Behringer Harvard Mid-Term Value Enhancement Liquidating Trust - FORM 10-K

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EX-31.2 - EXHIBIT 31.2 - Behringer Harvard Mid-Term Value Enhancement Liquidating Trust	v372310_ex31-2.htm
EX-21.1 - EXHIBIT 21.1 - Behringer Harvard Mid-Term Value Enhancement Liquidating Trust	v372310_ex21-1.htm
EX-31.1 - EXHIBIT 31.1 - Behringer Harvard Mid-Term Value Enhancement Liquidating Trust	v372310_ex31-1.htm
EX-32.1 - EXHIBIT 32.1 - Behringer Harvard Mid-Term Value Enhancement Liquidating Trust	v372310_ex32-1.htm
EX-10.3 - EXHIBIT 10.3 - Behringer Harvard Mid-Term Value Enhancement Liquidating Trust	v372310_ex10-3.htm
EX-10.1 - EXHIBIT 10.1 - Behringer Harvard Mid-Term Value Enhancement Liquidating Trust	v372310_ex10-1.htm
EX-10.2 - EXHIBIT 10.2 - Behringer Harvard Mid-Term Value Enhancement Liquidating Trust	v372310_ex10-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013

Commission File Number: 000-51292

Behringer Harvard Mid-Term Value Enhancement Liquidating Trust
(Exact name of registrant as specified in its charter)
Delaware				71-0897613
(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)
15601 Dallas Parkway, Suite 600, Addison, Texas 75001
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (866) 655-3600

Securities registered pursuant to section 12(b) of the Act:

None

Securities registered pursuant to section 12(g) of the Act:

None*

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ¨ *

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 ¨ No ¨ *

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.45 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨*

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨ *

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.

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

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity as of June 30, 2013 (the last business day of the registrant’s most recently completed second fiscal quarter). Not applicable.

As of March 27, 2014, there were 4,275,187 units of beneficial interest in Behringer Harvard Mid-Term Value Enhancement Liquidating Trust outstanding.

*Behringer Harvard Mid-Term Value Enhancement Liquidating Trust is the transferee of the assets and liabilities of Behringer Harvard Mid-Term Value Enhancement Fund I LP and files reports under the Securities and Exchange Commission file number for Behringer Harvard Mid-Term Value Enhancement Fund I LP. Behringer Harvard Mid-Term Value Enhancement Fund I LP filed a Form 15 on February 16, 2011 indicating its notice of termination of registration and filing requirements.

BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT LIQUIDATING TRUST

FORM 10-K

Year Ended December 31, 2013

PART I

		Page

Item 1.	Business.	4

Item 1A.	Risk Factors.	7

Item 1B.	Unresolved Staff Comments.	15

Item 2.	Properties.	15

Item 3.	Legal Proceedings.	15

Item 4.	Mine Safety Disclosures.	15

	PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	16

Item 6.	Selected Financial Data.	17

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	17

Item 7A.	Quantitative and Qualitative Disclosures about Market Risk.	20

Item 8.	Financial Statements and Supplementary Data.	20

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	20

Item 9A.	Controls and Procedures.	21

Item 9B.	Other Information.	21

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance.	22

Item 11.	Executive Compensation.	24

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	24

Item 13.	Certain Relationships and Related Transactions, and Director Independence.	25

Item 14.	Principal Accountant Fees and Services.	26

	PART IV

Item 15.	Exhibits, Financial Statement Schedules.	27

Signatures		28

Forward-Looking Statements

Certain statements in this Annual Report on Form 10-K constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements include discussion and analysis of the financial condition of Behringer Harvard Mid-Term Value Enhancement Liquidating Trust (which may be referred to herein as the “Liquidating Trust,” “we,” “us,” or “our”) as successor in interest to Behringer Harvard Mid-Term Value Enhancement Fund I LP (which may be referred to herein as the “Partnership”) and our subsidiaries, including our ability to rent space on favorable terms and to fund our liquidity requirements, the value of our assets, our anticipated expenditures, the amount and timing of anticipated future cash distributions to our beneficiaries and other matters. Words such as “may,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “could,” “should” and variations of these words and similar expressions are intended to identify forward-looking statements.

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of our management based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution our beneficiaries not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors listed and described under Item 1A. “Risk Factors” in this Annual Report on Form 10-K and the factors described below:

adverse economic challenges experienced by the U.S. economy;

our ability to retain our executive officers and other key personnel of our managing trustee, property manager and their affiliates;

conflicts of interest arising out of our relationships with our managing trustee and its affiliates; and

unfavorable changes in laws or regulations impacting our business or our assets.

Forward-looking statements in this Annual Report on Form 10-K reflect our management’s view only as of the date of this Report, and may ultimately prove to be incorrect or false. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results except as required by applicable law. We intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act.

Cautionary Note

The representations, warranties and covenants made by us in any agreement filed as an exhibit to this Annual Report on Form 10-K are made solely for the benefit of the parties to the agreement, including, in some cases, for the purpose of allocating risk among the parties to the agreement, and should not be deemed to be representations, warranties or covenants to or with any other parties. Moreover, these representations, warranties or covenants should not be relied upon as accurately describing or reflecting the current state of our affairs.

PART I

Item 1.

Business.

The use of the words the “Liquidating Trust,” “we,” “us” or “our” refers to Behringer Harvard Mid-Term Value Enhancement Liquidating Trust and its subsidiaries, except where the context otherwise requires.

Overview

On February 16, 2011, Behringer Harvard Mid-Term Value Enhancement Fund I LP (referred to herein as the “Partnership”) completed its liquidation pursuant to a Plan of Liquidation adopted by its General Partners (as defined below), which plan provided for the formation of a liquidating trust. The General Partners in their sole discretion organized us as a Delaware statutory trust for the purpose of winding up the Partnership’s affairs and liquidating the Partnership’s assets, including, but not limited to, the sale of its remaining real estate assets, to make appropriate provision for the Partnership’s remaining obligations and to make special distributions to our investors of available liquidation proceeds. As of December 31, 2013, there were no properties remaining in our portfolio. We are currently in the process of determining final costs and calculating remaining proceeds available for distribution to our investors.

The Partnership was a limited partnership formed in Texas on July 30, 2002. Its general partners were Behringer Harvard Advisors I LP (“Behringer Advisors I”) and Robert M. Behringer (each a “General Partner” and collectively, the “General Partners”). It was funded through capital contributions from its General Partners and an initial limited partner on September 20, 2002 (the date of inception). It offered its limited partnership units pursuant to a public offering which commenced on February 19, 2003 and terminated on February 19, 2005 (the “Offering”). The Offering was a best efforts continuous offering and the Partnership admitted new investors until the termination of the Offering. The Partnership used the proceeds from the Offering, after deducting offering expenses, primarily to acquire six office building properties.

Our office is located at 15601 Dallas Parkway, Suite 600, Addison, Texas 75001, and our toll-free telephone number is (866) 655-3600. The name Behringer Harvard is the property of Behringer Harvard Holdings, LLC (“Behringer Holdings”), and is used by permission.

Liquidation of the Partnership

On February 16, 2011 (the “Effective Date”), the Partnership completed its liquidation pursuant to a Plan of Liquidation (the “Plan”) adopted by its General Partners pursuant to their authority under the Partnership’s Agreement of Limited Partnership, as amended (the “Partnership Agreement”), which provided for our formation as a liquidating trust for the purpose of completing the liquidation of the assets of the Partnership.

In furtherance of the Plan, the Partnership entered into a Liquidating Trust Agreement (the “Liquidating Trust Agreement”) with one of the Partnership’s General Partners, Behringer Advisors I, as managing trustee (the “Managing Trustee”), and CSC Trust Company of Delaware, as resident trustee (the “Resident Trustee”). As of the Effective Date, each of the holders of limited partnership units in the Partnership received a pro rata beneficial interest unit in the Liquidating Trust in exchange for such holder’s interest in the Partnership. Effective as of January 31, 2013, Mr. Behringer announced his resignation as Chairman of the Managing Trustee due to a permanent disability.

In accordance with the Plan and the Liquidating Trust Agreement, the Partnership transferred all of its remaining assets and liabilities to the Liquidating Trust to be administered, disposed of or provided for in accordance with the terms and conditions set forth in the Liquidating Trust Agreement. On the Effective Date, the Partnership filed a Form 15 with the Securities and Exchange Commission (“SEC”) to terminate the registration of the limited partnership units in the Partnership under the Exchange Act and announced it would cease filing reports under that Act. On March 31, 2011 we were granted No-Action relief from the SEC regarding our proposed modified reporting. A copy of the No-Action letter is publicly available through the SEC’s website. Accordingly, our Managing Trustee will file with the SEC annual reports on Form 10-K that contain unaudited financial statements based on the liquidation basis of accounting and current reports on Form 8-K to disclose material events relating to us. For purposes of the financial statements included in this Annual Report on Form 10-K, under the liquidation basis of accounting, all assets were adjusted to their estimated fair value (on an undiscounted basis) and liabilities, including estimated costs associated with implementing the Plan, were adjusted to their estimated settlement amounts as of April 1, 2011. We chose to adjust items to their fair values as of April 1, 2011 as a matter of convergence, efficiency and materiality.

The Liquidating Trust Agreement provides for the Liquidating Trust to terminate upon the earliest of (i) the distribution of all of our assets in accordance with the terms of the Liquidating Trust Agreement, or (ii) the expiration of a period of three years from the Effective Date, unless our Managing Trustee determines that an extension is reasonably necessary to wind up our affairs. Our current timeframe for liquidation is by the end of the second quarter of 2014 and as such, our Managing Trustee has extended the termination date of the Liquidating Trust an additional six months.

Disposition Policies and Objectives

The Liquidating Trust Agreement provides for a three-year period to liquidate our remaining assets. Our Managing Trustee has worked diligently to liquidate these assets in a manner that makes sense for our beneficiaries before the end of this three year period.

Pursuant to the Liquidating Trust Agreement, our primary objective is limited to conserving value, protecting and selling our remaining assets, providing for our liabilities and distributing the remaining proceeds therefrom. Thus, cash flow from operations has not been invested in the acquisition of properties. In addition, net sales proceeds have not been reinvested, but will be distributed to our beneficiaries. Thus, we are intended to be self-liquidating in nature. As of December 31, 2013, there were no real estate assets remaining in our portfolio. We are currently in the process of determining final costs and calculating remaining proceeds available for distribution to our investors.

Liquidation Update

On October 24, 2013, Behringer Harvard Parkway Vista LP, our wholly-owned subsidiary, sold a two-story office building containing approximately 33,470 rentable square feet located on approximately 2 acres of land in Dallas, Texas (“Parkway Vista”), to an unaffiliated third party. The contract sales price for Parkway Vista was $5.6 million, exclusive of closing costs.

On August 21, 2013, Behringer Harvard 7400 Tucson Way, LLC, our wholly-owned subsidiary, sold a two-story office building containing approximately 70,660 rentable square feet located on approximately 6 acres of land in Denver, Colorado (“Tucson Way”), to an unaffiliated third party. The contract sales price for Tucson Way was $4.7 million, exclusive of closing costs.

We sold no properties during the year ended December 31, 2012.

On October 26, 2011, Behringer Harvard 1401 Plano Road LP, our wholly-owned subsidiary, sold a single-story office building containing approximately 28,880 rentable square feet located on approximately 2.2 acres of land in Richardson, Texas, a suburb of Dallas (the “ASC Building”), to an unaffiliated buyer. The contract sales price for the ASC Building was $3.6 million, exclusive of closing costs. We made an initial distribution of $1.6 million, approximately one-half of the net sales proceeds, to our beneficial owners on November 14, 2011 via a special distribution of $0.38 per unit.

On May 26, 2011, Behringer Harvard 2800 Mockingbird LP, our wholly-owned subsidiary, sold a single-story office building containing approximately 73,349 rentable square feet located on approximately 3.9 acres of land in Dallas, Texas (“2800 W. Mockingbird”), to an unaffiliated buyer. The contract sales price for 2800 W. Mockingbird was $5.5 million, exclusive of closing costs. We made a special distribution of $5.2 million of the net sales proceeds, which is equal to $1.22 per unit, to our beneficial owners on August 15, 2011.

Conflicts of Interest

We are subject to various conflicts of interest arising out of our relationship with our Managing Trustee and its affiliates, including conflicts related to the arrangements pursuant to which our Managing Trustee and its affiliates will be compensated by us. All of our agreements and arrangements with our Managing Trustee and its affiliates, including those relating to compensation, are not the result of arm’s-length negotiations. Some of the conflicts of interest in our transactions with our Managing Trustee and its affiliates are described below.

Our Managing Trustee is Behringer Advisors I, one of the former General Partners of the Partnership. Mr. Robert M. Behringer, the other former General Partner of the Partnership, owns a controlling interest in Behringer Holdings, a Delaware limited liability company that indirectly owns all of the outstanding equity interests of Behringer Advisors I, our property managers and Behringer Securities LP (“Behringer Securities”), the dealer manager for the Offering. Robert S. Aisner, Gary S. Bresky, and M. Jason Mattox are executive officers of Harvard Property Trust, LLC (“HPT”), the sole general partner of Behringer Advisors I and Behringer Securities. In addition, Mr. Bresky is an executive officer of Behringer Securities.

Because we are operated by our Managing Trustee, conflicts of interest will not be resolved through arm’s-length negotiations, but through the exercise of our Managing Trustee’s judgment consistent with its fiduciary responsibility to our beneficiaries and our disposition objectives and policies. For a description of some of the risks related to these conflicts of interest, see “Item 1A. Risk Factors” of this Annual Report on Form 10-K. For a discussion of the conflict resolution policies, see “Item 13. Certain Relationships and Related Transactions, and Director Independence” of this Annual Report on Form 10-K.

Interests in Other Real Estate Programs

Affiliates of our Managing Trustee (collectively, “Behringer”) are general partners of other Behringer programs, including real estate programs that have investment objectives similar to ours, and we expect that they will organize other such programs in the future. Affiliates of our Managing Trustee have legal and financial obligations with respect to these other programs that are similar to their obligations to us. As general partners of other programs, they may have contingent liabilities for the obligations of other programs structured as partnerships as well as our obligations, which, if such obligations were enforced against them, could result in substantial reduction of their net worth.

Other Activities of Our Managing Trustee and its Affiliates

We rely on our Managing Trustee and its affiliates for the day-to-day operation of our business. As a result of their interests in other Behringer programs, and the fact that they have also engaged and will continue to engage in other business activities, our Managing Trustee and its affiliates will have conflicts of interest in allocating their time between us and other Behringer programs and other activities in which they are involved. In addition, our Liquidating Trust Agreement does not specify any minimum amount of time or level of attention that our Managing Trustee must devote to us. However, our Managing Trustee believes that it and its affiliates have sufficient personnel to discharge fully their responsibilities to all of the Behringer programs and other ventures in which they are involved.

Environmental

As an owner of real estate, we were subject to various environmental laws of federal, state and local governments. Compliance with existing laws has not had a material adverse effect on our financial condition or results of operations.

Significant Tenants

For the year ended December 31, 2013, one of our tenants accounted for 10% or more of our aggregate rental revenues from our properties. Lockheed Martin, a major United States Government defense contractor, leased all of Tucson Way and accounted for approximately $0.8 million, or 64%, of our rental revenue.

Employees

We have no employees. The employees of our Managing Trustee, Behringer Advisors I, and other affiliates of Behringer Holdings perform a full range of real estate services for us, including property management, accounting, legal, asset management, and wholesale brokerage and investor relations.

We are dependent on our affiliates for services that are essential to us, including property management and other general and administrative responsibilities. In the event that these companies were unable to provide these services to us, we would be required to obtain such services from other sources.

Available Information

We electronically file an annual report on Form 10-K and current reports on Form 8-K and all amendments to those reports with the SEC. The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F. Street, NE, Washington, D.C. 20549, on official business days during the hours of 10:00 am to 3:00 pm. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Copies of our filings with the SEC, as well as the Partnership’s prior filings, may be obtained from the web site maintained for us by our Managing Trustee at http://www.behringerinvestments.com or at the SEC’s website, at http://www.sec.gov. Access to these filings is free of charge. As part of the creation of the Liquidating Trust, we requested, and on March 31, 2011 were granted, No-Action relief from the SEC regarding our proposed modified reporting. In accordance with this No-Action relief, we are not required to file quarterly reports on Form 10-Q with the SEC. A copy of the No-Action letter may also be obtained through the SEC’s website. We are not incorporating our website or any information from the website into this Form 10-K.

Item 1A.

Risk Factors.

The factors described below represent our principal risks. Other factors may exist that we do not consider to be significant based on information that is currently available or that we are not currently able to anticipate.

Risks Related to our Liquidation and your Investment in Behringer Harvard Mid-Term Value Enhancement Liquidating Trust

Our units have limited transferability and lack liquidity.

There is no established trading market for our units of beneficial interests, and we do not expect that one will develop. Except for certain transfers by will, intestate succession or operation of law, or from a qualified account to a non-qualified account if necessary to allow holders of beneficial interests to comply with certain individual retirement account (“IRA”) minimum distribution requirements under the Internal Revenue Code, if applicable, beneficial interests in the Liquidating Trust are not transferable, and our beneficiaries do not have authority or power to sell or in any other manner dispose of their beneficial interests.

If we lose or are unable to obtain key personnel, our ability to implement our disposition strategies could be delayed or hindered.

Our success depends to a significant degree upon the continued contributions of certain key personnel of the general partner of Behringer Advisors I, HPT, who would be difficult to replace. Although HPT has employment agreements with its key personnel, these agreements are terminable at will, and we cannot guarantee that such persons will remain affiliated with HPT or us. If any of HPT’s key personnel were to cease employment, our operating results could suffer. We believe that our successful wind down depends, in large part, upon HPT’s ability to hire and retain highly skilled managerial, operational and marketing personnel. Competition for such personnel is intense, and we cannot assure our beneficiaries that HPT will be successful in attracting and retaining such skilled personnel. Further, our Managing Trustee intends to establish strategic relationships with firms that have special expertise in certain services. Maintaining such relationships may be important for us to effectively complete our wind down. We cannot assure our beneficiaries that our Managing Trustee will be successful in attracting and retaining such relationships. If we lose or are unable to obtain the services of key personnel or do not establish or maintain appropriate strategic relationships, our ability to implement our wind down strategies could be delayed or hindered.

The executive officers of HPT have dominant roles in determining what is in our best interests and, therefore, we will not have the benefit of independent consideration of issues affecting our operations.

Our Managing Trustee is Behringer Advisors I. Behringer Advisors I is managed by its general partner, HPT. Therefore, the executive officers of HPT have dominant roles in determining what is in the best interests of us and our beneficiaries. Since no persons other than the other executive officers of HPT have any direct control over our management, we do not have the benefit of independent consideration of issues affecting our operations. Therefore, the executive officers of HPT will determine the propriety of their own actions, which could result in a conflict of interest when they are faced with any significant decision relating to our affairs.

Our Managing Trustee has a limited net worth consisting of assets that are not liquid, which may adversely affect the ability of our Managing Trustee to fulfill its financial obligations to us.

The net worth of our Managing Trustee consists primarily of interests in real estate, partnerships and closely held businesses. Accordingly, the net worth of our Managing Trustee is illiquid and not readily marketable. This illiquidity, and the fact that our Managing Trustee and its affiliates have commitments to other Behringer programs, may adversely affect the ability of our Managing Trustee to fulfill its financial obligations to us.

Our rights and the rights of our beneficiaries to recover claims against our Managing Trustee are limited.

Our Liquidating Trust Agreement provides that our Managing Trustee will have no liability for any action or failure to act that the Managing Trustee in good faith determines was in our best interest, provided that its action or failure to act did not constitute gross negligence, willful misconduct or fraud. As a result, we and our beneficiaries may have more limited rights against our Managing Trustee than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by our Managing Trustee in some cases.

We have terminated our regular monthly distributions and future liquidating distributions will be determined at the sole discretion of our Managing Trustee.

The terms of the Liquidating Trust Agreement do not contemplate that we will make monthly distributions. Rather, it is expected that from time to time we will make special cash distributions to our beneficiaries, including in connection with the disposition of our remaining assets, to the extent that such cash will not be needed to provide for our liabilities (including contingent liabilities), in the sole discretion of our Managing Trustee. As a result, regular monthly distributions to the Partnership’s limited partners were terminated on the Effective Date. Liquidating distribution amounts of net proceeds received from the recent sales of our remaining assets will generally depend on our anticipated cash needs to satisfy liquidation and other expenses, financial condition and capital requirements, and other factors our Managing Trustee may deem relevant. Our ability to pay distributions to our beneficiaries may be adversely affected by the risks described herein.

We may be delayed in completing our liquidation.

Our current timeframe for liquidating is by the end of the second quarter of 2014. Remaining contingent liabilities and other factors could cause us to delay liquidation beyond this period. If liquidation is delayed, your units will continue to be illiquid.

Our beneficiaries should view their investments as long-term in nature.

Our units lack a public trading market and are subject to transfer restrictions. Although our Liquidating Trust Agreement provides for a three-year period to liquidate the remaining assets, the Managing Trustee has worked diligently to liquidate these assets in a manner that makes sense for the beneficiaries before the end of this three-year period. We are currently in the process of determining final costs and calculating remaining proceeds available for distribution to our investors. For each of these reasons, our beneficiaries should view their investment in units strictly as a long-term investment.

If our liquidation costs or unpaid liabilities are greater than we expect, our liquidating distributions to our beneficiaries may be delayed and/or reduced.

Before making the final liquidating distribution to our beneficiaries, we will need to pay or arrange for the payment of all of our transaction costs in the liquidation, and all other costs and all valid claims of our creditors. Our Managing Trustee may also decide to acquire one or more insurance policies covering unknown or contingent claims against us, for which we would pay a premium which has not yet been determined. Our Managing Trustee may also decide to establish a reserve fund to pay these contingent claims. The total amount of transaction costs in the liquidation is not yet known. In addition, if the claims of our creditors are greater than we have anticipated or we decide to acquire one or more insurance policies covering unknown or contingent claims against us, our liquidating distributions to our beneficiaries may be delayed and/or reduced. Further, if a reserve fund is established, payment of liquidating distributions to our beneficiaries may be delayed and/or reduced.

There can be no assurance that the plan of liquidation will result in greater returns to our beneficiaries on their investment within a reasonable period of time than our beneficiaries would have received through other alternatives that were reasonably available to the Partnership.

While the Partnership’s General Partners each believed that a liquidation of the Partnership through a transfer of assets and liabilities to a liquidating trust would be more likely to provide our beneficiaries with a greater return on their investment within a reasonable period of time than our beneficiaries would have received through other alternatives reasonably available to the Partnership at the time, such belief relied upon certain assumptions and judgments concerning future events which may be unreliable or incorrect.

The Plan may lead to litigation which could result in substantial costs and distract our Managing Trustee.

Historically, extraordinary company actions by a company, such as the Plan, may sometimes lead to securities class action lawsuits being filed against that company. We may become involved in this type of litigation as a result of the Plan. As of March 27, 2014, no such lawsuits relative to the plan of liquidation have been filed. However, if such a lawsuit is filed against us, the litigation is likely to be expensive and, even if we ultimately prevail, the process will divert our Managing Trustee’s attention from implementing the Plan and otherwise operating our business. If we do not prevail in any such lawsuit which may be filed against us in the future, we may be liable for damages. In such event, we cannot predict the amount of any such damages; however, they may be significant and may reduce our cash available for distribution to our beneficiaries.

Our beneficiaries could be liable to the extent of liquidating distributions received from us if contingent reserves are insufficient to satisfy our liabilities.

Similar to the liquation of any fund, including had we remained a partnership, if during the final liquidation of the liquidating trust we fail to create an adequate contingency reserve for payment of our expenses and liabilities, or if the contingency reserve and the assets held by us are less than the amount ultimately found payable in respect of expenses and liabilities, each of our beneficiaries could be held liable for the payment to creditors of such beneficiary’s pro rata portion of the excess, limited in all cases to the amounts previously received by each beneficiary in distributions from us.

If a court holds at any time that we have failed to make adequate provision for our expenses and liabilities or if the amount ultimately required to be paid in respect of such liabilities exceeds the amount available from contingency reserve and our assets, our creditors could seek an injunction to prevent us from making distributions under the Plan on the grounds that the amounts to be distributed are needed to provide for the payment of our expenses and liabilities. Any such action could delay or substantially diminish the cash distributions to be made to our beneficiaries under the Liquidating Trust Agreement.

The provisions of the Delaware Statutory Trust Act applicable to statutory trusts do not grant our beneficiaries any voting rights, and our beneficiaries’ rights are limited under our Liquidating Trust Agreement.

A vote of a majority of the units of beneficial interest is sufficient to take the following actions:

to amend our Liquidating Trust Agreement under certain circumstances;

to dissolve and terminate the Liquidating Trust; and

to remove our Managing Trustee.

These are the only significant voting rights granted to our beneficiaries under our Liquidating Trust Agreement. Therefore, our beneficiaries’ voting rights in our operations are limited.

Our Managing Trustee will make all decisions with respect to our management and determine all of our major policies, including our financing, disposition strategies and distributions. Our Managing Trustee may revise these and other policies without a vote of the beneficiaries. Therefore, our beneficiaries will be relying almost entirely on our Managing Trustee for our management and the operation of our business. Our Managing Trustee may only be removed under certain conditions, as set forth in our Liquidating Trust Agreement.

Payment of fees to our Managing Trustee and its affiliates will reduce cash available for distribution.

Our Managing Trustee and its affiliates have performed services for us in connection with the management and leasing of our properties and the administration of our other investments. They have been and will be paid substantial fees for these services, which has and will reduce the amount of cash available for distribution to our beneficiaries.

The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions.

We have diversified our cash and cash equivalents between several banking institutions in an attempt to minimize exposure to any one of these entities. However, the Federal Deposit Insurance Corporation, or FDIC, generally only insures limited amounts per depositor per insured bank. We have cash and cash equivalents and restricted cash deposited in interest bearing transaction accounts at certain financial institutions in excess of federally insured levels. If any of the banking institutions in which we have deposited funds ultimately fails, we may lose our deposits over the federally insured levels. The loss of our deposits could reduce the amount of cash we have available to distribute and could result in a decline in the value of your investment.

Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act.

We are not registered, and do not intend to register, as an investment company under the Investment Company Act of 1940, as amended (“Investment Company Act”), based on exclusions that we believe are available to us. If we were obligated to register as an investment company, we would have to comply with a variety of substantive requirements under the Investment Company Act imposing, among other things:

limitations on capital structure;

restrictions on specified investments;

prohibitions on transactions with affiliates; and

compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations.

In order to be excluded from regulation under the Investment Company Act, we must engage primarily in the business of acquiring and owning real estate assets or real estate-related assets. We rely on exemptions or exclusions provided by the Investment Company Act for the direct ownership, or the functional equivalent thereof, of certain qualifying real estate assets or by engaging in business through one or more majority-owned subsidiaries, as well as other exemptions or exclusions. The position of the SEC staff generally requires us to maintain at least 55% of our assets directly in qualifying real estate interests in order for us to maintain our exemption. Mortgaged-backed securities may or may not constitute qualifying real estate assets, depending on the characteristics of the mortgage-backed securities, including the rights that we have with respect to the underlying loans.

If we were required to register as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

Discovery of previously undetected environmentally hazardous conditions may adversely affect our cash available for distributions.

Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may be liable for the cost of removal or remediation of hazardous or toxic substances on, under or in such property. The costs of removal or remediation could be substantial. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures. Environmental laws provide for sanctions in the event of noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for release of and exposure to hazardous substances, including asbestos-containing materials into the air, and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with exposure to released hazardous substances. The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution to our beneficiaries.

Risks Related to Conflicts of Interest

We will be subject to conflicts of interest arising out of our relationships with our Managing Trustee and its affiliates, including the material conflicts discussed below.

Our Managing Trustee and certain of its key personnel will face competing demands relating to their time, and this may cause our investment returns to suffer.

Our Managing Trustee and certain of its key personnel and their respective affiliates are general partners and sponsors of other real estate programs having investment objectives and legal and financial obligations similar to ours and may have other business interests as well. Because these persons have competing interests on their time and resources, they may have conflicts of interest in allocating their time between our business and these other activities. During times of intense activity in other programs and ventures, they may devote less time and resources to our business than is necessary or appropriate. If this occurs, the returns on our investments may suffer.

The Managing Trustee and certain of its affiliates face conflicts of interest caused by their compensation arrangements with us, which could result in actions that are not in the long-term best interests of our beneficiaries.

Our Managing Trustee and certain of its affiliates, including Behringer Harvard Mid-Term Management Services, LLC, Behringer Harvard Real Estate Services, LLC or HPT Management Services, LLC, or their affiliates (individually or collectively referred to as "Property Manager"), are entitled to substantial fees from us under the terms of our Liquidating Trust Agreement and property management agreement. These fees were not negotiated at arm’s length and reduce the amount of cash available for distributions.

These fees could influence our Managing Trustee’s advice to us as well as the judgment of its affiliates performing services for us.

Our Managing Trustee and certain of its key personnel face conflicts of interest related to the positions they hold with affiliated entities, which could diminish the value of the services they provide to us.

Certain personnel of Behringer Advisors I are also officers of our Property Manager, our dealer manager and other affiliated entities. As a result, these individuals owe fiduciary duties to these other entities, which may conflict with the fiduciary duties that they owe to us and our investors. Conflicts with our business and interests are most likely to arise from involvement in activities related to (1) allocation of management time and services between us and the other entities, (2) compensation to our Managing Trustee, and (3) our relationship with our dealer manager and Property Manager.

There is no separate counsel for us and our affiliates, which could result in conflicts of interest.

DLA Piper, LLP (US) acts as legal counsel to us, and is also expected to represent our Managing Trustee and some of its affiliates from time to time. There is a possibility in the future that the interests of the various parties may become adverse and, under the Code of Professional Responsibility of the legal profession, DLA Piper, LLP (US) may be precluded from representing any one or all of such parties. If any situation arises in which our interests appear to be in conflict with those of our Managing Trustee or its affiliates, additional counsel may be retained by one or more of the parties to assure that their interests are adequately protected. Moreover, should such a conflict not be readily apparent, DLA Piper, LLP (US), may inadvertently act in derogation of the interest of the parties which could affect us and our ability to meet our investment objectives.

Federal Income Tax Risks

There can be no assurance that the Liquidating Trust will be treated as a partnership for federal income tax purposes.

The Liquidating Trust is intending to be treated as a continuation of the Partnership and classified as a partnership for federal income tax purposes, and therefore income, gains, losses, deductions and credits (if any) realized by the Liquidating Trust will be allocated among the beneficiaries for federal tax purposes in the same manner as previously allocated by the Partnership. Further, with the transfer of all of the Partnership’s remaining assets to the Liquidating Trust and the assumption by the Liquidating Trust of all of the Partnership’s remaining liabilities, it is contemplated that there will be no change to the adjusted basis of any beneficiary’s interest in the Liquidating Trust and the beneficiaries will each have an adjusted basis with respect to such beneficiary’s beneficial interest in the Liquidating Trust equal to the adjusted basis of such beneficiary’s limited partnership interest in the Partnership immediately prior to the Effective Date. On a yearly basis, the Managing Trustee will cause the Liquidating Trust to continue to issue a schedule K-1 to each beneficiary. However, there can be no assurance that the Liquidating Trust will be treated as a partnership for federal income tax purposes. We will advise you if we learn that the tax treatment of the Liquidating Trust is other than as described herein.

The state and local tax consequences of the transfer of assets to the Liquidating Trust may be different from the federal income tax consequences of such transfer. In addition, any items of income, gain, loss, deduction or credit of the Liquidating Trust, and any distribution made by the Liquidating Trust, may be treated differently for state and local tax purposes than for federal income tax purposes.

The Internal Revenue Service may challenge our characterization of material tax aspects of your investment in our units of beneficial interest.

An investment in units involves material income tax risks. Investors are urged to consult with their own tax advisor with respect to the federal, state and foreign tax considerations of an investment in our units. We will not seek any rulings from the Internal Revenue Service regarding any of the tax issues discussed herein. Further, although we have obtained an opinion from our counsel, regarding the material federal income tax issues relating to an investment in our units, investors should be aware that this opinion represents only our counsel’s best legal judgment, based upon representations and assumptions referred to therein and conditioned upon the existence of certain facts. Our counsel’s tax opinion has no binding effect on the Internal Revenue Service or any court. Accordingly, we cannot assure investors that the conclusions reached in the tax opinion, if contested, would be sustained by any court. In addition, our counsel is unable to form an opinion as to the probable outcome of the contest of certain material tax aspects, including whether we will be characterized as a “dealer” so that sales of our assets would give rise to ordinary income rather than capital gain and whether we are required to qualify as a tax shelter under the Internal Revenue Code. Our counsel also gives no opinion as to the tax considerations to investors of tax issues that have an impact at the individual or beneficiary level. Accordingly, investors are urged to consult with and rely upon their own tax advisors with respect to tax issues that have an impact at the beneficiary or individual level.

Investors may realize taxable income without cash distributions, and they may have to use funds from other sources to pay their tax liabilities.

Beneficiaries will be required to report their allocable share of our taxable income on their personal income tax return regardless of whether they have received any cash distributions from us. It is possible that units of beneficial interest will be allocated taxable income in excess of their cash distributions. As a result, beneficiaries may have to use funds from other sources to pay their tax liability.

We could be characterized as a publicly traded partnership, which would have an adverse tax effect on investors.

If the Internal Revenue Service were to classify us as a publicly traded partnership, we could be taxable as a corporation, and distributions made to beneficiaries could be treated as portfolio income to them rather than passive income. Our counsel has given its opinion that we will not be classified as a publicly traded partnership, which is defined generally as a partnership whose interests are publicly traded or frequently transferred. However, this opinion is based only upon certain representations of our former General Partners and the provisions in our Liquidating Trust Agreement that attempt to comply with certain safe harbor standards adopted by the Internal Revenue Service. We cannot assure beneficiaries that the Internal Revenue Service will not challenge this conclusion or that we will not, at some time in the future, be treated as a publicly traded partnership due to the following factors:

the complex nature of the Internal Revenue Service safe harbors;

the lack of interpretive guidance with respect to such provisions; and

the fact that any determination in this regard will necessarily be based upon facts that have not yet occurred.

The deductibility of losses will be subject to passive loss limitations, and therefore, their deductibility will be limited.

Units of beneficial interest will be allocated their pro rata share of our tax losses. Section 469 of the Internal Revenue Code limits the allowance of deductions for losses attributable to passive activities, which are defined generally as activities in which the taxpayer does not materially participate. Any tax losses allocated to investors will be characterized as passive losses, and accordingly, the deductibility of such losses will be subject to these limitations. Losses from passive activities are generally deductible only to the extent of a taxpayer’s income or gains from passive activities and will not be allowed as an offset against other income, including salary or other compensation for personal services, active business income or “portfolio income,” which includes non-business income derived from dividends, interest, royalties, annuities and gains from the sale of property held for investment. Accordingly, beneficiaries may receive no current benefit from their share of tax losses unless they are currently being allocated passive income from other sources.

The Internal Revenue Service may challenge our allocations of profit and loss, and any reallocation of items of income, gain, deduction and credit could reduce anticipated tax benefits.

Counsel has given its opinion that it is more likely than not that partnership items of income, gain, loss, deduction and credit will be allocated among our beneficiaries substantially in accordance with the allocation provisions of the Liquidating Trust Agreement. We cannot assure investors, however, that the Internal Revenue Service will not successfully challenge the allocations in the Liquidating Trust Agreement and reallocate items of income, gain, loss, deduction and credit in a manner that reduces anticipated tax benefits. The tax rules applicable to allocation of items of taxable income and loss are complex. The ultimate determination of whether allocations adopted by us will be respected by the Internal Revenue Service will depend upon facts which will occur in the future and which cannot be predicted with certainty or completely controlled by us. If the allocations we use are not recognized, beneficiaries could be required to report greater taxable income or less taxable loss with respect to an investment in us and, as a result, pay more tax and associated interest and penalties. Our beneficiaries might also be required to incur the costs of amending their individual returns.

We may be characterized as a dealer, and if so, any gain recognized upon a sale of real property would be taxable to investors as ordinary income.

If we were deemed for tax purposes to be a dealer, defined as one who holds property primarily for sale to customers in the ordinary course of business, with respect to one or more of our properties, any gain recognized upon a sale of such real property would be taxable to investors as ordinary income and would also constitute unrelated business taxable income (“UBTI”) to investors who are tax-exempt entities. The resolution of our status in this regard is dependent upon facts that will not be known until the time a property is sold, held for sale or thereafter. Under existing law, whether property is held primarily for sale to customers in the ordinary course of business must be determined from all the facts and circumstances surrounding the particular property at the time of disposition. These include the number, frequency, regularity and nature of dispositions of real estate by the holder and activities of the holder of the property in selling the property or preparing the property for sale. Accordingly, our counsel is unable to render an opinion as to whether we will be considered to hold any or all of our properties primarily for sale to customers in the ordinary course of business.

We may be audited by the Internal Revenue Service, which could result in the imposition of additional tax, interest and penalties.

Our federal income tax returns may be audited by the Internal Revenue Service. Any audit of us could result in an audit of beneficiaries’ tax returns that may require adjustments of items unrelated to their investment in us, in addition to adjustments to various items. In the event of any such adjustments, beneficiaries might incur attorneys’ fees, court costs and other expenses contesting deficiencies asserted by the Internal Revenue Service. Beneficiaries may also be liable for interest on any underpayment and penalties from the date their tax was originally due. The tax treatment of all items will generally be determined at the Liquidating Trust level in a single proceeding rather than in separate proceedings with each partner, and our Managing Trustee is primarily responsible for contesting federal income tax adjustments proposed by the Internal Revenue Service. In this connection, our Managing Trustee may extend the statute of limitations as to all beneficiaries and, in certain circumstances, may bind the beneficiaries to a settlement with the Internal Revenue Service. Further, our Managing Trustee may cause us to elect to be treated as an electing large partnership. If they do, we could take advantage of simplified flow-through reporting of items. Adjustments to items would continue to be determined at the Liquidating Trust level, however, and any such adjustments would be accounted for in the year they take effect, rather than in the year to which such adjustments relate. Our Managing Trustee will have the discretion in such circumstances either to pass along any such adjustments to the beneficiaries or to bear such adjustments at the Liquidating Trust level.

State and local taxes and a requirement to withhold state taxes may apply, and if so, the amount of cash available for distribution would be reduced.

The state in which a beneficiary resides may impose an income tax upon such beneficiary’s share of our taxable income. Further, states in which we owned our properties may impose income taxes upon beneficiaries’ share of our taxable income allocable to any property located in that state. Many states have also implemented or are implementing programs to require entities classified as partnerships for federal income tax purposes to withhold and pay state income taxes owed by non-resident partners relating to income-producing properties located in their states, and we may be required to withhold state taxes from cash distributions otherwise payable to beneficiaries. Beneficiaries may also be required to file income tax returns in some states and report their share of income attributable to ownership and operation by the Liquidating Trust of properties in those states. Moreover, despite our pass-through treatment for U.S. federal income tax purposes, certain states may impose income or franchise taxes upon our income and not treat us as a pass-through entity. The imposition of such taxes will reduce the amounts distributable to our beneficiaries. In the event we are required to withhold state taxes from beneficiaries’ cash distributions, the amount of cash available to our beneficiaries would be reduced. In addition, such collection and filing requirements at the state level may result in increases in our administrative expenses that would have the effect of reducing cash available for distribution to beneficiaries. Beneficiaries are urged to consult with their own tax advisors with respect to the impact of applicable state and local taxes and state tax withholding requirements on an investment in our units.

Legislative or regulatory action could adversely affect investors.

In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of the federal income tax laws applicable to investments similar to an investment in our units. Additional changes to the tax laws are likely to continue to occur, and we cannot assure investors that any such changes will not adversely affect the taxation of a beneficiary. Any such changes could have an adverse effect on an investment in our units or on the market value or the resale potential of our properties. Investors are urged to consult with their own tax advisor with respect to the impact of recent legislation on their investment in units and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our units. Investors should also note that our counsel’s tax opinion assumed that no legislation that will be applicable to an investment in our units would be enacted after the commencement of the Offering on February 19, 2003.

Congress has passed major federal tax legislation regarding taxes applicable to recipients of qualified dividends. Effective for 2013 the highest marginal tax rate for individuals was increased to 39.6%, and for individuals in this tax bracket the rate on qualified dividends was increased to 20%. The tax changes did not, however, reduce the corporate tax rates. Therefore, the maximum corporate tax rate of 35% has not been affected. Even with the rate of 15% on qualified dividends received by some individuals, the combined maximum corporate federal tax rate and individual tax rate on qualified corporate dividends is 44.75% and, with the effect of state income taxes, can exceed 50%.

In addition, for taxable years beginning before January 1, 2013, the maximum stated U.S. federal income tax rate applicable to individuals generally was 35% for ordinary income and 15% for net long-term capital gain (with lower rates applying to taxpayers in the 10% and 15% rate brackets), except that the portion of such gain that is attributable to certain depreciation recapture will be taxable at the maximum rate of 25%. Effective for tax years beginning after December 31, 2012 the maximum tax rate applicable to individuals was increased to 39.6% for ordinary income and 20% for net long term capital gain.

Although entities classified as partnerships for federal income tax purposes continue to receive better tax treatment than entities taxed as corporations, it is possible that future legislation would make a partnership structure a less advantageous organizational form for investment in real estate, or that it could become more advantageous for us to elect to be taxed for federal income tax purposes as a corporation or a real estate investment trust (“REIT”). Pursuant to our Liquidating Trust Agreement, our Managing Trustee has the authority to make any tax elections on our behalf that, in its sole judgment, are in our best interest. This authority includes the ability to elect to cause us to be taxed as a corporation or to qualify as a REIT for federal income tax purposes. Our Managing Trustee has the authority under our Liquidating Trust Agreement to make those elections without the necessity of obtaining the approval of our beneficiaries. In addition, our Managing Trustee has the authority to amend our Liquidating Trust Agreement without the consent of beneficiaries in order to facilitate our operations so as to be able to qualify us as a REIT, corporation or other tax status that it elects for us. Our Managing Trustee has fiduciary duties to us and to all investors and would only cause such changes in our organizational structure or tax treatment if it determines in good faith that such changes are in the best interest of our investors.

Under recently enacted legislation, for taxable years beginning after December 31, 2012, a U.S. person that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, generally will be subject to a 3.8% tax (the "Medicare tax") on the lesser of (1) the U.S. person's "net investment income" for the relevant taxable year and (2) the excess of the U.S. person's modified adjusted gross income for the taxable year over a certain threshold. A U.S. person's net investment income for these purposes will generally include income and gain allocable to such U.S. person and/or any gain realized with respect to a disposition of our units of beneficial interest. If you are a U.S. person that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of the Medicare tax to your investment in the ordinary shares.

There are special considerations that apply to pension or profit sharing trusts or IRAs investing in our units.

If investors are investing the assets of a pension, profit sharing, 401(k), Keogh or other qualified retirement plan or the assets of an IRA in our units of beneficial interest, they should satisfy themselves that, among other things:

their investment is consistent with their fiduciary obligations under the Employee Retirement Income Security Act (“ERISA”) and the Internal Revenue Code;

their investment is made in accordance with the documents and instruments governing their plan or IRA, including their plan’s investment policy;

their investment satisfies the prudence and diversification requirements of ERISA;

their investment will not impair the liquidity of the plan or IRA;

their investment will not produce UBTI for the plan or IRA;

they will be able to value the assets of the plan annually in accordance with ERISA requirements; and

their investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

We may dissolve the Liquidating Trust if our assets are deemed to be “plan assets” or if we engage in prohibited transactions.

If our assets were deemed to be assets of qualified plans investing as limited partners, known as “plan assets,” our Managing Trustee would be considered to be a plan fiduciary and certain contemplated transactions between our Managing Trustee or its affiliates and us may be deemed to be prohibited transactions subject to excise taxation under Section 4975 of the Internal Revenue Code. Additionally, if our assets were deemed to be plan assets, ERISA’s fiduciary standards would extend to the Managing Trustee as a plan fiduciary with respect to our investments. We have not requested an opinion of our counsel regarding whether or not our assets would constitute plan assets under ERISA, nor have we sought any rulings from the U.S. Department of Labor (“Department of Labor”) regarding classification of our assets.

Department of Labor regulations defining plan assets for purposes of ERISA contain exemptions that, if satisfied, would preclude assets of an entity such as ours from being treated as plan assets. We cannot assure investors that our Liquidating Trust Agreement and the Offering have been structured so that the exemptions in such regulations would apply to us, and although our Managing Trustee intends that an investment by a qualified plan in units will not be deemed an investment in our assets, we can make no representations or warranties of any kind regarding the consequences of an investment in our units by qualified plans in this regard. Plan fiduciaries are urged to consult with and rely upon their own advisors with respect to this and other ERISA issues which, if decided adversely to us, could result in prohibited transactions, which would cause the imposition of excise taxation and the imposition of co-fiduciary liability under Section 405 of ERISA in the event actions undertaken by us are deemed to be non-prudent investments or prohibited transactions.

In the event our assets are deemed to constitute plan assets, or if certain transactions undertaken by us are deemed to constitute prohibited transactions under ERISA or the Internal Revenue Code and no exemption for such transactions applies or is obtainable by us, our Managing Trustee has the right, but not the obligation, upon notice to all beneficiaries, but without the consent of any beneficiary to:

compel a termination and dissolution of the Liquidating Trust; or

restructure our activities to the extent necessary to comply with any exemption in the Department of Labor regulations or any prohibited transaction exemption granted by the Department of Labor or any condition that the Department of Labor might impose as a condition to granting a prohibited transaction exemption.

Adverse tax considerations may result because of minimum distribution requirements.

If units are held through an IRA or other retirement plan and our properties have not yet been sold at such time as mandatory distributions are required to begin to an IRA beneficiary or qualified plan participant, Sections 408(a)(6) and 401(a)(9) of the Internal Revenue Code will likely require that a distribution-in-kind of the units be made to the IRA beneficiary or qualified plan participant. Any such distribution-in-kind of units must be included in the taxable income of the IRA beneficiary or qualified plan participant for the year in which the units are received at the fair market value of the units without any corresponding cash distributions with which to pay the income tax liability attributable to any such distribution. Also, fiduciaries of a retirement plan should consider that, for distributions subject to mandatory income tax withholding under Section 3405 of the Internal Revenue Code, the fiduciary may have an obligation, even in situations involving in-kind distributions of units, to liquidate a portion of the in-kind units distributed in order to satisfy such withholding obligations. There may also be similar state and/or local tax withholding or other obligations that should be considered.

UBTI may be generated with respect to tax-exempt investors.

We do not intend or anticipate that our tax-exempt investors will be allocated income deemed to be derived from an unrelated trade or business, which is generally referred to as UBTI. Notwithstanding this prohibition, our Managing Trustee does have limited authority to borrow funds deemed necessary.

Our Managing Trustee has represented that they will not cause us to incur indebtedness unless it obtains an opinion of our counsel or an opinion from our tax accountants that the proposed indebtedness more likely than not will not cause the income allocable to tax-exempt investors to be characterized as UBTI. Any such opinion will have no binding effect on the Internal Revenue Service or any court. Therefore, some risk remains that we may generate UBTI for our tax-exempt investors in the event that it becomes necessary for us to borrow funds.

Further, in the event we are deemed to be a “dealer” in real property, defined as one who holds real estate primarily for sale to customers in the ordinary course of business, the gain realized on the sale of our properties that is allocable to tax-exempt investors would be characterized as UBTI. If we generate UBTI, a trustee of a charitable remainder trust that has invested in us will lose its exemption from income taxation with respect to all of its income for the tax year in question. A tax-exempt limited partner other than a charitable remainder trust that has UBTI in any tax year from all sources of more than $1,000 will be subject to taxation on such income and be required to file tax returns reporting such income.

Item 1B.

Unresolved Staff Comments.

None.

Item 2.

Properties.

We owned no properties at December 31, 2013.

Item 3.

Legal Proceedings.

We are not party to, and none of our properties are subject to, any material pending legal proceedings nor are we aware of any such legal or regulatory proceedings contemplated by governmental authorities.

Item 4.

Mine Safety Disclosures.

None.

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

There is no established trading market for our units of beneficial interests, and we do not expect that one will develop. Except for certain transfers by will, intestate succession or operation of law, or from a qualified account to a non-qualified account if necessary to allow holders of beneficial interests to comply with certain IRA minimum distribution requirements under the Internal Revenue Code, if applicable, beneficial interests in the Liquidating Trust are not transferable, and our beneficiaries do not have authority or power to sell or in any other manner dispose of their beneficial interests.

Holders

As of March 27, 2014, we had 4,275,187 of beneficial interest units outstanding that were held by a total of approximately 1,300 beneficiaries of record.

Distributions

We made no cash distributions during the years ended December 31, 2013 and 2012.

On August 15, 2011, the Liquidating Trust made a distribution of $5.2 million to its beneficial interest unit holders of record as of July 15, 2011, via a special distribution of $1.22 per unit, representing all of the net sales proceeds from the sale of the 2800 W. Mockingbird property on May 26, 2011.

On November 14, 2011, the Liquidating Trust made a distribution of $1.6 million; representing approximately one-half of the net sales proceeds of the ASC Building to its beneficial interest unit holders of record as of November 1, 2011, via a special distribution of $0.38 per unit. The Liquidating Trust retained one-half of the sales proceeds of the ASC Building in order to preserve sufficient cash for operations and projects at Tucson Way.

As is common in real estate-related direct investments, when a fund enters its final disposition phase and sells assets, thereby reducing the asset base available to generate distributable cash, it is normal for monthly distributions to cease, and for further distributions to come in the form of special distributions as assets are sold. As a result, the terms of the Liquidating Trust Agreement do not contemplate that we will make monthly distributions; rather, it is expected that from time to time we will make special cash distributions to our beneficiaries, including in connection with the disposition of our remaining assets, to the extent that such cash will not be needed to provide for our liabilities (including contingent liabilities). Liquidating distribution amounts of net proceeds received from the recent sales of our remaining assets will generally depend on our anticipated cash needs to satisfy liquidation and other expenses, financial condition and capital requirements, and other factors our Managing Trustee may deem relevant.

Recent Sales of Unregistered Securities

None.

Item 6.

Selected Financial Data.

The following selected financial data should be read in conjunction with “Item 1A. Risk Factors,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the notes thereto beginning on page F-1 of this Annual Report on Form 10-K. The results for the period from April 1, 2011 (a date we used as a matter of convergence, efficiency and materiality) through December 31, 2011 are not comparable to any prior period because we began operations as of an effective date of February 16, 2011. Our historical results are not necessarily indicative of results for any future period (amounts in thousands).

	December 31,		December 31,		December 31,
Selected Financial Data	2013		2012		2011
STATEMENT OF NET ASSETS:
Total Assets	$	13,428	$	14,375	$	14,380
Net assets in liquidation (1)	$	13,075	$	13,561	$	12,119
Net asset value per unit (1)	$	3.06	$	3.17	$	2.83

Previously paid distributions per unit (1)	$	6.19
Estimated total distributions per unit (1)	$	9.25

(1)

							Period from
							April 1, 2011
	Year Ended			Year Ended			through
	December 31, 2013			December 31, 2012			December 31, 2011

Statement of Changes in Net Assets:
Net assets in liquidation at beginning of period	$	13,561		$	12,119		$	19,094
Change in estimated receipts in excess of estimated costs during liquidation		(822	)		2,241			316
Net decrease in fair value		(9,167	)		(942	)		(433	)
Changes in other assets/liabilities		9,503			143			-
Liquidating distributions to beneficiaries		-			-			(6,858	)
Change in net assets in liquidation		(486	)		1,442			(6,975	)
Net assets in liquidation at end of period	$	13,075		$	13,561		$	12,119

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with “Item 6. Selected Financial Data” and our consolidated financial statements and related notes included in this Annual Report on Form 10-K.

Overview and Background

On February 16, 2011, the General Partners in their sole discretion organized us as a Delaware statutory trust for the purpose of winding up the Partnership’s affairs and liquidating the Partnership’s assets, including, but not limited to, the sale of its remaining real estate assets, to make appropriate provision for the Partnership’s remaining obligations and to make special distributions to our investors of available liquidation proceeds. As of December 31, 2013, no properties remained in our portfolio. We will not purchase any additional properties for our portfolio.

On February 16, 2011, the Partnership completed its liquidation pursuant to the Plan, which was adopted by its General Partners pursuant to their authority under the Partnership Agreement and which provided for our formation as a liquidating trust for the purpose of completing the liquidation of the assets of the Partnership.

Property Dispositions

On October 24, 2013, Behringer Harvard Parkway Vista LP, our wholly-owned subsidiary, sold Parkway Vista to an unaffiliated third party. The contract sales price for Parkway Vista was $5.6 million, exclusive of closing costs. On August 21, 2013, Behringer Harvard 7400 Tucson Way, LLC, our wholly-owned subsidiary, sold Tucson Way to an unaffiliated third party. The contract sales price for Tucson Way was $4.7 million, exclusive of closing costs. As a result of these sales, we no longer own any properties.

We sold no properties during the year ended December 31, 2012.

On October 26, 2011, Behringer Harvard 1401 Plano Road LP, our wholly-owned subsidiary, sold the ASC Building to an unaffiliated buyer. The contract sales price for the ASC Building was $3.6 million, exclusive of closing costs. On May 26, 2011, Behringer Harvard 2800 Mockingbird LP, our wholly-owned subsidiary, sold 2800 W. Mockingbird to an unaffiliated buyer. The contract sales price for 2800 W. Mockingbird was $5.5 million, exclusive of closing costs.

Critical Accounting Policies and Estimates

Use of Estimates in the Preparation of Financial Statements

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and under the liquidation basis of accounting requires management to make estimates and assumptions that affect the reported amounts of assets (including net assets in liquidation) and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On a regular basis, we will evaluate these estimates. These estimates will be based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Liquidation Basis of Accounting

Under the liquidation basis of accounting, all assets were adjusted to their estimated fair value (on an undiscounted basis) and liabilities, including estimated costs associated with implementing the Plan, were adjusted to their estimated settlement amounts as of April 1, 2011. We chose to adjust items to their fair values as of April 1, 2011 as a matter of convergence, efficiency and materiality. Actual values realized for assets and settlements of liabilities may differ materially from the amounts estimated. Estimated future cash flows from property operations were made based on the anticipated sales dates of our remaining assets. Due to the uncertainty in the timing of the anticipated sales dates and the cash flows therefrom, operations may differ materially from amounts estimated. These amounts are presented in the accompanying statement of net assets included in the consolidated financial statements. The net assets represent the estimated liquidation value of our remaining assets available to our beneficiaries upon liquidation. The actual settlement amounts realized for assets and liabilities may differ materially, perhaps in adverse ways, from the amounts estimated.

Asset (Liability) for Estimated Receipts (Costs) in Excess of Estimated Costs (Receipts) during Liquidation

Under the liquidation basis of accounting, we are required to estimate the cash flows from operations and accrue the costs associated with implementing the liquidation of our remaining assets in compliance with the Plan and our Liquidating Trust Agreement. We currently estimate that we will have estimated costs in excess of estimated receipts of liquidation. These amounts can vary significantly due to the timing and amounts associated with discharging known and contingent liabilities and the costs associated with winding up our operations. These costs are estimated and are expected to be paid over the liquidation period.

The change in the asset (liability) for estimated receipts (costs) in excess of estimated costs (receipts) during liquidation for the year ended December 31, 2013 was as follows (amounts in thousands):

	December 31,			Cash Payments			Change in			December 31,
	2012			and (Receipts)			Estimates			2013

Assets:
Estimated net inflows from consolidated operating activities	$	1,059		$	(655	)	$	(404	)	$	-
Liabilities:
Liquidation costs		(237	)		265			(228	)		(200	)
Capital expenditures		(200	)		361			(161	)		(0	)
Total liabilities		(437	)		626			(389	)		(200	)
Total asset (liability) for estimated receipts in excess of estimated costs during liquidation	$	622		$	(29	)	$	(793	)	$	(200	)

The change in the asset (liability) for estimated receipts (costs) in excess of estimated costs (receipts) during liquidation for the year ended December 31, 2012 was as follows (amounts in thousands):

	December 31,			Cash Payments			Change in		December 31,
	2011			and (Receipts)			Estimates		2012

Assets:
Estimated net inflows from consolidated operating activities	$	316		$	(1,188	)	$	1,931	$	1,059
Liabilities:
Liquidation costs		(440	)		162			41		(237	)
Capital expenditures		(1,495	)		822			473		(200	)
Total liabilities		(1,935	)		984			514		(437	)
Total asset (liability) for estimated receipts in excess of estimated costs during liquidation	$	(1,619	)	$	(204	)	$	2,445	$	622

The change in the asset (liability) for estimated receipts (costs) in excess of estimated costs (receipts) during liquidation for the period from April 1, 2011 to December 31, 2011 was as follows (amounts in thousands):

	April 1,			Cash Payments			Change in			December 31,
	2011			and (Receipts)			Estimates			2011

Assets:
Estimated net inflows from consolidated operating activities	$	1,346		$	733		$	(1,763	)	$	316
Liabilities:
Liquidation costs		(700	)		160			100			(440	)
Capital expenditures		(1,492	)		(1,026	)		1,023			(1,495	)
Total liabilities		(2,192	)		(866	)		1,123			(1,935	)
Total asset (liability) for estimated receipts in excess of estimated costs during liquidation	$	(846	)	$	(133	)	$	(640	)	$	(1,619	)

Net Assets in Liquidation

The net assets in liquidation as of December 31, 2013 of $13.1 million plus cumulative liquidating distributions paid through December 31, 2013 of $25.3 million (which includes $18.4 million paid to the Partnership’s limited partners prior to the transfer of its assets and liabilities to the Liquidating Trust), would result in liquidating distributions paid to our beneficiaries per unit of approximately $9.25 per unit (of which $6.19 has been paid, including $4.59 per unit paid to the Partnership’s limited partners prior to the transfer its of assets and liabilities to the Liquidating Trust). These estimates for liquidating distributions per unit include projections of costs and expenses expected to be incurred during the period required to complete liquidation of our remaining assets in compliance with the Plan and our Liquidating Trust Agreement. These projections could change.

Factors Which May Influence Future Changes in Net Assets in Liquidation

Liquidation Expenses and Contingent Liabilities

We have estimated our remaining liquidation expenses and any known contingent liabilities. These amounts can vary significantly due to the timing and amounts associated with discharging known and contingent liabilities and the costs associated with winding up our operations.

Changes in Net Assets in Liquidation

For the year ended December 31, 2013

Net assets in liquidation decreased by $0.5 million during the period from January 1, 2013 to December 31, 2013. The decrease in net assets was primarily due to receiving less operating income as a result of selling our remaining properties earlier than expected and a change in estimated liquidation costs.

For the year ended December 31, 2012

Net assets in liquidation increased by $1.4 million during the period from January 1, 2012 to December 31, 2012. The primary reason for the increase in net assets was increased operating income from our two properties which were 98% leased as of December 31, 2012.

Liquidity and Capital Resources

Our total assets and net assets in liquidation were $13.4 million and $13.1 million, respectively at December 31, 2013. We estimate that the net proceeds from the sale of our remaining assets will be adequate to pay our obligations.

Current Sources of Capital and Liquidity

We anticipate, but cannot assure, that our cash flow from the sale of our remaining assets will be sufficient during the liquidation period to fund our cash needs for payment of liquidation expenses and contingent liabilities.

Other Liquidity Needs

We believe that we will have sufficient capital resources to satisfy our liquidity needs during the liquidation period. We made no cash distributions during the years ended December 31, 2013 and 2012.

As of December 31, 2013, we estimate that we will have approximately $0.1 million of commitments and expenditures during the liquidation period. However, there can be no assurance that we will not exceed the amounts of these estimated expenditures.

Liquidating distributions will be determined in our Managing Trustee’s sole discretion and are dependent on a number of factors, including the amount of funds available for distribution, our financial condition, our capital expenditures, and other factors our Managing Trustee may deem relevant.

We do not own any loans or debt instruments. We have no exposure to money market mutual funds and we monitor the depository institutions that hold our cash and cash equivalents on a regular basis and believe that we have placed our deposits with creditworthy financial institutions.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Contractual Obligations

The Liquidating Trust had no contractual obligations as of December 31, 2013.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk.

We have limited exposure to financial market risks, including changes in interest rates and other relevant market prices. We have no investments or obligations that would be affected by an increase or decrease in interest rates. At December 31, 2013, the Liquidating Trust did not have any foreign operations and thus was not exposed to foreign currency fluctuations.

Item 8.

Financial Statements and Supplementary Data.

The information required by this Item 8 is provided in our unaudited financial statements beginning on page F-1 of this Annual Report on Form 10-K.

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

We did not employ an independent registered public accounting firm to perform an audit on the financial statements contained in this Annual Report on Form 10-K.

Item 9A.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The management of Behringer Advisors I, as Managing Trustee of the Liquidating Trust, including its Chief Executive Officer and Chief Financial Officer, evaluated as of December 31, 2013 the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and Rule 15d-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of Behringer Advisors I concluded that our disclosure controls and procedures, as of December 31, 2013, were effective for the purpose of ensuring that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to the management of Behringer Advisors I, as our Managing Trustee, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within an entity have been detected.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). The Liquidating Trust’s management, including the Chief Executive Officer and Chief Financial Officer of Behringer Advisors I, as Managing Trustee of the Liquidating Trust, evaluated as of December 31, 2013 the effectiveness of our internal control over financial reporting using the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of Behringer Advisors I concluded that the Liquidating Trust’s internal controls, as of December 31, 2013, were effective in providing reasonable assurance regarding reliability of financial reporting.

Changes in Internal Control Over Financial Reporting

There has been no change in internal control over financial reporting that occurred during the year ended December 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.

Other Information.

None.

PART III

Item 10.

Directors, Executive Officers and Corporate Governance.

Managing Trustee

Prior to the Effective Date, the Partnership operated under the direction of its General Partners, Behringer Advisors I and Mr. Robert M. Behringer. Since the Effective Date, the Liquidating Trust operates under the direction of our Managing Trustee, Behringer Advisors I, which was formerly one of the General Partners. The Managing Trustee is assisted by the employees of HPT, the general partner of Behringer Advisors I. We do not employ our own management personnel; instead we pay fees and expense allocations to our Managing Trustee for its services. The Managing Trustee is responsible for the management and control of our affairs, including acquisitions in the past, capital improvements, construction and property management.

Our Managing Trustee, Behringer Advisors I, is a Texas limited partnership formed in July 2002. The executive office of Behringer Advisors I is located at 15601 Dallas Parkway, Suite 600, Addison, Texas 75001. Behringer Advisors I is owned by HPT, its sole general partner, and Behringer Harvard Partners, LLC (“Behringer Partners”), its sole limited partner. Behringer Holdings is the sole owner of HPT and Behringer Partners. Behringer Holdings also is the indirect owner of our Property Manager, Behringer Development Company LP, a real estate development company, and Behringer Securities, our dealer manager.

Behringer Advisors I was created in 2002 for the sole purpose of acting as one of the Partnership’s General Partners. It is managed by its executive officers, namely:

Name	Age	Position(s)
Robert S. Aisner	67	Chairman
Michael J. O'Hanlon	62	Chief Executive Officer and President
Gary S. Bresky	47	Chief Financial Officer
M. Jason Mattox	38	Executive Vice President
S. Jason Hall	47	Treasurer

Robert S. Aisner has served as the Chairman of Behringer Advisors I since 2013. Mr. Aisner has served as President (from May 2005 until February 2013), Chief Executive Officer (from June 2008 until May 2009 and from July 2009 until February 2013), and a director since June 2003 of TIER REIT, Inc. (“TIER REIT”) (formerly Behringer Harvard REIT I, Inc.). In addition, Mr. Aisner serves as Chairman (since January 2013) and a director (since June 2006) of Behringer Harvard Opportunity REIT I, Inc. (“Behringer Harvard Opportunity REIT I”). Mr. Aisner also has served as Chairman (since January 2013) and a director (since January 2007) of Behringer Harvard Opportunity REIT II, Inc. (“Behringer Harvard Opportunity REIT II”) and as Chief Executive Officer and a director of Behringer Harvard Multifamily REIT, Inc. (“Behringer Harvard Multifamily REIT I”) (since August 2006). Furthermore, Mr. Aisner serves as a Class II Director of Priority Senior Secured Income Fund, Inc., a closed-end management investment company jointly advised by Behringer Holdings and Prospect Capital Management, LLC. Mr. Aisner is also Chief Executive Officer and President of other Behringer companies.

Mr. Aisner has over 30 years of commercial real estate experience with acquiring, managing and disposing of properties located in the United States and other countries, including Germany, the Netherlands, England, the Bahamas and Australia. From 1996 until joining TIER REIT in 2003, Mr. Aisner served as (i) Executive Vice President of AMLI Residential Properties Trust, formerly a New York Stock Exchange-listed REIT that focused on the development, acquisition and management of upscale apartment communities, which serves as advisor and asset manager for institutional investors with respect to their multifamily real estate investment activities, (ii) President of AMLI Management Company, that oversees all of AMLI’s apartment operations in 80 communities, (iii) President of the AMLI Corporate Homes division that manages AMLI’s corporate housing properties, (iv) Vice President of AMLI Residential Construction, a division of AMLI that performs real estate construction services, and (v) Vice President of AMLI Institutional Advisors, the AMLI division that serves as institutional advisor and asset manager for institutional investors with respect to their multifamily real estate activities. Mr. Aisner also served on AMLI’s Executive Committee and Investment Committee from 1999 until 2003. From 1994 until 1996, Mr. Aisner owned and operated Regents Management, Inc., which had both a multifamily development and construction group, and a general commercial property management group. From 1984 to 1994, he was employed by HRW Resources, Inc., a real estate development and management company, where he served as Vice President. Mr. Aisner received a Bachelor of Arts degree from Colby College and a Masters of Business Administration degree from the University of New Hampshire.

Michael J. O’Hanlon has served as Chief Executive Officer and President of Behringer Advisors I since January 2012. Mr. O’Hanlon has also served as Chief Executive Officer and President of several other Behringer–sponsored programs, including Behringer Harvard Opportunity REIT I and Behringer Harvard Opportunity REIT II, since January 2012. In addition, Mr. O’Hanlon has served as a director of Behringer Harvard Opportunity REIT I and Behringer Harvard Opportunity REIT II since February 2013. From September 2010 to December 2011, Mr. O’Hanlon was President and Chief Operating Officer of Billingsley Company, a major Dallas, Texas-based owner, operator and developer that has interests in commercial office, industrial, retail, and multifamily properties. From November 2007 to October 2009, Mr. O’Hanlon served as Chief Executive Officer and President for Inland Western Retail Real Estate Trust, Inc., a public non-traded REIT, where he was responsible for an $8.5 billion national retail and office portfolio consisting of 335 properties and 51 million square feet. From January 2005 to October 2007, Mr. O’Hanlon served as head of Asset Management for Inland Real Estate Group of Companies. In total, Mr. O’Hanlon has over 30 years of management experience with public and private firms with commercial real estate portfolios, with a broad range of responsibilities including overseeing acquisitions, dispositions, restructurings, joint ventures and capital raising, and with experience with a diverse group of real estate-related investments including multifamily and debt-related investments. Mr. O’Hanlon received a Masters of Business Administration, Finance-Money and Financial Markets degree from Columbia University Graduate School of Business. Mr. O’Hanlon has also received a Bachelor of Science, Accounting degree from Fordham University. Mr. O’Hanlon has served and been an active member of the Real Estate Roundtable, NAREIT, ICSC and ULI.

Gary S. Bresky is the Chief Financial Officer of Behringer Advisors I. Mr. Bresky also serves as Executive Vice President and Chief Financial Officer or in similar executive capacities with other entities sponsored by Behringer Holdings, including Behringer Harvard Advisors II LP, the managing trustee of Behringer Harvard Short-Term Opportunity Enhancement Liquidating Trust. Behringer Harvard Opportunity REIT II (since January 2007) and Behringer Harvard Multifamily REIT I (since August 2006). He previously served as Chief Financial Officer of TIER REIT (from June 2002 to May 2009), Behringer Harvard Opportunity REIT I (from November 2004 to November 2010), Behringer Harvard Opportunity REIT II (from January 2007 to November 2010) and Behringer Harvard Multifamily REIT I (from August 2006 to September 2009).

Mr. Bresky has been active in commercial real estate and related financial activities for over 20 years. Prior to his employment with Behringer Advisors I, Mr. Bresky served as Senior Vice President of Finance with Harvard Property Trust, Inc. from 1997 to 2001. In this capacity, Mr. Bresky was responsible for directing all accounting and financial reporting functions and overseeing all treasury management and banking functions for the company. Mr. Bresky holds FINRA Series 7, 24, 27 and 63 registrations. Mr. Bresky received a Bachelor of Arts degree from the University of California – Berkeley and a Masters of Business Administration degree from the University of Texas at Austin.

M. Jason Mattox is the Executive Vice President of Behringer Advisors I and serves in a similar capacity with other Behringer companies. From 2002 until March 2006, Mr. Mattox served as the Senior Vice President of Behringer Advisors I.

From 1997 until joining Behringer Advisors I in 2002, Mr. Mattox served as a Vice President of Harvard Property Trust, Inc. and became a member of its Investment Committee in 1998. From 1999 until 2001, Mr. Mattox served as Vice President of Sun Resorts International, Inc., a recreational property investment company, coordinating marina acquisitions throughout the southern United States and the U.S. Virgin Islands. From 1999 until 2001, in addition to providing services related to investing, acquisition, disposition and operational activities, Mr. Mattox served as an asset manager with responsibility for over one million square feet of Harvard Property Trust, Inc.’s commercial office assets in Texas and Minnesota, overseeing property performance, management offices, personnel and outsourcing relationships.

Mr. Mattox is a continuing member of the Building Owners and Managers Association and the National Association of Industrial and Office Properties. Mr. Mattox holds FINRA Series 7, 24 and 63 registrations. Mr. Mattox received both a Bachelor of Business Administration degree, with honors, and a Bachelor of Science degree, cum laude, from Southern Methodist University.

S. Jason Hall is Treasurer of Behringer Advisors I. In such capacity, Mr. Hall served as principal accounting officer of the Partnership and now serves as principal accounting officer of the Liquidating Trust. Mr. Hall also serves as the Chief Accounting Officer and Treasurer for Behringer Harvard Opportunity REIT II and is responsible for its accounting and financial reporting. He has held the position of Director of Financial Reporting for other Behringer-sponsored programs since 2010. Mr. Hall joined Behringer 2005 as SEC Reporting Manager. From 2000 to 2004, he served in a number of accounting positions, including Corporate Controller from 2003 to 2004, at Aegis Communications Group, Inc., then publicly traded on NASDAQ and the nation’s seventh largest provider of outsourced customer care services. Prior to joining Aegis Communications Group, Mr. Hall spent five years as Corporate Controller for a private distribution company and three years in public accounting. Mr. Hall is a certified public accountant in the state of Texas and received a Bachelor of Business Administration in Finance from Angelo State University and a Master of Business Administration from Tarleton State University.

Other Personnel

The Managing Trustee, Behringer Advisors I, is assisted by the officers and employees of HPT, which is the general partner of Behringer Advisors I. HPT and its affiliates will continue to hire employees as needed. HPT and its affiliates also will engage the services of non-affiliated third parties to assist with management of our operations.

Advisory Board

The Liquidating Trust does not have a board of directors. The Partnership’s General Partners were initially assisted by an advisory board, which was dissolved on March 31, 2008.

No Audit Committee; No “Audit Committee Financial Expert”

The Liquidating Trust does not have a board of directors and, as such, has no board committees such as an audit committee. Because we do not have an audit committee, we do not have an “audit committee financial expert.” The Managing Trustee is responsible for managing the relationship with our independent registered Public accounting firm.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act, as amended, requires each director, officer, and individual beneficially owning more than 10% of a registered security of the Partnership to file with the SEC reports of security ownership and reports on subsequent changes in ownership of their securities within specified time frames. These specified time frames require the reporting of changes in ownership within two business days of the transaction giving rise to the reporting obligation. Reporting persons are required to furnish the Partnership with copies of all Section 16(a) forms filed with the SEC. Based upon our review of the reports furnished to the Partnership pursuant to Section 16(a) of the Exchange Act, to the best of our knowledge, all required Section 16(a) filings with respect to the securities of the Partnership were timely and correctly made by reporting persons during 2011 prior to the Effective Date when the Partnership filed a Form 15 with the SEC to terminate the registration of its limited partnership under the Exchange Act.

Code of Ethics

Behringer Advisors I, both formerly as a General Partner of the Partnership and now as Managing Trustee of the Liquidating Trust, adopted a code of ethics applicable to its principal executive officer, principal financial officer, principal accounting officer, controller and other employees. A copy of the code of ethics of Behringer Advisors I may be obtained from our website at http://www.behringerinvestments.com. The web-site will be updated to include any material waivers or modifications to the code of ethics.

Item 11.

Executive Compensation.

Prior to the Effective Date, the Partnership operated under the direction of its General Partners. Since the Effective Date, the Liquidating Trust operates under the direction of our Managing Trustee, Behringer Advisors I, which was formerly one of the General Partners. As of December 31, 2013, neither the Partnership not the Liquidating Trust had made any payments to Mr. Behringer as compensation for serving as a General Partner of the Partnership. The officers and employees of HPT assist the Managing Trustee. The officers and employees of HPT do not devote all of their time to managing us, and they do not receive any compensation from us for their services. We pay fees to our Managing Trustee, Behringer Advisors I, and its other affiliates, as provided for in our Liquidating Trust Agreement, which fees are the same as those paid by the Partnership to Behringer Advisors I as General Partner. We do not directly compensate the executive officers of our Managing Trustee, nor do we reimburse our Managing Trustee for compensation paid to the executive officers, for services rendered to us. Reimbursement for the costs of salaries and benefits of the employees of our Managing Trustee relate to compensation paid to the Managing Trustee’s employees that provide services to us such as accounting, administrative or legal, for which our Managing Trustee or its affiliates are not entitled to a separate fee. Accordingly, we do not have, and our Managing Trustee has not considered, a compensation policy or program for itself, its affiliates, any of its employees or any employees of affiliates of our Managing Trustee and have not included a Compensation Discussion and Analysis in this Annual Report on Form 10-K. See “Item 13. Certain Relationships and Related Transactions, and Director Independence” for a description of the fees payable and expenses reimbursed to our affiliates.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

There were no beneficiaries known by us who owned more than 5% of our outstanding beneficial interests units as of March 27, 2014.

We do not have any officers or directors. The Partnership’s two General Partners, Robert M. Behringer and Behringer Advisors I, each owned 50% of the general partnership interests of the Partnership. Behringer Advisors I, in its capacity as our Managing Trustee, does not own any beneficial interest in the Liquidating Trust. We do not maintain any equity compensation plans, and no arrangements exist that would, upon operation, result in a change in control for us.

The following table sets forth information as of March 27, 2014 regarding the beneficial ownership of units of our beneficial interest by each person known by us to own 5% or more of the outstanding beneficial interests, each of our directors or directors of our Managing Trustee, each of our executive officers or the executive officers of our Managing Trustee, and our directors and executive officers, or the directors and executive officers of our Managing Trustee, as a group. The percentage of beneficial ownership is calculated based on 4,275,187 units of beneficial interest.

		Beneficial Interest		Percent
		Units Beneficially		of
Title of Class	Beneficial Owner	Owned		Class
Beneficial interest	Behringer Advisors I (1)(3)		-	*
Beneficial interest	Robert S. Aisner (1)(2)		1,104.97	*
Beneficial interest	Michael J. O'Hanlon(1)(2)		-	*
Beneficial interest	Gary S. Bresky (1)(2)		-	*
Beneficial interest	S. Jason Hall (1)(2)		-	*
Beneficial interest	M. Jason Mattox (1)(2)		-	*
Beneficial interest	All current executive officers
	as a group (5 persons)		1,104.97	*

*Denotes less than 1%

(1) The address of Messrs. Aisner, O’Hanlon, Bresky, Hall, Mattox, and Behringer Advisors I is 15601 Dallas Parkway, Suite 600, Addison, Texas 75001.

(2) Messrs. Aisner, O’Hanlon, Bresky, Hall and Mattox are executive officers of our Managing Trustee, Behringer Advisors I.

(3) Behringer Advisors I is our Managing Trustee.

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

Transactions with Related Persons

The Managing Trustee and certain of its affiliates are entitled to receive fees and compensation in connection with the management and sale of our assets, which fees are the same as those previously paid by the Partnership to Behringer Advisors I as General Partner. In its former capacity as General Partner of the Partnership, Behringer Advisors I and certain of its affiliates have also received fees in the past in connection with the Partnership’s Offering and acquisitions.

For the management and leasing of our properties, we paid our Property Manager property management and leasing fees equal to the lesser of: (A) the amounts charged by unaffiliated persons rendering comparable services in the same geographic area or (B)(1) for commercial properties that were not leased on a long-term net lease basis, 4% of gross revenues, plus separate leasing fees of up to 1.5% of gross revenues based upon the customary leasing fees applicable to the geographic location of the properties, and (2) in the case of commercial properties that were leased on a long-term net lease basis (10 or more years), 1% of gross revenues plus a one-time initial leasing fee of 3% of gross revenues payable over the first five years of the lease term. We reimbursed the costs and expenses incurred by our Property Manager on our behalf, including the wages and salaries and other employee-related expenses of all on-site employees of our Property Manager who were engaged in the operation, management, maintenance and leasing or access control of our properties, including taxes, insurance and benefits relating to such employees, and legal, travel and other out-of-pocket expenses that are directly related to the management of specific properties. For the year ended December 31, 2013, the Liquidating Trust incurred property management fees payable to the Property Manager or its affiliates of approximately $54,000. For the year ended December 31, 2012, the Liquidating Trust incurred property management fees payable to the Property Manager or its affiliates of approximately $97,000.

We paid Behringer Advisors I, or its affiliates, an annual asset management fee of 0.5% of the contract purchase price of our real estate assets. For the years ended December 31, 2013 and 2012 the Liquidating Trust incurred asset management fees of approximately $52,000 and $72,000, respectively.

We may reimburse Behringer Advisors I for costs and expenses paid or incurred to provide services to us including direct expenses and the costs of salaries and benefits of certain persons employed by those entities and performing services for us. For the years ended December 31, 2013 and 2012 the Liquidating Trust incurred such costs for administrative services totaling approximately $77,000 and $58,000, respectively.

At December 31, 2013, the Liquidating Trust had payables to related parties of approximately $24,000 which consisted of direct expenses and services payable to Behringer Advisors I.

As the Partnership did previously, in connection with the sale of our properties, we will pay our Managing Trustee, Behringer Advisors I, or its affiliates a subordinated disposition fee in an amount not exceeding the lesser of: (A) 50% of the reasonable, customary and competitive real estate brokerage commissions customarily paid for the sale of a comparable property in light of the size, type and location of the property, or (B) 3% of the gross sales price of each property, subordinated to distributions to beneficiaries from the sale proceeds of an amount which, together with distributions to Partnership’s limited partners prior to the Effective Date, will equal (1) 100% of their capital contributions plus (2) an 8% annual cumulative (noncompounded) return of their net capital contributions. Subordinated disposition fees that are not payable at the date of sale, because beneficiaries have not yet received their required minimum distributions, will be deferred and paid at such time as these subordination conditions have been satisfied. In addition, after the beneficiaries have received a return of their net capital contributions and an 8% annual cumulative (noncompounded) return on their net capital contributions, then Behringer Advisors I is entitled to receive 15% of the remaining residual proceeds available for distribution (a subordinated participation in net sale proceeds and distributions); provided, however, that in no event will Behringer Advisors I receive in the aggregate more than 15% of sale proceeds remaining after the beneficiaries have received a return of their net capital contributions. Since such conditions have not been met for the Liquidating Trust, the Liquidating Trust incurred no such disposition fees for the years ended December 31, 2013 and 2012.

We are dependent on Behringer Advisors I for certain services that are essential to us, including general and administrative responsibilities. In the event that Behringer Advisors I is unable to provide the respective services to us, we would be required to obtain such services from other sources.

Policies and Procedures for Transactions with Related Persons

The agreements and arrangements among the Liquidating Trust, our Managing Trustee and its affiliates have been established by our Managing Trustee, and our Managing Trustee believes the amounts to be paid thereunder to be reasonable and customary under the circumstances. Additionally, our Managing Trustee has a fiduciary obligation to act in the best interests of both our beneficiaries and the investors in other affiliated programs and will use its best efforts to assure that we will be treated at least as favorably as any other affiliated program.

Item 14.

Principal Accountant Fees and Services.

None.

PART IV

Item 15.

Exhibits and Financial Statement Schedules.

(a)

List of Documents Filed.

Unaudited Financial Statements

The list of the financial statements filed as part of this Annual Report on Form 10-K is set forth on page F-1 herein.

Unaudited Financial Statement Schedules

Schedule III - Real Estate and Accumulated Depreciation

Exhibits

The list of exhibits filed as part of this Annual Report on Form 10-K is submitted in the Exhibit Index following the financial statements in response to Item 601 of Regulation S-K.

(b)

Exhibits.

The exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.

(c)

Unaudited Financial Statement Schedules.

All other financial statement schedules have been omitted because the required information of such schedules is not present or not applicable.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

March 27, 2014	Behringer Harvard Mid-Term Value Enhancement Liquidating Trust

	By:	/s/ Michael J. O’Hanlon
		Michael J. O’Hanlon
		Chief Executive Officer and President of Behringer Harvard Advisors I LP

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

March 27, 2014	/s/ Michael J. O’Hanlon
	Michael J. O’Hanlon
	Chief Executive Officer and President of Behringer Harvard Advisors I LP
	(Principal Executive Officer)

March 27, 2014	/s/ Gary S. Bresky
	Gary S. Bresky
	Chief Financial Officer of Behringer Harvard Advisors I LP (Principal Financial Officer)

March 27, 2014	/s/ S. Jason Hall
	S. Jason Hall
	Treasurer of Behringer Harvard Advisors I LP
	(Principal Accounting Officer)

INDEX TO UNAUDITED FINANCIAL STATEMENTS

	Page

Unaudited Financial Statements

Unaudited Consolidated Statement of Net Assets (Liquidation Basis) as of December 31, 2013 and 2012	F-2

Unaudited Consolidated Statement of Changes in Net Assets (Liquidation Basis) for the years ended December 31, 2013 and 2012	F-3

Notes to Unaudited Consolidated Financial Statements	F-4

Unaudited Financial Statement Schedules

Schedule III – Real Estate and Accumulated Depreciation for the years ended December 31, 2013 and 2012	F-9

F-1

Behringer Harvard Mid-Term Value Enhancement Liquidating Trust

Consolidated Statement of Net Assets

(Liquidation Basis)

As of December 31, 2013 and 2012

(unaudited)

(in thousands, except unit amounts)

	2013		2012

Real estate investments:
Real estate held for sale	$	-	$	9,167
Cash and cash equivalents		13,378		4,520
Accounts receivable, net		50		52
Prepaid expenses and other assets		-		14
Assets for estimated receipts in excess of estimated costs during liquidation		-		622
Total assets	$	13,428	$	14,375

Liabilities
Accounts payable	$	109	$	8
Payables to related parties		24		29
Accrued liabilities		20		777
Liability for estimated costs in excess of estimated receipts during liquidation		200		-
Total liabilities		353		814
Net assets in liquidation	$	13,075	$	13,561

See Notes to Consolidated Financial Statements.

F-2

Behringer Harvard Mid-Term Value Enhancement Liquidating Trust

Consolidated Statement of Changes in Net Assets

(Liquidation Basis)

For the Years Ended December 31, 2013 and 2012

(Unaudited)

(in thousands)

	2013			2012

Statement of Changes in Net Assets:
Net assets in liquidation at beginning of period	$	13,561		$	12,119
Change in estimated receipts in excess of estimated costs during liquidation		(822	)		2,241
Net decrease in fair value		(9,167	)		(942	)
Changes in other assets/liabilities		9,503			143
Liquidating distributions to beneficiaries		-			-
Change in net assets in liquidation		(486	)		1,442
Net assets in liquidation at end of period	$	13,075		$	13,561

See Notes to Consolidated Financial Statements

F-3

Behringer Harvard Mid-Term Value Enhancement Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

Business and Organization

Business

Behringer Harvard Mid-Term Value Enhancement Fund I LP (which may be referred to as the “Partnership”) was a limited partnership formed in Texas on July 30, 2002 and governed by an Agreement of Limited Partnership, as amended (the “Partnership Agreement”). Its general partners were Behringer Harvard Advisors I LP (“Behringer Advisors I”) and Robert M. Behringer (each a “General Partner” and collectively, the “General Partners”).

The Partnership was funded through capital contributions from the General Partners and an initial limited partner on September 20, 2002 (the date of inception). It offered its limited partnership units pursuant to a public offering which commenced on February 19, 2003 and terminated on February 19, 2005 (the “Offering”). The Offering was a best efforts continuous offering and the Partnership admitted new investors until the termination of the Offering.

The Partnership used the proceeds from the Offering, after deducting offering expenses, primarily to acquire six office building properties. As of December 31, 2013, no properties remained in the portfolio. We will not purchase any additional properties.

On February 16, 2011, the General Partners in their sole discretion organized the Behringer Harvard Mid-Term Value Enhancement Liquidating Trust (referred herein as the “Liquidating Trust,” “we,” “us,” or “our”) as a Delaware statutory trust for the purpose of winding up the Partnership’s affairs and liquidating the Partnership’s assets, including, but not limited to, the sale of its remaining real estate assets, to make appropriate provision for the Partnership’s remaining obligations and to make special distributions to our investors of available liquidation proceeds.

Plan of Liquidation

On February 16, 2011, the Liquidating Trust was formed, and the Partnership transferred all of its remaining assets and liabilities to the Liquidating Trust. Also on February 16, 2011 (the “Effective Date”), the Partnership completed its liquidation pursuant to a Plan of Liquidation (the “Plan”) adopted by its General Partners pursuant to their authority under the Partnership Agreement, which provided for our formation as a liquidating trust for the purpose of completing the liquidation of the assets of the Partnership.

On the Effective Date, the Partnership filed a Form 15 with the Securities and Exchange Commission (“SEC”) to terminate the registration of the limited partnership units in the Partnership under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and announced it would cease filing reports under that Act. On March 31, 2011 we were granted No-Action relief from the SEC regarding our proposed modified reporting. A copy of the No-Action letter is publicly available through the SEC’s website. Accordingly our Managing Trustee will file with the SEC annual reports on Form 10-K that contain unaudited financial statements based on the liquidation basis of accounting and current reports on Form 8-K to disclose material events relating to us.

We are currently in the process of determining final costs and calculating remaining proceeds available for distribution to our investors. The Liquidating Trust Agreement provides for the Liquidating Trust to terminate upon the earliest of (i) the distribution of all of our assets in accordance with the terms of the Liquidating Trust Agreement, or (ii) the expiration of a period of three years from the Effective Date, unless our Managing Trustee determines that an extension is reasonably necessary to wind up our affairs. Our current timeframe for liquidation is by the end of the second quarter of 2014 and as such, our Managing Trustee has extended the termination date of the Liquidating Trust and additional six months.

F-4

Behringer Harvard Mid-Term Value Enhancement Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

Summary of Significant Accounting Policies

The summary of significant accounting policies presented below is designed to assist in understanding our consolidated financial statements. Such financial statements and accompanying notes are the representations of our management, who are responsible for their integrity and objectivity. The following accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”), in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements.

Use of Estimates in the Preparation of Financial Statements

The preparation of our financial statements in conformity with GAAP and the liquidation basis of accounting requires management to make estimates and assumptions that affect the reported amounts of the assets, including net assets in liquidation, and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. These estimates are made and evaluated on an on-going basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ, perhaps in adverse ways, and those estimates could be different under different assumptions or conditions from those estimates.

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Liquidating Trust and the accounts of all of its wholly owned subsidiaries. All inter-company transactions, balances and profits have been eliminated in consolidation. These consolidated financial statements have been prepared according to the liquidation basis of accounting. We have evaluated subsequent events for recognition or disclosure in the consolidated financial statements. In the Notes to Consolidated Financial Statements, all dollar and share amounts in tabulation are in thousands of dollars and units, respectively, unless otherwise noted.

Liquidation Basis of Accounting

We owned no properties as of December 31, 2013. Under the terms of the Liquidating Trust Agreement, we will not acquire any new properties and are focused on liquidating our remaining assets and settling remaining liabilities.

Cash and Cash Equivalents

We consider investments in highly-liquid money market funds or investments with original maturities of three months or less to be cash equivalents.

Income Taxes

The Liquidating Trust is intended to be treated as a continuation of the Partnership and classified as a partnership for federal income tax purposes. Therefore, the Liquidating Trust is generally not subject to income tax. However, legal entities that conduct business in Texas are subject to the Texas margin tax, including previously non-taxable entities such as limited partnerships and limited liability partnerships. The tax is assessed on Texas sourced taxable margin, which is defined as the lesser of (1) 70% of total revenue or (2) total revenue less (a) the cost of goods sold or (b) compensation and benefits. Although the law states that the margin tax is not an income tax, it has the characteristics of an income tax since it is determined by applying a tax rate to a base that considers both revenues and expenses. For the years ended December 31, 2013 and 2012, the Liquidating Trust did not recognize a provision for current tax expense. The Liquidating Trust did not have any entity level uncertain tax positions.

F-5

Behringer Harvard Mid-Term Value Enhancement Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

Certain transactions may be subject to accounting methods for income tax purposes that differ from the accounting methods used in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Accordingly, net income or loss and the resulting balances in the partners’ capital accounts reported for income tax purposes may differ from the balances reported for those same items in the accompanying financial statements.

Concentration of Credit Risk

We had cash and cash equivalents in excess of federally insured levels on deposit in financial institutions and have diversified our cash and cash equivalents between several banking institutions in an attempt to minimize exposure to any one of these entities. We regularly monitor the financial stability of these financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents.

Revenue Recognition

Rental revenue is recorded on the contractual basis under the liquidation basis of accounting.

Reportable Segments

The Liquidating Trust has determined that it has one reportable segment, with activities related to the ownership and management of real estate. Income producing properties generated 100% of the Liquidating Trust’s consolidated revenues for both the years ended December 31, 2013 and 2012. The chief operating decision maker evaluates operating performance on an individual property level. Therefore, the properties are aggregated into one reportable segment.

Asset (Liability) for Estimated Receipts (Costs) in Excess of Estimated Costs (Receipts) during Liquidation

	December 31,			Cash Payments			Change in			December 31,
	2012			and (Receipts)			Estimates			2013

Assets:
Estimated net inflows from consolidated operating activities	$	1,059		$	(655	)	$	(404	)	$	-
Liabilities:
Liquidation costs		(237	)		265			(228	)		(200	)
Capital expenditures		(200	)		361			(161	)		(0	)
Total liabilities		(437	)		626			(389	)		(200	)
Total asset (liability) for estimated receipts in excess of estimated costs during liquidation	$	622		$	(29	)	$	(793	)	$	(200	)

	December 31,			Cash Payments			Change in		December 31,
	2011			and (Receipts)			Estimates		2012

Assets:
Estimated net inflows from consolidated operating activities	$	316		$	(1,188	)	$	1,931	$	1,059
Liabilities:
Liquidation costs		(440	)		162			41		(237	)
Capital expenditures		(1,495	)		822			473		(200	)
Total liabilities		(1,935	)		984			514		(437	)
Total asset (liability) for estimated receipts in excess of estimated costs during liquidation	$	(1,619	)	$	(204	)	$	2,445	$	622

F-6

Behringer Harvard Mid-Term Value Enhancement Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

5. Net Assets in Liquidation

The net assets in liquidation as of December 31, 2013 of $13.1 million plus cumulative liquidating distributions paid through December 31, 2012 of $25.3 million (which includes $18.4 million paid to the Partnership’s limited partners prior to the transfer of its assets and liabilities to the Liquidating Trust), would result in liquidating distributions paid to our beneficiaries per unit of approximately $9.25 per unit (of which $6.19 has been paid, including $4.59 per unit paid to the Partnership’s limited partners prior to the transfer of its assets and liabilities to the Liquidating Trust). These estimates for liquidating distributions per unit include projections of costs and expenses expected to be incurred during the period required to complete the liquidation of our remaining assets in compliance with the Plan and our Liquidating Trust Agreement. These projections could change.

6. Real Estate Investments

We had no real estate investments as of December 31, 2013.

Dispositions during the year ended December 31, 2013

On October 24, 2013, Behringer Harvard Parkway Vista LP, our wholly-owned subsidiary, sold a two-story office building containing approximately 33,470 rentable square feet, located on approximately 2 acres of land in Dallas, Texas (“Parkway Vista”), to an unaffiliated third party. The contract sales price for Parkway Vista was $5.6 million, exclusive of closing costs.

On August 21, 2013, Behringer Harvard 7400 Tucson Way, LLC, our wholly-owned subsidiary, sold a two-story office building containing approximately 70,660 rentable square feet, located on approximately 6 acres of land in Denver, Colorado (“Tucson Way”), to an unaffiliated third party. The contract sales price for Tucson Way was $4.7 million, exclusive of closing costs.

Dispositions during the year ended December 31, 2012

We disposed of no properties during the year ended December 31, 2012.

7. Leasing Activity

We owned no real estate investments at December 31, 2013.

For the year ended December 31, 2013, one of our tenants accounted for 10% or more of the aggregate rental revenues from our properties. Lockheed Martin, a major United States Government defense contractor, leased all of Tucson Way and accounted for rental revenue of approximately $0.8 million or approximately 64% of our aggregate rental revenues for the year ended December 31, 2013. Tucson Way was sold on August 21, 2013.

Related Party Arrangements

The Managing Trustee and certain of its affiliates received fees and compensation in connection with the management and sale of our assets, which fees are the same as those previously paid by the Partnership to Behringer Advisors I as General Partner. In its former capacity as General Partner of the Partnership, Behringer Advisors I and certain of its affiliates have also received fees in the past in connection with the Partnership’s Offering and acquisitions.

For the management and leasing of our properties, we paid Behringer Harvard Mid-Term Management Services, LLC, Behringer Harvard Real Estate Services, LLC or HPT Management Services, LLC, our affiliated property managers or their affiliates (individually or collectively referred to as "Property Manager"), property management and leasing fees equal to the lesser of: (A) the amounts charged by unaffiliated persons rendering comparable services in the same geographic area or (B)(1) for commercial properties that were not leased on a long-term net lease basis, 4% of gross revenues, plus separate leasing fees of up to 1.5% of gross revenues based upon the customary leasing fees applicable to the geographic location of the properties, and (2) in the case of commercial properties that were leased on a long-term net lease basis (10 or more years), 1% of gross revenues plus a one-time initial leasing fee of 3% of gross revenues payable over the first five years of the lease term. We reimbursed the costs and expenses incurred by our Property Manager on our behalf, including the wages and salaries and other employee-related expenses of all on-site employees of our Property Manager who were engaged in the operation, management, maintenance and leasing or access control of our properties, including taxes, insurance and benefits relating to such employees, and legal, travel and other out-of-pocket expenses that were directly related to the management of specific properties. For the year ended December 31, 2013, the Liquidating Trust incurred property management fees payable to the Property Manager or its affiliates of approximately $54,000. For the year ended December 31, 2012, the Liquidating Trust incurred property management fees payable to the Property Manager or its affiliates of approximately $97,000.

F-7

Behringer Harvard Mid-Term Value Enhancement Liquidating Trust

Notes to Consolidated Financial Statements

(Unaudited)

At December 31, 2013, the Liquidating Trust had payables to related parties of approximately $24,000 which consisted of direct expenses and services payable to Behringer Advisors I.

As the Partnership did previously, in connection with the sale of our properties, we will pay our Managing Trustee, Behringer Advisors I, or its affiliates a subordinated disposition fee in an amount not exceeding the lesser of: (A) 50% of the reasonable, customary and competitive real estate brokerage commissions customarily paid for the sale of a comparable property in light of the size, type and location of the property, or (B) 3% of the gross sales price of each property, subordinated to distributions to our beneficiaries from the sale proceeds of an amount which, together with distributions to Partnership’s limited partners prior to the Effective Date, will equal (1) 100% of their capital contributions plus (2) an 8% annual cumulative (noncompounded) return of their net capital contributions. Subordinated disposition fees that are not payable at the date of sale, because our beneficiaries have not yet received their required minimum distributions, will be deferred and paid at such time as these subordination conditions have been satisfied. In addition, after the beneficiaries have received a return of their net capital contributions and an 8% annual cumulative (noncompounded) return on their net capital contributions, then Behringer Advisors I is entitled to receive 15% of the remaining residual proceeds available for distribution (a subordinated participation in net sale proceeds and distributions); provided, however, that in no event will Behringer Advisors I receive in the aggregate more than 15% of sale proceeds remaining after the beneficiaries have received a return of their net capital contributions. Since such conditions have not been met for the Liquidating Trust, the Liquidating Trust incurred no such disposition fees for the years ended December 31, 2013 and 2012.

As of December 31, 2013, the Liquidating Trust owned no real estate assets.

We are dependent on Behringer Advisors I for certain services that are essential to us, including general and administrative responsibilities. In the event that Behringer Advisors I is unable to provide the services to us, we would be required to obtain such services from other sources.

F-8

Behringer Harvard Mid-Term Value Enhancement Liquidating Trust

Real Estate and Accumulated Depreciation

Schedule III

December 31, 2013

(in thousands)

We owned no real estate at December 31, 2013.

The changes in total real estate for the year ended December 31, 2013 are as follows (in thousands):

	Year Ended
	December 31, 2013
Balance as of December 31, 2012	$	9,167
Capital expenditures		361
Liquidation adjustment (1)		(65	)
Disposals		(9,463	)
Balance as of December 31, 2013 (liquidation basis)	$	-

(1) Represents the net liquidation adjustment we made to the carrying value of our remaining real estate investments

The changes in total real estate for the year ended December 31, 2012 are as follows (in thousands):

	Year Ended
	December 31, 2012
Balance as of December 31, 2011	$	10,109
Capital expenditures		822
Liquidation adjustment (1)		(1,764	)
Balance as of December 31, 2012 (liquidation basis)	$	9,167

(1)

Represents the net liquidation adjustment we made to the carrying value of our remaining real estate investments during the year ended December 31, 2012.

F-9

Index to Exhibits

Exhibit Number		Description

2.1		Behringer Harvard Mid-Term Value Enhancement Fund I LP Plan of Liquidation dated February 16, 2011 (previously filed in and incorporated by reference to Form 8-K filed on February 16, 2011)
3.1		Certificate of Trust of Behringer Harvard Mid-Term Value Enhancement Liquidating Trust dated February 16, 2011 (previously filed in and incorporated by reference to Form 10-K filed on April 15, 2011)
10.1*		Purchase Agreement by and between Behringer Harvard 7400 Tucson Way, LLC and Arsenault Holdings, LLC
10.2*		First Amendment to Purchase Agreement by and between Behringer Harvard 7400 Tucson Way, LLC and Arsenault Holdings, LLC
10.3*		Purchase Agreement by and between Behringer Harvard Parkway Vista LP and MOC 5710, LLC
21.1*		List of Subsidiaries
31.1*		Rule 13a-14(a) or Rule 15d-14(a) Certification of Principal Executive Officer
31.2*		Rule 13a-14(a) or Rule 15d-14(a) Certification of Principal Financial Officer
32.1*		Section 1350 Certifications**

* filed herewith

** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

F-10

Attached files

Behringer Harvard Mid-Term Value Enhancement Liquidating Trust Reports

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