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<table style="border-collapse:collapse; text-align: left" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="9%" valign="top" align="left">NOTE 1.</td> <td align="left" valign="top">ORGANIZATION </td> </tr> </table> Rancon Realty Fund IV, a California Limited Partnership, (“the Partnership”), was organized in accordance with the provisions of the California Uniform Limited Partnership Act for the purpose of acquiring, developing, operating and disposing of real property. The Partnership was organized in 1984 and reached final funding in July 1987. The general partners of the Partnership are Daniel L. Stephenson and Rancon Financial Corporation (“RFC”), hereinafter collectively referred to as the General Partner. RFC is wholly-owned by Daniel L. Stephenson. The Partnership has no employees. As of September 30, 2012, there were 65,819 Units (“Units”) outstanding. The Partnership commenced on April 3, 1984 and shall continue until December 31, 2015, unless previously terminated in accordance with the provisions of the Partnership Agreement. Allocation of Net Income and Net Loss Allocation of net income and net loss is made pursuant to the terms of the Partnership Agreement. Generally, net income from operations is allocated 90% to the limited partners and 10% to the General Partner. Net losses from operations are allocated 99% to the limited partners and 1% to the General Partner; however, if the limited partners or the General Partner would have, as a result of an allocation of cumulative net losses, a deficit balance in their capital accounts, then net losses shall not be allocated to the limited partners or General Partner, as the case may be, so as to create a capital account deficit, but such losses shall be allocated to the limited partners or General Partner with positive capital account balances until the positive capital account balances of such other partners are reduced to zero. However, if deficits are the result of cumulative distributions in excess of earnings, losses will continue to be allocated to the General Partner. Capital accounts shall be determined after taking into account all other allocations and distributions for the fiscal year. Net income other than net income from operations shall be allocated as follows: (i) first, to the partners who have a deficit balance in their capital account, provided that, in no event, shall the General Partner be allocated more than 5% of the net income other than net income from operations until the earlier of sale or disposition of substantially all of the assets or the distribution of cash (other than cash from operations) equal to the Unitholder’s original invested capital; (ii) second, to the limited partners in proportion to and to the extent of the amounts required to increase their capital accounts to an amount equal to the sum of the adjusted invested capital of their units plus an additional cumulative non-compounded 6% return per annum (plus additional amounts depending on the date Units were purchased); (iii) third, to the partners in the minimum amount required to first equalize their capital accounts in proportion to the number of units owned, and then, to bring the sum of the balances of the capital accounts of the limited partners and the General Partner into the ratio of 4 to 1; and (iv) the balance, if any, 80% to the limited partners and 20% to the General Partner. In no event shall the General Partner be allocated less than 1% of the net income other than net income from operations for any period. Net losses other than net losses from operations are allocated 99% to the limited partners and 1% to the General Partner. Such net losses will be allocated among limited partners as necessary to equalize their capital accounts in proportion to their Units, and thereafter will be allocated in proportion to their Units. The terms of the Partnership Agreement call for the General Partner to restore any deficits that may exist in its capital account after allocation of gains and losses from the sale of the final property owned by the Partnership, but prior to any liquidating distributions being made to the partners. Distribution of Cash The Partnership shall make annual or more frequent distributions of substantially all cash available to be distributed to partners as determined by the General Partner, subject to the following: (i) distributions may be restricted or suspended for limited periods when the General Partner determines in their absolute discretion that it is in the best interests of the Partnership; and (ii) all distributions are subject to the payment of Partnership expenses and maintenance of reasonable reserves for debt service, alterations and improvements, maintenance, replacement of furniture and fixtures, working capital and contingent liabilities. All excess cash from operations shall be distributed 90% to the limited partners and 10% to the General Partner. All cash from sales or refinancing and any other cash determined by the General Partner to be available for distribution other than cash from operations shall be distributed in the following order of priority: (i) first, 1% to the General Partner and 99% to the limited partners in proportion to the outstanding positive amounts of Adjusted Invested Capital (as defined in the Partnership Agreement) for each of their Units until Adjusted Invested Capital (as defined in the Partnership Agreement) for each Unit is reduced to zero; (ii) second, 1% to the General Partner and 99% to the limited partners until each of the limited partners has received an amount which, including cash from operations previously distributed to the limited partners equals a 12% annual cumulative non-compounded return on the Adjusted Invested Capital (as defined in the Partnership Agreement) of their Units plus such limited partners’ Limited Incremental Preferential Return (as defined in the Partnership Agreement), if any, with respect to each such Unit, on the Adjusted Investment Capital (as defined in the Partnership Agreement) of such Units for the twelve month period following the date upon which such Unit was purchased from the Partnership and following the admission of such limited partner; (for limited partners admitted to the Partnership before March 31, 1985, there are additional cumulative non-compounded returns of 9%, 6%, or 3% depending on purchase date, through October 31, 1985); (iii) third, 99% to the General Partner and 1% to the limited partners, until the General Partner has received an amount equal to 20% of all distributions of cash from sales or refinancing; and (iv) the balance, 80% to the limited partners, pro rata in proportion to the number of Units held by each, and 20% to the General Partner.

<table style="border-collapse:collapse; text-align: left" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="9%" valign="top" align="left">NOTE 2.</td> <td align="left" valign="top">SIGNIFICANT ACCOUNTING POLICIES </td> </tr> </table> Basis of Presentation The accompanying financial statements present the consolidated financial position of the Partnership and its subsidiaries as of September 30, 2012 and December 31, 2011, and the consolidated results of operations of the Partnership and its subsidiaries for the three and nine months ended September 30, 2012 and 2011, the consolidated statement of partners’ equity for the nine months ended September 30, 2012, and cash flows of the Partnership for the nine months ended September 30, 2012 and 2011. All significant intercompany transactions, receivables and payables have been eliminated in consolidation. The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the General Partner, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal accruals) necessary to present fairly the consolidated financial position of the Partnership as of September 30, 2012 and December 31, 2011, and the related consolidated statements of operations for the three and nine months ended September 30, 2012 and 2011, the consolidated statement of partners’ equity for the nine months ended September 30, 2012 and the consolidated statement of cash flows for the nine months ended September 30, 2012 and 2011. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“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 financial statements and the reported results of operations during the reporting period. Actual results could differ from those estimates. Rental Properties Rental properties, including the related land, are stated at depreciated cost unless events or circumstances indicate that such amounts cannot be recovered, in which case, the carrying value of the property is reduced to its estimated fair value to the extent the carrying value is greater than the undiscounted future cash flows excluding interest. Estimated fair value is computed using estimated sales price, as determined by prevailing market values for comparable properties and/or the use of capitalization rates applied to annualized net operating income based upon the age, construction and use of the building. Due to uncertainties inherent in the valuation process and in the economy, it is reasonably possible that the actual results of operating and disposing of the Partnership’s properties could be materially different than current expectations. Rental properties are reviewed for impairment whenever there is a triggering event and at least annually. Depreciation is provided using the straight-line method over the useful lives of the respective assets. The useful lives are as follows:   <table cellspacing="0" cellpadding="0" width="68%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="51%"> </td> <td valign="bottom" width="3%"> </td> <td width="46%"> </td> </tr>   <tr> <td valign="top">Building and improvements</td> <td valign="bottom"> </td> <td valign="bottom">5 to 40 years</td> </tr> <tr> <td valign="top">Tenant improvements</td> <td valign="bottom"> </td> <td valign="bottom">Lesser of the initial term of the related lease, or the estimated useful life of the improvements</td> </tr> <tr> <td valign="top">Furniture and equipment</td> <td valign="bottom"> </td> <td valign="bottom">5 to 7 years</td> </tr>  </table> Fair Value of Investments The guidance related to accounting for fair value measurements defines fair value and establishes a framework for measuring fair value in order to meet disclosure requirements for fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This hierarchy describes three levels of inputs that may be used to measure fair value.   Financial assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows: Level 1. Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market. Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation using unobservable inputs. This category generally includes long-term derivative contracts, real estate and unconsolidated joint ventures. Cash and Cash Equivalents The Partnership considers short-term investments with an original maturity of three months or less at the time of investment to be cash and cash equivalents. Deferred Costs Deferred loan fees are capitalized and amortized on a straight-line basis, which approximates the effective interest method, over the life of the related loan. Deferred lease commissions are capitalized and amortized on a straight-line basis over the initial fixed term of the related lease agreements. Revenues The Partnership recognizes rental revenue on a straight-line basis over the term of the leases. Actual amounts collected could be lower than the amounts recognized on a straight-line basis if specific tenants are unable to pay rent that the Partnership has previously recognized as revenue. For tenants with percentage rent, the Partnership recognizes revenue when the tenants’ specified sales targets have been met. The reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized as revenue on an estimated basis during the current year. The Partnership develops a revised estimate of the amount recoverable from tenants based on updated expenses for the year and amounts to be recovered and records adjustments to income in the current year financial statement accounts. Any final changes in estimate based on lease-by-lease reconciliations and tenant negotiations and collection are recorded in the period those negotiations are settled. Net (Loss) Income Per Limited Partnership Unit Net (loss) income per Unit is calculated using the weighted average number of Units outstanding during the period and the limited partners’ allocable share of the net (loss) income.   Net (loss) income per Unit is as follows (in thousands, except for weighted average units and per unit amounts):   <table cellspacing="0" cellpadding="0" width="100%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="57%"> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="14" align="center" style="border-bottom:1px solid #000000">For the three months ended</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="14" align="center" style="border-bottom:1px solid #000000">For the nine months ended</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2011</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2011</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> Loss allocation: </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> </tr>   <tr bgcolor="#cceeff"> <td valign="top"> Net income (loss) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> 7</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(136</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> </td> <td nowrap="nowrap" valign="bottom">(4) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(403</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> 2</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(558</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> </td> <td nowrap="nowrap" valign="bottom">(9) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(885</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr> <td valign="top"> Weighted average number of limited partnership units outstanding during each period </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> Basic and diluted loss per limited partnership unit </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(2.07</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(6.12</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(8.48</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(13.45</td> <td nowrap="nowrap" valign="bottom">) </td> </tr>  </table> The calculation of net (loss) income per Unit assumes that the income (loss) otherwise allocable to the limited partners is first used to fund distributions to the General Partner. As discussed in Note 1, because distributions of available cash have exceeded cumulative earnings and the General Partner has a deficit, the General Partner would restore that deficit in liquidation. Income Taxes No provision for income taxes is included in the accompanying consolidated financial statements as the Partnership’s results of operations are allocated to the partners for inclusion in their respective income tax returns. Net (loss) income and partners’ equity (deficit) for financial reporting purposes will differ from the Partnership’s income tax return because of different accounting methods used for certain items, including depreciation expense, provisions for impairment of investments in real estate, capitalization of development period interest and rental income and loss recognition. Concentration Risk Two tenants (both educational institutions) represented a combined 23% and 32% of rental revenue for the nine months ended September 30, 2012 and 2011 respectively. Reference to 2011 audited consolidated financial statements These unaudited consolidated financial statements should be read in conjunction with the notes to audited consolidated financial statements included in the Partnership’s December 31, 2011 annual report on Form 10-K.

<table style="border-collapse:collapse; text-align: left" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="9%" valign="top" align="left">NOTE 3.</td> <td align="left" valign="top">INVESTMENTS IN REAL ESTATE </td> </tr> </table> Rental properties consist of the following (in thousands):   <table cellspacing="0" cellpadding="0" width="76%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="74%"> </td> <td valign="bottom" width="8%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="8%"> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">September 30, 2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">December 31, 2011</td> <td valign="bottom"> </td> </tr>   <tr bgcolor="#cceeff"> <td valign="top"> Land </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,650</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,690</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> Buildings </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">49,704</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">49,704</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> Building and tenant improvements </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9,732</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11,320</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">64,086</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,714</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> Less: accumulated depreciation </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(22,965</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(22,757</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total rental properties, net </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">41,121</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">42,957</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr>  </table> As of September 30, 2012, the Partnership’s rental properties included five office properties and seven retail properties (see detailed listing of properties in Item 2. Properties). In September 2012, the Partnership sold, in an all cash transaction, approximately 11,000 square feet of land adjacent to Hospitality Lane to the San Bernardino County Transportation Commission (SANBAG) for construction of an express bus service (SBX). The bus service will run along Hospitality Lane thru the Tri-city project. Land with a basis of $40,000 was sold for total consideration of $246,000. Costs related to the sale included $4,000 in sale fees. A gain on the sale of property of $202,000 was allocated to the affected properties on a prorata basis. In conjunction with the purchase of the land, SANBAG also received a temporary easement for approximately 13,000 square feet of land for six months starting in August 2012 to be used for construction staging with consideration of $2,000 per month.

<table style="border-collapse:collapse; text-align: left" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="9%" valign="top" align="left">NOTE 4.</td> <td align="left" valign="top">NOTE PAYABLE AND LINE OF CREDIT </td> </tr> </table> Note payable and line of credit consist of the following (in thousands):   <table cellspacing="0" cellpadding="0" width="76%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="74%"> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center">September 30,</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center">December 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">2011</td> <td valign="bottom"> </td> </tr>   <tr bgcolor="#cceeff"> <td valign="top"> Note payable collateralized by first deeds of trust on eight properties (discussed below). The note has a fixed interest rate of 5.46%, a maturity date of January 1, 2016, with a 30-year amortization requiring monthly payments of principal and interest totaling $136. </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">21,504</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">21,842</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> Line of credit </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,749</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,749</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> Total note payable and line of credit </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">29,253</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">29,591</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr>  </table> The note payable is collateralized by Promotional Retail II, Mimi’s Cafe, Palm Court Retail I and II, Promotional Retail Center, Service Retail Center, TGI Friday’s and One Vanderbilt. This note provides for a one-time loan assumption and release provisions for individual assets. The note payable contains a debt service coverage ratio covenant. The line of credit is collateralized by Carnegie Business Center, Vanderbilt Plaza, North River Place and Northcourt Plaza and has a total availability of $15,000,000 and an interest rate of 30-day LIBOR plus 3.00%, 3.25% at September 30, 2012. The line of credit contains a minimum net worth covenant and a debt to total assets covenant. The line of credit has a maturity date of December 19, 2013 with two one-year extension options. In order to extend the maturity date of the line of credit in the future, the Partnership must meet several conditions precedent, including a specified loan to value ratio. The Partnership is in compliance with the debt covenants. The required principal payments on the Partnership’s note payable for the next five years and thereafter, as of September 30, 2012, are as follows (in thousands).   <table cellspacing="0" cellpadding="0" width="68%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="88%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> </tr>   <tr bgcolor="#cceeff"> <td valign="top"> 2012 </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> 77</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> 2013 </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">477</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> 2014 </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">503</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> 2015 </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">532</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> 2016 </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,915</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">21,504</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr>  </table>

<table style="border-collapse:collapse; text-align: left" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="9%" valign="top" align="left">NOTE 5.</td> <td align="left" valign="top">RELATED PARTY TRANSACTIONS </td> </tr> </table> Glenborough LLC earns fees from the Partnership as prescribed by the Property Management and Services Agreement (the “Agreement”). The Agreement is in effect until the earlier of December 31, 2015 or the completion of sale of all real property assets of the Partnership. The terms and conditions of the Agreement are to perform services for the following fees:   <table cellspacing="0" cellpadding="0" width="84%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="76%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center">Nine Months Ended</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">September 30, 2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">September 30, 2011</td> <td valign="bottom"> </td> </tr>   <tr bgcolor="#cceeff"> <td valign="top"> (i) property management fees of 2.5% of gross rental revenue which were included in property operating expenses in the accompanying consolidated statements of operations </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">159,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">169,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> (ii) construction services fees which were capitalized and included in rental properties on the accompanying consolidated balance sheets </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">29,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">14,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> (iii) an asset and Partnership management fee which was included in general and administrative expenses in the accompanying consolidated statements of operations </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">187,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">187,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> (iv) leasing services fees which were included in deferred costs on the accompanying consolidated balance sheets </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">195,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">131,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> (v) a sales fee of 1% for all properties, which were included in net gain on sale of property </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> (vi) a financing services fee of 1% of the gross loan amount which is included in deferred costs on the accompanying consolidated balance sheets </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">150,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> (viii) a development fee equal to 5% of the hard costs of the development project, excluding the cost of the land, which would be included in construction in progress and/or rental properties on the accompanying consolidated balance sheets, the development fee and the general contractor’s fee shall not exceed 11.5%, in the aggregate, of the hard costs of the development fee project </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> (viii) data processing fees which were included in property operating expenses in the accompanying consolidated statements of operations </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">73,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">70,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> (ix) engineering fees which were included in property operating expenses in the accompanying consolidated statements of operations </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">21,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">21,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr>  </table> On October 1, 2010, Glenborough Holdings, LLC (Glenborough Holdings) transferred all of its interest in the Partnership to Glenborough Investors, LLC, which currently holds those units in its subsidiary, Glenborough Property Partners, LLC (“Glenborough Property Partners”). As part of the same transaction Glenborough Holdings transferred its ownership of Glenborough LLC to Glenborough Investors, LLC, which currently holds the ownership interests in that entity in its subsidiary, Glenborough Service, LP, the parent of Glenborough Property Partners. As of September 30, 2012, Glenborough Property Partners LLC, an affiliate of Glenborough LLC, held 7,386 or 11.22% of the Units.

<table style="border-collapse:collapse; text-align: left" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td width="9%" valign="top" align="left">NOTE 6.</td> <td align="left" valign="top">COMMITMENTS AND CONTINGENT LIABILITIES </td> </tr> </table> Environmental Matters The Partnership follows a policy of monitoring its properties for the presence of hazardous or toxic substances. The Partnership is not aware of any environmental liability with respect to the properties that would have a material adverse effect on the Partnership’s business, assets or results of operations. There can be no assurance that such a material environmental liability does not exist. The existence of any such material environmental liability could have an adverse effect on the Partnership’s consolidated results of operations and cash flows. Approximately 14.7 acres of the Tri-City land owned by the Partnership was part of a 27-acre landfill operated by the City of San Bernardino (“the City”) from approximately 1950 to 1960. This landfill incorporates two land parcels and part of a third parcel. In 1996, the Santa Ana Regional Water Quality Control Board (“SARWQCB”), with regulatory jurisdiction over the closure and monitoring of landfills, determined that the City was primarily responsible for the landfill. Therefore, the City and the Partnership entered into a Limited Access Easement Agreement, giving the City access to the site for development, implementation and financial responsibility for a plan for the remediation of the landfill. It was determined that the City was to improve the landfill cover system (The Waterman Landfill Cover Improvement Plans, April 2002), perform groundwater monitoring and install a permanent gas extraction system (Landfill Gas Collection System). Under the Limited Access Easement Agreement with the Partnership, methane monitoring is handled directly by the City. The City’s installation of the cover improvement system was completed in the first quarter of 2007 along with the gas extraction system. The system is now operational and working properly to eliminate methane from the landfill. All controlled wells are in compliance with County standards. Presently, the Partnership does not have any plans to develop or sell this site. No assurance can be made that circumstances will not arise which could impact the Partnership’s responsibility related to the land. General Uninsured Losses The Partnership carries property and liability insurance with respect to the properties. This coverage has policy specification and insured limits customarily carried for similar properties. However, certain types of losses (such as from earthquakes and floods) may be either uninsurable or not economically insurable. Should the properties sustain damage as a result of an earthquake or flood, the Partnership may incur losses due to insurance deductibles, co-payments on insured losses or uninsured losses. Additionally, the Partnership has elected to obtain insurance coverage for “certified acts of terrorism” as defined in the Terrorism Risk Insurance Act of 2002, as amended and reauthorized to date; however, our policies of insurance may not provide coverage for other acts of terrorism. Any losses from such other acts of terrorism might be uninsured. Should an uninsured loss occur, the Partnership could lose some or all of its capital investment, cash flow and anticipated profits related to the properties. Other Matters The Partnership is contingently liable for subordinated real estate commissions payable to the General Partner in the aggregate amount of $643,000 at September 30, 2012, for sales that were completed in previous years. The subordinated real estate commissions are payable only after the Limited Partners have received distributions equal to their original invested capital plus a cumulative non-compounded return of 12% per annum on their adjusted invested capital. Since the circumstances under which these commissions would be payable are not currently met, the liability has not been recognized in the accompanying consolidated financial statements; however, the amount will be recorded when and if it becomes payable.

Net (Loss) Income Per Limited Partnership Unit Net (loss) income per Unit is calculated using the weighted average number of Units outstanding during the period and the limited partners’ allocable share of the net (loss) income.   Net (loss) income per Unit is as follows (in thousands, except for weighted average units and per unit amounts):   <table cellspacing="0" cellpadding="0" width="100%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="57%"> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="14" align="center" style="border-bottom:1px solid #000000">For the three months ended</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="14" align="center" style="border-bottom:1px solid #000000">For the nine months ended</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2011</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2011</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> Loss allocation: </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> </tr>   <tr bgcolor="#cceeff"> <td valign="top"> Net income (loss) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> 7</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(136</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> </td> <td nowrap="nowrap" valign="bottom">(4) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(403</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> 2</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(558</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> </td> <td nowrap="nowrap" valign="bottom">(9) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(885</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr> <td valign="top"> Weighted average number of limited partnership units outstanding during each period </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> Basic and diluted loss per limited partnership unit </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(2.07</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(6.12</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(8.48</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(13.45</td> <td nowrap="nowrap" valign="bottom">) </td> </tr>  </table> The calculation of net (loss) income per Unit assumes that the income (loss) otherwise allocable to the limited partners is first used to fund distributions to the General Partner. As discussed in Note 1, because distributions of available cash have exceeded cumulative earnings and the General Partner has a deficit, the General Partner would restore that deficit in liquidation.

Net (loss) income per Unit is as follows (in thousands, except for weighted average units and per unit amounts):   <table cellspacing="0" cellpadding="0" width="100%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="57%"> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="14" align="center" style="border-bottom:1px solid #000000">For the three months ended</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="14" align="center" style="border-bottom:1px solid #000000">For the nine months ended</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2011</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">September 30, 2011</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">General Partner</td> <td valign="bottom" rowspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" rowspan="2" align="center" style="border-bottom:1px solid #000000">Limited Partners</td> <td valign="bottom" rowspan="2"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> Loss allocation: </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> </tr>   <tr bgcolor="#cceeff"> <td valign="top"> Net income (loss) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> 7</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(136</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> </td> <td nowrap="nowrap" valign="bottom">(4) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(403</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> 2</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(558</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> </td> <td nowrap="nowrap" valign="bottom">(9) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(885</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr> <td valign="top"> Weighted average number of limited partnership units outstanding during each period </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,819</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> Basic and diluted loss per limited partnership unit </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(2.07</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(6.12</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(8.48</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(13.45</td> <td nowrap="nowrap" valign="bottom">) </td> </tr>  </table>   <table cellspacing="0" cellpadding="0" width="76%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="74%"> </td> <td valign="bottom" width="8%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="8%"> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">September 30, 2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">December 31, 2011</td> <td valign="bottom"> </td> </tr>   <tr bgcolor="#cceeff"> <td valign="top"> Land </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,650</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,690</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> Buildings </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">49,704</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">49,704</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> Building and tenant improvements </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9,732</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11,320</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">64,086</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65,714</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> Less: accumulated depreciation </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(22,965</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(22,757</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total rental properties, net </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">41,121</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">42,957</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr>  </table>

<table cellspacing="0" cellpadding="0" width="76%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="74%"> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center">September 30,</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center">December 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">2011</td> <td valign="bottom"> </td> </tr>   <tr bgcolor="#cceeff"> <td valign="top"> Note payable collateralized by first deeds of trust on eight properties (discussed below). The note has a fixed interest rate of 5.46%, a maturity date of January 1, 2016, with a 30-year amortization requiring monthly payments of principal and interest totaling $136. </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">21,504</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">21,842</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> Line of credit </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,749</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,749</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> Total note payable and line of credit </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">29,253</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">29,591</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr>  </table>

<table cellspacing="0" cellpadding="0" width="68%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="88%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> </tr>   <tr bgcolor="#cceeff"> <td valign="top"> 2012 </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right"> 77</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> 2013 </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">477</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> 2014 </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">503</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> 2015 </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">532</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> 2016 </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,915</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">21,504</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr style="font-size:1px"> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr>  </table>

<table cellspacing="0" cellpadding="0" width="84%" border="0" style="border-collapse:collapse; text-align: left" align="center">  <tr> <td width="76%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center">Nine Months Ended</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">September 30, 2012</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">September 30, 2011</td> <td valign="bottom"> </td> </tr>   <tr bgcolor="#cceeff"> <td valign="top"> (i) property management fees of 2.5% of gross rental revenue which were included in property operating expenses in the accompanying consolidated statements of operations </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">159,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">169,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> (ii) construction services fees which were capitalized and included in rental properties on the accompanying consolidated balance sheets </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">29,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">14,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> (iii) an asset and Partnership management fee which was included in general and administrative expenses in the accompanying consolidated statements of operations </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">187,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">187,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> (iv) leasing services fees which were included in deferred costs on the accompanying consolidated balance sheets </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">195,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">131,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> (v) a sales fee of 1% for all properties, which were included in net gain on sale of property </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> (vi) a financing services fee of 1% of the gross loan amount which is included in deferred costs on the accompanying consolidated balance sheets </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">150,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> (viii) a development fee equal to 5% of the hard costs of the development project, excluding the cost of the land, which would be included in construction in progress and/or rental properties on the accompanying consolidated balance sheets, the development fee and the general contractor’s fee shall not exceed 11.5%, in the aggregate, of the hard costs of the development fee project </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr> <td valign="top"> (viii) data processing fees which were included in property operating expenses in the accompanying consolidated statements of operations </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">73,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">70,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr> <tr bgcolor="#cceeff"> <td valign="top"> (ix) engineering fees which were included in property operating expenses in the accompanying consolidated statements of operations </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">21,000</td> <td nowrap="nowrap" valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">21,000</td> <td nowrap="nowrap" valign="bottom"> </td> </tr>  </table>

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1918000 1751000 0.06 0.09 0.03 0.06 0.10 0.90 0.12 27 14.7 11000 187000000 187000000 -13.45 -6.12 -8.48 -2.07 2000 14000000 29000000 40000 70000000 73000000 2075000 2183000 0.05 (i) first, 1 percent to the General Partner and 99 percent to the limited partners in proportion to the outstanding positive amounts of Adjusted Invested Capital (as defined in the Partnership Agreement) for each of their Units until Adjusted Invested Capital (as defined in the Partnership Agreement) for each Unit is reduced to zero; (ii) second, 1 percent to the General Partner and 99 percent to the limited partners until each of the limited partners has received an amount which, including cash from operations previously distributed to the limited partners equals a 12 percent annual cumulative non-compounded return on the Adjusted Invested Capital (as defined in the Partnership Agreement) of their Units plus such limited partners’ Limited Incremental Preferential Return (as defined in the Partnership Agreement), if any, with respect to each such Unit, on the Adjusted Investment Capital (as defined in the Partnership Agreement) of such Units for the twelve month period following the date upon which such Unit was purchased from the Partnership and following the admission of such limited partner; (for limited partners admitted to the Partnership before March 31, 1985, there are additional cumulative non-compounded returns of 9 percent, 6 percent, or 3 percent depending on purchase date, through October 31, 1985); (iii) third, 99 percent to the General Partner and 1 percent to the limited partners, until the General Partner has received an amount equal to 20 percent of all distributions of cash from sales or refinancing; and (iv) the balance, 80 percent to the limited partners, pro rata in proportion to the number of Units held by each, and 20 percent to the General Partner. 21000000 21000000 150000000 0.01 -894000 -407000 -758000 -331000 131000000 195000000 0.115 0.05 0.01 (i) first, to the partners who have a deficit balance in their capital account, provided that, in no event, shall the General Partner be allocated more than 5% of the net income other than net income from operations until the earlier of sale or disposition of substantially all of the assets or the distribution of cash (other than cash from operations) equal to the Unitholder’s original invested capital; (ii) second, to the limited partners in proportion to and to the extent of the amounts required to increase their capital accounts to an amount equal to the sum of the adjusted invested capital of their units plus an additional cumulative non-compounded 6% return per annum (plus additional amounts depending on the date Units were purchased); (iii) third, to the partners in the minimum amount required to first equalize their capital accounts in proportion to the number of units owned, and then, to bring the sum of the balances of the capital accounts of the limited partners and the General Partner into the ratio of 4 to 1; and (iv) the balance, if any, 80% to the limited partners and 20% to the General Partner. In no event shall the General Partner be allocated less than 1% of the net income other than net income from operations for any period. 0 2 P30D 5 7 342000 0.01 0.99 0.10 0.90 0.20 0.80 0.20 0.20 0.80 0.01 0.99 0.99 0.01 0.01 0.99 0.12 0.01 169000000 159000000 Lesser of the initial term of the related lease, or the estimated useful life of the improvements 4.00 4000 3000000 13000 213000 295000 649000 826000 2089000