1
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the Quarterly Period Ended SEPTEMBER 30, 1996

Commission File Number 2-82765

REAL EQUITY PARTNERS
(A California Limited Partnership)

I.R.S. Employer Identification No. 95-3784125

9090 WILSHIRE BLVD., SUITE 201
BEVERLY HILLS, CA 90211

Registrant's Telephone Number,
Including Area Code (310) 278-2191

Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

Yes X No
---- ----
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REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 1996

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements and Notes to Financial Statements

Balance Sheets, September 30, 1996 and December 31, 1995 . . . . . . . . . . . . . . . 1

Statements of Operations,
Nine and Three Months Ended September 30, 1996 and 1995 . . . . . . . . . . . . 2

Statement of Partners' Equity (Deficiency),
Nine Months Ended September 30, 1996 . . . . . . . . . . . . . . . . . . . . . . 3

Statements of Cash Flows,
Nine Months Ended September 30, 1996 and 1995 . . . . . . . . . . . . . . . . . 4

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Item 2. Management's Discussion and Analysis of Financial
Position and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . 9

PART II. OTHER INFORMATION

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

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REAL-EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

BALANCE SHEETS

SEPTEMBER 30, 1996 AND DECEMBER 31, 1995

ASSETS

1996 1995
(Unaudited) (Audited)
-------------- --------------

RENTAL PROPERTY, at cost (Notes 1 and 2)
Land $ 6,553,357 $ 7,077,565
Buildings 22,096,723 26,949,118
Furniture and equipment 3,720,901 4,034,243
-------------- --------------
32,370,981 38,060,926
Less accumulated depreciation (12,916,781) (14,497,544)
-------------- --------------

19,454,200 23,563,382
-------------- --------------

CASH AND CASH EQUIVALENTS 2,170,744 1,794,041
-------------- --------------

OTHER ASSETS:
Due from affiliated rental agent 625,661 448,634
Other receivables and prepaid expenses 227,780 225,144
Receivable for earthquake loss (Note 1) - 334,591
-------------- --------------
853,441 1,008,369
-------------- --------------

TOTAL ASSETS $ 22,478,385 $ 26,365,792
============== ==============

LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Mortgage notes payable (Notes 2 and 7) $ 14,122,841 $ 17,747,363
Accrued fees and expenses due general partner
(Notes 5 and 7) 682,942 651,320
Accrued interest payable 100,271 388,551
Accounts payable and accrued expenses (Note 1) 162,749 269,663
Liability for earthquake loss (Note 1) 516,149 627,738
Tenant security deposits 235,078 255,772
-------------- --------------
15,820,030 19,940,407
COMMITMENTS AND CONTINGENCIES (Notes 5 and 6)

PARTNERS' EQUITY 6,658,355 6,425,385
-------------- --------------

TOTAL LIABILITIES AND PARTNERS' EQUITY $ 22,478,385 $ 26,365,792
============== ==============

The accompanying notes are an integral part of these financial statements.

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REAL-EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS

NINE AND THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

(Unaudited)

Nine months Three months Nine months Three months
ended ended ended ended
Sept. 30, 1996 Sept. 30, 1996 Sept. 30, 1995 Sept. 30, 1995
--------------- --------------- --------------- ---------------

RENTAL OPERATIONS:
Revenues
Rental income $ 3,541,982 $ 1,171,944 $ 3,942,549 $ 1,286,277
Other income 128,825 40,284 213,856 69,686
--------------- --------------- --------------- ---------------
3,670,807 1,212,228 4,156,405 1,355,963
--------------- --------------- --------------- ---------------
Expenses
Operating expenses 1,596,554 476,625 1,960,493 579,185
Management fees - affiliate (Note 4) 183,592 58,956 229,743 75,078
Depreciation (Note 1) 639,831 184,603 682,839 227,613
General and administrative expenses 171,938 41,516 195,790 65,845
Interest expense (Note 2) 1,050,365 343,262 1,334,960 442,225

3,642,280 1,104,962 4,403,825 1,389,946
--------------- --------------- --------------- ---------------

Income (loss) from rental operations 28,527 107,266 (247,420) (33,983)
--------------- --------------- --------------- ---------------

PARTNERSHIPS OPERATIONS:
Interest income 54,465 19,159 34,007 11,226
--------------- --------------- --------------- ---------------

Expenses
General and administrative expenses 44,978 16,178 65,933 26,102
Professional fees 32,510 4,768 24,950 2,986
Interest expense - general partner (Note 5) 31,622 10,618 31,507 10,618
--------------- --------------- --------------- ---------------

109,110 31,564 122,390 39,706
--------------- --------------- --------------- ---------------

Loss from partnership operations (54,645) (12,405) (88,383) (28,480)
--------------- --------------- --------------- ---------------

GAIN ON FORECLOSURE OF RENTAL PROPERTIES 259,088 - - -
--------------- --------------- --------------- ---------------

NET INCOME (LOSS) $ 232,970 $ 94,861 $ (335,803) $ (62,463)
=============== =============== =============== ===============

NET INCOME (LOSS) PER LIMITED PARTNERSHIP
INTEREST $ 8 $ 3 $ (11) $ (2)
=============== =============== =============== ===============

The accompanying notes are an integral part of these financial statements.

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REAL-EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

STATEMENT OF PARTNERS' EQUITY (DEFICIENCY)

NINE MONTHS ENDED SEPTEMBER 30, 1996

(Unaudited)

General Limited
Partners Partners Total
------------- ------------- -------------

PARTNERSHIP INTERESTS,
September 30, 1996 30,000
=============

EQUITY (DEFICIENCY),
January 1, 1996 $ (720,324) $ 7,145,709 $ 6,425,385

Net income for the nine months
ended September 30, 1996 2,329 230,641 232,970
------------- ------------- -------------

EQUITY (DEFICIENCY),
September 30, 1996 $ (717,995) $ 7,376,350 $ 6,658,355
============= ============= =============

The accompanying notes are an integral part of these financial statements.

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REAL-EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

(Unaudited)

1996 1995
------------- -------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 232,970 $ (335,803)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation 639,831 682,838
Gain on foreclosure of rental property (259,088) -
Decrease (increase) in:
Due from affiliated rental agent (259,879) (325,928)
Other receivables and prepaid expenses (23,102) 27,237
Receivable for earthquake loss 334,591 -
Increase (decrease) in:
Accrued fees and expenses due general partner 31,622 31,507
Accounts payable and accrued expenses (30,798) 116,820
Accrued interest payable (6,818) -
------------- -------------

Net cash provided by operating activities 659,329 196,671
------------- -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on mortgage notes payable (171,037) (174,991)
Payments on liability for earthquake loss (111,589) -
------------- -------------

Net cash used in financing activities (282,626) (174,991)
------------- -------------

NET INCREASE IN CASH AND CASH EQUIVALENTS 376,703 21,680

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,794,041 1,195,937
------------- -------------

CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,170,744 $ 1,217,617
============= =============

NON CASH INVESTING AND FINANCING ACTIVITIES
During 1996, the Partnership was relieved of a nonrecourse
mortgage note payable and related accrued interest upon
foreclosure of a rental property, summarized as follows:
Mortgage note payable 3,453,485 -
Accrued interest payable 281,462 -
Write off of rental property (3,469,351) -
Write off of other assets and liabilities (6,508) -
------------- -------------

Gain on foreclosure of rental property 259,088 -
============= =============

The accompanying notes are an integral part of these financial statements.

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REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL

The information contained in the following notes to the financial
statements is condensed from that which would appear in the annual
audited financial statements; accordingly, the financial statements
included herein should be reviewed in conjunction with the financial
statements and related notes thereto contained in the annual report
for the year ended December 31, 1995 filed by Real Equity Partners
(the "Partnership"). National Partnership Investments Corp.
("NAPICO") is the corporate general partner of the Partnership.
Accounting measurements at interim dates inherently involve greater
reliance on estimates than at year end. The results of operations for
the interim periods presented are not necessarily indicative of the
results for the entire year.

In the opinion of the general partners of the Partnership, the
accompanying unaudited financial statements contain all adjustments
(consisting primarily of normal recurring accruals) necessary to
present fairly the financial position of the Partnership as of
September 30, 1996, and the results of operations for the nine and
three months then ended and changes in cash flows for the nine months
then ended.

USE OF ESTIMATES

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

RENTAL PROPERTY AND DEPRECIATION

Rental property is stated at cost. Depreciation is provided for on
the straight-line method over the estimated useful lives of the
buildings and equipment.

On January 17, 1994, the Park Creek and Warner Willows I and II rental
properties sustained damage, estimated at approximately $1,454,000,
due to the Northridge earthquake in the Los Angeles area. The total
estimated expenditures needed to repair the properties, net of
insurance recoveries in 1994 of $630,000, which nets to approximately
$824,000, were expensed in 1994 since they did not extend the useful
life of the properties. In April 1996, the Partnership received from
the insurance company a final settlement payment of $334,591 related
to the earthquake loss. This was reflected in income in the fourth
quarter of 1995 and as a receivable at December 31, 1995.

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REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash and bank certificates of
deposit with an original maturity of three months or less.

NOTE 2 - MORTGAGE NOTES PAYABLE

Mortgage notes payable consist of the following:

a. Conventional mortgage notes bearing interest at rates ranging
from 8% to 10.375% per annum, payable in monthly installments
ranging from $14,105 to $44,300 per month and having maturity
dates from February 1996 to March 2001. These notes total
$11,809,992 at September 30, 1996.

b. Mortgage note, insured by the Department of Housing and Urban
Development under the Section 221(d)(4) program, bearing
interest at the rate of 7 percent per annum, payable in
monthly installments of approximately $19,500, including
interest through maturity in the year 2013. The note has a
balance of $2,312,849 at September 30, 1996.

The mortgage notes are secured by deeds of trust on the rental
properties.

In March 1995, the Parkside Apartments rental property ceased
making payments to the mortgage lender and the mortgage was in
default. A Trust Deed Sale was completed and the property was
forclosed upon on May 23, 1996. The assets and liabilities
were written off at June 30, 1996 and the operating statement
reflects a gain of $259,000 because the Partnership was
relieved of nonrecourse liabilities which were in excess of
the net book value of the property.

NOTE 3 - INCOME TAXES

No provision has been made for income taxes in the accompanying
financial statements as such taxes, if any, are the liability of the
individual partners.

NOTE 4 - RELATED PARTY TRANSACTIONS

The Partnership has entered into agreements with an affiliate of
NAPICO to manage the operations of the rental properties. The
agreements are on a month-to-month basis and provide, among other
things, for a management fee equal to 5 percent of gross rentals and
other collections. Management fees charged to operations under this
agreement were approximately $183,600 and $229,700 for the nine months
ended September 30, 1996 and 1995, respectively.

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REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1996

NOTE 4 - RELATED PARTY TRANSACTIONS (CONTINUED)

An affiliate of NAPICO performed certain of the earthquake repairs at
the Park Creek and Warner Willows I and II rental properties. The
payments to this affiliate for these repairs were approximately
$735,000 as of December 31, 1995. (Note 1). The remaining earthquake
work which shall be funded from insurance proceeds is estimated to be
approximately $226,891 will be competitively bid. On February 22,
1996, the Partnership entered into contracts with the affiliate of
NAPICO to perform earthquake related repairs of $107,700 at the
damaged properties, of which $112,600 has been paid as of September
30, 1996.

NOTE 5 - FEES AND EXPENSES DUE GENERAL PARTNER

Under the terms of the Restated Certificate and Agreement of Limited
Partnership (the "Partnership Agreement"), the Partnership is
obligated to the corporate general partner for a deferred acquisition
fee. This fee is for services rendered in connection with the
selection, purchase, acquisition, development, and management of the
Partnership and monitoring the operations of the properties.
Distribution of any part of this fee shall be subordinated to receipt
by each Limited Partner of an amount equal to a cumulative non-
compounded 6 percent annual distribution with respect to the adjusted
capital value (as defined in the Partnership Agreement). The
aggregate amount of the deferred acquisition fee distributed in any
year from net cash from operations shall not exceed an amount equal to
3 percent of the investment in properties plus any proceeds from sale
or refinancing of the properties. The deferred acquisition fee shall
be an amount which, when present valued at 8 percent from certain
dates as defined in the Partnership Agreement, equals 10 percent of
the gross proceeds of the offering ($3,000,000). Distribution of
deferred acquisition fees will be made from net cash from operations
and net proceeds from sale or refinancing for a maximum of 15 years,
or until the above limit is met.

The present value of the deferred acquisition fee plus accrued
interest has been reflected in the accompanying financial statements
and has been capitalized as part of the cost of rental property
acquired. In March 1994, the Partnership paid approximately
$2,300,000 to the corporate general partner from refinancing proceeds.
The amount outstanding as of September 30, 1996 was approximately
$682,900.

The Partnership reimburses NAPICO for certain expenses. The
reimbursement paid to NAPICO was $9,621 and $8,028 for the nine months
ended September 30, 1996 and 1995, respectively, and is included in
general and administrative expenses.

NOTE 6 - CONTINGENCIES

The corporate general partner of the Partnership is a plaintiff in
various lawsuits and has also been named as defendant in other
lawsuits arising from transactions in the ordinary course of business.
In the opinion of management and the corporate general partner, the
claims will not result in any material liability to the Partnership.

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REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1996

NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair
value information about financial instruments, when it is practicable
to estimate that value. One of the mortgage notes payable is insured
by HUD and is secured by a rental property. The operations generated
by the property are subject to various government rules, regulations
and restrictions which make it impracticable to estimate the fair
value of this mortgage note payable. The book values of all other
debt instruments approximate their fair values because the interest
rates of these instruments are comparable to rates currently offered
to the Partnership. The carrying amount of other assets and
liabilities reported on the balance sheets that require such
disclosure approximates fair value due to their short-term maturity.

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REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

SEPTEMBER 30, 1996

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS
OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

The Partnership was formed to invest in residential rental properties
either directly or through investments in joint ventures and other
partnerships which will invest in such real estate. The Partnership
acquired 6 buildings at various dates during 1984 and 1985. One of
the buildings was foreclosed in 1996.

The Partnership's primary sources of funds are income from rental
operations and interest income earned on cash reserves.

Distributions of net cash from operations were normally intended to be
made to the Limited Partners of record on a quarterly basis during the
months of February, May, August, and November pro rata in proportion
to the number of units held. The November 1994 and subsequent
distributions to the limited partners were not made due to the
Partnership setting aside funds for losses incurred by REP as a result
of the January 17, 1995 earthquake in the Los Angeles area. The
Partnership will resume distributions to the limited partners once
sufficient funds are in cash reserves to repair such earthquake
damage.

Currently, it is anticipated that the Partnership will continue to
meet its current and long term obligations as they become due.

RESULTS OF OPERATIONS

Rental operations consist primarily of rental income and depreciation
expense, debt service, and normal operating expenses to maintain the
properties. Depreciation is provided on the straight-line method over
the estimated useful lives of the buildings and equipment.
Substantially all of the rental units in the apartment projects are
leased on a month-to-month basis.

An annual property management fee, which shall in any event not exceed
5% of gross revenues from each property under management, is payable
by the properties to an affiliate of NAPICO.

The Parkside Apartments rental property was operating at a deficit.
In March 1995, the Parkside Apartments rental property ceased making
payments to the mortgage lender. The mortgage lender filed a notice
of default on January 17, 1996, and foreclosed on the property on May
23, 1996. The foreclosure resulted in a gain of $259,088 because the
Partnership was relieved of nonrecourse liabilities which were in
excess of the net book value of the property.

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REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

SEPTEMBER 30, 1996

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS
OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS (CONTINUED)

Occupancy at the Warner Willows I and II properties averaged 92
percent during the first nine months of 1996, a 4 percent decrease
from the same period in 1995. Both properties operated with positive
cash earnings for the nine months ended September 30, 1996, (excluding
earthquake repair costs, depreciation and principal payments on the
mortgage loans). Positive cash earnings for the nine months ended
September 30, 1996 were approximately $83,000 and $29,000 for Warner
Willows I and II, respectively.

Occupancy at the Arbor Glen property averaged 96 percent during the
first nine months of 1996, a 1 percent increase from the same period
in 1995. The property operated with a positive cash flows of
approximately $40,000 during the first nine months of 1996. The
existing loan of $5 million maturing on May 1, 1996 was extended to
August 1997 while concurrently entering into negotiations with Home
Savings of America to refinance the existing loan. A good faith
deposit check was given to Home Savings of America on February 28,
1996.

Occupancy at the Park Creek property averaged 75 percent during the
first nine months of 1996, a 10 percent decrease from the same period
in 1995. The property operated with a positive cash flows of
approximately $59,000 (excluding earthquake repair costs, depreciation
and principal payments on the mortgage loan) during the first nine
months of 1996.

Occupancy at the Willowbrook property averaged 94 percent during the
first nine months of 1996, a 1 percent decrease from the same period
in 1995. The property operated with a positive cash flow of
approximately $247,000, (excluding depreciation and principal payments
on the mortgage loan) during the first nine months of 1996.

On January 17, 1994, the Park Creek and Warner Willows I and II rental
properties sustained damage, estimated at approximately $1,454,000,
due to the earthquake in the Los Angeles area. Included in
liabilities as of September 30, 1996 is approximately $516,000 related
to the earthquake damages. The total estimated expenditures needed to
repair the properties, net of the insurance recoveries in 1994 of
$630,000, which nets to approximately $824,000, were expensed in 1994,
since they did not extend the useful life of the properties. In April
1996, the Partnership received from the insurance company a final
settlement payment of $334,591 related to the earthquake loss. This
was reflected in income in the fourth quarter of 1995 and included as
a receivable at December 31, 1995.

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REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

SEPTEMBER 30, 1996

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS
OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS (CONTINUED)

NAPICO to perform earthquake related repairs of $107,700 at the
properties, of which $112,600 has been paid as of September 30, 1996.

The Partnership operations consist primarily of interest income earned
on certificates of deposit and other temporary investments of funds
not required for investment in projects. The amount of interest
income varies with market rates available on certificates of deposit
and with the amount of funds available for investment.

Operating expenses of the Partnership consist substantially of
recurring general and administrative expenses and professional fees
for services rendered to the Partnership and interest on the deferred
acquisition fee due the General Partners.

The Partnership is incurring interest expense at a rate of 8 percent
per annum on the unpaid fees due the general partner. Under the terms
of the Partnership Agreement, the Partnership is obligated to the
general partner for a deferred acquisition fee for services rendered
in connection with the selection, purchase, development, management
and monitoring the operations of the properties, in an amount which,
when calculated on a present value basis (using a discount factor of 8
percent for this purpose) from the date of payment to the general
partners to September 27, 1984 equals 10 percent of the gross proceeds
of the offering ($3,000,000). Distribution of any part of this fee
from net cash from operations shall be subordinate to receipt by each
Limited Partner of an amount equal to a cumulative noncompounded 6%
distribution. The acquisition fee distributed in any year from net
cash from operations shall not exceed an amount equal to 3 percent of
investment in properties (approximately $600,000) plus any proceeds
from sale or refinancing of the properties. An annual property
management fee, which shall not in any event exceed 5% of gross
revenues from each property under management, is also payable to an
affiliate of the corporate general partner. On March 21, 1994, the
excess proceeds received from the Park Creek and the Warner Willows I
and II refinancings were used to partially pay the deferred
acquisition fees due the general partner. The amount outstanding as
of September 30, 1996 was approximately $682,900.

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REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

SEPTEMBER 30, 1996

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of September 30, 1996, the Partnership's corporate general partner was a
plaintiff or defendant in several lawsuits. None of these were related to the
Partnership.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) No exhibits are required per the provision of Item 7 of regulation S-K.

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REAL EQUITY PARTNERS
(A CALIFORNIA LIMITED PARTNERSHIP)

SEPTEMBER 30, 1996

SIGNATURES

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

REAL EQUITY PARTNERS
(a California limited partnership)

By: National Partnership Investments Corp.
Corporate General Partner

Date: ______________________________________

By: ______________________________________
Bruce Nelson
President

Date: ______________________________________

By: ______________________________________
Shawn Horwitz
Executive Vice President and
Chief Financial Officer