1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

[X] Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee Required)

For the fiscal year ended January 31, 1996

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No Fee Required)

For the transition period from _______ to _______.

Commission File No. 1-7062

REALTY REFUND TRUST
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)

OHIO 34-6647590
- --------------------------------- -------------------------------
(State or Other Jurisdiction (I.R.S. Employer Identification
of Incorporation or Organization) Number)

1385 Eaton Center Cleveland, Ohio 44114
- --------------------------------------- -------------------------------
(Address of Principal Executive Office) (ZIP Code)

(216) 771-7663
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)

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

Title of Each Class Name of Exchange on Which Registered
- ------------------- ------------------------------------

Shares of Beneficial
Interest New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _____

[Cover Continued on Following Page]

[Cover Continued From Previous Page]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K 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 [X]

Aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 18, 1996: $ 5,432,864
---------

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Registrant's Notice of Annual Meeting and Proxy Statement dated
April 5, 1996, as supplemented by a Supplement to Proxy Statement dated April
11, 1996--Part III. The Trust Performance Graph contained in the Registrant's
Notice of Annual Meeting and Proxy Statement dated April 5, 1996, as
supplemented by a Supplement to Proxy Statement dated April 11, 1996, shall not
be deemed incorporated by reference herein.

Portions of the Registrant's 1996 Annual Report--Parts I and II.

-2-

PART I
------

Item 1. BUSINESS.
---------

Introduction.
- -------------

The Registrant is an unincorporated Ohio real estate investment
trust under a Declaration of Trust dated April 28, 1971 and has elected to be
taxed as a real estate investment trust, as that term is used in Sections
856-860 of the Internal Revenue Code.

The Registrant historically has specialized in wrap-around
mortgage lending, whereby the borrower is offered a total mortgage loan (the
wrap-around loan), the principal amount of which loan equals the balance
outstanding on an existing prior mortgage loan on the borrower's property, plus
an additional amount supplied by the Registrant, on existing income-producing
commercial, industrial and multi-unit residential real property. Typically, a
wrap-around loan made by the Registrant is subordinate to the lien of the
existing prior mortgage loan that remains on the property.

In addition to mortgage investments, the Trustees in 1990
authorized the Registrant to pursue equity investments in shopping center,
multi-family residential, office building, industrial and warehouse properties.

The Registrant made no mortgage loans during the fiscal year
ended January 31, 1996. Both of the Registrant's existing loans are scheduled to
mature in fiscal year 1997. Accordingly, the Registrant in fiscal year 1996
retained Brown, Gibbons, Lang & Company, L.P., to review the options available
to the Registrant in respect of the future operations of the Registrant. These
options include the merger, sale or restructuring of the Registrant, new
financing sources, both public and private, and the liquidation of the
Registrant.

Wrap-Around Financing and Other Mortgage Loans.
- -----------------------------------------------

Wrap-around financing is desirable for a borrower in those cases
in which an existing mortgage has an interest rate below presently prevailing
interest rates or in which replacing an existing mortgage is either prohibited
entirely or involves a pre-payment penalty. The decline in recent years in
prevailing interest rates coupled with the low cost of traditional refinancing
has decreased significantly the desirability of wrap-around financing as a form
of refinancing.

-3-

In certain cases, the Registrant has provided refinancing in the
form of junior mortgage loans. Such mortgages are substantially similar to the
Registrant's wrap-around mortgages except that the stated principal amount of
the mortgage is only the amount advanced by the Registrant. The Registrant still
requires the borrower to remit to the Registrant an amount equal to the
principal and interest payments due on the prior mortgage loan in addition to
the payments required on the junior mortgage.

In general, the income-producing properties which secure the
Registrant's loans tend to be relatively large. As of January 31, 1996, the
Registrant had investments in two wrap-around loans. The Registrant's original
cash investments in these loans were $9,000,000 and $6,500,000.

The following table sets forth the geographic distribution of the
Registrant's loans as of January 31, 1996:

State Number of Loans
----- ---------------

Ohio 1
Texas 1

A partnership in which an affiliate of Alan M. Krause, a Trustee
and the Chairman and Co-Chief Executive Officer of the Registrant, is general
partner accounted for 25.9% of the Registrant's loan investment portfolio (after
consideration of the applicable valuation allowance) as of January 31, 1996. See
"Properties - Toledo, Ohio". In general, the Registrant is not dependent upon a
single borrower or a very few borrowers for making any future loans.

As of January 31, 1996, the Registrant's loans receivable
totalled $17,422,010, all of which represented loans secured by wrap-around
mortgages. Loans payable underlying these wrap-around mortgages totalled
$7,732,450. The Registrant's net investment in its loans receivable at January
31, 1996 totalled $9,689,560. Assuming that all of the mortgages remain in
existence until their respective scheduled maturity dates in fiscal 1997, a
total of $17,116,000 of these loans receivable would be payable to the
Registrant in lump sum "balloon" payments at such maturities. The ability of a
borrower to satisfy the obligation to pay the lump sum at maturity applicable to
its property may be dependent upon the borrower's ability to obtain refinancing.
For a detailed analysis of these totals and a description of the periodic
payment terms and maturity dates of the Registrant's loans receivable as of
January 31, 1996, see Note 10 of Notes to Financial Statements set forth on page
16 of the Registrant's 1996 Annual Report (Exhibit 13), which information is
incorporated herein by reference.

-4-

Equity Investments.
- -------------------

In July 1992, the Registrant, through a wholly-owned corporate
subsidiary, took title in lieu of foreclosure to the leasehold estate in the
Chicago office building upon which the Registrant previously had mortgage loans.
At January 31, 1992, the Registrant's net investment in the Chicago office
building was approximately $11,261,900, net of senior mortgage loans of
approximately $942,000. The Registrant's investment was written down to
$7,260,000, based upon the report of an independent real estate appraisal firm,
with a corresponding charge to the Registrant's operations in the third quarter
of fiscal 1993. In the first quarter of fiscal year 1994, the Registrant,
through a wholly-owned corporate subsidiary, consummated the purchase of an 83%
interest in the underlying fee simple estate in the property for approximately
$897,000. In April 1996, the Registrant, through a wholly-owned corporate
subsidiary, consummated the purchase of the remaining 17% interest in the
underlying fee simple estate for approximately $275,000. Net book value for the
Chicago office building, improvements and land as of January 31, 1996 (including
a $3,000,000 valuation allowance established to reduce the carrying value of the
property to its current estimated net realizable value) was $6,396,364. While
the Registrant presently is operating the office building, its present intention
is to seek a purchaser and not to hold the building as a long-term investment.

The Registrant currently has no other equity investments in real estate.
The Board of Trustees has authorized, and the Registrant's investment advisor is
exploring opportunities for, equity investments by the Registrant, as well as
mortgage loan opportunities, in shopping centers, multi-family residential,
hospitality and other types of properties.

Competition and Inflation.
- --------------------------

In connection with its investments, the Registrant competes
against banks, insurance companies, savings and loan associations, mortgage
bankers, pension funds and other lenders and investors, including a number of
other real estate investment trusts, many of which are larger and have
substantially greater financial resources than the Registrant. The principal
elements of competition include the amount, maturity, interest rate, debt
service charged and other terms of a refinancing, and whether the personal
liability of a borrower is required in addition to the mortgage lien on the
refinanced property.

In respect of equity investments, the Registrant will compete
against insurance companies, pension funds, other real estate investment trusts,
limited partnerships, private investors, owner-operators and numerous other
potential

-5-

investors, many of which may have greater financial resources and more
experience than the Registrant. The Registrant's Chicago property has, and it is
expected that any additional rental properties acquired by the Registrant will
have, substantial competition from similar properties in the vicinity. To the
extent the Registrant has acquired or acquires commercial properties, the
success of the Registrant will depend, in part, upon the ability of its tenants
in competing with businesses similar to those conducted by the tenants and upon
other factors which may affect the economic viability of the tenants.

Generally, inflation affects the Registrant as it affects its
borrowers and the underlying real estate collateral. Although this type of
collateral traditionally has been able to sustain itself during periods of
inflation, there has been a significant down-turn in market values of real
property in the United States over the past few years. The Registrant is unable
to predict future real estate market conditions.

Advisory Agreement And Advisor.
- -------------------------------

The Registrant has an Advisory Agreement with Mid-America ReaFund
Advisors, Inc. (the "Advisor") which provides for the Advisor's services as the
investment advisor and administrator of the day-to-day investment operations of
the Registrant and pursuant to which the Advisor is responsible for providing
the Registrant with a continuing and suitable investment program. Therefore, the
Registrant employs no persons on a full-time basis. The Registrant's Chairman
and President are the sole shareholders of the Advisor.

The Advisory Agreement is renewable annually and can be
terminated upon 60 days' notice by the Registrant and 120 days' notice by the
Advisor. The Advisor receives, subject to certain limitations, an annual fee
equal to 1% of the average invested assets for the year (as defined in the
Advisory Agreement) and an annual incentive fee equal to 10% of the amount by
which the net profits (as defined in the Advisory Agreement) of the Registrant
exceeds 8% of the average net worth for the year, and 10% of any realized net
capital gains of the Registrant.

Lines Of Credit.
- ----------------

The Registrant has an agreement with National City Bank (the
"Bank") providing for a secured revolving line of credit. The loan agreement
provides for borrowings at either the Bank's prime lending rate or a fixed rate
equal to 1.5% over the LIBOR then in effect throughout the term of the loan
agreement, which expires on July 31, 1996. Maximum availability under the line
of credit is $7,000,000. Among other provisions, the loan agreement provides for
a borrowing base equal to 83.3% of the Registrant's

-6-

investments (as defined) and $3,000,000 of availability for working capital,
with the remainder available for new investments. The loan agreement also
provides that the Registrant cannot permit its net worth (including subordinated
debt) to be less than $8,500,000 or its total debt (excluding wrap-around
mortgages) and senior indebtedness to exceed 300% and 225%, respectively, of its
net worth. At January 31, 1996, the Registrant had borrowed $6,295,000 under
this line of credit.

On March 16, 1993, the Registrant sold a $5,000,000 secured note
(the "Note") to Mr. Krause at par. The Note bears interest at the prime lending
rate of the Bank, and will mature on August 31, 1996. The Note is secured by a
lien on the assets of the Registrant, which lien is subordinate to the prior
lien of the Bank. In connection with the closing of the sale of the Note, the
Registrant's Trustees received the written opinion of an independent investment
banking firm that the terms of such sale were fair, from a financial point of
view, to the other Shareholders of the Registrant. The proceeds of the sale of
the Note were used to reduce the outstanding indebtedness of the Registrant to
the Bank under its secured revolving line of credit. At March 18, 1996, the
outstanding principal balance of the Note was $4,500,000.

Item 2. PROPERTIES.
-----------

The Registrant maintains its headquarters in leased facilities in
Cleveland, Ohio which it shares with the Advisor. The Registrant owns no real
property other than the Chicago office building. See "Business-Equity
Investments".

The following is a detailed description of the property owned by
the Registrant as well as the properties underlying each of the Registrant's
mortgage loans. All of the information set forth below in respect of the
Registrant's mortgage loans has been furnished by the respective borrowers.
Financial information concerning the Chicago office building as well as the
Registrant's wrap-around mortgages, including the mortgage loans underlying such
wrap-around mortgages, is outlined in Notes 3, 4, 9, 10 and 12, respectively, to
Notes to Financial Statements set forth on Pages 14 and 16, respectively, of the
Registrant's 1996 Annual Report (Exhibit 13), which information hereby is
incorporated by reference.

1. CHICAGO, ILLINOIS - OFFICE BUILDING. This office building, known as The
Carbide and Carbon Building, is located at 230 North Michigan Avenue in downtown
Chicago, and is a thirty-eight story steel frame, concrete and stone structure.
The building has a total rentable floor area of approximately 192,000 square
feet and is approximately 64 years old. In the opinion of the Registrant's
management, the building is covered adequately by insurance.

-7-

The general market for office leasing in downtown Chicago is very
competitive. According to the fourth quarter 1995 Building Owners and Managers
Association of Chicago occupancy survey, the overall occupancy in the area where
this building is located, the Central Business District/East Loop, was 79.77%,
an increase of .35% since the fourth quarter of 1994 and .17% since the fourth
quarter of 1993. Occupancy for Class C Buildings has decreased to approximately
82.6%. A Class C Building generally is described as an older building in need of
some repair and/or renovation.

The following table sets forth the average occupancy rate and
average rent per square foot for this building as of December 31 for the years
indicated:

1995 1994 1993 1992 1991
---- ---- ---- ---- ----

Average Occupancy 59.0% 61.0% 57.0% 55.0% 63.6%
Rate

Average Rent Per $15.50 $16.19 $15.99 $16.15 $16.35
Square Foot

No tenant occupies 10% or more of the rentable square footage of
the building. The following table sets forth further information concerning the
office building leases:

Year of Number Net Percentage
Lease of Square Annual of Gross
Expiration Tenants Feet Rent Annual Rent
- ---------- ------- ---- ---- -----------

1996 18 16,732 $276,468.00 15.33%
1997 10 11,986 $196,692.00 10.90%
1998 19 39,040 $565,368.00 31.34%
1999 9 14,812 $269,112.00 14.92%
2000 6 16,369 $344,760.00 19.11%
2001 3 7,484 $134,940.00 7.48%
2002 0 0 $ 0 0
2003 1 105.9 $ 18,691.00 1.04%
2004 0 0 $ 0 0
2005 0 0 $ 0 0

For federal income tax purposes, the Registrant's tax basis in
the building, improvements and land is $9,672,000 less accumulated depreciation
on the building and improvements as of January 31, 1996 of $691,000. For federal
income tax purposes, the Registrant depreciates the building and improvements
using the straight line method over a life of 40 years.

-8-

The real estate tax rate is $199.13 per $1,000 of assessed
valuation. The current annual real estate taxes are $448,049.

2. TOLEDO, OHIO - OFFICE BUILDING. This office building, known as The
Fiberglas Tower, is located at 319 Madison Avenue, Toledo, Ohio, and is a
thirty-story structure having a total rentable floor area of approximately
332,570 square feet. The building is owned by Riverview Tower Limited
Partnership, a limited partnership of which an affiliate of Mr. Krause is a
general partner. The building is 25 years old and was acquired by the borrower
on July 31, 1985. In the opinion of the Registrant's management, the building is
covered adequately by insurance.

At January 31, 1996, the outstanding principal balance of the
Registrant's loan was $4,506,055 (net of a valuation allowance of $5,000,000)
and interest accrued thereon at 8.70%. This loan is payable in monthly
installments of approximately $128,000 until maturity thereof on December 31,
1996, at which time the entire principal sum including unpaid interest will be
due. In connection with the extension of such loan maturity to December 31,
1996, the Borrower was required to make principal payments of $1,350,000,
$850,000 and $850,000 in June 1994, January 1995 and January 1996, respectively.

The Owens-Corning Corporation ("Owens"), a manufacturer of
fiberglass products, occupies 100% of the building's office space under leases
dated May 1, 1967 and April 30, 1981, respectively and a lease amendment and
extension agreement dated June 4, 1994 (collectively, the "Owens Lease").
Pursuant to the Owens Lease and two additional agreements for basement storage
space, Owens leases the entire rentable floor area of the building at an annual
base rent of $2,261,000. The initial term of the Owens Lease expired on December
31, 1994; however, Owens and the borrower have negotiated an extension of such
lease until December 31, 1996 with two six-month renewal options. In October
1993, Owens announced that it would be relocating from the building to another
facility. Relocation is expected to be completed in 1996. Such relocation, when
it occurs, will impact directly the borrower's ability to meet timely its loan
obligations to the Registrant. In the event that the borrower defaults in its
obligations to the Registrant, the Registrant may be faced with a write-down of
this investment. The borrower is unable to determine competitive conditions
affecting office space which might exist at the time Owens relocates from this
building. In view of the fact that such loan was made on a non-recourse basis,
the Registrant has established a valuation allowance to reflect the Registrant's
current estimate of the net proceeds of a sale of the building.

The following table sets forth the average occupancy

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rate and average rent per square foot as of December 31 for the
years indicated:

1995 1994 1993 1992 1991
---- ---- ---- ---- ----

Average Occupancy 100% 100% 99% 99% 99%
Rate

Average Rent Per $17.29 $22.43 $11.81 $12.07 $11.62
Square Foot

For federal income tax purposes, the borrower's tax basis in the
property is $16,705,077, less accumulated depreciation as of December 31, 1995
equal to $9,598,758. The borrower depreciates the building using the
straight-line method over a life of 19 years. The borrower also depreciates
various building improvements using the straight line method over lives of 10
years.

The effective real estate tax rate is $65.68 per $1,000 of
assessed valuation. The current annual real estate taxes are $286,871.

3. FORT WORTH, TEXAS - OFFICE BUILDING. This facility is located on a
portion of the General Dynamics West Campus, Fort Worth, Texas, and consists of
a 44.3 acre site on which is located three buildings having a total rentable
floor area of approximately 550,500 square feet. The facility is owned by
Pacific Place Partners, LTD., a Texas limited partnership. The facility is
approximately five years old and was acquired by the borrower in November 1991.

At January 31, 1995, the outstanding principal balance of the
Registrant's loan was $12,915,955 and interest accrued thereon at 11.4%. This
loan is payable in monthly installments of principal and interest of
approximately $625,000 until maturity thereof on October 31, 1996, at which time
the entire principal sum remaining unpaid will be due.

General Dynamics Corporation ("General Dynamics"), a defense
contractor, leased the entire facility until March 1, 1993, at which time
General Dynamics assigned all of its right, title and interest in, to and under
the lease to Lockheed Corporation. However, General Dynamics remains liable for
all promises, covenants, conditions and agreements to be kept, made or performed
by Lockheed Corporation under the lease. The lease permits Lockheed Corporation
to use the facility for general business office purposes, including engineering
facilities, computer software development facilities and storage facilities
incidental to such uses. However, the property may not be used

-10-

for chemical laboratories. The term of the lease expires in November 1996.
Annual rent for the first lease year was approximately $11,500,000 and for each
lease year thereafter is approximately $7,500,000. The borrower is unable to
determine competitive conditions which might exist at the time the lease
expires.

For federal income tax purposes, the borrower's tax basis in the
property, which was acquired in a Section 1031 exchange, is $48,404,030, less
accumulated depreciation and amortization of deferred charges as of December 31,
1994 equal to $11,240,841. The borrower depreciates the three buildings using
the straight line method over lives of 15 years. Personal property is
depreciated using the declining balance method over lives of five years.

The effective real estate tax rate is $30.50 per $1,000 of
assessed valuation. The current annual real estate taxes are $323,093.

Item 3. LEGAL PROCEEDINGS.
------------------

The Registrant is not a party to any material pending legal
proceedings.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
----------------------------------------------------

No matters were submitted to a vote of security holders during
the fourth quarter of the fiscal year covered by this report.

EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------

The age (as of March 18, 1996), business experience during the
past five years and offices presently held by each of the Registrant's executive
officers are reported below. The Registrant's By-Laws provide that officers
shall hold office until their successors are duly elected and qualified and that
any officer may be removed from office at any time by the Registrant's Trustees.

ALAN M. KRAUSE: Age 66; Chairman of the Board of Trustees and
Co-Chief Executive Officer of the Registrant since 1990 and prior thereto Vice
Chairman of the Board of Trustees of the Registrant since 1971. Chairman of the
Board and Co-Chief Executive Officer of Mid-America ReaFund Advisors, Inc.
(Advisor to the Registrant) since 1990. Principal, The Mid-America Companies
(real estate ownership) since prior to 1983 and President, The Mid-America
Management Corporation (real estate management) since 1983.

-11-

JAMES H. BERICK: Age 62; President, Treasurer and Co-Chief Executive
Officer of the Registrant since 1990 and prior thereto Vice Chairman of the
Board of Trustees and Secretary of the Registrant since 1971. President,
Co-Chief Executive Officer and Treasurer of Mid-America ReaFund Advisors, Inc.
(Advisor to the Registrant) since 1990. Chairman, Berick, Pearlman & Mills Co.,
L.P.A. (attorneys) since 1986.

PART II
-------

Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
----------------------------------------
AND RELATED SECURITY HOLDER MATTERS
-----------------------------------

The Registrant's shares of beneficial interest are traded on the
New York Stock Exchange under the symbol "RRF". As of March 18, 1996, the
Registrant had approximately 632 shareholders.

The following table sets forth the high and low sales prices of
the Registrant's shares of beneficial interest, as well as dividends declared
thereon, for the last two fiscal years:

Price Range
-----------

Fiscal Year 1995 High Low Dividends
- ---------------- ---- --- ---------

First Quarter 7 5/8 7 .20
Second Quarter 8 1/4 7 1/8 .20
Third Quarter 8 3/8 8 1/4 .20
Fourth Quarter 8 1/2 7 3/4 .20

Fiscal Year 1996 High Low Dividends
- ---------------- ---- --- ---------

First Quarter 8 5/8 7 3/8 .20
Second Quarter 8 1/8 7 1/4 .10
Third Quarter 8 4 1/2 .10
Fourth Quarter 7 4 3/8 .10

Item 6. SELECTED FINANCIAL DATA.
-----------------------

Information in response to this item is set forth on page 4 of
the Registrant's 1996 Annual Report (Exhibit 13), which information is
incorporated herein by reference.

-12-

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
OPERATING RESULTS AND FINANCIAL POSITION.
----------------------------------------

Information in response to this Item is set forth on pages 5
through 8 of the Registrant's 1996 Annual Report (Exhibit 13), which information
is incorporated herein by reference.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
-------------------------------------------

The financial statements of the Registrant and the notes thereto
appear on pages 9 through 18 of the Registrant's 1996 Annual Report, which
information is incorporated herein by reference.

The other financial statements and schedules required herein are
filed as "Financial Statement Schedules" pursuant to Item 14 of this Report.

Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
----------------------------------------------------
None.

PART III
--------

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
--------------------------------------------------

Information in response to this Item is set forth under the
caption "Election of Trustees" in the Registrant's proxy statement dated April
5, 1996, as supplemented by that Supplement to Proxy Statement dated April 11,
1996 (Exhibit 99(a)), which information is incorporated herein by reference. The
information required by this Item in respect of Executive Officers is set forth
on Page 13 of this Form 10-K and is incorporated herein by reference.

Item 11. EXECUTIVE COMPENSATION.
----------------------

Information in response to this Item is set forth under the
caption "Compensation of Trustees and Executive Officers" in the Registrant's
proxy statement dated April 5, 1996, as supplemented by that Supplement to Proxy
Statement April 11, 1996 (Exhibit 99(a)), which information is incorporated
herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN
-----------------------------
BENEFICIAL OWNERS AND MANAGEMENT.
--------------------------------

Information in response to this Item is set forth under
the caption "Ownership of Shares of Beneficial Interest" in the

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14
Registrant's proxy statement dated April 5, 1996, as supplemented by that
Supplement to Proxy Statement dated April 11, 1996 (Exhibit 99(a)), which
information is incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
----------------------------------------------

Information in response to this Item is set forth under the
caption "Certain Transactions" in the Registrant's proxy statement dated April
5, 1996, as supplemented by that Supplement to Proxy Statement dated April 11,
1996 (Exhibit 99(a)), which information is incorporated herein by reference.

PART IV
-------

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
---------------------------------------------------
ON FORM 8-K.
------------

(a) 1. See the Index to Financial Statements set
forth on page 21 hereof for a list of
financial statements and financial schedules
included or incorporated herein by reference.

2.1 The Financial Statements of Riverview Tower
Limited Partnership, a borrower of the
Registrant (which financial statements were
audited by such borrower's auditors), are set
forth as Exhibit 99(b).

2.2 The Financial Statements of Pacific Place
Partners, LTD., a borrower of the Registrant
(which financial statements were audited by
such borrower's auditors), are set forth as
Exhibit 99(c).

3. The exhibits filed as part of this report are
set forth on the Exhibit Index on pages 16
through 20 hereof and each management contract
or compensatory plan or arrangement required to
be filed as an exhibit hereto has been marked
with an asterisk on the Exhibit Index.

(b) No current reports on Form 8-K were filed during the
last quarter of fiscal year 1996.

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SIGNATURES
----------

Pursuant to the requirements of Section 13 or 15(d) of Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

REALTY REFUND TRUST

Dated: April 29, 1996 By: /s/ Alan M. Krause
------------------
Alan M. Krause, Chairman

By: /s/ James H. Berick
-------------------
James H. Berick, President

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.

Dated: April 29, 1996 /s/ James H. Berick
-------------------
James H. Berick, Trustee,
Principal Executive Officer,
Principal Financial Officer
and Principal Accounting
Officer

Dated: April 29, 1996 /s/ Alan M. Krause
------------------
Alan M. Krause, Trustee and
Principal Executive
Officer

Frank L. Kennard, Trustee
Alvin M. Kendis, Trustee
Samuel S. Pearlman, Trustee

Dated: April 29, 1996 By: /s/ Alan M. Krause
------------------
Alan M. Krause,
Attorney-In-Fact

Powers of attorney authorizing Alan M. Krause to sign this Form 10-K on
behalf of Trustees of the Registrant are being filed with the Securities and
Exchange Commission herewith (Exhibit 24).

-15-

Index of Exhibits
-----------------

Exhibit
Number
- ------

3(a) First Amended and Restated Declaration of Trust
(incorporated by reference to Exhibit 3.1 of
Registration Statement No. 2-40238 effective June 17,
1971).

3(b) By-Laws (incorporated by reference to Exhibit 3.2 of the
Registrant's Current Report on Form 8-K dated February 12, 1985
and filed with the Securities and Exchange
Commission on February 13, 1985).

10(a)* Form of Advisory Agreement between the Registrant and
the Advisor (incorporated by reference to Exhibit 12.1
of Registration Statement No. 2-40238 effective June 17,
1971).

10(b)* Amendment dated June 1, 1987 to Advisory Agreement between
Registrant and the Advisor (incorporated by reference to Exhibit
10(b) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1994).

10(c)* Amendment dated June 1, 1988 to Advisory Agreement between the
Registrant and the Advisor (incorporated in Exhibit 10(c) of the
Registrant's Form 10-K for fiscal year ended January 31, 1995).

10(d)* Amendment dated June 1, 1989 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(d) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1990).

10(e)* Amendment dated June 1, 1990 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(e) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1991).

10(f)* Amendment dated June 1, 1991 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(f) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1992).

-16-

10(g)* Amendment dated June 1, 1992 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(g) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1993).

10(h)* Amendment dated June 1, 1993 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(h) of the Registrant's Form 10-K for the fiscal year ended
January 31, 1994).

10(i)* Amendment dated June 1, 1994 to Advisory Agreement between the
Registrant and the Advisor (incorporated by reference to Exhibit
10(i) of Registrant's Form 10-K for fiscal year ended January 31,
1995).

10(j)* Amendment dated June 1, 1995 to Advisory Agreement
between the Registrant and the Advisor.

10(k) Credit Agreement dated July 18, 1990 between the Registrant and
the Bank (incorporated by reference to Exhibit 10(f) of the
Registrant's Form 10-K for the fiscal year ended January 31,
1991).

10(l) Extension Agreement dated June 27, 1991 to Credit
Agreement between the Registrant and the Bank
(incorporated by reference to Exhibit 10(g) of the
Registrant's Form 10-K for the fiscal year ended January
31, 1992).

10(m) Amendment and Waiver Agreement dated as of July 7, 1992 to Credit
Agreement between the Registrant and the Bank (incorporated by
reference to Exhibit 10.5 of the Registrant's Current Report on
Form 8-K dated March 16, 1993 and filed with the Securities and
Exchange Commission on March 24, 1993).

10(n) Security Agreement (Promissory Notes) dated as of July
7, 1992 between Registrant and the Bank (incorporated by
reference to Exhibit 10.6 of the Registrant's Current
Report on Form 8-K dated March 16, 1993 and filed with
the Securities and Exchange Commission on March 24,
1993).

10(o) Second Amendment dated March 16, 1993 to Credit
Agreement between the Registrant and the Bank
(incorporated by reference to Exhibit 10.2 of the
Registrant's Current Report on Form 8-K dated March 16,
1993 and filed with the Securities and Exchange
Commission on March 24, 1993).

-17-

10(p) Third Amendment dated as of July 28, 1994 between the Registrant
and the Bank (incorporated by reference to Exhibit 10(o) of the
Registrant's Form 10-K for the fiscal year ended January 31,
1995).

10(q) Security Agreement (Promissory Notes) dated as of March
16, 1993 between Registrant and the Bank (incorporated
by reference to Exhibit 10.4 of the Registrant's Current
Report on Form 8-K dated March 16, 1993 and filed with
the Securities and Exchange Commission on March 24,
1993).

10(r) Fourth Amendment dated as of July 27, 1995 between the
Registrant and the Bank.

10(s) Fifth Amendment dated as of January 29, 1996 between
Registrant and the Bank.

10(t) Sixth Amendment dated April 16, 1996 between Registrant
and the Bank.

10(u) Security Agreement (Inventory, Receivables and Equipment) dated
as of March 16, 1993 between Registrant and Bank (incorporated by
reference to Exhibit 10.3 of the Registrant's Current Report on
Form 8-K dated March 16, 1993 and filed with the Securities and
Exchange Commission on March 24, 1993).

10(v) Secured Note Purchase Agreement dated March 16, 1993
between the Registrant and Alan M. Krause (incorporated
by reference to Exhibit 10.1 of the Registrant's Current
Report on Form 8-K dated March 16, 1993 and filed with
the Securities and Exchange Commission on March 24,
1993).

10(w)* Employment Agreement dated January 22, 1990 between the
Registrant and Alan M. Krause (incorporated by reference to
Exhibit 10(i) of the Registrant's Form 10-K for the fiscal year
ended January 31, 1992).

10(x)* Amendment No. 1 dated June 1, 1990 to Employment
Agreement between the Registrant and Alan M. Krause
(incorporated by reference to Exhibit 10(j) of the
Registrant's Form 10-K for the fiscal year ended January
31, 1992).

10(y)* Amendment No. 2 dated June 1, 1991 to Employment
Agreement between the Registrant and Alan M. Krause
(incorporated by reference to Exhibit 10(k) of the
Registrant's Form 10-K for the fiscal year ended January
31, 1992).

-18-

10(z)* Amendment No. 3 dated June 1, 1992 to Employment
Agreement between the Registrant and Alan M. Krause
(incorporated by reference to Exhibit 10(s) of the
Registrant's Form 10-K for the fiscal year ended January
31, 1993).

10(aa)* Amendment No. 4 dated June 1, 1993 to Employment
Agreement between the Registrant and Alan M. Krause
(incorporated by reference to Exhibit 10(u) of the
Registrant's Form 10-K for the fiscal year ended January
31, 1994).

10(bb)* Amendment No. 5 dated June 1, 1994 to Employment
Agreement between the Registrant and Alan M. Krause
(incorporated by reference to Exhibit 10(x) of the
Registrant's Form 10-K for the fiscal year ended January
31, 1995).

10(cc)* Amendment No. 6 dated June 1, 1995 to Employment
Agreement between Registrant and Alan M. Krause.

10(dd)* Employment Agreement dated January 22, 1990 between the
Registrant and James H. Berick (incorporated by reference to
Exhibit 10(l) of the Registrant's Form 10-K for the fiscal year
ended January 31, 1992).

10(ee)* Amendment No. 1 dated June 1, 1990 to Employment
Agreement between the Registrant and James H. Berick
(incorporated by reference to Exhibit 10(m) of the
Registrant's Form 10-K for the fiscal year ended January
31, 1992).

10(ff)* Amendment No. 2 dated June 1, 1991 to Employment
Agreement between the Registrant and James H. Berick
(incorporated by reference to Exhibit 10(n) of the
Registrant's Form 10-K for the fiscal year ended January
31, 1992).

10(gg)* Amendment No. 3 dated June 1, 1992 to Employment
Agreement between the Registrant and James H. Berick
(incorporated by reference to Exhibit 10(w) of the
Registrant's Form 10-K for the fiscal year ended January
31, 1993).

10(hh)* Amendment No. 4 dated June 1, 1993 to Employment
Agreement between the Registrant and James H. Berick
(incorporated by reference to Exhibit 10 (z) of the
Registrant's Form 10-K for the fiscal year ended January
31, 1994).

-19-

10(ii)* Amendment No. 5 dated June 1, 1994 to Employment
Agreement between the Registrant and James H. Berick
(incorporated by reference to Exhibit 10(dd) of the
Registrant's Form 10-K for the fiscal year ended January
31, 1995).

10(jj)* Amendment No. 6 dated June 1, 1995 to Employment
Agreement between the Registrant and James H. Berick.

13 The Registrant's 1996 Annual Report.

24 Powers of Attorney.

27** Financial Data Schedule.

99(a) Notice of Annual Meeting and Proxy Statement dated April
5, 1996 and Supplement to Proxy Statement dated April
11, 1996.

99(b) Financial Statements of Riverview Tower Limited
Partnership as at December 31, 1994 and 1995.

99(c) Financial Statements of Pacific Place Partners, Ltd. as
at December 31, 1994 and 1995.

<FN>
*Management contract or compensatory plan or arrangement required
to be filed as an exhibit hereto.

**Filed only in electronic format pursuant to Item 601(b)(27) of
Regulation S-K.

-20-

21
REALTY ReFUND TRUST
-------------------

LIST OF FINANCIAL STATEMENTS AND SCHEDULE
-----------------------------------------

The following financial statements of Realty ReFund Trust are included in
Item 8:

Report of Independent Public Accountants

Balance Sheets -- January 31, 1996 and 1995

Statements of Operations -- For the Years Ended January 31,
1996, 1995 and 1994

Statements of Shareholders' Equity -- For the Years Ended
January 31, 1996, 1995 and 1994

Statements of Cash Flows -- For the Years Ended January 31,
1996, 1995 and 1994

Notes to Financial Statements -- January 31, 1996, 1995 and
1994

The following financial statement schedule of Realty ReFund Trust is included
in Item 14(a)1.:

Schedule III -- Real Estate and Accumulated Depreciation

All other schedules are omitted, as the information is not
required or is otherwise furnished.

-21-
22

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Trustees,
Realty ReFund Trust:

We have audited the accompanying balance sheets of Realty ReFund Trust (an Ohio
unincorporated business trust) as of January 31, 1996 and 1995, and the related
statements of operations, shareholders' equity and cash flows for each of the
three years in the period ended January 31, 1996. These financial statements
and the schedule referred to below are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits. The summarized financial data
contained in Note 12 are based on the financial statements of Riverview Tower
Limited Partnership and Pacific Place Partners, Ltd. which were audited by
other auditors. Their reports have been furnished to us and our opinion,
insofar as it relates to the data in Note 12, is based solely on the reports of
the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Realty ReFund Trust as of January 31, 1996
and 1995, and the results of its operations and its cash flows for each of the
three years in the period ended January 31, 1996 in conformity with generally
accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in Item 14(a)1. of
this Form 10-K is the responsibility of the Trust's management and is presented
for purposes of complying with the Securities and Exchange Commission's rules
and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly states, in all material
respects, the financial data required to be set forth therein in relation to
the basic financial statements taken as a whole.

/s/ Arthur Andersen LLP
------------------------

Cleveland, Ohio,
February 26, 1996.

-22-
23
SCHEDULE III

REALTY ReFUND TRUST
-------------------

REAL ESTATE AND ACCUMULATED DEPRECIATION
----------------------------------------

AS OF JANUARY 31, 1996
----------------------

Cost Capitalized Gross Amount to
Initial Cost Subsequent to Which Carried at
to Trust Acquisition Close of Period
------------------------ ------------------------ ------------------------------------

Buildings and Carrying Buildings and Total
Encumbrances Land Improvements Improvements Costs Land Improvements (A) (B)
------------ -------- ------------- ------------ -------- -------- ------------- ----------

Office Building --
Chicago, Illinois $ -- $897,436 $7,260,000 $ -- $ -- $897,436 $6,291,164 $7,188,600
======= ======== ========== ======= ======= ======== ========== ==========

<FN>
(A) Reconciliation of total cost and accumulated depreciation.

Year
Accumulated Construction Date
Depreciation Completed Acquired Life
------------ ------------ -------- ------

Office Building --
Chicago, Illinois $792,236 $ -- (C) (D)
======== ======= =====

<FN>
(A) Reconciliation of total cost and accumulated depreciation.

1996 1995 1994
------------------------ ------------------------ ------------------------
Total Accumulated Total Accumulated Total Accumulated
Cost Depreciation Cost Depreciation Cost Depreciation
---------- ------------ ---------- ------------ ---------- ------------

BALANCE, beginning of year $9,009,696 $359,439 $8,387,719 $ 29,256 $7,401,863 $ 2,746

ADDITIONS DURING PERIOD:
Building improvements 491,599 -- 107,000 -- -- --
Tenants improvements 687,305 -- 514,977 -- 88,420 --
Acquisition of land -- -- -- -- 897,436 --
Depreciation expense -- 432,797 -- 330,183 -- 26,510

DEDUCTIONS DURING PERIOD:
Writedown to estimated net realizable value (E) (3,000,000) -- -- -- -- --
---------- -------- ---------- -------- ---------- -------

BALANCE, end of year $7,188,600 $792,236 $9,009,696 $359,439 $8,387,719 $29,256
========== ======== ========== ======== ========== =======

<FN>
(B) For federal income tax purposes, the aggregate cost is $9,672,000 at January 31, 1996.

(D) Commencing February 1, 1994, building and building improvements are being depreciated on a straight-line basis over 30 years.
Tenant improvements are depreciated on a straight-line basis over the related lease terms, which range from five to fifteen
years.

(E) In fiscal 1996, the Trust recorded a $3,000,000 provision to reduce the carrying value of the real estate held for sale to its
estimated net realizable value. The amount of the writedown was based upon the Trust's estimate of the amount of net proceeds
which would be realized upon the sale of the real estate.

-23-