##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K

(Mark One)

|                                            |  |                                                                                   
|------------------------------------------- |  | ----------------------------------------------------------------------------------
|X IN BALLOT BOX                             |  | ANNUAL REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934    
|                                           
|For the fiscal year ended December 31, 2001
|                                           
|OR                                         
|                                           
|OPEN BALLOT BOX                             |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                           
|For the Transition period from

to         

Commission file number 333-9371

CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV
(Exact name of registrant as specified in its charter)

|                                                                                                                            |      |                                                
|--------------------------------------------------------------------------------------------------------------------------- | ---- | -----------------------------------------------
|Delaware
(State or other jurisdiction
of incorporation or organization)                                                     |      | 38-3304095
(I.R.S. Employer
Identification No.)
|                                                                                                                           
|24 Frank Lloyd
Wright Drive, Lobby L, 4th Floor, P.O. Box 544, Ann Arbor,
Michigan
(Address of principal executive offices) |      | 48106-0544
(Zip Code)                          
|                                                                                                                           
|Issuers
telephone number, including area code: (734) 994-5505                                                              |     
|Securities registered under Section 12(b) of the Exchange Act:                                                              | None
|Securities registered under Section 12(g) of the Exchange Act:                                                              | None
|                                                                                                                            |      | (Title of Class)                               

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

|                    |  |                    |  | 
|------------------- |  | ------------------ |  | 
|Yes
X IN BALLOT BOX |  | No OPEN BALLOT BOX |  | 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.X IN BALLOT BOX

At December 31, 2001 subscriptions for 30,000 units of limited partnership
interest (the Units) had been accepted, representing an aggregate amount of
$30,000,000. The aggregate sales price does not reflect market value and it
reflects only the price at which the Units were offered to the public.
Currently, there is no market for the Units and no market is expected to
develop. At December 31, 2001, there were 29,391 Units issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

A portion of the Prospectus of the Registrant dated December 23, 1996, as
supplemented and filed pursuant to Rule 424(b) under the Securities Act of
1933, as amended, S.E.C. File No. 333-9371, and is incorporated by reference in
Parts I and III of this Annual Report on Form 10-K.





---

TABLE OF CONTENTS



|                                                                         |  |  |  |  |  |  |  | 
|------------------------------------------------------------------------ |  |  |  |  |  |  |  | 
|PART I                                                                  
|PART II                                                                 
|PART III                                                                
|SIGNATURES                                                              
|Report of Independent Accountants                                       
|Balance Sheets                                                          
|Statements of Operations                                                
|Statements of Changes in Partners Capital                              
|Statements of Cash Flows                                                
|Captec Franchise Capital Partners, L.P. IV Notes to Financial Statements
|Report of Independent Accountants                                       
|SCHEDULE III                                                            
|PROPERTIES AND ACCUMULATED DEPRECIATION AS OF DECEMBER 31, 2001         



---



##### Table of Contents






PART I

Item 1. Business

Captec Franchise Capital Partners L.P. IV (the Partnership) is a
Delaware limited partnership formed on July 23, 1996 for the purpose of
acquiring income-producing commercial real properties and equipment which are
leased primarily to operators of national chain and nationally franchised
fast-food, family style and dinner house restaurants as well as other
franchised or chain businesses pursuant to leases requiring the lessee to pay
all taxes, assessments, utilities, insurance, maintenance, and repair costs
associated with such properties or leases differing only in that the
Partnership is responsible for the maintenance of the exterior walls and roof
of the property. The Partnership also acquires properties that are leased to
prominent national and regional retail concerns. The general partners upon
formation of the Partnership were Captec Franchise Capital Corporation IV
(Captec) and Patrick L. Beach, an individual. In August, 1998, the general
partnership interest in the Partnership was acquired by Captec Net Lease
Realty, Inc. (Captec Net Lease), an affiliate of Captec. Captec Net Lease,
Captec, and Mr. Beach are collectively referred to as the General Partners.

In December 2001, Captec Net Lease merged with and into Commercial Net
Lease Realty, Inc. In connection with the merger, Commercial Net
Lease agreed to sell and assign its general partnership interest in the
Partnership to GP4 Asset Acquisition, LLC, a wholly-owned subsidiary of CRC
Asset Acquisition LLC which is a Michigan limited liability company of which
Patrick L. Beach is the sole member. Patrick L. Beach is the former Chairman
of the Board of Directors and President and Chief Executive Officer of Captec
Net Lease and an original general partner of the Partnership. In order to
complete the assignment of the general partnership interest, a majority in
interest of the Limited Partners and the Partnerships lender must consent to
the transfer to GP4 Asset Acquisition. A majority in interest of the Limited
Partners consented to the transfer to GP4 Asset Acquisition in January 2002 and
the lender consent is pending. Until such time that the transfer of the
general partnership interest to GP4 Asset Acquisition is completed, Commercial
Net Lease and GP4 Asset Acquisition have entered into an agreement whereby
Commercial Net Lease assigned to GP4 Asset Acquisition all economic interests
as general partner, GP4 Asset Acquisition has assumed all obligations to be
performed relative to such economic interests and Commercial Net Lease has
contracted with GP4 Asset Acquisition to perform all management services
previously performed by the General Partners under the terms of the Partnership
Agreement.

The Partnership commenced a public offering (the Offering) of up to
30,000 units of Limited Partnership interest (the Units) registered under the
Securities Act of 1933, as amended, by means of a Registration Statement on
Form S-11 which was declared effective by the Securities and Exchange
Commission on December 23, 1996. Capitalized terms not defined herein shall
have the meaning ascribed to them in the Partnerships Prospectus dated
December 23, 1996. The Partnership accepted subscriptions for the Minimum
Number of Units on March 5, 1997 and immediately commenced operations. The
Offering reached final funding in December 1998 having received subscriptions
for the entire 30,000 Units from 1,587 investors. Since 1999, a total of 609
units have been repurchased by the Partnership pursuant to the terms of the
Repurchase Plan set forth in the Partnerships Prospectus. At December 31,
2001, the Partnership had 29,391 Units issued and outstanding.

The principal investment objectives of the Partnership are: (i)
preservation and protection of capital; (ii) distribution of cash flow
generated by the Partnerships leases; (iii) capital appreciation of
Partnership properties; (iv) generation of increased income and protection
against inflation through escalation of base rents or participation in gross
revenues of lessees of Partnership properties; and (v) deferred taxation of
Partnership cash distributions for Limited Partners.

The Partnership expects to have not less than 75%, but not more than 90%
of total investments in properties and up to 25%, but not less than 10% in
equipment. The Partnership does not intend to have more than 25% of properties
to be leased to retail concerns. The properties generally will be leased on
terms which provide for a base minimum annual rent with fixed increases on
specific dates or indexation of rent to indices such as the Consumer Price
Index. The equipment will be leased only pursuant to leases under which the
present value of non-cancelable rental payments payable during the initial term
of the lease is at least sufficient to permit a lessor to recover the purchase
price of the equipment.

The Partnership has no employees. The General Partners and their
affiliates, however, are permitted to perform services for the Partnership.

Item 2. Description of Properties

As of December 31, 2001, the Partnership had a portfolio of 21 properties
located in 10 states, with a cost basis of $31.9 million and 23 equipment
leases with an original investment of $7.7 million. The properties are leased
to 10 operators of restaurant concepts and five retail operators.

2



---



##### Table of Contents



As of December 31, 2001, operating leases to S&A Restaurants Corporation,
Kona Restaurant Group, Inc. and United Supermarkets, Inc. represented 13.4%,
11.3% and 9.7% of the annualized rent from the total portfolio, respectively.
Equipment leases to Champps Americana, Inc. represented 9.7% of the annualized
rent from the total portfolio. Any performance failure under these leases could
materially affect the Partnerships income and financial position.

All of the properties in the Partnership are occupied at December 31, 2001
and the related leases are performing. In October of 1998, Boston Chicken Inc.
and the majority of its subsidiaries filed for Chapter 11 bankruptcy
protection. The Partnership has one lease to a Boston Chicken franchisee who
did file bankruptcy. This lease was assumed under the bankruptcy court with
slightly modified terms. Annualized rent from this lease was $84,620 at
December 31, 2001.

The Partnership has one impaired equipment lease at December 31, 2001,
with a recorded investment of $210,541 net of a related allowance of $65,000.
The net investment in the impaired lease represents the estimated net proceeds
that the Partnership expects to receive. Rental payments on this lease are
delinquent by more than 90 days, and income accrual has been suspended by the
Partnership. The tenant, a Dennys restaurant franchisee, filed for Chapter 11
bankruptcy protection in September 2001. It is anticipated that the tenants
restaurant operations will be re-structured and/or sold and that, as a result,
the tenants restaurants will continue and the restaurant in which the leased
equipment is located will remain in operation. There is no definitive
timetable for resolution of this default.

The following is a summary description of the property and equipment
leases as of December 31, 2001.

|                                 |                                 |                       |              |  |          |         |  |            |          |         |                  |           |           |          |                  |            |      |         |        |          |           |   |              |         |         |         |      |        |  |  |        |  |  |  |  |  | 
|-------------------------------- | ------------------------------- | --------------------- | ------------ |  | -------- | ------- |  | ---------- | -------- | ------- | ---------------- | --------- | --------- | -------- | ---------------- | ---------- | ---- | ------- | ------ | -------- | --------- | - | ------------ | ------- | ------- | ------- | ---- | ------ |  |  | ------ |  |  |  |  |  | 
|                                 |                                 |                       |              |  |          |         |  |            |          |         |                  |           |           |          | Total Asset Cost |            |      | Asset   |        |          |           |   |              |         | Date of |         |      | Annual |  |  |        |  | 
|                                 |                                 |                       | Concept      |  |          | Date of |  |            | Date of  |         |                  | Including |           |          | State            |            |      | Monthly |        |          | Next Rent |   |              | Rate of |         |         |      |        | 
|Lessee Name                      |                                 | Name                  |              |  | Commence |         |  | Expiration |          |         | Acquisition Fees |           |           | Location |                  |            | Rent |         |        | Increase |           |   | Increase     |         |         | Sq. Ft. |     
|                                 |                                 |                       |              |  |          |         |  |            |          |         |                  |           |           |          |                  |            |      |         |        |          |           |   |              |         |         |         |     
|PROPERTIES                       |                                 |                       |              |  |          |         |  |            |          |         |                  |           |           |          |                  |            |      |         |        |          |           |   |              |         |         |         |      |        |  |  |        |  |  |  |  | 
|Hollywood Entertainment Corp.    |                                 | Hollywood Video       |              |  | 11/1/97  |         |  |            | 7/1/12   |         |                  |           | 1,455,300 |          |                  | OH         |      |         | 12,702 |          |           |   | (1) 07/01/03 |         |         |         | 1.92 | %      |  |  | 7,488  | 
|Blockbuster Entertainment Corp.  |                                 | Blockbuster Video     |              |  | 9/1/97   |         |  |            | 8/1/07   |         |                  |           | 1,170,000 |          |                  | GA         |      |         | 9,831  |          |           |   | 08/01/02     |         |         |         | 2.29 | %      |  |  | 6,500  | 
|Kona Restaurant Group, Inc.      |                                 | Carinos              |              |  | 8/1/97   |         |  |            | 8/1/14   |         |                  |           | 1,680,000 |          |                  | TX         |      |         | 15,400 |          |           |   | 08/01/03     |         |         |         | 1.64 | %      |  |  | 6,257  | 
|Capital Foods, Inc.              |                                 | Arbys                |              |  | 12/1/98  |         |  |            | 12/1/18  |         |                  |           | 819,000   |          |                  | OH         |      |         | 7,683  |          |           |   | 12/01/02     |         |         |         | 2.50 | %      |  |  | 2,950  | 
|Taco Two of Bakersfield          |                                 | Del Taco              |              |  | 2/1/99   |         |  |            | 2/1/19   |         |                  |           | 1,239,000 |          |                  | CA         |      |         | 10,571 |          |           |   | 02/01/02     |         |         |         | 1.32 | %      |  |  | 2,200  | 
|Kona Restaurant Group, Inc.      |                                 | Carino's              |              |  | 8/1/99   |         |  |            | 8/1/16   |         |                  |           | 1,801,622 |          |                  | TX         |      |         | 15,728 |          |           |   | 08/01/02     |         |         |         | 1.63 | %      |  |  | 6,335  | 
|Kona Restaurant Group, Inc.      |                                 | Kona Ranch Steakhouse |              |  | 8/1/99   |         |  |            | 8/1/16   |         |                  |           | 1,675,622 |          |                  | TX         |      |         | 14,628 |          |           |   | 08/01/02     |         |         |         | 1.63 | %      |  |  | 7,814  | 
|Hollywood Entertainment Corp.    |                                 | Hollywood Video       |              |  | 10/1/98  |         |  |            | 11/1/12  |         |                  |           | 1,454,880 |          |                  | OH         |      |         | 12,268 |          |           |   | (2) 10/01/02 |         |         |         | n/a  |        |  |  | 7,488  | 
|S&A Restaurant Corporation       |                                 | Steak & Ale           |              |  | 7/1/98   |         |  |            | 7/1/18   |         |                  |           | 2,100,000 |          |                  | MI         |      |         | 18,109 |          |           |   | 07/01/02     |         |         |         | 1.96 | %      |  |  | 7,724  | 
|S&A Restaurant Corporation       |                                 | Steak & Ale           |              |  | 7/1/98   |         |  |            | 7/1/18   |         |                  |           | 2,441,250 |          |                  | PA         |      |         | 21,051 |          |           |   | 07/01/02     |         |         |         | 1.96 | %      |  |  | 7,239  | 
|S&A Restaurant Corporation       |                                 | Bennigans            |              |  | 7/1/98   |         |  |            | 7/1/18   |         |                  |           | 1,627,500 |          |                  | VA         |      |         | 14,034 |          |           |   | 07/01/02     |         |         |         | 1.96 | %      |  |  | 5,210  | 
|Slaymaker Group                  |                                 | Wingers              |              |  | 3/1/99   |         |  |            | 3/1/19   |         |                  |           | 941,850   |          |                  | AZ         |      |         | 8,036  |          |           |   | 03/01/04     |         |         |         | 1.92 | %      |  |  | 3,172  | 
|Slaymaker Group                  |                                 | Wingers              |              |  | 2/1/99   |         |  |            | 2/1/19   |         |                  |           | 948,150   |          |                  | AZ         |      |         | 8,089  |          |           |   | 02/01/04     |         |         |         | 1.92 | %      |  |  | 3,240  | 
|Sterling Jewelers                |                                 | Jared Jewelers        |              |  | 2/1/99   |         |  |            | 2/1/19   |         |                  |           | 1,131,619 |          |                  | TX         |      |         | 11,667 |          |           |   | 02/01/04     |         |         |         | 1.92 | %      |  |  | 5,800  | 
|TEC Foods                        |                                 | Taco Bell             |              |  | 1/1/99   |         |  |            | 1/1/09   |         |                  |           | 766,500   |          |                  | MI         |      |         | 6,235  |          |           |   | 01/01/02     |         |         |         | 0.66 | %      |  |  | 2,252  | 
|TEC Foods                        |                                 | Taco Bell             |              |  | 1/1/99   |         |  |            | 1/1/19   |         |                  |           | 766,500   |          |                  | MI         |      |         | 6,235  |          |           |   | 01/01/02     |         |         |         | 0.66 | %      |  |  | 2,269  | 
|RTM Acquisition Company, Inc.    |                                 | Arbys                |              |  | 9/1/98   |         |  |            | 9/1/18   |         |                  |           | 840,000   |          |                  | MI         |      |         | 6,524  |          |           |   | 09/01/03     |         |         |         | 1.49 | %      |  |  | 5,909  | 
|Romacorp, Inc.                   |                                 | Tony Romas           |              |  | 1/1/99   |         |  |            | 1/1/14   |         |                  |           | 1,942,500 |          |                  | TX         |      |         | 15,417 |          |           |   | 01/01/02     |         |         |         | 1.96 | %      |  |  | 6,385  | 
|DRM, Inc.                        |                                 | Arbys                |              |  | 1/1/00   |         |  |            | 1/1/20   |         |                  |           | 987,000   |          |                  | IA         |      |         | 8,029  |          |           |   | 01/01/05     |         |         |         | 1.92 | %      |  |  | 3,094  | 
|United Supermarkets, Inc.        |                                 | United Supermarket    |              |  | 11/1/00  |         |  |            | 6/1/20   |         |                  |           | 5,077,907 |          |                  | TX         |      |         | 39,094 |          |           |   |              |         |         |         | n/a  |        |  |  | 43,100 | 
|Finest Foodservice, LLC          |                                 | Boston Market         |              |  | 4/1/97   |         |  |            | 8/1/12   |         |                  |           | 1,012,200 |          |                  | MN         |      |         | 7,052  |          |           |   | 01/01/02     |         |         |         | 3.93 | %      |  |  | 3,035  | 
|                                 |                                 |                       |              |  |          |         |  |            |          |         |                  |           |           |          | 31,878,400       |            |      |         |        |          |           |   | 268,382      |         |         |         |      |        |  |  |        |  |  |  |  | 
|EQUIPMENT                        |                                 |                       |              |  |          |         |  |            |          |         |                  |           |           |          |                  |            |      |         |        |          |           |   |              |         |         |         |      |        |  |  |        |  |  |  |  | 
|Corral South Store #4, Inc.      |                                 | Golden Corral         |              |  | 6/15/97  |         |  |            | 6/15/02  |         |                  |           | 531,508   |          |                  | FL         |      |         | 10,934 |          |           |   |              |         |         |         |      |        |  |  |        | 
|Girardi-Riva Enterprises, Inc.   |                                 | Arbys                |              |  | 2/1/98   |         |  |            | 2/1/05   |         |                  |           | 252,269   |          |                  | WA         |      |         | 4,108  |          |           |   |              |         |         |         |      |        |  |  |        | 
|Girardi-Riva Enterprises, Inc.   |                                 | Arbys                |              |  | 7/1/97   |         |  |            | 7/1/04   |         |                  |           | 167,444   |          |                  | WA         |      |         | 2,727  |          |           |   |              |         |         |         |      |        |  |  |        | 
|Morgans Restaurants of PA, Inc. |                                 | KFC                   |              |  | 10/15/97 |         |  |            | 10/15/04 |         |                  |           | 242,572   |          |                  | PA         |      |         | 3,766  |          |           |   |              |         |         |         |      |        |  |  |        | 
|Virginia QSC, LLC                |                                 | Burger King           |              |  | 11/1/97  |         |  |            | 11/1/04  |         |                  |           | 296,444   |          |                  | VA         |      |         | 4,862  |          |           |   |              |         |         |         |      |        |  |  |        | 
|J-Four, Inc.                     |                                 | KFC                   |              |  | 2/1/98   |         |  |            | 2/1/03   |         |                  |           | 292,691   |          |                  | NY, NH, MA |      |         | 5,882  |          |           |   |              |         |         |         |      |        |  |  |        | 
|                                 | RTM Georgia                     |                       | TJ Cinnamons |  |          | 4/1/98  |  |            |          | 4/1/03  |                  |           |           | 236,250  |                  |            | GA   |         |        | 4,590    |           |   |              |         |         |         |      |        |  |  |        |  | 
|                                 | RTMSC, Inc.                     |                       | TJ Cinnamons |  |          | 4/1/98  |  |            |          | 4/1/03  |                  |           |           | 210,000  |                  |            | SC   |         |        | 4,080    |           |   |              |         |         |         |      |        |  |  |        |  | 
|                                 | RTM, Inc.                       |                       | Arbys       |  |          | 10/1/98 |  |            |          | 10/1/03 |                  |           |           | 74,327   |                  |            | GA   |         |        | 1,444    |           |   |              |         |         |         |      |        |  |  |        |  | 
|                                 | RTM, Inc.                       |                       | Arbys       |  |          | 10/1/98 |  |            |          | 10/1/03 |                  |           |           | 73,446   |                  |            | AL   |         |        | 1,427    |           |   |              |         |         |         |      |        |  |  |        |  | 
|                                 | Cypress Restaurants, Inc.       |                       | Dennys      |  |          | 9/1/98  |  |            |          | 9/1/05  |                  |           |           | 367,500  |                  |            | SC   |         |        | 5,537    |           |   |              |         |         |         |      |        |  |  |        |  | 
|GC of Charlottesville            |                                 | Golden Corral         |              |  | 5/1/98   |         |  |            | 5/1/05   |         |                  |           | 418,870   |          |                  | VA         |      |         | 6,439  |          |           |   |              |         |         |         |      |        |  |  |        | 
|Taco Two of Bakersfield          |                                 | Del Taco              |              |  | 1/1/99   |         |  |            | 1/1/06   |         |                  |           | 319,528   |          |                  | CA         |      |         | 5,087  |          |           |   |              |         |         |         |      |        |  |  |        | 
|                                 | Circle Restaurant Company, Inc. |                       | Arbys       |  |          | 12/1/00 |  |            |          | 9/1/05  |                  |           |           | 98,425   |                  |            | CO   |         |        |         |           |   |              |         |         |         |      |        |  |  |        |  | 
|El Chico Restaurants, Inc.       |                                 | El Chico              |              |  | 9/1/98   |         |  |            | 9/1/03   |         |                  |           | 487,516   |          |                  | TX         |      |         | 9,797  |          |           |   |              |         |         |         |      |        |  |  |        | 
|                                 | El Chico Restaurants, Inc.      |                       | El Chico     |  |          | 9/1/98  |  |            |          | 9/1/03  |                  |           |           | 436,688  |                  |            | OK   |         |        | 8,775    |           |   |              |         |         |         |      |        |  |  |        |  | 
|DJ Enterprises, Inc.             |                                 | Taco Bell             |              |  | 10/1/98  |         |  |            | 9/1/07   |         |                  |           | 180,600   |          |                  | FL         |      |         | 500    |          |           |   |              |         |         |         |      |        |  |  |        | 
|J.M.C. Limited Partnership       |                                 | Applebees            |              |  | 3/1/97   |         |  |            | 3/1/04   |         |                  |           | 422,101   |          |                  | UT         |      |         | 6,838  |          |           |   |              |         |         |         |      |        |  |  |        | 
|DenAmerica Corp.                 |                                 | Black Eye Pea         |              |  | 4/15/97  |         |  |            | 4/15/04  |         |                  |           | 367,500   |          |                  | TX         |      |         | 5,866  |          |           |   |              |         |         |         |      |        |  |  |        | 
|Shells Seafood Restaurants, Inc. |                                 | Shells Seafood        |              |  | 6/1/97   |         |  |            | 6/1/02   |         |                  |           | 124,591   |          |                  | FL         |      |         | 2,648  |          |           |   |              |         |         |         |      |        |  |  |        | 
|Shells Seafood Restaurants, Inc. |                                 | Shells Seafood        |              |  | 6/1/97   |         |  |            | 6/1/02   |         |                  |           | 98,133    |          |                  | FL         |      |         | 2,086  |          |           |   |              |         |         |         |      |        |  |  |        | 
|Champps Americana, Inc.          |                                 | Champps               |              |  | 4/1/98   |         |  |            | 4/1/03   |         |                  |           | 896,229   |          |                  | IL         |      |         | 17,651 |          |           |   |              |         |         |         |      |        |  |  |        | 
|Champps Americana, Inc.          |                                 | Champps               |              |  | 7/1/98   |         |  |            | 7/1/03   |         |                  |           | 1,089,913 |          |                  | MI         |      |         | 21,466 |          |           |   |              |         |         |         |      |        |  |  |        | 
|                                 |                                 |                       |              |  |          |         |  |            |          |         |                  |           |           |          |                  |            |      |         |        |          |           |   |              |         |         |         |      |        |  |  |        |  |  | 
|                                 |                                 |                       |              |  |          |         |  |            |          |         |                  |           |           |          | 7,684,544        |            |      |         |        |          |           |   | 136,510      |         |         |         |      |        |  |  |        |  |  |  |  | 
|                                 |                                 |                       |              |  |          |         |  |            |          |         |                  |           |           |          |                  |            |      |         |        |          |           |   |              |         |         |         |      |        |  |  |        |  |  | 
|                                 |                                 |                       |              |  |          |         |  |            |          |         |                  |           |           | $        | 39,562,944       |            |      |         |        |          |           | $ | 404,892      |         |         |         |      |        |  |  |        |  |  |  |  | 
|                                 |                                 |                       |              |  |          |         |  |            |          |         |                  |           |           |          |                  |            |      |         |        |          |           |   |              |         |         |         |      |        |  |  |        |  |  | 



|(1) |  | Rent Increase equals the lesser of CPI or 10%.    
|--- |  | --------------------------------------------------
|   
|(2) |  | Rent increase is based on percentage CPI increase.

Leases

General Real Estate Lease Provisions:All of the properties are subject to
leases which are triple net leases whereby the tenant is responsible for all
expenses related to the cost of operating the properties including real estate
taxes, insurance, maintenance and repair costs. Original base terms of the
property leases ranged from 14 to 20 years, and the weighted average remaining
base term of the property lease portfolio was 15.4 years as of December 31,
2001. Certain of the leases provide the tenant with one or more options to
renew the lease upon expiration of the base term at predetermined or market
rental rates. All but one of the leases provide for increases in the monthly
rents during the base term of the lease, with most of these determined based
upon fixed, contractual rates of increases. Two of the leases provide for
rental increases based upon changes in the Consumer Price Index. The timing of
rental increases is specified in the leases, but generally occurs no more often
than annually and no less often than once every five years.

General Equipment Lease Provisions:All of the equipment leases are on the
Partnerships standard form of lease whereby the lessee is responsible for all
expenses related to the equipment including taxes, insurance, maintenance and
repair costs. All of the equipment was purchased with cash from Offering
proceeds. Original base terms of the equipment leases ranged
from 5 to 9 years, and the weighted average remaining base term of the
equipment lease portfolio was 25 months as of December 31, 2001. All of the
leases provide for fixed monthly rents during the entire term of the lease.
Approximately 61% of the equipment leases provide the tenant with the option to
purchase the equipment for a nominal purchase price ($1) upon expiration of the
base lease term.

Summary of Investment Objectives and Policies

The Partnership acquires income-producing property and equipment which are
leased primarily to operators of nationally franchised fast-food, family style
and dinner house restaurants as well as other franchised service-type
businesses such as automotive and specialty retail franchises. Properties are
selected for acquisition based on an examination and evaluation by the General
Partners or an affiliate of the potential value of the site, the financial
condition and business history of the proposed lessee, the demographics of the
area in which the property is located, the proposed purchase price and lease
terms, geographic and market diversification, and potential operating results.
Similar analyses are utilized in selecting equipment. The Partnership
anticipates that only fee interests in real property will be acquired, although
other interests (including acquisitions of buildings, with the underlying land
being subject to a long-term ground lease) may be acquired if it is deemed to
be advantageous to the Partnership. At December 31, 2001 the Partnership has
one property subject to a ground lease.

3



---



##### Table of Contents



In making investments, the General Partners consider relevant factors,
including the condition and proposed use of the property and/or equipment,
income-producing capacity, the financial condition of the lessee, and with
respect to properties, the prospects for long-term appreciation. In no event
will property or equipment be acquired unless a satisfactory lease commitment
has been obtained from a suitable lessee as further described below.

In selecting specific properties, the General Partners generally require
the following:

(i)  Base annual rent will provide a specified minimum return on the
contract purchase price of the property; the majority of the leases will
provide for fixed increases on specific dates or indexation of rents to indices
such as the Consumer Price Index. Leases may also provide for percentage rents
calculated to provide rents equal to a percentage of the lessees gross sales
if greater than the base rent; and

(ii)  The initial lease will have a term of between ten and twenty years.

In selecting specific equipment, the General Partners typically require
the following:

(i)  Full Payout Leases providing for fixed rents structured to return 100%
of the cost of the equipment plus yield a return equivalent to market interest
rates over the lease term; and

(ii)  The leases are expected to have terms of five to seven years with
residual values of equipment at the end of such terms expected to be minimal
(approximately 10% of original cost).

The determination of whether particular properties or equipment should be
sold or otherwise disposed of will be made after consideration of relevant
factors, including performance or projected performance of the property or
equipment and market conditions, with a view toward achieving the principal
investment objectives of the Partnership.

Item 3. Legal Proceedings

The Partnership is not a party to any material legal proceeding nor, to
the best of its knowledge, are any such proceedings either pending or
threatened.

Item 4. Submission of Matters to a Vote of Security Holders

As described herein under the heading Item 1. Business, Captec Net Lease
merged with and into Commercial Net Lease effective on December 1,
2001. In connection with the merger, Commercial Net Lease agreed to sell and
assign its general partnership interest in the Partnership to GP4 Asset
Acquisition, a wholly-owned subsidiary of CRC Asset Acquisition LLC which is a
Michigan limited liability company of which Patrick L. Beach is the sole
member. Patrick L. Beach is the former Chairman of the Board of Directors and
President and Chief Executive Officer of Captec Net Lease and an original
general partner of the Partnership.

In order to complete this transaction, a majority in interest of the
Limited Partners and the Partnerships lender must consent to the transfer of
the general partner interest to GP4 Asset Acquisition. A consent
solicitation
regarding this consent was filed with the Securities and Exchange Commission
and mailed to all Limited Partners on or about November 30, 2001. The consent
solicitation requested that the Limited Partners provide written consent to:



| |  | Transfer the general partners interest to GP4 Asset Acquisition;                          
| | - | -------------------------------------------------------------------------------------------
|
| |  | Admit GP4 Asset Acquisition as the general partner of the Partnership; and                 
|
| |  | Continue the business of the Partnership with GP4 Asset Acquisition as the general partner.

Effective
January 15, 2002, the requisite Limited Partner consents to the
transfer of the general partnership interest to GP4 Asset Acquisition
were obtained and the consent solicitation was closed. Lender consent is still pending.




PART II

Item 5. Market for Registrants Limited Partnership Interests and Related
Security Holder Matters

The Units are not readily transferable. There is no public market for the
Units and it is not currently expected that any will develop. There are
restrictions upon the transferability of Units, including the requirement that
the General Partners consent to any

4



---



##### Table of Contents



transferee becoming a substituted Limited Partner (which consent may be
granted or withheld at the sole discretion of the General Partners). In
addition, restrictions on transfer may be imposed under state securities laws.

The Revenue Act of 1987 contains provisions which may have an adverse
impact on investors in certain publicly traded partnerships. If the
Partnership were to be classified as a publicly traded partnership, income
attributable to the Units would be characterized as portfolio income and the
gross income attributable to Units acquired by tax-exempt entities would be
unrelated business income, with the result that the Units could be less
marketable. The General Partners will, if necessary, take appropriate steps to
ensure that the Partnership will not be deemed a publicly traded partnership.

Item 6. Selected Financial Data

Selected Financial Data

|                                                                 |                             |                                    |            |              |           |   |              |           |           |              |            |           |           | 
|---------------------------------------------------------------- | --------------------------- | ---------------------------------- | ---------- | ------------ | --------- | - | ------------ | --------- | --------- | ------------ | ---------- | --------- | --------- | 
|                                                                 |                             |                                    |            | Year Ended   |           |   | Year Ended   |           |           | Year Ended   |           
|                                                                 |                             |                                    |            | December 31, |           |   | December 31, |           |           | December 31, |           
|                                                                 |                             |                                    |            | 2001         |           |   | 2000         |           |           | 1999         |           
|                                                                 |                             |                                    |            |              |           |   |              |           |           |              |           
|Statements of Operations Data:                                   |                             |                                    |            |              |           |   |              |           |           |              |            |          
|Operating revenue:                                               |                             |                                    |            |              |           |   |              |           |           |              |            |          
|                                                                 | Rental income               |                                    | $          | 3,363,815    |           |   | $            | 3,002,022 |           |              | $          | 2,672,588 |          
|                                                                 | Finance income              |                                    |            | 456,552      |           |   |              | 588,435   |           |              |            | 805,410   |          
|                                                                 |                             |                                    |            |              |           |   |              |           |          
|                                                                 |                             | Total operating revenue            |            |              | 3,820,367 |   |              |           | 3,590,457 |              |            |           | 3,477,998 | 
|Operating costs and expenses:                                    |                             |                                    |            |              |           |   |              |           |           |              |            |          
|                                                                 | Interest expense            |                                    |            | 1,217,899    |           |   |              | 923,965   |           |              |            | 788,199   |          
|                                                                 | Depreciation                |                                    |            | 482,954      |           |   |              | 394,312   |           |              |            | 327,803   |          
|                                                                 | Provision for losses        |                                    |            | 65,000       |           |   |              |          |           |              |            |          |          
|                                                                 | General and administrative  |                                    |            | 129,144      |           |   |              | 101,226   |           |              |            | 108,023   |          
|                                                                 |                             |                                    |            |              |           |   |              |           |          
|                                                                 |                             | Total operating costs and expenses |            |              | 1,894,997 |   |              |           | 1,419,503 |              |            |           | 1,224,025 | 
|                                                                 |                             |                                    |            |              |           |   |              |           |          
|Income from operations                                           |                             |                                    | 1,925,370  |              |           |   | 2,170,954    |           |           |              | 2,253,973  |          
|Other income (expense):                                          |                             |                                    |            |              |           |   |              |           |           |              |            |          
|                                                                 | Interest income             |                                    |            | 14,608       |           |   |              | 488       |           |              |            | 29,143    |          
|                                                                 | Gain on sale of real estate |                                    |            |             |           |   |              |          |           |              |            | 5,858     |          
|                                                                 | Gain on sale of equipment   |                                    |            | (258         | )         |   |              | 42,433    |           |              |            |          |          
|                                                                 | Other                       |                                    |            |             |           |   |              | 234       |           |              |            | 5,055     |          
|                                                                 |                             |                                    |            |              |           |   |              |           |          
|                                                                 |                             | Total other income                 |            |              | 14,350    |   |              |           | 43,155    |              |            |           | 40,056    | 
|                                                                 |                             |                                    |            |              |           |   |              |           |          
|Net income                                                       |                             |                                    | 1,939,720  |              |           |   | 2,214,109    |           |           |              | 2,294,029  |          
|Net income allocable to general partners                         |                             |                                    | 19,397     |              |           |   | 22,141       |           |           |              | 22,940     |          
|                                                                 |                             |                                    |            |              |           |   |              |           |          
|Net income allocable to limited partners                         |                             | $                                  | 1,920,323  |              |           | $ | 2,191,968    |           |           | $            | 2,271,089  |          
|                                                                 |                             |                                    |            |              |           |   |              |           |          
|Net income per limited partnership unit                          |                             | $                                  | 65.10      |              |           | $ | 73.65        |           |           | $            | 75.78      |          
|Weighted average number of limited partnership units
outstanding |                             |                                    | 29,496     |              |           |   | 29,763       |           |           |              | 29,969     |          
|Other Data:                                                      |                             |                                    |            |              |           |   |              |           |           |              |            |          
|Cash flows from operating activities                             |                             | $                                  | 2,020,200  |              |           | $ | 2,626,092    |           |           | $            | 3,306,697  |          
|Cash flows from investing activities                             |                             | $                                  | 1,253,154  |              |           | $ | (3,138,164   | )         |           | $            | (4,000,047 | )        
|Cash flows from financing activities                             |                             | $                                  | (2,094,789 | )            |           | $ | (110,816     | )         |           | $            | (507,083   | )        
|Balance Sheet Data:                                              |                             |                                    |            |              |           |   |              |           |           |              |            |          
|Cash and cash equivalents                                        |                             | $                                  | 1,460,847  |              |           | $ | 179,066      |           |           | $            | 915,760    |          
|Investment in property under leases                              |                             | $                                  | 33,604,343 |              |           | $ | 35,405,709   |           |           | $            | 32,619,423 |          
|Total assets                                                     |                             | $                                  | 36,589,728 |              |           | $ | 36,819,022   |           |           | $            | 34,533,478 |          
|                                                                 |                             |                                    |            |              |           |   |              |           |           |              |            |          

5



---



##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations

When used in this discussion, the words, intends, anticipates,
expects, and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties
which could cause actual results to differ materially from those projected.
Such risks and uncertainties include the following: (i) a tenant may default in
making rent payments, (ii) a fire or other casualty may interrupt the cash flow
stream from a property, (iii) the properties may not be able to be leased at
the assumed rental rates, (iv) unexpected expenses may be incurred in the
ownership of the properties, and (v) properties may not be able to be sold at
the presently anticipated prices and times.

As a result of these and other factors, the Partnership may experience
material fluctuations in future operating results on a quarterly or annual
basis, which could materially and adversely affect its business, financial
condition and operating results. Any statements contained in this
report or any document incorporated herein by reference that are not
statements of historical fact may be deemed to be forward-looking
statements.  These statements by their nature involve substantial
risks and uncertainties, some of which are beyond the Partnership's
control, and actual results may differ materially depending on a
variety of important factors, many of which are also beyond the
Partnership's control.  You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this
report.  The Partnership disclaims
any obligations to update or release revisions to these
forward-looking statements to reflect events or circumstances after
the date of this report or to reflect the occurrence of unanticipated
events except as may be required by law.

Results of Operations  2001 to 2000

For the year ended December 31, 2001, operating revenue increased 6% to
approximately $3.8 million as compared to approximately $3.6 million for the
year ended December 31, 2000. Rental income from operating leases for 2001
increased 12% to approximately $3.4 million as compared to approximately $3.0
million for 2000 due to the benefit of a full year of rental income from
properties acquired and leased in 2000. Earned income from financing leases for
2001 decreased 22% to approximately $457,000 as compared to approximately
$588,000 for 2000 due to the sale of one equipment lease in March 2000 and the
amortization of principal balances.

Operating expenses increased 33% to approximately $1.9 million for 2001 as
compared to approximately $1.4 million for 2000. The increase is primarily due
to increases in interest expense and depreciation and a charge for a provision
for credit losses. Interest expense increased 32% to approximately $1.2
million in connection with the $3.75 million and the $1.5 million term notes
that the Partnership entered into in October 2000 and November 2001,
respectively. These notes were used to fund property purchases and provide
cash for future property acquisitions. Depreciation expense increased 23% to
approximately $483,000 as a result of a full year of depreciation for a
property acquired in 2000. The Partnership recognized a $65,000 provision for
credit losses to reserve for losses anticipated in connection with an impaired
equipment lease. Rental payments on this lease are delinquent by more than 90
days, and income accrual has been suspended by the Partnership. The tenant, a
Dennys restaurant franchisee, filed for Chapter 11 bankruptcy protection in
September 2001. It is anticipated that the tenants restaurant operations will
be re-structured and/or sold and that, as a result, the tenants restaurants
will continue and the restaurant in which the leased equipment is located will
remain in operation. There is no definitive timetable for resolution of this
default. General and administrative expenses increased 28% to approximately
$129,000 for 2001 as compared to $101,000 for 2000, primarily due to the
increase in professional fee expense.

Other income decreased 67% to approximately $14,000 for 2001 as compared
to approximately $43,000 for 2000. Other income for 2001 was due to late fees
and interest income on short term investments. Other income for 2000 was
mainly a result of a gain on the sale of one equipment lease.

As a result of the foregoing, the Partnerships net income for 2001
decreased 12% to approximately $2.0 million as compared to $2.2 million in
2000. The Partnership is not subject to income taxation as all of its income
and expenses flow through to the Partners. During the year ended December 31,
2001, the Partnership made distributions to limited partners totaling $3.2
million, as compared to $3.6 million for the preceding year.

Results of Operations  2000 to 1999

For the year ended December 31, 2000, operating revenue increased 3% to
$3.6 million as compared to $3.5 million for the year ended December 31, 1999.
Rental income from operating leases for 2000 increased 12% to $3.0 million as
compared to $2.7 million for 1999 due to the acquisition of one real estate
property and the benefit of a full year of rental income from properties
acquired and leased in 1999. Earned income from financing leases for 2000
decreased 27% to $588,000 as compared to $805,000 for 1999 due to the sale of
one equipment lease and the amortization of principal balances.

Operating expenses increased 16% to approximately $1.4 million for 2000 as
compared to approximately $1.2 million for 1999. Interest expense increased
17% to $924,000 in 2000 as compared to $788,000 for 1999. The increase is due
to a full year of interest

6



---



##### Table of Contents



expense for the $3.3 million term note that the Partnership entered into
in March 1999, as well as the additional interest expense incurred for the
$3.75 million term note that the Partnership entered into in October 2000.
Depreciation expense increased 20% to $394,000 for 2000 as compared to $328,000
for 1999 due to the acquisition of one real estate property and the effect of a
full period of depreciation of properties acquired and leased in the preceding
year. General and administrative expenses decreased 6% to $101,000 for 2000 as
compared to $108,000 for 1999. The decrease is primarily the result of a
decrease in professional fee expense.

Interest and other income decreased to $722 for 2000 as compared to
$34,000 for 1999 primarily as a result of idle funds being invested in
properties and no longer earning interest.

During 2000, the Partnership recognized a gain of $42,000 on the sale of
equipment. Proceeds of approximately $611,000 were reinvested in a real estate
property. During 1999, the Partnership recognized a gain of $5,858 on the sale
of real estate. Proceeds of approximately $953,000 were reinvested in a real
estate property.

As a result of the foregoing, the Partnerships net income for 2000
decreased 3% to approximately $2.2 million as compared to $2.3 million in 1999.
The Partnership is not subject to income taxation as all of its income and
expenses flow through to the Partners. During the year ended December 31, 2000,
the Partnership made distributions to limited partners totaling $3.6 million,
as compared to $3.4 million for the preceding year.

Critical Accounting Policies

The financial statements are prepared in accordance
with GAAP, which requires the Partnership to make certain estimates and
assumptions. A summary of the Partnership's significant accounting
policies is provided in Note 1 to the financial statements. The
following section is a summary of certain aspects of those accounting
policies that require management estimates and judgement.

When real estate
properties are acquired, acquisition costs are allocated to components
of the property using relative fair value based on historical
experience and the Partnership's current judgement. These
assumptions and estimates impact the amount of costs allocated
between land and building, depreciation expense, and gains or losses
recorded on sales of properties.

Receivables are
reported net of allowance for doubtful accounts and may be
uncollectible in the future. The Partnership reviews its receivables
regularly for potential collection problems in computing the
allowance recorded against its receivables;
this review process requires the Partnership to make certain judgements
regarding collections that are inherently difficult to predict.

Liquidity and Capital Resources

The Partnership commenced the Offering of up to 30,000 Units registered
under the Securities Act of 1933, as amended, by means of a Registration
Statement filed on Form S-11 which was declared effective by the Securities and
Exchange Commission on December 23, 1996. The Partnership accepted
subscriptions for the Minimum Number of Units on March 5, 1997 and immediately
commenced operations. The offering reached final funding in December 1998 with
subscriptions for the entire 30,000 Units. Net proceeds after offering expenses
were approximately $26.1 million.

In December, 1998, the Partnership entered into a $6.4 million term note.
The Partnership entered into an additional $3.3 million term note in March
1999. Proceeds from the notes were used to acquire additional properties. The
notes have a 10 year term, are collateralized by certain properties subject to
operating leases, and bear interest at rates ranging from 8.13 to 8.5% per
annum. Debt issuance costs of approximately $595,000 incurred in connection
with the issuance of the notes are being amortized into interest expense over
the life of the notes using the straight-line method.

The Partnership purchased one net leased real estate property in October
2000 and assumed a $3.75 million term note in connection with the acquisition.
The note has a 10-year term and bears interest at the rate of 8.35% per annum.

In November 2001, the Partnership entered into an additional $1.5 million
term note. The note has a 2-year term, is collateralized by certain properties
subject to operating leases and bears an interest rate of prime plus 2% per
annum. Proceeds from this note were used to repay approximately $700,000 of
short-term borrowings and to provide working capital intended to be used to
fund Unit repurchases and potential property acquisitions.

As of December 31, 2001, the Partnership had invested $31.9 million in 21
net leased real estate properties and $7.7 million in 23 equipment packages.
Net of $4.6 million of aggregate principal collections on financing leases
during the life of those investments, the net remaining investment in the
Partnerships leased equipment is $3.1 million. As of December 31, 2001, the
Partnership has not made any commitments to purchase additional properties, but
will continue to consider property purchases to the extent that it has capital
available to invest.

The Partnership semi-annually considers written requests to repurchase
Units pursuant to the terms of the Repurchase Plan set forth in the
Partnerships Prospectus. Since 1999, a total of 609 units have been
repurchased by the Partnership. During 1999 the Partnership repurchased a
total of 117 Units for $105,399, or approximately $901 per Unit on average. In
2000 the Partnership repurchased a total of 258 Units for $230,362, or
approximately $893 per Unit on average. In 2001 the Partnership repurchased a
total of 234 Units for $189,450, or approximately $810 per Unit on average.
The Partnership expects to fund future Unit repurchases out of working capital
reserves and Net Sale or Refinancing Proceeds, but may also fund such
repurchases out of Cash Flow. The Partnership is not obligated to accept Unit
repurchase requests if the Partnership does not have the liquidity to fund such
requests and/or if the Partnership does not have sufficient Cash Flow to
distribute the 10% Current Preferred Return.

7



---



##### Table of Contents



The Partnership expects that only limited amounts of liquid assets will be
required for existing properties since its property and equipment
leases require lessees to pay all taxes and assessments,
maintenance and repairs and insurance premiums, including casualty
insurance thereby minimizing the Partnerships operating
expenses and capital requirements.
The General Partners expect that the cash flow to be generated by the
Partnerships properties and equipment will provide adequate liquidity and
capital resources to pay operating expenses and provide distributions to
Limited Partners.

Item 7a. Qualitative and Quantitative Disclosures About Market Risk. None

Item 8. Financial Statements
and Supplementary Data

See Index to Financial Statements on Page F-I of this Form 10-K for
Financial Statements and Financial Statement Schedules, where applicable.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.




PART III

Item 10. Directors and Executive Officers of the Registrant

The Partnership does not have directors or officers.

Item 11. Executive Compensation

The Partnership has
no officers or other employees. All amounts paid by the Partnership
for management and administration services are pursuant to agreements
described under Item 13 Certain Relationships and Related Transactions.

Item 12. Security Ownership of Certain Beneficial Owners and Management

To the best knowledge of the Partnership, as of December 31, 2001 no
person known by the Partnership, beneficially owned more than 5% of the
outstanding Units.

Item 13. Certain Relationships and Related Transactions

Pursuant to the
Partnership Agreement, acquisition fees of 4%, plus an
additional .00624% for each 1% of indebtedness incurred in acquiring
properties and equipment, of the aggregate purchase prices of
properties and equipment (not to exceed a total 5% acquisition fee)
are incurred to the General Partner.  The Partnership incurred $0,
$240,772 and $279,146 in acquisition fees during 2001, 2000 and 1999,
respectively.  The acquisition fees were capitalized as part of the
Partnership's investment in land and buildings subject to operating
leases and net investment in financing leases.

The Partnership has
entered into an asset management agreement with the General Partner
and its affiliates, whereby the General Partner and the General
Partner's affiliates provide various property and equipment
management services for the Partnership.  A subordinated asset
management fee is charged, in an amount equal to 1% of the gross
rental revenues derived from the properties and equipment.  Payment
of the asset management fee is subordinated to receipt by the limited
partners of annual distributions equal to a cumulative, non-compounded
return of 10% per annum on their adjusted invested capital.
Management fees of $47,426, $45,556 and $39,507 were incurred during
2001, 2000 and 1999, respectively.

The Partnership
Agreement provides for the General Partner to receive liquidation
fees limited to the lesser of 3% of the gross sales price or 50% of
the customary real estate commissions in the event of a real estate
liquidation.  This fee is payable only after the limited partners
have received distributions equal to a cumulative, non-compounded
return of 10.5% per annum, cumulative non-compounded preferred return
on their adjusted invested capital plus distributions of sale or
refinancing proceeds equal to 100% of their original contributions.
The Partnership's Prospectus provides for the reinvestment of net
sale proceeds during the four year period beginning on the date the
Partnership terminated the offering, December 23, 1998.  The
Partnership did not pay any liquidation fees during 2001, 2000, or 1999.

In December 2001, Captec Net Lease merged with and into Commercial Net
Lease Realty, Inc. In connection with the merger, Commercial Net
Lease agreed to sell and assign its general partnership interest in the
Partnership to GP4 Asset Acquisition, LLC, a wholly-owned subsidiary of CRC
Asset Acquisition LLC which is a Michigan limited liability company of which
Patrick L. Beach is the sole member. Patrick L. Beach is the former Chairman
of the Board of Directors and President and Chief Executive Officer of Captec
Net Lease and an original general partner of the Partnership. In order to
complete the assignment of the general partnership interest, a majority in
interest of the Limited Partners and the Partnerships lender must consent to
the transfer to GP4 Asset Acquisition. A majority in interest of the Limited
Partners consented to the transfer to GP4 Asset Acquisition in January 2002 and
the lender consent is pending. Until such time that the transfer of the
general partnership interest to GP4 Asset Acquisition is completed, Commercial
Net Lease and GP4 Asset Acquisition have entered into an agreement whereby
Commercial Net Lease assigned to GP4 Asset Acquisition all economic interests
as general partner, GP4 Asset Acquisition has assumed all obligations to be
performed relative to such economic interests and Commercial Net Lease has
contracted with GP4 Asset Acquisition to perform all management services
previously performed by the General Partners under the terms of the Partnership
Agreement.

8



---



##### Table of Contents



The agreements and arrangements, including those relating to compensation,
between the Partnership and the General Partners or any of their affiliates
have not and will not be the result of arms-length negotiations although the
General Partners believe that such agreements and arrangements will approximate
those which would be arrived at through arms-length negotiations. While the
Partnership will make no loans to the General Partners or their affiliates, the
Partnership may borrow money from the General Partners or their affiliates but
only on such terms as to interest rate, security, fees and other charges at
least as favorable to the Partnership as are charged by unaffiliated lending
institutions in the same locality on comparable loans for the same purpose. The
General Partners and their affiliates are not prohibited from providing
services to, and otherwise dealing or doing business with, persons (for
example, franchisees), who may deal with the Partnership. However, the
Partnership Agreement prohibits receipt of rebates or participation in any
reciprocal business arrangements which would have the effect of circumventing
any of the provisions of the Partnership Agreement.

Item 14. Exhibits and Reports on Form 8-K

(a)  The following exhibits are included herein or incorporated by
reference:

|       |  |                                                                                                                                                                                                                                                                                                 
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Exhibit                                                                                                                                                                                                                                                                                         
|4      |  | Agreement of Limited Partnership of Registrant (Incorporated by
reference from Exhibit B of the final Prospectus dated December 23,
1996, as supplemented and filed with the Securities and Exchange
Commission, S.E.C. File No. 333-9371)                                                      
|4.1    |  | Amended Agreement of Limited Partnership of Registrant.
(Incorporated by reference to the corresponding exhibit in the
Registrants Form 10-K for the fiscal year ended December 31, 1998)                                                                                                      
|10.1   |  | Promissory Note dated December 17, 1998 between Registrant and
National Realty Funding L.C. (Incorporated by reference to the
corresponding exhibit in the Registrants Form 10-K for the fiscal
year ended December 31, 1998)                                                                  
|10.2   |  | Promissory Note dated March 30, 1999 between Registrant and
National Realty Funding L.C. (Incorporated by reference to the
corresponding exhibit in the Registrants Form 10-Q for the quarter
ended March 31, 1999)                                                                            
|99.1   |  | Pages 35-42 of the final Prospectus dated December 23, 1997 as
supplemented. (Incorporated by reference from the final Prospectus
filed with the Securities and Exchange Commission pursuant to Rule
424(b) promulgated under the Securities Act of 1933, as amended.
S.E.C. File No. 333-9371.)

(b)  Reports on Form 8-K:

There were no reports filed on Form 8-K for the fourth quarter ended
December 31, 2001.

9



---



##### Table of Contents






SIGNATURES

In accordance with Section 13 or 15 (d) of the Securities Exchange Act of
1934, as amended, the registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

|                                         
|-----------------------------------------
|CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV
|                                         
|By: GP4 Asset Acquisition, LLC           
|Its Manager                              
|                                         
|By: /s/ Patrick L.
Beach                 
|Patrick L. Beach                         
|Sole Member,                             
|                                         
|Date: March 29, 2002                     

In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|    |  |                              
|--- |  | -----------------------------
|By: |  | /s/ Patrick L. Beach         
|    |  | Patrick L. Beach             
|    |  | Sole Member                  
|    |  | of GP4 Asset Acquisition, LLC

Date: March 29, 2002

10



---



##### Table of Contents



Captec Franchise Capital Partners, L.P. IV
Contents

|                                                                               |  |         |      | 
|------------------------------------------------------------------------------ |  | ------- | ---- | 
|                                                                               |  | Page(s) |     
|                                                                               |  |         |     
|Report of Independent Accountants                                              |  |         | F-1  | 
|Financial Statements                                                           |  |         |      | 
|Balance Sheets                                                                 |  |         | F-2  | 
|Statements of Operations                                                       |  |         | F-3  | 
|Statements of Changes in Partners Capital                                     |  |         | F-4  | 
|Statements of Cash Flows                                                       |  |         | F-5  | 
|Notes to Financial Statements                                                  |  |         | F-6  | 
|Report of Independent Accountants                                              |  |         | F-11 | 
|Schedule III  Properties and Accumulated Depreciation as of December 31, 2001 |  |         | F-12 | 

11



---



##### Table of Contents






Report of Independent Accountants

To the Sole Member of
GP4 Asset Acquisition, LLC
Manager of Captec Franchise Capital Partners, L.P. IV

In our opinion, the accompanying balance sheets and the related statements of
operations, of partners capital and of cash flows present fairly, in all
material respects, the financial position of Captec Franchise Capital Partners
L.P. IV at December 31, 2001 and 2000, and the results of its operations and
its cash flows for each of the three years in the period ended
December 31, 2001, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements are the responsibility of the Companys
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Detroit, Michigan
March 22, 2002

F-1



---



##### Table of Contents






Captec Franchise Capital Partners L.P. IV
Balance SheetsDecember 31, 2001 and 2000

|                                   |                                       |                                         |                                   |            |            |      |            |            |            |  |  | 
|---------------------------------- | ------------------------------------- | --------------------------------------- | --------------------------------- | ---------- | ---------- | ---- | ---------- | ---------- | ---------- |  |  | 
|                                   |                                       |                                         |                                   |            |            | 2001 |            |            | 2000       | 
|                                   |                                       |                                         |                                   | Assets     |            |      |            |            |            |  |  | 
|Cash and cash equivalents          |                                       | $                                       | 1,257,402                         |            |            | $    | 78,837     |           
|Restricted cash                    |                                       |                                         | 203,445                           |            |            |      | 100,229    |           
|Investment in leases:              |                                       |                                         |                                   |            |            |      |            |           
|                                   | Operating leases, net                 |                                         |                                   | 29,400,369 |            |      |            | 29,869,323 |           
|                                   | Financing leases, net                 |                                         |                                   | 3,993,432  |            |      |            | 5,536,386  |           
|                                   | Impaired financing leases, net        |                                         |                                   | 210,542    |            |      |            |           |           
|Accounts receivable                |                                       |                                         | 20,697                            |            |            |      | 26,751     |           
|Unbilled rent, net                 |                                       |                                         | 1,044,659                         |            |            |      | 730,375    |           
|Due from related parties           |                                       |                                         | 3,667                             |            |            |      | 966        |           
|Deferred financing costs, net      |                                       |                                         | 455,515                           |            |            |      | 476,155    |           
|                                   |                                       |                                         |                                   |            |            |     
|                                   |                                       | Total assets                            |                                   | $          | 36,589,728 |      |            | $          | 36,819,022 | 
|                                   |                                       |                                         |                                   |            |            |     
|                                   |                                       |                                         | Liabilities and Partners Capital |            |            |      |            |            |            |  | 
|Liabilities:                       |                                       |                                         |                                   |            |            |      |            |           
|                                   | Notes payable                         |                                         | $                                 | 14,678,290 |            |      | $          | 13,389,750 |           
|                                   | Accounts payable and accrued expenses |                                         |                                   | 166,359    |            |      |            | 110,184    |           
|                                   | Due to related parties                |                                         |                                   | 84,174     |            |      |            | 253,454    |           
|                                   |                                       |                                         |                                   |            |            |     
|                                   |                                       | Total liabilities                       |                                   |            | 14,928,823 |      |            |            | 13,753,388 | 
|                                   |                                       |                                         |                                   |            |            |     
|Partners capital:                 |                                       |                                         |                                   |            |            |      |            |           
|Limited partners capital accounts |                                       |                                         | 21,645,283                        |            |            |      | 23,069,409 |           
|General partners capital accounts |                                       |                                         | 15,622                            |            |            |      | (3,775     | )         
|                                   |                                       |                                         |                                   |            |            |     
|                                   |                                       | Total partners capital                 |                                   |            | 21,660,905 |      |            |            | 23,065,634 | 
|                                   |                                       |                                         |                                   |            |            |     
|                                   |                                       | Total liabilities and partners capital |                                   | $          | 36,589,728 |      |            | $          | 36,819,022 | 
|                                   |                                       |                                         |                                   |            |            |     

The accompanying notes are an integral part of the financial statements.

F-2



---



##### Table of Contents






Captec Franchise Capital Partners
L.P. IVStatements of Operations
For the Years Ended December 31, 2001, 2000 and 1999

|                                                                 |                                  |                                    |           |           |           |   |           |           |           |      |           |           |           | 
|---------------------------------------------------------------- | -------------------------------- | ---------------------------------- | --------- | --------- | --------- | - | --------- | --------- | --------- | ---- | --------- | --------- | --------- | 
|                                                                 |                                  |                                    |           | 2001      |           |   | 2000      |           |           | 1999 |          
|                                                                 |                                  |                                    |           |           |           |   |           |           |           |      |          
|Operating revenue:                                               |                                  |                                    |           |           |           |   |           |           |           |      |           |          
|                                                                 | Rental income                    |                                    | $         | 3,363,815 |           |   | $         | 3,002,022 |           |      | $         | 2,672,588 |          
|                                                                 | Finance income                   |                                    |           | 456,552   |           |   |           | 588,435   |           |      |           | 805,410   |          
|                                                                 |                                  |                                    |           |           |           |   |           |           |          
|                                                                 |                                  | Total operating revenue            |           |           | 3,820,367 |   |           |           | 3,590,457 |      |           |           | 3,477,998 | 
|Operating costs and expenses:                                    |                                  |                                    |           |           |           |   |           |           |           |      |           |          
|                                                                 | Interest expense                 |                                    |           | 1,217,899 |           |   |           | 923,965   |           |      |           | 788,199   |          
|                                                                 | Depreciation                     |                                    |           | 482,954   |           |   |           | 394,312   |           |      |           | 327,803   |          
|                                                                 | General and administrative       |                                    |           | 129,144   |           |   |           | 101,226   |           |      |           | 108,023   |          
|                                                                 | Provision for losses             |                                    |           | 65,000    |           |   |           |          |           |      |           |          |          
|                                                                 |                                  |                                    |           |           |           |   |           |           |          
|                                                                 |                                  | Total operating costs and expenses |           |           | 1,894,997 |   |           |           | 1,419,503 |      |           |           | 1,224,025 | 
|                                                                 |                                  |                                    |           |           |           |   |           |           |          
|                                                                 |                                  | Income from operations             |           |           | 1,925,370 |   |           |           | 2,170,954 |      |           |           | 2,253,973 | 
|Other income:                                                    |                                  |                                    |           |           |           |   |           |           |           |      |           |          
|                                                                 | Interest income                  |                                    |           | 14,608    |           |   |           | 488       |           |      |           | 29,143    |          
|                                                                 | Gain on sale of real estate      |                                    |           |          |           |   |           |          |           |      |           | 5,858     |          
|                                                                 | Gain (loss) on sale of equipment |                                    |           | (258      | )         |   |           | 42,433    |           |      |           |          |          
|                                                                 | Other                            |                                    |           |          |           |   |           | 234       |           |      |           | 5,055     |          
|                                                                 |                                  |                                    |           |           |           |   |           |           |          
|                                                                 |                                  | Total other income                 |           |           | 14,350    |   |           |           | 43,155    |      |           |           | 40,056    | 
|                                                                 |                                  |                                    |           |           |           |   |           |           |          
|Net income                                                       |                                  |                                    | 1,939,720 |           |           |   | 2,214,109 |           |           |      | 2,294,029 |          
|Net income allocable to general partner                          |                                  |                                    | 19,397    |           |           |   | 22,141    |           |           |      | 22,940    |          
|                                                                 |                                  |                                    |           |           |           |   |           |           |          
|Net income allocable to limited partners                         |                                  | $                                  | 1,920,323 |           |           | $ | 2,191,968 |           |           | $    | 2,271,089 |          
|                                                                 |                                  |                                    |           |           |           |   |           |           |          
|Net income per limited partnership unit                          |                                  | $                                  | 65.10     |           |           | $ | 73.65     |           |           | $    | 75.78     |          
|                                                                 |                                  |                                    |           |           |           |   |           |           |          
|Weighted average number of limited partnership
units outstanding |                                  |                                    | 29,496    |           |           |   | 29,763    |           |           |      | 29,969    |          
|                                                                 |                                  |                                    |           |           |           |   |           |           |          

The accompanying notes are an integral part of the financial statements.

F-3



---



##### Table of Contents






Captec Franchise Capital Partners L.P. IV
Statements of Changes in Partners Capital
For the Years Ended December 31, 2001, 2000 and 1999

|                                        |  |           |        |   |           |   |            |           |  |   |           |   |  |   |            |  
|--------------------------------------- |  | --------- | ------ | - | --------- | - | ---------- | --------- |  | - | --------- | - |  | - | ---------- | -
|                                        |  | Limited   |        |   | Limited   |   |            | General   |  |   | Total     |  
|                                        |  | Partners' |        |   | Partners' |   |            | Partner's |  |   | Partners' |  
|                                        |  | Units     |        |   | Accounts  |   |            | Accounts  |  |   | Capital   |  
|                                        |  |           |        |   |           |   |            |           |  |   |           |  
|Balance, January 1, 1999                |  |           | 30,000 |   |           |   | 25,964,614 |           |  |   | 23,567    |   |  |   | 25,988,181 |  
|Repurchase of limited partnership units |  |           | (117   | ) |           |   | (105,399   | )         |  |   |          |   |  |   | (105,399   | )
|Distributions  ($114.20 per unit)      |  |           |       |   |           |   | (3,412,501 | )         |  |   | (63,219   | ) |  |   | (3,475,720 | )
|Net income                              |  |           |       |   |           |   | 2,271,089  |           |  |   | 22,940    |   |  |   | 2,294,029  |  
|                                        |  |           |        |   |           |   |            |           |  |   |           |  
|Balance, December 31, 1999              |  |           | 29,883 |   |           |   | 24,717,802 |           |  |   | (16,711   | ) |  |   | 24,701,091 |  
|Repurchase of limited partnership units |  |           | (258   | ) |           |   | (230,363   | )         |  |   |          |   |  |   | (230,363   | )
|Distributions  ($121.86 per unit)      |  |           |       |   |           |   | (3,609,998 | )         |  |   | (9,205    | ) |  |   | (3,619,203 | )
|Net income                              |  |           |       |   |           |   | 2,191,968  |           |  |   | 22,141    |   |  |   | 2,214,109  |  
|                                        |  |           |        |   |           |   |            |           |  |   |           |  
|Balance, December 31, 2000              |  |           | 29,625 |   |           |   | 23,069,409 |           |  |   | (3,775    | ) |  |   | 23,065,634 |  
|                                        |  |           |        |   |           |   |            |           |  |   |           |  
|Repurchase of limited partnership units |  |           | (234   | ) |           |   | (189,449   | )         |  |   |          |   |  |   | (189,449   | )
|Distributions  ($109.86 per unit)      |  |           |       |   |           |   | (3,155,000 | )         |  |   |          |   |  |   | (3,155,000 | )
|Net income                              |  |           |       |   |           |   | 1,920,323  |           |  |   | 19,397    |   |  |   | 1,939,720  |  
|                                        |  |           |        |   |           |   |            |           |  |   |           |  
|Balance, December 31, 2001              |  |           | 29,391 |   |           | $ | 21,645,283 |           |  | $ | 15,622    |   |  | $ | 21,660,905 |  
|                                        |  |           |        |   |           |   |            |           |  |   |           |  

F-4



---



##### Table of Contents






Captec Franchise Capital Partners L.P. IV
Statements of Cash Flows
For the Years Ended December 31, 2001, 2000 and 1999

|                                                    |                                                                          |   |                                                              |                        |          |          |            |            |         |          |            |            |          |          |         | 
|--------------------------------------------------- | ------------------------------------------------------------------------ | - | ------------------------------------------------------------ | ---------------------- | -------- | -------- | ---------- | ---------- | ------- | -------- | ---------- | ---------- | -------- | -------- | ------- | 
|                                                    |                                                                          |   |                                                              |                        |          | 2001     |            |            | 2000    |          |            | 1999       |         
|Cash flows from operating activities:               |                                                                          |   |                                                              |                        |          |          |            |            |         |          |            |           
|                                                    | Net Income                                                               |   | $                                                            | 1,939,720              |          |          | $          | 2,214,109  |         |          | $          | 2,294,029  |         
|                                                    | Adjustments to net income:                                               |   |                                                              |                        |          |          |            |            |         |          |            |            |         
|                                                    |                                                                          |   | Depreciation                                                 |                        |          | 482,954  |            |            |         | 394,312  |            |            |          | 327,803  |        
|                                                    |                                                                          |   | Amortization of debt issuance costs                          |                        |          | 59,519   |            |            |         | 59,519   |            |            |          | 59,519   |        
|                                                    |                                                                          |   | Gain on sale of real estate                                  |                        |          |         |            |            |         |         |            |            |          | (5,858   | )      
|                                                    |                                                                          |   | (Gain) loss on sale of equipment                             |                        |          | 258      |            |            |         | (42,433  | )          |            |          |         |        
|                                                    |                                                                          |   | Provision for credit losses                                  |                        |          | 65,000   |            |            |         |         |            |            |          |         |        
|                                                    |                                                                          |   | Increase in unbilled rent                                    |                        |          | (314,284 | )          |            |         | (340,879 | )          |            |          | (260,654 | )      
|                                                    |                                                                          |   | Increase in accounts receivable                              |                        |          | 6,054    |            |            |         | 5,896    |            |            |          | 97,587   |        
|                                                    |                                                                          |   | Increase (decrease) in accounts payable and accrued expenses |                        |          | 56,176   |            |            |         | (18,090  | )          |            |          | 81,573   |        
|                                                    |                                                                          |   | (Increase) decrease in due from related parties              |                        |          | (2,701   | )          |            |         | 39,511   |            |            |          | 135,140  |        
|                                                    |                                                                          |   | (Decrease) increase in due to related parties                |                        | (169,280 | )        |            |            | 200,341 |          |            |            | (196,596 | )        |        
|                                                    |                                                                          |   | (Increase) decrease in restricted cash                       |                        | (103,216 | )        |            |            | 113,806 |          |            |            | 774,154  |          |        
|                                                    |                                                                          |   |                                                              |                        |          |          |            |            |        
|Net cash provided by operating activities           |                                                                          |   | 2,020,200                                                    |                        |          |          | 2,626,092  |            |         |          | 3,306,697  |           
|                                                    |                                                                          |   |                                                              |                        |          |          |            |            |        
|Cash flows from investing activities:               |                                                                          |   |                                                              |                        |          |          |            |            |         |          |            |           
|                                                    | Purchase and construction cost of properties
subject to operating leases |   |                                                              | (14,000                | )        |          |            | (5,063,907 | )       |          |            | (5,040,449 | )       
|                                                    | Proceeds from disposition of properties subject to operating leases      |   |                                                              |                       |          |          |            |           |         |          |            | 952,639    |         
|                                                    | Proceeds from sale of equipment                                          |   |                                                              |                        |          |          |            | 611,121    |         |          |            |           |         
|                                                    | Purchase of equipment and real estate subject to financing leases        |   |                                                              |                       |          |          |            |           |         |          |            | (1,131,619 | )       
|                                                    | Principal collections on financing leases                                |   |                                                              | 1,267,154              |          |          |            | 1,314,622  |         |          |            | 1,219,382  |         
|                                                    |                                                                          |   |                                                              |                        |          |          |            |            |        
|Net cash provided by (used in) investing activities |                                                                          |   | 1,253,154                                                    |                        |          |          | (3,138,164 | )          |         |          | (4,000,047 | )         
|                                                    |                                                                          |   |                                                              |                        |          |          |            |            |        
|Cash flows from financing activities:               |                                                                          |   |                                                              |                        |          |          |            |            |         |          |            |           
|                                                    | Proceeds from issuance of notes payable                                  |   |                                                              | 2,203,000              |          |          |            | 3,746,276  |         |          |            | 3,276,000  |         
|                                                    | Debt issuance costs                                                      |   |                                                              | (38,879                | )        |          |            |           |         |          |            | (201,964   | )       
|                                                    | Repayments of notes payable                                              |   |                                                              | (914,460               | )        |          |            | (7,526     | )       |          |            |           |         
|                                                    | Repurchase of limited partnership units                                  |   |                                                              | (189,449               | )        |          |            | (230,363   | )       |          |            | (105,399   | )       
|                                                    | Distributions to limited partners                                        |   |                                                              | (3,155,000             | )        |          |            | (3,609,998 | )       |          |            | (3,412,501 | )       
|                                                    | Distributions to general partner                                         |   |                                                              |                       |          |          |            | (9,205     | )       |          |            | (63,219    | )       
|                                                    |                                                                          |   |                                                              |                        |          |          |            |            |        
|Net cash used in financing activities               |                                                                          |   | (2,094,789                                                   | )                      |          |          | (110,816   | )          |         |          | (507,083   | )         
|                                                    |                                                                          |   |                                                              |                        |          |          |            |            |        
|Net decrease in cash and cash equivalents           |                                                                          |   | 1,178,565                                                    |                        |          |          | (622,888   | )          |         |          | (1,200,433 | )         
|Cash and cash equivalents, beginning of period      |                                                                          |   | 78,837                                                       |                        |          |          | 701,725    |            |         |          | 1,902,158  |           
|                                                    |                                                                          |   |                                                              |                        |          |          |            |            |        
|Cash and cash equivalents, end of period            |                                                                          | $ | 1,257,402                                                    |                        |          | $        | 78,837     |            |         |          | 701,725    |           
|                                                    |                                                                          |   |                                                              |                        |          |          |            |            |        
|Supplemental disclosure of cash flow information:   |                                                                          |   |                                                              |                        |          |          |            |            |         |          |            |           
|                                                    |                                                                          |   |                                                              | Cash paid for interest |          | $        | 1,147,876  |            |         | $        | 838,430    |            |          | $        | 665,731 | 
|                                                    |                                                                          |   |                                                              |                        |          |          |            |            |        

The accompanying notes are an integral part of the financial statements.

F-5



---



##### Table of Contents






Captec Franchise Capital Partners, L.P. IV
Notes to Financial Statements

1.      The Partnership and Its Significant Accounting Principles



| |                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Captec Franchise Capital Partners L.P. IV (the Partnership), a Delaware
limited partnership, was organized on July 23, 1996 for the purpose of
acquiring income-producing commercial real properties and equipment leased on
a triple net or double net basis, primarily to operators of national and
regional chain franchised fast food and family style restaurants, as well as
other national and regional retail chains.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The general partners upon formation of the Partnership were Captec Franchise
Capital Corporation IV (the Corporation), a wholly owned subsidiary of
Captec Financial Group, Inc. (Captec), and Patrick L. Beach, the Chairman
of the Board of Directors, President and Chief Executive Officer of the
Corporation and Captec. In August 1998, the general partnership interest of
the Partnership was acquired by Captec Net Lease Realty, Inc., an affiliate
of Captec. In December 2001, Captec Net Lease Realty, Inc. merged with and
into Commercial Net Lease Realty, Inc. In connection with the merger,
Commercial Net Lease agreed to sell and assign its general partnership
interest in the Partnership to GP4 Asset Acquisition, LLC, an affiliate of
Captec. In order to complete this transaction, the Limited Partners and the
Partnerships lender must consent to the transfer of the general partner
interest to GP4 Asset Acquisition. The Limited Partners consented to the
transfer of the general partner interest and the lender consent is pending.
In accordance with the terms of an agreement with Commercial Net Lease,
immediately upon the closing of the merger and until such time as the
required consents are obtained, GP4 Asset Acquisition has assumed all of the
General Partners obligations and liabilities prescribed under the terms of
the Partnership Agreement.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnership commenced a public offering of 30,000 limited partnership
interests (units), priced at $1,000 per unit, on December 31, 1996. The
Partnership commenced operations on March 5, 1997. At December 31, 1998, the
Partnership had accepted subscriptions for all 30,000 units. During 1999 the
Partnership repurchased a total of 117 units for $105,399, or approximately
$901 per unit on average. In 2000 the Partnership repurchased a total of 258
units for $230,362, or approximately $893 per unit on average. In 2001 the
Partnership repurchased a total of 234 units for $189,450, or approximately
$810 per unit on average. The repurchase of the units was completed pursuant
to the terms of the Repurchase Plan set forth in the Partnerships
Prospectus. At December 31, 2001, the Partnership had 29,391 units issued and
outstanding.



| |                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Allocation of profits, losses and cash distributions from operations and cash
distributions from sale or refinancing are made pursuant to the terms of the
Partnership Agreement. Profits and losses from operations are allocated among
the limited partners based upon the number of Units owned.

Following is a summary of the Partnerships significant accounting policies:

Cash and cash equivalents



| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnership considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

Restricted cash



| |                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnership is required to maintain a cash balance in an escrow account
until specific post closing requirements have been satisfied related to a
note payable.

Rental income from operating leases



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnerships operating leases have scheduled rent increases which occur
at various dates throughout the lease terms. The Partnership recognizes the
total rent, as stipulated by the lease agreement, as income on a
straight-line basis over the term of each lease. To the extent rental income
on the straight-line basis exceeds rents billable per the lease agreement, an
amount is recorded as unbilled rent. In addition to scheduled rent increases,
certain of the Partnerships leases also have percentage and overage rent
clauses, which the Partnership recognizes after the tenants reported sales
have exceeded the applicable sales breakpoint.

Land and building subject to operating leases

F-6



---



##### Table of Contents





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Land and buildings subject to operating leases are stated at cost less
accumulated depreciation. Buildings are depreciated on the straight-line
method over their estimated useful lives (40 years). The Partnership
periodically reviews its real estate portfolio for impairment whenever events
or changes in circumstances indicate that the carrying amount of the property
may not be recoverable. If an impairment loss were indicated using
undiscounted cash flows, the loss is measured as the amount by which the
carrying amount of the asset exceeds the estimated fair or present value of
the asset on a discounted cash flow basis.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In October 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 144 Accounting for the
Impairment or Disposal of Long-Lived Assets (FAS 144). FAS 144 requires
that long-lived assets to be disposed of other than by sale be considered
held and used until they are disposed of. The new standard also requires
that long-lived assets to be disposed of by sale be accounted for under the
requirements of FAS No. 121 which requires that such assets be measured at
the lower of carrying amounts or fair value less cost to sell and to cease
depreciation. FAS 144 is effective for financial statements issued for
fiscal years beginning after December 15, 2001. The Partnership
does not expect the implementation of this statement to have material
effect on its financial statements.

Net investment in financing leases



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Net investment in financing leases primarily represents equipment used in
restaurant operations and are leased under a triple-net basis. Leases
classified as financing leases are stated as the sum of the minimum lease
payments plus the unguaranteed residual value accruing to the benefit of the
lessor, less unearned income. Unearned income is amortized to income over the
lease term so as to produce a constant periodic rate of return on the net
investment in the lease. Direct origination costs are deferred and amortized
over the life of the lease as an adjustment to yield. Financing leases
delinquent for 90 or more days are determined to be impaired, and income
accrual is suspended at that time. A loss reserve is calculated based on the
estimated amounts recoverable. At December 31, 2001 the Partnership has
provided for an allowance of $65,000 for uncollectible amounts associated
with its financing leases.

Note payable



| |                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The fair value of fixed rate debt approximates the book value, and is
estimated based on current rates offered for notes payable of the equivalent
remaining maturity.

Net income per limited partnership interest



| |                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Net income per limited partnership interest is calculated using the weighted
average number of limited partnership units outstanding during the period and
the limited partners allocable share of the net income.

Income taxes



| |                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | No provision for income taxes is included in the accompanying financial
statements, as the Partnerships results of operations are passed through to
the partners for inclusion in their respective income tax returns.

Estimates



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Reclassifications



| |                                                                                                              
| | -------------------------------------------------------------------------------------------------------------
| | Certain prior period financial statement amounts have been reclassified to
conform to the 2001 presentations.

2.      Distributions



| |                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cash flows of the Partnership are allocated 99% to the limited partners and
1% to the General Partner, except that the General Partners share is
subordinated to a 10% per annum cumulative, non-compounded preferred return
to the limited partners. Net sale

F-7



---



##### Table of Contents





| |                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | or refinancing proceeds of the Partnership will be allocated 90% to the
limited partners 10% to the General Partner, except that the General
Partners share will be subordinated to a 10.5% per annum cumulative,
non-compounded return on their Adjusted Investment plus return of the
original contributions to the limited partners.

Distributions of cash flow from operations are paid quarterly in arrears.

3.      Related Party Transactions and Agreements



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Pursuant to the Partnership Agreement, acquisition fees of 4%, plus an
additional .00624% for each 1% of indebtedness incurred in acquiring
properties and equipment, of the aggregate purchase prices of properties and
equipment (not to exceed a total 5% acquisition fee) are incurred to the
General Partner. The Partnership incurred $0, $240,772 and $279,146 in
acquisition fees during 2001, 2000 and 1999, respectively. The acquisition
fees were capitalized as part of the Partnerships investment in land and
buildings subject to operating leases and net investment in financing leases.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnership has entered into an asset management agreement with the
General Partner and its affiliates, whereby the General Partner and the
General Partners affiliates provide various property and equipment
management services for the Partnership. A subordinated asset management fee
is charged, in an amount equal to 1% of the gross rental revenues derived
from the properties and equipment. Payment of the asset management fee is
subordinated to receipt by the limited partners of annual distributions equal
to a cumulative, non-compounded return of 10% per annum on their adjusted
invested capital. Management fees of $47,426, $45,556 and $39,507 were
incurred during 2001, 2000 and 1999, respectively.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnership Agreement provides for the General Partner to receive
liquidation fees limited to the lesser of 3% of the gross sales price or 50%
of the customary real estate commissions in the event of a real estate
liquidation. This fee is payable only after the limited partners have
received distributions equal to a cumulative, non-compounded return of 10.5%
per annum, cumulative non-compounded preferred return on their adjusted
invested capital plus distributions of sale or refinancing proceeds equal to
100% of their original contributions. The Partnerships Prospectus provides
for the reinvestment of net sale proceeds during the four year period
beginning on the date the Partnership terminated the offering, December 23,
1998. The Partnership did not pay any liquidation fees during 2001, 2000 or
1999.

4.      Land and Building Subject to Operating Leases



| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | The net investment in operating leases as of December 31, 2001 and 2000 is
comprised of the following:

|                          |                               |   |            |            |   |      |            |          |  
|------------------------- | ----------------------------- | - | ---------- | ---------- | - | ---- | ---------- | -------- | -
|                          |                               |   | 2001       |            |   | 2000 |           
|                          |                               |   |            |            |   |      |           
|Land                      |                               | $ | 11,197,200 |            |   | $    | 11,197,200 |         
|Building and improvements |                               |   | 19,549,580 |            |   |      | 19,535,581 |         
|                          |                               |   |            |            |   |     
|                          |                               |   | 30,746,780 |            |   |      | 30,732,781 |         
|                          | Less accumulated depreciation |   |            | (1,346,411 | ) |      |            | (863,458 | )
|                          |                               |   |            |            |   |     
|                          |                               | $ | 29,400,369 |            |   | $    | 29,869,323 |         
|                          |                               |   |            |            |   |     



| |                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------
| | The following is a schedule of future minimum lease payments to be received
on the operating leases as of December 31, 2001:

|           |  |   |            | 
|---------- |  | - | ---------- | 
|2002       |  | $ | 3,124,362  | 
|2003       |  |   | 3,157,794  | 
|2004       |  |   | 3,216,979  | 
|2005       |  |   | 3,274,194  | 
|2006       |  |   | 3,298,327  | 
|Thereafter |  |   | 35,645,676 | 
|           |  |   |           
|Total      |  | $ | 51,717,332 | 
|           |  |   |           

F-8



---



##### Table of Contents



5.      Net Investment in Financing Leases



| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | The net investment in financing leases as of December 31, 2001 and 2000 is
comprised of the following:

|                                      |                                 |                                      |           |            |           |   |           |            |           | 
|------------------------------------- | ------------------------------- | ------------------------------------ | --------- | ---------- | --------- | - | --------- | ---------- | --------- | 
|                                      |                                 |                                      |           | 2001       |           |   | 2000      |           
|                                      |                                 |                                      |           |            |           |   |           |           
|Minimum lease payments to be received |                                 | $                                    | 5,239,395 |            |           | $ | 7,261,082 |           
|Estimated residual value              |                                 |                                      | 232,697   |            |           |   | 232,697   |           
|                                      |                                 |                                      |           |            |           |  
|                                      |                                 | Gross investment in financing leases |           |            | 5,472,092 |   |           |            | 7,493,779 | 
|                                      | Less  unearned income          |                                      |           | (1,398,482 | )         |   |           | (1,785,349 | )        
|                                      | Less  direct origination costs |                                      |           | (80,178    | )         |   |           | (172,044   | )        
|                                      |                                 |                                      |           |            |           |  
|                                      |                                 | Net investment in financing leases   |           | $          | 3,993,432 |   |           | $          | 5,536,386 | 
|                                      |                                 |                                      |           |            |           |  



| |                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------
| | The following is a schedule of future minimum lease payments to be received
on the financing leases as of December 31, 2001:

|           |  |   |           | 
|---------- |  | - | --------- | 
|2002       |  | $ | 1,504,045 | 
|2003       |  |   | 1,062,775 | 
|2004       |  |   | 491,885   | 
|2005       |  |   | 272,431   | 
|2006       |  |   | 165,087   | 
|Thereafter |  |   | 1,743,172 | 
|           |  |   |          
|Total      |  | $ | 5,239,395 | 
|           |  |   |          

6.      Impaired Financing Leases



| |                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Partnership has one impaired equipment lease at December 31, 2001, with a
recorded investment of $210,541 net of a related allowance of $65,000.
Installment payments on the lease are delinquent by more than 90 days, and
income accrual has been suspended by the Partnership. The net investment in
the impaired lease represents the estimated net proceeds that the Partnership
expects to receive.

7.      Notes Payable



| |                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In December 1998, the Partnership entered into a $6.4 million term note. The
note has a 10-year term, is collateralized by certain properties subject to
operating leases, and bears an interest rate of 8.13% per annum.



| |                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In March 1999, the Partnership entered into an additional $3.3 million term
note. The note has a 10-year term, is collateralized by certain properties
subject to operating leases, and bears an interest rate of 8.5% per annum.



| |                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In October 2000, the Partnership assumed a $3.7 million term note in
connection with the acquisition of a United Supermarket property. The note
has a 10-year term, and bears an interest rate of 8.35% per annum.



| |                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In November 2001, the Partnership entered into an additional $1.5 million
term note. The note has a 2-year term, is collateralized by certain properties
subject to operating leases, and bears an interest rate of prime plus 2% per
annum.



| |                                                                                  
| | ---------------------------------------------------------------------------------
| | At December 31, 2001, annual maturities on the notes in aggregate are as
follows:

|           |       |   |            |            | 
|---------- | ----- | - | ---------- | ---------- | 
|2002       |       | $ | 303,400    |           
|2003       |       |   | 1,746,049  |           
|2004       |       |   | 310,613    |           
|2005       |       |   | 337,300    |           
|2006       |       |   | 366,279    |           
|Thereafter |       |   | 11,614,649 |           
|           |       |   |           
|           | Total |   | $          | 14,678,290 | 



| |                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Debt issuance costs of $622,434 in aggregate were incurred in connection with
the issuance of the notes, and are being amortized to interest expense using
the straight-line method over the term of the notes.

F-9



---



##### Table of Contents



8.      Subsequent Event



| |                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Based upon the results of operations for the three month period ended
December 31, 2001, the Partnership declared distributions of $775,000 to its
limited partners on January 15, 2002.

F-10



---



##### Table of Contents






Report of Independent Accountants

To the Sole Member of
Captec Net Lease Realty, Inc.
Manager of Captec Franchise Capital Partners L.P. IV

In connection with our audit of the financial statements of Captec Franchise
Capital Partners L.P. IV for the years ended December 31, 2001
and 2000, which
financial statements are included in this Form 10-K, we have also audited the
financial statement schedule listed in the index to Financial Statements
contained in this Form 10-K.
In our opinion, this financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material aspects, the information required to be included therein.

PricewaterhouseCoopers LLP

Detroit, Michigan
March 22, 2002

F-11



---



##### Table of Contents









SCHEDULE III
PROPERTIES AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2001

|                   |  |            |  |    |          |  |           |              |  |  |            |              |  |             |            |  |           |             |           |              |              |  |              |              |  |              |              |         |              |              |  |          |  |  |  |  |  |  |  | 
|------------------ |  | ---------- |  | -- | -------- |  | --------- | ------------ |  |  | ---------- | ------------ |  | ----------- | ---------- |  | --------- | ----------- | --------- | ------------ | ------------ |  | ------------ | ------------ |  | ------------ | ------------ | ------- | ------------ | ------------ |  | -------- |  |  |  |  |  |  |  | 
|                   |  |            |  |    |          |  |           |              |  |  |            |              |  |             |            |  |           | Cost        |           |              | Gross Amount |  |              |              |  |              |              |         |              |              |  |          |  |  |  |  |  | 
|                   |  |            |  |    |          |  |           |              |  |  |            |              |  |             |            |  |           | Capitalized |           |              | At Which     |  |              |              |  |              |              |         |              |              |  |          |  |  |  |  |  | 
|                   |  |            |  |    |          |  |           |              |  |  |            |              |  |             |            |  |           | Subsequent  |           |              | Carried At   |  |              |              |  |              |              | Date of |              |              |  |          |  |  |  |  | 
|                   |  | Type of    |  |    | State    |  |           |              |  |  |            | Initial Cost |  |             | To         |  |           | Close       |           |              | Accumulated  |  |              | Acquisition/ |  |              | Acquisition/ |         |              |              |  |         
|Concept            |  | Property   |  |    | Location |  |           | Encumbrances |  |  | To Company |              |  | Acquisition |            |  | Of Period |             |           | Depreciation |              |  | Construction |              |  | Construction |              |         | Depreciation |             
|                   |  |            |  |    |          |  |           |              |  |  |            |              |  |             |            |  |           |             |           |              |              |  |              |              |  |              |              |         |              |             
|Boston Market      |  | Restaurant |  | MN |          |  |          |              |  |  | 1,012,200  |              |  |             |           |  |           |             | 1,012,200 |              |              |  | 76,558       |              |  |              | 1997         |         |              | Acquisition  |  | 40 Years
|Hollywood Video    |  | Retail     |  | OH |          |  | 736,836   |              |  |  | 1,455,300  |              |  |             |           |  |           |             | 1,455,300 |              |              |  | 88,703       |              |  |              | 1997         |         |              | Acquisition  |  | 40 Years
|Blockbuster Video  |  | Retail     |  | GA |          |  | 590,078   |              |  |  | 1,170,000  |              |  |             |           |  |           |             | 1,170,000 |              |              |  | 84,663       |              |  |              | 1997         |         |              | Acquisition  |  | 40 Years
|Italian Oven       |  | Restaurant |  | TX |          |  | 883,177   |              |  |  | 1,680,000  |              |  |             |           |  |           |             | 1,680,000 |              |              |  | 57,969       |              |  |              | 1997         |         |              | Acquisition  |  | 40 Years
|Arbys             |  | Restaurant |  | OH |          |  | 398,136   |              |  |  | 819,000    |              |  |             |           |  |           |             | 819,000   |              |              |  | 33,913       |              |  |              | 1998         |         |              | Construction |  | 40 Years
|Hollywood Video    |  | Retail     |  | OH |          |  | 762,912   |              |  |  | 1,454,880  |              |  |             |           |  |           |             | 1,454,880 |              |              |  | 85,980       |              |  |              | 1998         |         |              | Acquisition  |  | 40 Years
|Steak & Ale        |  | Restaurant |  | MI |          |  | 1,028,261 |              |  |  | 2,100,000  |              |  |             |           |  |           |             | 2,100,000 |              |              |  | 89,762       |              |  |              | 1998         |         |              | Acquisition  |  | 40 Years
|Steak & Ale        |  | Restaurant |  | PA |          |  | 1,196,139 |              |  |  | 2,441,250  |              |  |             |           |  |           |             | 2,441,250 |              |              |  | 82,550       |              |  |              | 1998         |         |              | Acquisition  |  | 40 Years
|Bennigans         |  | Restaurant |  | VA |          |  | 796,226   |              |  |  | 1,627,500  |              |  |             |           |  |           |             | 1,627,500 |              |              |  | 111,904      |              |  |              | 1998         |         |              | Acquisition  |  | 40 Years
|Taco Bell          |  | Restaurant |  | MI |          |  | 385,541   |              |  |  | 766,500    |              |  |             |           |  |           |             | 766,500   |              |              |  | 31,894       |              |  |              | 1998         |         |              | Acquisition  |  | 40 Years
|Taco Bell          |  | Restaurant |  | MI |          |  | 385,541   |              |  |  | 766,500    |              |  |             |           |  |           |             | 766,500   |              |              |  | 37,013       |              |  |              | 1998         |         |              | Acquisition  |  | 40 Years
|Arbys             |  | Restaurant |  | MI |          |  | 381,371   |              |  |  | 840,000    |              |  |             |           |  |           |             | 840,000   |              |              |  | 43,750       |              |  |              | 1998         |         |              | Acquisition  |  | 40 Years
|Tony Romas        |  | Restaurant |  | TX |          |  | 951,803   |              |  |  | 1,942,500  |              |  |             |           |  |           |             | 1,942,500 |              |              |  | 86,625       |              |  |              | 1998         |         |              | Acquisition  |  | 40 Years
|Del Taco           |  | Restaurant |  | CA |          |  | 654,981   |              |  |  | 1,239,000  |              |  |             |           |  |           |             | 1,239,000 |              |              |  | 35,678       |              |  |              | 1998         |         |              | Construction |  | 40 Years
|Kona Steakhouse    |  | Restaurant |  | TX |          |  | 750,000   |              |  |  | 1,801,622  |              |  |             |           |  |           |             | 1,801,622 |              |              |  | 86,424       |              |  |              | 1998         |         |              | Construction |  | 40 Years
|Carinos            |  | Restaurant |  | TX |          |  | 750,000   |              |  |  | 1,675,622  |              |  |             |           |  |           |             | 1,675,622 |              |              |  | 64,616       |              |  |              | 1999         |         |              | Construction |  | 40 Years
|Wingers            |  | Restaurant |  | AZ |          |  |          |              |  |  | 941,850    |              |  |             |           |  |           |             | 941,850   |              |              |  | 42,319       |              |  |              | 1999         |         |              | Acquisition  |  | 40 Years
|Wingers            |  | Restaurant |  | AZ |          |  | 499,998   |              |  |  | 948,150    |              |  |             |           |  |           |             | 948,150   |              |              |  | 43,602       |              |  |              | 1999         |         |              | Acquisition  |  | 40 Years
|Arbys             |  | Restaurant |  | IA |          |  |           |              |  |  | 987,000    |              |  |             |            |  |           |             | 987,000   |              |              |  | 37,644       |              |  |              | 1999         |         |              | Acquisition  |  | 40 Years
|United Supermarket |  | Retail     |  | TX |          |  | 3,738,450 |              |  |  | 5,077,907  |              |  |             |           |  |           |             | 5,077,907 |              |              |  | 124,846      |              |  |              | 2000         |         |              | Acquisition  |  | 40 Years
|                   |  |            |  |    |          |  |           |              |  |  |            |              |  |             |            |  |           |             |           |              |              |  |              |              |  |              |              |         |              |              |  |          |  |  | 
|Total Properties   |  |            |  |    |          |  |           |              |  |  | 14,889,450 |              |  |             | 30,746,781 |  |           |             |          |              |              |  | 30,746,781   |              |  |              | 1,346,412    |         |              |              |  |          |  |  |  |  |  |  |  | 
|                   |  |            |  |    |          |  |           |              |  |  |            |              |  |             |            |  |           |             |           |              |              |  |              |              |  |              |              |         |              |              |  |          |  |  | 

Notes:

The changes in total properties for the years ended December 31, 2001 and
2000 are as follows:

|                           |  |      |            |  |      |   |            | 
|-------------------------- |  | ---- | ---------- |  | ---- | - | ---------- | 
|                           |  | 2001 |            |  | 2000 |  
|                           |  |      |            |  |      |  
|Balance, beginning of year |  | $    | 30,732,781 |  |      | $ | 25,668,874 | 
|Acquisitions               |  |      |            |  |      |   | 5,063,907  | 
|Dispositions and other     |  |      |           |  |      |   |           | 
|Costs Capitalized          |  |      | 14,000     |  |      |   |           | 
|                           |  |      |            |  |      |  
|Balance, end of year       |  | $    | 30,746,781 |  |      | $ | 30,732,781 | 
|                           |  |      |            |  |      |  

The changes in accumulated depreciation for the years ended December 31,
2001 and 2000 are as follows:

|                           |  |      |           |  |      |   |         | 
|-------------------------- |  | ---- | --------- |  | ---- | - | ------- | 
|                           |  | 2001 |           |  | 2000 |  
|                           |  |      |           |  |      |  
|Balance, beginning of year |  | $    | 863,458   |  |      | $ | 469,146 | 
|Depreciation expense       |  |      | 482,954   |  |      |   | 394,312 | 
|Dispositions and other     |  |      |          |  |      |   |        | 
|                           |  |      |           |  |      |  
|Balance, end of year       |  | $    | 1,346,412 |  |      | $ | 863,458 | 
|                           |  |      |           |  |      |  

F(a)-12



---



##### Table of Contents



Exhibit Index

|       |  |                                                                                                                                                                                                                                                                                                 
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Description                                                                                                                                                                                                                                                                                     
|4      |  | Agreement of Limited Partnership of Registrant (Incorporated by
reference from Exhibit B of the final Prospectus dated December 23,
1996, as supplemented and filed with the Securities and Exchange
Commission, S.E.C. File No. 333-9371)                                                      
|4.1    |  | Amended Agreement of Limited Partnership of Registrant.
(Incorporated by reference to the corresponding exhibit in the
Registrants Form 10-K for the fiscal year ended December 31, 1998)                                                                                                      
|10.1   |  | Promissory Note dated December 17, 1998 between Registrant and
National Realty Funding L.C. (Incorporated by reference to the
corresponding exhibit in the Registrants Form 10-K for the fiscal
year ended December 31, 1998)                                                                  
|10.2   |  | Promissory Note dated March 30, 1999 between Registrant and
National Realty Funding L.C. (Incorporated by reference to the
corresponding exhibit in the Registrants Form 10-Q for the quarter
ended March 31, 1999)                                                                            
|99.1   |  | Pages 35-42 of the final Prospectus dated December 23, 1997 as
supplemented. (Incorporated by reference from the final Prospectus
filed with the Securities and Exchange Commission pursuant to Rule
424(b) promulgated under the Securities Act of 1933, as amended.
S.E.C. File No. 333-9371.)