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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 September 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                            |  | 21   | 
|                               | 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

ITEM1. FINANCIAL STATEMENTS.

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

|                                                                                                    |  |                    |        |                   |   |        |  
|--------------------------------------------------------------------------------------------------- |  | ------------------ | ------ | ----------------- | - | ------ | -
|                                                                                                    |  | September 30,
2010 |        | December 31,
2009 |  
|                                                                                                    |  | (unaudited)        |        |                   |  
|                                                                                                    |  |                    |        |                   |   |        |  
|ASSETS                                                                                              |  |                    |        |                   |   |        |  
|Real estate investments at cost:                                                                    |  |                    |        |                   |   |        |  
|Land                                                                                                |  | $                  | 12,476 |                   | $ | 31,168 |  
|Buildings                                                                                           |  |                    | 12,796 |                   |   | 31,060 |  
|Tenant improvements                                                                                 |  |                    | 324    |                   |   | 1,270  |  
|                                                                                                    |  |                    | 25,596 |                   |   | 63,498 |  
|Less accumulated depreciation and amortization                                                      |  |                    | (1,325 | )                 |   | (3,419 | )
|                                                                                                    |  |                    | 24,271 |                   |   | 60,079 |  
|                                                                                                    |  |                    |        |                   |   |        |  
|Investment in non-consolidated entities                                                             |  |                    | 12,432 |                   |   | 12,042 |  
|Acquired lease intangibles, net                                                                     |  |                    | 92     |                   |   | 1,547  |  
|Net real estate investments                                                                         |  |                    | 36,795 |                   |   | 73,668 |  
|                                                                                                    |  |                    |        |                   |   |        |  
|Cash and cash equivalents                                                                           |  |                    | 1,534  |                   |   | 469    |  
|Tenant receivables, net                                                                             |  |                    | 378    |                   |   | 283    |  
|Accounts receivable                                                                                 |  |                    |       |                   |   |       |  
|Accounts receivable - related party                                                                 |  |                    | 235    |                   |   | 9      |  
|Notes receivable                                                                                    |  |                    | 5      |                   |   |       |  
|Notes receivable - related party                                                                    |  |                    |       |                   |   | 162    |  
|Deferred costs, net                                                                                 |  |                    | 67     |                   |   | 139    |  
|Other assets                                                                                        |  |                    | 328    |                   |   | 163    |  
|TOTAL ASSETS                                                                                        |  | $                  | 39,342 |                   | $ | 74,893 |  
|                                                                                                    |  |                    |        |                   |   |        |  
|LIABILITIES AND CAPITAL                                                                             |  |                    |        |                   |   |        |  
|Liabilities:                                                                                        |  |                    |        |                   |   |        |  
|Notes payable                                                                                       |  | $                  | 6,088  |                   | $ | 29,949 |  
|Notes payable - related party                                                                       |  |                    | 1,201  |                   |   | 230    |  
|Accounts payable and other liabilities                                                              |  |                    | 691    |                   |   | 1,328  |  
|Accounts payable - related party                                                                    |  |                    | 70     |                   |   | 4      |  
|Derivative liability                                                                                |  |                    |       |                   |   | 678    |  
|Asset retirement obligations                                                                        |  |                    |       |                   |   | 530    |  
|Acquired below-market lease intangibles, net                                                        |  |                    | 21     |                   |   | 1,563  |  
|Security deposits                                                                                   |  |                    | 72     |                   |   | 110    |  
|TOTAL LIABILITIES                                                                                   |  |                    | 8,143  |                   |   | 34,392 |  
|                                                                                                    |  |                    |        |                   |   |        |  
|Capital:                                                                                            |  |                    |        |                   |   |        |  
|Partners capital:                                                                                  |  |                    |        |                   |   |        |  
|General partner                                                                                     |  |                    |       |                   |   |       |  
|Limited partners, 1,988 units outstanding at September 30, 2010 and
December 31, 2009, respectively |  |                    | 24,234 |                   |   | 30,293 |  
|Accumulated other comprehensive loss                                                                |  |                    |       |                   |   | (263   | )
|TOTAL PARTNERS CAPITAL                                                                             |  |                    | 24,234 |                   |   | 30,030 |  
|                                                                                                    |  |                    |        |                   |   |        |  
|Non-controlling interests                                                                           |  |                    | 6,965  |                   |   | 10,471 |  
|TOTAL CAPITAL                                                                                       |  |                    | 31,199 |                   |   | 40,501 |  
|                                                                                                    |  |                    |        |                   |   |        |  
|TOTAL LIABILITIES AND CAPITAL                                                                       |  | $                  | 39,342 |                   | $ | 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 September 30, |         | Nine months ended September 30, |  
|                                                   |  | 2010                             |         | 2009                            |   | 2010    |   | 2009 |          
|                                                   |  |                                  |         |                                 |   |         |   |      |           |   |   |           |  
|Revenues:                                          |  |                                  |         |                                 |   |         |   |      |           |   |   |           |  
|Rental income from operating leases                |  | $                                | 511     |                                 | $ | 1,263   |   | $    | 2,322     |   | $ | 3,800     |  
|Total revenues                                     |  |                                  | 511     |                                 |   | 1,263   |   |      | 2,322     |   |   | 3,800     |  
|                                                   |  |                                  |         |                                 |   |         |   |      |           |   |   |           |  
|Expenses:                                          |  |                                  |         |                                 |   |         |   |      |           |   |   |           |  
|General and administrative                         |  |                                  | 17      |                                 |   | 12      |   |      | 68        |   |   | 63        |  
|General and administrative - related party         |  |                                  | 86      |                                 |   | 54      |   |      | 245       |   |   | 248       |  
|Asset management fees - related party              |  |                                  | 108     |                                 |   | 108     |   |      | 323       |   |   | 323       |  
|Property expense                                   |  |                                  | 192     |                                 |   | 458     |   |      | 862       |   |   | 1,295     |  
|Property management fees - related party           |  |                                  | 16      |                                 |   | 44      |   |      | 80        |   |   | 140       |  
|Legal and professional                             |  |                                  | 58      |                                 |   | 63      |   |      | 194       |   |   | 199       |  
|Depreciation and amortization                      |  |                                  | 261     |                                 |   | 730     |   |      | 7,513     |   |   | 2,252     |  
|Total operating expenses                           |  |                                  | 738     |                                 |   | 1,469   |   |      | 9,285     |   |   | 4,520     |  
|                                                   |  |                                  |         |                                 |   |         |   |      |           |   |   |           |  
|Operating loss                                     |  |                                  | (227    | )                               |   | (206    | ) |      | (6,963    | ) |   | (720      | )
|                                                   |  |                                  |         |                                 |   |         |   |      |           |   |   |           |  
|Other income (expense):                            |  |                                  |         |                                 |   |         |   |      |           |   |   |           |  
|Interest income - related party                    |  |                                  |        |                                 |   | 1       |   |      | 2         |   |   | 3         |  
|Impairment                                         |  |                                  | (618    | )                               |   |        |   |      | (618      | ) |   |          |  
|Interest and other income                          |  |                                  |        |                                 |   | 1       |   |      | 2         |   |   | 12        |  
|Interest expense                                   |  |                                  | 157     |                                 |   | (442    | ) |      | (713      | ) |   | (1,324    | )
|Interest expense - related party                   |  |                                  | (15     | )                               |   |        |   |      | (37       | ) |   |          |  
|Equity in losses from non-consolidated entities    |  |                                  | (260    | )                               |   | (274    | ) |      | (709      | ) |   | (907      | )
|Margin tax expense                                 |  |                                  | (1      | )                               |   | (7      | ) |      | (14       | ) |   | (15       | )
|Total other income (expense)                       |  |                                  | (737    | )                               |   | (721    | ) |      | (2,087    | ) |   | (2,231    | )
|                                                   |  |                                  |         |                                 |   |         |   |      |           |   |   |           |  
|Net loss, including non-controlling interests      |  |                                  | (964    | )                               |   | (927    | ) |      | (9,050    | ) |   | (2,951    | )
|                                                   |  |                                  |         |                                 |   |         |   |      |           |   |   |           |  
|Net loss attributable to non-controlling interests |  |                                  | 173     |                                 |   | 137     |   |      | 2,991     |   |   | 449       |  
|                                                   |  |                                  |         |                                 |   |         |   |      |           |   |   |           |  
|Net loss attributable to partners                  |  | $                                | (791    | )                               | $ | (790    | ) | $    | (6,059    | ) | $ | (2,502    | )
|                                                   |  |                                  |         |                                 |   |         |   |      |           |   |   |           |  
|Weighted average units outstanding                 |  |                                  | 1,988   |                                 |   | 1,988   |   |      | 1,988     |   |   | 1,989     |  
|Net loss per unit                                  |  | $                                | (397.89 | )                               | $ | (397.38 | ) | $    | (3,047.79 | ) | $ | (1,257.92 | )

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 nine months ended September 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)                                   |  |                   |  |                  |   | (6,059                                      | ) |                           |     |       |   | (2,991 | ) |   | (9,050 | )
|Contributions from non-controlling interests   |  |                   |  |                  |   |                                            |   |                           |     |       |   | 249    |   |   | 249    |  
|Distributions to non-controlling interests     |  |                   |  |                  |   |                                            |   |                           |     |       |   | (764   | ) |   | (764   | )
|Decrease in fair value of derivative liability |  |                   |  |                  |   |                                            |   |                           | 523  |       |   |       |   |   | 523    |  
|Reclassification of gain into income           |  |                   |  |                  |   |                                            |   |                           | (260 | )     |   |       |   |   | (260   | )
|                                               |  |                   |   |                  |   |                                             |   |                           |      |       |   |        |   |   |        |  
|Balance at
September 30, 2010                  |  | $                 |  |                  | $ | 24,234                                      |   | $                         |     |       | $ | 6,965  |   | $ | 31,199 |  

|    |                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allocation of net loss
includes a curative allocation to increase the General Partners capital
account by $61 for the nine months ended September 30, 2010. The cumulative
curative allocation since inception of the Partnership is $194. 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)

|                                                                                                                                                                                                                                         |  |                                 |         |      |   |        |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | ---- | - | ------ | -
|                                                                                                                                                                                                                                         |  | Nine months ended September 30, |        
|                                                                                                                                                                                                                                         |  | 2010                            |         | 2009 |  
|Cash flows from operating activities:                                                                                                                                                                                                    |  |                                 |         |      |   |        |  
|Net loss, including non-controlling interests                                                                                                                                                                                            |  | $                               | (9,050  | )    | $ | (2,951 | )
|Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:                                                                                                                                                |  |                                 |         |      |   |        |  
|Impairment                                                                                                                                                                                                                               |  |                                 | 618     |      |   |       |  
|Bad debt expense                                                                                                                                                                                                                         |  |                                 | 80      |      |   | 57     |  
|Loss from non-consolidated entities                                                                                                                                                                                                      |  |                                 | 709     |      |   | 907    |  
|Depreciation and amortization                                                                                                                                                                                                            |  |                                 | 7,513   |      |   | 2,252  |  
|Amortization of above- and below-market leases, net                                                                                                                                                                                      |  |                                 | (215    | )    |   | (314   | )
|Amortization of loan acquisition costs                                                                                                                                                                                                   |  |                                 | 47      |      |   | 70     |  
|Realized gain on derivative                                                                                                                                                                                                              |  |                                 | (260    | )    |   |       |  
|Increase in tenant receivables                                                                                                                                                                                                           |  |                                 | (272    | )    |   | (284   | )
|(Increase) decrease in accounts receivable - related party                                                                                                                                                                               |  |                                 | (366    | )    |   | 474    |  
|Increase in deferred costs                                                                                                                                                                                                               |  |                                 | (81     | )    |   | (38    | )
|(Increase) decrease in other assets                                                                                                                                                                                                      |  |                                 | (227    | )    |   | 174    |  
|(Decrease) increase in accounts payable and other liabilities                                                                                                                                                                            |  |                                 | (628    | )    |   | 814    |  
|Increase (decrease) in accounts payable - related party                                                                                                                                                                                  |  |                                 | 437     |      |   | (169   | )
|Decrease in asset retirement obligations                                                                                                                                                                                                 |  |                                 |        |      |   | (5     | )
|Increase (decrease) in security deposits                                                                                                                                                                                                 |  |                                 | 17      |      |   | (10    | )
|Net
cash (used in) provided by operating activities                                                                                                                                                                                      |  |                                 | (1,678  | )    |   | 977    |  
|                                                                                                                                                                                                                                         |  |                                 |         |      |   |        |  
|Cash flows from investing activities:                                                                                                                                                                                                    |  |                                 |         |      |   |        |  
|Improvements to real estate                                                                                                                                                                                                              |  |                                 | (240    | )    |   | (170   | )
|Payments received on notes receivable                                                                                                                                                                                                    |  |                                 | 5       |      |   |       |  
|Increase in notes receivable - related party                                                                                                                                                                                             |  |                                 |        |      |   | (642   | )
|Payments received on notes receivable - related party                                                                                                                                                                                    |  |                                 | 82      |      |   | 181    |  
|Investment in non-consolidated entities                                                                                                                                                                                                  |  |                                 | (855    | )    |   | (846   | )
|Distributions from non-consolidated entities                                                                                                                                                                                             |  |                                 | 280     |      |   |       |  
|Net proceeds from sale of interest in an investment property                                                                                                                                                                             |  |                                 | 3,447   |      |   |       |  
|Reimbursement of earnest money deposits                                                                                                                                                                                                  |  |                                 |        |      |   | 1,245  |  
|Net cash provided (used in) by investing activities                                                                                                                                                                                      |  |                                 | 2,719   |      |   | (232   | )
|                                                                                                                                                                                                                                         |  |                                 |         |      |   |        |  
|Cash flows from financing activities:                                                                                                                                                                                                    |  |                                 |         |      |   |        |  
|Payments on notes payable                                                                                                                                                                                                                |  |                                 | (61     | )    |   | (31    | )
|Proceeds from notes payable - related party                                                                                                                                                                                              |  |                                 | 800     |      |   |       |  
|Payments on notes payable - related party                                                                                                                                                                                                |  |                                 | (200    | )    |   |       |  
|Limited optional redemptions                                                                                                                                                                                                             |  |                                 |        |      |   | (62    | )
|Distributions                                                                                                                                                                                                                            |  |                                 |        |      |   | (880   | )
|Contributions from non-controlling interests                                                                                                                                                                                             |  |                                 | 249     |      |   |       |  
|Distributions to non-controlling interests                                                                                                                                                                                               |  |                                 | (764    | )    |   | (206   | )
|Net cash provided by (used in) financing activities                                                                                                                                                                                      |  |                                 | 24      |      |   | (1,179 | )
|                                                                                                                                                                                                                                         |  |                                 |         |      |   |        |  
|Net increase (decrease) in cash and cash equivalents                                                                                                                                                                                     |  |                                 | 1,065   |      |   | (434   | )
|Cash and cash equivalents, beginning of period                                                                                                                                                                                           |  |                                 | 469     |      |   | 1,011  |  
|Cash and cash equivalents, end of period                                                                                                                                                                                                 |  | $                               | 1,534   |      | $ | 577    |  
|                                                                                                                                                                                                                                         |  |                                 |         |      |   |        |  
|Supplemental schedule of cash flow information:                                                                                                                                                                                          |  |                                 |         |      |   |        |  
|                                                                                                                                                                                                                                         |  |                                 |         |      |   |        |  
|Cash paid during the period for:                                                                                                                                                                                                         |  |                                 |         |      |   |        |  
|Interest                                                                                                                                                                                                                                 |  | $                               | 912     |      | $ | 1,250  |  
|Taxes                                                                                                                                                                                                                                    |  | $                               | 40      |      | $ | 25     |  
|                                                                                                                                                                                                                                         |  |                                 |         |      |   |        |  
|Supplemental schedule of noncash investing and
financing activities:                                                                                                                                                                     |  |                                 |         |      |   |        |  
|                                                                                                                                                                                                                                         |  |                                 |         |      |   |        |  
|Net proceeds from sale of interest in an investment property                                                                                                                                                                             |  |                                 |         |      |   |        |  
|Land                                                                                                                                                                                                                                     |  | $                               | 18,548  |      | $ |       |  
|Building and tenant improvements, net of accumulated depreciation                                                                                                                                                                        |  |                                 | 9,467   |      |   |       |  
|Receivables                                                                                                                                                                                                                              |  |                                 | 218     |      |   |       |  
|Acquired lease intangibles, net                                                                                                                                                                                                          |  |                                 | 1,087   |      |   |       |  
|Deferred costs and other assets                                                                                                                                                                                                          |  |                                 | 144     |      |   |       |  
|Notes Payable                                                                                                                                                                                                                            |  |                                 | (23,800 | )    |   |       |  
|Acquired below-market lease intangibles and other liabilities                                                                                                                                                                            |  |                                 | (1,782  | )    |   |       |  
|Retained investment in non-consolidated entity                                                                                                                                                                                           |  |                                 | (435    | )    |   |       |  
|                                                                                                                                                                                                                                         |  | $                               | 3,447   |      | $ |       |  
|                                                                                                                                                                                                                                        
|During 2010, we wrote-off our asset retirement obligation related to
Woodlake Square as the environmental exposure no longer exists on the
property. This caused a decrease in land of $400,000 and a decrease in
buildings of $130,000.
|                                                                                                                                                                                                                                         |  |                                 |         |      |   |        |  
|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 $256,000 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, $371,000 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 
September 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 September 30,
2010, our investments included a wholly-owned property comprising approximately
36,000 square feet of gross leasable area, a property in which we own a
controlling interest comprising approximately 82,000 square feet of gross
leasable area and four properties in which we own a non-controlling interest
through joint ventures comprising approximately 1.2 million 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 various 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 cash resources to be insufficient to meet
our obligations over the next 12 months. Effective July 15, 2009, we suspended
all distributions in an effort to conserve cash and to protect partners
invested capital. As we have several 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 may seek to postpone liquidation if we believe such liquidation is not in
the best interests of the Partners at that time.

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Projected cash sources
(including cash on hand) and uses for the Partnership indicate periods of cash
shortfalls during the year ended December 31, 2011. However, 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) financing of an unencumbered property and (3)
sales of certain of our investments in non-consolidated entities. No assurance
can be given that we will be able to generate such liquidity. In the event that
we are unable to generate sufficient liquidity, we may be forced to sell one or
more properties at a time when it is disadvantageous to do so, potentially
resulting in losses on the disposition of those properties.

|                      |                                           
|--------------------- | ------------------------------------------
|2.                    | 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.

As discussed further in Notes
3 and 10, we and our affiliated partners sold a 90% interest in the Woodlake
Square property to a third-party institutional partner in July 2010. As a
result of this transaction, we ultimately retained a net 6% non-controlling
financial interest in the Woodlake Square property, but such interest provides
us with the ability to exercise significant influence. Accordingly, we
deconsolidated this property as of the date of the transaction and began
accounting for the net 6% retained interest in the property on the equity
method of accounting.

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.
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 recorded within rental income from operating leases
and 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 nine
months ended September 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 nine months ended September 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.

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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 nine months ended September 30, 2010 and 2009,
interest and taxes in the amount of $256,000 and $185,000, respectively, were
capitalized on properties under development or redevelopment.

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 nine months ended September 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 and demolish certain buildings. The
redevelopment has commenced and the building demolition is taking place as
planned. As a result of this change in estimate, depreciation expense was $6.2
million ($3,138.73 per unit) higher for the nine months ended September 30,
2010 than it otherwise would have been. As a result of the deconsolidation of
Woodlake Square in July 2010, the net assets of this property are now included
in our investment in non-consolidated entities.

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 September
30, 2010 and December 31, 2009, we had no properties held for sale.

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Our properties generally have
operations and cash flows that can be clearly distinguished from the rest of
the Partnership. The operations and gains on sales reported in discontinued
operations include those properties that have been sold or are held for sale
and for which operations and cash flows have been clearly distinguished. The
operations of these properties are eliminated from ongoing operations, and we
will not have continuing involvement after disposition. Prior period operating
activity related to such properties is reclassified as discontinued operations
in the accompanying consolidated statements of operations. We have not reported
any operating activity as discontinued operations for the nine months ended
September 30, 2010 or 2009.

As discussed in the previous
section, we disposed of a majority of our interest in a previously controlled
entity and retained an interest accounted for using the equity method. As such,
the conditions for discontinued operations presentation were not met as we will
continue to have cash flows from our retained interest and will continue to be
involved with the operations of the entity through our position of significant
influence. As a result, the operations associated with this entity are
reflected in the consolidated statement of operations up to the date on which
we disposed of our controlling interest.

Impairment We review our
properties for impairment whenever events or changes in circumstances indicate
that the carrying amount of the assets, including acquired lease intangibles
and accrued rental income, may not be recoverable through operations. We
determine whether an impairment in value 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. As further
discussed in Notes 3 and 10, we recorded an impairment of $618,000 on our
Woodlake Square property.

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 September 30, 2010 and December 31, 2009, our allowance for
uncollectible accounts related to our tenant receivables was $168,000 and
$124,000, respectively.

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

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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
remaining 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.

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 $10,000 and $214,000 as of September
30, 2010 and December 31, 2009, respectively. Accumulated amortization related
to leasing costs totaled $18,000 and $16,000 as of September 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 $14,000 and $15,000 for the Texas Margin Tax for
the nine months ended September 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.

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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.

ASC 820 requires the use of
observable market data, when available, in making fair value measurements.
Observable inputs that the market participants would use in pricing the asset
or liability are developed based on market data obtained from sources
independent of our own. Unobservable inputs are inputs that reflect our
assumptions about the assumptions market participants would use in pricing the
asset or liability developed based on the best information available in the
circumstances. When inputs used to measure fair value fall within different
levels of the hierarchy, the level within which the fair value measurement is
categorized is based on the lowest level input that is significant to the fair
value measurement.

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 September
30, 2010 and December 31, 2009, the carrying value of debt obligations
associated with our consolidated entities was approximately $6.1 million and
$29.9 million, respectively, $6.1 million of which represents a fixed-rate obligation
with an estimated fair value of $6.1 million and $5.7 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 September 30, 2010 (in
thousands):

|              |  |         |   |         |   |         |  |   |   | 
|------------- |  | ------- | - | ------- | - | ------- |  | - | - | 
|              |  | Level 1 |   | Level 2 |   | Level 3 | 
|Notes Payable |  | $       |  |         | $ | 6,147   |  | $ |  | 

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.

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CASH AND CASH EQUIVALENTS

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

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. 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.

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

Since inception, we have made
the following investments in four entities through which we own an interest in
four 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 AmREIT Monthly Income & Growth Fund III, Ltd. (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%).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | Between June 2008 and July
2010, we owned a 60% interest in AmREIT Woodlake, LP (Woodlake LP) which owns
Woodlake Square, a grocery-anchored, multi-tenant retail property located at
the corner of Westheimer and Gessner in Houston, Texas with a combined gross
leasable area of approximately 206,000 square feet. As further discussed in
Notes 2 and 10, we and our affiliated entities sold a 90% interest in
Woodlake LP to a third-party institutional partner. We ultimately retained a
net 6% interest in the new property owner (VIF II/AmREIT Woodlake, LP)
through our 60% controlling interest in the managing member of the new
property owner, and the remaining 94% is owned by the third-party
institutional partner (90%), ARIC (1%) and by MIG III (3%), an affiliated
AmREIT entity. Due to our retention of the controlling financial interest in
VIF II/AmREIT Woodlake, LPs managing member, the 10% interest retained by us
and our affiliated entities is presented as investment in non-consolidated
entities with the 4% owned by AmREIT Realty Investment Corporation (ARIC)
and MIG III presented as non-controlling interests in the accompanying
balance sheet.

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We report our investments in
these four 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 nine months ended September 30, 2010 and 2009, as follows (in thousands):

|                              |  |                                  |        |                                 |   |        |   |      |        |   |   |        |  
|----------------------------- |  | -------------------------------- | ------ | ------------------------------- | - | ------ | - | ---- | ------ | - | - | ------ | -
|                              |  | Three months ended
September 30, |        | Nine months ended
September 30, |  
|                              |  | 2010                             |        | 2009                            |   | 2010   |   | 2009 |       
|Revenue                       |  | $                                | 3,783  |                                 | $ | 3,016  |   | $    | 10,553 |   | $ | 8,831  |  
|Depreciation and
amortization |  |                                  | (1,455 | )                               |   | (1,592 | ) |      | (4,381 | ) |   | (4,419 | )
|Interest expense              |  |                                  | (1,671 | )                               |   | (1,450 | ) |      | (4,551 | ) |   | (4,342 | )
|Net loss                      |  |                                  | (946   | )                               |   | (1,146 | ) |      | (2,510 | ) |   | (3,467 | )

|   |                           
|-- | --------------------------
|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
$348,000 and $1.1 million for the nine months ended September 30, 2010 and
2009, respectively. We recorded disposals of in-place leases of $1.9 million
and $239,000 for the nine months ended September 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 $20,000 and $25,000 for the nine months ended September 30, 2010
and 2009, respectively. 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 $235,000 and
$339,000 for the nine months ended September 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 nine months
ended September 30, 2010 and 2009, respectively, related to lease expirations.

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

|                                               |  |                    |      |                   |   |        |  
|---------------------------------------------- |  | ------------------ | ---- | ----------------- | - | ------ | -
|                                               |  | September 30,
2010 |      | December 31,
2009 |  
|Acquired lease intangible assets:              |  |                    |      |                   |   |        |  
|In-place leases                                |  | $                  | 667  |                   | $ | 4,676  |  
|In-place leases  accumulated amortization     |  |                    | (576 | )                 |   | (3,217 | )
|Above-market leases                            |  |                    | 14   |                   |   | 193    |  
|Above-market leases  accumulated amortization |  |                    | (13  | )                 |   | (105   | )
|Acquired lease intangibles, net                |  | $                  | 92   |                   | $ | 1,547  |  
|                                               |  |                    |      |                   |   |        |  
|Acquired lease intangible liabilities:         |  |                    |      |                   |   |        |  
|Below-market leases                            |  | $                  | 150  |                   | $ | 2,599  |  
|Below-market leases  accumulated amortization |  |                    | (129 | )                 |   | (1,036 | )
|Acquired below-market lease intangibles, net   |  | $                  | 21   |                   | $ | 1,563  |  

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

Our outstanding debt at
September 30, 2010 consisted of a fixed-rate mortgage loan of $6.1 million
secured by the Village on the Green property which matures in April 2017. This
mortgage loan may be prepaid but is subject to a yield-maintenance premium or
prepayment penalty. As of September 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 6.5 years.

As of September 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                       |  | $                            | 20  |                      |   |               |  |   | 20    | 
|2011                       |  |                              | 86  |                      |   |               |  |   | 86    | 
|2012                       |  |                              | 90  |                      |   |               |  |   | 90    | 
|2013                       |  |                              | 96  |                      |   |               |  |   | 96    | 
|2014                       |  |                              | 102 |                      |   |               |  |   | 102   | 
|Thereafter                 |  |                              | 251 |                      |   | 5,443          |  |   | 5,694 | 
|Total                      |  | $                            | 645 |                      | $ | 5,443          |  | $ | 6,088 | 

We serve as the guarantor of
debt in the amount of $45.0 million that is the primary obligation of our
non-consolidated joint ventures. The mortgage for one of those joint ventures
in the amount of $8.3 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. We estimate that any potential obligation arising as a result of our
guarantees would be satisfied from our share of cash distributions following
the sale of the mortgaged property. We have not accrued any liability with
respect to these guarantees as we believe the value of any obligation is
insignificant. Notes Payable  Related PartyAs of September 30, 2010 and December 31, 2009, the balance of our notes
payable  related party was $1.2 million and $230,000, respectively. During the
nine months ended September 30, 2010, we borrowed $800,000 from an affiliate of
our General Partner. In August 2010, we repaid $200,000 of the balance due to
the affiliate. 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 property.

|   |                                 
|-- | --------------------------------
|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 swap settled monthly with an amount paid to or
received from our counterparty upon settlement being recorded as an adjustment
to interest expense. We 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.
In conjunction with the refinancing of the underlying mortgage, we terminated this hedge.
 Accordingly, we reclassified into earnings the gain that had been deferred in accumulated other comprehensive
 income to appropriately offset the earnings impact of the remaining hedged forecasted interest payments and recognized
the remainder as a result of the fact that some of the hedged forecasted transactions were probable not to occur.
 As such, we recorded $260,000 as a credit to interest expense in
July 2010. We do not use derivative financial instruments for trading or
speculative purposes. For the nine months ended September 30, 2010 and 2009, we
paid $461,000 and $642,000, respectively, related to this swap which is
included in interest expense.

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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.

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

As of
September 30, 2010 and December 31, 2009, each of our two consolidated
properties individually comprises greater than
10% of our consolidated total assets. Consistent with our strategy of investing
in areas that we know well, both
properties are located in Texas metropolitan areas. These Texas properties represent 100% of our rental income for each of
the nine months ended September 30,
2010 and 2009. Houston is Texas largest city and the fourth largest city in
the United States.

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

|                       |  |                                 |      |  |      |     |  | 
|---------------------- |  | ------------------------------- | ---- |  | ---- | --- |  | 
|                       |  | Nine
months ended September 30,
|Tenant                 |  |                                 | 2010 |  | 2009 |    
|Walgreens              |  | $                               | 184  |  | $    | 249 | 
|Paesanos              |  |                                 | 148  |  |      | 144 | 
|Randalls              |  |                                 | 134  |  |      | 182 | 
|Jos A. Bank            |  |                                 | 114  |  |      | 155 | 
|Louis Shanks Furniture |  |                                 | 85   |  |      |    | 
|                       |  | $                               | 665  |  | $    | 730 | 

|   |                                                
|-- | -----------------------------------------------
|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 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 nine months ended
September 30, 2010. During the nine months ended September 30, 2009, we
received five redemption requests, three of which were denied in the aggregate
amount of $253,000 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.

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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:

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 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 nine months ended September 30, 2010 and
2009 (in thousands):

|                                           |  |                                  |     |                                 |   |      |  |      |     |  |   |     | 
|------------------------------------------ |  | -------------------------------- | --- | ------------------------------- | - | ---- |  | ---- | --- |  | - | --- | 
|                                           |  | Three months ended September 30, |     | Nine months ended September 30, |  
|Type of
service                            |  | 2010                             |     | 2009                            |   | 2010 |  | 2009 |    
|Asset
management fees                      |  | $                                | 108 |                                 | $ | 108  |  | $    | 323 |  | $ | 323 | 
|Property
management fees and leasing costs |  |                                  | 18  |                                 |   | 50   |  |      | 138 |  |   | 177 | 
|Administrative
costs reimbursements        |  |                                  | 86  |                                 |   | 54   |  |      | 245 |  |   | 248 | 
|                                           |  | $                                | 212 |                                 | $ | 212  |  | $    | 706 |  | $ | 748 | 

In addition to
the above fees paid by us, the non-consolidated entities in which we have
investments paid $652,000 and $516,000 in property management and leasing fees
to one of our affiliated entities for the nine months ended September 30, 2010
and 2009, respectively. See also Note 3
regarding investments in non-consolidated entities.

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

In July 2010, we and our affiliated joint venture partners on our
Woodlake Square property, MIG III and ARIC, entered into a 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 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. We recorded an impairment
of approximately $618,000 on the transaction which has been recorded as
impairment in our consolidated statements of operations. The sale generated cash proceeds of approximately
$3.4 million (our share was approximately $2.0 million), and we, our affiliated
partners, and our third party joint venture partner are responsible for funding
our pro rata amount of the redevelopment costs on the project, which are
currently estimated to be approximately $8.0 million. 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.
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, MIG III 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 deconsolidated this property as of the date of the transaction
and began accounting for the property under the equity method of accounting.

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

|    |                              
|--- | -----------------------------
|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
on the acquisition date related to these exposures. As of September 30, 2010,
we believe that the environmental exposure no longer exists as a result of the
propertys admittance into the Dry Cleaner Remediation Program.

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

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

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|       |                                                                                       
|------ | --------------------------------------------------------------------------------------
|ITEM2. | 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
September 30, 2010, our investments included a wholly-owned property comprised
of approximately 36,000 square feet of gross leasable area, a property in which
we own a controlling interest comprised of approximately 82,000 square feet of
gross leasable area and four properties in which we own investment interests
through joint ventures comprised of approximately 1.2 million 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 nine months ended September 30, 2010 and
2009. As of September 30, 2010, our properties had an average occupancy rate of
approximately 76%, and the average
debt leverage ratio of the properties in which we own an interest was
approximately 59%, with 85% 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 September 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. As of September 30, 2010, our investments included
a wholly-owned property comprised of approximately 36,000 square feet of gross
leasable area, a property in which we owned a controlling interest comprised of
approximately 82,000 square feet of gross leasable area and four properties in
which we owned investment interests through joint ventures comprised of
approximately 1.2 million 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 as our interest does not give us
the ability to control but does provide the 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% non-controlling
interest in each. With the additional 20% investment that we made in these
properties during the second quarter of 2008, we began consolidating their
financial position and results of
operations in the accompanying consolidated financial statements as we
obtained a controlling financial interest. 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. As a result of this transaction,
we ultimately retained a net 6% non-controlling financial interest in Woodlake Square, and account for the property
under the equity method of accounting. See
Notes 3 and 10 to the financial
statements included in this Report for
further discussion related to the sale of 90% of our interest in Woodlake
Square. 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 September 30,
2010 versus Three Months Ended September 30, 2009

Revenue.Total
revenues decreased by $752,000 for the
three months ended September 30, 2010 as compared to the same period in 2009
($511,000 in 2010 versus $1.3 million in 2009). The decrease in revenue
was primarily due to the deconsolidation of Woodlake Square in July 2010. The
decrease was also due to decreased revenue generated by the Woodlake Pointe
property due to Borders vacating its space in January 2010.

General and Administrative  Related Party.General and administrative  related party
increased $32,000 for the three months ended September 30, 2010 as compared to the same period in 2009
($86,000 in 2010 versus $54,000 in 2009). This increase was primarily due to
timing differences in our General Partners compensation accrual recorded
during the third quarter of 2010 which resulted in a higher than normal expense
for that period.

Property Expense.Property expense decreased $266,000 for the
three months ended September 30, 2010 as compared to the same period in 2009
($192,000 in 2010 versus $458,000 in 2009). The decrease was primarily due to the deconsolidation of
Woodlake Square in July 2010. The
decrease was also due to a decrease in property tax expense on Woodlake Pointe.
We began capitalizing property taxes on the property during 2010 as it is
planned for a major redevelopment.

Property Management Fees  Related Party.Property
management fees  related party expense decreased $28,000 for the three months
ended September 30, 2010 as compared to the same period in 2009 ($16,000 in
2010 versus $44,000 in 2009). The decrease was due to the deconsolidation of
Woodlake Square in July 2010.

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Depreciation and Amortization Expense.Depreciation and
amortization expense decreased $469,000 for the three months ended September
30, 2010 as compared to the same period in 2009 ($261,000 in 2010 versus
$730,000 in 2009). The decrease was
primarily due to the deconsolidation of Woodlake Square in July 2010.

Impairment. As discussed further in Note 10 to the
accompanying consolidated financial statements, we incurred a $618,000
impairment on our investment in Woodlake Square in July 2010.

Interest Expense. Interest expense decreased approximately
$599,000 for the three months ended September 30, 2010 as compared to the same
period in 2009 ($157,000 of net interest income in 2010 versus interest expense
of $442,000 in 2009). The decrease was
primarily due to the deconsolidation of Woodlake Square in July 2010 as well as
$260,000 in accumulated other comprehensive gain that was credited against
interest expense due to the termination of the interest rate swap on Woodlake
Square.

Net Loss Attributable to Non-Controlling
Interests. Net
loss attributable to non-controlling interests increased $36,000 for the three
months ended September 30, 2010 as compared to the same period in 2009
($173,000 in 2010 versus $137,000 in 2009).
This increase was primarily due to recording the non-controlling
interests share of the impairment on our investment in the Woodlake Square
property in July 2010. The impairment was partially offset by a decrease in net
loss on Woodlake Square due to the deconsolidation of the property in July
2010, and the reclassification of the deferred gain in accumulated other comprehensive income into earnings
due to the termination of our hedge.

Nine Months Ended September 30,
2010 versus Nine Months Ended September 30, 2009

Revenue.Total revenues decreased by $1.5 million for the nine months ended September 30, 2010
as compared to the same period in 2009 ($2.3 million in 2010 versus $3.8
million in 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. The
decrease was also due to the deconsolidation of Woodlake Square in July 2010.
As our joint venture is in the early stages of redeveloping Woodlake Square, we
had not aggressively pursued lease renewals related to lease expirations.

Property Expense. Property expense decreased $433,000 for the nine months ended
September 30, 2010 as compared to the same period in 2009 ($862,000 in 2010
versus $1.3 million in 2009). The
decrease was primarily due to the deconsolidation of Woodlake Square in July
2010. The decrease was also due to a
decrease in property tax expense on Woodlake Pointe. We began capitalizing
property taxes on Woodlake Pointe during 2010 as it is planned for a major
redevelopment.

Property Management Fees  Related Party. Property management fees  related party decreased $60,000 for the
nine months ended September 30, 2010 as compared to the same period in 2009
($80,000 in 2010 versus $140,000 in 2009). Property management
fees are calculated based on tenant billings, which have decreased due to reduced occupancy rates at Woodlake Square and
Woodlake Pointe. The decrease
was also due to the deconsolidation of Woodlake Square in July 2010.

Depreciation and Amortization Expense.Depreciation and
amortization expense increased $5.2 million for the nine months ended September
30, 2010 as compared to the same period in 2009 ($7.5 million in 2010 compared
to $2.3 million in 2009). This increase
was due to the impending redevelopment of the Woodlake Square property. We reassessed and shortened the estimated
useful lives of various buildings consistent with our plan to demolish such
buildings as part of the redevelopment. The redevelopment commenced in July
2010. We deconsolidated this property in July 2010 and, as such, depreciation
and amortization of this entity are no longer reported in our consolidated
operations.

Impairment. As discussed further in Note 10 to the
accompanying consolidated financial statements, we incurred a $618,000
impairment on our investment in the Woodlake Square property in July 2010.

Interest Expense. Interest expense decreased $611,000 for the
nine months ended September 30, 2010 as compared to the same period in 2009
($713,000 in 2010 versus $1.3 million in 2009). The decrease was primarily due to the deconsolidation of
Woodlake Square in July 2010 as well as $260,000 in accumulated other
comprehensive gain that was credited against interest expense due to the
termination of the interest rate swap on Woodlake Square.

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Equity in Losses From Non-Consolidated
Entities. Loss
from non-consolidated entities decreased $198,000 for the nine months ended
September 30, 2010 as compared to the same period in 2009 ($709,000 in 2010
versus $907,000 in 2009). These
amounts represent our ownership portion of our joint ventures net income or
loss for the period. The decreased loss
is attributable to increased occupancy on our Shadow Creek Ranch and Casa Linda
properties.

Net Loss Attributable to Non-Controlling
Interests. Net
loss attributable to non-controlling interests increased $2.5 million for the
nine months ended September 30, 2010 as compared to the same period in 2009
($3.0 million in 2010 versus $449,000 in 2009). This increase was primarily due to the additional loss on our
Woodlake Square property due to the accelerated depreciation and amortization
recorded as a result of the redevelopment that commenced in July 2010. This
increase was also due to recording the non-controlling interests share of the
impairment recognized on our investment in the Woodlake Square property in July
2010. The increased net loss on Woodlake Square was partially offset by the
reclassification of the deferred gain in accumulated other comprehensive
income into earnings due to the termination of our hedge.

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.

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 various 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
several 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 may seek to postpone liquidation if we
believe such liquidation is not in the best interests of the Partners at that
time.

Projected cash sources (including cash on hand) and uses for the Partnership indicate periods of
cash shortfalls during the year ended December 31, 2011. However, 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) financings of unencumbered properties and (3) sales of
certain of our investments in non-consolidated entities.  No assurance can
be given that we will be able to generate such liquidity. In the event that we are
unable to generate sufficient liquidity, we may be forced to sell one or more
properties at a time when it is disadvantageous to do so, potentially resulting
in losses on the disposition of those properties.

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As of
September 30, 2010 and December 31, 2009, our cash and cash equivalents totaled
$1.5 million and $469,000, respectively.
Cash flows provided by (used in) operating activities, investing
activities and financing activities for the nine months ended September 30,
2010 and 2009 are as follows (in thousands):

|                     |  |                                 |        |      |   |        |  
|-------------------- |  | ------------------------------- | ------ | ---- | - | ------ | -
|                     |  | Nine
months ended September 30, |       
|                     |  | 2010                            |        | 2009 |  
|Operating
activities |  | $                               | (1,678 | )    | $ | 977    |  
|Investing
activities |  |                                 | 2,719  |      |   | (232   | )
|Financing
activities |  |                                 | 24     |      |   | (1,179 | )

Operating Activities

During the
nine months ended September 30, 2010 and 2009, net cash flows used in operating
activities increased $2.7 million ($1.7 million of cash used in operating
activities during the 2010 period versus $977,000 of cash provided by operating
activities during the same period in 2009).
This decrease in cash is primarily due to 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 same period in 2009 as we paid our 2008
property taxes during December 2008. In addition, we had a decrease in cash
associated with accounts receivable  related party due to the funding of costs
associated with the redevelopment of Woodlake Square. These outflows were
partially offset by an increase in cash related to timing of payments made to
our related parties.

Investing Activities

During the nine months ended
September 30, 2010, we received net proceeds of $3.4 million related to the
sale of 90% of our interest in the Woodlake Square property. During the nine months ended September 30,
2009, cash outflows associated with notes receivable  related party increased
by $642,000 due to funding the Casa Linda redevelopment, which took place
during the 2009 period. Cash flows associated with reimbursement of earnest
money deposits decreased by $1.2 million due to earnest money deposits that we
received during the 2009 period. We had
no such inflows during the 2010 period.

Financing Activities

We paid
distributions of $880,000 during the nine months ended September 30, 2009;
whereas we did not pay any distributions during the same period in 2010. During the nine months ended September 30,
2010, we received net proceeds from notes payable - related party of $600,000,
compared to $0 in the same period in 2009.
We also paid more distributions to non-controlling interests in the 2010
period ($764,000 in 2010 versus $206,000 in 2009) as a result of the proceeds
received from the sale of 90% of our and our affiliates interest in the
Woodlake Square property.

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 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 former Borders lease, or at all.

Subsequent Events

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

|       |                                                            
|------ | -----------------------------------------------------------
|ITEM3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

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|       |                         
|------ | ------------------------
|ITEM4. | 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 September 30, 2010.
Based on that evaluation, our General Partners CEO and CFO concluded
that, as of September 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 September 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: November 15, 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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