##### Table of Contents



FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2003

OR

|     |  |                                                                                         
|---- |  | ----------------------------------------------------------------------------------------
|[  ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-14207

RANCON REALTY FUND IV,
A CALIFORNIA LIMITED PARTNERSHIP




(Exact name of registrant as specified in its charter)


|                                                                                                    |  |                                                
|--------------------------------------------------------------------------------------------------- |  | -----------------------------------------------
|California
(State or other jurisdiction of
incorporation or organization)                           |  | 33-0016355
(I.R.S. Employer
Identification No.)
|                                                                                                    |  |                                                
|400 South El Camino Real, Suite 1100
San Mateo, California
(Address of principal
executive offices) |  | 94402-1708
(Zip Code)                          

(650) 343-9300




(Registrants telephone number, including area code)


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

Yes [X] No [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [  ] No [X]

Total number of units outstanding as of November 11, 2003: 70,321

1



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TABLE OF CONTENTS



|                              |                                                                                               |                                            |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements                                                                 
|                              |                                                                                               | Consolidated Balance Sheets               
|                              |                                                                                               | Consolidated Statements of Operations     
|                              |                                                                                               | Consolidated Statement of Partners Equity
|                              |                                                                                               | Consolidated Statements of Cash Flows     
|                              |                                                                                               | Notes to Consolidated Financial Statements
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                              | Item 3. Qualitative and Quantitative Information About Market Risk                           
|                              | Item 4. Controls and procedures                                                              
|Part II. OTHER INFORMATION   
|                              | Item 1. Legal Proceedings                                                                    
|                              | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                   
|Exhibit Index                
|EXHIBIT 10.3                 
|EXHIBIT 31.1                 
|EXHIBIT 32.1                 



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##### Table of Contents



INDEX
RANCON REALTY FUND IV,
A CALIFORNIA LIMITED PARTNERSHIP

|           |  |                                                                                       |  |  |       |  |  |                                                                                                       |    |          |      | 
|---------- |  | ------------------------------------------------------------------------------------- |  |  | ----- |  |  | ----------------------------------------------------------------------------------------------------- | -- | -------- | ---- | 
|           |  |                                                                                       |  |  |       |  |  |                                                                                                       |    | Page No.
|PART I     |  | FINANCIAL INFORMATION                                                                 |  |  |       | 
|Item 1.    |  | Consolidated Financial Statements of Rancon Realty Fund IV (Unaudited):               |  |  |       | 
|           |  |                                                                                       |  |  |       |  |  | Consolidated Balance Sheets at September 30, 2003 and December 31, 2002                               |    |          | 3    | 
|           |  |                                                                                       |  |  |       |  |  | Consolidated Statements of Operations for the three and nine months ended
September 30, 2003 and 2002 |    |          | 4    | 
|           |  |                                                                                       |  |  |       |  |  | Consolidated Statement of Partners Equity for the nine months ended
September 30, 2003               |    |          | 5    | 
|           |  |                                                                                       |  |  |       |  |  | Consolidated Statements of Cash Flows for the nine months ended September
30, 2003 and 2002           |    |          | 6    | 
|           |  |                                                                                       |  |  |       |  |  | Notes to Consolidated Financial Statements                                                            |    |          | 7-13 | 
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations |  |  | 14-17 | 
|Item 3.    |  | Qualitative and Quantitative Information About Market Risk                            |  |  | 17    | 
|Item 4.    |  | Controls and Procedures                                                               |  |  | 17    | 
|PART II    |  | OTHER INFORMATION                                                                     |  |  |       | 
|Item 1.    |  | Legal Proceedings                                                                     |  |  | 18    | 
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                   |  |  | 18    | 
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                      |  |  | 18    | 
|SIGNATURES |  |                                                                                       |  |  |       |  |  |                                                                                                       | 19 |         

2



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##### Table of Contents






PART I. FINANCIAL INFORMATION




Item 1. Financial Statements

RANCON REALTY FUND IV,
A CALIFORNIA LIMITED PARTNERSHIP




Consolidated Balance Sheets
(in thousands, except unit amounts)
(Unaudited)

|                                                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |              |         |        |        | 
|--------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | -------------------------------------- | ------- | ------------- | ------ | ------------ | ------- | ------ | ------ | 
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         | September 30, |        | December 31,
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         | 2003          |        | 2002        
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |             
|ASSETS                                                                                                                                        |                                                                                                                                     |                               |                                        |         |               |        |              |        
|Investments in real estate:                                                                                                                   |                                                                                                                                     |                               |                                        |         |               |        |              |        
|                                                                                                                                              | Rental properties                                                                                                                   |                               | $                                      | 42,728  |               |        | $            | 42,330  |       
|                                                                                                                                              | Accumulated depreciation                                                                                                            |                               |                                        | (14,940 | )             |        |              | (14,024 | )     
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |              |        
|                                                                                                                                              | Rental properties, net                                                                                                              |                               |                                        | 27,788  |               |        |              | 28,306  |       
|                                                                                                                                              | Construction in progress                                                                                                            |                               |                                        | 837     |               |        |              |       |       
|                                                                                                                                              | Land held for development                                                                                                           |                               |                                        | 703     |               |        |              | 1,214   |       
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |              |        
|                                                                                                                                              |                                                                                                                                     | Total real estate investments |                                        |         | 29,328        |        |              |         | 29,520 |       
|Cash and cash equivalents                                                                                                                     |                                                                                                                                     |                               | 4,428                                  |         |               |        | 3,764        |        
|Accounts receivable                                                                                                                           |                                                                                                                                     |                               | 33                                     |         |               |        | 246          |        
|Deferred costs and other fees, net of
accumulated amortization of $2,246 and $2,045 at
September 30, 2003 and December 31, 2002, respectively |                                                                                                                                     |                               | 887                                    |         |               |        | 977          |        
|Prepaid expenses and other assets                                                                                                             |                                                                                                                                     |                               | 1,140                                  |         |               |        | 991          |        
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |              |        
|                                                                                                                                              |                                                                                                                                     | Total assets                  |                                        | $       | 35,816        |        |              | $       | 35,498 |       
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |              |         |       
|LIABILITIES AND PARTNERS EQUITY                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |              |        
|Liabilities:                                                                                                                                  |                                                                                                                                     |                               |                                        |         |               |        |              |        
|                                                                                                                                              | Loans payable                                                                                                                       |                               | $                                      | 7,831   |               |        | $            | 7,970   |       
|                                                                                                                                              | Accounts payable and other liabilities                                                                                              |                               |                                        | 443     |               |        |              | 460     |       
|                                                                                                                                              | Construction costs payable                                                                                                          |                               |                                        | 132     |               |        |              |       |       
|                                                                                                                                              | Prepaid rent                                                                                                                        |                               |                                        | 119     |               |        |              |       |       
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |              |        
|                                                                                                                                              |                                                                                                                                     | Total liabilities             |                                        |         | 8,525         |        |              |         | 8,430  |       
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |              |        
|Commitments and contingent liabilities (Note 5)                                                                                               |                                                                                                                                     |                               |                                        |         |               |        |              |        
|Partners Equity :                                                                                                                            |                                                                                                                                     |                               |                                        |         |               |        |              |        
|                                                                                                                                              | General partners                                                                                                                    |                               |                                        | (486    | )             |        |              | (552    | )     
|                                                                                                                                              | Limited partners, 70,376 and 71,546 limited partnership
units outstanding at September 30, 2003 and December
31, 2002, respectively |                               |                                        | 27,777  |               |        |              | 27,620  |       
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |              |        
|                                                                                                                                              |                                                                                                                                     | Total partners equity        |                                        |         | 27,291        |        |              |         | 27,068 |       
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |              |        
|                                                                                                                                              |                                                                                                                                     |                               | Total liabilities and partners equity |         | $             | 35,816 |              |         | $      | 35,498 | 
|                                                                                                                                              |                                                                                                                                     |                               |                                        |         |               |        |              |         |       

The accompanying notes are an integral part of these consolidated financial statements.

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RANCON REALTY FUND IV,
A CALIFORNIA LIMITED PARTNERSHIP




Consolidated Statements of Operations
(in thousands, except per unit amounts and units outstanding)
(Unaudited)

|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |       |       |  
|----------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------------------------------------------------------------ | ------ | ------------------ | ----- | ----------------- | ------ | ----- | ----- | ---- | ------ | ----- | ----- | - | ------ | ----- | ----- | -
|                                                                                    |                                           |                                                                                |        | Three months ended |       | Nine months ended
|                                                                                    |                                           |                                                                                |        | September 30,      |       | September 30,    
|                                                                                    |                                           |                                                                                |        |                    |       |                  
|                                                                                    |                                           |                                                                                |        | 2003               |       | 2002              |        | 2003  |       | 2002
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |     
|REVENUE                                                                             |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |      
|                                                                                    | Rental income                             |                                                                                | $      | 1,714              |       |                   | $      | 1,517 |       |      | $      | 5,284 |       |   | $      | 4,681 |      
|                                                                                    | Interest and other income                 |                                                                                |        | 16                 |       |                   |        | 25    |       |      |        | 44    |       |   |        | 54    |      
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |      
|                                                                                    |                                           | Total revenues                                                                 |        |                    | 1,730 |                   |        |       | 1,542 |      |        |       | 5,328 |   |        |       | 4,735 |  
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |      
|EXPENSES                                                                            |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |      
|                                                                                    | Operating                                 |                                                                                |        | 695                |       |                   |        | 685   |       |      |        | 1,952 |       |   |        | 1,865 |      
|                                                                                    | Interest expense                          |                                                                                |        | 196                |       |                   |        | 203   |       |      |        | 596   |       |   |        | 655   |      
|                                                                                    | Depreciation and amortization             |                                                                                |        | 362                |       |                   |        | 346   |       |      |        | 1,040 |       |   |        | 1,042 |      
|                                                                                    | Expenses associated with undeveloped land |                                                                                |        | 66                 |       |                   |        | 108   |       |      |        | 220   |       |   |        | 787   |      
|                                                                                    | General and administrative                |                                                                                |        | 297                |       |                   |        | 272   |       |      |        | 858   |       |   |        | 866   |      
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |      
|                                                                                    |                                           | Total expenses                                                                 |        |                    | 1,616 |                   |        |       | 1,614 |      |        |       | 4,666 |   |        |       | 5,215 |  
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |      
|                                                                                    |                                           | Income (loss) from operations                                                  |        |                    | 114   |                   |        |       | (72   | )    |        |       | 662   |   |        |       | (480  | )
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |      
|                                                                                    |                                           | Income from discontinued
operations (including gain on
sale of $5,120 in 2002) |        |                    |     |                   |        |       |     |      |        |       |     |   |        |       | 5,172 |  
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |      
|Net income (loss)                                                                   |                                           | $                                                                              | 114    |                    |       | $                 | (72    | )     |       | $    | 662    |       |       | $ | 4,692  |      
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |       |      
|Basic and diluted net income (loss) per
limited partnership unit                    |                                           | $                                                                              | 1.47   |                    |       | $                 | (0.93  | )     |       | $    | 8.39   |       |       | $ | 60.04  |      
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |       |      
|Distributions per limited partnership unit:                                         |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |      
|                                                                                    | From net income                           |                                                                                | $      |                  |       |                   | $      |     |       |      | $      |     |       |   | $      |     |      
|                                                                                    | Representing return of capital            |                                                                                |        |                  |       |                   |        |     |       |      |        |     |       |   |        |     |      
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |      
|                                                                                    |                                           | Total distributions per limited
partnership unit                               |        | $                  |     |                   |        | $     |     |      |        | $     |     |   |        | $     |     |  
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |       |      
|Weighted average number of limited
partnership units outstanding during each
period |                                           |                                                                                | 70,569 |                    |       |                   | 73,749 |       |       |      | 71,007 |       |       |   | 73,879 |      
|                                                                                    |                                           |                                                                                |        |                    |       |                   |        |       |       |      |        |       |       |   |        |      

The accompanying notes are an integral part of these consolidated financial statements.

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RANCON REALTY FUND IV,
A CALIFORNIA LIMITED PARTNERSHIP




Consolidated Statement of Partners Equity
For the nine months ended September 30, 2003
(in thousands)
(Unaudited)

|                                        |  |                  |      |                  |  |       |        |   |  |   |        |  
|--------------------------------------- |  | ---------------- | ---- | ---------------- |  | ----- | ------ | - |  | - | ------ | -
|                                        |  | General Partners |      | Limited Partners |  | Total
|                                        |  |                  |      |                  |  |      
|Balance at December 31, 2002            |  | $                | (552 | )                |  | $     | 27,620 |   |  | $ | 27,068 |  
|Redemption of limited partnership units |  |                  |     |                  |  |       | (439   | ) |  |   | (439   | )
|Income from operations                  |  |                  | 66   |                  |  |       | 596    |   |  |   | 662    |  
|                                        |  |                  |      |                  |  |       |        |   |  |   |        |  
|Balance at September 30, 2003           |  | $                | (486 | )                |  | $     | 27,777 |   |  | $ | 27,291 |  
|                                        |  |                  |      |                  |  |       |        |   |  |   |        |  

The accompanying notes are an integral part of these consolidated financial statements.

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RANCON REALTY FUND IV,
A CALIFORNIA LIMITED PARTNERSHIP




Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |        |   |     |        |  
|------------------------------------------------- | ---------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------------------------ | ------------------------------------------------------- | - | ----------------- | ----- | ------ | - | --- | ------ | -
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   | Nine months ended
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   | September 30,    
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                  
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   | 2003              |       | 2002  
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|CASH FLOWS FROM OPERATING ACTIVITIES:             |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|                                                  | Net income                               |                                                                                   | $                                                                  | 662                                                     |   |                   | $     | 4,692  |  
|                                                  |                                          | Adjustments to reconcile net income
to net cash provided by operating activities: |                                                                    |                                                         |   |                   |       |        |   |    
|                                                  |                                          |                                                                                   |                                                                    | Gain on sale of real estate                             |   |                   |     |        |   |     | (5,120 | )
|                                                  |                                          |                                                                                   |                                                                    | Depreciation and amortization                           |   |                   | 1,040 |        |   |     | 1,118  |  
|                                                  |                                          |                                                                                   |                                                                    | Amortization of loan fees, included in interest expense |   |                   | 77    |        |   |     | 78     |  
|                                                  |                                          |                                                                                   |                                                                    | Changes in certain assets and liabilities:              |   |                   |       |        |   |     |        |  
|                                                  |                                          |                                                                                   |                                                                    | Accounts receivable                                     |   |                   | 213   |        |   |     | 125    |  
|                                                  |                                          |                                                                                   |                                                                    | Deferred costs and other fees                           |   |                   | (111  | )      |   |     | (92    | )
|                                                  |                                          |                                                                                   |                                                                    | Prepaid expenses and other assets                       |   |                   | (149  | )      |   |     | (58    | )
|                                                  |                                          |                                                                                   |                                                                    | Accounts payable and other liabilities                  |   |                   | (17   | )      |   |     | (219   | )
|                                                  |                                          |                                                                                   |                                                                    | Prepaid rent                                            |   |                   | 119   |        |   |     |      |  
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|                                                  |                                          |                                                                                   |                                                                    | Net cash provided by operating activities               |   |                   | 1,834 |        |   |     | 524    |  
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|CASH FLOWS FROM INVESTING ACTIVITIES:             |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|                                                  | Net proceeds from sales of real estate   |                                                                                   |                                                                    |                                                       |   |                   |       | 8,382  |  
|                                                  | Net additions to real estate investments |                                                                                   |                                                                    | (592                                                    | ) |                   |       | (588   | )
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|                                                  |                                          |                                                                                   |                                                                    | Net cash (used for) provided by investing activities    |   |                   | (592  | )      |   |     | 7,794  |  
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|CASH FLOWS FROM FINANCING ACTIVITIES:             |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|                                                  | Notes payable principal payments         |                                                                                   |                                                                    | (139                                                    | ) |                   |       | (4,327 | )
|                                                  | Redemption of limited partnership units  |                                                                                   |                                                                    | (439                                                    | ) |                   |       | (119   | )
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|                                                  |                                          |                                                                                   |                                                                    | Net cash used for financing activities                  |   |                   | (578  | )      |   |     | (4,446 | )
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|Net increase in cash and cash equivalents         |                                          |                                                                                   | 664                                                                |                                                         |   |                   | 3,872 |       
|Cash and cash equivalents at beginning of period  |                                          |                                                                                   | 3,764                                                              |                                                         |   |                   | 1,462 |       
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|Cash and cash equivalents at end of period        |                                          | $                                                                                 | 4,428                                                              |                                                         |   | $                 | 5,334 |       
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |        |  
|Supplemental disclosure of cash flow information: |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |       
|                                                  |                                          |                                                                                   | Cash paid for interest (net of capitalized interest of $3 in 2003) |                                                         | $ | 539               |       |        | $ | 596 |       
|                                                  |                                          |                                                                                   |                                                                    |                                                         |   |                   |       |        |  

The accompanying notes are an integral part of these consolidated financial statements.

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RANCON REALTY FUND IV
A California Limited partnership




Notes to Consolidated Financial Statements

September 30, 2003
(Unaudited)

Note 1. ORGANIZATION

Rancon Realty Fund IV, a California Limited Partnership, (the Partnership),
was organized in accordance with the provisions of the California Uniform
Limited Partnership Act for the purpose of acquiring, developing, operating and
disposing of real property. The General Partners of the Partnership are Daniel
L. Stephenson and Rancon Financial Corporation (RFC) hereinafter referred to
as the Sponsor or the General Partner. RFC is wholly-owned by Daniel L.
Stephenson. The Partnership reached final funding in July 1987.

During the nine months ended September 30, 2003, a total of 1,170 Units were
redeemed at an average price of $375. As of September 30, 2003, there were
70,376 Units outstanding.

In the opinion of RFC, the General Partner and Glenborough Realty Trust
Incorporated (Glenborough), the Partnerships asset and property manager, the
accompanying unaudited consolidated financial statements contain all
adjustments (consisting of only normal accruals) necessary to present fairly
the consolidated financial position of the Partnership as of September 30, 2003
and December 31, 2002, and the related consolidated statements of operations
for the three and nine months ended September 30, 2003 and 2002, partners
equity for the nine months ended September 30, 2003, and cash flows for the
three and nine months ended September 30, 2003 and 2002.

Allocation of Net Income and Net Loss

Allocation of net income and net losses are made pursuant to the terms of the
Partnership Agreement. Generally, net income from operations is allocated 90%
to the limited partners and 10% to the General Partners. Net losses from
operations are allocated 99% to the limited partners and 1% to the General
Partners until such time as a partners capital account is reduced to zero.
Additional losses will be allocated entirely to those partners with positive
capital account balances until such balances are reduced to zero.

Net income other than net income from operations shall be allocated as follows:
(i) first, to the partners who have a deficit balance in their capital account,
provided that, in no event shall the General Partners be allocated more than 5%
of the net income other than net income from operations until the earlier of
sale or disposition of substantially all of the assets or the distribution of
cash (other than cash from operations) equal to the limited partners original
invested capital; (ii) second, to the limited partners in proportion to and to
the extent of the amounts required to increase their capital accounts to an
amount equal to the sum of the adjusted invested capital of their units plus an
additional cumulative non-compounded 6% return per annum (plus additional
amounts depending on the date units were purchased); (iii) third, to the
partners in the minimum amount required to first equalize their capital
accounts in proportion to the number of units owned, and then, to bring the sum
of the balances of the capital accounts of the limited partners and the General
Partners into the ratio of 4 to 1; and (iv) the balance, if any, 80% to the
limited partners and 20% to the General Partners. In no event shall the
General Partners be allocated less than 1% of the net income other than net
income from operations for any period. Net loss other than net loss from
operations shall be allocated 99% to the limited partners and 1% to the General
Partners.

The terms of the Partnership agreement call for the General Partner to restore
any deficits that may exist in its capital account after allocation of gains
and losses from the sale of the final property owned by the Partnership, but
prior to any liquidating distributions being made to the partners.

Distribution of Cash

The Partnership shall make annual or more frequent distributions of
substantially all cash available to be distributed to partners as determined by
the General Partner, subject to the following: (i) distributions may be
restricted or suspended for limited periods when the General Partner determines
in its absolute discretion that it is in the best interest of the Partnership;
and (ii) all distributions are subject to the payments of partnership expenses
and maintenance of reasonable reserves for debt service, alterations
improvements, maintenance, replacement of furniture and fixtures, working
capital and contingent liabilities.

All excess cash from operations shall be distributed 90 percent to the limited
partners and 10 percent to the General Partner.

All cash from sales or refinancing and any other cash determined by the General
Partner to be available for distribution other than cash from operations shall
be distributed in the following order of priority: (i) first, 1 percent to the
General Partner and 99 percent to the limited partners in proportion to the
outstanding positive amounts of Adjusted Invested Capital (as defined in the
Partnership Agreement) for each of their Units until Adjusted Invested Capital
(as defined in the Partnership Agreement) for each Unit is reduced to zero;
(ii) second, 1 percent to the General Partner and 99 percent to the limited
partners until each of the limited partners has received an amount which,
including cash from operations previously distributed to the limited partners,
equals a 12 percent annual cumulative non-compounded return on the Adjusted
Invested Capital (as defined in the Partnership

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RANCON REALTY FUND IV
A California Limited partnership

Notes to Consolidated Financial Statements

September 30, 2003
(Unaudited)

Agreement) of their Units plus
such limited partners Limited Incremental Preferential Return (as defined in
the Partnership Agreement), if any, with respect to each such Unit, on the Adjusted Investment
Capital (as defined in the Partnership Agreement) of such Units for the twelve
month period following the date upon which such Unit was purchased from the
Partnership and following the admission of such limited partner; (for limited
partners admitted to the Partnership before March 31, 1985, there are
additional cumulative non-compounded returns of 9 percent, 6 percent, or 3
percent depending on purchase date, through October 31, 1985); (iii) third, 99
percent to the General Partner and 1 percent to the limited partners, until the
General Partner has received an amount equal to 20 percent of all distributions
of cash from sales or refinancing; and (iv) the balance, 80 percent to the
limited partners, pro rata in proportion to the number of Units held by each,
and 20 percent to the General Partner.

All cash from a sale or disposition of substantially all of the assets (as
defined in the Partnership Agreement) and any cash, other than cash from
operations, available for distribution to partners during the dissolution and
termination of the Partnership, shall be distributed to the partners: (i)
first, in proportion to and to the extent of the positive balances of their
capital accounts; and (ii) the remaining balance, if any, in accordance with
distributions of cash from sales or refinancing above.

The terms of the Partnership agreement call for the General Partner to restore
any deficit that may exist in its capital account after allocation of gains and
losses from the sale of the final property owned by the Partnership, but prior
to any liquidating distributions being made to the partners.

Management Agreement

Effective January 1, 1995, Glenborough Corporation (GC) entered into an
agreement with the Partnership and other related Partnerships (collectively,
the Rancon Partnerships) to perform or contract on the Partnerships behalf
for financial, accounting, data processing, marketing, legal, investor
relations, asset and development management and consulting services for a
period of ten years or until the dissolution of the Partnership, whichever
comes first. Effective January 1, 1998, GC ceased to have the responsibility
for providing investor relation services and Preferred Partnership Services,
Inc., a California corporation unaffiliated with the Partnership, contracted to
assume the investor relations service. In October 2000, GC merged into
Glenborough.

The Partnership will pay Glenborough for its services as follows: (i) a
specified asset administration fee ($490,000 and $525,000 as of September 30,
2003 and 2002); (ii) sales fees of 2% for improved properties and 4% for land
($175,000 as of September 30, 2002); (iii) a refinancing fee of 1% and (iv) a
management fee of 5% of gross rental receipts. As part of this agreement,
Glenborough will perform certain duties for the General Partner of the Rancon
Partnerships. RFC agreed to cooperate with Glenborough, should Glenborough
attempt with a vote of those Limited Partners owning not less than a majority
(and in certain cases 100%) of the outstanding units to substitute itself as
the general partner of the Rancon Partnerships. Glenborough is not an
affiliate of RFC or the Partnership.

Risks and Uncertainties

The Partnerships ability to (i) achieve positive cash flow from operations,
(ii) meet its debt obligations, (iii) provide distributions either from
operations or the ultimate disposition of the Partnerships properties or (iv)
continue as a going concern, may be impacted by changes in interest rates,
property values, local and regional economic conditions, or the entry of other
competitors into the market. The accompanying consolidated financial
statements do not provide for adjustments with regard to these uncertainties.

Note 2. SIGNIFICANT ACCOUNTING POLICES

Basis of Accounting

The accompanying consolidated financial statements have been prepared on the
accrual basis of accounting in accordance with accounting principles generally
accepted in the United States of America. They include the accounts of certain
wholly owned subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 results of operations during
the reporting period. Actual results could differ from those estimates.

8



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RANCON REALTY FUND IV
A California Limited partnership

Notes to Consolidated Financial Statements

September 30, 2003
(Unaudited)

New Accounting Pronouncements

In January 2003, the FASB approved for issuance FASB Interpretation No. 46 (FIN
46), Consolidation of Variable Interest Entities. FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, Consolidated Financial
Statements to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 applies immediately
to variable interest entities (VIEs) created after January 31, 2003, and to
VIEs in which an enterprise obtains an interest after that date. It was
originally to be applied in the first fiscal year or interim period beginning
after June 15, 2003, to VIEs in which an enterprise holds a variable interest
that it acquired before February 1, 2003. In October 2003, the FASB deferred
the June 15, 2003 date to the first fiscal year or interim period ending after
December 15, 2003. FIN 46 may be applied prospectively with a
cumulative-effect adjustment as of the date on which it is first applied or by
restating previously issued financial statements for one or more years with a
cumulative-effect adjustment as of the beginning of the first year restated.
The disclosure requirements of FIN 46 are effective for all financial
statements initially issued after January 31, 2003. The adoption of FIN 46 will
not have a material impact on the financial statements of the Partnership.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This
statement establishes standards for the classification and measurement of
certain financial instruments with characteristics of both liabilities and
equity. SFAS No. 150 requires that an issuer classify a financial instrument
that is within its scope as a liability (or an asset in some circumstances).
Many of those instruments were previously classified as equity. This statement
is effective for financial instruments entered into or modified after May 31,
2003 and, otherwise, is effective at the beginning of the first interim period
beginning after June 15, 2003. Certain provisions have been deferred
indefinitely by the FASB. This standard did not have a material impact on the
financial statements or results of operations of the Partnership.

Consolidation

In April 1996, the Partnership formed Rancon Realty Fund IV Tri-City Limited
Partnership, a Delaware limited partnership (RRF IV Tri-City). The limited
partner of RRF IV Tri-City is the Partnership and the General Partner is Rancon
Realty Fund IV, Inc. (RRF IV, Inc.), a corporation wholly owned by the
Partnership. Since the Partnership owns 100% of RRF IV, Inc. and indirectly
owns 100% of RRF IV Tri-City, the financial statements of RRF IV, Inc. and RRF
IV Tri-City have been consolidated with those of the Partnership. All
intercompany balances and transactions have been eliminated in the
consolidation.

Rental Properties

Rental properties, including the related land, are stated at cost unless events
or circumstances indicate that cost cannot be recovered, in which case, the
carrying value of the property is reduced to its estimated fair value.
Estimated fair value: (i) is based upon the Partnerships plans for the
continued operations of each property; and (ii) is computed using estimated
sales price, as determined by prevailing market values for comparable
properties and/or the use of capitalization rates multiplied by annualized
rental income based upon the age, construction and use of the building. The
fulfillment of the Partnerships plans related to each of its properties is
dependent upon, among other things, the presence of economic conditions which
will enable the Partnership to continue to hold and operate the properties
prior to their eventual sale. Due to uncertainties inherent in the valuation
process and in the economy, it is reasonably possible that the actual results
of operating and disposing of the Partnerships properties could be materially
different than current expectations.

Depreciation is provided using the straight line method over the five to forty
year estimated useful lives of the respective assets.

Land Held for Development

Land held for development is stated at cost unless events or circumstances
indicate that cost cannot be recovered, in which case, the carrying value is
reduced to estimated fair value. Estimated fair value: (i) is based on the
Partnerships plans for the development of each property; (ii) is computed
using estimated sales price, based upon market values for comparable
properties; and (iii) considers the cost to complete and the estimated fair
value of the completed project. The fulfillment of the Partnerships plans
related to each of its properties is dependent upon, among other things, the
presence of economic conditions which will enable the Partnership to either
hold the properties for eventual sale or obtain financing to further develop
the properties.

Cash and Cash Equivalents

The Partnership considers short-term investments (including certificates of
deposit and money market funds) with a maturity of less than ninety days at the
time of investment to be cash equivalents.

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RANCON REALTY FUND IV
A California Limited partnership

Notes to Consolidated Financial Statements

September 30, 2003
(Unaudited)

Deferred Costs and Other Fees

Deferred financing costs are amortized on a straight-line basis over the life
of the related loan and deferred lease commissions are amortized over the
initial fixed term of the related lease agreement.

Revenues

The Partnership recognizes rental revenue on a straight-line basis at amounts
that it believes it will collect on a tenant by tenant basis. The estimation
process may result in higher or lower levels from period to period as the
Partnerships collection experience and the credit quality of the Partnerships
tenants changes. Actual amounts collected could be lower or higher than the
amounts recognized on a straight-line basis if specific tenants are unable to
pay rent that the Partnership has previously recognized as revenue, or if other
tenants pay rent whom the Partnership previously estimated would not.

The Partnerships portfolio of leases turns over continuously, with the number
and value of expiring leases varying from year to year. The Partnerships
ability to re-lease the space to existing or new tenants at rates equal to or
greater than those realized historically is impacted by, among other things,
the economic conditions of the market in which a property is located, the
availability of competing space, and the level of improvements which may be
required at the property. No assurance can be given that the rental rates that
the Partnership will obtain in the future will be equal to or greater than
those obtained under existing contractual commitments.

Reimbursements from tenants for real estate taxes and other recoverable
operating expenses are recognized as revenue in the period the applicable
expenses are incurred. Differences between estimated and actual amounts are
recognized in the subsequent year.

Sales of Real Estate

The Partnership recognizes sales of real estate when a contract is in place, a
closing has taken place, the buyers investment is adequate to demonstrate a
commitment to pay for the property and the Partnership does not have a
substantial continuing involvement in the property. Each property is
considered a separately identifiable component of the Partnership and is
reported in discontinued operations when the operations and cash flows of the
Property have been (or will be) eliminated from the ongoing operations of the
Partnership as a result of the disposal transaction and the Property will not
have any significant continuing involvement in the operations of the
Partnership after the disposal transaction.

Net Income/Loss Per Limited Partnership Unit

Net income or loss per limited partnership unit 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 or loss.

Income Taxes

No provision for income taxes is included in the accompanying consolidated
financial statements as the Partnerships results of operations are allocated
to the partners for inclusion in their respective income tax returns. Net
income (loss) and partners equity (deficit) for financial reporting purposes
will differ from the Partnership income tax return because of different
accounting methods used for certain items, including depreciation expense,
provisions for impairment of investments in real estate, capitalization of
development period interest and rental income and loss recognition.

Concentration Risk

One tenant represented 21 percent and 20 percent of rental income for the nine
months ended September 30, 2003 and 2002, respectively.

Reference to 2002 audited consolidated financial statements

These unaudited consolidated financial statements should be read in conjunction
with the notes to audited consolidated financial statements included in the
December 31, 2002 audited consolidated financial statements on Form 10-K.

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RANCON REALTY FUND IV
A California Limited partnership

Notes to Consolidated Financial Statements

September 30, 2003
(Unaudited)

Note 3. INVESTMENTS IN REAL ESTATE

Rental properties consisted of the following at September 30, 2003 and December
31, 2002 (in thousands):

|                                 |  |      |         |      |  |   |         |  
|-------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                 |  | 2003 |         | 2002
|                                 |  |      |         |     
|Land                             |  | $    | 4,236   |      |  | $ | 4,236   |  
|Buildings                        |  |      | 28,369  |      |  |   | 28,369  |  
|Leasehold and other improvements |  |      | 10,123  |      |  |   | 9,725   |  
|                                 |  |      |         |      |  |   |         |  
|                                 |  |      | 42,728  |      |  |   | 42,330  |  
|Less: accumulated depreciation   |  |      | (14,940 | )    |  |   | (14,024 | )
|                                 |  |      |         |      |  |   |         |  
|Total rental properties, net     |  | $    | 27,788  |      |  | $ | 28,306  |  
|                                 |  |      |         |      |  |   |         |  

At September 30, 2003, the Partnerships rental properties included seven
retail and four office/R & D projects at the Tri-City Corporate Centre in San
Bernardino, California.

On March 20, 2002, the Partnership sold the Two Vanderbilt property to an
anchor tenant, Inland Empire Health Plan, who occupied 78% of the property for
a sales price of $8,750,000. The sale generated net proceeds of approximately
$8,382,000 and a gain on sale of approximately $5,120,000. The Partnership
made a pay down on the line of credit of $4,200,000 from the sales proceeds and
added the remaining cash to its cash reserves.

In accordance with SFAS 144 Accounting for the Impairment or Disposal of Long
Lived Assets, effective for financial statements issued for fiscal years
beginning after December 15, 2001, net income and gain or loss on sales of real
estate for properties sold or classified as held for sale subsequent to
December 31, 2001 are reflected in the consolidated statements of operations as
Discontinued operations for all periods presented.

Below is a summary of the results of operations of Two Vanderbilt for the nine
months ended September 30, 2002 (in thousands):

|                                               |  |        |       | 
|---------------------------------------------- |  | ------ | ----- | 
|                                               |  | Nine  
|                                               |  | Months
|                                               |  |       
|Rental income                                  |  | $      | 265   | 
|Operating expenses                             |  |        | 137   | 
|Depreciation and amortization                  |  |        | 76    | 
|                                               |  |        |       | 
|Total expenses                                 |  |        | 213   | 
|                                               |  |        |       | 
|Income before net gain on sales of real estate |  |        | 52    | 
|Net gain on sales of real estate               |  |        | 5,120 | 
|                                               |  |        |       | 
|Discontinued operations                        |  | $      | 5,172 | 
|                                               |  |        |       | 

Construction in progress consisted of the following at September 30, 2003 and
December 31, 2002 (in thousands):

|                                              |  |      |     |      |  |   |   | 
|--------------------------------------------- |  | ---- | --- | ---- |  | - | - | 
|                                              |  | 2003 |     | 2002
|                                              |  |      |     |     
|Tri-City Corporate Centre, San Bernardino, CA |  |      |     |      |  |   |   | 
|(approximately 1 acre in 2003).               |  | $    | 837 |      |  | $ |  | 
|                                              |  |      |     |      |  |   |   | 

The Partnership is in the process of developing approximately one acre of land
at Vanderbilt Tower. The construction cost for this four-story office building
of 120,000 square feet is approximately $10,000,000. The construction is
estimated to be completed in late 2004.

Land held for development consists of the following at September 30, 2003 and
December 31, 2002 (in thousands):

|                                                           |  |      |     |      |  |   |       | 
|---------------------------------------------------------- |  | ---- | --- | ---- |  | - | ----- | 
|                                                           |  | 2003 |     | 2002
|                                                           |  |      |     |     
|Tri-City Corporate Centre, San Bernardino, CA              |  |      |     |      |  |   |       | 
|(approximately 21.5 acres in 2003 and 22.5 acres in 2002). |  | $    | 703 |      |  | $ | 1,214 | 
|                                                           |  |      |     |      |  |   |       | 

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RANCON REALTY FUND IV
A California Limited partnership

Notes to Consolidated Financial Statements

September 30, 2003
(Unaudited)

Land held for development decreased primarily due to a transfer from land held
for development to construction in progress.

Note 4. LOANS PAYABLE

Loans payable as of September 30, 2003 and December 31, 2002 were as follows
(in thousands):

|                                                                                                                                                                                                                                                                                                          |  |      |       |      |  |   |       | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|                                                                                                                                                                                                                                                                                                          |  | 2003 |       | 2002
|                                                                                                                                                                                                                                                                                                          |  |      |       |     
|Note payable secured by first deeds of trust
on Service Retail Center, Promotional Retail
Center and Carnegie Business Center I. The
note, which matures May 1, 2006, is a 10-year,
8.744% fixed rate loan with a 25-year
amortization requiring monthly payments of
principal and interest totaling $53. |  | $    | 5,757 |      |  | $ | 5,857 | 
|                                                                                                                                                                                                                                                                                                         
|Note payable secured by first deed of trust on
the One Vanderbilt building. The note bears a
fixed interest rate of 9%. Monthly payments of
principal and interest totaling $20 are due
until the maturity date of January 1, 2005.                                                                       |  |      | 2,074 |      |  |   | 2,113 | 
|                                                                                                                                                                                                                                                                                                          |  |      |       |      |  |   |       | 
|Total loans payable                                                                                                                                                                                                                                                                                       |  | $    | 7,831 |      |  | $ | 7,970 | 
|                                                                                                                                                                                                                                                                                                          |  |      |       |      |  |   |       | 

The Partnership has a line of credit with a total availability of $7.2
million. The line of credit is secured by first deeds of trust on IRC
building, Circuit City and TGI Fridays, requires monthly interest-only
payments, carries a variable interest rate of Prime Rate (4% as of
September 30, 2003), and has a maturity date of April 15, 2004. Currently,
there is $0 drawn on this line of credit (as discussed in Note 3 above).

The annual maturities on the Partnerships loans payable as of September 30,
2003, are as follows (in thousands):

|             |  |   |       | 
|------------ |  | - | ----- | 
|Year ending  |  |   |       | 
|December 31, |  |   |       | 
|             |  |   |       | 
|2003         |  | $ | 48    | 
|2004         |  |   | 205   | 
|2005         |  |   | 2,160 | 
|2006         |  |   | 5,418 | 
|             |  |   |       | 
|Total        |  | $ | 7,831 | 
|             |  |   |       | 

Note 5. COMMITMENTS AND CONTINGENT LIABILITIES

Environmental Matters

The Partnership follows a policy of monitoring its properties for the presence
of hazardous or toxic substances. The Partnership is not aware of any
environmental liability with respect to the properties that would have a
material adverse effect on the Partnerships business, assets or results of
operations. There can be no assurance that such a material environmental
liability does not exist. The existence of any such material environmental
liability could have an adverse effect on the Partnerships results of
operations and cash flows.

Approximately 15 acres of the Tri-City Corporate Centre land owned by the
Partnership was part of a landfill operated by the City of San Bernardino (the
City) from approximately 1950 to 1960. There are no records of which the
Partnership is aware disclosing that hazardous wastes exist at the landfill.
The City is responsible for the landfill and the gas-monitoring program as
prescribed by the Santa Ana Region of the California Water Quality Control
Board (WQCB). The monitoring will be handled directly by the City as of May
1, 2003. Also, the City has presented a draft plan for closure of the landfill
to the WQCB. Most likely, this plan will commence in Spring 2004. There is no
current requirement to conduct clean closure of the site, and the Partnership
will work directly with the City on the details of their plan with the WQCB.
However, no assurance can be made that circumstances will not arise which could
impact the Partnerships responsibility related to the land.

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RANCON REALTY FUND IV
A California Limited partnership

Notes to Consolidated Financial Statements

September 30, 2003
(Unaudited)

General Uninsured Losses

The Partnership carries comprehensive liability, fire, flood, extended coverage
and rental loss insurance with policy specifications, limits and deductibles
customarily carried for similar properties. There are, however, certain types
of extraordinary losses, which may be either uninsurable, or not economically
insurable. Further, certain of the properties are located in areas that are
subject to earthquake activity. Should a property sustain damage as a result
of an earthquake, the Partnership may incur losses due to insurance
deductibles, co-payments on insured losses or uninsured losses. Should an
uninsured loss occur, the Partnership could lose its investment in, and
anticipated profits and cash flows from, a property.

Other Matters

The Partnership is contingently liable for subordinated real estate commissions
payable to the Sponsors in the aggregate amount of $643,000 at September 30,
2003, for sales that transpired in previous years. The subordinated real estate
commissions are payable only after the Limited Partners have received
distributions equal to their original invested capital plus a cumulative
non-compounded return of 6% per annum on their adjusted invested capital. Since
the circumstances under which these commissions would be payable are limited,
the liability has not been recognized in the accompanying consolidated
financial statements; however, the amount will be recorded when and if it
becomes payable.

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##### Table of Contents






Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Occupancy rates at the Partnerships Tri-City properties as of September 30,
2003 and 2002 were as follows:

|                           |  |      |     |      |  |  |     |  
|-------------------------- |  | ---- | --- | ---- |  |  | --- | -
|                           |  | 2003 |     | 2002
|                           |  |      |     |     
|One Vanderbilt             |  |      | 95  | %    |  |  | 99  | %
|Service Retail Center      |  |      | 93  | %    |  |  | 93  | %
|Carnegie Business Center I |  |      | 100 | %    |  |  | 100 | %
|Promotional Retail Center  |  |      | 100 | %    |  |  | 100 | %
|Inland Regional Center     |  |      | 100 | %    |  |  | 100 | %
|TGI Fridays               |  |      | 100 | %    |  |  | 100 | %
|Circuit City               |  |      | 100 | %    |  |  | 100 | %
|Office Max                 |  |      | 100 | %    |  |  | 100 | %
|Mimis Café                |  |      | 100 | %    |  |  | 100 | %
|Palm Court Retail #1       |  |      | 100 | %    |  |  | 100 | %
|Palm Court Retail #2       |  |      | 100 | %    |  |  | 100 | %
|                           |  |      |     |      |  |  |     |  
|Weighted average occupancy |  |      | 99  | %    |  |  | 99  | %
|                           |  |      |     |      |  |  |     |  

As of September 30, 2003, tenants at Tri-City occupying substantial portions of
leased rental space included: (i) ITT Educational Services with a lease through
December 2004; (ii) Countrywide Home Loans with a lease through August 2005;
(iii) CompUSA with a lease through August 2008; (iv) Fidelity National Title
with a lease through August 2008; (v) PetsMart with a lease through January
2009; (vi) Inland Regional Center with a lease through July 2009; (vii) The
University of Phoenix, Inc. with a lease through August 2009; (viii) Office Max
with a lease through October 2013; and (ix) Circuit City with a lease through
January 2018. These nine tenants, in the aggregate, occupied approximately
293,000 square feet of the 395,000 total leasable square feet at Tri-City and
accounted for approximately 74% of the rental income of the Partnership as of
September 30, 2003.

The 4% decrease in occupancy from September 30, 2002 to September 30, 2003 at
One Vanderbilt was due to a 3,900 square feet tenant moving out when its lease
term expired.

Comparison of the nine months ended September 30, 2003 to the nine months ended
September 30, 2002

Revenue

Rental income for the nine months ended September 30, 2003 increased $603,000,
or 13%, compared to the nine months ended September 30, 2002, primarily due to
an increase in rental rates.

Interest and other income decreased $10,000, or 19%, for the nine months ended
September 30, 2003, compared to the nine months ended September 30, 2002,
primarily due to a lower average invested cash balance as a result of
distributions made to the General and Limited Partners in November 2002, as
well as decreases in interest rates.

Expenses

Operating expenses increased $87,000, or 5%, for the nine months ended
September 30, 2003, compared to the nine months ended September 30, 2002,
primarily due to an increase in utility and janitorial costs.

Interest expense decreased $59,000, or 9%, for the nine months ended September
30, 2003, compared to the nine months ended September 30, 2002, primarily due
to a pay down on the line of credit in March 2002.

Expenses associated with undeveloped land decreased $567,000, or 72%, for the
nine months ended September 30, 2003, compared to the nine months ended
September 30, 2002, primarily due to a decrease in property taxes resulting
from early payoff in 2002 of an annual assessment levied by the City of San
Bernardino. The City of San Bernardino issued bonds which were used to fund
land infrastructure costs. The Partnership benefited from these improvements
and was responsible for a portion of the annual bond service costs. In 2002,
the bonds were repaid which required the Partnership to incur a larger expense.

Income from discontinued operations

Income from discontinued operations totaled $5,172,000 for the nine months
ended September 30, 2002, which included a $5,120,000 gain from the sale of the
Two Vanderbilt property (as discussed below), and $52,000 of net operating
income from the Two Vanderbilt property.

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Comparison of the three months ended September 30, 2003 to the three months
ended September 30, 2002.

Revenue

Rental income for the three months ended September 30, 2003 increased $197,000,
or 13%, compared to the three months ended September 30, 2002, primarily due to
an increase in rental rates.

Interest and other income decreased $9,000, or 36%, for the three months ended
September 30, 2003, compared to the three months ended September 30, 2002,
primarily due to a lower average invested cash balance as a result of
distributions made to the General and Limited Partners in November 2002, as
well as decreases in interest rates.

Expenses

Expenses associated with undeveloped land decreased $42,000, or 39%, for the
three months ended September 30, 2003, compared to the three months ended
September 30, 2002, primarily due to a decrease in property taxes resulting
from early payoff in 2002 of an annual assessment levied by the City of San
Bernardino. The City of San Bernardino issued bonds which were used to fund
land infrastructure costs. The Partnership benefited from these improvements
and was responsible for a portion of the annual bond service costs. In 2002,
the bonds were repaid which required the Partnership to incur a larger expense.

General and administrative expenses increased $25,000, or 9%, for the three
months ended September 30, 2003, compared to the three months ended September
30, 2002, primarily due to legal fees related to landfill environmental
matters, increased audit fees, and increased postage costs in investor relation
service expenses, offset by a decrease in asset management fees resulting from
the sale of Two Vanderbilt in 2002.

LIQUIDITY AND CAPITAL RESOURCES

The following discussion should be read in conjunction with the Partnerships
December 31, 2002 audited consolidated financial statements and the notes
thereto.

At September 30, 2003, the Partnership had cash of $4,428,000. The remainder of
the Partnerships assets consists primarily of its net investments in real
estate, totaling approximately $29,328,000, which includes $27,788,000 in
rental properties, $837,000 of construction in progress, and $703,000 of land
held for development.

The Partnerships primary liabilities at September 30, 2003 include loans
payable, totaling approximately $7,831,000 which consist of two secured loans
encumbering properties with an aggregate net book value of approximately
$13,391,000 and with maturity dates of January 1, 2005 and May 1, 2006. These
notes require monthly principal and interest payments of $20,000 and $53,000
and bear fixed interest rates of 8.74% and 9%. A line of credit, which bears
interest at Prime Rate (4% as of September 30, 2003), has no outstanding
balance at September 30, 2003.

On March 20, 2002, the Partnership sold the Two Vanderbilt property to an
anchor tenant, Inland Empire Health Plan, who occupied 78% of the property for
a sales price of $8,750,000. The sale generated net proceeds of approximately
$8,382,000 and a gain on sale of approximately $5,120,000. The Partnership made
a pay down on the line of credit of $4,200,000 from the sales proceeds and
added the remaining cash to its cash reserves.

The Partnership is contingently liable for subordinated real estate commissions
payable to the Sponsors in the aggregate amount of $643,000 at September 30,
2003, for sales that transpired in previous years. The subordinated real estate
commissions are payable only after the Limited Partners have received
distributions equal to their original invested capital plus a cumulative
non-compounded return of 6% per annum on their adjusted invested capital. Since
the circumstances under which these commissions would be payable are limited,
the liability has not been recognized in the accompanying consolidated
financial statements; however, the amount will be recorded when and if it
becomes payable.

Operationally, the Partnerships primary source of funds consists of cash
provided by its rental activities. Other sources of funds may include permanent
financing, draws on the line of credit, property sales, interest income on
certificates of deposit and other deposits of funds invested temporarily. Cash
generated from property sales is generally added to the Partnerships cash
reserves, pending use in the development of properties or distribution to the
partners.

Management believes that the Partnerships cash balance as of September 30,
2003, together with cash from operations, sales and financing, will be
sufficient to finance the Partnerships and the properties continued
operations and development plans on a short-term basis and for the reasonably
foreseeable future. There can be no assurance that the Partnerships results
of operations will not fluctuate in the future and at times affect its ability
to meet its operating requirements.

The Partnership knows of no demands, commitments, events or uncertainties,
which might effect its capital resources in any material respect. In addition,
the Partnership is not subject to any covenants pursuant to its secured debt
that would constrain its ability to obtain additional capital.

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Operating Activities

During the nine months ended September 30, 2003, the Partnerships cash
provided by operating activities totaled $1,834,000.

The $213,000 decrease in accounts receivable at September 30, 2003, compared to
December 31, 2002, was primarily due to the collection of tenant rents and the
reimbursement of tenant improvements from the reserve impound account.

The $111,000 increase in deferred costs and other fees at September 30, 2003,
compared to December 31, 2002 was primarily due to lease commissions paid for
new and renewal leases.

The $149,000 increase in prepaid expenses and other assets at September 30,
2003, compared to December 31, 2002, was primarily due to increases in prepaid
insurance and impound accounts.

The $17,000 decrease in accounts payable and other liabilities at September 30,
2003, compared to December 31, 2002, was primarily due to payments of audit and
tax preparation fees, offset by increase in accruals for property taxes and
building operating expenses.

The $119,000 increase in prepaid rents at September 30, 2003, compared to
December 31, 2002, was due to the receipt of October 2003 rents in September
2003.

Investing Activities

During the nine months ended September 30, 2003, the Partnerships cash used
for investing activities totaled $592,000, which included $398,000 for tenant
improvements at One Vanderbilt and Carnegie Business Center I, and $194,000 for
construction costs at Vanderbilt Tower.

Financing Activities

During the nine months ended September 30, 2003, the Partnerships cash used
for financing activities totaled $578,000, which consisted of $139,000 in
principal payments on loans payable, and $439,000 paid to redeem 1,170 limited
partnership units (Units).

Critical Accounting Policies

Revenue recognized on a straight-line basis

The Partnership recognizes rental revenue on a straight-line basis at amounts
that it believes it will collect on a tenant by tenant basis. The estimation
process may result in higher or lower levels from period to period as the
Partnerships collection experience and the credit quality of the Partnerships
tenants changes. Actual amounts collected could be lower or higher than the
amounts recognized on a straight-line basis if specific tenants are unable to
pay rent that the Partnership has previously recognized as revenue.

Carrying value of rental properties and land held for development

The Partnerships rental properties, including the related land, are stated at
depreciated cost unless events or circumstances indicate that depreciated cost
cannot be recovered, in which case, the carrying value of the property is
reduced to its estimated fair value. Estimated fair value is based upon (i)
the Partnerships plans for the continued operations of each property, and (ii)
is computed using estimated sales price, as determined by prevailing market
values for comparable properties and/or the use of capitalization rates
multiplied by annualized rental income based upon the age, construction and use
of the building. The fulfillment of the Partnerships plans related to each of
its properties is dependent upon, among other things, the presence of economic
conditions which will enable the Partnership to continue to hold and operate
the properties prior to their eventual sale. Due to uncertainties inherent in
the valuation process and in the economy, it is reasonably possible that the
actual results of operating and disposing of the Partnerships properties could
be materially different than current expectations.

Land held for development is stated at cost unless events or circumstances
indicate that cost cannot be recovered, in which case, the carrying value is
reduced to estimated fair value. Estimated fair value: (i) is based on the
Partnerships plans for the development of each property; (ii) is computed
using estimated sales price, based upon market values for comparable
properties; and (iii) considers the cost to complete and the estimated fair
value of the completed project. The fulfillment of the Partnerships plans
related to each of its properties is dependent upon, among other things, the
presence of economic conditions which will enable the Partnership to either
hold the properties for eventual sale or obtain financing to further develop
the properties.

The actual value of the Partnerships portfolio of properties and land held for
development could be significantly higher or lower than their carrying amounts.

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New Accounting Pronouncements

In January 2003, the FASB approved for issuance FASB Interpretation No. 46 (FIN
46), Consolidation of Variable Interest Entities. FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, Consolidated Financial
Statements to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 applies immediately
to variable interest entities (VIEs) created after January 31, 2003, and to
VIEs in which an enterprise obtains an interest after that date. It was
originally to be applied in the first fiscal year or interim period beginning
after June 15, 2003, to VIEs in which an enterprise holds a variable interest
that it acquired before February 1, 2003. In October 2003, the FASB deferred
the June 15, 2003 date to the first fiscal year or interim period ending after
December 15, 2003. FIN 46 may be applied prospectively with a
cumulative-effect adjustment as of the date on which it is first applied or by
restating previously issued financial statements for one or more years with a
cumulative-effect adjustment as of the beginning of the first year restated.
The disclosure requirements of FIN 46 are effective for all financial
statements initially issued after January 31, 2003. The adoption of FIN 46 will
not have a material impact on the financial statements of the Partnership.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This
statement establishes standards for the classification and measurement of
certain financial instruments with characteristics of both liabilities and
equity. SFAS No. 150 requires that an issuer classify a financial instrument
that is within its scope as a liability (or an asset in some circumstances).
Many of those instruments were previously classified as equity. This statement
is effective for financial instruments entered into or modified after May 31,
2003 and, otherwise, is effective at the beginning of the first interim period
beginning after June 15, 2003. Certain provisions have been deferred
indefinitely by the FASB. This standard did not have a material impact on the
financial statements or results of operations of the Partnership.




Item 3. Qualitative and Quantitative Information About Market Risk

Interest Rates

The Partnerships primary market risk exposure is to changes in interest rates
obtainable on its secured borrowings. The Partnership does not believe that
changes in market interest rates will have a material impact on the performance
or fair value of its portfolio.

For debt obligations, the table below presents principal cash flows and
interest rates by expected maturity dates.

|                        |  |                        |      |      |  |      |      |      |  |            |       |       |  |            |       |   |  |  |    |  |  |   |       |   |  |   |       | 
|----------------------- |  | ---------------------- | ---- | ---- |  | ---- | ---- | ---- |  | ---------- | ----- | ----- |  | ---------- | ----- | - |  |  | -- |  |  | - | ----- | - |  | - | ----- | 
|                        |  | Expected Maturity Date
|                        |  |                       
|                        |  | 2003                   |      | 2004 |  | 2005 |      | 2006 |  | Thereafter |       | Total |  | Fair value
|                        |  |                        |      |      |  |      |      |      |  |            |       |       |  |           
|                        |  | (in thousands)        
|Secured Fixed Rate Debt |  | $                      | 48   |      |  | $    | 205  |      |  | $          | 2,160 |       |  | $          | 5,418 |   |  |  |  |  |  | $ | 7,831 |   |  | $ | 7,831 | 
|Average interest rate   |  |                        | 8.82 | %    |  |      | 8.82 | %    |  |            | 8.98  | %     |  |            | 8.74  | % |  |  |  |  |  |   | 8.81  | % |  |   |       | 

The Partnership believes that its interest rate risk profile has not changed
significantly from December 31, 2002.

As of September 30, 2003, the Partnership had cash equivalents of $3,197,000
invested in interest-bearing certificates of deposit. These investments are
subject to interest rate risk due to changes in interest rates upon maturity.
The Partnership does not own any derivative instruments. Declines in interest
rates over time would reduce Partnership interest income.




Item 4. Controls and procedures

(a)  Evaluation of disclosure controls and procedures.

The Partnerships chief executive officer and chief financial officer, after
evaluating the effectiveness of the Partnerships disclosure controls and
procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c)
and 15-d-14(c)) as of a date (the Evaluation Date) within 90 days before the
filing date of this quarterly report, has concluded that as of the Evaluation
Date, the Partnerships disclosure controls and procedures were effective and
designed to ensure that material information relating to the Partnership and
its consolidated subsidiaries would be made known to him by others within those
entities.

(b)  Changes in internal controls.

There were no significant changes in the Partnerships internal controls or in
other factors that could significantly affect those controls subsequent to the
Evaluation Date.

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##### Table of Contents






Part II. OTHER INFORMATION




Item 1. Legal Proceedings

None.




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

None.




Item 6. Exhibits and Reports on Form 8-K



|                                                             |  |                                                                                                                                | 
|------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------ | 
|(a)  Exhibits:                                               |  |                                                                                                                               
|                                                             |  |                                                                                                                               
|10.3                                                         |  | Agreement for Acquisition of Management Interests, dated
December 20, 1994.                                                   
|                                                             |  |                                                                                                                               
|31.1                                                         |  | Section 302 Certification of Daniel L.
Stephenson, Chief Executive Officer and Chief Financial
Officer of General Partnership.
|                                                             |  |                                                                                                                               
|32.1                                                         |  | Section 906 Certification of Daniel L. Stephenson, Chief
Executive Officer and Chief Financial
Officer of General Partnership.
|                                                             |  |                                                                                                                               
|(b)  Reports on Form 8-K (incorporated herein by reference):
|                                                             |  |                                                                                                                               
|None                                                        





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SIGNATURES

Pursuant to the requirements of Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

|                        |  |                                  |  |                                                                            |  |                                
|----------------------- |  | -------------------------------- |  | -------------------------------------------------------------------------- |  | -------------------------------
|                        |  | RANCON REALTY FUND IV,          
|                        |  | a California limited partnership
|                        |  |                                  |  |                                                                            |  |                                
|                        |  | By:                              |  | Rancon Financial Corporation
a California corporation,
its General Partner
|                        |  |                                  |  |                                                                            |  |                                
|Date: November 14, 2003 |  |                                  |  | By:                                                                        |  | /s/ DANIEL L. STEPHENSON       
|                        |  |                                  |  |                                                                            |  |                                
|                        |  |                                  |  |                                                                            |  | Daniel L. Stephenson, President
|                        |  |                                  |  |                                                                            |  |                                
|Date: November 14, 2003 |  | By:                              |  | /s/ DANIEL L. STEPHENSON                                                  
|                        |  |                                  |  |                                                                           
|                        |  |                                  |  | Daniel L. Stephenson, General Partner                                     

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Exhibit Index

| |      |  |                                                                                                                               
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------
| |      |  |                                                                                                                               
| | 10.3 |  | Agreement for Acquisition of Management Interests, dated
December 20, 1994.                                                   
| |      |  |                                                                                                                               
| | 31.1 |  | Section 302 Certification of Daniel L.
Stephenson, Chief Executive Officer and Chief Financial
Officer of General Partnership.
| |      |  |                                                                                                                               
| | 32.1 |  | Section 906 Certification of Daniel L. Stephenson, Chief
Executive Officer and Chief Financial
Officer of General Partnership.