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|----------------------------------
|UNITED STATES                     
|SECURITIES AND EXCHANGE COMMISSION
|WASHINGTON,
 DC 20549             

|                                                                                            |           | 
|------------------------------------------------------------------------------------------- | --------- | 
|                                                                                            |           | 
|                                                                                            |           | 
|                                                                                            | FORM
10-Q | 
|                                                                                            |           | 
|                                                                                            |           | 
|                                                                                            |           | 
|(Mark One)                                                                                 
|xQUARTERLY REPORT PURSUANT TO SECTION
 13 OR 15(d) OF THE SECURITIES
 EXCHANGE ACT OF 1934 
|                                                                                           
|For the quarterly period ended June 30, 2010                                               
|                                                                                           
|OR                                                                                         
|                                                                                           
|oTRANSITION REPORT PURSUANT TO SECTION
 13 OR 15(d) OF THE SECURITIES
 EXCHANGE ACT OF 1934
|                                                                                           
|For the transition period from _____ to _____                                              
|                                                                                           
|Commission file number 000-53203                                                           
|                                                                                           
|                                                                                            |           | 
|                                                                                           
|AmREIT
MONTHLY INCOME & GROWTH FUND IV, L.P.                                               
|(Exact Name of Registrant as Specified in Its Charter)                                     

|                                                 |  |                                     
|------------------------------------------------ |  | ------------------------------------
|Delaware                                         |  | 20-5685431                          
|(State or Other Jurisdiction of Incorporation or |  | (I.R.S. Employer Identification No.)
|Organization)                                    |  |                                     
|                                                 |  |                                     
|8 Greenway Plaza, Suite 1000                     |  |                                     
|Houston, Texas                                   |  | 77046                               
|(Address of Principal Executive Offices)         |  | (Zip Code)                          

713-850-1400

(Registrants Telephone Number, Including Area Code)

Not applicable

(Former Name, Former Address and Formal Fiscal Year, if Changed Since
Last Report)

| |  | 
| |  | 
| |  | 

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

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

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

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

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

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|                               |          |                                                                                        |  |      | 
|------------------------------ | -------- | -------------------------------------------------------------------------------------- |  | ---- | 
|TABLE OF CONTENTS             
|                              
|                               |          |                                                                                        |  | Page
|                               |          |                                                                                        |  |      | 
|Part I  Financial Information |          |                                                                                        | 
|                               | Item 1 - | Financial Statements                                                                   |  | 1    | 
|                               | Item 2 - | Managements Discussion and Analysis of Financial Condition and
 Results of Operations |  | 17   | 
|                               | Item 3 - | Quantitative and Qualitative Disclosures About Market Risk                             |  | 22   | 
|                               | Item 4 - | Controls and Procedures                                                                |  | 22   | 
|                               |          |                                                                                        |  |      | 
|Part II  Other Information    |          |                                                                                        | 
|                               | Item 6 - | Exhibits                                                                               |  | 22   | 
|                               |          |                                                                                        |  |      | 
|Signatures                     |          | 23                                                                                     | 
|Exhibit Index                  |          | 24                                                                                     | 

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Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 2010 and December 31, 2009(in
thousands, except unit data)

|                                                                                                |  |              |         |                    |   |        |  
|----------------------------------------------------------------------------------------------- |  | ------------ | ------- | ------------------ | - | ------ | -
|                                                                                                |  | June 30,2010 |         | December 31,
 2009 |  
|                                                                                                |  | (unaudited)  |         |                    |  
|                                                                                                |  |              |         |                    |  
|ASSETS                                                                                          |  |              |         |                    |   |        |  
|Real estate investments at cost:                                                                |  |              |         |                    |   |        |  
|Land                                                                                            |  | $            | 31,333  |                    | $ | 31,168 |  
|Buildings                                                                                       |  |              | 31,344  |                    |   | 31,060 |  
|Tenant improvements                                                                             |  |              | 1,046   |                    |   | 1,270  |  
|                                                                                                |  |              | 63,723  |                    |   | 63,498 |  
|Less accumulated depreciation and amortization                                                  |  |              | (10,024 | )                  |   | (3,419 | )
|                                                                                                |  |              | 53,699  |                    |   | 60,079 |  
|                                                                                                |  |              |         |                    |   |        |  
|Investment in non-consolidated entities                                                         |  |              | 12,018  |                    |   | 12,042 |  
|Acquired lease intangibles, net                                                                 |  |              | 1,222   |                    |   | 1,547  |  
|Net real estate investments                                                                     |  |              | 66,939  |                    |   | 73,668 |  
|                                                                                                |  |              |         |                    |   |        |  
|Cash and cash equivalents                                                                       |  |              | 91      |                    |   | 469    |  
|Tenant receivables, net                                                                         |  |              | 355     |                    |   | 283    |  
|Accounts receivable - related party                                                             |  |              | 8       |                    |   | 9      |  
|Notes receivable - related party                                                                |  |              |        |                    |   | 162    |  
|Deferred costs, net                                                                             |  |              | 151     |                    |   | 139    |  
|Other assets                                                                                    |  |              | 373     |                    |   | 163    |  
|TOTAL ASSETS                                                                                    |  | $            | 67,917  |                    | $ | 74,893 |  
|                                                                                                |  |              |         |                    |   |        |  
|LIABILITIES AND CAPITAL                                                                         |  |              |         |                    |   |        |  
|Liabilities:                                                                                    |  |              |         |                    |   |        |  
|Notes payable                                                                                   |  | $            | 29,908  |                    | $ | 29,949 |  
|Notes payable - related party                                                                   |  |              | 1,103   |                    |   | 230    |  
|Accounts payable and other liabilities                                                          |  |              | 1,148   |                    |   | 1,328  |  
|Accounts payable - related party                                                                |  |              | 403     |                    |   | 4      |  
|Derivative liability                                                                            |  |              | 155     |                    |   | 678    |  
|Asset retirement obligations                                                                    |  |              | 530     |                    |   | 530    |  
|Acquired below-market lease intangibles, net                                                    |  |              | 1,361   |                    |   | 1,563  |  
|Security deposits                                                                               |  |              | 122     |                    |   | 110    |  
|TOTAL LIABILITIES                                                                               |  |              | 34,730  |                    |   | 34,392 |  
|                                                                                                |  |              |         |                    |   |        |  
|Capital:                                                                                        |  |              |         |                    |   |        |  
|Partners capital:                                                                              |  |              |         |                    |   |        |  
|General partner                                                                                 |  |              |        |                    |   |       |  
|Limited partners, 1,988 units outstanding at June 30, 2010 and
 December 31, 2009, respectively |  |              | 25,025  |                    |   | 30,293 |  
|Accumulated other comprehensive gain (loss)                                                     |  |              | 260     |                    |   | (263   | )
|TOTAL PARTNERS CAPITAL                                                                         |  |              | 25,285  |                    |   | 30,030 |  
|                                                                                                |  |              |         |                    |   |        |  
|Non-controlling interests                                                                       |  |              | 7,902   |                    |   | 10,471 |  
|TOTAL CAPITAL                                                                                   |  |              | 33,187  |                    |   | 40,501 |  
|                                                                                                |  |              |         |                    |   |        |  
|TOTAL LIABILITIES AND CAPITAL                                                                   |  | $            | 67,917  |                    | $ | 74,893 |  

See Notes to Consolidated Financial
Statements.

1

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Table of Contents

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

|                                                   |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|-------------------------------------------------- |  | --------------------------- | --------- | ------------------------- | - | ------- | - | ---- | --------- | - | - | ------- | -
|                                                   |  | Three months ended June 30, |           | Six months ended June 30, |  
|                                                   |  | 2010                        |           | 2009                      |   | 2010    |   | 2009 |          
|                                                   |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|Revenues:                                          |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|Rental income from operating leases                |  | $                           | 890       |                           | $ | 1,223   |   | $    | 1,811     |   | $ | 2,537   |  
|Total revenues                                     |  |                             | 890       |                           |   | 1,223   |   |      | 1,811     |   |   | 2,537   |  
|                                                   |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|Expenses:                                          |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|General and administrative                         |  |                             | 36        |                           |   | 36      |   |      | 51        |   |   | 51      |  
|General and administrative - related party         |  |                             | 83        |                           |   | 126     |   |      | 159       |   |   | 194     |  
|Asset management fees - related party              |  |                             | 107       |                           |   | 107     |   |      | 215       |   |   | 215     |  
|Property expense                                   |  |                             | 299       |                           |   | 404     |   |      | 670       |   |   | 837     |  
|Property management fees - related party           |  |                             | 35        |                           |   | 44      |   |      | 64        |   |   | 96      |  
|Legal and professional                             |  |                             | 59        |                           |   | 77      |   |      | 136       |   |   | 136     |  
|Depreciation and amortization                      |  |                             | 2,628     |                           |   | 754     |   |      | 7,252     |   |   | 1,522   |  
|Total operating expenses                           |  |                             | 3,247     |                           |   | 1,548   |   |      | 8,547     |   |   | 3,051   |  
|                                                   |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|Operating loss                                     |  |                             | (2,357    | )                         |   | (325    | ) |      | (6,736    | ) |   | (514    | )
|                                                   |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|Other income (expense):                            |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|Interest income - related party                    |  |                             |          |                           |   | 2       |   |      | 2         |   |   | 2       |  
|Interest and other income                          |  |                             | 1         |                           |   | 3       |   |      | 2         |   |   | 11      |  
|Interest expense                                   |  |                             | (437      | )                         |   | (439    | ) |      | (870      | ) |   | (882    | )
|Interest expense - related party                   |  |                             | (13       | )                         |   |        |   |      | (22       | ) |   |        |  
|Equity in losses from non-consolidated entities    |  |                             | (237      | )                         |   | (347    | ) |      | (449      | ) |   | (633    | )
|Margin tax expense                                 |  |                             | (6        | )                         |   | (1      | ) |      | (13       | ) |   | (8      | )
|Total other income (expense)                       |  |                             | (692      | )                         |   | (782    | ) |      | (1,350    | ) |   | (1,510  | )
|                                                   |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|Net loss, including non-controlling interests      |  |                             | (3,049    | )                         |   | (1,107  | ) |      | (8,086    | ) |   | (2,024  | )
|                                                   |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|Net loss attributable to non-controlling interests |  |                             | 1,005     |                           |   | 167     |   |      | 2,818     |   |   | 312     |  
|                                                   |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|Net loss attributable to partners                  |  | $                           | (2,044    | )                         | $ | (940    | ) | $    | (5,268    | ) | $ | (1,712  | )
|                                                   |  |                             |           |                           |   |         |   |      |           |   |   |         |  
|Weighted average units outstanding                 |  |                             | 1,988     |                           |   | 1,988   |   |      | 1,988     |   |   | 1,989   |  
|Net loss per unit                                  |  | $                           | (1,028.17 | )                         | $ | (472.84 | ) | $    | (2,649.90 | ) | $ | (860.73 | )

See Notes to Consolidated
Financial Statements.

2

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Table of Contents

AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P. AND
SUBSIDIARIES
CONSOLIDATED STATEMENT OF CAPITAL
For the six months ended June 30, 2010(in
thousands)
(unaudited)

|                                               |  |                   |   |                  |   |                                             |   |                           |      |       |   |        |   |   |        |  
|---------------------------------------------- |  | ----------------- | - | ---------------- | - | ------------------------------------------- | - | ------------------------- | ---- | ----- | - | ------ | - | - | ------ | -
|                                               |  | Partners Capital |   |                  |   |                                             |   |                           |     
|                                               |  | General Partner   |   | Limited Partners |   | Accumulated Other
Comprehensive Gain (Loss) |   | Non-Controlling
Interests |      | Total |  
|Balance at
December 31, 2009                   |  | $                 |  |                  | $ | 30,293                                      |   | $                         | (263 | )     | $ | 10,471 |   | $ | 40,501 |  
|                                               |  |                   |   |                  |   |                                             |   |                           |      |       |   |        |   |   |        |  
|Net loss (1)                                   |  |                   |  |                  |   | (5,268                                      | ) |                           |     |       |   | (2,818 | ) |   | (8,086 | )
|Contributions from non-controlling interests   |  |                   |  |                  |   |                                            |   |                           |     |       |   | 249    |   |   | 249    |  
|Decrease in fair value of derivative liability |  |                   |  |                  |   |                                            |   |                           | 523  |       |   |       |   |   | 523    |  
|                                               |  |                   |   |                  |   |                                             |   |                           |      |       |   |        |   |   |        |  
|Balance at
June 30, 2010                       |  | $                 |  |                  | $ | 25,025                                      |   | $                         | 260  |       | $ | 7,902  |   | $ | 33,187 |  

|    |                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allocation of net loss
includes a curative allocation to increase the General Partners capital
account by $53 for the six months ended June 30, 2010. The cumulative
curative allocation since inception of the Partnership is $186. The
Partnership Agreement provides that no Partner shall be required to fund a
deficit balance in their capital account.

See Notes to Consolidated
Financial Statements.

3

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Table of Contents

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

|                                                                                                                                                                                                                     |  |                           |        |      |   |        |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ------ | ---- | - | ------ | -
|                                                                                                                                                                                                                     |  | Six months ended June 30, |       
|                                                                                                                                                                                                                     |  | 2010                      |        | 2009 |  
|Cash flows from operating activities:                                                                                                                                                                                |  |                           |        |      |   |        |  
|Net loss, including non-controlling interests                                                                                                                                                                        |  | $                         | (8,086 | )    | $ | (2,024 | )
|Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:                                                                                                                            |  |                           |        |      |   |        |  
|Bad debt expense                                                                                                                                                                                                     |  |                           | 4      |      |   | 22     |  
|Loss from non-consolidated entities                                                                                                                                                                                  |  |                           | 449    |      |   | 633    |  
|Depreciation and amortization                                                                                                                                                                                        |  |                           | 7,252  |      |   | 1,522  |  
|Amortization of above- and below-market leases, net                                                                                                                                                                  |  |                           | (185   | )    |   | (215   | )
|Amortization of loan acquisition costs                                                                                                                                                                               |  |                           | 46     |      |   | 47     |  
|Increase in tenant receivables                                                                                                                                                                                       |  |                           | (76    | )    |   | (177   | )
|(Increase) decrease in accounts receivable - related party                                                                                                                                                           |  |                           | (8     | )    |   | 461    |  
|Increase in deferred costs                                                                                                                                                                                           |  |                           | (76    | )    |   | (32    | )
|Increase in other assets                                                                                                                                                                                             |  |                           | (210   | )    |   | (143   | )
|(Decrease) increase in accounts payable and other liabilities                                                                                                                                                        |  |                           | (345   | )    |   | 609    |  
|Increase (decrease) in accounts payable - related party                                                                                                                                                              |  |                           | 672    |      |   | (149   | )
|Decrease in asset retirement obligations                                                                                                                                                                             |  |                           |       |      |   | (5     | )
|Increase (decrease) in security deposits                                                                                                                                                                             |  |                           | 12     |      |   | (10    | )
|Net
cash (used in) provided by operating activities                                                                                                                                                                  |  |                           | (551   | )    |   | 539    |  
|                                                                                                                                                                                                                     |  |                           |        |      |   |        |  
|Cash flows from investing activities:                                                                                                                                                                                |  |                           |        |      |   |        |  
|Improvements to real estate                                                                                                                                                                                          |  |                           | (381   | )    |   | (115   | )
|Increase in notes receivable - related party                                                                                                                                                                         |  |                           |       |      |   | (438   | )
|Payments received on notes receivable - related party                                                                                                                                                                |  |                           | 82     |      |   | 178    |  
|Investment in non-consolidated entities                                                                                                                                                                              |  |                           | (336   | )    |   | (477   | )
|Reimbursement of earnest money deposits                                                                                                                                                                              |  |                           |       |      |   | 1,245  |  
|Net cash (used in) provided by investing activities                                                                                                                                                                  |  |                           | (635   | )    |   | 393    |  
|                                                                                                                                                                                                                     |  |                           |        |      |   |        |  
|Cash flows from financing activities:                                                                                                                                                                                |  |                           |        |      |   |        |  
|Payments on notes payable                                                                                                                                                                                            |  |                           | (41    | )    |   | (13    | )
|Proceeds from notes payable - related party                                                                                                                                                                          |  |                           | 600    |      |   |       |  
|Limited optional redemptions                                                                                                                                                                                         |  |                           |       |      |   | (62    | )
|Distributions                                                                                                                                                                                                        |  |                           |       |      |   | (754   | )
|Contributions from non-controlling interests                                                                                                                                                                         |  |                           | 249    |      |   |       |  
|Distributions to non-controlling interests                                                                                                                                                                           |  |                           |       |      |   | (152   | )
|Net cash provided by (used in) financing activities                                                                                                                                                                  |  |                           | 808    |      |   | (981   | )
|                                                                                                                                                                                                                     |  |                           |        |      |   |        |  
|Net (decrease) increase in cash and cash equivalents                                                                                                                                                                 |  |                           | (378   | )    |   | (49    | )
|Cash and cash equivalents, beginning of period                                                                                                                                                                       |  |                           | 469    |      |   | 1,011  |  
|Cash and cash equivalents, end of period                                                                                                                                                                             |  | $                         | 91     |      | $ | 962    |  
|                                                                                                                                                                                                                     |  |                           |        |      |   |        |  
|Supplemental schedule of cash flow information:                                                                                                                                                                      |  |                           |        |      |   |        |  
|                                                                                                                                                                                                                     |  |                           |        |      |   |        |  
|Cash paid during the period for:                                                                                                                                                                                     |  |                           |        |      |   |        |  
|Interest                                                                                                                                                                                                             |  | $                         | 717    |      | $ | 830    |  
|Taxes                                                                                                                                                                                                                |  | $                         | 28     |      | $ | 27     |  
|                                                                                                                                                                                                                     |  |                           |        |      |   |        |  
|Supplemental schedule of noncash investing and
financing activities:                                                                                                                                                 |  |                           |        |      |   |        |  
|                                                                                                                                                                                                                     |  |                           |        |      |   |        |  
|During
2010, notes receivable - related party of $80,000 from Casa Linda was
converted to equity, causing an increase in our investment in
non-consolidated entities.                                               
|                                                                                                                                                                                                                     |  |                           |        |      |   |        |  
|During
2010, we capitalized $165,000 of accrued property taxes into the basis of our
land at Woodlake Pointe. We are in the intital stages of planning a major
redevelopment at the Woodlake Pointe shopping center.
|                                                                                                                                                                                                                     |  |                           |        |      |   |        |  
|During
2010, $273,000 in accounts payable - related party was reclassified to notes
payable - related party.                                                                                                        

See Notes to Consolidated
Financial Statements.

4

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Table of Contents

AmREIT MONTHLY INCOME & GROWTH FUND IV,
L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2010
(unaudited)

|   |                                                 
|-- | ------------------------------------------------
|1. | DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

AmREIT Monthly
Income & Growth Fund IV, L.P., a Delaware limited partnership (hereinafter
referred to as the Partnership, MIG IV, we, us or our), was formed on
October 10, 2006 to acquire, develop and operate, directly or indirectly, a
portfolio of commercial real estate consisting primarily of multi-tenant shopping
centers and mixed-use developments. The general partner of the Partnership is
AmREIT Monthly Income & Growth IV Corporation, a Delaware corporation (the
General Partner), which is a subsidiary of AmREIT, Inc., an SEC reporting,
non-traded Maryland corporation that has elected to be taxed as a real estate
investment trust (AmREIT). The General Partner maintains its principal place
of business in Houston, Texas.

We commenced
our principal operations on January 12, 2007, when we raised the minimum offering
of $1.0 million (the Offering) pursuant to the terms of our Offering
Memorandum dated November 15, 2006 (the Offering Memorandum) and issued the
initial 40 limited partnership units (the Units). We closed the offering on
March 31, 2008 when we had received $49.7 million from the sale of 1,991 Units.
As of June 30, 2010, our investments included a wholly-owned property
comprising approximately 36,000 square feet of gross leasable area, two
properties in which we own controlling interests comprising approximately
288,000 square feet of gross leasable area and three properties in which we own
a non-controlling interest through joint ventures comprising approximately
949,000 square feet of gross leasable area.

Our Units were
sold pursuant to exemptions from registration under the Securities Act of 1933,
as amended (the Securities Act), and are not currently listed on a national
exchange. These Units will be transferable only if we register them under
applicable securities laws (such registration is not expected) or they are
transferred pursuant to an exemption under the Securities Act and applicable
state securities laws. We do not anticipate that any established public trading
market for the Units will develop.

The United
States has undergone and may continue to experience a prolonged recession that
has been marked by pervasive and fundamental disruptions in the financial
markets. Continued concerns regarding the uncertainty of whether the U.S.
economy will be adversely affected by inflation, deflation or stagflation and
the systemic impact of increased unemployment, volatile energy costs,
geopolitical issues, the availability and cost of credit, the U.S. mortgage
market and a severely distressed real estate market have contributed to
increased market volatility and weakened business and consumer confidence. The
United States may not experience a sustained recovery and could suffer
pronounced instability and decreased economic activity for an extended period
of time. Our operations are sensitive to changes in overall economic conditions
that impact our tenants, including, among other things, increased bad debts due
to such recessionary pressures. A general reduction in the level of tenant
leasing or shifts in tenant leasing practices could adversely affect our
revenues, profitability and results of operations. It is difficult to determine
the breadth and duration of the financial market problems and the many ways in
which they may affect our tenants and our business in general. A significant
additional deterioration in the U.S. economy or the bankruptcy or insolvency of
one or more of our significant tenants could cause our 2010 cash resources to
be insufficient to meet our obligations. Effective July 15, 2009, we suspended
all distributions in an effort to conserve cash and to protect partners
invested capital. As we have a few projects that are mid-stream in
redevelopment, we are conserving cash from operations to improve our ability to
fund capital improvements, tenant improvements and leasing commissions, and to
meet our obligations, including debt service. We expect that the economy and
real estate market will recover prior to our anticipated liquidation
commencement date of November 15, 2013. However, if the economy remains in a
protracted recession, we will seek to postpone liquidation if we believe that
such liquidation is not in the best interests of the partners at that time.

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We believe
that we will be able to generate sufficient liquidity to satisfy any cash
shortfalls through (1) managing the timing of forecasted capital expenditures
related to the lease-up of properties, (2) potential joint venture equity
investments in existing non-consolidated entities (3) financings of
unencumbered properties and (4) sales of certain of our investments in
non-consolidated entities. In July 2010, we and our affiliated joint venture
partners on our Woodlake Square property, AmREIT Monthly Income and Growth Fund
III, Ltd. (MIG III) and AmREIT Realty Investment Corporation (ARIC), sold a
90% interest in the property to a third party (see Note 12 for more
discussion). The sale generated net proceeds of approximately $3.4 million. Our
portion of such proceeds is approximately $2.0 million. As a result, our cash
projections indicate that we will have sufficient cash for the next 12 months.
However, we would consider the above options, as necessary, if those cash
projections deteriorate.

|   |                                           
|-- | ------------------------------------------
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF
PRESENTATION

Our financial
records are maintained on the accrual basis of accounting whereby revenues are
recognized when earned and expenses are recorded when incurred. The
consolidated financial statements include our accounts as well as the accounts
of any wholly- or majority-owned subsidiaries in which we have a controlling
financial interest. Investments in joint ventures and partnerships in which we
have the ability to exercise significant influence but do not exercise
financial and operating control are accounted for using the equity method (see
Note 3). The significant accounting policies of our non-consolidated entities
are consistent with those of our subsidiaries in which we have a controlling
financial interest. As applicable, we consolidate certain joint ventures and
partnerships in which we own less than a 100% equity interest if the entity is
a variable interest entity and we are the primary beneficiary (as defined in
ASC 810, Consolidation). All
significant inter-company accounts and transactions have been eliminated in
consolidation. See Note 12 for a discussion of the sale of 90% of our interest
in the Woodlake Square property in July 2010.

The
consolidated financial statements included in this report are unaudited;
however, amounts presented in the consolidated balance sheet as of December 31,
2009 are derived from our audited financial statements as of that date. In our
opinion, all adjustments necessary for a fair presentation of such financial
statements have been included. Such adjustments consisted of normal recurring
items.

REVENUE RECOGNITION

We lease space
to tenants under agreements with varying terms. All of the leases are accounted
for as operating leases, and, although certain leases of the properties provide
for tenant occupancy during periods for which no rent is due and/or increases or
decreases in the minimum lease payments over the terms of the leases, revenue
is recognized on a straight-line basis over the terms of the individual leases.
In most cases, revenue recognition under a lease begins when the lessee takes
possession of or controls the physical use of the leased asset. Generally,
possession or control occurs on the lease commencement date. We have determined
that we are the owner of any tenant improvements that we fund pursuant to the
lease terms. In cases where significant tenant improvements are made prior to
lease commencement, the leased asset is considered to be finished space, and
revenue recognition therefore begins when the improvements are substantially
complete.

Accrued rents
are included in tenant receivables. Revenue from tenant reimbursements of
taxes, maintenance expenses and insurance is recognized in the period the
related expense is recorded. Additionally, certain of the lease agreements
contain provisions that grant additional rents based on tenants sales volumes
(contingent or percentage rent). Percentage rents are recognized when the
tenants achieve the specified targets as defined in their lease agreements. No
percentage rents were recognized during the six months ended June 30, 2010 and
2009. We recognize lease termination fees in the period that the lease is
terminated and collection of the fees is reasonably assured. During the six
months ended June 30, 2010 and 2009, we recognized no lease termination fees.
Upon early lease termination, as applicable, we also provide for losses related
to unrecovered intangibles and other assets and write off any assets or
liabilities and the associated accumulated amortization.

REAL ESTATE
INVESTMENTS

Development Properties
 Land, buildings and improvements are recorded at cost. Expenditures related
to the development of real estate are carried at cost which includes
capitalized carrying charges, acquisition costs and development costs. Carrying
charges, primarily interest, real estate taxes and loan acquisition costs, and
direct and indirect development costs related to buildings under construction,
are capitalized as part of construction in progress. The capitalization of such
costs ceases at the earlier of one year from the date of completion of major
construction or when the property, or any completed portion, becomes available
for occupancy. During the six months ended June 30, 2010 and 2009, interest and
taxes in the amount of $165,000 and $123,000, respectively, were capitalized on
properties under development or redevelopment.

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Acquired Properties and Acquired Lease
Intangibles  We account for operating real estate
acquisitions pursuant to ASC 805, Business
Combinations, as we believe most operating real estate meets the
definition of a business pursuant to this guidance. Accordingly, we allocate
the purchase price of the acquired operating properties to land, building and
improvements, identifiable intangible assets and acquired liabilities based on
their respective fair values. Identifiable intangibles include amounts
allocated to acquired above and below market leases, out of market debt, the
value of in-place leases and customer relationship value, if any. We determine
fair value based on estimated cash flow projections that utilize appropriate
discount and capitalization rates and available market information. Estimates
of future cash flows are based on a number of factors including the historical
operating results, known trends and specific market and economic conditions
that may affect the property. Factors considered by management in our analysis
of determining the as-if-vacant property value include an estimate of carrying
costs during the expected lease-up periods considering market conditions and
costs to execute similar leases. In estimating carrying costs, management
includes real estate taxes, insurance and estimates of lost rentals at market
rates during the expected lease-up periods, tenant demand and other economic
conditions. Management also estimates costs to execute similar leases including
leasing commissions, tenant improvements, legal and other related expenses.
Intangibles related to above (and below) market leases and in-place lease value
are recorded as acquired lease intangibles (liabilities) and are amortized as
an adjustment to rental income or amortization expense, as appropriate, over
the remaining terms of the underlying leases. Below-market leases include
fixed-rate renewal periods. Premiums or discounts on acquired above and below
market debt are amortized to interest expense over the remaining term of such
debt.

We expense
acquisition costs associated with operating properties as incurred in
accordance with ASC 805. We capitalize costs associated with pending
acquisitions of raw land as incurred. Such costs are expensed if and when such
land acquisition becomes no longer probable. During the six months ended June
30, 2010 and 2009, we expensed acquisition costs of $0 and $7,000,
respectively.

Depreciation 
Depreciation is computed using the straight-line method over an estimated useful
life of up to 36 years for buildings, up to 11 years for site improvements and
over the term of lease for tenant improvements. We re-evaluate the useful lives
of our buildings and improvements as warranted by changing conditions at our
properties. As part of this re-evaluation, we may also consider whether such
changing conditions indicate a potential impairment, and we perform an
impairment analysis, as necessary, at the property level. In the case of a
property redevelopment, we reassess the useful lives of specific buildings or
other improvements to be demolished as part of that redevelopment once the
redevelopment is probable of occurring. During 2010, we re-evaluated the useful
lives of certain buildings within our Woodlake Square retail center as a result
of our decision to redevelop the property, which will include the demolition of
certain buildings. As a result of this change in estimate, depreciation expense
was $2.1 million and $6.2 million higher for the three and six months ended June 30, 2010, and the net
loss per unit was $1,079.64 and $3,129.03 higher for the same periods, respectively.

Properties Held for Sale
 Properties will be classified as held for sale if we have decided to market
the property for immediate sale in its present condition with the belief that
the sale will be completed within one year. Properties held for sale will be
carried at the lower of cost or fair value less cost to sell. Depreciation and
amortization are suspended during the held for sale period. As of June 30, 2010
and December 31, 2009, we had no properties held for sale.

Impairment  We
review our properties for impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets, including
accrued rental income, may not be recoverable through operations. We determine
whether an impairment in value occurred by comparing the estimated future cash
flows (undiscounted and without interest charges), including the residual value
of the property, with the carrying value of the individual property. If
impairment is indicated, a loss will be recorded for the amount by which the
carrying value of the asset exceeds its fair value. Both the estimated
undiscounted cash flow analysis and fair value determination are based upon
various factors which require complex and subjective judgments to be made by
management. Such assumptions include projecting lease-up periods, holding
periods, cap rates, rental rates, operating expenses, lease terms, tenant
creditworthiness, tenant improvement allowances, terminal sales value and
certain macroeconomic factors among other assumptions to be made for each
property. For our multi-building retail centers, we consider the entire retail
center as the asset group for purposes of our impairment analysis. We have not
incurred any impairment losses since our inception.

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ENVIRONMENTAL
EXPOSURES

We are subject
to numerous environmental laws and regulations as they apply to real estate,
including those addressing chemicals used by the dry cleaning industry, the
existence of asbestos in older shopping centers, and underground petroleum
storage tanks. We believe that the tenants occupying our properties who
currently operate dry cleaning plants or gas stations do so in accordance with
current laws and regulations. We believe that the ultimate disposition of
currently known environmental matters will not have a material affect on our
financial position, liquidity, or operations (see Note 11). However, we can
give no assurance that existing environmental studies with respect to the
shopping centers have revealed all potential environmental liabilities; that
any previous owner, occupant or tenant did not create any material
environmental condition not known to it; that the current environmental
condition of the shopping centers will not be affected by tenants and occupants,
by the condition of nearby properties, or by unrelated third parties; or that
changes in applicable environmental laws and regulations or their
interpretation will not result in additional environmental liability to the
Partnership.

RECEIVABLES AND
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

Tenant Receivables
 Included in tenant receivables are base rents, tenant reimbursements and
adjustments attributable to recording rents on a straight-line basis. An
allowance for the uncollectible portion of accrued rents and accounts
receivable is determined based upon customer credit-worthiness (including
expected recovery of our claim with respect to any tenants in bankruptcy),
historical bad debt levels and current economic trends. Bad debt expenses and
any related recoveries related to tenant receivables are included in property
expense. As of June 30, 2010 and December 31, 2009, our allowance for
uncollectible accounts related to our tenant receivables was $101,000 and
$124,000, respectively.

DERIVATIVE FINANCIAL
INSTRUMENTS

We account for
our derivative financial instruments pursuant to ASC 815, Derivatives and Hedging. ASC 815 requires
that all derivative instruments, whether designated in hedging relationships or
not, be recorded on the balance sheet at their fair value. Gains or losses
resulting from changes in the values of those derivatives are accounted for
depending on the use of the derivative and whether it qualifies for hedge
accounting. Our use of derivative financial instruments to date has been
limited to the use of interest rate swaps to mitigate our interest rate risk on
variable-rate debt. We have designated these interest rate swaps as cash flow
hedges for financial reporting purposes. We do not use derivative financial
instruments for trading or speculative purposes.

ASC 815
requires that changes in fair value of derivatives that qualify as cash flow
hedges be recognized in other comprehensive income (OCI) while the
ineffective portion of the derivatives change in fair value be recognized in
the statement of operations as interest expense. Upon the settlement of a
hedge, gains and losses associated with the transaction are recorded in OCI and
amortized over the underlying term of the hedge transaction. We assess, both at
inception of the hedge and on an ongoing basis, whether the derivatives that
are used in hedging transactions are highly effective in offsetting changes in
the cash flows of the hedged items. In assessing the hedge, we use standard
market conventions and techniques such as discounted cash flow analysis, option
pricing models and termination costs at each balance sheet date. All methods of
assessing fair value result in a general approximation of value, and such value
may never actually be realized. See Note 6 for further discussion regarding our
derivative financial instruments.

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DEFERRED COSTS

Deferred costs
include deferred leasing costs and loan acquisition costs, net of amortization.
Loan acquisition costs are incurred in obtaining financing and are amortized to
interest expense over the term of the debt agreements using a method that
approximates the effective interest method. Deferred leasing costs consist of
external commissions associated with leasing our properties and are amortized
to depreciation and amortization expense on a straight-line basis over the
lease term. If a lease is terminated early, or if a loan is repaid prior to
maturity, the remaining costs will be disposed of. Accumulated amortization
related to loan acquisition costs totaled $261,000 and $214,000 as of June 30,
2010 and December 31, 2009, respectively. Accumulated amortization related to
leasing costs totaled $25,000 and $16,000 as of June 30, 2010 and December 31,
2009, respectively.

INCOME TAXES

Federal  No
provision for U.S. federal income taxes is included in the accompanying
consolidated financial statements. As a partnership, we are not subject to
federal income tax, and the federal tax effect of our activities is passed
through to our partners.

State In May
2006, the State of Texas adopted House Bill 3, which modified the states
franchise tax structure, replacing the previous tax based on capital or earned
surplus with one based on margin (often referred to as the Texas Margin Tax)
effective with franchise tax reports filed on or after January 1, 2007. The
Texas Margin Tax is computed by applying the applicable tax rate (1% for the
Partnership) to the profit margin, which, generally, will be determined for us
as total revenue less a 30% standard deduction. Although House Bill 3 states
that the Texas Margin Tax is not an income tax, the Partnership believes that
ASC 740,Income Taxes, applies to
the Texas Margin Tax. We have recorded margin tax provisions of approximately
$13,000 and $8,000 for the Texas Margin Tax for the six months ended June 30,
2010 and 2009, respectively.

USE OF ESTIMATES

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

FAIR VALUE OF
FINANCIAL INSTRUMENTS

We account for
assets and liabilities measured at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures.
ASC 820 emphasizes that fair value is a market-based measurement, not an
entity-specific measurement. Therefore, a fair value measurement should be
determined based on the assumptions that market participants would use in
pricing the asset or liability. As a basis for considering market participant
assumptions in fair value measurements, ASC 820 establishes a fair value
hierarchy that distinguishes between market participant assumptions based on
market data obtained from sources independent of the reporting entity
(observable inputs that are classified within Levels 1 and 2 of the hierarchy)
and the reporting entitys own assumptions about market participant assumptions
(unobservable inputs classified within Level 3 of the hierarchy). The three
levels of inputs used to measure fair value are as follows:

| |   |                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Level 1
 Inputs  Quoted prices (unadjusted) in active markets for identical assets or
 liabilities that the Company has the ability to access.                                     
| |   |                                                                                                                                                                                     
| |  | Level 2
 Inputs  Inputs other than quoted prices included in Level 1 that are
 observable for the asset or liability, either directly or indirectly.                               
| |   |                                                                                                                                                                                     
| |  | Level 3
 Inputs  Unobservable inputs for the asset or liability, which are typically
 based on the Companys own assumptions, as there is little, if any, related
 market activity.

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Derivative Financial Instruments
 In determining the fair value of our derivative instrument, we consider
whether credit valuation adjustments are necessary to appropriately reflect
both our own nonperformance risk and the respective counterpartys
nonperformance risk in the fair value measurements. Although we have determined
that the majority of the inputs used to value our derivatives fall within Level
2 of the fair value hierarchy, the credit valuation assumptions associated with
its derivatives utilize Level 3 inputs, such as estimates of current credit
spreads to evaluate the likelihood of default by us and our counterparties.
However, as of June 30, 2010, we have assessed the significance of the impact
of the credit valuation adjustments on the overall valuation of our derivative
positions and have determined that the credit valuation adjustments are not
significant to the overall valuation of our derivatives. As a result, we have
determined that our derivative valuations in their entirety are classified in
Level 2 of the fair value hierarchy.

Notes Payable 
In determining the fair value of our debt instruments, we determine the
appropriate Treasury Bill Rate based on the remaining time to maturity for each
of the debt instruments. We then add the appropriate yield spread to the
Treasury Bill Rate. The yield spread is a risk premium estimated by investors
to account for credit risk involved in debt financing. The spread is typically
estimated based on the property type and loan-to-value ratio of the debt
instrument. The result is an estimate of the market interest rate a typical
investor would expect to receive given the underlying subject asset (property
type) and remaining time to maturity. We believe the fair value of our notes
payable is classified in Level 2 of the fair value hierarchy. As of June 30,
2010 and December 31, 2009, the carrying value of debt obligations associated
with our consolidated entities was approximately $29.9 million, $6.1 million of
which represents a fixed-rate obligation with an estimated fair value of $6.0
million and $5.7 million, respectively. As of June 30, 2010 and December 31,
2009, the estimated fair value of our $23.8 million variable-rate obligation
approximated $23.6 million and $23.4 million, respectively.

The following
table presents our assets and liabilities and related valuation inputs within
the fair value hierarchy utilized to measure fair value as of June 30, 2010 (in
thousands):

|                      |  |         |   |         |   |         |  |   |   | 
|--------------------- |  | ------- | - | ------- | - | ------- |  | - | - | 
|                      |  | Level 1 |   | Level 2 |   | Level 3 | 
|Derivative
 Liability |  | $       |  |         | $ | 155     |  | $ |  | 
|Notes
 Payable        |  | $       |  |         | $ | 29,625  |  | $ |  | 

NEW ACCOUNTING
STANDARDS

In June 2009,
the FASB amended the consolidation guidance applicable to variable interest
entities in ASC 810 - Consolidation.
The amendments will significantly affect the overall consolidation analysis
under FASB Interpretation No. 46(R), Consolidation
of Variable Interest Entitiesan interpretation of ARB No. 51, and
changes the way entities account for securitizations and variable interest
entities as a result of the elimination of the Qualified Special Purpose Entity
(QSPE) concept in SFAS No.166. We adopted the provisions of ASC 810 on
January 1, 2010. The adoption of SFAS 167 did not have an effect on our results
of operations or financial position.

CASH AND CASH
EQUIVALENTS

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

INTEREST

Interest is
charged to interest expense as it accrues. No interest has been capitalized on
our wholly-owned property since the inception of the Partnership.

SEGMENT REPORTING

ASC 280, Segment Reporting, establishes standards
for reporting financial and descriptive information about an enterprises
reportable segments. We determined that we have one reportable segment with
activities related to investing in real estate. Our investments in real estate
generate rental revenue and other income through the leasing of multi-tenant
retail properties, which comprised 100% of our total consolidated revenues for
all periods presented.

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We evaluate
operating performance on an individual property level. However, as each of our
properties have similar economic characteristics, tenants and products and
services, our properties have been aggregated into one reportable segment.

RECLASSIFICATIONS

Certain prior
period amounts in the consolidated financial statements have been reclassified
to conform to the presentation used in the current period consolidated
financial statements.

|   |                                         
|-- | ----------------------------------------
|3. | INVESTMENTS IN NON-CONSOLIDATED ENTITIES

Since inception,
we have made the following investments in three entities through which we own
an interest in three properties:

| |  |   |                                                                                                                                                                                                                                                                                                                                           
| |  | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | In January
 2007, we acquired a 50% interest in AmREIT Casa Linda, LP which owns Casa
 Linda Plaza, a multi-tenant retail property located in Dallas, Texas with a
 combined gross leasable area of approximately 325,000 square feet. The
 remaining 50% is owned by MIG III, an affiliated AmREIT entity.                               
| |  |   |                                                                                                                                                                                                                                                                                                                                           
| |  |  | In December
 2007, we acquired a 50% interest in Cambridge & Holcombe, LP which owns
 2.02 acres of raw land that may be developed, sold or contributed to a joint
 venture in the future. The property is located adjacent to the Texas Medical
 Center in Houston, Texas. The remaining 50% is owned by an unaffiliated third
 party.   
| |  |   |                                                                                                                                                                                                                                                                                                                                           
| |  |  | In February
 2008, we acquired a 10% interest in Shadow Creek Holding Company LLC which
 owns Shadow Creek Ranch, a multi-tenant retail property located in Pearland,
 Texas with a combined gross leasable area of approximately 624,000 square
 feet. The remaining 90% is owned by an unaffiliated third party (80%) and
 AmREIT (10%).

We report our
investments in these three entities using the equity method of accounting due
to our ability to exercise significant influence over them. Combined condensed
financial information for the underlying investee entities (at 100%) is
summarized for the three and six months ended June 30, 2010 and 2009, as
follows (in thousands):

|                               |  |                             |        |                           |   |        |   |      |        |   |   |        |  
|------------------------------ |  | --------------------------- | ------ | ------------------------- | - | ------ | - | ---- | ------ | - | - | ------ | -
|                               |  | Three months ended June 30, |        | Six months ended June 30, |  
|                               |  | 2010                        |        | 2009                      |   | 2010   |   | 2009 |       
|Revenue                        |  | $                           | 3,359  |                           | $ | 2,771  |   | $    | 6,769  |   | $ | 5,815  |  
|Depreciation
 and amortization |  |                             | (1,475 | )                         |   | (1,922 | ) |      | (2,926 | ) |   | (2,827 | )
|Interest
 expense              |  |                             | (1,445 | )                         |   | (1,456 | ) |      | (2,885 | ) |   | (2,893 | )
|Net loss                       |  |                             | (787   | )                         |   | (1,796 | ) |      | (1,564 | ) |   | (2,321 | )

|   |                           
|-- | --------------------------
|4. | ACQUIRED LEASE INTANGIBLES

In accordance
with ASC 805, we have identified and recorded the value of acquired lease
intangibles at the property acquisition date. Such intangibles include the
value of acquired in-place leases and above and below market leases. Acquired
lease intangible assets (in-place leases and above-market leases) are amortized
over the leases remaining terms, which range from two months to approximately
thirteen years. The amortization of above-market leases is recorded as a
reduction of rental income, and the amortization of in-place leases is recorded
to amortization expense. The amortization expense related to in-place leases
was approximately $308,000 and $735,000 for the six months ended June 30, 2010
and 2009, respectively. We recorded disposals of in-place leases of $1.9
million and $224,000 for the six months ended June 30, 2010 and 2009,
respectively, related to normal lease expirations and acceleration of
amortization expense related to early move-outs. The amortization of above-market
leases, which was recorded as a reduction of rental income, was approximately
$17,000 for each of the six months ended June 30, 2010 and 2009. Acquired lease intangible liabilities
(below-market leases) are accreted over the leases remaining non-cancelable
lease term plus any fixed rate renewal options, if applicable, which range from
two months to approximately thirteen years. Accretion of below-market leases
was approximately $202,000 and $232,000 for the six months ended June 30, 2010
and 2009, respectively. Such accretion is recorded as an increase to rental
income. We recorded disposals of below-market leases of $106,000 and $35,000
for the six months ended June 30, 2010 and 2009, respectively, related to lease
expirations.

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Acquired
in-place lease and above- and below-market lease values and their respective
accumulated amortization are as follows (in thousands):

|                                                |  |                |        |                    |   |        |  
|----------------------------------------------- |  | -------------- | ------ | ------------------ | - | ------ | -
|                                                |  | June 30,
 2010 |        | December 31,
 2009 |  
|Acquired
 lease intangible assets:              |  |                |        |                    |   |        |  
|In-place
 leases                                |  | $              | 2,803  |                    | $ | 4,676  |  
|In-place
 leases  accumulated amortization     |  |                | (1,652 | )                  |   | (3,217 | )
|Above-market
 leases                            |  |                | 193    |                    |   | 193    |  
|Above-market
 leases  accumulated amortization |  |                | (122   | )                  |   | (105   | )
|Acquired
 lease intangibles, net                |  | $              | 1,222  |                    | $ | 1,547  |  
|                                                |  |                |        |                    |   |        |  
|Acquired
 lease intangible liabilities:         |  |                |        |                    |   |        |  
|Below-market leases                             |  | $              | 2,493  |                    | $ | 2,599  |  
|Below-market
 leases  accumulated amortization |  |                | (1,132 | )                  |   | (1,036 | )
|Acquired
 below-market lease intangibles, net   |  | $              | 1,361  |                    | $ | 1,563  |  

|   |              
|-- | -------------
|5. | NOTES PAYABLE

Our
outstanding debt at June 30, 2010 consisted of two loans  a fixed-rate
mortgage loan of $6.1 million secured by the Village on the Green property
which matures in April 2017 and a variable-rate mortgage loan of $23.8 million
secured by the Woodlake Square property which matures in September 2010,
carries an interest rate of LIBOR plus 1.35% (1.70% at June 30, 2010) and
requires monthly interest-only payments. We have entered into an interest rate
swap agreement which fixes the interest rate at 5.465% on our $23.8 million
variable-rate mortgage loan. See Note 12 for a discussion of the refinancing of
this loan in connection with the sale of 90% of our interest in the Woodlake
Square property.

Interest-only
loans are generally due in full at maturity. Our mortgage loans are secured by
real estate properties and may be prepaid but could be subject to a
yield-maintenance premium or prepayment penalty. As of June 30, 2010, the
weighted-average interest rate on our fixed-rate debt is 5.5%, and the weighted
average remaining life of such debt is 6.8 years.

As of June 30,
2010, scheduled principal repayments on notes payable were as follows (in
thousands):

|                            |  |  |                                |     |                       |   |                 |  |   |        | 
|--------------------------- |  |  | ------------------------------ | --- | --------------------- | - | --------------- |  | - | ------ | 
|Scheduled
 Payments by Year |  |  | Scheduled
 Principal
 Payments |     | Term-Loan
 Maturities |   | Total
 Payments | 
|2010                        |  |  | $                              | 40  |                       |   | 23,800          |  |   | 23,840 | 
|2011                        |  |  |                                | 86  |                       |   |                |  |   | 86     | 
|2012                        |  |  |                                | 90  |                       |   |                |  |   | 90     | 
|2013                        |  |  |                                | 96  |                       |   |                |  |   | 96     | 
|2014                        |  |  |                                | 102 |                       |   |                |  |   | 102    | 
|Thereafter                  |  |  |                                | 251 |                       |   | 5,443           |  |   | 5,694  | 
|Total                       |  |  | $                              | 665 |                       | $ | 29,243          |  | $ | 29,908 | 

We serve as
the guarantor of debt in the amount of $62.2 million that is the primary
obligation of our non-consolidated joint ventures. The mortgage for one of
those joint ventures in the amount of $8.5 million matures in the second
quarter of 2011. We expect that mortgage to be refinanced by June 2011.
However, should that entity be unable
to pay or refinance the mortgage, we would be liable for 50% of the balance.
The remaining debt for which we serve as guarantor matures in 2014 and 2015.

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Notes Payable  Related Party
As of June 30, 2010 and December 31, 2009, the balance of our notes
payable  related party was $1.1 million and $230,000, respectively. During the
six months ended June 30, 2010, we borrowed $600,000 from an affiliate of our
General Partner. The note accrues interest monthly at LIBOR plus a spread of
3.5% with a floor of 5.0% and is secured by our investment interests in the
Woodlake Pointe and Woodlake Square properties.

|   |                                 
|-- | --------------------------------
|6. | DERIVATIVE FINANCIAL INSTRUMENTS

We use
derivative instruments primarily to manage exposures to interest rate risks. In
order to manage the volatility relating to interest rate risk, we may enter
into interest rate swaps from time to time. We do not use derivative financial
instruments for trading or speculative purposes. In December 2007, Woodlake
Square entered into an interest rate swap with a notional amount of $23.8
million and a fixed rate of 5.465% to hedge the interest rate risk on the $23.8
million variable-rate loan that was placed in conjunction with the 2007
acquisition of the Woodlake Square shopping center. The fair value of the swap
was a liability of $155,000 at June 30, 2010. The swap settles monthly with an
amount paid to or received from our counterparty upon settlement being recorded
as an adjustment to interest expense. For the six months ended June 30, 2010
and 2009, we paid $387,000 and $411,000, respectively, related to this swap
which is included in interest expense.

Valuations are
not actual market prices for which an offer would be for unwinding any
transactions but rather are calculated mathematical approximations of market
values derived from proprietary models as of a given date. These valuations are
calculated on a mid-market basis and do not include the bid/offered spread that
would be reflected in an actual price quotation; therefore, actual price
quotations for unwinding our transactions would be different. These valuations
and models rely on certain assumptions regarding past, present, and future
market conditions. These valuations, models and assumptions are subject to
change at any time. All methods of assessing fair value result in a general
approximation of value, and such value may never actually be realized.

We have
designated our interest rate swap as a hedge for financial reporting purposes.
Accordingly, gains or losses resulting from changes in the value of our
derivatives have been recorded as an adjustment to our partners capital
through accumulated other comprehensive income. We could be exposed to losses
in the event of nonperformance by the counterparties. In June 2010, this swap
transaction was terminated, and in July 2010, the underlying mortgage was
refinanced, see Note 12. In accordance with ASC 815, Derivatives andHedging, the amount in accumulated other
comprehensive income, which was $260,000 as of June 30, 2010, will be amortized
into earnings over the remaining term of the hedged transaction. We do not use
derivative financial instruments for trading or speculative purposes.

|   |               
|-- | --------------
|7. | CONCENTRATIONS

As of June 30,
2010 and December 31, 2009, each of our three consolidated properties
individually comprises greater than 10% of our consolidated total assets.
Consistent with our strategy of investing in areas that we know well, two of
our three properties are located in the Houston metropolitan area. These
Houston properties represent 76% and 78% of our rental income for the six
months ended June 30, 2010 and 2009, respectively. Houston is Texas largest
city and the fourth largest city in the United States.

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Following are
the base rents generated by our top tenants during the six months ended June
30, 2010 and 2009 (in thousands):

|            |  |  |                           |     |      |   |     | 
|----------- |  |  | ------------------------- | --- | ---- | - | --- | 
|            |  |  | Six months ended June 30, |    
|Tenant      |  |  | 2010                      |     | 2009 |  
|Walgreens   |  |  | $                         | 166 |      | $ | 166 | 
|Randalls   |  |  |                           | 121 |      |   | 121 | 
|Jos A. Bank |  |  |                           | 103 |      |   | 103 | 
|Paesanos   |  |  |                           | 98  |      |   | 95  | 
|Borders (1) |  |  |                           | 70  |      |   | 417 | 
|            |  |  | $                         | 558 |      | $ | 902 | 

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | As of December 31, 2009,
 Borders, Inc. (Borders) constituted our largest tenant as determined by
 base rents paid. Borders lease expired in January 2010, and Borders vacated
 its space. Accordingly, our 2010 forecasted cash flows, as addressed in Note
 1, assume no rental income from Borders for the 2010 period. We expected this
 lease expiration when we acquired the property and believe that we will be
 able to recover its carrying value based on our property redevelopment plan.
 We are actively identifying potential lessees to occupy the premises as part
 of this redevelopment plan and are in active discussions with several
 potential tenants. The closing of any new leases would be subject to the
 negotiation and execution of definitive lease agreements and the fulfillment
 of customary conditions. Accordingly, no assurance can be given that a new
 lease will be procured on the same terms as the Borders lease, or at all.

|   |                                                
|-- | -----------------------------------------------
|8. | PARTNERS CAPITAL AND NON-CONTROLLING INTERESTS

The General
Partner invested $800,000 as a limited partner and $1,000 as a general partner
in MIG IV. We began raising capital in December 2006. We closed the offering on
March 31, 2008 when we had raised approximately $49.7 million. The General
Partners $800,000 investment represents a 1.6% limited partner interest in the
Partnership.

Limited Optional Redemption Our Units were sold pursuant to exemptions from registration under the
Securities Act of 1933 and are not currently listed on a national exchange or
otherwise traded in an organized securities market. These Units may be
transferred only with the consent of the General Partner after the delivery of
required documents, and in any event, only if we register the offer and sale of
the Units under applicable securities laws or if an exemption from such
registration is available. We do not expect to register the offer and sale of
Units. Moreover, we do not anticipate that any public market for the Units will
develop. In order to provide limited partners with the possibility of
liquidity, at any time after November 15, 2009 and prior to November 15, 2013,
limited partners who have held their Units for at least three years may receive
the benefit of interim liquidity by presenting all of those Units to the
Partnership for redemption. At that time, we may, at our sole election and
subject to the conditions and limitations described below, redeem the Units
presented for cash to the extent that we have sufficient funds available to us
to fund such redemption. The redemption price to be paid will be 92% of the
limited partners unreturned invested capital. At no time during a 12-month
period, however, may the number of Units redeemed by us exceed 2% of the number
of Units outstanding at the beginning of that 12-month period. We received no
redemption requests during the six months ended June 30, 2010. During the six
months ended June 30, 2009, we received four redemption requests, two of which
were denied in the aggregate amount of $69,000 and two of which were granted in
the amount of $62,000, despite the restriction on redemptions until November
15, 2009. All redemption requests that have been granted represent a return of
capital. We suspended the optional redemption program during the second quarter
of 2009 due to macroeconomic conditions and the need to preserve cash.

Distributions
During the operating stage of the Partnership, net cash flow, as defined, will
be distributed 99% to the limited partners and 1% to the General Partner. We
paid a distribution of 7.5% per annum on invested capital through December
2008. Beginning in January 2009 through June 2009, we paid a distribution of
3.0% per annum on invested capital. Effective July 15, 2009, we suspended
payment of all distributions and we do not plan to resume the payment of
distributions until improvements in the real estate and liquidity markets
warrant such payment. All distributions to date have been a return of capital.
During the liquidation stage of the Partnership (anticipated to commence in
November 2013, unless extended), net cash flow, as defined, will be distributed
among the limited partners and the General Partner in the following manner:

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | First - 100%
 to the Limited Partners (in proportion to their unreturned actual invested
 capital) until such time as the Limited Partners have received cumulative
 distributions from all sources equal to 100% of their actual invested capital
 (calculated using the actual purchase price per Unit);                                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | Second -
 100% to the General Partner until it has received cumulative distributions
 from all sources equal to 100% of its actual invested capital of $1,000;                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | Third - 1%
 to the General Partner and 99% to the limited partners on a per Unit basis
 until such time as the limited partners have received cumulative
 distributions from all sources equal to 8.5% per annum, cumulative,
 uncompounded return on their unreturned deemed capital contributions (which
 will be equal to (i) the product of $25,000 per Unit (regardless of the
 purchase price paid for a Unit) multiplied by the number of Units owned by a
 partner, reduced by (ii) the aggregate amount of any distributions received
 that constitute a return of capital contributions);
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | Fourth 
 100% to the General Partner until it has received cumulative distributions
 from all sources (other than with respect to the Units it purchased) in an
 amount equal to 40% of the net cash flow paid to date to the Limited Partners
 in excess of their actual invested capital; and                                                                                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | Thereafter -
 60% to the limited partners on a per Unit basis and 40% to the General
 Partner.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Non-controlling Interests
Non-controlling interests represent a 40% ownership interest that two of
our affiliates have in two real estate partnerships that we consolidate as a
result of our 60% controlling financial interest in such partnerships.

|   |                           
|-- | --------------------------
|9. | RELATED PARTY TRANSACTIONS

Certain of our
affiliates received fees and compensation during the organizational stage of
the Partnership, including securities commissions and due diligence
reimbursements, marketing reimbursements and reimbursement of organizational
and offering expenses. In the event that these companies are unable to provide
us with the respective services, we would be required to find alternative
providers of these services. The following table summarizes the amount of such
compensation paid to our affiliates during the three and six months ended June
30, 2010 and 2009 (in thousands):

|                                            |  |                             |     |                           |   |      |  |      |     |  |   |     | 
|------------------------------------------- |  | --------------------------- | --- | ------------------------- | - | ---- |  | ---- | --- |  | - | --- | 
|                                            |  | Three months ended June 30, |     | Six months ended June 30, |  
|Type of
 service                            |  | 2010                        |     | 2009                      |   | 2010 |  | 2009 |    
|Asset
 management fees                      |  | $                           | 107 |                           | $ | 107  |  | $    | 215 |  | $ | 215 | 
|Property
 management fees and leasing costs |  |                             | 53  |                           |   | 64   |  |      | 120 |  |   | 127 | 
|Administrative
 costs reimbursements        |  |                             | 83  |                           |   | 126  |  |      | 159 |  |   | 194 | 
|                                            |  | $                           | 243 |                           | $ | 297  |  | $    | 494 |  | $ | 536 | 

In addition to
the above fees paid by us, the non-consolidated entities in which we have
investments paid $283,000 and $306,000 in property management and leasing fees
to one of our affiliated entities for the six months ended June 30, 2010 and
2009, respectively. See also Note 3 regarding investments in non-consolidated
entities.

|    |                                          
|--- | -----------------------------------------
|10. | REAL ESTATE ACQUISITIONS AND DISPOSITIONS

We did not
have any real estate acquisitions or dispositions during the six months ended
June 30, 2010 and 2009.

See Note 3 for
a discussion of our investment activity since our inception with respect to our
non-consolidated entities.

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|    |                              
|--- | -----------------------------
|11. | COMMITMENTS AND CONTINGENCIES

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

Environmental matters
 In connection with the ownership and operation of real estate, we may be
potentially liable for costs and damages related to environmental matters. We
have not been notified by any governmental authority of any non-compliance,
liability or other claim.

In conjunction
with our acquisition of the Woodlake Square shopping center in August 2007, we
identified environmental exposures caused by businesses which were operated on
the property prior to our ownership. We recorded an asset retirement obligation
of $700,000 on the acquisition date related to these exposures. In conjunction
with the acquisition, the seller placed $700,000 in escrow which approximated
the estimated remediation costs on the acquisition date. During 2009, we
reassessed our environmental exposure at the site and now believe that the
estimated costs to remediate the site will be approximately $530,000.
Accordingly, we have reduced the asset retirement obligation by $170,000. As of
June 30, 2010, we have a remaining asset retirement obligation related to this
matter of $530,000. We believe that these exposures will not have a material
adverse effect on our consolidated financial position or results of operations,
and we are aware of no other environmental exposures.

|    |                  
|--- | -----------------
|12. | SUBSEQUENT EVENTS

In July 2010, we and our
affiliated joint venture partners on our Woodlake Square property, MIG III and
ARIC, entered into a new joint venture agreement with a third party on
our Woodlake Square property.  As part of this transaction, we and our
affiliates sold 90% of our interest in the property and retained a 10%
ownership interest, which carries a promoted interest in cash flows and profits once an 11.65%
preferred return threshold is met on the project.  Prior to the transaction, we
owned a 60% interest in the property, and we own a 6% interest,
post-transaction.
This transaction was accounted for under ASC 360, Property, Plant and Equipment, as it
represented a sale of in-substance real estate.
 The fair value of the consideration received approximated the
carrying value of the interest that we sold, which was approximately $3.8
million (of which our share was approximately $2.3 million). Accordingly, no significant gain or loss will be recognized upon sale. 
 The sale generated cash proceeds of
approximately $3.4 million (our share was approximately $2.0 million), and we
and our third party joint venture partner are responsible for funding the pro
rata amount of the redevelopment costs on the project, which are currently
estimated to be approximately $8.0 million.
As part of the consideration received, we and our affiliated joint venture partners are due a reimbursement from our
third party joint venture partner for a portion of such redevelopment costs already incurred.
  Additionally, as part of
the transaction, the $23.8 million loan on the property, which was due to
mature in September 2010, was paid in full at closing.  We terminated our interest rate swap in connection with the refinancing
of the related debt.  Upon the swap termination, we made a settlement payment
to the counterparty of approximately $155,000, which was recorded to interest
expense in July 2010.  The new entity in which we now own a 6% interest,
VIF II/AmREIT Woodlake L.P., is the borrower on the new $20.9 million loan,
which has a 3-year term with two one-year extension options, provided certain
conditions are met.  We, along with our affiliate, AmREIT Monthly Income &
Growth Fund III, Ltd.  are joint and several repayment guarantors on the loan. 
As a result of our reduced ownership interest and decision-making ability, we
no longer have a controlling financial interest in the property.  In accordance
with ASC 810, we therefore will begin reporting this property under the equity
method of accounting versus under the consolidation method.

We have
evaluated all events or transactions as of the date through which the financial
statements were made available for issuance. With the exception of the event
listed above, we did not have any other material subsequent events that
impacted our consolidated financial statements during this period.

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|         |                                                                                        
|-------- | ---------------------------------------------------------------------------------------
|ITEM
 2. | MANAGEMENTS DISCUSSION AND
 ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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

Certain
information presented in this Report constitutes forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended (the Exchange Act). Although we
believe that the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, our actual results could differ materially
from those set forth in the forward-looking statements. Certain factors that
might cause such a difference include the following: changes in general
economic conditions, changes in real estate market conditions, continued
availability of proceeds from our debt or equity capital, our ability to locate
suitable tenants for our properties, the ability of tenants to make payments
under their respective leases, timing of acquisitions, development starts and
sales of properties, the ability to meet development schedules and other risks,
uncertainties and assumptions. Any forward-looking statement speaks only as of
the date on which it was made, and the Partnership undertakes no obligation to
update or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operation results over
time.

Overview

We are a
Delaware limited partnership formed on October 10, 2006 to acquire, develop and
operate, directly or indirectly through joint venture arrangements, a portfolio
of commercial real estate consisting primarily of multi-tenant shopping centers
and mixed-use developments throughout Texas. We focus on properties
characterized by high automobile traffic counts, high populations, high
household incomes and limited opportunities for competition.

We have no
employees and are managed by AmREIT Monthly Income & Growth IV Corporation,
our General Partner, pursuant to our Partnership Agreement. Our General Partner
is a wholly-owned subsidiary of AmREIT, Inc., an SEC reporting, non-traded
Maryland corporation that has elected to be taxed as a real estate investment
trust (AmREIT). Our General Partner has contributed $1,000 to us for its
general partner interest and has contributed $800,000 to us in exchange for
Units. The remaining Units are held by other limited partners. We qualify as a
partnership for federal income tax purposes.

As of June 30,
2010, our investments included a wholly-owned property comprised of
approximately 36,000 square feet of gross leasable area, two properties in
which we own controlling interests comprised of approximately 288,000 square
feet of gross leasable area and three properties in which we own investment
interests through joint ventures comprised of approximately 949,000 square feet
of gross leasable area. A majority of our properties are located in
highly-populated, suburban communities in Texas. We derive a substantial
portion of our revenue from rental income from these properties, primarily from
net leasing arrangements, where most of the operating expenses of the
properties are absorbed by our tenants. As a result, our operating results and
cash flows are primarily influenced by rental income from our properties and
interest expense on our property acquisition indebtedness. Rental income
accounted for 100% of our total revenue during the six months ended June 30,
2010 and 2009. As of June 30, 2010, our properties had an average occupancy
rate of approximately 77%, and the average debt leverage ratio of the
properties in which we own an interest was approximately 59%, with 83% of such
debt carrying a fixed-rate of interest.

Summary of Critical Accounting Policies

The
preparation of the consolidated financial statement information contained
herein requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, net sales and expenses and related
disclosure of contingent assets and liabilities. Management bases its estimates
on historical experience and on various other assumptions that are believed to
be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

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An accounting
policy is deemed to be critical if it requires an accounting estimate to be
made based on assumptions about matters that are highly uncertain at the time
the estimate is made, and if different estimates that reasonably could have
been used, or changes in the accounting estimates that are reasonably likely to
occur periodically, could materially impact the financial statements.
Information with respect to the Partnerships critical accounting policies that
the Partnership believes could have the most significant effect on the
Partnerships reported results and require subjective or complex judgments by
management is contained in Part II, Item 7. Managements Discussion and
Analysis of Financial Condition and Results of Operations of the Partnerships
Annual Report on Form 10-K for the fiscal year ended December 31, 2009.
Management believes that as of June 30, 2010, there have been no material
changes to these policies.

Results of Operations

We commenced
our principal operations on January 12, 2007, when we accepted subscriptions
for the minimum offering of $1.0 million pursuant to the terms of our Offering
Memorandum and issued the initial 40 Units to investors. During 2007, we made
investments in three joint ventures through which we obtained an ownership
interest in three properties. During 2008, we acquired a direct interest in one
property on March 25, 2008, made an investment in a joint venture through which
we obtained an ownership interest in one property and made additional
investments in two joint ventures through which we obtained additional
ownership interests in two properties. As of June 30, 2010, our investments
included a wholly-owned property comprised of approximately 36,000 square feet
of gross leasable area, two properties in which we owned controlling interests
comprised of approximately 288,000 square feet of gross leasable area and three
properties in which we owned investment interests through joint ventures
comprised of approximately 949,000 square feet of gross leasable area.

Our direct
property acquisition was accounted for as a purchase, and the results of its
operations are included in our consolidated financial statements from the date
of acquisition. We report our investments in joint ventures under the equity
method of accounting given our ability to exercise significant influence over
them. Until June 2008, we reported our interest in AmREIT Woodlake, LP and
AmREIT Westheimer Gessner, LP under the equity method of accounting as we owned
a 40% interest in each. With the additional 20% investment that we made in
these properties during the second quarter of 2008, we are now consolidating
their financial position and results of operations in the accompanying
consolidated financial statements. See Note 12 to the financial statements
included in this Report for a discussion of the subsequent event related to
sale of 90% of our interest in the Woodlake Square property. See Note 3 to the
financial statements included in this Report for a discussion of our investment
activity since our inception with respect to our non-consolidated entities.

Three Months Ended June 30, 2010 versus Three
Months Ended June 30, 2009

Revenue.Revenue
decreased approximately $333,000 to approximately $890,000 during the three
months ended June 30, 2010 compared to approximately $1.2 million for the three
months ended June 30, 2009. The decrease is primarily due to decreased revenue
from Woodlake Square and Woodlake Pointe due to reduced occupancy rates and
reduced recoverable property expenses. As we are in the early stages of
redeveloping Woodlake Square and Woodlake Pointe, we have not aggressively
pursued lease renewals related to lease expirations.

General and administrative  related party.General
and administrative  related party decreased approximately $43,000 to
approximately $83,000 during the three months ended June 30, 2010 compared to
approximately $126,000 for the three months ended June 30, 2009. This decrease
was primarily due to timing differences in our General Partners compensation accrual
recorded during the second quarter of 2009, which caused expenses to be higher
for that period.

Property Expense.Property
expense decreased approximately $105,000 to approximately $299,000 during the
three months ended June 30, 2010 compared to approximately $404,000 for the
three months ended June 30, 2009. This decrease was due to a decrease in
property tax expense and security expense. We began capitalizing property taxes
on Woodlake Pointe during 2010 as the property is planned for a major redevelopment.

Depreciation and Amortization Expense.Depreciation
and amortization expense increased approximately $1.9 million to approximately
$2.6 million during the three months ended June 30, 2010 compared to $754,000
for the three months ended June 30, 2009. This increase was due to the
impending redevelopment of the Woodlake Square property. We have reassessed and
shortened the estimated useful lives of various buildings consistent with our
current plan to demolish such buildings as part of the redevelopment, which is
scheduled to begin in June 2010.

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Equity in Losses From Non-Consolidated
Entities. Loss from non-consolidated entities
decreased approximately $110,000 to approximately $237,000 for the three months
ended June 30, 2010 compared to approximately $347,000 for the three months
ended June 30, 2009. These amounts represent our ownership portion of our joint
ventures net income or loss for the period. The decreased loss is attributable
to our Shadow Creek Ranch and Casa Linda properties. Net loss has decreased due
to increased occupancy on both properties.

Net Loss Attributable to Non-controlling
Interests. Net loss attributable to non-controlling
interests increased approximately $838,000 to approximately $1.0 million during
the three months ended June 30, 2010 compared to net loss attributable to
non-controlling interests of approximately $167,000 for the three months ended
June 30, 2009. This increase was primarily due to our revised estimate of the
useful lives of certain buildings, which resulted in an increase in
depreciation expense on Woodlake Square and which is attributable to the
redevelopment that commenced in July 2010.

Six Months Ended June 30, 2010 versus Six
Months Ended June 30, 2009

Revenue.Revenue
decreased approximately $726,000 to approximately $1.8 million during the six
months ended June 30, 2010 compared to approximately $2.5 million for the six
months ended June 30, 2009. The decrease is primarily due to decreased revenue
from Woodlake Square and Woodlake Pointe due to reduced occupancy rates and
reduced recoverable property expenses. As we are in the early stages of
redeveloping Woodlake Square, we have not aggressively pursued lease renewals
related to lease expirations.

General and administrative  related party.General
and administrative  related party decreased approximately $35,000 to
approximately $159,000 during the six months ended June 30, 2010 compared to
approximately $194,000 for the six months ended June 30, 2009. This decrease
was primarily due to timing differences in our General Partners compensation
accrual recorded during the second quarter of 2009, which caused expenses to be
higher for that period.

Property Expense.Property
expense decreased approximately $167,000 to approximately $670,000 during the
six months ended June 30, 2010 compared to approximately $837,000 for the six
months ended June 30, 2009. This decrease was due to a decrease in property tax
expense and security expense. We began capitalizing property taxes on Woodlake
Pointe during 2010 as the property is planned for a major redevelopment.

Property Management Fees  Related Party.Property
management fees decreased approximately $32,000 to approximately $64,000 during
the six months ended June 30, 2010 compared to approximately $96,000 for the
six months ended June 30, 2009. Property management fees are calculated based
on tenant billings. Tenant billings have decreased due to reduced occupancy
rates at Woodlake Square and Woodlake Pointe.

Depreciation and Amortization Expense.Depreciation
and amortization expense increased approximately $5.8 million to approximately
$7.3 million during the six months ended June 30, 2010 compared to $1.5 million
for the six months ended June 30, 2009. This increase was due to the impending
redevelopment of the Woodlake Square property. We have reassessed and shortened
the estimated useful lives of various buildings consistent with our current
plan to demolish such buildings as part of the redevelopment, which is
scheduled to begin in June 2010.

Equity in Losses From Non-Consolidated
Entities. Loss from non-consolidated entities
decreased approximately $184,000 to approximately $449,000 for the six months
ended June 30, 2010 compared to approximately $633,000 for the six months ended
June 30, 2009. These amounts represent our ownership portion of our joint
ventures net income or loss for the period. The decreased loss is attributable
to our Shadow Creek Ranch and Casa Linda properties. Net loss has decreased due
to increased occupancy on both properties.

Net Loss Attributable to Non-controlling
Interests. Net loss attributable to non-controlling
interests increased approximately $2.5 million to approximately $2.8 million
during the six months ended June 30, 2010 compared to net loss attributable to
non-controlling interests of approximately $312,000 for the six months ended
June 30, 2009.

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This increase
was primarily due to our revised estimate of the useful lives of certain
buildings, which resulted in an increase in depreciation expense on Woodlake
Square and which is attributable to the redevelopment that commenced in July
2010.

Liquidity and Capital Resources

We expect to
meet our liquidity requirements through cash on-hand, net cash provided by
distributions from joint ventures, proceeds from secured or unsecured
financings from banks and other lenders, the selective and strategic sale of
properties and net cash flows from operations. We expect that our primary uses
of capital will be for investment in real estate properties and related improvements,
the payment of operating expenses, including interest expense on any
outstanding indebtedness, and the payment of distributions to our partners. As
we sell properties during our operating period, we plan to strategically
reinvest the proceeds from such sales rather than distributing the proceeds to
our partners.

As of June 30,
2010 and December 31, 2009, our cash and cash equivalents totaled approximately
$91,000 and approximately $469,000, respectively. Cash flows provided by (used
in) operating activities, investing activities and financing activities for the
six months ended June 30, 2010 and 2009 are as follows (in thousands):

|                      |  |                           |      |      |   |      |  
|--------------------- |  | ------------------------- | ---- | ---- | - | ---- | -
|                      |  | Six months ended June 30, |     
|                      |  | 2010                      |      | 2009 |  
|Operating
 activities |  | $                         | (551 | )    | $ | 539  |  
|Investing
 activities |  |                           | (635 | )    |   | 393  |  
|Financing
 activities |  |                           | 808  |      |   | (981 | )

Net cash flows
used in operating activities increased approximately $1.1 million to
approximately $551,000 for the six months ended June 30, 2010 compared to net
cash flows provided by operating activities of approximately $539,000 for the
six months ended June 30, 2009. This increase in operating cash outflows was
primarily attributable to a reduction in rental income of approximately
$726,000 (primarily due to reduced occupancy rates at Woodlake Square and
Woodlake Pointe), coupled with a difference in the timing of our property tax
payments. We paid our 2009 property taxes during the first quarter of 2010 but
paid no property taxes during the similar period in 2009 as we made payment on
our 2008 property taxes during December 2008.

Net cash flows
used in investing activities increased approximately $1.0 million to
approximately $635,000 for the six months ended June 30, 2010 compared to net
cash flows provided by investing activities of approximately $393,000 for the
six months ended June 30, 2009. This increase in investing outflows was
primarily due to a net reimbursement of $1.2 million in earnest money deposits
that we received during the six months ended June 30, 2009. We had no such
inflows during the 2010 period. This inflow during the six months ended June
30, 2009 was partially offset by an increase in notes receivable - related
party of $438,000. Additionally, during the six months ended June 30, 2010, we
paid for improvements to real estate of $381,000 compared to $115,000 for the
six months ended June 30, 2009.

Net cash flows
provided by financing activities increased approximately $1.8 million to
approximately $808,000 for the six months ended June 30, 2010 compared to net
cash flows used in financing activities of approximately $981,000 for the six
months ended June 30, 2009. This increase in financing inflows was primarily
attributable to proceeds received from notes payable  related party of
approximately $600,000 and contributions received from non-controlling
interests of approximately $249,000 during the six months ended June 30, 2010.
Additionally, during the six months ended June 30, 2009, we paid distributions
of approximately $754,000, paid distributions to non-controlling interests of
approximately $152,000, and redeemed two Units for approximately $62,000, none
of which occurred during the six months ended June 30, 2010.

As of December
31, 2009, Borders, Inc. (Borders) constituted our largest tenant as
determined by base rents paid. Borders lease expired in January 2010, and
Borders vacated its space. Accordingly, our 2010 forecasted cash flows assume
no rental income from Borders for the 2010 period. We expected this lease
expiration when we acquired the property and believe that we will be able to
recover its carrying value based on our property redevelopment plan. We are
actively identifying potential lessees to occupy the premises as part of this
redevelopment plan and are in active discussions with several potential tenants.
The closing of any new leases would be subject to the negotiation and execution
of definitive lease agreements and the fulfillment of customary conditions.
Accordingly, no assurance can be given that a new lease would be procured on
the same terms as the Borders lease, or at all.

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The United
States has undergone and may continue to experience a prolonged recession that
has been marked by pervasive and fundamental disruptions in the financial
markets. Continued concerns regarding the uncertainty of whether the U.S.
economy will be adversely affected by inflation, deflation or stagflation and
the systemic impact of increased unemployment, volatile energy costs,
geopolitical issues, the availability and cost of credit, the U.S. mortgage
market and a severely distressed real estate market have contributed to
increased market volatility and weakened business and consumer confidence. The
United States may not experience a sustained recovery and could suffer
pronounced instability and decreased economic activity for an extended period
of time. Our operations are sensitive to changes in overall economic conditions
that impact our tenants, including, among other things, increased bad debts due
to such recessionary pressures. A general reduction in the level of tenant
leasing or shifts in tenant leasing practices could adversely affect our
revenues, profitability and results of operations. It is difficult to determine
the breadth and duration of the financial market problems and the many ways in
which they may affect our tenants and our business in general. A significant
additional deterioration in the U.S. economy or the bankruptcy or insolvency of
one or more of our significant tenants could cause our 2010 cash resources to
be insufficient to meet our obligations. Effective July 15, 2009, we suspended
all distributions in an effort to conserve cash and to protect investors
invested capital. As we have numerous projects that are mid-stream in
redevelopment, we are conserving cash from operations to improve our ability to
fund capital improvements, tenant improvements and leasing commissions, and to
meet our obligations, including debt service. We expect that the economy and
real estate market will recover prior to our anticipated liquidation
commencement date of November 15, 2013. However, if the economy remains in a
protracted recession, we will seek to postpone liquidation if we believe such a
liquidation is not in the best interest of the Partners at that time.

We believe
that we will be able to generate sufficient liquidity to satisfy any cash
shortfalls through (1) managing the timing of forecasted capital expenditures
related to the lease-up of properties, (2) potential joint venture equity
investments in existing non-consolidated entities (3) financings of unencumbered
properties and (4) sales of certain of our investments in non-consolidated
entities. In July 2010, we and our joint venture partners on our Woodlake
Square property, AmREIT Monthly Income and Growth Fund III, Ltd. (MIG III)
and AmREIT Realty Investment Corporation (ARIC), sold a 90% interest in the
property to a third party (see Note 12 for more discussion). The sale generated
net proceeds of approximately $3.4 million. Our portion of such proceeds is
approximately $2.0 million. As a result, our cash projections indicate that we
will have sufficient cash for the next 12 months. However, we would consider
the above options as necessary if those cash projections deteriorate.

Subsequent Events

In July 2010, we and our
affiliated joint venture partners on the Woodlake Square property, AmREIT
Monthly Income & Growth Fund III, Ltd.  and
AmREIT Realty Investment Corporation, entered into a new joint venture
agreement with a third party on our Woodlake Square property in order to
commence the redevelopment of Woodlake Square and to generate liquidity.  As
part of this transaction, we and our affiliates sold 90% of our interest in the
property and retained a 10% ownership interest, which carries a promoted
interest in cash flows and profits once an 11.65% preferred return threshold is
met on the project.  Prior to the transaction, we owned a 60% interest in the
property, and we own a 6% interest, post-transaction.
This transaction was accounted for under ASC 360, Property, Plant and Equipment, as it
represented a sale of in-substance real estate.
 The fair value of the consideration
received approximated the carrying value of the interest that we sold, which
was approximately $3.8 million (of which our share was approximately $2.3 million) after consideration of $9.3 million in
depreciation and amortization recorded since inception of the project.  Accordingly,
no significant gain or loss will be recognized upon sale.  The sale generated cash proceeds of approximately
$3.4 million (our share was approximately $2.0 million), and we and our third
party joint venture partner are responsible for funding the pro-rata amount of
the redevelopment costs on the project, which are currently estimated to be
approximately $8.0 million.
As part of the consideration received, we and our affiliated joint venture partners are due a reimbursement from our
third party joint venture partner for a portion of such redevelopment costs already incurred.
Additionally, as part of the transaction,
the $23.8 million loan on the property, which was due to mature in September
2010, was paid in full at closing.  We
terminated our interest rate swap in connection with the refinancing of the
related debt.  Upon the swap termination, we made a settlement payment to the
counterparty of approximately $155,000, which was recorded to interest expense
in July 2010.  The new entity in which we now own a 6% interest, VIF
II/AmREIT Woodlake L.P., is the borrower on the new $20.9 million loan, which
has a 3-year term with two one-year extension options, provided certain
conditions are met.  We, along with our affiliate, AmREIT Monthly Income &
Growth Fund III, Ltd.  are joint and several repayment guarantors on the loan. 
As a result of our reduced ownership interest and decision-making ability, we
no longer have a controlling financial interest in the property.  In accordance
with ASC 810, we therefore will begin reporting this property under the equity
method of accounting versus under the consolidation method in the third quarter.

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We have
evaluated all events or transactions as of the date through which the financial
statements were made available for issuance. With the exception of the event
listed above, we did not have any other material subsequent events that
impacted our consolidated financial statements during this period.

|        |                                                            
|------- | -----------------------------------------------------------
|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not
applicable.

|        |                         
|------- | ------------------------
|ITEM 4. | CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and
Procedures

Under the
supervision and with the participation of our General Partners Chief Executive
Officer (CEO) and Chief Financial Officer (CFO), our General Partners
management has evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e)
of the Exchange Act) as of June 30, 2010. Based on that evaluation, our General
Partners CEO and CFO concluded that, as of June 30, 2010, our disclosure
controls and procedures were effective in causing material information relating
to us to be recorded, processed, summarized and reported by management on a
timely basis and to ensure the quality and timeliness of our public disclosures
in accordance with SEC disclosure obligations.

Changes in Internal Controls

There has been
no change to our internal control over financial reporting during the quarter
ended June 30, 2010 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.

PART II  OTHER
INFORMATION

|        |          
|------- | ---------
|ITEM 6. | EXHIBITS.

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

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SIGNATURES

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

|                       |                                               |                                                                     | 
|---------------------- | --------------------------------------------- | ------------------------------------------------------------------- | 
|                       | AmREIT
 Monthly Income & Growth Fund IV, L.P. |                                                                    
|                       |                                               |                                                                     | 
|                       | By:                                           | AmREIT
 Monthly Income & Growth IV Corporation, its General Partner | 
|Date: August
 13, 2010 |                                               |                                                                     | 
|                       |                                               |                                                                     | 
|                       | By:                                           | /s/ H. Kerr
 Taylor                                                 | 
|                       |                                               | H. Kerr
 Taylor                                                     | 
|                       |                                               | President,
 Chief Executive Officer and Director                    | 
|                       |                                               |                                                                     | 
|                       | By:                                           | /s/ Chad C.
 Braun                                                  | 
|                       |                                               | Chad C.
 Braun                                                      | 
|                       |                                               | Executive
 Vice President, Chief Financial Officer,                 | 
|                       |                                               | Treasurer
 and Secretary                                            | 

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EXHIBIT INDEX

|               |  |                                                                                                                                                                                                                                                                    
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 3.1    |  | Certificate
 of Limited Partnership of AmREIT Monthly Income & Growth Fund IV, L.P., dated
 October 10, 2006 (incorporated herein by reference from Exhibit 3.1 to the Partnerships
 Registration Statement on Form 10-12G dated April 29, 2008).                 
|               |  |                                                                                                                                                                                                                                                                    
|Exhibit 3.2    |  | Agreement of
 Limited Partnership of AmREIT Monthly & Income Growth Fund IV, L.P., dated
 October 10, 2006 (incorporated herein by reference from Exhibit 3.2 to the Partnerships
 Registration Statement on Form 10-12G dated April 29, 2008).                   
|               |  |                                                                                                                                                                                                                                                                    
|Exhibit
 3.2.1 |  | Amendment
 No. 1 to Agreement of Limited Partnership of AmREIT Monthly & Income Growth Fund
 IV, L.P., dated December 7, 2006 (incorporated herein by reference from Exhibit 3.3
 to the Partnerships Registration Statement on Form 10-12G dated April 29, 2008).
|               |  |                                                                                                                                                                                                                                                                    
|Exhibit 31.1   |  | Certification
 of the Chief Executive Officer of the Partnerships General Partner pursuant to Exchange
 Act Rule 13a-14(a) (filed herewith).                                                                                                                      
|               |  |                                                                                                                                                                                                                                                                    
|Exhibit 31.2   |  | Certification
 of the Chief Financial Officer of the Partnerships General Partner pursuant to Exchange
 Act Rule 13a-14(a) (filed herewith).                                                                                                                      
|               |  |                                                                                                                                                                                                                                                                    
|Exhibit 32.1   |  | Certification
 of the Chief Executive Officer of the Partnerships General Partner pursuant to 18 U.S.C.
 Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act                                                                               
|               |  | of 2002
 (furnished herewith).                                                                                                                                                                                                                                     
|               |  |                                                                                                                                                                                                                                                                    
|Exhibit 32.2   |  | Certification
 of the Chief Financial Officer of the Partnerships General Partner pursuant to 18 U.S.C.
 Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 (furnished herewith).                                                

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