Table of Contents





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|-------------------------------------------------------------------------------------------
|UNITED STATES 
 SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549                     
|                                                                                           
|                                                                                           
|                                                                                           
|FORM 10-Q                                                                                  
|                                                                                           
|                                                                                           
|                                                                                           
|(Mark One)                                                                                 
|xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
 EXCHANGE ACT OF 1934 
|                                                                                           
|For
 the quarterly period ended June 30, 2009                                              
|                                                                                           
|OR                                                                                         
|                                                                                           
|oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
 EXCHANGE ACT OF 1934
|                                                                                           
|For
 the transition period from _____ to _____                                             
|                                                                                           
|Commission
 file number 000-53203                                                          
|                                                                                           
|                                                                                           
|                                                                                           
|AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P.                                               
|(Exact
 Name of Registrant as Specified in Its Charter)                                    

|                                                                                    |  |                                      
|----------------------------------------------------------------------------------- |  | -------------------------------------
|Delaware                                                                            |  | 20-5685431                           
|(State
 or Other Jurisdiction of Incorporation or 
 Organization)                   |  | (I.R.S.
 Employer Identification No.)
|                                                                                    |  |                                      
|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). Yeso
Noo

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







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                                                                               |  | 22  
|Signatures                     |                                                                                        |  | 23  
|Exhibit Index                  |                                                                                        |  | 24  

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Table of Contents

PART I  FINANCIAL
INFORMATION

|        |                       
|------- | ----------------------
|ITEM 1. | FINANCIAL
 STATEMENTS.

AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS(in
thousands)

|                                                                                                         |  |                |        |                    |   |        |  
|-------------------------------------------------------------------------------------------------------- |  | -------------- | ------ | ------------------ | - | ------ | -
|                                                                                                         |  | June 30,
 2009 |        | December 31,
 2008 |  
|                                                                                                         |  | (unaudited)    |        |                    |  
|                                                                                                         |  |                |        |                    |   |        |  
|ASSETS                                                                                                   |  |                |        |                    |   |        |  
|Real estate investments at cost:                                                                         |  |                |        |                    |   |        |  
|Land                                                                                                     |  | $              | 30,922 |                    | $ | 30,927 |  
|Buildings                                                                                                |  |                | 30,960 |                    |   | 30,851 |  
|Tenant improvements                                                                                      |  |                | 1,277  |                    |   | 1,286  |  
|                                                                                                         |  |                | 63,159 |                    |   | 63,064 |  
|Less accumulated depreciation and
amortization                                                           |  |                | (2,676 | )                  |   | (1,914 | )
|                                                                                                         |  |                | 60,483 |                    |   | 61,150 |  
|                                                                                                         |  |                |        |                    |   |        |  
|Investment in non-consolidated entities                                                                  |  |                | 11,952 |                    |   | 11,680 |  
|Acquired lease intangibles, net                                                                          |  |                | 2,215  |                    |   | 2,967  |  
|Net real estate investments                                                                              |  |                | 74,650 |                    |   | 75,797 |  
|                                                                                                         |  |                |        |                    |   |        |  
|Cash and cash equivalents                                                                                |  |                | 962    |                    |   | 1,011  |  
|Escrow deposits                                                                                          |  |                | 494    |                    |   | 1,659  |  
|Tenant receivables, net                                                                                  |  |                | 459    |                    |   | 223    |  
|Accounts receivable - related party                                                                      |  |                | 110    |                    |   | 739    |  
|Deferred costs, net                                                                                      |  |                | 168    |                    |   | 188    |  
|Other assets                                                                                             |  |                | 115    |                    |   | 52     |  
|TOTAL ASSETS                                                                                             |  | $              | 76,958 |                    | $ | 79,669 |  
|                                                                                                         |  |                |        |                    |   |        |  
|LIABILITIES AND CAPITAL                                                                                  |  |                |        |                    |   |        |  
|Liabilities:                                                                                             |  |                |        |                    |   |        |  
|Notes payable                                                                                            |  | $              | 29,987 |                    | $ | 30,000 |  
|Accounts payable and other liabilities                                                                   |  |                | 1,059  |                    |   | 369    |  
|Accounts payable - related party                                                                         |  |                | 153    |                    |   | 302    |  
|Derivative liability                                                                                     |  |                | 1,009  |                    |   | 1,257  |  
|Asset retirement obligations                                                                             |  |                | 530    |                    |   | 535    |  
|Acquired below-market lease intangibles,
net                                                             |  |                | 1,772  |                    |   | 2,004  |  
|Security deposits                                                                                        |  |                | 112    |                    |   | 122    |  
|TOTAL LIABILITIES                                                                                        |  |                | 34,622 |                    |   | 34,589 |  
|                                                                                                         |  |                |        |                    |   |        |  
|Capital:                                                                                                 |  |                |        |                    |   |        |  
|Partners capital:                                                                                       |  |                |        |                    |   |        |  
|General partner                                                                                          |  |                |       |                    |   |       |  
|Limited partners, 1,988 and 1,991 units
outstanding at June 30, 2009 and December 31, 2008,
respectively |  |                | 32,103 |                    |   | 34,631 |  
|Accumulated other comprehensive loss                                                                     |  |                | (594   | )                  |   | (842   | )
|TOTAL PARTNERS CAPITAL                                                                                  |  |                | 31,509 |                    |   | 33,789 |  
|                                                                                                         |  |                |        |                    |   |        |  
|Non-controlling interests                                                                                |  |                | 10,827 |                    |   | 11,291 |  
|TOTAL CAPITAL                                                                                            |  |                | 42,336 |                    |   | 45,080 |  
|                                                                                                         |  |                |        |                    |   |        |  
|TOTAL LIABILITIES AND CAPITAL                                                                            |  | $              | 76,958 |                    | $ | 79,669 |  

See Notes to Consolidated Financial Statements.

1

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Table of Contents

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

|                                                            |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|----------------------------------------------------------- |  | --------------------------- | ------- | ------------------------- | - | ------- | - | ---- | ------- | - | - | ------- | -
|                                                            |  | Three months ended June 30, |         | Six months ended June 30, |  
|                                                            |  | 2009                        |         | 2008                      |   | 2009    |   | 2008 |        
|                                                            |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|Revenues:                                                   |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|Rental income from operating leases                         |  | $                           | 1,223   |                           | $ | 1,458   |   | $    | 2,537   |   | $ | 2,554   |  
|Total revenues                                              |  |                             | 1,223   |                           |   | 1,458   |   |      | 2,537   |   |   | 2,554   |  
|                                                            |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|Expenses:                                                   |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|General and administrative                                  |  |                             | 36      |                           |   | 31      |   |      | 51      |   |   | 48      |  
|General and administrative - related party                  |  |                             | 126     |                           |   | 27      |   |      | 194     |   |   | 57      |  
|Asset management fees - related party                       |  |                             | 107     |                           |   | 107     |   |      | 215     |   |   | 212     |  
|Property expense                                            |  |                             | 404     |                           |   | 503     |   |      | 837     |   |   | 861     |  
|Property management fees - related party                    |  |                             | 44      |                           |   | 49      |   |      | 96      |   |   | 94      |  
|Legal and professional                                      |  |                             | 77      |                           |   | 72      |   |      | 136     |   |   | 123     |  
|Depreciation and amortization                               |  |                             | 754     |                           |   | 894     |   |      | 1,522   |   |   | 1,679   |  
|Total operating expenses                                    |  |                             | 1,548   |                           |   | 1,683   |   |      | 3,051   |   |   | 3,074   |  
|                                                            |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|Operating loss                                              |  |                             | (325    | )                         |   | (225    | ) |      | (514    | ) |   | (520    | )
|                                                            |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|Other income (expense):                                     |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|Interest income - related party                             |  |                             | 2       |                           |   |        |   |      | 2       |   |   |        |  
|Gain (loss) on derivative                                   |  |                             |        |                           |   | 585     |   |      |        |   |   | (376    | )
|Interest and other income                                   |  |                             | 3       |                           |   | 59      |   |      | 11      |   |   | 227     |  
|Interest expense                                            |  |                             | (439    | )                         |   | (435    | ) |      | (882    | ) |   | (781    | )
|Interest expense - related party                            |  |                             |        |                           |   | (7      | ) |      |        |   |   | (14     | )
|Equity in losses from non-consolidated
entities             |  |                             | (347    | )                         |   | (353    | ) |      | (633    | ) |   | (498    | )
|Margin tax expense                                          |  |                             | (1      | )                         |   | (11     | ) |      | (8      | ) |   | (20     | )
|Total other income (expense)                                |  |                             | (782    | )                         |   | (162    | ) |      | (1,510  | ) |   | (1,462  | )
|                                                            |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|Net loss                                                    |  |                             | (1,107  | )                         |   | (387    | ) |      | (2,024  | ) |   | (1,982  | )
|                                                            |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|Net loss (income) attributable to non-controlling
interests |  |                             | 167     |                           |   | (95     | ) |      | 312     |   |   | 745     |  
|                                                            |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|Net loss attributable to controlling interests              |  | $                           | (940    | )                         | $ | (482    | ) | $    | (1,712  | ) | $ | (1,237  | )
|                                                            |  |                             |         |                           |   |         |   |      |         |   |   |         |  
|Weighted average units outstanding                          |  |                             | 1,988   |                           |   | 1,991   |   |      | 1,989   |   |   | 1,893   |  
|Net loss per unit                                           |  | $                           | (472.76 | )                         | $ | (242.09 | ) | $    | (860.79 | ) | $ | (653.45 | )

See Notes to Consolidated
Financial Statements.

2

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Table of Contents

AmREIT MONTHLY INCOME & GROWTH FUND IV, L.P. AND
SUBSIDIARIES
CONSOLIDATED STATEMENT OF CAPITAL
For the six months ended June 30, 2009(in
thousands) 
(unaudited)

|                                           |  |                   |    |                  |   |                                       |   |                             |      |       |   |        |   |   |        |  
|------------------------------------------ |  | ----------------- | -- | ---------------- | - | ------------------------------------- | - | --------------------------- | ---- | ----- | - | ------ | - | - | ------ | -
|                                           |  | Partners Capital |    |                  |   |                                       |   |                             |     
|                                           |  | General Partner   |    | Limited Partners |   | Accumulated Other
 Comprehensive Loss |   | Non-Controlling 
 Interests |      | Total |  
|Balance at
 December 31, 2008              |  | $                 |   |                  | $ | 34,631                                |   | $                           | (842 | )     | $ | 11,291 |   | $ | 45,080 |  
|                                           |  |                   |    |                  |   |                                       |   |                             |      |       |   |        |   |   |        |  
|Redemptions                                |  |                   |   |                  |   | (62                                   | ) |                             |     |       |   |       |   |   | (62    | )
|Net loss (1)                               |  |                   | 7  |                  |   | (1,719                                | ) |                             |     |       |   | (312   | ) |   | (2,024 | )
|Distributions                              |  |                   | (7 | )                |   | (747                                  | ) |                             |     |       |   |       |   |   | (754   | )
|Distributions to non-controlling interests |  |                   |   |                  |   |                                      |   |                             |     |       |   | (152   | ) |   | (152   | )
|Gain on derivative                         |  |                   |   |                  |   |                                      |   |                             | 248  |       |   |       |   |   | 248    |  
|                                           |  |                   |    |                  |   |                                       |   |                             |      |       |   |        |   |   |        |  
|Balance at
 June 30, 2009                  |  | $                 |   |                  | $ | 32,103                                |   | $                           | (594 | )     | $ | 10,827 |   | $ | 42,336 |  

|    |                                                                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allocation of net loss
 includes a curative allocation to increase the General Partners capital
 account by $24 for the six months ended June 30, 2009. The cumulative
 curative allocation since inception of the Partnership is $114. The
 partnership agreement provides that no partner shall be required to fund a
 deficit balance in their capital account.

See Notes to Consolidated
Financial Statements.

3

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Table of Contents

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

|                                                                                                                                                                                     |  |                           |        |      |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------- | ------ | ---- | - | ------- | -
|                                                                                                                                                                                     |  | Six months ended June 30, |       
|                                                                                                                                                                                     |  | 2009                      |        | 2008 |  
|Cash flows from operating activities:                                                                                                                                                |  |                           |        |      |   |         |  
|Net loss                                                                                                                                                                             |  | $                         | (2,024 | )    | $ | (1,982  | )
|Adjustments to reconcile net loss to net cash
provided by (used in)
 operating activities:                                                                                           |  |                           |        |      |   |         |  
|Bad debt expense                                                                                                                                                                     |  |                           | 22     |      |   |        |  
|Loss from non-consolidated entities                                                                                                                                                  |  |                           | 633    |      |   | 498     |  
|Depreciation and amortization                                                                                                                                                        |  |                           | 1,522  |      |   | 1,679   |  
|Amortization of above and below market leases,
net                                                                                                                                   |  |                           | (215   | )    |   | (210    | )
|Amortization of loan acquisition costs                                                                                                                                               |  |                           | 47     |      |   | 46      |  
|Loss on derivative                                                                                                                                                                   |  |                           |       |      |   | 376     |  
|(Increase) decrease in escrow deposits                                                                                                                                               |  |                           | (80    | )    |   | 865     |  
|Increase in tenant receivables                                                                                                                                                       |  |                           | (177   | )    |   | (120    | )
|Decrease (increase) in accounts receivable - related party                                                                                                                           |  |                           | 461    |      |   | (14     | )
|Increase in deferred costs                                                                                                                                                           |  |                           | (32    | )    |   | (3      | )
|Increase in other assets                                                                                                                                                             |  |                           | (63    | )    |   | (55     | )
|Increase (decrease) in accounts payable and other
liabilities                                                                                                                        |  |                           | 609    |      |   | (332    | )
|Decrease in accounts payable - related
party                                                                                                                                         |  |                           | (149   | )    |   | (1,912  | )
|Decrease in asset retirement obligations                                                                                                                                             |  |                           | (5     | )    |   |        |  
|Decrease in security deposits                                                                                                                                                        |  |                           | (10    | )    |   | (10     | )
|Net
 cash provided by (used in) operating activities                                                                                                                                 |  |                           | 539    |      |   | (1,174  | )
|                                                                                                                                                                                     |  |                           |        |      |   |         |  
|Cash flows from investing activities:                                                                                                                                                |  |                           |        |      |   |         |  
|Improvements to real estate                                                                                                                                                          |  |                           | (115   | )    |   | (242    | )
|Acquisition of investment properties                                                                                                                                                 |  |                           |       |      |   | (10,882 | )
|Increase in notes receivable - related
party                                                                                                                                         |  |                           | (438   | )    |   |        |  
|Payments received on notes receivable - related
party                                                                                                                                |  |                           | 178    |      |   |        |  
|Investment in non-consolidated entities                                                                                                                                              |  |                           | (477   | )    |   | (4,818  | )
|Reimbursement of earnest money deposits                                                                                                                                              |  |                           | 1,245  |      |   |        |  
|Net cash provided by (used in) investing
activities                                                                                                                                  |  |                           | 393    |      |   | (15,942 | )
|                                                                                                                                                                                     |  |                           |        |      |   |         |  
|Cash flows from financing activities:                                                                                                                                                |  |                           |        |      |   |         |  
|Payments on notes payable                                                                                                                                                            |  |                           | (13    | )    |   |        |  
|Proceeds from notes payable - related
party                                                                                                                                          |  |                           |       |      |   | 544     |  
|Contributions                                                                                                                                                                        |  |                           |       |      |   | 4,899   |  
|Limited optional redemptions                                                                                                                                                         |  |                           | (62    | )    |   |        |  
|Issuance costs                                                                                                                                                                       |  |                           |       |      |   | (600    | )
|Distributions                                                                                                                                                                        |  |                           | (754   | )    |   | (1,805  | )
|Distributions to non-controlling interests                                                                                                                                           |  |                           | (152   | )    |   |        |  
|Net cash (used in) provided by financing
activities                                                                                                                                  |  |                           | (981   | )    |   | 3,038   |  
|                                                                                                                                                                                     |  |                           |        |      |   |         |  
|Net decrease in cash and cash equivalents                                                                                                                                            |  |                           | (49    | )    |   | (14,078 | )
|Cash and cash equivalents, beginning of period                                                                                                                                       |  |                           | 1,011  |      |   | 19,349  |  
|Cash and cash equivalents, beginning of period for previously
 non-consolidated entities                                                                                             |  |                           |       |      |   | 535     |  
|Cash and cash equivalents, beginning of period, adjusted for entities
 consolidated during the 2008 period                                                                           |  |                           | 1,011  |      |   | 19,884  |  
|Cash and cash equivalents, end of period                                                                                                                                             |  | $                         | 962    |      | $ | 5,806   |  
|                                                                                                                                                                                     |  |                           |        |      |   |         |  
|Supplemental schedule of cash flow
information:                                                                                                                                      |  |                           |        |      |   |         |  
|                                                                                                                                                                                     |  |                           |        |      |   |         |  
|Cash paid during the period for:                                                                                                                                                     |  |                           |        |      |   |         |  
|Interest                                                                                                                                                                             |  | $                         | 830    |      | $ | 809     |  
|Taxes                                                                                                                                                                                |  | $                         | 27     |      | $ | 10      |  
|                                                                                                                                                                                     |  |                           |        |      |   |         |  
|Supplemental schedule of noncash investing and
 financing activities:                                                                                                                |  |                           |        |      |   |         |  
|                                                                                                                                                                                     |  |                           |        |      |   |         |  
|During
 2009, accounts receivable - related party of $168,000 from Shadow Creek Ranch
 was converted to equity, causing an increase in our investment in
 non-consolidated entities. | 
|                                                                                                                                                                                     |  |                           |        |      |   |         |  
|During
 2009, notes receivable - related party of $260,000 from Casa Linda was converted
 to equity, causing an increase in our investment in non-consolidated
 entities.            | 

See Notes to Consolidated
Financial Statements.

4

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Table of Contents

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2009(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
through joint venture arrangements, 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,
a non-traded Maryland real estate investment trust that files reports with the
Securities and Exchange Commission (the SEC). The General Partner maintains
its principal place of business in Houston, Texas.

We commenced
our principal operations on December 8, 2006 when we acquired our first
interest in a property. On January 12, 2007, we accepted subscriptions for the
minimum offering of $1.0 million pursuant to
the terms of our Offering Memorandum dated November 15, 2006 (the Offering Memorandum) and issued the initial 40 limited
partnership units (the Units). We closed the offering on March 31, 2008 when
we had received $49.7 million from the
sale of 1,991 Units. As of June 30, 2009, 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
918,000 square feet of gross leasable area.

Our Units were sold pursuant to exemptions from registration under the
Securities Act of 1933, as amended, 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 pursuant to an exemption under the
Securities Act of 1933, as amended, and applicable state securities laws. We do
not anticipate that any public market for the Units will develop.

During the
past 18 months, the United States has experienced an unprecedented business
downturn, coupled with a substantial curtailment of available debt financing
and a virtual shutdown of equity capital markets, particularly in the real estate
sector. While we expect to generate sufficient cash flow from operations in
2009 to meet our contractual obligations, a significant additional
deterioration in the national economy, the bankruptcy or insolvency of one or
more of our large tenants could cause our 2009 cash resources to be
insufficient to meet our obligations. If necessary, we have the ability to
defer capital improvements and to defer payment of certain operating costs,
including property taxes, until cash resources are available. Effective July
15, 2009, we have suspended all distributions in an effort to conserve cash and
to protect investors principal. As we have numerous projects that are
mid-stream in redevelopment, we are conserving cash from operations to ensure
that we have the ability to fund capital improvements, tenant improvements and
leasing commissions, and to meet our obligations, including debt service.

|   |                                           
|-- | ------------------------------------------
|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 (see Note 10). 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 Financial Accounting Standards Board (FASB)
Interpretation No. (FIN) 46(R): Consolidation
of Variable Interest Entities, an Interpretation of ARB No. 51, as revised(FIN 46(R))). Following consideration under FIN 46(R), if
required, we also evaluate applicable partially-owned entities under Emerging
Issues Task Force (EITF) Issue No. 04-5: Determining Whether a General Partner, or the General Partners as a
Group, Controls a Limited Partnership or Similar Entity when the Limited
Partners Have Certain Rights, for consolidation considerations. All
significant inter-company accounts and transactions have been eliminated in
consolidation.

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The
consolidated financial statements included in this report are unaudited;
however, amounts presented in the consolidated balance sheet as of December 31,
2008 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. In all cases, we
have determined that we are the owner of any tenant improvements that we fund
pursuant to the lease terms. In cases where significant tenant improvements are
made prior to lease commencement, the leased asset is considered to be finished
space, and revenue recognition therefore begins when the improvements are
substantially complete.

Accrued rents
are included in tenant receivables. Revenue from tenant reimbursements of
taxes, maintenance expenses and insurance is recognized in the period the
related expense is recorded. Additionally, certain of the lease agreements
contain provisions that grant additional rents based on tenants sales volumes
(contingent or percentage rent). Percentage rents are recognized when the
tenants achieve the specified targets as defined in their lease agreements. No
percentage rents were recognized during the six months ended June 30, 2009 and
2008. 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 six months ended June 30, 2009 and 2008, 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.

Acquired Properties and Acquired Lease
Intangibles
 We account for operating real estate acquisitions pursuant to
Statement of Financial Accounting Standards (SFAS) No. 141 (revised
2007), Business Combinations
(SFAS No. 141R). 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, 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 market leases
and in-place lease value are recorded as acquired lease intangibles and are
amortized as an adjustment to rental revenue 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.

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We expense acquisition costs associated with operating properties as
incurred in accordance with SFAS No. 141R. Prior to the adoption of SFAS No.
141R, such costs were capitalized and expensed if and when the acquisition became no longer
probable. During the six months ended
June 30, 2009 and 2008, we expensed acquisition costs of $7,000 and $0,
respectively. We did not capitalize any interest or taxes during the same
periods.

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.

Properties Held for Sale  Properties will be classified as
held for sale if we have decided to market the property for immediate sale in its present condition with the belief
that the sale will be completed within one
year. Properties held for sale will be carried at the lower of cost or fair
value less cost to sell. Depreciation
and amortization are suspended during the held for sale period. As of June 30,
2009 and December 31, 2008, 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. We have not incurred any impairment losses since our inception.

ENVIRONMENTAL
EXPOSURES

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

RECEIVABLES AND
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

Tenant Receivables  Included
in tenant receivables are base rents, tenant reimbursements and adjustments
attributable to recording rents on a straight-line basis. An allowance for the
uncollectible portion of accrued rents and
accounts receivable is determined based upon customer credit-worthiness
(including expected recovery of our claim with respect to any tenants in
bankruptcy), historical bad debt levels and current economic trends. Bad debt
expenses and any related recoveries related to tenant receivables are included
in property expense. As of June 30, 2009 and December 31, 2008, our allowance
for uncollectible accounts related to our tenant receivables was $22,000
and $0, respectively.

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

DERIVATIVE
FINANCIAL INSTRUMENTS

We account for
our derivative financial instruments pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities(SFAS No. 133), as amended by SFAS No. 149, Amendment of Statement 133 on Derivative Instruments
and Hedging Activities. SFAS No. 133 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.

SFAS
No. 133 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.

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
$168,000 and $121,000 as of June 30, 2009 and December 31, 2008,
respectively. Accumulated amortization related to leasing costs totaled $10,000
and $5,000 as of June 30, 2009 and December 31, 2008, respectively.

INCOME TAXES

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

State  In
May 2006, the State of Texas adopted House Bill 3, which modified the states
franchise tax structure, replacing
the previous tax based on capital or earned surplus with one based on margin
(often referred to as the Texas
Margin Tax) effective with franchise tax reports filed on or after January 1,
2007. The Texas Margin Tax is
computed by applying the applicable tax rate (1% for the Partnership) to the profit
margin, which, generally, will be determined for us as total revenue less a 30%
standard deduction. Although House Bill 3
states that the Texas Margin Tax is not an income tax, the Partnership believes
that SFAS No. 109, Accounting for Income Taxes, applies to the Texas Margin Tax. We
have recorded margin tax provisions of approximately $8,000 and $20,000 for the
Texas Margin Tax for the six months ended June 30, 2009 and 2008, respectively.

USE OF ESTIMATES

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

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FAIR VALUE OF
FINANCIAL INSTRUMENTS

Our
consolidated financial instruments consist primarily of cash and cash
equivalents, tenant receivables, accounts receivable - related party, accounts
payable and other liabilities, accounts payable - related party, a derivative
financial instrument and notes payable. The carrying value of cash and cash
equivalents, tenant receivables, accounts receivable - related party, accounts
payable and other liabilities, and accounts payable - related party are representative of their respective fair values
due to the short-term nature of these instruments. As of June 30, 2009 and
December 31, 2008, the carrying value of debt obligations associated with our
consolidated entities was approximately $30 million, $6.2 million of which
represents a fixed-rate obligation with an estimated fair value of $5.8 million
and $6.3 million, respectively, based on a discounted cash flow analysis
using current market rates of interest. As of June 30, 2009 and December 31,
2008, the estimated fair value of our $23.8 million variable-rate obligation
approximated $23.2 million, based on a discounted cash flow analysis using
current market rates of interest. We record our derivative financial instrument
at its fair value which was estimated to be a liability of $1,009,000 and
$1,257,000 as of June 30, 2009 and December
31, 2008, respectively.

SFAS No. 157, Fair Value Measurements(SFAS No. 157) defines a
hierarchy of inputs to valuation techniques based upon whether those inputs
reflect assumptions other market participants would use based upon market data
obtained from independent sources (observable inputs). The following summarizes
the fair value hierarchy defined within SFAS 157:

| |   |                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Level 1 Inputs  Quoted market prices (unadjusted) for identical
 assets and liabilities in an active market that the Partnership has the
 ability to access at the measurement date.
| |   |                                                                                                                                                                                      
| |  | Level 2 Inputs  Inputs, other than the quoted prices in active
 markets, that are observable either directly or indirectly.                                                         
| |   |                                                                                                                                                                                      
| |  | Level 3 Inputs  Inputs based on prices or valuation techniques that
 are both unobservable and significant to the overall fair value measurements.                                  

SFAS No. 157 requires the use of observable market data, when
available, in making fair value measurements. Observable inputs are inputs that
the market participants would use in pricing the asset or liability developed
based on market data obtained from sources independent of ours. Unobservable
inputs are inputs that reflect our assumptions about the assumptions market
participants would use in pricing the asset or liability developed based on the
best information available in the circumstances. When inputs used
to measure fair value fall within different levels of the hierarchy, the level
within which the fair value measurement is categorized is based on the lowest
level input that is significant to the fair value measurement.

In determining
the fair value of our derivative instruments, 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 adjustments associated
with its derivatives utilize Level 3 inputs, such as estimates of current
credit spreads to evaluate the likelihood of default by us and our
counterparties. However, as of June 30, 2009, 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.

In determining
the value of our debt instruments, we determine the appropriate Treasury Bill
Rate based on the remaining time to maturity for each of the debt instruments.
We then add the appropriate yield spread to the Treasury Bill Rate. The yield
spread is a risk premium estimated by investors to account for credit risk
involved in debt financing. The spread is typically estimated based on the
property type and loan-to-value ratio of the debt instrument. The result is an
estimate of the market interest rate a typical investor would expect to receive
given the underlying subject asset (property type) and remaining time to
maturity. As the spread is neither a quoted market price nor an observable
input, we feel it is properly classified as a level 3 input.

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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 June 30, 2009 (in thousands):

|                      |  |         |   |         |   |         |  |   |        | 
|--------------------- |  | ------- | - | ------- | - | ------- |  | - | ------ | 
|                      |  | Level 1 |   | Level 2 |   | Level 3 | 
|Notes
 Payable        |  | $       |  |         | $ |        |  | $ | 28,964 | 
|Derivative
 Liability |  | $       |  |         | $ | 1,009   |  | $ |       | 

NEW ACCOUNTING
STANDARDS

In December 2007, the FASB
issued SFAS No. 141R, which changes the accounting for business combinations.
Under SFAS No. 141R, an acquiring entity is required to recognize all the
assets acquired and liabilities assumed in a transaction at the
acquisition-date fair value with limited exceptions. SFAS No. 141R applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. We adopted the
provisions of SFAS No. 141R on January 1, 2009. Such adoption did not have an
impact on our results of operations, cash flows or financial condition as we
did not acquire any operating properties or entities during the six months
ended June 30, 2009.

In December 2007, the FASB issued SFAS
No. 160, Noncontrolling Interests in Consolidated Financial Statementsan
amendment of ARB No. 51 (SFAS No. 160). SFAS No.
160 establishes accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No.
160 clarifies that a noncontrolling interest in a subsidiary is an ownership
interest in the consolidated entity that should be reported as equity in the
consolidated financial statements. SFAS No. 160 is effective for fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008. SFAS No. 160 requires retroactive adoption of the
presentation and disclosure requirements for existing minority interests. All
other requirements of SFAS No. 160 shall be applied prospectively. Our
adoption of SFAS No. 160 caused our partners capital to increase as a result
of transferring the minority interest in our consolidated subsidiaries from the
mezzanine section of our balance sheet into equity.

In March 2008, the FASB issued SFAS No. 161, Disclosures
about Derivative Instruments and HedgingActivities 
an amendment of FASB Statement No. 133 (SFAS No. 161). This statement
amends SFAS No. 133 to provide additional information about how derivative and
hedging activities affect an entitys financial position, financial performance
and cash flows. The statement requires enhanced disclosures about an entitys
derivatives and hedging activities. SFAS No. 161 will be effective for
financial statements issued for years beginning on or after November 15, 2008.
We adopted the provisions of SFAS No. 161 on January 1, 2009, and there was no
material impact on the results of our operations or financial position.

In
May 2009, the FASB issued SFAS No. 165, Subsequent Events (SFAS No. 165). SFAS No. 165
establishes general standards of accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are issued
or are available to be issued. We adopted SFAS No. 165 in the second
quarter of 2009 and evaluated all events or transactions through August 14,
2009. During this period, we did not have any material subsequent events that
impacted our consolidated financial statements.

In June 2009,
the FASB issued SFAS No. 167, Amendments
to FASB Interpretation No. 46(R) (SFAS No. 167), which
amends the consolidation guidance applicable to variable interest entities. 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 special purpose
entities as a result of the elimination of the QSPE concept in SFAS No.166.
SFAS No. 167 is effective as of the beginning of the first fiscal year
that begins after November 15, 2009 and early adoption is prohibited.
Management is currently evaluating the impact on our consolidated financial
statements of adopting SFAS No. 167.

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In June 2009,
the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles (SFAS No.
168). SFAS No. 168 will become the single source of authoritative
nongovernmental U.S. generally accepted accounting principles, superseding
existing FASB, American Institute of Certified Public Accountants, EITF, and
related accounting literature. SFAS No. 168 reorganizes the thousands of GAAP
pronouncements into roughly 90 accounting topics and displays them using a
consistent structure. Also included is relevant Securities and Exchange
Commission guidance organized using the same topical structure in separate
sections. SFAS No. 168 will be effective for financial statements issued for
reporting periods that end after September 15, 2009 and is not expected to have
a significant impact on our consolidated financial statements.

OFFERING COSTS

The General
Partner funded all of the organization and offering costs on the Partnerships
behalf. As of June 30, 2009, we had fully
reimbursed the General Partner for approximately $651,000 of organization and
offering costs. The offering costs, which include items such as legal and
accounting fees, marketing, and promotional
printing costs, are treated as a reduction of partners capital along with
sales commissions and dealer manager fees of 7.75% and 3.25%,
respectively (see Note 9).

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 inception of the
Partnership.

SEGMENT REPORTING

SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information, 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.

|   |                                          
|-- | -----------------------------------------
|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 December 2006, 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., 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.           

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| |   |                                                                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 593,000 square feet. The remaining 90% is owned by an
 unaffiliated third party (80%) and REITPlus, Inc. (10%), an affiliated AmREIT
 entity.

We report our investments in these three entities using the equity method
of accounting due to our ability to exercise significant influence over them.
Combined condensed financial information for the underlying investee entities
(at 100%) is summarized for the three and six months ended June 30, 2009 and
2008 as follows (in thousands):

|                               |  |                              |        |                            |   |        |   |      |        |   |   |        |  
|------------------------------ |  | ---------------------------- | ------ | -------------------------- | - | ------ | - | ---- | ------ | - | - | ------ | -
|                               |  | Three
 months ended June 30, |        | Six months
 ended June 30, |  
|                               |  | 2009                         |        | 2008                       |   | 2009   |   | 2008 |       
|Revenue                        |  | $                            | 2,771  |                            | $ | 2,112  |   | $    | 5,815  |   | $ | 3,521  |  
|Depreciation
 and amortization |  |                              | (1,922 | )                          |   | (1,034 | ) |      | (2,827 | ) |   | (1,599 | )
|Interest expense               |  |                              | (1,456 | )                          |   | (1,439 | ) |      | (2,893 | ) |   | (2,287 | )
|Net loss                       |  |                              | (1,796 | )                          |   | (1,394 | ) |      | (2,321 | ) |   | (1,701 | )

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

In accordance with SFAS No. 141 (SFAS No. 141R will be applied to
operating properties acquired subsequent to its adoption), 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 $735,000 and $924,000 for the six
months ended June 30, 2009 and 2008,
respectively. We recorded disposals related to in-place leases of $224,000 and $0 for the six months ended June 30,
2009 and 2008, respectively. The
amortization of above-market leases, which was recorded as a reduction of rental
income, was approximately $17,000 and
$27,000 for the six months ended June 30, 2009 and 2008, respectively. Acquired lease intangible liabilities (below-market leases) are
accreted over the leases remaining non-cancelable lease term plus any fixed
rate renewal options, if applicable,
which range from two months to approximately thirteen years. Accretion of
below-market leases was approximately $232,000
and $239,000 for the six months ended June 30, 2009 and 2008, respectively. Such accretion is recorded
as an increase to rental income. We recorded
disposals related to below-market leases of $35,000 and $0 for the six months ended June 30, 2009 and 2008, respectively.

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

|                                               |  |               |        |                   |   |        |  
|---------------------------------------------- |  | ------------- | ------ | ----------------- | - | ------ | -
|                                               |  | June 30, 2009 |        | December 31, 2008 |  
|Acquired lease intangible assets:              |  |               |        |                   |   |        |  
|In-place leases                                |  | $             | 4,780  |                   | $ | 5,004  |  
|In-place leases  accumulated amortization     |  |               | (2,671 | )                 |   | (2,160 | )
|Above-market leases                            |  |               | 193    |                   |   | 193    |  
|Above-market leases  accumulated amortization |  |               | (87    | )                 |   | (70    | )
|Acquired lease intangibles, net                |  | $             | 2,215  |                   | $ | 2,967  |  
|                                               |  |               |        |                   |   |        |  
|Acquired lease intangible liabilities:         |  |               |        |                   |   |        |  
|Below-market leases                            |  | $             | 2,605  |                   | $ | 2,640  |  
|Below-market leases  accumulated amortization |  |               | (833   | )                 |   | (636   | )
|Acquired below-market lease
 intangibles, net  |  | $             | 1,772  |                   | $ | 2,004  |  

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

Our outstanding debt at June 30, 2009 consisted
of two loans  a fixed-rate mortgage loan of $6.2 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% (1.67% at June 30, 2009) 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.

Interest-only
loans are generally due in full at maturity. Our
mortgage loans are secured by real estate properties and may be prepaid but could be subject to a
yield-maintenance premium or prepayment penalty. As of June 30, 2009, the weighted-average interest
rate on our fixed-rate debt is 5.5%, and the weighted
average remaining life of such debt is 7.8 years.

As of June 30, 2009, scheduled principal repayments on
notes payable were as follows (in thousands):

|                            |            |                                |   |                       |  |                 |        |  |   |        | 
|--------------------------- | ---------- | ------------------------------ | - | --------------------- |  | --------------- | ------ |  | - | ------ | 
|Scheduled
 Payments by Year |            | Scheduled 
 Principal Payments |   | Term-Loan
 Maturities |  | Total
 Payments |       
|                            | 2009       |                                | $ | 38                    |  | $               |       |  | $ | 38     | 
|                            | 2010       |                                |   | 81                    |  |                 | 23,800 |  |   | 23,881 | 
|                            | 2011       |                                |   | 86                    |  |                 |       |  |   | 86     | 
|                            | 2012       |                                |   | 90                    |  |                 |       |  |   | 90     | 
|                            | 2013       |                                |   | 96                    |  |                 |       |  |   | 96     | 
|                            | Thereafter |                                |   | 353                   |  |                 | 5,443  |  |   | 5,796  | 
|                            | Total      |                                | $ | 744                   |  | $               | 29,243 |  | $ | 29,987 | 

We serve as
the guarantor of debt in the amount of $6.2 million that is the primary obligation
of our wholly-owned subsidiary. Additionally, we serve as the guarantor of debt
in the amount of $68.3 million that is the primary obligation of our joint
ventures.

|   |                                 
|-- | --------------------------------
|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 $1,009,000 at June 30, 2009. The swap settles
monthly with an amount paid to or received from our counterparty upon
settlement being recorded as an adjustment to interest expense. For the
six months ended June 30, 2009 and 2008, we paid $411,000 and $65,000,
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 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 derivates will be recorded as an adjustment to
our partners capital. We could be exposed
to losses in the event of nonperformance by the counterparties.

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

As of June 30,
2009 and December 31, 2008, each of our three consolidated properties
individually comprises greater than 12% 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 89% of
our rental income for the six months
ended June 30, 2009 and 2008, 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 six months ended June 30, 2009 and 2008 (in thousands):

|            |  |                            |     |      |   |     | 
|----------- |  | -------------------------- | --- | ---- | - | --- | 
|            |  | Six months
 ended June 30, |    
|Tenant      |  | 2009                       |     | 2008 |  
|Borders (1) |  | $                          | 417 |      | $ | 417 | 
|Walgreens   |  |                            | 166 |      |   | 166 | 
|Randalls   |  |                            | 121 |      |   | 121 | 
|Jos A. Bank |  |                            | 103 |      |   | 103 | 
|Paesanos   |  |                            | 95  |      |   | 49  | 
|            |  | $                          | 902 |      | $ | 856 | 

| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | (1) The Borders lease
 expires in January 2010 and we do not expect Borders to renew their lease.

|   |                                                
|-- | -----------------------------------------------
|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, as amended, 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. During the six months ended June 30, 2009, we received four redemption
requests, two of which were denied in the aggregate amount of $69,000 and two
of which were granted in the amount of $62,000, despite the restriction on redemptions
until November 15, 2009. We received no redemption requests during the six
months ended June 30, 2008. All redemption requests that have been granted
represent a return of capital. As of June 30, 2009, we have suspended the
optional redemption due to macro economic conditions and the need to preserve
cash.

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Distributions
During the operating stage of the Partnership, net cash flow, as defined, will
be distributed 99% to the limited partners and 1% to the General Partner. We
paid a distribution of 7.5% per annum on invested capital through December
2008. Beginning in January 2009, we paid a distribution of 3.0% per annum on
invested capital. Beginning July 1, 2009 we will cease payment of distributions
until improvements in the real estate and liquidity markets warrant such
payment. All distributions to date have
been a return of capital. During the liquidation stage of the Partnership
(anticipated to commence in November 2013, unless extended), net cash flow, as
defined, will be distributed among the limited partners and the General
Partner in the following manner:

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

Non-controlling Interests
Non-controlling interests
represent a 40% ownership interest that 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. These affiliates also receive fees for
ongoing property management and administrative services. In the
event that these companies are unable to provide us with the respective
services, we would be required to find alternative providers of these services.
The following table summarizes the amount of such compensation paid
to our affiliates during the three and six months ended June 30, 2009 and 2008
(in thousands):

|                                                                   |  |                             |     |                           |   |      |  |      |     |  |   |       | 
|------------------------------------------------------------------ |  | --------------------------- | --- | ------------------------- | - | ---- |  | ---- | --- |  | - | ----- | 
|                                                                   |  | Three months ended June 30, |     | Six months ended June 30, |  
|Type of
 service                                                   |  | 2009                        |     | 2008                      |   | 2009 |  | 2008 |    
|Securities commissions, due diligence and marketing reimbursements |  | $                           |    |                           | $ | 43   |  | $    |    |  | $ | 558   | 
|Organizational and offering cost reimbursements                    |  |                             |    |                           |   | 26   |  |      |    |  |   | 41    | 
|Asset management fees                                              |  |                             | 107 |                           |   | 107  |  |      | 215 |  |   | 212   | 
|Development and acquisition fees                                   |  |                             |    |                           |   |     |  |      |    |  |   | 264   | 
|Property management fees and leasing costs                         |  |                             | 64  |                           |   | 51   |  |      | 127 |  |   | 99    | 
|Administrative costs reimbursements                                |  |                             | 126 |                           |   | 27   |  |      | 194 |  |   | 57    | 
|                                                                   |  | $                           | 297 |                           | $ | 254  |  | $    | 536 |  | $ | 1,231 | 

In addition to
the above fees paid by us, the non-consolidated entities in which we have
investments paid $306,000 and $125,000 in property management and leasing fees
to one of our affiliated entities for the six months ended June 30, 2009 and
2008, respectively. See also Note 3
regarding investments in non-consolidated entities.

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

In March 2008, we acquired Village on the Green, a multi-tenant retail
property located in San Antonio, Texas with a gross leasable area of
approximately 36,000 square feet. The acquisition was accounted for as a purchase and the results of its
operations are included in the accompanying consolidated financial
statements from the date of acquisition.

In November 2007, we acquired a 40% interest in AmREIT Westheimer
Gessner, LP which owns Woodlake Pointe, a multi-tenant retail
property located in Houston, Texas with a combined gross leasable area of
approximately 82,000 square feet. In June
2008, we acquired an additional 20% investment interest in AmREIT Westheimer
Gessner, LP from an affiliated entity at its net book value. Until June 2008, we reported our interest in
AmREIT Westheimer Gessner, LP under the equity method of accounting as we owned
a 40% interest in the partnership. With the additional 20% investment, we own a 60%
controlling interest in this partnership, and we began including its financial
position and operations in our
consolidated financial statements beginning with our financial statements for
the quarter ended June 30, 2008 and effective as of January 1, 2008. On May 30,
2008, AmREIT Westheimer Gessner, LP acquired an additional tract of land
adjacent to Woodlake Pointe. The results of operations are included in the
accompanying consolidated financial statements from the date of acquisition.

In August 2007, we acquired a 40% interest in AmREIT Woodlake, LP which
owns Woodlake Square, a multi-tenant retail property located in
Houston, Texas with a combined gross leasable area of approximately 206,000
square feet. In June 2008, we acquired an
additional investment interest of 20% in AmREIT Woodlake, LP from an affiliated
entity at its net book value. Until
June 2008, we reported our interest in AmREIT Woodlake, LP under the equity
method of accounting as we owned a 40% interest in the partnership. With
the additional 20% investment, we own a 60% controlling interest in this
partnership, and we began including its financial position and operations in our consolidated financial
statements beginning with our financial statements for the quarter ended June
30, 2008 and effective as of January 1, 2008.

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 that 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 June 30, 2009, 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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|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|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 Quarterly Report constitutes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. 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 the 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 the Southern and
Southwestern United States. Our investment strategy is to (1) sell
approximately 40% of our properties when appropriate and re-invest the net
sales proceeds into additional properties and (2) retain the remaining
properties as income-producing assets during our entire operating period. 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 IV Corporation, our General Partner,
pursuant to our Partnership Agreement. Our General Partner is a wholly owned
subsidiary of AmREIT, a non-traded Maryland real estate investment trust that
files reports with the Securities and Exchange Commission (SEC). We qualify
as a partnership for federal income tax purposes.

As of
June 30, 2009, 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 918,000 square feet
of gross leasable area. A
majority of our properties are located in highly-populated, suburban
communities in Texas. We derive a substantial portion of our revenue from
rental income from these properties, primarily from net leasing arrangements,
where most of the operating expenses of the properties are absorbed by our
tenants. As a result, our operating results and cash flows are primarily
influenced by rental income from our properties and interest expense on our
property acquisition indebtedness. Rental income accounted for 100% of our
total revenue during the six months ended June 30, 2009 and 2008. As of June
30, 2009, our properties had an average occupancy rate of approximately 73%, and the average debt
leverage ratio of the properties in which we own an interest was approximately
57%, 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 Item 6. Financial Information  Managements
Discussion and Analysis or Plan of Operation of the Partnerships Annual
Report on Form 10-K for the fiscal year ended December 31, 2008.
Management believes that, as of June 30, 2009, there have been no material
changes to this information.

Results of Operations

We commenced
our principal operations on December 8, 2006 when we acquired our first
interest in a property. On January 12, 2007 we accepted subscriptions for the
minimum offering of $1.0 million pursuant to the terms of our Offering
Memorandum and issued the initial 40 Units to investors. During 2007, we made
investments in three joint ventures through which we obtained an ownership
interest in three properties. During 2008, we acquired a direct interest in one
property on March 25, 2008, made an investment in a joint venture through which
we obtained an ownership interest in one property and made additional
investments in two joint ventures through which we obtained additional
ownership interests in two properties. As of
June 30, 2009, 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 918,000 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 Quarterly Report for a
discussion of our investment activity since our inception with respect to our
non-consolidated entities.

Three Months Ended June 30, 2009 versus Three Months Ended
June 30, 2008

Revenue.Revenue
decreased approximately $235,000 to approximately $1.2 million during the three
months ended June 30, 2009 compared to approximately $1.5 million for the three
months ended June 30, 2008. The decrease is primarily due to decreased revenue
from Woodlake Square due to tenant move outs related to lease expirations and
reduced recoverable property expenses. As we are in the early stages of
redeveloping this property, we have not aggressively pursued lease renewals
related to lease expirations.

General & Administrative.General
and administrative expenses increased approximately $5,000 to approximately
$36,000 during the three months ended June 30, 2009 compared to approximately
$31,000 for the three months ended June 30, 2008. This increase was due to an
increase in printing expenses associated with our first quarter SEC filing in
April 2009. We were not required to file a report with the SEC for the first
quarter of 2008.

General & Administrative  Related Party.General and administrative  related party expenses
paid to our affiliate increased approximately $99,000 to approximately $126,000
during the three months ended June 30, 2009 compared to approximately $27,000
for the three months ended June 30, 2008. This increase was due to an increase in the compensation pool and to an increase
in the allocation of those costs during the period to better reflect the
level of effort expended by our affiliates financial personnel in providing
accounting and financial reporting services to us.

Property Expense.
Property expense decreased approximately $99,000 to approximately $404,000
during the three months ended June 30, 2009 compared to $503,000 for the three
months ended June 30, 2008. This decrease was primarily due to a decrease in
property taxes and security expenses on Woodlake Square.

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Legal and Professional Fees.Legal
and professional fees increased approximately $5,000 to approximately $77,000
during the three months ended June 30, 2009 compared to approximately $72,000
for the three months ended June 30, 2008. The additional costs were primarily
attributable to increased tax return preparation fees.

Depreciation and Amortization Expense.Depreciation
and amortization expense decreased approximately $140,000 to approximately
$754,000 during the three months ended June 30, 2009 compared to $894,000 for
the three months ended June 30, 2008. This decrease was due to a decrease in
intangible lease cost amortization on Woodlake Square due to these costs
becoming fully amortized during the year.

Gain on Derivative.
Gain on derivative of approximately $585,000 during the three months ended June
30, 2008 represents the net change in fair value of our interest rate swap on
the variable-rate loan secured by Woodlake Square. The interest rate swap was
designated as a hedge on October 1, 2008. The net change in fair value
subsequent to October 1, 2008 is reported through accumulated other
comprehensive income.

Interest and Other Income.
Interest and other income decreased approximately $56,000 to approximately
$3,000 during the three months ended June 30, 2009 compared to approximately
$59,000 for the three months ended June 30, 2008. This decrease was primarily
due to a lower balance of investable funds as these funds were invested in
Shadow Creek Ranch, Woodlake Square, Westheimer Gessner and Village on the
Green. We invest our excess cash in short-term investments until properties suitable
for acquisition can be identified and acquired.

Interest Expense  Related Party.Interest
expense  related party recorded during the three months ended June 30, 2008
was related to a note payable that Woodlake Square had with an affiliated
AmREIT entity. The note was paid in full during 2008 and we had no related
party notes payable outstanding during the second quarter of 2009.

Margin Tax Expense.
Margin tax expense decreased approximately $10,000 to approximately $1,000
during the three months ended June 30, 2009 compared to $11,000 for the three
months ended June 30, 2008. This decrease was due to a refund of the prior
years margin taxes that was received during the three months ended June 30,
2009.

Net Loss Attributable to Non-controlling
Interests. Net loss attributable to non-controlling
interests increased approximately $262,000 to approximately $167,000 during the
three months ended June 30, 2009 compared to net income attributable to
non-controlling interests of approximately $95,000 for the three months ended
June 30, 2008. This was primarily due to allocating the non-controlling
interests their share of the $585,000 gain on derivative that was recognized
during the three months ended June 30, 2008 on the interest rate swap relating
to Woodlake Square.

Six Months Ended June 30, 2009 versus Six Months Ended June
30, 2008

Revenue.Revenue
stayed relatively constant at approximately $2.5 million for the six months
ended June 30, 2009 and 2008. A decrease in revenue due to vacancies and
reduced recoverable property expenses on Woodlake Square was offset by an
increase in revenue on Village on the Green. Village on the Green was acquired
in March 2008, so we recognized revenue for only a portion of 2008.

General & Administrative  Related Party.General and administrative  related party expenses
paid to our affiliate increased approximately $137,000 to approximately $194,000
during the six months ended June 30, 2009 compared to approximately $57,000 for
the six months ended June 30, 2008. This increase was due to an increase in the compensation pool and to an increase
in the allocation of those costs during the period to better reflect the level
of effort expended by our affiliates financial personnel in providing
accounting and financial reporting services to us.

Property Expense.
Property expense decreased approximately $24,000 to approximately $837,000
during the six months ended June 30, 2009 compared to $861,000 for the six
months ended June 30, 2008. This decrease was primarily due to a decrease in
property taxes and security expenses on Woodlake Square. This decrease was
partially offset by an increase in property expenses on Village on the Green since
the property was acquired in March 2008.

Legal and Professional Fees.Legal
and professional fees increased approximately $13,000 to approximately $136,000
during the six months ended June 30, 2009 compared to approximately $123,000
for the six months ended June 30, 2008. The additional costs were primarily
attributable to increased tax return preparation fees.

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Depreciation and Amortization Expense.Depreciation
and amortization expense decreased approximately $157,000 to approximately $1.5
million during the six months ended June 30, 2009 compared to $1.7 million for
the six months ended June 30, 2008. This decrease was due to a decrease in
intangible lease cost amortization on Woodlake Square due to these costs
becoming fully amortized during the year. This decrease was partially offset by
an increase in depreciation and amortization expense on Village on the Green
since the property was acquired in March 2008.

Loss on Derivative.
Loss on derivative of approximately $376,000 during the six months ended June
30, 2008 represents the net change in fair value of our interest rate swap on
the variable-rate loan secured by Woodlake Square. The interest rate swap was
designated as a hedge on October 1, 2008. The net change in fair value
subsequent to October 1, 2008 is reported through accumulated other
comprehensive income.

Interest and Other Income.
Interest and other income decreased approximately $216,000 to approximately
$11,000 during the six months ended June 30, 2009 compared to approximately
$227,000 for the six months ended June 30, 2008. This decrease was primarily
due to a lower balance of investable funds as these funds were invested in
Shadow Creek Ranch, Woodlake Square, Westheimer Gessner and Village on the
Green. We invest our excess cash in short-term investments until properties suitable
for acquisition can be identified and acquired.

Interest Expense.Interest
expense increased approximately $101,000 to approximately $882,000 during the
six months ended June 30, 2009 compared to $781,000 for the six months ended
June 30, 2008. The increase in interest expense is related to the notes payable
on Village on the Green, which we acquired in March 2008. Also included in
interest expense is an expense of $440,000 related to our interest rate swap
for the six months ended June 30, 2009.

Interest Expense  Related Party.Interest
expense  related party recorded during the six months ended June 30, 2008 was
related to a note payable that Woodlake Square had with an affiliated AmREIT
entity. The note was paid in full during 2008 and we had no related party notes
payable outstanding during 2009.

Equity in Losses From Non-Consolidated
Entities.Loss from non-consolidated entities
increased approximately $135,000 to approximately $633,000 for the six months
ended June 30, 2009 compared to approximately $498,000 for the six months ended
June 30, 2008. These amounts represent our ownership portion of our joint
ventures net income or loss for the period. The increased loss is primarily
attributable to Shadow Creek Ranch, which was acquired in February 2008.

Margin Tax Expense.
Margin tax expense decreased approximately $12,000 to approximately $8,000
during the six months ended June 30, 2009 compared to $20,000 for the six
months ended June 30, 2008. This decrease was due to a refund of prior years
margin taxes that was received during the six months ended June 30, 2009.

Net Loss Attributable to Non-controlling
Interests. Net loss attributable to non-controlling
interests decreased approximately $433,000 to approximately $312,000 during the
six months ended June 30, 2009 compared to approximately $745,000 for the six
months ended June 30, 2008. This was due to a decrease in net loss on Woodlake
Square and Westheimer Gessner during the six months ended June 30, 2009.

Liquidity and Capital Resources

We expect to meet our
short-term liquidity requirements with cash on hand as well as through net cash
provided by property operations. We expect to meet our long-term liquidity
requirements through proceeds from secured or unsecured financings from banks
and other lenders, the selective and strategic sale of properties and net cash
flows from operations.

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As of June 30,
2009 and December 31, 2008, our cash and cash equivalents totaled approximately
$962,000 and approximately $1.0 million, respectively. Cash flows provided by
(used in) operating activities, investing activities and financing activities
for the six months ended June 30, 2009 and 2008 are as follows (in thousands):

|                      |  |                           |      |      |   |         |  
|--------------------- |  | ------------------------- | ---- | ---- | - | ------- | -
|                      |  | Six months ended June 30, |     
|                      |  | 2009                      |      | 2008 |  
|Operating
 activities |  | $                         | 539  |      | $ | (1,174  | )
|Investing
 activities |  |                           | 393  |      |   | (15,942 | )
|Financing
 activities |  |                           | (981 | )    |   | 3,038   |  

Net cash flows
provided by operating activities increased approximately $1.7 million to
approximately $539,000 for the six months ended June 30, 2009 compared to net
cash flows used in operating activities of approximately $1.2 million for the
six months ended June 30, 2008. This increase in operating cash inflows was
primarily driven by a net increase in payables of $2.7 million offset by a net
increase in escrow deposits of $945,000.

Net cash flows provided by
investing activities increased approximately $16.3 million to approximately
$393,000 for the six months ended June 30, 2009 compared to net cash flows used
in investing activities of approximately $15.9 million for the six months ended
June 30, 2008. This increase in investing inflows was primarily due to a
decrease in the acquisition of investment properties; we invested $705,000 in
the Casa Linda Plaza property during the six months ended June 30, 2009
compared to investing $3.1 million in Village on the Green, $2.5 million in
Woodlake Square, $5.2 million in Westheimer Gessner and $4.8 million in Shadow
Creek Ranch during the 2008 period. In addition to the reduction of investing
outflows, we received a net reimbursement of $1.2 million in earnest money
deposits during the six months ended June 30, 2009.

Net cash flows
used in financing activities increased approximately $4.0 million to
approximately $981,000 for the six months ended June 30, 2009 compared to net
cash flows provided by financing activities of approximately $3.0 million for
the six months ended June 30, 2008. This decrease in financing inflows was
primarily due to a reduction in contributions received of approximately $4.3
million, net of issuance costs, as the offering was closed on March 31, 2008.
Additionally, we had a decrease in proceeds from notes payable  related party
of $544,000, had redemptions of $62,000 and made distributions of $152,000 to
non-controlling interests during the six months ended June 30, 2009. These
outflows were partially offset by a decrease in distributions paid to investors
of $1.0 million, which resulted from the reduction in the distribution rate
from 7.5% to 3.0% per annum.

During the
past 18 months, the United States has experienced an unprecedented business
downturn, coupled with a substantial curtailment of available debt financing
and a virtual shutdown of equity capital markets, particularly in the real estate
sector. While we expect to generate sufficient cash flow from operations in
2009 to meet our contractual obligations, a significant additional
deterioration in the national economy, the bankruptcy or insolvency of one or
more of our large tenants could cause our 2009 cash resources to be
insufficient to meet our obligations. If necessary, we have the ability to
defer capital improvements and to defer payment of certain operating costs,
including property taxes, until cash resources are available. Effective July
15, 2009, we have 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.

|        |                                                             
|------- | ------------------------------------------------------------
|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 Rule 13a-15(e) or 15d-15(e)
of the Securities Exchange Act of 1934) as of June 30, 2009. Based on that
evaluation, our General Partners CEO and CFO concluded that, as of June 30,
2009, 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.

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Changes in Internal Controls

There has been
no change to our internal control over financial reporting during the quarter
ended June 30, 2009 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 Quarterly Report on Form 10-Q.

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SIGNATURES

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

|                       |                                                                             |                                                                     | 
|---------------------- | --------------------------------------------------------------------------- | ------------------------------------------------------------------- | 
|                       | AmREIT
 Monthly Income & Growth Fund IV, L.P.                              
|                       |                                                                            
|                       | By:                                                                         | AmREIT Monthly
 Income & Growth IV Corporation, its General Partner
|Date: August
 14, 2009 |                                                                             |                                                                     | 
|                       | 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 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 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 dated April 29, 2008).
|               |                                                                                                                                                                                                                                                                 
|Exhibit 31.1   | Certification
 of the Chief Executive Officer of the General Partner pursuant to Exchange
 Act Rule 13a-14(a) (filed herewith).                                                                                                                                 
|               |                                                                                                                                                                                                                                                                 
|Exhibit 31.2   | Certification
 of the Chief Financial Officer of the General Partner pursuant to Exchange
 Act Rule 13a-14(a) (filed herewith).                                                                                                                                 
|               |                                                                                                                                                                                                                                                                 
|Exhibit 32.1   | Certification
 Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
 Sarbanes-Oxley Act of 2002, signed by the Chief Executive Officer of the
 Partnerships General Partner (furnished herewith).                                     
|               |                                                                                                                                                                                                                                                                 
|Exhibit 32.2   | Certification
 Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
 Sarbanes-Oxley Act of 2002, signed by the Chief Financial Officer of the
 Partnerships General Partner (furnished herewith).                                     

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