Table of Contents





|                                  
|----------------------------------
|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 SECURITIESEXCHANGE ACT OF 1934 
|                                                                                        
|For
the quarterly period ended March 31, 2010                                           
|                                                                                        
|OR                                                                                      
|                                                                                        
|oTRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE 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 and Notes                                                        | 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
4T - | Controls
and Procedures                                                               | 21 | 
|                               |           |                                                                                       |    | 
|Part II  Other Information    |           |                                                                                      
|                               | Item
6 -  | Exhibits                                                                              | 21 | 
|Signatures                     | 22        |                                                                                      
|Exhibit Index                  | 23        |                                                                                      

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Table of Contents

|                                                             
|-------------------------------------------------------------
|PART I  FINANCIAL INFORMATION                               
|                                                             
|ITEM 1. FINANCIAL STATEMENTS.                                
|                                                             
|AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P. AND
SUBSIDIARIES
|CONSOLIDATED BALANCE SHEETS                                  
|March 31, 2010 and December 31, 2009                         
|(in thousands, except unit data)                             

|                                                                                                |  |                |        |                   |   |        |  
|----------------------------------------------------------------------------------------------- |  | -------------- | ------ | ----------------- | - | ------ | -
|                                                                                                |  | March 31,
2010 |        | December 31,
2009 |  
|                                                                                                |  | (unaudited)    |        |                   |   |       
|                                                                                               
|ASSETS                                                                                          |  |                |        |                   |   |        |  
|Real estate investments at
cost:                                                                |  |                |        |                   |   |        |  
|Land                                                                                            |  | $              | 31,242 |                   | $ | 31,168 |  
|Buildings                                                                                       |  |                | 31,147 |                   |   | 31,060 |  
|Tenant improvements                                                                             |  |                | 1,017  |                   |   | 1,270  |  
|                                                                                                |  |                | 63,406 |                   |   | 63,498 |  
|Less accumulated depreciation and amortization                                                  |  |                | (7,552 | )                 |   | (3,419 | )
|                                                                                                |  |                | 55,854 |                   |   | 60,079 |  
|                                                                                                |  |                |        |                   |   |        |  
|Investment in non-consolidated entities                                                         |  |                | 12,152 |                   |   | 12,042 |  
|Acquired lease intangibles, net                                                                 |  |                | 1,355  |                   |   | 1,547  |  
|Net real estate investments                                                                     |  |                | 69,361 |                   |   | 73,668 |  
|                                                                                                |  |                |        |                   |   |        |  
|Cash and cash equivalents                                                                       |  |                | 128    |                   |   | 469    |  
|Tenant receivables, net                                                                         |  |                | 264    |                   |   | 283    |  
|Accounts receivable - related
party                                                             |  |                | 5      |                   |   | 9      |  
|Notes receivable - related
party                                                                |  |                | 83     |                   |   | 162    |  
|Deferred costs, net                                                                             |  |                | 150    |                   |   | 139    |  
|Other assets                                                                                    |  |                | 194    |                   |   | 163    |  
|TOTAL ASSETS                                                                                    |  | $              | 70,185 |                   | $ | 74,893 |  
|                                                                                                |  |                |        |                   |   |        |  
|LIABILITIES
AND CAPITAL                                                                         |  |                |        |                   |   |        |  
|Liabilities:                                                                                    |  |                |        |                   |   |        |  
|Notes payable                                                                                   |  | $              | 29,928 |                   | $ | 29,949 |  
|Notes payable - related party                                                                   |  |                | 893    |                   |   | 230    |  
|Accounts payable and other liabilities                                                          |  |                | 794    |                   |   | 1,328  |  
|Accounts payable - related party                                                                |  |                | 64     |                   |   | 4      |  
|Derivative liability                                                                            |  |                | 465    |                   |   | 678    |  
|Asset retirement obligations                                                                    |  |                | 530    |                   |   | 530    |  
|Acquired below-market lease intangibles, net                                                    |  |                | 1,462  |                   |   | 1,563  |  
|Security deposits                                                                               |  |                | 123    |                   |   | 110    |  
|TOTAL LIABILITIES                                                                               |  |                | 34,259 |                   |   | 34,392 |  
|                                                                                                |  |                |        |                   |   |        |  
|Capital:                                                                                        |  |                |        |                   |   |        |  
|Partners capital:                                                                              |  |                |        |                   |   |        |  
|General partner                                                                                 |  |                |       |                   |   |       |  
|Limited partners, 1,988 units outstanding at March 31, 2010 and
December 31, 2009, respectively |  |                | 27,069 |                   |   | 30,293 |  
|Accumulated other comprehensive loss                                                            |  |                | (50    | )                 |   | (263   | )
|TOTAL PARTNERS CAPITAL                                                                         |  |                | 27,019 |                   |   | 30,030 |  
|                                                                                                |  |                |        |                   |   |        |  
|Non-controlling interests                                                                       |  |                | 8,907  |                   |   | 10,471 |  
|TOTAL CAPITAL                                                                                   |  |                | 35,926 |                   |   | 40,501 |  
|                                                                                                |  |                |        |                   |   |        |  
|TOTAL LIABILITIES AND
CAPITAL                                                                   |  | $              | 70,185 |                   | $ | 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 March 31, |          
|                                                   |  | 2010                         |           | 2009 |  
|                                                   |  |                              |           |      |   |         |  
|Revenues:                                          |  |                              |           |      |   |         |  
|Rental income from operating leases                |  | $                            | 921       |      | $ | 1,314   |  
|Total revenues                                     |  |                              | 921       |      |   | 1,314   |  
|                                                   |  |                              |           |      |   |         |  
|Expenses:                                          |  |                              |           |      |   |         |  
|General and administrative                         |  |                              | 15        |      |   | 15      |  
|General and administrative - related party         |  |                              | 76        |      |   | 68      |  
|Asset management fees - related party              |  |                              | 108       |      |   | 108     |  
|Property expense                                   |  |                              | 371       |      |   | 433     |  
|Property management fees - related party           |  |                              | 29        |      |   | 52      |  
|Legal and professional                             |  |                              | 77        |      |   | 59      |  
|Depreciation and amortization                      |  |                              | 4,624     |      |   | 768     |  
|Total operating expenses                           |  |                              | 5,300     |      |   | 1,503   |  
|                                                   |  |                              |           |      |   |         |  
|Operating loss                                     |  |                              | (4,379    | )    |   | (189    | )
|                                                   |  |                              |           |      |   |         |  
|Other income (expense):                            |  |                              |           |      |   |         |  
|Interest income - related party                    |  |                              | 2         |      |   |        |  
|Interest and other income                          |  |                              | 1         |      |   | 8       |  
|Interest expense                                   |  |                              | (433      | )    |   | (443    | )
|Interest expense - related party                   |  |                              | (9        | )    |   |        |  
|Equity in losses from non-consolidated entities    |  |                              | (212      | )    |   | (286    | )
|Margin tax expense                                 |  |                              | (7        | )    |   | (7      | )
|Total other income (expense)                       |  |                              | (658      | )    |   | (728    | )
|                                                   |  |                              |           |      |   |         |  
|Net loss, including non-controlling interests      |  |                              | (5,037    | )    |   | (917    | )
|                                                   |  |                              |           |      |   |         |  
|Net loss attributable to non-controlling interests |  |                              | 1,813     |      |   | 145     |  
|                                                   |  |                              |           |      |   |         |  
|Net loss attributable to partners                  |  | $                            | (3,224    | )    | $ | (772    | )
|                                                   |  |                              |           |      |   |         |  
|Weighted average units outstanding                 |  |                              | 1,988     |      |   | 1,989   |  
|Net loss per unit                                  |  | $                            | (1,621.73 | )    | $ | (388.13 | )

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 three months ended March 31, 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)                                   |  |                   |  |                  |   | (3,224                                        | ) |                             |     |       |   | (1,813 | ) |   | (5,037 | )
|Contributions from non-controlling interests   |  |                   |  |                  |   |                                              |   |                             |     |       |   | 249    |   |   | 249    |  
|Decrease in fair value of derivative liability |  |                   |  |                  |   |                                              |   |                             | 213  |       |   |       |   |   | 213    |  
|                                               |  |                   |   |                  |   |                                               |   |                             |      |       |   |        |   |   |        |  
|Balance at March 31, 2010                      |  | $                 |  |                  | $ | 27,069                                        |   | $                           | (50  | )     | $ | 8,907  |   | $ | 35,926 |  

|    |                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allocation of net loss
 includes a curative allocation to increase the General Partners capital
 account by $32 for the three months ended March 31, 2010. The cumulative
 curative allocation since inception of the Partnership is $165. 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)

|                                                                                                                                                                                                                       |  |                              |        |      |   |       |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | ---- | - | ----- | -
|                                                                                                                                                                                                                       |  | Three months ended March 31, |       
|                                                                                                                                                                                                                       |  | 2010                         |        | 2009 |  
|Cash flows from operating activities:                                                                                                                                                                                  |  |                              |        |      |   |       |  
|Net loss, including non-controlling interests                                                                                                                                                                          |  | $                            | (5,037 | )    | $ | (917  | )
|Adjustments to reconcile net loss to net cash provided by (used in)
 operating activities:                                                                                                                             |  |                              |        |      |   |       |  
|Bad debt expense                                                                                                                                                                                                       |  |                              | (7     | )    |   | 8     |  
|Loss from non-consolidated entities                                                                                                                                                                                    |  |                              | 212    |      |   | 286   |  
|Depreciation and amortization                                                                                                                                                                                          |  |                              | 4,624  |      |   | 768   |  
|Amortization of above- and below-market leases, net                                                                                                                                                                    |  |                              | (93    | )    |   | (108  | )
|Amortization of loan acquisition costs                                                                                                                                                                                 |  |                              | 23     |      |   | 24    |  
|Decrease (increase) in tenant receivables                                                                                                                                                                              |  |                              | 26     |      |   | (120  | )
|(Increase) decrease in accounts receivable - related party                                                                                                                                                             |  |                              | (5     | )    |   | 432   |  
|Increase in deferred costs                                                                                                                                                                                             |  |                              | (43    | )    |   | (12   | )
|Increase in other assets                                                                                                                                                                                               |  |                              | (31    | )    |   | (46   | )
|(Decrease) increase in accounts payable and other liabilities                                                                                                                                                          |  |                              | (608   | )    |   | 356   |  
|Increase (decrease) in accounts payable - related party                                                                                                                                                                |  |                              | 123    |      |   | (134  | )
|Increase (decrease) in security deposits                                                                                                                                                                               |  |                              | 13     |      |   | (8    | )
|Net
 cash (used in) provided by operating activities                                                                                                                                                                   |  |                              | (803   | )    |   | 529   |  
|                                                                                                                                                                                                                       |  |                              |        |      |   |       |  
|Cash flows from investing activities:                                                                                                                                                                                  |  |                              |        |      |   |       |  
|Improvements to real estate                                                                                                                                                                                            |  |                              | (132   | )    |   | (62   | )
|Increase in notes receivable - related party                                                                                                                                                                           |  |                              | (1     | )    |   |      |  
|Investment in non-consolidated entities                                                                                                                                                                                |  |                              | (233   | )    |   | (387  | )
|Reimbursement of earnest money deposits                                                                                                                                                                                |  |                              |       |      |   | 1,245 |  
|Net cash (used in) provided by investing activities                                                                                                                                                                    |  |                              | (366   | )    |   | 796   |  
|                                                                                                                                                                                                                       |  |                              |        |      |   |       |  
|Cash flows from financing activities:                                                                                                                                                                                  |  |                              |        |      |   |       |  
|Payments on notes payable                                                                                                                                                                                              |  |                              | (21    | )    |   |      |  
|Proceeds from notes payable - related party                                                                                                                                                                            |  |                              | 600    |      |   |      |  
|Limited optional redemptions                                                                                                                                                                                           |  |                              |       |      |   | (62   | )
|Distributions                                                                                                                                                                                                          |  |                              |       |      |   | (378  | )
|Contributions from non-controlling interests                                                                                                                                                                           |  |                              | 249    |      |   |      |  
|Distributions to non-controlling interests                                                                                                                                                                             |  |                              |       |      |   | (92   | )
|Net cash provided by (used in) financing activities                                                                                                                                                                    |  |                              | 828    |      |   | (532  | )
|                                                                                                                                                                                                                       |  |                              |        |      |   |       |  
|Net (decrease) increase in cash and cash equivalents                                                                                                                                                                   |  |                              | (341   | )    |   | 793   |  
|Cash and cash equivalents, beginning of period                                                                                                                                                                         |  |                              | 469    |      |   | 1,011 |  
|Cash and cash equivalents, end of period                                                                                                                                                                               |  | $                            | 128    |      | $ | 1,804 |  
|                                                                                                                                                                                                                       |  |                              |        |      |   |       |  
|Supplemental schedule of cash flow information:                                                                                                                                                                        |  |                              |        |      |   |       |  
|                                                                                                                                                                                                                       |  |                              |        |      |   |       |  
|Cash paid during the period for:                                                                                                                                                                                       |  |                              |        |      |   |       |  
|Interest                                                                                                                                                                                                               |  | $                            | 298    |      | $ | 411   |  
|                                                                                                                                                                                                                       |  |                              |        |      |   |       |  
|Supplemental schedule of noncash investing and
 financing activities:                                                                                                                                                  |  |                              |        |      |   |       |  
|                                                                                                                                                                                                                       |  |                              |        |      |   |       |  
|During
 2010, notes receivable - related party of $80,000 from Casa Linda was
 converted to equity, causing an increase in our investment in
 non-consolidated entities.                                              
|                                                                                                                                                                                                                       |  |                              |        |      |   |       |  
|During
 2010, we capitalized $74,000 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, $63,000 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
March 31, 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 March 31, 2010, our investments included a
wholly-owned property comprising approximately 36,000 square feet of gross
leasable area, two properties in which we own controlling interests comprising
approximately 288,000 square feet of gross leasable area and three properties
in which we own a non-controlling interest through joint ventures comprising
approximately 949,000 square feet of gross leasable area.

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

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

5

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Table of Contents

Projected cash sources and uses for the
Partnerships 2010 fiscal year indicate certain periods of cash shortfalls
within the twelve month period; 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) potential joint venture equity
investments in existing non-consolidated entities (3) financings of
unencumbered properties and (4) sales of certain of our investments in
non-consolidated entities. However, 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
disposition of those properties. See Note 5 for a discussion of our debt
maturing in 2010.

|   |                                           
|-- | ------------------------------------------
|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.

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

REVENUE
RECOGNITION

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

Accrued rents
are included in tenant receivables. Revenue from tenant reimbursements of
taxes, maintenance expenses and insurance is recognized in the period the
related expense is recorded. Additionally, certain of the lease agreements
contain provisions that grant additional rents based on tenants sales volumes
(contingent or percentage rent). Percentage rents are recognized when the
tenants achieve the specified targets as defined in their lease agreements. No
percentage rents were recognized during the three months ended March 31, 2010
and 2009. We recognize lease termination fees in the period that the lease is
terminated and collection of the fees is reasonably assured. Upon early lease
termination, we provide for losses related to unrecovered intangibles and other
assets. During the three months ended March 31, 2010 and 2009, we recognized no
lease termination fees.

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 three months ended March
31, 2010 and 2009, interest and taxes in the amount of $74,000 and $61,000,
respectively, were capitalized on properties under development or
redevelopment.

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

We expense acquisition costs associated with operating properties as
incurred in accordance with ASC 805. We capitalize costs
associated with pending acquisitions of raw land as incurred. Such costs are
expensed if and when such land acquisition becomes no longer probable. During the three months ended March 31, 2010 and 2009, we expensed
acquisition costs of $0 and $3,000, 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.

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

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

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ENVIRONMENTAL
EXPOSURES

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

RECEIVABLES AND
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

Tenant Receivables  Included
in tenant receivables are base rents, tenant reimbursements and adjustments
attributable to recording rents on a straight-line basis. An allowance for the
uncollectible portion of accrued rents and
accounts receivable is determined based upon customer credit-worthiness
(including expected recovery of our claim with respect to any tenants in
bankruptcy), historical bad debt levels and current economic trends. Bad debt
expenses and any related recoveries related to tenant receivables are included
in property expense. As of March 31, 2010 and December 31, 2009, our allowance
for uncollectible accounts related to our tenant receivables was
$117,000 and $124,000, respectively.

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

DERIVATIVE
FINANCIAL INSTRUMENTS

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

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

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. Accumulated amortization related to loan acquisition costs totaled
$237,000 and $214,000 as of March 31, 2010 and December 31, 2009,
respectively. Accumulated amortization related to leasing costs totaled $18,000
and $16,000 as of March 31, 2010 and December 31, 2009, respectively.

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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 $7,000 for the Texas Margin Tax for each of the
three months ended March 31, 2010 and 2009.

USE OF ESTIMATES

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

FAIR VALUE OF
FINANCIAL INSTRUMENTS

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

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

Derivative Financial Instruments
 In determining the fair value of our derivative instrument, we consider
whether credit valuation adjustments are necessary to appropriately reflect
both our own nonperformance risk and the respective counterpartys
nonperformance risk in the fair value measurements. Although we have determined
that the majority of the inputs used to value our derivatives fall within Level
2 of the fair value hierarchy, the credit valuation assumptions associated with
its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to
evaluate the likelihood of default by us and our counterparties. However, as of
March 31, 2010, we have assessed the significance of the impact of the credit
valuation adjustments on the overall valuation of our derivative positions and
have determined that the credit valuation adjustments are not significant to
the overall valuation of our derivatives. As a result, we have determined that
our derivative valuations in their entirety are classified in Level 2 of the
fair value hierarchy.

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The following table presents our assets and
liabilities and related valuation inputs within the fair value hierarchy utilized
to measure fair value as of March 31, 2010 (in thousands):

|                      |  |         |   |         |   |         |  |   |   | 
|--------------------- |  | ------- | - | ------- | - | ------- |  | - | - | 
|                      |  | Level 1 |   | Level 2 |   | Level 3 | 
|Derivative
 Liability |  | $       |  |         | $ | 465     |  | $ |  | 

Notes Payable  As of March 31, 2010 and December 31, 2009, the
carrying value of debt obligations associated with our consolidated entities
was approximately $29.9 million, $6.1 million of which represents a fixed-rate
obligation with an estimated fair value of $5.7 million, based on a
discounted cash flow analysis using current market rates of interest. As of
March 31, 2010 and December 31, 2009, the estimated fair value of our $23.8
million variable-rate obligation approximated $23.5 million and $23.4 million,
respectively, based on a discounted cash flow analysis using current market
rates of interest.

NEW ACCOUNTING
STANDARDS

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

CASH AND CASH
EQUIVALENTS

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

INTEREST

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

SEGMENT REPORTING

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

| |   |                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In January 2007, we acquired a 50% interest in AmREIT
 Casa Linda, LP which owns Casa Linda Plaza, a multi-tenant retail property
 located in Dallas, Texas with a combined gross leasable area of approximately
 325,000 square feet. The remaining 50% is owned by 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%).                    

We report our investments in these three entities using the equity
method of accounting due to our ability to exercise significant influence over
them. Combined condensed financial information for the underlying investee
entities (at 100%) is summarized for the three months ended March 31, 2010 and
2009, as follows (in thousands):

|                               |  |                                |        |      |   |        |  
|------------------------------ |  | ------------------------------ | ------ | ---- | - | ------ | -
|                               |  | Three months ended 
 March 31, |       
|                               |  | 2010                           |        | 2009 |  
|Revenue                        |  | $                              | 3,411  |      | $ | 3,044  |  
|Depreciation
 and amortization |  |                                | (1,451 | )    |   | (905   | )
|Interest
 expense              |  |                                | (1,440 | )    |   | (1,437 | )
|Net loss                       |  |                                | (775   | )    |   | (525   | )
|                               |  |                                |        |      |   |        |  

|   |                           
|-- | --------------------------
|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 $184,000 and $373,000 for the
three months ended March 31, 2010 and 2009, respectively. We recorded disposals of in-place leases of $1.7 million and $203,000 for the three months
ended March 31, 2010 and 2009,
respectively, related to lease expirations. The amortization of above-market
leases, which was recorded as a reduction of rental income, was
approximately $8,000 for each of the three
months ended March 31, 2010 and 2009. Acquired
lease intangible liabilities (below-market leases) are accreted over the
leases remaining non-cancelable lease term plus any fixed rate renewal
options, if applicable, which range
from two months to approximately thirteen years. Accretion of below-market
leases was approximately $101,000 and
$117,000 for the three months ended March 31, 2010 and 2009, respectively. Such accretion is recorded
as an increase to rental income. We recorded
disposals of below-market leases of $65,000
and $35,000 for the three months ended March 31, 2010 and 2009, respectively, related to lease expirations.

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

|                                                |  |                  |        |                    |   |        |  
|----------------------------------------------- |  | ---------------- | ------ | ------------------ | - | ------ | -
|                                                |  | March 31, 
 2010 |        | December 31,
 2009 |  
|Acquired
 lease intangible assets:              |  |                  |        |                    |   |        |  
|In-place
 leases                                |  | $                | 2,995  |                    | $ | 4,676  |  
|In-place
 leases  accumulated amortization     |  |                  | (1,720 | )                  |   | (3,217 | )
|Above-market
 leases                            |  |                  | 193    |                    |   | 193    |  
|Above-market
 leases  accumulated amortization |  |                  | (113   | )                  |   | (105   | )
|Acquired lease intangibles, net                 |  | $                | 1,355  |                    | $ | 1,547  |  
|                                                |  |                  |        |                    |   |        |  
|Acquired
 lease intangible liabilities:         |  |                  |        |                    |   |        |  
|Below-market
 leases                            |  | $                | 2,534  |                    | $ | 2,599  |  
|Below-market
 leases  accumulated amortization |  |                  | (1,072 | )                  |   | (1,036 | )
|Acquired below-market lease intangibles,
 net   |  | $                | 1,462  |                    | $ | 1,563  |  

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

Our outstanding debt at March 31, 2010 consisted
of two loans  a fixed-rate mortgage loan of $6.1 million secured by the Village on the Green property which matures
in April 2017 and a variable-rate mortgage loan of $23.8 million secured by the
Woodlake Square property which matures in September 2010, carries an interest
rate of LIBOR plus 1.35% (1.58% at March 31, 2010) and requires monthly
interest-only payments. We have entered into an interest rate swap
agreement which fixes the interest rate at 5.465% on our $23.8 million
variable-rate mortgage loan.

We expect to
be able to refinance the Woodlake Square loan by September 2010, either with
our existing lender or another lender. However, no assurance can be given that
we will be able to obtain such financing. In the event that such financing is
unavailable and we default on the note, the lender has the right to foreclose
on the property. We and our affiliate, MIG III, are jointly and severally
liable for up to an aggregate 25% of the $23.8 million loan amount. See Note 1
for discussion of our forecasted 2010 cash flows and plans to generate
sufficient liquidity to satisfy our obligations.

Interest-only
loans are generally due in full at maturity. Our
mortgage loans are secured by real estate properties and may be prepaid but could be subject to a
yield-maintenance premium or prepayment penalty. As of March 31, 2010, the weighted-average
interest rate on our fixed-rate debt is 5.5%, and the weighted average remaining life of such debt is 7.0 years.

As of March 31, 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                        |  |  | $                              | 60  |                       | $ | 23,800          |  | $ | 23,860 | 
|2011                        |  |  |                                | 86  |                       |   |                |  |   | 86     | 
|2012                        |  |  |                                | 90  |                       |   |                |  |   | 90     | 
|2013                        |  |  |                                | 96  |                       |   |                |  |   | 96     | 
|2014                        |  |  |                                | 102 |                       |   |                |  |   | 102    | 
|Thereafter                  |  |  |                                | 251 |                       |   | 5,443           |  |   | 5,694  | 
|Total                       |  |  | $                              | 685 |                       | $ | 29,243          |  | $ | 29,928 | 

We serve as
the guarantor of debt in the amount of $62.3 million that is the primary
obligation of our non-consolidated joint ventures.

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Notes Payable  Related Party
As of March 31, 2010 and December 31, 2009, the balance of our notes
payable  related party was $893,000 and $230,000, respectively. During the
three months ended March 31, 2010, we borrowed $600,000 from an affiliate of
our General Partner. The note accrues interest monthly at LIBOR plus a spread
of 3.5% with a floor of 5.0% and is secured by our investment interests in the
Woodlake Pointe and Woodlake Square properties.

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

We use derivative instruments primarily to manage exposures to interest
rate risks. In order to manage the volatility relating to interest rate risk,
we may enter into interest rate swaps from time to time. We do not use derivative
financial instruments for trading or speculative purposes. In December 2007,
Woodlake Square entered into an interest rate swap with a notional amount of
$23.8 million and a fixed rate of 5.465% to hedge the interest rate risk on the
$23.8 million variable-rate loan that was placed in conjunction with the 2007
acquisition of the Woodlake Square shopping center. The fair value of the
swap was a liability of $465,000 at March 31, 2010. The swap settles monthly
with an amount paid to or received from our counterparty upon settlement being
recorded as an adjustment to interest expense. For the three months ended
March 31, 2010 and 2009, we paid $152,000 and $189,000, respectively, related
to this swap which is included in interest expense.

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

We have designated
our interest rate swap as a hedge for financial reporting purposes. Accordingly, gains or losses resulting
from changes in the value of our derivatives will be recorded as an adjustment
to our partners capital. We could be
exposed to losses in the event of nonperformance by the counterparties.

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

As of March
31, 2010 and December 31, 2009, each of our three consolidated properties
individually comprises greater than 10% of
our consolidated total assets. Consistent with our strategy of investing in
areas that we know well, two of our
three properties are located in the Houston metropolitan area. These Houston
properties represent 78% and 80% of
our rental income for the three
months ended March 31, 2010 and 2009, respectively. 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 three months ended March 31, 2010 and 2009 (in thousands):

|            |  |   |                              |    |      |     |     | 
|----------- |  | - | ---------------------------- | -- | ---- | --- | --- | 
|            |  |   | Three months ended March 31, |   
|Tenant      |  |   | 2010                         |    | 2009 |    
|Walgreens   |  |   | $                            | 83 |      | $   | 83  | 
|Borders     |  |   |                              | 70 |      |     | 209 | 
|Randalls   |  |   |                              | 61 |      |     | 61  | 
|Jos A. Bank |  |   |                              | 52 |      |     | 52  | 
|Paesanos   |  |   | 49                           |    |      | 46  |    
|            |  | $ | 315                          |    | $    | 451 |    

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

13

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

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

Limited Optional
Redemption  Our Units were sold pursuant to exemptions from registration under the Securities Act of 1933
and are not currently listed on a national exchange or otherwise traded in an
organized securities market. These
Units may be transferred only with the consent of the General Partner after the
delivery of required documents, and in any event, only if we register the offer
and sale of the Units under applicable securities laws or if an exemption from
such registration is available. We do not expect to register the offer and sale
of Units. Moreover, we do not anticipate that any public market for the
Units will develop. In order to provide
limited partners with the possibility of liquidity, at any time after November
15, 2009 and prior to November 15, 2013, limited partners who have held their
Units for at least three years may
receive the benefit of interim liquidity by presenting all of those Units to the Partnership for redemption. At that time, we
may, at our sole election and subject to the conditions and limitations
described below, redeem the Units presented for cash to the extent that we have
sufficient funds available to us to fund
such redemption. The redemption price to be paid will be 92% of the limited partners
unreturned invested capital. At no time during a 12-month period, however, may
the number of Units redeemed by us exceed
2% of the number of Units outstanding at the beginning of that 12-month
period. We received no redemption requests during the three months ended March
31, 2010. During the three months ended March 31, 2009, we received four
redemption requests, two of which were denied in the aggregate amount of
$115,000 and two of which were granted in the amount of $62,000, despite the
restriction on redemptions until November 15, 2009. All redemption requests
that have been granted represent a return of capital. We suspended the optional
redemption program during the second quarter of 2009 due to macroeconomic
conditions and the need to preserve cash.

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

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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);

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| |   |                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Fourth 
 100% to the General Partner until it has received cumulative distributions
 from all sources (other than with respect to the Units it purchased) in an
 amount equal to 40% of the net cash flow paid to date to the Limited Partners
 in excess of their actual invested capital; and
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Thereafter - 60% to the limited partners on a per Unit basis and 40% to the General Partner.                                                                                                                                                                                                    

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

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

Certain of our affiliates received fees and compensation during the
organizational stage of the Partnership, including securities commissions and
due diligence reimbursements, marketing reimbursements and reimbursement of
organizational and offering expenses. In the event that these companies are unable to provide us with the respective
services, we would be required to find alternative providers of these services.
The following table summarizes the
amount of such compensation paid to our affiliates during the three months
March 31, 2010 and 2009:

|                                            |  |                              |     |      |   |     | 
|------------------------------------------- |  | ---------------------------- | --- | ---- | - | --- | 
|                                            |  | Three months ended March 31, |    
|Type of
 service                            |  | 2010                         |     | 2009 |  
|Asset
 management fees                      |  | $                            | 108 |      | $ | 108 | 
|Property
 management fees and leasing costs |  |                              | 67  |      |   | 63  | 
|Administrative
 costs reimbursements        |  |                              | 76  |      |   | 68  | 
|                                            |  | $                            | 251 |      | $ | 239 | 

In addition to
the above fees paid by us, the non-consolidated entities in which we have
investments paid $137,000 and $130,000 in property management and leasing fees
to one of our affiliated entities for the three months ended March 31, 2010 and
2009, respectively. See also Note 3
regarding investments in non-consolidated entities.

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

We did not
have any real estate acquisitions or dispositions during the three months ended
March 31, 2010 and 2009.

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
of $700,000 on the acquisition date related to these exposures. In conjunction
with the acquisition, the seller placed $700,000 in escrow which approximated
the estimated remediation costs on the acquisition date. During 2009, we
reassessed our environmental exposure at the site and now believe that the
estimated costs to remediate the site will be approximately $530,000. Accordingly,
we have reduced the asset retirement obligation by $170,000 and released a
corresponding amount to the seller pursuant to the terms of the escrow
agreement. As of March 31, 2010, we have a remaining asset retirement
obligation related to this matter
of $530,000. We believe that these matters will not have a material adverse
effect on our consolidated financial position or results of operations, and we
are aware of no other environmental exposures.

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

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

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

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

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

Overview

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

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

As of March
31, 2010, our investments included a wholly-owned property comprised of
approximately 36,000 square feet of gross leasable area, two properties in
which we own controlling interests comprised of approximately 288,000 square
feet of gross leasable area and three properties in which we own investment
interests through joint ventures comprised of approximately 949,000 square feet
of gross leasable area. A majority of our properties are located in
highly-populated, suburban communities in Texas. We derive a substantial
portion of our revenue from rental income from these properties, primarily from
net leasing arrangements, where most of the operating expenses of the
properties are absorbed by our tenants. As a result, our operating results and
cash flows are primarily influenced by rental income from our properties and
interest expense on our property acquisition indebtedness. Rental income
accounted for 100% of our total revenue during the three months ended March 31,
2010 and 2009. As of March 31, 2010, our properties had an average occupancy
rate of approximately 71%, and the average debt leverage ratio of the
properties in which we own an interest was approximately 59%, with 83% of such
debt carrying a fixed-rate of interest.

Summary of Critical Accounting Policies

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

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

Results of Operations

We commenced
our principal operations on January 12, 2007, when we accepted subscriptions
for the minimum offering of $1.0 million pursuant to the terms of our Offering
Memorandum and issued the initial 40 Units to investors. During 2007, we made
investments in three joint ventures through which we obtained an ownership
interest in three properties. During 2008, we acquired a direct interest in one
property on March 25, 2008, made an investment in a joint venture through which
we obtained an ownership interest in one property and made additional
investments in two joint ventures through which we obtained additional ownership
interests in two properties. As of March 31, 2010, our investments included a
wholly-owned property comprised of approximately 36,000 square feet of gross
leasable area, two properties in which we owned controlling interests comprised
of approximately 288,000 square feet of gross leasable area and three
properties in which we owned investment interests through joint ventures
comprised of approximately 949,000 square feet of gross leasable area.

Our direct
property acquisition was accounted for as a purchase and the results of its
operations are included in our consolidated financial statements from the date
of acquisition. We report our investments in joint ventures under the equity
method of accounting given our ability to exercise significant influence over
them. Until June 2008, we reported our interest in AmREIT Woodlake, LP and
AmREIT Westheimer Gessner, LP under the equity method of accounting as we owned
a 40% interest in each. With the additional 20% investment that we made in
these properties during the second quarter of 2008, we are now consolidating
their financial position and the results of operations in the accompanying
consolidated financial statements. 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 March 31, 2010 versus
Three Months Ended March 31, 2009

Revenue.Revenue
decreased approximately $400,000 to approximately $921,000 during the three
months ended March 31, 2010 compared to approximately $1.3 million for the
three months ended March 31, 2009. The decrease is primarily due to decreased
revenue from Woodlake Square and Woodlake Pointe due to reduced occupancy rates
and reduced recoverable property expenses. As we are in the early stages of
redeveloping these properties, we have not aggressively pursued lease renewals
related to lease expirations.

Property Expense.Property
expense decreased approximately $62,000 to approximately $371,000 during the
three months ended March 31, 2010 compared to approximately $433,000 for the
three months ended March 31, 2009. This decrease was due to a decrease in
property tax expense and security expense. We began capitalizing property taxes
on Woodlake Pointe during 2009 as the property is planned for a major
redevelopment.

Property Management Fees  Related Party.Property
management fees decreased approximately $23,000 to approximately $29,000 during
the three months ended March 31, 2010 compared to approximately $52,000 for the
three months ended March 31, 2009. Property management fees are calculated
based on tenant billings. Tenant billings have decreased due to reduced
occupancy rates at Woodlake Square and Woodlake Pointe.

Legal and Professional Fees.Legal
and professional fees increased approximately $18,000 to approximately $77,000
during the three months ended March 31, 2010 compared to approximately $59,000
for the three months ended March 31, 2009. The increase was primarily due to
the payment of tax fees during the first quarter of 2010, which during 2009
were paid during the second quarter.

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Depreciation and Amortization Expense.Depreciation
and amortization expense increased approximately $3.8  million to
approximately $4.6 million during the three months ended March 31, 2010
compared to $768,000 for the three months ended March 31, 2009. This increase
was due to the impending redevelopment of the Woodlake Square property. We have
reassessed and shortened the estimated useful lives of various buildings
consistent with our current plan to demolish such buildings as part of the
redevelopment, which is scheduled to begin in June 2010.

Equity in Losses From Non-Consolidated
Entities. Loss from non-consolidated entities
decreased approximately $74,000 to approximately $212,000 for the three months
ended March 31, 2010 compared to approximately $286,000 for the three months
ended March 31, 2009. These amounts represent our ownership portion of our
joint ventures net income or loss for the period. The decreased loss is
attributable to Shadow Creek Ranch and Casa Linda. Net loss on both properties
has decreased due to tenant lease-ups.

Net Loss Attributable to Non-controlling
Interests. Net loss attributable to non-controlling
interests increased approximately $1.7 million to approximately $1.8 million
during the three months ended March 31, 2010 compared to net loss attributable
to non-controlling interests of approximately $145,000 for the three months
ended March 31, 2009. This increase was primarily due to our revised estimate
of the useful lives of certain buildings resulting in an increase in
depreciation expense on Woodlake Square, which is attributable to the
redevelopment scheduled to begin in June 2010.

Liquidity and Capital Resources

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

As of March
31, 2010 and December 31, 2009, our cash and cash equivalents totaled
approximately $128,000 and approximately $469,000, respectively. Cash flows
provided by (used in) operating activities, investing activities and financing
activities for the three months ended March 31, 2010 and 2009 are as follows
(in thousands):

|                      |  |                              |      |      |   |      |  
|--------------------- |  | ---------------------------- | ---- | ---- | - | ---- | -
|                      |  | Three months ended March 31, |     
|                      |  | 2010                         |      | 2009 |  
|Operating
 activities |  | $                            | (803 | )    | $ | 529  |  
|Investing
 activities |  |                              | (366 | )    |   | 796  |  
|Financing
 activities |  |                              | 828  |      |   | (532 | )

Net cash flows
used in operating activities increased approximately $1.3 million to
approximately $803,000 for the three months ended March 31, 2010 compared to
net cash flows provided by operating activities of approximately $529,000 for
the three months ended March 31, 2009. This increase in operating cash outflows
was primarily attributable to a reduction in rental income of approximately
$400,000 (primarily due to reduced occupancy rates at Woodlake Square and
Woodlake Pointe), coupled with payments of 2009 property taxes of approximately
$925,000 in the first quarter of 2010.

Net cash flows
used in investing activities increased approximately $1.2 million to
approximately $366,000 for the three months ended March 31, 2010 compared to
net cash flows provided by investing activities of approximately $796,000 for
the three months ended March 31, 2009. This increase in investing outflows was
primarily due to a net reimbursement of $1.2 million in earnest money deposits
that we received during the three months ended March 31, 2009. We had no such
inflows during the 2010 period.

Net cash flows
provided by financing activities increased approximately $1.4 million to
approximately $828,000 for the three months ended March 31, 2010 compared to
net cash flows used in financing activities of approximately $532,000 for the
three months ended March 31, 2009. This increase in financing inflows was
primarily attributable to proceeds received from notes payable  related party
of approximately $600,000 and contributions received from non-controlling
interests of approximately $249,000 during the three months ended March 31,
2010. Additionally, during the three months ended March 31, 2009, we paid
distributions of approximately $378,000, paid distributions to non-controlling
interests of approximately $92,000, and redeemed two Units for approximately
$62,000, none of which occurred during the three months ended March 31, 2010.

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Our $23.8
million loan secured by the Woodlake Square property matures in September 2010.
We expect to be able to refinance the Woodlake Square loan by September 2010,
either with our existing lender or another lender. However, no assurance can be
given that we will be able to obtain such financing. In the event that such
financing is unavailable and we default on the note, the lender has the right
to foreclose on the property. We and our affiliate, MIG III, are jointly and
severally liable for up to an aggregate 25% of the $23.8 million loan amount.
We are actively seeking joint venture capital which will allow us to commence
the redevelopment of the Woodlake Square property and believe that we will have
this capital in place by June 2010. In the event that we are unable to obtain
this capital, we may be required to defer the redevelopment of the center until
such time as the capital was available.

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

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

Projected cash
sources and uses for the Partnerships 2010 fiscal year indicate certain periods
of cash shortfalls within the twelve month period; 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) potential joint venture equity investments in
existing non-consolidated entities (3) financings of unencumbered properties
and (4) sales of certain of our investments in non-consolidated entities.
However, 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 disposition of those
properties.

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

Not
applicable.

|          |                         
|--------- | ------------------------
|ITEM
 4T. | 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 March 31, 2010. Based on that evaluation, our
General Partners CEO and CFO concluded that, as of March 31, 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 March 31, 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: May
 14, 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).                                                 

23

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