depreciation and amortization		361			267
Loss (income) from non-consolidated entities		(1,250	)		876
Decrease (increase) in tenant and accounts receivable		(351	)		112
Depreciation and amortization		508			400
Increase in accounts receivable - related party		(224	)		(85	)
Decrease (increase) in tenant and accounts receivable		(342	)		92
Increase in other assets		(143	)		(112	)
(Increase) decrease in accounts receivable - related party		(92	)		(85	)
Decrease in accounts payable and other liabilities		(5	)		(338	)
(Increase) decrease in other assets		(153	)		(123	)
Increase in accounts payable - related party		162			416
Increase (decrease) in accounts payable and other liabilities		38			(309	)
Increase in security deposits		7			—
Increase in accounts payable - related party		171			583
Net cash used in operating activities		(595	)		(352	)
Increase (decrease) in security deposits		2			(2	)
Net cash used in operating activities		(396	)		(384	)
Cash flows from investing activities:
Improvements to real estate		(~~511~~558	)		(13,~~141~~785	)
Payments received on notes receivable		814			—
Investment in non-consolidated entities		(240	)		(~~893~~938	)
Distributions from non-consolidated entities		~~146~~3,573			7594
Net proceeds applied to land basis		72			72
Net proceeds from sale of interest in an investment property		11,584			—
Net cash used in investing activities		(525	)		(1,887	)
Net proceeds applied to land basis		108			108
Net cash provided by (used in) investing activities		14,481			(4,521	)
Cash flows from financing activities:
Proceeds from notes payable		460			13,~~344~~694
Payments on notes payable		(696,780	)		(4467	)
Proceeds from notes payable - related party		860			~~756~~892
Distributions from non-consolidated entities		146			97
Payments on notes payable - related party		(2,050	)		—
Net cash provided by financing activities		1,397			2,153
Contributions from non-controlling interests		146			97
Net increase (decrease) in cash and cash equivalents		277			(86	)
Distributions to non-controlling interests		(1,355	)		—
Net cash provided by (used) in financing activities		(8,719	)		4,616
Net increase (decrease) in cash and cash equivalents		5,366			(289	)
Cash and cash equivalents, beginning of period		129			422
Cash and cash equivalents, end of period	$	~~406~~5,495		$	~~336~~133
Supplemental schedule of cash flow information:
Cash paid during the period for:
Interest	$	~~270~~415		$	~~167~~251
Taxes	$	6		$	—6
Supplemental schedule of noncash investing and financing activities:
Capitalization of accrued property taxes into the basis of our land at Woodlake Pointe	$	~~124~~192		$	96144
Reclassification from accounts payable - related party to notes payable - related party	$	~~273~~439		$	~~269~~580
Reclassification from accounts receivable to notes receivable	$	55137		$	—
Construction fees included in accounts payable	$	2127		$	~~149~~95

See Notes to Consolidated Financial Statements.

Table of Contents

AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ~~June~~September 30, 2013 (unaudited)


1.	DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

General

We are a Delaware limited partnership formed on October 10, 2006, to acquire, develop and operate, directly or indirectly through joint venture arrangements, a portfolio of commercial real estate consisting primarily of multi-tenant shopping centers and mixed-use developments. Our General Partner is a ~~subsidiary~~ subsidiary of AmREIT, an SEC reporting, Maryland corporation that is publicly traded on the NYSE and that has elected to be taxed as a REIT. As of ~~June~~ September 30, 2013, our investments included a wholly-owned property comprised of approximately 36,~~000~~ 306 square feet of GLA, a property in which we own a controlling interest comprised of approximately ~~127~~82,~~000~~120 square feet of GLA and three ~~four~~ properties in which we own a non-controlling interest through joint ventures comprised of approximately ~~1.1~~ ~~million~~938,000 square feet of GLA.

Our operating period will continue until November 15, 2013 (our scheduled liquidation commencement date); however, the operating period may be extended to November 15, 2015 with the consent of holders of the majority of Units held by our Limited Partners. Once the liquidation period commences, anwe will not invest in any new real estate without approval of our limited partners. An orderly liquidation of all of our properties ~~will~~and wind-down of our operations will likely take years for our General Partner to complete. ~~and~~Because ~~wind~~liquidation upwas ~~our~~not ~~operations~~imminent as of September 30, 2013, the financial statements are presented assuming we continue as a going concern.

Economic Conditions and Liquidity

Over the past several years, our results of operations and valuations of our real estate assets have been negatively impacted by overall economic conditions. ~~The United~~from ~~States~~the ~~economy~~recent, ~~has~~severe ~~experienced~~recession. Most ~~recent~~of ~~improvements~~our inretail ~~the~~properties ~~general economy,~~were ~~but~~purchased ~~general~~prior ~~concerns~~to ~~from~~2008 ~~the~~when ~~recent,~~retail ~~severe~~real ~~recession~~estate ~~remain.~~market ~~Concerns include,~~prices ~~but~~were ~~are~~much ~~not~~higher, ~~limited~~and toour ~~the~~property valuations ~~potential~~were ~~future~~negatively ~~increase~~impacted inby ~~interest~~these ~~rates as~~market ~~well~~dynamics. asThe ~~the~~United ~~availability~~States ~~and~~has ~~cost~~experienced ofrecent ~~capital~~improvements asin the general economy; ~~improves. Additionally~~however, ~~there~~ ishigh ~~remaining~~levels ~~uncertainty~~of ~~whether~~unemployment ~~the~~have ~~United~~persisted, ~~States~~and ~~economy~~rental ~~will~~rates ~~be adversely~~and ~~affected~~valuations byfor ~~inflation,~~retail ~~deflation~~space orhave ~~stagflation,~~not fully recovered to pre-recession levels and ~~the~~may ~~systemic impact~~not offor ~~periods~~a number of ~~high~~years. ~~unemployment~~As a result, ~~volatile~~we ~~energy~~have ~~costs,~~faced ~~geopolitical~~significant liquidity challenges over the ~~issues,~~last ~~which~~several years. However, we have ~~contributed~~been tosuccessful ~~increased~~in ~~market~~meeting ~~volatility~~our ~~and~~historic ~~weakened business~~cash ~~and~~shortfalls ~~consumer~~through ~~confidence.~~(1) ~~High~~managing ~~levels~~the timing of ~~unemployment~~forecasted capital ~~have~~expenditures ~~persisted, and~~related ~~rental~~to ~~rates~~the ~~and~~lease-up ~~valuations~~of ~~for~~properties, ~~retail~~(2) ~~space~~managing ~~have~~the ~~not~~timing ~~fully~~of ~~recovered~~operating expense payments and, to the extent ~~pre-recession~~possible, ~~levels~~accelerating ~~and~~cash ~~may~~collections, ~~not~~(3) ~~for~~deferring athe ~~number~~payment of ~~years.~~fees ~~Most~~owed ofto our ~~retail properties~~General ~~were~~Partner ~~purchased~~and ~~prior~~its toaffiliates, ~~2008~~(4) selling ~~when~~certain ~~retail~~of ~~real~~our ~~estate~~properties ~~market~~and ~~prices were~~investments ~~much~~in ~~higher,~~non-consolidated ~~and~~entities ~~our~~(see ~~property~~Notes ~~valuations~~3 ~~have~~and ~~been~~4) ~~negatively~~and/or ~~impacted~~(5) byobtaining funds through ~~these~~additional ~~market~~borrowings ~~dynamics~~from AmREIT.

~~We face~~As ~~significant~~of ~~liquidity~~September ~~challenges~~30, in2013, ~~implementing~~we ~~our~~have ~~investment strategy~~$5. ~~Projected~~5 ~~cash~~million ~~sources, including~~ in cash on hand, and ~~uses~~our ~~indicate~~liquidity ~~periods~~has ~~of cash~~improved ~~shortfalls~~due ~~during the year ended December 31, 2013. Further, we borrowed an additional $860,000 from AmREIT during the first quarter of 2013, primarily~~ to ~~fund~~ the ~~payment~~sale of ~~property~~Woodlake ~~taxes~~Square and ~~to fund tenant improvements and leasing commissions for~~ our ~~lease-up~~Woodlake ~~strategy~~Pointe atjoint ~~Casa Linda. However, we~~venture’s ~~believe~~sale ~~that we will be able to generate sufficient liquidity to satisfy any cash shortfalls through (1) managing the timing~~ of ~~forecasted~~a ~~capital~~portion ~~expenditures related to the lease-up~~ of ~~properties,~~its ~~(2)~~Woodlake ~~managing~~Pointe ~~the~~property. ~~timing~~During ~~of operating expense payments and~~2013, towe ~~the~~have ~~extent~~repaid ~~possible,~~approximately ~~accelerating cash collections, (3) obtaining funds through additional borrowings from our General Partner, (~~$4~~) deferring~~.0 ~~the~~million ~~payment~~ of ~~fees owed to~~ our ~~General Partner and its affiliates,~~notes ~~and/or~~payable ~~(5)~~–related ~~selling~~party ~~certain of our investments,~~ (including ~~our anticipated sale of Woodlake Square and~~ a ~~single~~payment ~~tenant~~made ~~building~~October ~~and~~1, ~~portion of land at our Woodlake Pointe property~~2013). ~~See also Note 3.~~

We expect to fund approximately $1.5 million in capital expenditures over the next two years at our Casa Linda property, (a 50% joint venture between us and MIG III,) representing our 50% share of a lease-up strategy at this property. The ~~lease-up~~ ~~strategy includes certain tenant build-out and site improvements. The~~ $38.0 million mortgage ~~loan~~ on the property matures in January 2014.We ~~The~~have ~~joint~~engaged a mortgage broker to ~~venture~~assist ~~will~~us ~~likely~~with ~~require~~refinancing this loan and have recently selected a ~~one-year~~lender ~~extension~~based upon ofpreliminary ~~the~~terms for a non-recourse loan towith ~~complete~~an ~~this~~initial funding of $38.0 ~~strategy~~million and ~~then~~a ~~refinance~~future funding of approximately $4.5 million for the ~~property~~potential acquisition onof aan ~~long-term~~adjacent ~~basis~~property. WeThe ~~believe~~proposed ~~we will~~terms beof ~~successful~~the inloan ~~obtaining~~are a term of four years with a one-year extension, ~~based~~interest onat ~~our~~the ~~preliminary~~3-Month LIBOR plus a spread of 3.50% ~~discussions~~and ~~with~~interest-only ~~the~~payments ~~lending~~for ~~agent;~~the ~~however,~~first notwo ~~assurances~~years ~~can~~with bemonthly ~~given~~payments ~~that~~of weinterest ~~will~~and beprincipal ~~successful.~~based Weupon doa ~~not~~30-year ~~guarantee~~amortization ~~this~~thereafter, ~~debt~~with ~~and~~the ~~our~~balance ~~risk~~due upon ofmaturity. ~~loss~~We ~~is limited~~expect the joint venture to ~~our~~close ~~ownership~~on ~~interest~~the inloan during the fourth ~~property~~quarter of 2013.

Table of Contents

On ~~April~~September 530, 2013, our Woodlake Pointe joint venture ~~entered~~sold ~~into~~ a ~~sales agreement to sell a~~ portion of the land and a single tenant building at our Woodlake Pointe property for $12.0 million to an unrelated third party. The ~~land~~sale ~~and building~~resulted ~~are~~in ~~secured~~net byproceeds aof $64.7 9 million ~~loan~~after ~~that~~payoff ~~will~~of bea ~~repaid in full with proceeds from the sale~~$6.6 ~~The~~million ~~sale~~mortgage ~~is expected to close in the third quarter of 2013,~~ and weother ~~estimate~~closing ~~that~~costs. ~~our~~ Our portion of the net cash proceeds, which iswas 60%, ~~would~~ bewas ~~approximately~~ $3.10 million. We plan to use the proceeds to fund the Casa Linda lease-up strategy, pay down a portion of our note payable to AmREIT and for working capital needs. We recorded a loss on sale of $576,000 primarily related to bad debt expense associated with the write-off of accrued rent.

On ~~July~~September 1518, 2013, VIF II/AmREIT Woodlake, LP (“Woodlake LP”), ~~which~~sold ~~owns~~ Woodlake Square, a grocery-anchored, multi-tenant retail shopping center, ~~entered into a purchase and sale agreement~~ to ~~sell Woodlake Square to~~ AmREIT for $41.6 million. We ~~expect~~received ~~to receive~~ approximately $2.30 million representing our proportional share, which is 6%, of the net proceeds. ~~The~~once ~~sale~~the ~~is expected to~~final ~~close~~distribution inis ~~the third quarter of 2013~~made.

There is no guarantee that we and our joint ventures will be successful with ~~all of~~ the above liquidity initiatives, and we may continue to look to AmREIT to provide additional financial support to us to meet our operating cash needs. We ~~AmREIT~~can ~~has~~provide ~~agreed~~no toassurance ~~continue~~that toAmREIT ~~provide~~will ~~financial~~be ~~support~~able to usprovide ~~through~~additional ~~and~~support, ~~including~~if ~~the~~needed. ~~next~~Historically, ~~twelve~~AmREIT ~~months~~has indeferred ~~the~~payment ~~form~~ of ~~continued deferral of payment of~~ advisory fees earned ~~and payable~~ to the extent such ~~deferral~~deferrals of fees is were necessary for our continued operation. Such fees ~~may~~included ~~include~~ property ~~management~~ ~~fees~~management, asset management ~~fees~~, development fees ~~and reimbursement of certain of AmREIT’s general and administrative costs. However~~, ~~we expect that~~ ~~sales~~interest ofexpense ~~the~~on ~~single~~amounts ~~tenant~~owed ~~building~~to atAmREIT ~~our Woodlake Pointe property~~ and ~~the sale~~reimbursements of ~~the~~certain ~~Woodlake Square shopping center during the third quarter~~ of ~~2013~~ ~~will~~AmREIT’s ~~provide~~general usand ~~with~~administrative ~~approximately $5~~costs.4 ~~million in net proceeds~~Additionally, which we believe will be sufficient to allow us to execute our strategy in the short term. In the event we are able to generate sufficient cash flows in the near term, we may elect to repay portions of the notes payable – related party; however, AmREIT has agreed that it will not require us to repay the ~~$4.8 million~~remaining balance of our notes payable – related party to it until a date subsequent to January 1, 2014 if such repayment were to prevent the execution of our strategy or present an an unnecessary financial hardship to us. AmREIT’s agreement to provide such financial support and defer payment is limited to its continued ability to do so.

Strategic Plan

We have created a strategic plan to maximize value prior to and during our upcoming liquidation period. The components of our strategic plan are as follows:

	•	Complete our development and redevelopment projects with a goal to stabilize these projects during 2013. We believe that completing our development and redevelopment projects including their lease-up and stabilization will allow us to maximize the return on these properties upon sale. Our investments in Cambridge & Holcombe, Woodlake Pointe and Woodlake Square represent our assets currently under development/redevelopment. See Note 4 for further discussion of redevelopment plans at each of these properties.
	•	Continue to operate our projects in a first-class manner with a goal to generate operating cash flow in order to re-commence distributions in 2014. We believe that the stabilization of our development and redevelopment properties, coupled with the continued and intense oversight of our operating properties, will generate liquidity that could allow us to re-commence distributions to our Limited Partners; however, we expect this will most likely occur during the liquidation phase. As we begin to sell our real estate assets, if the real estate market has not sufficiently recovered prior to our liquidation commencement date of November 15, 2013, and our General Partner believes that extending the operating period would be in the best interest of our Limited Partners, we may seek approval from the Limited Partners to postpone the liquidation commencement date.


	•	Complete our development and redevelopment projects with a goal to stabilize these projects over the next 6-12 months. We believe that completing our development and redevelopment projects including their lease-up and stabilization will allow us to maximize the return on these properties upon sale. Our investment in Cambridge & Holcombe represents our only investment property currently under development/redevelopment. See Note 4 for further discussion of the redevelopment plans at this property.

	•	Continue to operate our projects in a first-class manner with a goal to generate operating cash flow in order to re-commence distributions. We believe that the stabilization of our development and redevelopment properties, coupled with the continued and intense oversight of our operating properties, will generate liquidity that could allow us to re-commence distributions to our Limited Partners; however, we expect this will most likely occur during the liquidation phase. Once we begin our liquidation period, an orderly liquidation of our assets and wind-down of our operations will likely take several years for our General Partner to complete.

	•	Sell our properties opportunistically as the market continues to recover. Our recent sales by our joint venture of Woodlake Square and the portion of land and single tenant building at Woodlake Pointe are recent examples of our execution of this strategy. However, once a property is marketed for sale, it may take several months to receive offers and complete due diligence by both parties. Our General Partner will in good faith begin to review market sales opportunities for our operating properties at the conclusion of our operating period, but retail property valuations may continue to be challenged, and, accordingly, attractive sales opportunities may not exist in the near term. When deciding whether or when to sell properties, our General Partner will consider factors such as potential appreciation of value, and timing of cash flows. During the liquidation period, we will be distributing net proceeds generated from property sales to our Limited Partners unless the General Partner has identified attractive acquisition opportunities and obtained a majority vote of the Limited Partners to re-invest such proceeds.

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• Sell our properties opportunistically, likely beginning in 2014, as the market continues to recover. Once a property is marketed for sale, it may take several months to receive offers and complete due diligence by both parties. Our General Partner will in good faith begin to review market sales opportunities for our operating properties at the conclusion of our operating period, but retail property valuations may continue to be challenged, and, accordingly, attractive sales opportunities may not exist in the near term. When deciding whether or when to sell properties, our General Partner will consider factors such as potential appreciation of value, and timing of cash flows. During the liquidation period, we will be distributing net proceeds generated from property sales to our Limited Partners unless the General Partner has identified attractive acquisition opportunities and obtained a majority vote of the Limited Partners to re-invest such proceeds.

Although we believe that our strategic plan maximizes the value of our properties and is in the best interest of our Limited Partners, no assurances can be given that this strategy will be successful, and it is possible that investors may not recover all of their original investment.

The above steps may not be sufficient, and we could incur individual setbacks and possibly significant losses. Additional deterioration in the United States economy or the bankruptcy or insolvency of one or more of our significant tenants could cause our current plans to meet our projected cash shortfalls to be insufficient. Even with the above strategic plan and liquidity initiatives, we still may incur cash shortfalls if we are required to perform under certain guarantees (see Note 45) of our joint ventures or are unable to refinance certain debt as it comes due, which could result in lender repossession of one or more properties owned by us and/or our joint ventures or be forced to sell one or more properties at a time when it is disadvantageous to do so, potentially resulting in losses on the disposition of those properties.


2.	BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Our financial records are maintained on the accrual basis of accounting whereby revenues are recognized when earned and expenses are recorded when incurred. The consolidated financial statements include our accounts as well as the accounts of any wholly- or majority-owned subsidiaries in which we have a controlling financial interest. Investments in joint ventures and partnerships in which we have the ability to exercise significant influence but do not exercise financial and operating control are accounted for using the equity method (see Note 4). The significant accounting policies of our non-consolidated entities are consistent with those of our subsidiaries in which we have a controlling financial interest. As of ~~June~~September 30, 2013, we do not have any interests in variable interest entities. All significant inter-company ~~accounts~~ accounts and transactions have been eliminated in consolidation.

The consolidated financial statements included in this Quarterly Report have been prepared pursuant to the rules and regulations of the SEC and are unaudited. In our opinion, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted of normal recurring items. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from these statements pursuant to the SEC rules and regulations and, accordingly, these financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012.

Reclassifications

WeCertain ~~reclassified~~immaterial ~~$5,000~~reclassfications ~~and $3,000~~ from ~~state~~have ~~income~~been ~~tax~~made to ~~property~~our ~~expense on~~ our Consolidated ~~consolidated~~Statements ~~statements~~ of ~~operations~~Operations for the three and ~~six~~nine months ended ~~June~~ September 30, 2012~~, respectively~~ to conform to current period presentation. The items had no impact on previously reported net income (loss), our Consolidated Balance Sheet or Consolidated Statement of Cash Flow. See also Note 3 for a discussion of our presentation of discontinued operations.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Cash and Cash Equivalents

We consider all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of demand deposits at commercial banks and money market funds.

Revenue Recognition

Rental income from operating leases – We lease space to tenants under agreements with varying terms. Our leases are accounted for as operating leases, and, although certain leases of the properties provide for tenant occupancy during periods for which no rent is due and/or for changes in the minimum lease payments over the terms of the leases, revenue is recognized on a straight-line basis over the terms of the individual leases. Revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, possession or control occurs on the lease commencement date. In cases where significant tenant improvements are made prior to lease commencement, the leased asset is considered to be the finished space, and revenue recognition therefore begins when the improvements are substantially complete. Revenue from tenant reimbursements of taxes, maintenance expenses and insurance is recognized in the period the related expense is recorded. Additionally, certain of our lease agreements contain provisions that grant additional rents based upon tenants’ sales volumes (contingent or percentage rent). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Accrued rents are included in tenant and accounts receivable, net.

Receivables and Allowance for Uncollectible Accounts

Tenant and Accounts Receivable, net - Included in tenant and accounts receivable are base rents, tenant reimbursements and ~~adjustments~~ adjustments related to recording rents on a straight-line basis. An allowance for the uncollectible portion of accrued rents and accounts receivable is ~~determined~~ determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. Bad debt expenses and any related recoveries related to tenant receivables are included in property expense. As of ~~June~~September 30, 2013, and December 31, 2012, our allowance for uncollectible accounts related to our tenant receivables was $1011,000 and $32,000, respectively.

Accounts Receivable - Related Party - Included in accounts receivable - related party are short-term cash advances provided to certain of our affiliated investment entities primarily for their working capital needs. These cash advances are due upon demand.

Real Estate Held for Sale

Properties are classified as held for sale if management has decided to market the property for immediate sale in its present condition with the belief that the sale will be completed within one year. Depreciation and amortization are suspended during the held for sale period. On April 5, 2013, our Woodlake Pointe joint venture entered a sales agreement to sell a portion of the land and a single tenant building at our Woodlake Pointe property for $12.0 million to an unrelated third party. The land and building are secured by a $6.7 million loan that will be repaid in full with proceeds from the sale. The sale is expected to close in the third quarter of 2013, subject to customary closing conditions, and our portion of the net cash proceeds, which is 60%, is expected to be approximately $3.1 million.

Our properties generally have operations and cash flows that can be clearly distinguished from the rest of our operations. The operations and gains on sales reported in discontinued operations include those properties that have been sold or are held for sale and for which operations and cash flows have been clearly distinguished. The operations of these properties have been eliminated from ongoing operations, and we will not have continuing involvement after disposition. Prior period operating activity related to such properties has been reclassified as discontinued operations in the accompanying statements of operations.

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Development Properties

Expenditures related to the development of real estate are capitalized as part of construction in progress, which includes carrying charges, primarily interest, real estate taxes and loan acquisition costs, and direct and indirect development costs related to buildings under construction. The capitalization of such costs ceases at the earlier of one year from the date of completion of major construction or when the property, or any completed portion, becomes available for occupancy. We capitalize costs associated with pending acquisitions of raw land as incurred and expense such costs if and when the acquisition of the property becomes no longer probable. During the ~~six~~nine months ended ~~June~~September 30, 2013 and 2012, we capitalized interest and property taxes in the amount of $~~124~~192,000 and $96172,000, respectively.

Depreciation

Depreciation is computed using the straight-line method over an estimated useful life of up to 39 years for buildings, up to 11 years for site improvements and over the term of the lease for tenant improvements. We re-evaluate the useful lives of our buildings and improvements as warranted by changing conditions at our properties. As part of this re-evaluation, we may also consider whether such changing conditions indicate a potential impairment, and we perform an impairment analysis, as necessary, at the property level. In the case of a property redevelopment, we reassess the useful lives of specific buildings or other improvements to be demolished as part of that redevelopment once the redevelopment is probable of occurring.

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Impairment

We review our properties for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets, including acquired lease intangibles and accrued rental income, may not be recoverable through operations. We determine whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the residual value of the property, with the carrying value of the individual property. If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its fair value. Both the estimated undiscounted cash flow analysis and fair value determination are based upon various factors that require complex and subjective judgments to be made by management. Such assumptions include projecting lease-up periods, holding periods, cap rates, rental rates, operating expenses, lease terms, ~~tenant~~ tenant creditworthiness, tenant improvement allowances, terminal sales value ~~and~~ and certain macroeconomic factors among other assumptions to be made for each property. For our multi-building retail centers, we consider the entire retail center as the asset group for purposes of our impairment analysis. We review our investments in non-consolidated entities for impairment based on a similar review of the properties held by the investee entity. No impairment charges were recognized during the ~~six~~nine months ended ~~June~~September 30, 2013 and 2012.

Fair Value Measurements

GAAP emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. GAAP requires the use of observable market data, when available, in making fair value measurements. Observable inputs are inputs that the market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of ours. When market data inputs are unobservable, we utilize inputs that we believe reflect our best estimate of the assumptions market participants would use in pricing the asset or liability. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs that are classified within Level 3 of the hierarchy). The three levels of inputs used to measure fair value are as follows:

	•	Level 1 Inputs – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Partnership has the ability to access.
	•	Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.


	•	Level 1 Inputs – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Partnership has the ability to access.

	•	Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

	•	Level 3 Inputs – Unobservable inputs for the asset or liability, which are typically based on the Partnership’s own assumptions, as there is little, if any, related market activity.

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• Level 3 Inputs – Unobservable inputs for the asset or liability, which are typically based on the Partnership’s own assumptions, as there is little, if any, related market activity.

Recurring Fair Value Measurements and Financial Instruments – Our consolidated financial instruments consist of cash and cash equivalents, tenant and accounts receivable, accounts receivable – related party, notes payable, notes payable – related party, accounts payable – related party, and accounts payable and other liabilities. The carrying values of all of the financial instruments, except for our notes payable are representative of the fair values due to the short-term nature of the instruments. See Note 5 for fair value disclosures of our notes payable.

Subsequent Events

On ~~July~~October 151, 2013, ~~AmREIT~~we ~~Woodlake,~~repaid ~~LP (“Woodlake LP”), which owns Woodlake Square, a grocery-anchored, multi-tenant retail entered into a purchase and sale agreement with AmREIT to sell Woodlake Square for a purchase price of~~ $411.~~6 million.~~9 ~~We expect to receive approximately $2.3~~ million ~~representing~~ ~~our~~on ~~proportional share of~~ the ~~net~~note ~~proceeds~~payable ~~(see~~– ~~Note~~related ~~4).~~party ~~The sale is expected~~ to ~~close in the third quarter of 2013~~ AmREIT.

Except as disclosed above, we did not have any additional material subsequent events as of the date of this filing that impacted our consolidated financial statements.

~~3. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS~~9

On April 5, 2013, our Woodlake Pointe joint venture entered a sales agreement to sell a portion of the land and a single tenant building at our Woodlake Pointe property for $12.0 million to an unrelated third party. The land and building are secured by a $6.7 million loan that will be repaid in full with proceeds from the sale. The sale is expected to close in the third quarter of 2013, subject to customary closing conditions, and our portion of the net cash proceeds, which is 60%, is expected to be approximately $3.1 million. We plan to use the expected proceeds from the sale to fund the Casa Linda lease-up strategy (see Note 4) and for working capital needs.

We have presented the land and single tenant building with a carrying value of $11.8 million and related notes payable of $6.7 separately as assets held for sale and liabilities held for sale, respectively at June 30, 2013. Additionally, we have presented the operating results of these assets held for sale as discontinued operations in the accompanying consolidated statements of operations for all periods presented.

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~~A summary~~3. ofASSET ~~our~~DISPOSITIONS ~~discontinued~~AND ~~operations~~DISCONTINUED ~~for the periods presented is detailed below:~~OPERATIONS

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012(1)			2013			2012(1)
Revenues:
Rental income from operating leases	$	333		$	—		$	619		$	—
Total revenues		333			—			619			—
Expenses:
Property expense		95			1			188			1
Legal and professional		16			—			26			7
Depreciation and amortization		—			—			94			—
Total operating expenses		111			1			308			8
Operating income		222			(1	)		311			(8	)
Other expense:
Interest expense		(58	)		(4	)		(122	)		(9	)
Total other expense		(58	)		(4	)		(122	)		(9	)
Income (loss) from discontinued operations	$	164		$	(5	)	$	189		$	(17	)

On September 30, 2013, our Woodlake Pointe joint venture sold a portion of the Woodlake Pointe property consisting of land and a building for $12.0 million to an unrelated third party. The sale resulted in net proceeds of $4.9 million after payoff of a $6.6 million mortgage and other closing costs. Our 60% portion of the net cash proceeds was $3.0 million. We plan to use the proceeds to fund the Casa Linda lease-up strategy, pay down a portion of our note payable to AmREIT and for working capital needs.

~~(1)~~ We have ~~Tenant~~presented ~~building~~the ~~and~~operating ~~land~~results ~~were~~of ~~under~~this ~~development~~property ~~during~~as discontinued operations in the ~~three~~accompanying ~~and~~consolidated ~~six~~statements ~~months~~of ~~ended~~operations ~~June~~for ~~30,~~all periods ~~2012~~presented. ~~with~~A nosummary ~~significant~~of our discontinued operations. for the periods presented is detailed below:


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues:
Rental income from operating leases	$	263		$	—		$	882		$	—
Total revenues		263			—			882			—

Expenses:
Property expense		2			2			190			3
Legal and professional		30			1			56			8
Depreciation and amortization		—			—			94			—
Total operating expenses		32			3			340			11
Operating income (loss)		231			(3	)		542			(11	)

Other expense:
Interest expense		(61	)		(5	)		(183	)		(14	)
Total other expense		(61	)		(5	)		(183	)		(14	)

Income (loss) from real estate operations		170			(8	)		359			(25	)
Loss on sale of real estate⁽¹⁾		(576	)		—			(576	)		—
Loss from discontinued operations	$	(406	)	$	(8	)	$	(217	)	$	(25	)



	(1)	The loss on sale primarily relates to bad debt expense associated with the write-off of accrued rent.


4.	INVESTMENT IN NON-CONSOLIDATED ENTITIES

WeAs of September 30, 2013, we have investments in ~~four~~three entities that are accounted for using the equity method of accounting due to our ability to exercise significant influence over them. Our investment balances as reported on our consolidated balance sheet are as follows (in thousands):

Investment	~~Ownership~~	Ownership		~~June 30, 2013~~	September 30, 2013		~~December 31, 2012~~	December 31, 2012
Casa Linda		50%	%	$	~~2,439~~$	2,329	$	~~2,707~~$	2,707
Cambridge & Holcombe		50%	%		~~897~~	838		~~675~~	675
Shadow Creek Ranch		10%	%		~~4,055~~	3,999		~~4,214~~	4,214
Woodlake Square		6%	%		~~1,631~~	—		~~1,626~~	1,626
Total				$	~~9,022~~$	7,166	$	~~9,222~~$	9,222

Casa Linda - We own a 50% interest in AmREIT Casa Linda, LP, which owns Casa Linda Plaza, a multi-tenant retail property located in Dallas, Texas with a combined GLA of approximately 325,000 square feet. The remaining 50% is owned by MIG III. The property is secured by a $38.0 million, seven-year mortgage loan that matures January 2014. The loan bears an annual interest rate of 5.48% and is interest-only until maturity. During 2012, we and MIG III initiated a lease-up strategy that includes certain tenant build-out and site improvements. The joint venture will likely require a one-year extension of the loan and then refinance the property on a long-term basis. We believe we will be successful in obtaining a one-year extension based on our preliminary discussions with the lending agent; however, no assurances can be given. We do not guarantee this debt and our risk of loss is limited to our ownership interest in the property. We expect that our portion, which is 50%, of the costs to be incurred as part of the lease-up strategy is approximately $1.5 million. We expect to fund these capital requirements from proceeds received from the sale of a portion of the land and a single tenant building at Woodlake Pointe as further described below.10

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~~Cambridge & Holcombe~~Casa Linda - We own a 50% interest in ~~Cambridge~~AmREIT &Casa ~~Holcombe~~Linda, LP, which owns ~~2.02~~Casa ~~acres of~~Linda ~~raw land that may be developed~~Plaza, ~~sold or contributed to~~ a ~~joint~~multi-tenant ~~venture~~retail ~~in the future. The~~ property is located ~~adjacent~~in toDallas, Texas ~~the~~with ~~Texas~~a ~~Medical~~combined ~~Center~~GLA ~~in Houston~~of approximately 325,000 ~~Texas~~square feet. The remaining 50% is owned by anMIG ~~unaffiliated~~III. ~~third~~The ~~party.~~property ~~In June~~is ~~2011,~~secured ~~the~~by a $838.10 million, seven-year mortgage loan ~~matured~~that ~~unpaid~~matures January 2014. OnThe ~~April~~loan ~~26,~~bears ~~2012,~~an weannual interest rate ~~successfully~~of ~~extended~~5.48% ~~this~~and ~~debt~~is interest-only until ~~March~~maturity. ~~27,~~We ~~2013~~have inengaged ~~exchange~~a ~~for~~mortgage abroker ~~10%~~to ~~principal~~assist ~~reduction~~us onwith ~~the~~refinancing ~~note~~this loan and ~~payment~~have ofrecently ~~accrued~~selected ~~interest.~~a ~~Our~~lender ~~50%~~based upon ~~portion~~preliminary ofterms ~~this~~for ~~payment~~a ~~was~~non-recourse ~~$536,000,~~loan ~~which~~with ~~was~~an ~~funded~~initial ~~through a~~funding ~~loan~~of ~~from AmREIT~~$38.0 million Weand ~~closed on~~ a ~~second~~future ~~extension~~funding of ~~the~~approximately ~~loan~~$4.5 onmillion ~~May~~for ~~17,~~the potential ~~2013.~~acquisition ~~The~~of ~~extended~~an ~~loan~~adjacent ~~matures~~property. inThe ~~March~~proposed ~~2015.~~terms ~~There~~of isthe ~~also~~loan are a ~~joint~~term ~~and several~~of ~~guaranty~~four byyears uswith ~~and~~a one-year ~~our~~extension, ~~joint~~interest ~~venture~~at ~~partner~~the of3-Month upLIBOR toplus ~~60%~~a spread of ~~the loan balance~~3.50% and ~~The~~interest-only ~~joint~~payments ~~venture~~for ~~entered~~the ~~into~~first atwo ~~contract~~years towith ~~sell~~monthly ~~one~~payments ~~acre~~ of ~~the~~interest ~~property~~and toprincipal abased ~~third~~upon ~~party, subject to~~ a ~~due~~30-year ~~diligence~~amortization ~~period~~thereafter, ~~that~~with ~~expired~~the inbalance due ~~December~~upon ~~2012~~maturity. ~~The~~We ~~third~~expect ~~party~~the ~~elected~~joint ~~not~~venture to ~~purchase~~close on the ~~land,~~loan ~~and~~during the ~~contract~~fourth ~~expired~~quarter of 2013. ~~Approximately~~We ~~$325,000~~expect into ~~escrow~~fund ~~deposits~~approximately ~~was~~$1.5 ~~forfeited~~million byin capital expenditures over the ~~third~~next ~~party~~two ~~and~~years ~~recorded~~at asour ~~income,~~Casa ~~which~~Linda ~~will~~property be(a ~~used~~50% tojoint venture ~~fund~~between ~~debt~~us ~~service~~and onMIG ~~the~~III) ~~loan~~representing ~~for~~our ~~the~~50% share of a lease-up ~~next~~strategy ~~several~~at ~~months.~~this property.

Cambridge & Holcombe - We own a 50% interest in Cambridge & Holcombe, LP, which owns 2.02 acres of raw land that may be developed, sold or contributed to a joint venture in the future. The property is located adjacent to the Texas Medical Center in Houston, Texas. The remaining 50% is owned by an unaffiliated third party. In June 2011, the $8.1 million loan matured unpaid. On April 26, 2012, we successfully extended this debt until March 27, 2013 in exchange for a 10% principal reduction on the note and payment of accrued interest, which expired. Our 50% portion of this payment was $536,000, which was funded through a loan from AmREIT. We closed on a second extension of the loan on May 17, 2013. The extended loan matures in March 2015. In connection with this extension, we and our joint venture partner entered into a joint and several guaranty of up to 60% of the loan balance. The joint venture entered into a contract to sell one acre of the property to a third party, subject to a due diligence period that expired in December 2012. The third party elected not to purchase the land, and the contract expired. Approximately $325,000 in escrow deposits was forfeited by the third party, which we used to fund debt service on the loan for the past several months. We are currently marketing the property for sale and have received offers for the purchase of all or a portion of the property.

Shadow Creek Ranch - We own a 10% interest in Shadow Creek Holding Company LLC, which owns Shadow Creek Ranch, a multi-tenant retail property located in Pearland, Texas with a combined GLA of approximately 613,000 square feet. The remaining 90% is owned by an unaffiliated third party (80%) and AmREIT (10%). The property is secured by a loan in the amount of $65.0 million at an annual interest rate of 5.48% until its maturity in March 2015.

Woodlake Square -– WeAs ~~own~~ of December 31, 2012, we owned a 6% interest in Woodlake LP, which ~~owns~~owned Woodlake Square, a grocery-anchored, multi-tenant retail property located at the corner of Westheimer and Gessner in Houston, Texas with a combined GLA of approximately 161,000 square feet. The ~~remaining~~ remaining 94% iswas owned by the third-party institutional partner (90%), ARIC (1%) and by MIG III (3%). ~~Our~~On ~~interest~~September in18, 2013, Woodlake ~~Square~~LP ~~also~~sold ~~carries~~Woodlake ~~a promoted~~Square ~~interest~~to inAmREIT for ~~profits and cash flows once an 11~~$41.~~65%~~6 ~~return~~million isbased ~~met~~ on ~~the project.~~arms-length ~~The~~negotiations ~~joint~~between ~~venture~~AmREIT ~~commenced~~and ~~redevelopment~~our ofthird ~~this property in the~~party ~~third~~institutional ~~quarter~~partner ofthat ~~2010~~owned ~~and~~a ~~completed~~90% ~~the~~interest ~~redevelopment~~ in ~~April~~the ~~2011~~property. AsThe ofjoint ~~June 30,~~venture ~~2013,~~recorded ~~Woodlake Square had incurred approximately $7.0 million in redevelopment costs with~~ a ~~total~~gain ~~expected~~on ~~cost~~sale of ~~approximately~~ $810.34 million~~, including additional tenant improvements and leasing costs~~. ~~On February 23, 2012, this entity sold a parcel of land that resulted in a gain of approximately $437,000.~~ Our 6% share of this gain, ~~which was approximately $26,000,~~ is included in our ~~equity~~income in(loss) ~~losses~~ from non-consolidated entities. ~~on our~~We ~~consolidated~~received ~~statement~~approximately of$2.0 ~~operations~~million ~~for~~representing ~~the~~our proportional ~~six~~share ~~months~~of ~~ended~~the ~~June~~net ~~30, 2012~~proceeds.

OnCombined ~~July~~condensed ~~15,~~financial ~~2013,~~information ~~Woodlake~~for LPthe ~~entered~~underlying ~~into~~investee aentities ~~purchase~~(at ~~and sale agreement with~~100%) ~~AmREIT~~is tosummarized ~~sell Woodlake Square~~ for athe ~~purchase~~three ~~price~~and ofnine ~~$41.6~~months ~~million.~~ended WeSeptember ~~expect to~~30, ~~receive~~2013 ~~approximately~~and ~~$2.3 million representing our~~2012, ~~proportional~~as ~~share~~follows of(in ~~the~~thousands): ~~net proceeds.~~

Combined condensed financial information for the underlying investee entities (at 100%) is summarized for the three and six months ended June 30, 2013 and 2012, as follows (in thousands):


	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Revenue	$	4,545		$	4,247		$	14,251		$	12,841
Gain on sale of real estate		10,532			—			10,532			528
Depreciation and amortization		(1,661	)		(1,738	)		(5,088	)		(5,297	)
Interese expense		(1,588	)		(1,657	)		(4,862	)		(5,012	)
Net income (loss)		10,177			(930	)		9,415			(2,084	)

	Three months ended June 30,						Six months ended June 30,
	2013			2012			2013			2012
Revenue	$	5,017		$	4,354		$	9,706		$	9,122
Depreciation and amortization		(1,710	)		(1,719	)		(3,427	)		(3,559	)
Interese expense		(1,639	)		(1,657	)		(3,273	)		(3,355	)
Net loss		(253	)		(757	)		(762	)		(1,154	)


5.	NOTES PAYABLE

Our outstanding debt as of ~~June~~September 30, 2013, and December 31, 2012, was as follows (in thousands).

Notes payable	~~June~~September 30, 2013		December 31, 2012
Village on the Green	$	5,~~843~~820	$	5,891
Woodlake Pointe, held for sale		6,688		6,249
Woodlake Pointe		—		6,249
Total	$	125,~~531~~820	$	12,140

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The Village on the Green note payable is a fixed rate mortgage loan that bears interest at 5.5% and matures in April 2017. It may be prepaid, but is subject to a yield-maintenance premium or prepayment penalty. Our Woodlake Pointe construction loan was paid in full upon the sale of the property on September 30, 2013. See Note 3. As of September 30, 2013, we serve as the guarantor of debt in the amount of $24.2 million that is the primary obligation of our non-consolidated joint ventures. The debt for which we serve as guarantor matures in 2014 and 2015. We have not accrued any liability with respect to these guarantees as we believe it is unlikely we would be required to perform and, therefore, the fair value of any obligation would be insignificant.

~~Our~~Notes ~~Woodlake~~Payable ~~Pointe~~– ~~construction~~Related ~~loan~~Party ~~was~~– ~~obtained~~As inof ~~November~~September ~~2011~~30, 2013, and December ~~allows~~31, ~~for a~~2012, ~~total~~the balance of ~~$6.7~~our ~~million~~notes inpayable ~~construction~~– ~~draws~~related toparty ~~fund~~was ~~the~~$2.9 million ~~redevelopment~~and ~~of Woodlake~~$3.7 ~~Pointe~~million, respectively. The ~~variable~~note ~~rate~~accrues ~~loan bears~~ interest atmonthly ~~the prime rate, 3~~at 2.2578% at ~~June 30, 2013,~~ and ~~matures~~is insecured ~~May~~by ~~2018.~~our Weinvestment ~~expect~~interest toin ~~repay~~the ~~this~~Woodlake ~~note with~~Pointe ~~the~~property. ~~proceeds~~On ~~from~~October ~~the~~1, ~~sale~~2013, ofwe ~~the~~made ~~single~~a ~~tenant~~payment ~~building~~of ~~at our Woodlake Pointe property~~$1.9 ~~See Note 3~~million.

AsFair Value of ~~June~~Notes 30Payable – We record our debt instruments based on contractual terms, ~~2013~~net of any applicable premium or discount on our consolidated balance sheet. We did not elect to apply the alternative GAAP provisions of the fair value option for recording financial assets and financial liabilities. The fair value of our variable-rate notes payable approximate their carrying value. In determining the fair value of our fixed-rate debt instruments, we determine the ~~weighted~~appropriate ~~average~~treasury note rate based on the remaining ~~life~~time to maturity for each of ~~our~~the debt instruments. We then add the appropriate yield spread to the treasury note rate. The yield spread is a risk premium estimated by investors to account for credit risk involved in debt financing. The spread is typically estimated based on the property type and loan-to-value ratio of the debt instrument. The result is an estimate of the market interest rate a typical investor would expect to receive given the underlying subject asset (property type) and remaining time to maturity. The fair value of our fixed-rate notes payable is classified in Level 2 of the fair value hierarchy. Based on these estimates, the fair value of fixed-rate notes payable was 3approximately $6.773 million as of September 30, ~~years~~2013, and December 31, 2012.

We serve as the guarantor of debt in the amount of $40.4 million that is the primary obligation of our non-consolidated joint ventures. The debt for which we serve as guarantor matures in 2014 and 2015. We have not accrued any liability with respect to these guarantees as we believe it is unlikely we would be required to perform and, therefore, the fair value of any obligation would be insignificant.

Notes Payable – Related Party – As of June 30, 2013 and December 31, 2012, the balance of our notes payable – related party was $4.8 million and $3.7 million, respectively. The note accrues interest monthly at LIBOR plus a spread of 3.5% with a floor of 5.0% and is secured by our investment interest in the Woodlake Pointe property.

Fair Value of Notes Payable – We record our debt instruments based on contractual terms, net of any applicable premium or discount on our consolidated balance sheet. We did not elect to apply the alternative GAAP provisions of the fair value option for recording financial assets and financial liabilities. The fair value of our variable-rate notes payable approximate their carrying value. In determining the fair value of our fixed-rate debt instruments, we determine the appropriate treasury bill rate based on the remaining time to maturity for each of the debt instruments. We then add the appropriate yield spread to the treasury bill rate. The yield spread is a risk premium estimated by investors to account for credit risk involved in debt financing. The spread is typically estimated based on the property type and loan-to-value ratio of the debt instrument. The result is an estimate of the market interest rate a typical investor would expect to receive given the underlying subject asset (property type) and remaining time to maturity. The fair value of our fixed-rate notes payable is classified in Level 2 of the fair value hierarchy. Based on these estimates, the fair value of fixed-rate notes payable was approximately $6.2 million and $6.3 million as of June 30, 2013 and December 31, 2012, respectively.


6.	CONCENTRATIONS

As of ~~June~~September 30, 2013, and December 31, 2012, each of our two consolidated ~~properties~~ properties individually comprised greater than 10% of our consolidated total assets. Consistent with our strategy of investing in areas that we know well, ~~both~~ both properties are located in ~~the~~ Texas metropolitan areas. These Texas properties represent 100% of our rental income for the ~~six~~nine months ended ~~June~~September 30, 2013 and 2012. The following table details the base rents generated by our top tenants during the three and nine months ended September 30, 2013 and 2012 (in thousands):

The following table details the base rents generated by our top tenants during the three and six months ended June 30, 2013 and 2012 (in thousands):


	Three months ended September 30,				Nine months ended September 30,
Tenant	2013		2012		2013		2012
LA Fitness ⁽¹⁾	$	241	$	—	$	720	$	—
Paesano’s		39		49		148		148
Alamo Heights Pediatrics		18		18		53		53
Rouse Dental		20		14		48		42
Café Salsita		7		9		26		28
Total	$	325	$	90	$	995	$	271

	Three months ended June 30,				Six months ended June 30,
Tenant	2013		2012		2013		2012
LA Fitness (1)	$	241	$	—	$	479	$	—
Paesano’s		54		49		109		98
Alamo Heights Pediatrics		18		18		35		35
Rouse Dental		14		14		28		28
Café Salsita		9		9		19		19
Total	$	336	$	90	$	670	$	180



	(1)	LA Fitness occupied the newly constructed building at our Woodlake Pointe property, which was sold on September 30, 2013. See Note 3. We will receive no further rent from this tenant in future reporting periods.

~~(1) Rental income from this tenant will cease with the anticipated sale of land and the single tenant building at our Woodlake Pointe property. See Note 3.~~12

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7.	PARTNERS’ CAPITAL AND NON-CONTROLLING INTEREST

Distributions – We suspended all distribution payments in July 2009 and do not anticipate reinstating distributions until we ~~have~~ have stabilized our properties and we generate liquidity that could allow us to re-commence distributions. See Note 1. All distributions to date have been a return of capital. During our liquidation stage (anticipated to commence in November 2013, unless extended), net cash flows, will be distributed among the Limited Partners and the General Partner in the following manner:


	•	First - 100% to the Limited Partners (in proportion to their unreturned actual invested capital) until such time as the limited partners have received cumulative distributions from all sources equal to 100% of their actual invested capital (calculated using the actual purchase price per Unit);

	•	Second - 100% to the General Partner until it has received cumulative distributions from all sources equal to 100% of its actual invested capital of $1,000;

	•	Third - 1% to the General Partner and 99% to the Limited Partners on a per Unit basis until such time as the Limited Partners have received cumulative distributions from all sources equal to 8.5% per annum, cumulative, uncompounded return on their unreturned deemed capital contributions (which will be equal to (i) the product of $25,000 per Unit (regardless of the purchase price paid for a Unit) multiplied by the number of Units owned by a partner, reduced by (ii) the aggregate amount of any distributions received that constitute a return of capital contributions);

	•	Fourth – 100% to the General Partner until it has received cumulative distributions from all sources (other than with respect to the Units it purchased) in an amount equal to 40% of the net cash flow paid to date to the Limited Partners in excess of their actual invested capital; and

	•	Thereafter - 60% to the Limited Partners on a per Unit basis and 40% to the General Partner.

Non-controlling Interests – Non-controlling interests includes a 40% ownership interest that our affiliates have in our Woodlake Pointe property and a 40% interest that our affiliates have in our investment in Woodlake HoldCo that we consolidate as a result of our 60% controlling financial interest ~~in such partnership~~.


8.	RELATED PARTY TRANSACTIONS

Certain of our affiliates receive fees for ongoing property management and administrative services. In the event that these companies are unable to provide us with the respective services, we would be required to find ~~alternative~~ alternative providers of these services. The following table summarizes the amount of such compensation incurred by us during the three and ~~six~~nine months ended ~~June~~September 30, 2013 and 2012 (in thousands):

	Three months ended June 30,				Six months ended June 30,
	Three months ended September 30,				Nine months ended September 30,
Type of service	2013		2012		2013		2012
Asset management fees	$	3938	$	3938	$	77115	$	77115
Property management fees		12		1112		2335		2234
Leasing costs		7—		12		8		9698
Development costs		—		86		—		~~172~~258
Interest expense-related party		3264		3644		6296		64106
Administrative costs reimbursements		69		66		133		135
Administrative cost reimbursements		75		78		208		213
	$	~~159~~189	$	~~239~~260	$	~~303~~462	$	~~566~~824

In addition to the above fees incurred by us, the non-consolidated entities in which we have investments paid $~~454~~653,000 and $~~680~~979,000 in property management and leasing fees to one of our affiliated entities for the ~~six~~nine months ended ~~June~~ September 30, 2013 and 2012, respectively. See also Note 4 regarding investments in non-consolidated entities.

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9.	COMMITMENTS AND CONTINGENCIES

Litigation - In the ordinary course of business, we may become subject to litigation or claims. There are no material pending legal proceedings against us.

Environmental matters - In connection with the ownership and operation of real estate, we may be potentially liable for costs and damages related to environmental matters. We are not aware of any pending environmental proceedings with respect to our properties that would have a material adverse effect on our consolidated financial statements.

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ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and notes thereto.

Certain information presented in this Quarterly Report constitutes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, our actual results could differ materially from those set forth in the forward-looking statements. Certain factors that might cause such a difference include, but are not limited to the following: changes in general economic conditions, changes in real estate market conditions, continued availability of proceeds from our debt or equity capital, our ability to locate suitable tenants for our properties, the ability of tenants to make payments under their respective leases, timing of acquisitions, development starts and sales of properties, the ability to meet development and redevelopment schedules and other risks, uncertainties and assumptions. Any forward-looking statement speaks only as of the date on which it was made, and we undertake no duty or obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

OVERVIEW

We are a Delaware limited partnership formed to acquire, develop and operate, directly or indirectly through joint venture arrangements, a portfolio of commercial real estate consisting primarily of multi-tenant shopping centers and mixed-use properties. Our Units are not currently listed on a securities exchange, and there currently is no established public trading market for our Units. We do not intend to list our Units at this time and have no plans to list our Units on a securities exchange in the future.

Our general partner is a Delaware corporation and a wholly-owned subsidiary of AmREIT, an SEC reporting, Maryland corporation that is publicly traded on the NYSE and that has elected to be taxed as a REIT. Our General Partner has the exclusive right to manage our business and affairs on a day-to-day basis pursuant to our limited partnership agreement. The Limited Partners have the right to remove and replace our General Partner, with or without cause, by a vote of the Limited Partners owning a majority of the outstanding Units (excluding any Units held by our General Partner). Our General Partner is responsible for all of our investment decisions, including decisions relating to the properties to be developed, the method and timing of financing or refinancing the properties, the selection of tenants, the terms of the leases, the method and timing of the sale of our properties and the reinvestment of net sales proceeds. Our General Partner utilizes the services of AmREIT and its affiliates in performing its duties under our limited partnership agreement.

As of ~~June~~September 30, 2013, our consolidated investments include one wholly-owned property comprised of approximately 36,306 square feet of GLA and one majority owned property comprised of approximately ~~163~~82,~~000~~120 square feet of GLA and ~~four properties~~three properties in which we own a non-controlling interest through joint ventures comprised of approximately ~~1.1~~ ~~million square feet of GLA. As of June 30~~938, ~~2013, our majority owned property includes a single tenant building comprising 45,~~000 square feet of ~~GLA and a portion~~ of ~~the land which has been classified as real estate held for sale on our Consolidated Balance Sheets~~GLA. ~~See~~ ~~also Note 3 of the Notes to Consolidated Financial Statements.~~ Rental income accounted for 100% of our total revenue during the ~~six~~nine months ended ~~June~~September 30, 2013 and 2012, primarily from net leasing arrangements where most of the operating expenses of the properties are absorbed by our tenants. As a result, our operating results and cash flows are primarily influenced by rental income from our properties and interest expense on our property indebtedness. As of September ~~June~~ 30, 2013, our properties had an average occupancy of 9298.6%~~, and the average debt leverage ratio of the properties in which we have an investment was approximately 59%, with 83% of such debt carrying a fixed rate of interest~~.

Our ~~operating~~ operating period will continue until November 15, 2013 (our scheduled liquidation commencement date); however, ~~the~~an ~~operating~~orderly ~~period~~liquidation ~~may~~of beall ~~extended~~of ~~to November 15, 2015 with the~~our ~~consent~~properties ofand ~~holders~~wind ofdown ~~the majority~~ of our ~~Units~~operations ~~held~~will bylikely ~~our~~take ~~Limited Partners. Over the past~~ several years for our ~~results~~General ofPartner ~~operations~~to ~~and valuations of our real estate assets have been negatively impacted by overall economic conditions~~complete. ~~The~~Once ~~United States~~we ~~economy~~enter isinto ~~still~~our ~~experiencing~~liquidation ~~weakness from the past economic recession~~period, ~~which~~ ~~resulted in increased unemployment, weakening of tenant financial condition,~~we ~~large-scale~~will ~~business failures and tight credit markets. High levels of unemployment have persisted, and rental rates and valuations for retail space have~~ not ~~fully recovered~~invest toin ~~pre-recession~~any ~~levels~~new ~~and may not for a number of years. Most of our retail properties were purchased prior to 2008 when retail~~ real estate ~~market~~without ~~prices were~~approval ~~much~~of ~~higher, and~~ our ~~property valuations have been negatively impacted by these~~Limited ~~market dynamics~~Partners.

16 Over the past several years, our results of operations and valuations of our real estate assets have been negatively impacted by overall economic conditions from the recent, severe recession. Most of our retail properties were purchased prior to 2008 when retail real estate market prices were much higher, and our property valuations were negatively impacted by these market dynamics. The United States has experienced recent improvements in the general economy; however, high levels of unemployment have persisted, and rental rates and valuations for retail space have not fully recovered to pre-recession levels and may not for a number of years. As a result, we have faced significant liquidity challenges over the last several years. However, we have been successful in meeting our historic cash shortfalls through (1) managing the timing of forecasted capital expenditures related to the lease-up of properties, (2) managing the timing of operating expense payments and, to the extent possible, accelerating cash collections, (3) deferring the payment of fees owed to our General Partner and its affiliates, (4) selling certain of our properties and investments in non-consolidated entities (see Notes 3 and 4 of the Notes to Consolidated Financial Statements) and/or (5) obtaining funds through additional borrowings from AmREIT.

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As of September 30, 2013, we have $5.5 million in cash on hand and our liquidity has improved due to the sale of Woodlake Square and the Woodlake Pointe joint venture’s sale of a portion of its Woodlake Pointe property. See also Note 3 of the Notes to the Consolidated Financial Statements related to our property dispositions. During 2013, we have repaid approximately $4.0 million of our notes payable –related party (including a payment made October 1, 2013). We expect that our cash on hand should be sufficient to allow us to execute our strategy in the near term.

We have created a strategic plan to maximize value prior to and during our upcoming liquidation period. The components of our strategic plan are as follows:

• Complete our development and redevelopment projects with a goal to stabilize these projects ~~during~~over ~~2013~~the next 6-12 months. We believe that completing our development and redevelopment projects including their lease-up and stabilization will allow us to maximize the return on these properties upon sale. Our ~~investments~~investment in Cambridge & Holcombe, ~~Woodlake~~represents ~~Pointe~~our ~~and~~only ~~Woodlake~~investment ~~Square~~property ~~represent our assets~~ currently under development/redevelopment. See Note 4 of the Notes to Consolidated Financial Statements for further discussion of the redevelopment plans at ~~each~~this ~~of these properties~~property. • Continue to operate our projects in a first-class manner with a goal to generate operating cash flow in order to re-commence distributions ~~in 2014~~. We believe that the stabilization of our development and redevelopment properties, coupled with the continued and intense oversight of our operating properties, will generate liquidity that could allow us to re-commence distributions to our Limited Partners; however, we expect this will most likely occur during the liquidation phase. AsOnce we begin ~~to sell~~ our ~~real~~liquidation ~~estate assets~~period, ifan ~~the~~orderly ~~real~~liquidation ~~estate~~of ~~market~~our ~~has~~assets ~~not~~and ~~sufficiently~~wind-down ~~recovered~~of ~~prior to~~ our ~~liquidation~~operations ~~commencement~~will ~~date~~likely oftake ~~November~~several ~~15,~~years ~~2013,~~for ~~and~~ our General Partner ~~believes~~to ~~that~~complete. ~~extending~~• ~~the~~Sell ~~operating~~our ~~period~~properties ~~would~~opportunistically beas in the ~~best~~market ~~interest~~continues ofto ~~our~~recover. ~~Limited~~Our ~~Partners,~~sales weby ~~may~~our ~~seek~~Woodlake ~~approval~~Squre ~~from~~and ~~the~~Woodlake ~~Limited~~Pointe ~~Partners~~joint toventures ~~postpone~~are ~~the~~recent ~~liquidation~~examples ~~commencement~~of ~~date. • Sell~~ our ~~properties~~execution ~~opportunistically,~~of ~~likely~~this ~~beginning~~strategy. ~~in 2014~~However, asonce ~~the market continues to recover. Once~~ a property is marketed for sale, it may take several months to receive offers and complete due diligence by both parties. Our General Partner will in good faith begin to review market sales opportunities for our operating properties at the conclusion of our operating period, but retail property valuations may continue to be challenged, and, accordingly, attractive sales opportunities may not exist in the near term. When deciding whether or when to sell properties, our General Partner will consider factors such as potential appreciation of value, and timing of cash flows. During the liquidation period, we will be distributing net proceeds generated from property sales to our Limited Partner unless the General Partner has identified attractive acquisition opportunities and obtained a majority vote of the Limited Partners to re-invest such proceeds.

Although we believe that our strategic plan maximizes the value of our properties and is in the best interest of our Limited Partners, no assurance can be given that this strategy will be successful, and it is possible that investors may not recover all of their original investment.

RESULTS OF OPERATIONS

Below is a discussion of our results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2013, as compared to the same period in 2012.

~~Comparison of the Three Months Ended June 30, 2013 to the Three Months Ended June 30, 2012~~16

~~Revenue. Revenue~~Table ~~was~~of ~~constant at $244,000 for the three months ended June 30, 2013 as compared to the same period in 2012.~~Contents

~~Equity~~Comparison inof ~~losses from non-consolidated entities. Equity in losses from non-consolidated entities decreased approximately $199,000 during~~ the ~~three~~Three ~~months ended~~Months ~~June~~Ended September 30, 2013, ~~as compared~~ to the ~~same~~Three ~~period~~Months ~~in 2012 (a loss of $115,000 in~~Ended ~~2013~~September ~~versus $314~~30,~~000~~ in 2012). These amounts represent our ownership portion of our joint ventures’ net income or loss for the period. The decrease in loss is primarily due to increased income from our Cambridge and Holcombe joint venture. The Cambridge & Holcombe joint venture was under contract to sell a tract of land; however, the buyer cancelled the contract and the joint venture received $325,000 of non-refundable earnest money that was recorded as income. Our 50% share was approximately $162,500.

Revenue. Revenue remained comparable for the three months ended September 30, 2013 as compared to the same period in 2012 with an increase of $10,000, or 4%.

Income (loss) from non-consolidated entities. Income (loss) from non-consolidated entities increased approximately $1.9 million for the three months ended September 30, 2013 as compared to the same period in 2012 (income of $1,565,000 versus a loss of $324,000). These amounts represent our ownership portion of our joint ventures’ net income or loss for the period. The resulting increase in income is primarily related to 1) our portion of the gain on sale of Woodlake Square of approximately $10.5 million with our pro rata share of the gain representing approximately $1,050,000 and 2) increased income and lease-up of our properties within our investments in Casa Linda and Woodlake Square (prior to its sale) as compared to the respective period in 2012. See further discussion of our sale of our investment in Woodlake Square as discussed in Note 4 of the Notes to Consolidated Financial Statements.

Loss from discontinued operations. Loss from discontinued operations increased approximately $398,000 during the three months ended September 30, 2013 as compared to the same period in 2012 ($406,000 loss in 2013 versus a loss of $8,000 in 2012). The increase is due to the loss on the sale of a portion of the land and single tenant building at our Woodlake Pointe property of $576,000, partially offset by increased income from the single tenant at our Woodlake Pointe property, which opened for business during the fourth quarter of 2012.

Net (income) loss attributable to non-controlling interests. Net (income) loss attributable to non-controlling interests increased approximately $543,000 during the three months ended September 30, 2013 as compared to the same period in 2012 (income of $501,000 in 2013 versus a loss of $42,000 in 2012). This amount represents the 40% interest in the Woodlake Pointe property and the 40% interest in Woodlake Holdco (owns our investment in Woodlake Square) that we do not own, but that we consolidate in our financial statements. The increase in income was recognized from our equity portion of the gain on sale of Woodlake Square property offset by the loss from the sale of a portion of the land and single tenant building at our Woodlake Pointe property.

Comparison of the Nine Months Ended September 30, 2013, to the Nine Months Ended September 30, 2012

Revenue. Revenue decreased approximately $56,000 during the nine months ended September 30, 2013 as compared to the same period in 2012 ($761,000 in 2013 versus $817,000 in 2012). The decrease is primarily due to a favorable resolution of prior year common area maintenance recoveries received during the first quarter of 2012 with no comparable amount in 2013.

Property expense. Property expense decreased approximately $40,000 during the nine months ended September 30, 2013 compared to the same period in 2012 ($349,000 in 2013 versus $389,000 in 2012). The decrease is primarily due to bad debt expense for the second quarter of 2012. We did not have any such bad debt expense in the second quarter of 2013.

Legal and professional. Legal and professional expense decreased approximately $40,000 during the nine months ended September 30, 2013 as compared to the same period in 2012 ($158,000 in 2013 versus $198,000 in 2012). The decrease is primarily due to litigation fees that we incurred in 2012 resulting from the collection of outstanding receivables.

Income (loss) from non-consolidated entities. Income (loss) from non-consolidated entities increased approximately $2.1 million during the nine months ended September 30, 2013 as compared to the same period in 2012 (income of $1,250,000 in 2013 versus a loss of $876,000 in 2012). These amounts represent our ownership portion of our joint ventures’ net income or loss for the period. The resulting increase in income is primarily related to 1) our portion of the gain on sale of Woodlake Square of approximately $10.5 million with our pro rata share of the gain representing approximately $1,050,000 and 2) increased income associated with the lease-up of Casa Linda and Woodlake Square (prior to its sale) properties as compared to the respective period in 2012. See further discussion of the sale of our investment in Woodlake Square in Note 4 of the Notes to Consolidated Financial Statements.

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~~Income~~Loss ~~(loss)~~ from discontinued operations. ~~Income~~Loss from discontinued operations increased approximately $~~169~~192,000 during the ~~three~~nine months ended September ~~June~~ 30, 2013 as compared to the same period in 2012 (a loss of $~~164~~217,000 ~~income~~ in 2013 versus a loss of $525,000 in 2012). The increase is due to ~~rental~~the ~~income~~loss ~~from~~ on the ~~commencement~~sale of a portion of the LAland ~~Fitness~~and ~~lease~~single tenant building at our Woodlake Pointe property of $576,000, partially offset by increased income from the single tenant at our Woodlake Pointe property, inwhich ~~2013~~opened for business during the fourth quarter of 2012.

Net (income) loss attributable to non-controlling interests. Net (income) loss attributable to non-controlling interests increased approximately $73607,000 during the ~~three~~nine months ended ~~June~~September 30, 2013 as compared to the same period in 2012 (~~net~~ income of $27476,000 in 2013 versus ~~net~~a loss of $46131,000 in 2012). This amount represents the 40% interest of in the Woodlake Pointe property and the 40% interest in Woodlake Holdco (owns our investment in Woodlake Square) that we do not own, but that we consolidate in our financial statements. ~~The~~ The increase in income iswas ~~due~~recognized tofrom ~~increased~~our ~~rental~~equity ~~income~~portion ~~from~~of the gain on sale of Woodlake Square property offset by the ~~commencement~~loss from the sale of a portion of the LAland ~~Fitness~~and ~~lease~~single intenant ~~2013~~building at our Woodlake Pointe property.

Comparison of the Six Months Ended June 30, 2013 to the Six Months Ended June 30, 2012

Revenue. Revenue decreased approximately $66,000 during the six months ended June 30, 2013 as compared to the same period in 2012 ($496,000 in 2013 versus $562,000 in 2012). The decrease is primarily due to a favorable reconciliation and resolution of prior year common area maintenance recoveries received during the first quarter of 2012 with no comparable amount in 2013.

Property Expense. Property expense decreased approximately $59,000 during the six months ended June 30, 2013 compared to the same period in 2012 ($191,000 in 2013 versus $250,000 in 2012). The decrease is primarily due to bad debt expense for the second quarter of 2012. We did not have any such bad debt expense in the second quarter of 2013.

Legal and Professional. Legal and professional expense decreased approximately $38,000 during the six months ended June 30, 2013 as compared to the same period in 2012 ($116,000 in 2013 versus $154,000 in 2012). The decrease is primarily due to litigation fees that we incurred in 2012 resulting from the collection of outstanding receivables.

Equity in losses from non-consolidated entities. Loss from non-consolidated entities decreased approximately $237,000 during the six months ended June 30, 2013 as compared to the same period in 2012 (a loss of $315,000 in 2013 versus a loss of $552,000 in 2012). These amounts represent our ownership portion of our joint ventures’ net income or loss for the period. The decrease in loss is primarily due to increased income from our Cambridge and Holcombe joint venture. The Cambridge & Holcombe joint venture was under contract to sell a tract of land; however, the buyer cancelled the agreement and the joint venture received $325,000 of non refundable earnest money that was recorded as income. Our 50% share was approximately $162,500.

Income (loss) from discontinued operations. Loss from discontinued operations decreased approximately $206,000 during the six months ended June 30, 2013 as compared to the same period in 2012 ($189,000 income in 2013 versus a loss of $17,000 in 2012). The decrease is due to rental income from the commencement of the LA Fitness lease at our Woodlake Pointe property in 2013.

Net loss attributable to non-controlling interests. Net loss attributable to non-controlling interests decreased approximately $64,000 during the six months ended June 30, 2013 as compared to the same period in 2012 ($25,000 in 2013 versus $89,000 in 2012). This amount represents the 40% interest of Woodlake Pointe that we do not own but consolidate in our financial statements. The decrease in net loss is due to rental income from the commencement of the LA Fitness lease in 2013.

LIQUIDITY AND CAPITAL RESOURCES

As of ~~June~~September 30, 2013, and December 31, 2012, our cash and cash equivalents totaled approximately $~~406,000~~5.5 million and $129,000, respectively.

Over the past several years, our results of operations and valuations of our real estate assets have been negatively impacted by overall economic conditions from the recent, severe recession. Most of our retail properties were purchased prior to 2008 when retail real estate market prices were much higher, and our property valuations were negatively impacted by these market dynamics. The United States has experienced recent improvements in the general economy; however, high levels of unemployment have persisted, and rental rates and valuations for retail space have not fully recovered to pre-recession levels and may not for a number of years. As a result, we have faced significant liquidity challenges over the last several years. However, we have been successful in meeting our historic cash shortfalls through (1) managing the timing of forecasted capital expenditures related to the lease-up of properties, (2) managing the timing of operating expense payments and, to the extent possible, accelerating cash collections, (3) deferring the payment of fees owed to our General Partner and its affiliates, (4) selling certain of our properties and investments in non-consolidated entities (see Notes 3 and 4 of the Notes to Consolidated Financial Statements) and/or (5) obtaining funds through additional borrowings from AmREIT.

As of September 30, 2013, our liquidity has improved due to the sale of Woodlake Square and the Woodlake Pointe joint venture’s sale of a portion of its Woodlake Pointe property. See also Note 3 related to our property dispositions. During 2013, we have repaid approximately $4.0 million of our notes payable –related party (including a payment made October 1, 2013).

Our short-term liquidity requirements consist primarily of operating expenses and other expenditures associated with our properties, regular debt service requirements and capital expenditures. We anticipate that our primary long-term liquidity requirements will include, but will not be limited to, operating expenses, making scheduled debt service payments, funding renovations, expansions, and other significant capital expenditures for our existing portfolio of properties.

We expect to fund approximately $1.5 million in capital expenditures over the next two years at our Casa Linda property (a 50% joint venture between us and MIG III) representing our 50% share of a lease-up strategy at this property. The $38.0 million mortgage on the property matures in January 2014. We have engaged a mortgage broker to assist us with refinancing this loan and have recently selected a lender based upon preliminary terms for a non-recourse loan with an initial funding of $38.0 million and a future funding of approximately $4.5 million for the potential acquisition of an adjacent property. The terms of the proposed loan are a term of four years with a one-year extension, interest at the 3-Month LIBOR plus a spread of 3.50% and interest-only payments for the first two years with monthly payments of interest and principal based upon a 30-year amortization thereafter with the balance due upon maturity. We expect the joint venture to close on the loan during the fourth quarter of 2013.

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WeThere is ~~face~~no ~~significant liquidity~~guarantee ~~challenges~~that inwe ~~implementing~~and our ~~investment~~joint ~~strategy~~ventures onwill ~~both~~be asuccessful ~~short-term~~with all of ~~and~~the ~~long-term~~above ~~basis.~~liquidity ~~Projected~~initiatives, ~~cash~~and ~~sources~~we ~~(including~~may ~~cash~~continue onto ~~hand)~~look ~~and~~to ~~uses~~AmREIT ~~indicate~~to ~~periods~~provide ofadditional ~~cash~~financial ~~shortfalls~~support ~~during~~to ~~the~~us ~~year~~to ~~ended~~meet ~~December~~our ~~31,~~operating ~~2013~~cash ~~and 2014~~needs. ~~Further,~~We wecan ~~borrowed~~provide anno ~~additional~~assurance ~~$860,000~~that ~~from~~ AmREIT ~~during~~will ~~the~~be ~~first~~able ~~quarter~~to ofprovide ~~2013,~~additional ~~primarily~~support, toif ~~fund~~needed. ~~the~~Historically, AmREIT has deferred payment of ~~property~~advisory ~~taxes~~fees earned ~~and~~ to ~~fund~~the ~~tenant~~extent ~~improvements and~~such ~~leasing~~deferrals ~~commissions~~of fees were necessary for our ~~lease-up~~continued operation. ~~strategy~~Such atfees ~~Casa~~included ~~Linda.~~property ~~However~~management, weasset ~~believe~~management, ~~that~~development wefees, ~~will~~interest beexpense ~~able~~on toamounts ~~generate~~owed ~~sufficient liquidity~~ to ~~satisfy~~AmREIT ~~any~~and ~~cash shortfalls~~reimbursements ~~through~~of ~~(1)~~certain ~~managing the timing~~ of ~~forecasted~~AmREIT’s ~~capital~~general ~~expenditures~~and ~~related~~administrative tocosts. ~~the lease-up of properties~~Additionally, ~~(2)~~AmREIT has ~~managing~~agreed ~~the~~that ~~timing~~it ofwill ~~operating~~not ~~expense~~require ~~payments~~us ~~and,~~ to repay the ~~extent~~remaining ~~possible,~~balance ~~accelerating~~of ~~cash~~our notes ~~collections,~~payable ~~(3)~~– ~~additional~~related ~~borrowings from~~party ~~AmREIT,~~to ~~(4)~~it ~~deferring~~until ~~the~~a ~~payment~~date ofsubsequent ~~fees owed~~ to ~~our~~January ~~General~~1, ~~Partner~~2014 if ~~and~~such ~~its affiliates,~~repayment ~~and/or~~were ~~(5)~~to ~~selling~~prevent ~~certain~~the execution of our ~~investments~~strategy ~~including~~or ~~our~~present ~~anticipated~~an ~~sale~~unnecessary offinancial ~~Woodlake~~hardship ~~Square~~to ~~and~~us. aAmREIT’s ~~single~~agreement ~~tenant~~to ~~building~~provide ~~and portion of land at our~~such ~~Woodlake~~financial ~~Pointe~~support ~~property.~~and ~~See~~defer ~~also~~payment ~~Note~~is 3limited ofto ~~the~~its ~~Notes~~continued ability to ~~Consolidated Financial~~do ~~Statements.~~ so

We expect to fund approximately $1.5 million in capital expenditures over the next two years at our Casa Linda property (a 50% joint venture between us and MIG III) representing our 50% share of a lease-up strategy at this property. The lease-up strategy includes certain tenant build-out and site improvements. The $38.0 million mortgage on the property matures in January 2014. The joint venture will likely require a one-year extension of the loan to complete this strategy and then refinance the property on a long-term basis. We believe we will be successful in obtaining a one-year extension based on our preliminary discussions with the lending agent; however, no assurance can be given that we will be successful. We do not guarantee this debt and our risk of loss is limited to our ownership interest in the property.

On April 5, 2013, our Woodlake Pointe joint venture entered into a sales agreement to sell a portion of the land and a single tenant building at our Woodlake Pointe property for $12.0 million to an unrelated third party. The land and building are secured by a $6.7 million loan that will be repaid in full with proceeds from the sale. The sale is expected to close in the third quarter of 2013, and we estimate that our portion of the net cash proceeds, which is 60%, would be approximately $3.1 million. We plan to use the proceeds to fund the Casa Linda lease-up strategy and for working capital needs.

On July 15, 2013, Woodlake LP, which owns Woodlake Square, a grocery-anchored, multi-tenant retail entered into a purchase and sale agreement with AmREIT to sell Woodlake Square for a purchase price of $41.6 million. We expect to receive approximately $2.3 million representing our proportional share of the net proceeds. The sale is expected to close in the third quarter of 2013.

There is no guarantee that we and our joint ventures will be successful with all of the above liquidity initiatives, and we may continue to look to AmREIT to provide additional financial support to us to meet our operating cash needs. AmREIT has agreed to continue to provide financial support to us through and including the next twelve months in the form of continued deferral of payment of advisory fees earned and payable to the extent such deferral of fees is necessary for our continued operation. Such fees may include property management fees, asset management fees, development fees and reimbursement of certain of AmREIT’s general and administrative costs. However, we expect that sales of the single tenant building at our Woodlake Pointe property and the sale of the Woodlake Square shopping center during the third quarter of 2013 will provide us with approximately $5.4 million in net proceeds, which we believe will be sufficient to allow us to execute our strategy in the short term. See also Note 3 to the Notes to Consolidated Financial Statements. In the event we are able to generate sufficient cash flows in the near term, we may elect to repay portions of the notes payable – related party; however, AmREIT has agreed that it will not require us to repay the $4.8 million notes payable – related party until a date subsequent to January 1, 2014 if such repayment were to prevent the execution of our strategy or present an unnecessary financial hardship to us. AmREIT’s agreement to provide such financial support and defer payment is limited to its continued ability to do so.

The above steps may not be sufficient, and we could incur individual setbacks and possibly significant losses. Additional deterioration in the United States economy or the bankruptcy or insolvency of one or more of our significant tenants could cause our current plans to meet our projected cash shortfalls to be insufficient. Even with our strategic plan and the above liquidity initiatives, we may incur cash shortfalls if we are required to perform under certain guarantees of our joint ventures or are unable to refinance certain debt as it comes due, which could result in lender repossession of one or more properties owned by us and/or our joint ventures or if we are forced to sell one or more properties at a time when it is disadvantageous to do so, potentially resulting in losses on the disposition of those properties.

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Current Market Conditions

Over the past several years, our results of operations and valuations of our real estate assets have been negatively impacted by overall economic conditions. The United States economy has experienced recent improvements in the general economy, but general concerns from the recent, severe recession remain. Concerns include, but are not limited to the potential future increase of future interest as well as the availability and cost of capital as the economy improves. Additionally, there is remaining uncertainty of whether the United States economy will be adversely affected by inflation, deflation or stagflation and the systemic impact of periods of high unemployment, volatile energy costs, geopolitical issues, which have contributed to increased market volatility and weakened business and consumer confidence. High levels of unemployment have persisted, and rental rates and valuations for retail space have not fully recovered to pre-recession levels and may not for a number of years. Our General Partner believes that the retail real estate market is likely to remain depressed for most of 2013; however, it is difficult to determine the breadth and duration of the financial market problems and how such problems may affect our tenants and the valuation of our assets. To navigate these challenging market conditions, we have created a strategic plan to maximize value prior to and during our upcoming liquidation period as further described in the “Overview” section above.

Cash Flow Activities for the ~~six~~nine months Ended ~~June~~September 30, 2013 and 2012

Cash flows provided by (used in) operating activities, investing activities and financing activities for the ~~six~~nine months ended ~~June~~September 30, 2013 and 2012 are as follows (in thousands):

	Six months ended June 30,
	Nine months ended September 30,
	2013			2012
Operating activities	$	(~~595~~396	)	$	(~~352~~384	)
Investing activities		~~(525~~14,481	)		(14,~~887~~521	)
Financing activities		1(8,~~397~~719	)		24,~~153~~616

Net cash flows used in operating activities ~~increased~~has ~~approximately~~remained ~~$243,000~~comparable during the ~~six~~nine months ended ~~June~~September 30, 2013, as compared to the same period in 2012 ($~~595~~396,000 in 2013 versus $~~352~~384,000 in 2012). The increase in operating cash outflows was primarily attributable to lower collections of tenant accounts receivable and accounts receivable- related party partially offset by a decrease in net loss for the period.

Net cash flows used in investing activities ~~decreased~~ increased approximately $119.40 million during the ~~six~~nine months ended ~~June~~September 30, 2013, as compared to the same period in 2012 ($~~525,000 in 2013 versus $1~~14.95 million inprovided ~~2012).~~by ~~The decrease in~~ investing ~~outflows~~activities ~~was primarily due to a reduction~~ in ~~real estate~~2013 ~~improvements~~versus ~~of approximately~~ $~~613,000~~4.5 million ~~related~~used toin ~~our~~investing ~~Woodlake~~activities ~~Pointe property, a reduction of approximately $397,000~~ in ~~contributions~~2012). ~~made~~The toincrease ~~our~~is ~~Cambridge~~cash &provided ~~Holcombe joint venture when we refinanced the joint~~by ~~venture’s~~investing ~~debt~~activities ~~and~~is aprimarily ~~reduction~~related ~~of approximately $256,000 in contributions made~~ to ~~our Woodlake Square joint venture when compared to~~ the ~~2012 period.~~ following:

~~Net~~• ~~cash~~Proceeds ~~flows provided~~received byfrom ~~financing~~the ~~activities~~sale ~~decreased~~of ~~approximately~~a ~~$756,000~~portion ~~during~~of the ~~six months~~land ~~ended~~and ~~June~~a ~~30,~~single ~~2013,~~tenant asbuilding ~~compared~~at toour ~~the~~Woodlake ~~same~~Pointe ~~period~~property inof ~~2012 (~~$111.46 million . • A decrease in ~~2013~~real ~~versus~~estate improvements of $23.2 million inprimarily ~~2012).~~related ~~The~~to ~~decrease~~construction ~~was~~at ~~primarily~~our ~~attributable~~Woodlake ~~to a~~Pointe ~~reduction~~property induring ~~construction~~2012. ~~draw~~• ~~activity~~An increase in ~~2013~~distributions ~~versus~~received ~~2012~~from on our ~~Woodlake~~nonconsolidated ~~Pointe construction~~investments ~~loan.~~of ~~We funded~~ $1.3.5 million primarily related to the ~~development~~sale of ~~that~~Woodlake ~~property during 2012~~ Square.

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Net cash flows used in financing activities increased approximately $13.3 million during the nine months ended September 30, 2013, as compared to the same period in 2012 ($8.7 million used in financing activities in 2013 versus $4.6 million provided by financing activities in 2012). The increase in use of funds was primarily attributable to:

	•	A reduction in proceeds received from construction draw activity in 2013 versus 2012 on our Woodlake Pointe construction loan of approximately $3.2 million.
	•	Repayment of the Woodlake Pointe construction loan of $6.8 million during 2013 from the proceeds received from the sale of the portion of land and a single tenant building at our Woodlake Pointe property.
	•	Repayment of notes payable – related party of approximately $2.1 million from the distributions received from the sale of Woodlake Square.
	•	Increased distributions to our non-consolidated interests during 2013 of approximately $1.3 million, primarily to Cambridge & Holcombe and to fund Casa Linda lease-up.


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.


ITEM 4.	CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our General Partner’s CEO and CFO, our General Partner’s management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) as of ~~June~~September 30, 2013. Based on that evaluation, our General Partner’s CEO and CFO concluded that, as of ~~June~~September 30, 2013, our disclosure controls and procedures were effective in causing material information relating to us to be recorded, processed, summarized and reported by management on a timely basis and to ensure the ~~quality~~ quality and timeliness of our public disclosures in accordance with SEC disclosure obligations.

Changes in Internal Controls Over Financial Reporting

There has been no change to our internal control over financial reporting during the quarter ended ~~June~~ September 30, 2013, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION


ITEM 1.	LEGAL PROCEEDINGS.

In the ordinary course of business, we may become subject to litigation or claims. Neither we nor our properties are the subject of any material pending legal proceeding, nor are we aware of any legal proceeding that a government authority is contemplating against us.


ITEM 1A.	RISK FACTORS.

Not applicable.

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ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.


ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.

None.

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ITEM 4.	MINE SAFETY DISCLOSURES.

Not applicable.


ITEM 5.	OTHER INFORMATION.

None.


ITEM 6.	EXHIBITS

The exhibits listed on the accompanying Exhibit Index are filed, furnished, or incorporated by reference (as stated therein) as part of this Quarterly Report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AmREIT Monthly Income & Growth Fund IV, L.P.
	By:	AmREIT Monthly Income & Growth IV
		Corporation, its General Partner
Date: August 13, 2013	By:	/s/ H. Kerr Taylor
Date: November 12, 2013	By:	/s/ H. Kerr Taylor
		H. Kerr Taylor
		President, Chief Executive Officer and Director
Date: August 13, 2013	By:	/s/ Chad C. Braun
Date: November 12, 2013	By:	/s/ Chad C. Braun
		Chad C. Braun
		Executive Vice President, Chief Operating Officer, Chief Financial Officer, Treasurer and Secretary

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EXHIBIT INDEX


Exhibit 3.1	Certificate of Limited Partnership of AmREIT Monthly Income & Growth Fund IV, L.P., dated October 10, 2006 (incorporated herein by reference from Exhibit 3.1 to the Partnership’s Registration Statement on Form 10-12G dated April 29, 2008).

Exhibit 3.2	Agreement of Limited Partnership of AmREIT Monthly Income & Growth Fund IV, L.P., dated November 15, 2006 (incorporated herein by reference from Exhibit 3.2 to the Partnership’s Registration Statement on Form 10-12G dated April 29, 2008).

Exhibit 3.2.1	Amendment No. 1 to Agreement of Limited Partnership of AmREIT Monthly Income & Growth Fund IV, L.P., dated December 7, 2006 (incorporated herein by reference from Exhibit 3.3 to the Partnership’s Registration Statement on Form 10-12G dated April 29, 2008).

Exhibit 31.1	Certification of the Chief Executive Officer of the Partnership’s General Partner pursuant to Exchange Act Rule 13a-14(a) (filed herewith).

Exhibit 31.2	Certification of the Chief Financial Officer of the Partnership’s General Partner pursuant to Exchange Act Rule 13a-14(a) (filed herewith).

Exhibit 32.1	Certification of the Chief Executive Officer of the Partnership’s General Partner pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Exhibit 32.2	Certification of the Chief Financial Officer of the Partnership’s General Partner pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Exhibit 101.INS	XBRL Instance Document*

Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document*

Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*

Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase Document*

Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*

Exhibit 101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*

* Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets as of ~~June~~September 30, 2013, (unaudited) and December 31, 2012, (ii) the Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~June~~September 30, 2013, and 2012 (unaudited), (iii) the Consolidated Statement of Capital for the ~~six~~nine months ended ~~June~~September 30, 2013, (unaudited), (iv) the Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2013, and 2012 (unaudited) and (v) the Notes to the Consolidated Financial Statements (unaudited).

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