MCNEIL REAL ESTATE FUND IX LTD, 10-K405, 1998-03-31

MCNEIL REAL ESTATE FUND IX LTD
10-K405, 1998-03-31
OPERATORS OF NONRESIDENTIAL BUILDINGS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K405

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended December 31, 1997

-------------------------------------------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ______________ to_____________
Commission file number 0-9026
---------

McNEIL REAL ESTATE FUND IX, LTD.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

California 94-2491437
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code (972) 448-5800
-----------------------------

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

Securities registered pursuant to Section 12(g) of the Act: Limited partnership
units
- ---------------------------------------------------------- --------------------

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, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
--- ---

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 ]

104,455 of the registrant's 110,170 limited partnership units are held by
non-affiliates of this registrant. The aggregate market value of units held by
non-affiliates is not determinable since there is no public trading market for
limited partnership units and transfers of units are subject to certain
restrictions.

Documents Incorporated by Reference: See Item 14, Page 40

TOTAL OF 44 PAGES
<PAGE>
PART I

ITEM 1. BUSINESS
- ------- --------

ORGANIZATION
- ------------

McNeil Real Estate Fund IX, Ltd. (the "Partnership") was organized May 1, 1978,
as a limited partnership under provisions of the California Uniform Limited
Partnership Act. The general partner of the Partnership is McNeil Partners L.P.
(the "General Partner"), a Delaware limited partnership, an affiliate of Robert
A. McNeil ("McNeil"). The Partnership is governed by an amended and restated
partnership agreement dated November 12, 1991, as amended (the "Amended
Partnership Agreement"). Prior to November 12, 1991, Pacific Investors
Corporation (the prior "Corporate General Partner"), a wholly-owned subsidiary
of Southmark Corporation ("Southmark"), and McNeil were the general partners of
the Partnership, which was governed by an agreement of limited partnership dated
May 1, 1978 (the "Original Partnership Agreement"). The principal place of
business for the Partnership and the General Partner is 13760 Noel Road, Suite
600, LB70, Dallas, Texas, 75240.

On January 10, 1979, a Registration Statement on Form S-11 was declared
effective by the Securities and Exchange Commission whereby the Partnership
offered for sale $55,000,000 of limited partnership units ("Units"). The Units
represent equity interests in the Partnership and entitle the holders thereof to
participate in certain allocations and distributions of the Partnership. The
sale of Units closed on September 7, 1979, with 110,000 Units sold at $500 each,
or gross proceeds of $55,000,000 to the Partnership. In addition, the original
general partners purchased an additional 200 Units for $100,000. In 1993, 30
Units were relinquished leaving 110,170 Units outstanding at December 31, 1997.

SOUTHMARK BANKRUPTCY AND ASSET PURCHASE AGREEMENT
- -------------------------------------------------

On July 14, 1989, Southmark filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. Neither the Partnership, McNeil nor the
Corporate General Partner were included in the filing. Southmark's
reorganization plan became effective August 10, 1990. Under the plan, most of
Southmark's assets, which included Southmark's interests in the Corporate
General Partner, were sold or liquidated for the benefit of creditors.

In accordance with Southmark's reorganization plan, Southmark, McNeil and
various of their affiliates entered into an asset purchase agreement on October
12, 1990, providing for, among other things, the transfer of control to McNeil
or his affiliates of 34 limited partnerships (including the Partnership) in the
Southmark portfolio.

On February 14, 1991, pursuant to the asset purchase agreement as amended on
that date: (a) an affiliate of McNeil purchased the Corporate General Partner's
economic interest in the Partnership; (b) McNeil became the managing general
partner of the Partnership pursuant to an agreement with the Corporate General
Partner that delegated management authority to McNeil; and (c) McNeil Real
Estate Management, Inc. ("McREMI"), an affiliate of McNeil, acquired the assets
relating to the property management and partnership administrative business of
Southmark and its affiliates and commenced management of the Partnership's
properties pursuant to an assignment of the existing property management
agreements from the Southmark affiliates.
<PAGE>
On November 12, 1991, the limited partners approved a restructuring proposal
that provided for (i) the replacement of the Corporate General Partner and
McNeil with the General Partner; (ii) the adoption of the Amended Partnership
Agreement, which substantially altered the provisions of the Original
Partnership Agreement relating to, among other things, compensation,
reimbursement of expenses, and voting rights; and (iii) the approval of a new
property management agreement with McREMI, the Partnership's property manager.

The Amended Partnership Agreement provides for a Management Incentive
Distribution ("MID") to replace all other forms of general partner compensation
other than property management fees and reimbursements of certain costs.
Additional Units may be issued in connection with the payment of the MID
pursuant to the Amended Partnership Agreement. See Item 8 - Note 2 -
"Transactions with Affiliates." For a discussion of the methodology for
calculating and distributing MID, see Item 13 - Certain Relationships and
Related Transactions.

Settlement of Claims:

The Partnership filed claims with the United States Bankruptcy Court for the
Northern District of Texas, Dallas Division (the "Bankruptcy Court") against
Southmark for damages relating to improper overcharges, breach of contract and
breach of fiduciary duty. The Partnership settled these claims in 1991, and such
settlement was approved by the Bankruptcy Court.

An Order Granting Motion to Distribute Funds to Class 8 Claimants dated April
14, 1995, was issued by the Bankruptcy Court. In accordance with the Order, in
May 1995, the Partnership received in full satisfaction of its claims, $53,573
in cash, and common and preferred stock in the reorganized Southmark. The cash
and stock represent the Partnership's pro-rata share of Southmark assets
available for Class 8 claimants. The Partnership sold the Southmark common and
preferred stock in May 1995 for $17,244 which, when combined with the cash
proceeds from Southmark, resulted in a gain on settlement of litigation of
$70,817.

CURRENT OPERATIONS
- ------------------

General:

The Partnership is engaged in real estate activities, including the ownership,
operation and management of residential real estate and other real estate
related assets. At December 31, 1997, the Partnership owned thirteen
income-producing properties as described in Item 2 - Properties.

The Partnership does not directly employ any personnel. The General Partner
conducts the business of the Partnership directly and through its affiliates.
The Partnership is managed by the General Partner. The Partnership has
reimbursed affiliates of the General Partner for certain expenses incurred by
the affiliates in connection with the management of the Partnership. See Item 8
- - Note 2 - "Transactions With Affiliates."

The business of the Partnership to date has involved only one industry segment.
See Item 8 - Financial Statements and Supplementary Data. The Partnership has no
foreign operations. The business of the Partnership is not seasonal.

<PAGE>
Business Plan:

Pursuant to the Partnership's previously announced liquidation plans, the
Partnership has recently retained PaineWebber, Incorporated as its exclusive
financial advisor to explore alternatives to maximize the value of the
Partnership. The alternatives being considered by the Partnership include,
without limitation, a transaction in which limited partnership interests in the
Partnership are converted into cash. The General Partner of the Partnership or
entities or persons affiliated with the General Partner will not be involved as
a purchaser in any of the transactions contemplated above. Any transaction will
be subject to certain conditions including (i) approval by the limited partners
of the Partnership, and (ii) receipt of an opinion from an independent financial
advisory firm as to the fairness of the consideration received by the
Partnership pursuant to such transaction. Finally, there can be no assurance
that any transaction will be consummated, or as to the terms thereof.

The Partnership placed Sheraton Hills Apartments on the market for sale
effective August 1, 1997.

Competitive Conditions:

Since the principal business of the Partnership is to own and operate real
estate, the Partnership is subject to all of the risks incident to ownership of
real estate and interests therein, many of which relate to the illiquidity of
this type of investment. These risks include changes in general or local
economic conditions, changes in supply or demand for competing properties in an
area, changes in interest rates and availability of permanent mortgage funds
which may render the sale or refinancing of a property difficult or
unattractive, changes in real estate and zoning laws, increases in real property
tax rates and Federal or local economic or rent controls. The illiquidity of
real estate investments generally impairs the ability of the Partnership to
respond promptly to changed circumstances. The Partnership competes with
numerous established companies, private investors (including foreign investors),
real estate investment trusts, limited partnerships and other entities (many of
which have greater resources than the Partnership) in connection with the sale,
financing and leasing of properties. The impact of these risks on the
Partnership, including losses from operations and foreclosures of the
Partnership's properties, is described in Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations. See Item 2 -
Properties for a discussion of competitive conditions at the Partnership's
properties.

Forward-Looking Information:

Within this document, certain statements are made as to the expected occupancy
trends, financial condition, results of operations, and cash flows of the
Partnership for periods after December 31, 1997. All of these statements are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements are not
historical and involve risks and uncertainties. The Partnership's actual
occupancy trends, financial condition, results of operations, and cash flows for
future periods may differ materially due to several factors. These factors
include, but are not limited to, the Partnership's ability to control costs,
make necessary capital improvements, negotiate sales or refinancings of its
properties, and respond to changing economic and competitive factors.

<PAGE>
Other Information:

The environmental laws of the Federal government and of certain state and local
governments impose liability on current property owners for the clean-up of
hazardous and toxic substances discharged on the property. This liability may be
imposed without regard to the timing, cause or person responsible for the
release of such substances onto the property. The Partnership could be subject
to such liability in the event that it owns properties having such environmental
problems. The Partnership has no knowledge of any pending claims or proceedings
regarding such environmental problems.

In August 1995, High River Limited Partnership, a Delaware limited partnership
controlled by Carl C. Icahn ("High River") made an unsolicited tender offer to
purchase from holders of Units up to approximately 45% of the outstanding Units
of the Partnership for a purchase price of $143 per Unit. In September 1996,
High River made another unsolicited tender offer to purchase any and all of the
outstanding Units of the Partnership for a purchase price of $180 per Unit. In
addition, High River made unsolicited tender offers for certain other
partnerships controlled by the General Partner. The Partnership recommended that
the limited partners reject the tender offers made with respect to the
Partnership and not tender their Units. The General Partner believes that as of
January 31, 1998, High River has purchased approximately 14.2% of the
outstanding Units pursuant to the tender offers. In addition, all litigation
filed by High River, Mr. Icahn and his affiliates in connection with the tender
offers have been dismissed without prejudice.

Management has begun to review its information technology infrastructure to
identify any systems that could be affected by the year 2000 problem. The year
2000 problem is the result of computer programs being written using two digits
rather than four to define the applicable year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in major systems failure or
miscalculations. The information systems used by the Partnership for financial
reporting and significant accounting functions were made year 2000 compliant
during recent systems conversions. The Partnership is in the process of
evaluating the computer systems at the various properties. The Partnership also
intends to communicate with suppliers, financial institutions and others to
coordinate year 2000 issues. Management believes that the remediation of any
outstanding year 2000 conversion issues will not have a material or adverse
effect on the Partnership's operations.

<PAGE>
ITEM 2. PROPERTIES
- ------- ----------

The table on the following page sets forth the real estate investment portfolio
of the Partnership at December 31, 1997. The buildings and the land on which
they are located are owned by the Partnership in fee, subject in each case to a
first lien deed of trust as set forth more fully in Item 8 - Note 5 - "Mortgage
Notes Payable." See also Item 8 - Note 4 - "Real Estate Investments" and
Schedule III - "Real Estate Investments and Accumulated Depreciation." In the
opinion of management, the properties are adequately covered by insurance.

<TABLE>
<CAPTION>
Net Basis 1997 Date
Property Description of Property Debt Property Tax Acquired
- -------- ------------ --------------- ------------- ------------ ---------

Real Estate Investments:
<S> <C> <C> <C> <C> <C>
Berkley Hills (1) Apartments
Madison, TN 251 units $ 2,179,776 $ 3,196,776 $ 79,301 6/79

Cherry Hills (2) Apartments
Wichita, KS 348 units 4,145,555 4,476,064 83,675 6/80

Forest Park
Village (3) Apartments
Columbus, OH 376 units 3,658,767 5,861,401 192,447 12/79

Heather Square Apartments
Dallas, TX 288 units 3,796,935 3,146,577 185,611 10/79

Lantern Tree (4) Apartments
Omaha, NE 110 units 1,364,137 2,322,124 63,017 7/79

Meridian West (5) Apartments
Puyallup, WA 181 units 2,171,233 3,238,834 81,018 1/80

Pennbrook (6) Apartments
Dallas, TX 216 units 3,046,493 3,131,813 153,697 1/80

Rockborough (7) Apartments
Addison, TX 136 units 2,070,859 2,137,093 80,568 1/80

Rolling Hills (8) Apartments
Louisville, KY 400 units 3,504,523 6,584,044 78,878 9/79
</TABLE>

<PAGE>

Net Basis 1997 Date
Property Description of Property Debt Property Tax Acquired
- -------- ----------- --------------- ------------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Ruskin Place (9) Apartments
Lincoln, NE 270 units $ 2,708,734 $ 4,504,429 $ 182,382 12/79

Westgate (10) Apartments
Lansing, MI 264 units 2,584,006 5,767,941 133,770 12/79

Williamsburg (11) Apartments
Shreveport, LA 194 units 2,188,418 2,630,548 76,802 12/79
-------------- ------------ ------------

$ 33,419,436 $ 46,997,644 $ 1,391,166
============== ============ ============

Asset Held for Sale:

Sheraton Hills Apartments
Nashville, TN 272 units $ 3,009,553 $ 2,747,663 $ 98,043 6/79
============== ============ ============
</TABLE>

- ----------------------------
Total: Apartments - 3,306 units

(1) Berkley Hills Apartments is owned by Berkley Hills Associates which
is wholly-owned by the Partnership and the General Partner.

(2) Cherry Hills Apartments is owned by Cherry Hills Fund IX Limited
Partnership which is wholly-owned by the Partnership.

(3) Forest Park Village Apartments is owned by Forest Park Fund IX
Associates Limited Partnership which is wholly-owned by the
Partnership and the General Partner.

(4) Lantern Tree Apartments is owned by Lantern Tree Fund IX Limited
Partnership which is wholly-owned by the Partnership.

(5) Meridian West Apartments is owned by Meridian West Fund IX Limited
Partnership which is wholly-owned by the Partnership.

(6) Pennbrook Apartments is owned by Pennbrook Fund IX Associates,
L.P. which is wholly-owned by the Partnership and the General
Partner.

(7) Rockborough Apartments is owned by Rockborough Fund IX Limited
Partnership which is wholly-owned by the Partnership.

(8) Rolling Hills Apartments is owned by Rolling Hills Fund IX Associates
L.P. which is wholly-owned by the Partnership and the General
Partner.

<PAGE>
(9) Ruskin Place Apartments is owned by Ruskin Place Fund IX Associates
which is wholly-owned by the Partnership and the General Partner.

(10) Westgate Apartments (formerly known as Sherwood Forest Apartments) is
owned by Sherwood Forest Fund IX Associates which is wholly-owned by
the Partnership and the General Partner.

(11) Williamsburg Apartments is owned by Williamsburg Fund IX Limited
Partnership which is wholly-owned by the Partnership.

The following table sets forth the properties' occupancy rate and rent per
square foot for each of the last five years:

<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------------- ------------- -------------- ------------- --------
Real Estate Investments:

Berkley Hills
<S> <C> <C> <C> <C> <C>
Occupancy Rate............ 94% 93% 98% 98% 98%
Rent Per Square Foot...... $6.10 $5.94 $5.69 $5.35 $4.87

Cherry Hills
Occupancy Rate............ 98% 95% 89% 89% 81%
Rent Per Square Foot...... $6.50 $6.21 $5.75 $5.80 $5.05

Forest Park Village
Occupancy Rate............ 90% 90% 85% 92% 91%
Rent Per Square Foot...... $6.26 $6.24 $5.80 $5.57 $5.51

Heather Square
Occupancy Rate............ 98% 97% 99% 99% 97%
Rent Per Square Foot...... $7.94 $7.60 $7.00 $6.61 $6.20

Lantern Tree
Occupancy Rate............ 91% 89% 99% 99% 96%
Rent Per Square Foot...... $7.79 $7.61 $7.58 $7.07 $6.83

Meridian West
Occupancy Rate............ 93% 95% 93% 90% 92%
Rent Per Square Foot...... $7.75 $7.39 $7.18 $6.99 $7.35

Pennbrook
Occupancy Rate............ 96% 97% 98% 94% 97%
Rent Per Square Foot...... $8.43 $8.12 $7.62 $7.23 $7.03

Rockborough
Occupancy Rate............ 96% 99% 97% 99% 96%
Rent Per Square Foot...... $8.42 $8.25 $7.80 $7.40 $7.00

Rolling Hills
Occupancy Rate............ 97% 95% 94% 97% 90%
Rent Per Square Foot...... $4.92 $4.81 $4.66 $4.33 $3.95

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------------- ------------- -------------- ------------- --------
Ruskin Place
<S> <C> <C> <C> <C> <C>
Occupancy Rate............ 99% 94% 97% 96% 97%
Rent Per Square Foot...... $7.20 $7.08 $6.78 $6.47 $6.26

Westgate
Occupancy Rate............ 92% 87% 86% 92% 94%
Rent Per Square Foot...... $6.83 $6.52 $6.66 $6.51 $6.15

Williamsburg
Occupancy Rate............ 93% 92% 95% 99% 97%
Rent Per Square Foot...... $6.41 $6.39 $6.22 $5.86 $5.41

Asset Held for Sale:

Sheraton Hills
Occupancy Rate............ 96% 90% 98% 97% 98%
Rent Per Square Foot...... $6.26 $5.72 $5.53 $5.14 $4.85
</TABLE>

Occupancy rate represents all units leased divided by the total number of units
of the property as of December 31 of the given year. Rent per square foot
represents all revenue, except interest, derived from the property divided by
the leasable square footage of the property.

Competitive Conditions
- ----------------------

Real Estate Investments:

Berkley Hills Apartments
- ------------------------

A strong local economy has benefited Berkley Hills Apartments. Occupancy rates
are comparable with the property's competitors. Capital improvements at Berkley
Hills have allowed the property to remain competitive with nearby apartment
communities. The strong local economy, and the high occupancy rates are
prompting new construction in the area; but to date, the new construction has
not been located near Berkley Hills, and has been targeted to upscale single
residents while Berkley Hills targets middle class families and singles.

Cherry Hills Apartments
- -----------------------

Cherry Hills Apartments is one of Wichita's finer apartment communities in terms
of interior and exterior appearance. The well-maintained property's occupancy
rate is several points above the average occupancy rate of its competitors.
Rental rates, also, have typically been higher than the rates charged by the
property's competitors. The Wichita unemployment rate is at a record low level,
and all major employers are thriving, providing a good economic setting for the
property.

<PAGE>
Forest Park Village Apartments
- ------------------------------

Forest Park Village Apartments is currently in the midst of a five-year capital
improvement program. Exterior renovations are largely complete, and interior
upgrades are in process. The capital program is needed to allow the property to
compete with numerous other apartment communities in the Northeast Columbus
submarket. Forest Park Village represents a common property in the submarket,
with no distinguishing characteristics other than basements in all its units.
The submarket is very competitive, and many of the competing properties have
been renovated in the past few years.

Heather Square Apartments
- -------------------------

Occupancy rates at Heather Square Apartments typically run 2 or 3 percentage
points above the market due to the excellent curb appeal of the property. The
property also is able to command rental rates slightly higher than most of its
competition. Competition is mixed in the Dallas submarket where Heather Square
is located. As long as the local economy remains strong, it is anticipated that
the property will do well in competition with both older properties and new
construction under development. Annual absorption of apartment units in the
property's submarket has roughly equaled newly constructed units in the past two
years.

Lantern Tree Apartments
- -----------------------

Occupancy rates at Lantern Tree Apartments stabilized in 1997 after decreasing
in 1996. A new business park development is being constructed just a few blocks
from the property. Completion of the project toward the end of 1998 is expected
to improve Lantern Tree's occupancy rate. Lantern Tree compares well with its
competition due to spacious and attractive floor plans. Lantern Tree's occupancy
rate usually exceeds its competition's occupancy rate. The property appeals to
single, upper-middle class residents. The principal competitive disadvantage of
the property is its location which is set back from the main thoroughfare
reducing its drive-by visibility.

Meridian West Apartments
- ------------------------

The economy in Meridian West Apartments' submarket continues to improve, leading
to improved operating results at the property. Vacancy losses decreased in 1997.
The property implemented its first rate increase in several years in late 1997.
The improved cash flow is being reinvested in the property to improve the
competitiveness of the property. Meridian West competes primarily with better
quality apartment communities, and thus the Partnership generally expects rental
and occupancy rates lower than local market rates.

<PAGE>
Pennbrook Apartments
- --------------------

The 96% occupancy rate at Pennbrook Apartments exceeds the 94% average of the
Dallas submarket where the property is located. Extensive capital improvements
during 1991-1993 have positioned the property to compete effectively for the
middle-class, single residents that dominate its resident profile. The Dallas
market is expected to remain strong. For the past two years, new apartment
construction has roughly equaled the number of apartment units absorbed by the
market. New construction is expected to modestly exceed absorption in 1998,
resulting in some downward pressure on rental revenue, but most of the new
construction will be for newer, high-quality apartment communities, and should
have little effect on Pennbrook.

Rockborough Apartments
- ----------------------

Rockborough Apartments boasts excellent curb appeal, which has enabled the
property to maintain occupancy levels a few percentage points above the 94%
average occupancy for the property's submarket. Rockborough compares well to the
established apartment communities in the area. There is new construction in the
area, but rental rates are substantially higher than the rates charged at
Rockborough. The Dallas area economy is expected to remain strong. New
construction is expected to modestly exceed absorption in 1998, resulting in
some downward pressure on rental revenue. However, most of the new construction
will be for high-quality apartment communities, and should have little effect on
Rockborough.

Rolling Hills Apartments
- ------------------------

The area surrounding Rolling Hills Apartments is experiencing strong growth.
Capital improvements at Rolling Hills the past three years have upgraded the
property to compete more effectively with the high-quality apartment communities
in the immediate area. Rolling Hills offers the largest floor plans in the area.
The unit interiors are being updated to better compete with the newer properties
in Rolling Hills' submarket. The property's average occupancy rate is in line
with the Louisville market's 93% average, but average rental rates are lower
than market rates. Rolling Hills is a good quality property competing against
properties of even better quality.

Ruskin Place Apartments
- -----------------------

Ruskin Place Apartments has steadily improved its performance over the past
several years despite competitive pressures from newer apartment properties in
the Lincoln market. The newer properties and new construction in progress have
put upward pressure on local rental rates. Ruskin Place Apartments has been able
to offer its units at lower, but still rising rental rates. This trend is
expected to continue given the population increases and stable economic
conditions in the local area.

<PAGE>
Westgate Apartments
- -------------------

Westgate Apartments is in need of extensive capital improvements to compete
effectively with other Lansing apartment properties. The exterior and interiors
of the units are dated and unattractive. Occupancy rates are averaging four
percentage points below competing properties, and rental rates are averaging
approximately 85% of the average rental rates charged by competing properties.
Nine percent of Westgate's units are three and four bedroom floor plans, which
are the only three and four bedroom units in the area. The local economy is
doing very well, with unemployment at 2.6%. The property also has a good
location in a desirable school district.

Williamsburg Apartments
- -----------------------

Competition from new and refurbished apartment communities is putting pressure
on Williamsburg Apartments' financial performance. Although the occupancy rate
remains above the city-wide average, rental rate increases will be limited for
the next year or two. The property is in good condition, with only minor capital
improvements needed. The property offers attractive floor plans with interiors
that are being upgraded with new fixtures. Nearby Barksdale Air Force Base and a
growing gambling industry provide the employment base for many of the property's
tenants.

Asset Held for Sale:

Sheraton Hills Apartments
- -------------------------

Sheraton Hills Apartments has enjoyed an occupancy rate two to three percentage
points greater than the Nashville market in general. The Nashville apartment
market is overbuilt, and developers are planning new apartment projects for
1998. Although Sheraton Hills will not compete directly with the new
construction, the new construction will tend to slow the increases in rental
rates that older properties may expect in coming years. Sheraton Hills will
continue to focus on selected capital improvements and its excellent reputation
for service that has promoted decreased tenant turnover. On August 1, 1997, the
Partnership placed Sheraton Hills on the market for sale.

ITEM 3. LEGAL PROCEEDINGS
- ------- -----------------

The Partnership is not party to, nor are any of the Partnership's properties the
subject of, any material pending legal proceedings, other than ordinary, routine
litigation incidental to the Partnership's business, except for the following:

James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger,
Elizabeth Jung, Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil,
Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI,
Ltd., McNeil Real Estate Fund XII, Ltd., McNeil Real Estate Fund XIV, Ltd.,
McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real
Estate Fund XXI, L.P., McNeil Real Estate Fund XXII, L.P., McNeil Real Estate
Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., McNeil Real Estate Fund
XXVI, L.P., and McNeil Real Estate Fund XXVII, L.P., et al. - Superior Court of
the State of California for the County of Los Angeles, Case No. BC133799 (Class
and Derivative Action Complaint).
<PAGE>
The action involves purported class and derivative actions brought by limited
partners of each of the fourteen limited partnerships that were named as nominal
defendants as listed above (the "Partnerships"). Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their fiduciary duties and certain obligations under the respective Amended
Partnership Agreement. Plaintiffs allege that Defendants have rendered such
Units highly illiquid and artificially depressed the prices that are available
for Units on the resale market. Plaintiffs also allege that Defendants engaged
in a course of conduct to prevent the acquisition of Units by an affiliate of
Carl Icahn by disseminating purportedly false, misleading and inadequate
information. Plaintiffs further allege that Defendants acted to advance their
own personal interests at the expense of the Partnerships' public unit holders
by failing to sell Partnership properties and failing to make distributions to
unitholders.

On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs are suing for breach of fiduciary duty, breach of contract and an
accounting, alleging, among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive, that these fees should
be reduced retroactively and that the respective Amended Partnership Agreements
governing the Partnerships are invalid.

Defendants filed a demurrer to the consolidated and amended complaint and a
motion to strike on February 14, 1997, seeking to dismiss the consolidated and
amended complaint in all respects. A hearing on Defendant's demurrer and motion
to strike was held on May 5, 1997. The Court granted Defendants' demurrer,
dismissing the consolidated and amended complaint with leave to amend. On
October 31, 1997, the Plaintiffs filed a second consolidated and amended
complaint. Defendants must move, answer or otherwise respond to the second
consolidated and amended complaint by June 30, 1998.

For a discussion of the Southmark bankruptcy, see Item 1 - Business.

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

None.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S UNITS OF LIMITED PARTNERSHIP AND
- ------- ------------------------------------------------------------
RELATED SECURITY HOLDER MATTERS
-------------------------------

(A) There is no established public trading market for limited partnership
units, nor is one expected to develop.

(B) Title of Class Number of Record Unit Holders
-------------- -----------------------------

Limited partnership units 4,513 as of January 31, 1998

<PAGE>
(C) The Partnership paid $2,749,992 of distributions to the limited
partners in 1997. No such distributions were paid in 1996 or 1995. During
the last week of March 1998, the Partnership distributed approximately
$2,300,000 to limited partners of record as of March 1, 1998. The
Partnership accrued distributions of $1,137,022 and $1,133,561 for the
benefit of the General Partner for the years ended December 31, 1997 and
1996, respectively, of which $354,171 remains unpaid at December 31, 1997.
These distributions relate to the MID pursuant to the Amended Partnership
Agreement. See Item 8 - Note 2 - "Transactions with Affiliates."
Distributions of MID are expected to be paid to the General Partner in
1998. See Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations for a discussion of the likelihood
that the Partnership will continue distributions to the limited partners.

ITEM 6. SELECTED FINANCIAL DATA
- ------- -----------------------

The following table sets forth a summary of certain financial data for the
Partnership. This summary should be read in conjunction with the Partnership's
financial statements and notes thereto appearing in Item 8 - Financial
Statements and Supplementary Data.

<TABLE>
<CAPTION>
Statements of Years Ended December 31,
--------------------------------------------------------------------------
Operations 1997 1996 1995 1994 1993
- ------------------ ------------- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Rental revenue............... $ 19,947,518 $ 19,732,110 $ 19,123,434 $ 18,202,306 $ 17,215,644
Total revenue................ 20,616,269 19,964,950 19,567,182 18,642,220 17,367,511
Net income (loss) before
extraordinary items......... 977,262 (293,982) (328,996) (387,787) (1,320,829)
Extraordinary items.......... - - - - (31,055)
Net income (loss)............ 977,262 (293,982) (328,996) (387,787) (1,351,884)

Net income (loss) per limited
partnership unit:
Net income (loss) before
extraordinary items.......... $ 2.46 $ (13.21) $ (9.19) $ (9.21) $ (19.30)
Extraordinary items.......... - - - - (.28)
------------ ------------ ------------ ----------- -----------
Net income (loss)............ $ 2.46 $ (13.21) $ (9.19) $ (9.21) $ (19.58)
============ ============ ============ =========== ===========
Distributions per limited
partnership unit:........... $ 24.96 $ - $ - $ - $ -
============ ============ ============ =========== ===========

December 31,
--------------------------------------------------------------------------
Balance Sheets 1997 1996 1995 1994 1993
- -------------- ------------- ------------- ------------- ------------ ------------

Real estate investments, net... $ 33,419,436 $ 38,308,605 $ 42,434,162 $ 42,830,552 $ 42,133,962
Asset held for sale............ 3,009,553 - - - -
Total assets................... 44,051,144 47,650,109 49,970,886 51,749,891 53,376,263
Mortgage notes payable, net.... 49,745,307 50,600,006 51,390,822 52,098,952 52,610,769
Partners' deficit.............. (8,738,055) (5,828,303) (4,400,760) (3,001,001) (1,640,191)
</TABLE>
<PAGE>
See Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations. The Partnership sold Westridge Apartments on July 30,
1996.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
- ------- -----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------

FINANCIAL CONDITION
- -------------------

The Partnership was formed to acquire, operate and ultimately dispose of a
portfolio of income-producing real properties. At the end of 1997, the
Partnership owned thirteen apartment properties. All of the Partnership's
properties are subject to mortgage notes.

RESULTS OF OPERATIONS
- ---------------------

1997 compared to 1996

Revenues:

Rental revenue increased $215,408 or 1.1% in 1997 compared to rental revenue
achieved in 1996. Excluding rental revenue from Westridge Apartments, sold by
the Partnership on July 30, 1996, rental revenue increased $613,921 or 3.1% in
1997 compared to 1996. Rental revenues increased at 11 of the Partnership's 13
remaining properties. Rental revenue was unchanged at Forest Park Village
Apartments and Williamsburg Apartments as the increases in base rental rates
were matched by comparable increases in vacancy losses. Of the Partnership's 11
other properties, 10 increased base rental rates an average of 3.5%. Meridian
West Apartments did not increase base rental rates, but rental revenue improved
as vacancy losses decreased by 19.1%. Improving occupancy rates also boosted
rental revenue at Cherry Hills Apartments, Lantern Tree Apartments, and Westgate
Apartments.

In 1997, the Partnership incurred a gain on involuntary conversion totaling
$474,376 relating to a fire that destroyed twelve apartment units at Sheraton
Hills Apartments. No such gains were recorded in 1996.

Expenses:

Partnership expenses decreased $619,925 or 3.1% in 1997 compared to 1996.
However, after excluding both the loss on sale of Westridge Apartments and
expenses associated with operations at Westridge Apartments before its sale,
expenses remained virtually unchanged in 1997 compared to 1996. Decreases in
general and administrative expenses and general and administrative expenses paid
to affiliates were partially offset by increased property taxes.

Excluding Westridge Apartments for 1996, property taxes for 1997 increased
$114,337 or 8.3% over property taxes for 1996. The increase was due to increases
assessed valuation and tax rates in Dallas County, Texas, where three of the
Partnership's properties are located.

<PAGE>
General and administrative expenses decreased $172,168 or 51%. The decrease is
attributable to costs relating to the evaluation and dissemination of
information with regards to an unsolicited tender offer in 1996. No such costs
were incurred in 1997. Decreased tender offer costs were partially offset by
investor services expenses that were paid to a non-affiliate vendor beginning in
1997. Prior to 1997, investor services were provided by an affiliate of the
General Partner, and the related expenses were reported with general and
administrative expenses paid to affiliates.

General and administrative expenses paid to affiliates decreased $83,821 or
15.6%. Such expenses are generally charged based on the number of properties
under management. The sale of Westridge Apartments during 1996, as well as
decreased expenses incurred by the affiliates, both contributed to the decrease
in expenses paid to affiliates. Also contributing to the decrease in general and
administrative expenses paid to affiliates was the reclassification of investor
services expenses to general and administrative expenses as discussed in the
preceding paragraph.

Due to the sale of Westridge Apartments on July 30, 1996, the Partnership
recognized a $220,157 loss on sale of real estate in 1996. No properties were
disposed of during 1997.

1996 compared to 1995

Revenues:

Rental revenue increased $608,676 or 3.2% in 1996 compared to rental revenue
achieved in 1995. Excluding rental revenue from Westridge Apartments, sold by
the Partnership on July 30, 1996, rental revenue increased $881,595 or 4.8% in
1996 compared to 1995. Rental revenues increased at 11 of the Partnership's 13
remaining properties. Rental revenue was unchanged at Lantern Tree Apartments as
a 4% increase in base rental rates was matched by a comparable increase in
vacancy losses. Rental revenue decreased 2.1% at Westgate Apartments due to
increased vacancy losses at the Michigan property. Of the Partnership's 11 other
properties, 10 increased base rental rates an average of 4.7%. Cherry Hills
Apartments did not increase base rental rates, but rental revenue improved as
vacancy losses decreased by nearly half. Improving occupancy rates also boosted
rental revenue at Forest Park Village Apartments, Heather Square Apartments,
Meridian West Apartments, Pennbrook Apartments, and Rockborough Apartments.

Expenses:

Partnership expenses increased $362,754 or 1.8% in 1996 compared to 1995.
However, after excluding both the loss on sale of Westridge Apartments, and the
expenses associated with operations at Westridge Apartments before its sale,
expenses increased $381,881 or 2.0% in 1996 compared to 1995. The increased
expenses were concentrated in depreciation, repair and maintenance, and general
and administrative expenses. These increases were partially offset by a decrease
in general and administrative expenses paid to affiliates.

Depreciation expense increased $253,415 or 6.5% in 1996 compared to 1995.
Excluding the effects of the sale of Westridge Apartments reveals an even larger
increase of $346,749 or 9.3%. Increased depreciation expense is the result of
depreciation on the $2.4 million of new capital improvements placed in service
during 1996. The capital improvements are generally depreciated over lives
ranging from five to ten years.

<PAGE>
Repair and maintenance expenses increased $244,052 or 10.3% in 1996 compared to
1995. The increase is attributable to a $284,000 increase in floor covering
replacements during 1996. Expenditures for floor covering replacements during
1995 were large enough to qualify for capitalization under the Partnership's
capitalization policy. Though still substantial, such expenditures in 1996 did
not qualify for capitalization and were, accordingly, expensed.

General and administrative expenses increased $42,123 or 14.2% in 1996 compared
to 1995. The Partnership incurred a $17,630 increase in costs relating to the
evaluation and dissemination of information with regards to an unsolicited
tender offer. An additional $20,000 was expended for appraisal fees.

Due to the sale of Westridge Apartments on July 30, 1996, the Partnership
recognized a $220,157 loss on sale of real estate. No properties were disposed
of during 1995.

General and administrative expenses paid to affiliates decreased $196,189 or 27%
in 1996 compared to 1995. Part of the decrease is due to the sale of Westridge
Apartments during the year, but a greater part of the decrease is due to a
reduced level of overhead expenses charged to the Partnership by affiliates.

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

During the three year period ended December 31, 1997, the Partnership's net
income totaled $354,284. During the same three year period, the Partnership
generated $12,788,743 of cash flow from operating activities. Cash provided by
operating activities increased $807,127 or 19.9% in 1997 compared to 1996. A
7.2% increase in property taxes paid and escrowed was more than offset by
decreases in cash paid to suppliers and to affiliates as well as an increase in
cash received from tenants.

The Partnership continued to invest in capital improvements at its properties
during 1997. The Partnership invested $2,064,414 in capital improvements during
1997, a 13.9% decrease from the amount invested during 1996. These expenditures
are necessary to allow the Partnership's aging properties to maintain their
appeal to current and prospective tenants. 27% of the capital expenditures were
used to repair damage caused by a fire at Sheraton Hills Apartments. The
Partnership received $546,069 in insurance reimbursements to offset these costs.
The Partnership has budgeted an additional $1,579,000 for capital improvements
in 1998.

The Partnership received $1,550,000 and $492,384 in proceeds from the sale of
Westridge Apartments in 1997 and 1996, respectively.

Short-term liquidity:

At December 31, 1997, the Partnership held cash and cash equivalents of
$3,330,836, up $329,315 from the balance at the end of 1996. The general partner
anticipates that cash generated from operations during 1998 will be sufficient
to fund the partnership's operating expenses, budgeted capital improvements, and
monthly debt service requirements. Cash reserves are adequate for anticipated
operations during 1998.

<PAGE>
Though reduced in scope from amounts incurred in previous years, the Partnership
will continue to invest substantial sums in capital improvements for the
Partnership's properties. The Partnership has budgeted $1,579,000 for capital
improvements for 1998. The General Partner believes these capital improvements
are necessary to allow the Partnership to increase its rental revenues in the
competitive markets in which the Partnership's properties operate. These
expenditures also allow the Partnership to reduce future repair and maintenance
expenses from amounts that would otherwise be incurred.

The Forest Park Village mortgage note matured in January 1998. On March 20,
1998, the Partnership refinanced the Forest Park Village mortgage note with a
new $5,925,000 mortgage note that matures on March 20, 2001. The new mortgage
note bears interest at a variable rate equal to 1.75% plus the London Interbank
Offered Rate. The only other mortgage note maturing in 1998 is the Sheraton
Hills mortgage note, which matures in October 1998. The General Partner intends
to resolve the Sheraton Hills mortgage maturity by selling Sheraton Hills
Apartments. The General Partner placed Sheraton Hills Apartments on the market
for sale on August 1, 1997. Initial responses to the Partnership's marketing
efforts would seem to indicate that the Partnership will be able to sell
Sheraton Hills Apartments for an amount sufficient to retire the Sheraton Hills
mortgage note and to provide additional cash reserves for the Partnership.
However, the sale of Sheraton Hills Apartments is not assured, and if the
Partnership is unable to sell or otherwise refinance the Sheraton Hills mortgage
note, the Partnership's investment in Sheraton Hills Apartments could be at
risk.

Long-term liquidity:

For the long term, property operations will remain the primary source of funds.
In this regard, the General Partner expects that the approximately $8 million of
capital improvements made by the Partnership during the past three years will
yield improved cash flow from property operations in 1998. Furthermore, the
General Partner has budgeted an additional $1,579,000 of capital improvements
for 1998.

While the present outlook for the Partnership's liquidity is favorable, market
conditions may change and property operations can deteriorate. In that event,
the Partnership would require other sources of working capital. No such other
sources have been identified, and the Partnership has no established lines of
credit. Other possible actions to resolve working capital deficiencies include
refinancing or renegotiating terms of existing loans, deferring major capital
expenditures on Partnership properties except where improvements are expected to
enhance the competitiveness or marketability of the properties, or arranging
working capital support from affiliates. No affiliate support has been required
in the past, and there is no assurance that support from affiliates would be
provided in the future, since neither the General Partner nor any affiliates
have any obligation in this regard.

<PAGE>
entities or persons affiliated with the General Partner will not be involved as
a purchaser in any of the transactions contemplated above. Any transaction will
be subject to certain conditions including (i) approval by the limited partners
of the Partnership, and (ii) receipt of an opinion from an independent financial
advisory firm as to the fairness of the consideration received by the
Partnership pursuant to such transaction. Finally, there can be no assurance
that any transaction will be consummated, or as to the terms thereof.

Income Allocations and Distributions:

Terms of the Amended Partnership Agreement specify that income before
depreciation is allocated to the General Partner to the extent of MID paid in
cash. Depreciation is allocated in the ratio of 95:5 to the limited partners and
the General Partner, respectively. Therefore, for the years ended December 31,
1997, 1996 and 1995, net income of $706,613, $1,161,697 and $684,002,
respectively, was allocated to the General Partner. The limited partners
received allocations of net income (loss) of $270,649, $(1,455,679) and
$(1,012,998) for the years ended December 31, 1997, 1996 and 1995, respectively.

With the exception of the MID, distributions to partners had been suspended as
part of the General Partner's policy of maintaining adequate cash reserves.
However, on February 28, 1997, the General Partner distributed approximately
$2,250,000 to the limited partners. An additional $500,000 was distributed on
September 16, 1997. Approximately $2,042,000 of the distributions represents
proceeds from the sale of Westridge Apartments. The Partnership plans to
distribute approximately $2,300,000 to limited partners of record as of March 1,
1998. This distribution will be made from cash reserves and operations of the
Partnership. The General Partner will continue to monitor the cash reserves and
working capital needs of the Partnership to determine when cash flows will
support additional distributions to the limited partners.

The Partnership paid $903,815, $1,370,360 and $879,994 of MID to the General
Partner in 1997, 1996 and 1995, respectively. MID payments to the General
Partner are expected to continue in 1998. To the extent that cash flow from
operations is not sufficient to fund payments of MID along with other
Partnership obligations, the Partnership will use its cash reserves to make such
payments.

<PAGE>

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

Page
Number
------
INDEX TO FINANCIAL STATEMENTS

Financial Statements:

<S> <C>
Report of Independent Public Accountants....................................... 18

Balance Sheets at December 31, 1997 and 1996................................... 19

Statements of Operations for each of the three years in the period
ended December 31, 1997..................................................... 20

Statements of Partners' Deficit for each of the three years in the
period ended December 31, 1997.............................................. 21

Statements of Cash Flows for each of the three years in the
period ended December 31, 1997.............................................. 22

Notes to Financial Statements.................................................. 24

Financial Statement Schedule:

Schedule III - Real Estate Investments and Accumulated
Depreciation............................................................. 39
</TABLE>

All other schedules are omitted because they are not applicable or the financial
information required is included in the financial statements or the notes
thereto.

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
McNeil Real Estate Fund IX, Ltd.:

We have audited the accompanying balance sheets of McNeil Real Estate Fund IX,
Ltd. (a California limited partnership) as of December 31, 1997 and 1996, and
the related statements of operations, partners' deficit and cash flows for each
of the three years in the period ended December 31, 1997. These financial
statements and the schedule referred to below are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements and the schedule based on our audits.

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, the financial statements referred to above present fairly, in
all material respects, the financial position of McNeil Real Estate Fund IX,
Ltd. as of December 31, 1997 and 1996, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1997, 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 the index to
financial statements 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 our audits 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

Dallas, Texas
March 20, 1998

<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.

BALANCE SHEETS

<TABLE>
<CAPTION>
December 31,
----------------------------------
1997 1996
-------------- --------------
ASSETS
- ------

Real estate investments:
<S> <C> <C>
Land..................................................... $ 6,074,303 $ 6,370,834
Buildings and improvements............................... 76,812,085 81,666,317
------------- -------------
82,886,388 88,037,151
Less: Accumulated depreciation.......................... (49,466,952) (49,728,546)
------------- -------------
33,419,436 38,308,605

Asset held for sale......................................... 3,009,553 -

Cash and cash equivalents................................... 3,330,836 3,001,521
Cash segregated for security deposits....................... 622,602 571,749
Accounts receivable......................................... 92,135 59,871
Insurance proceeds receivable............................... - 562,560
Mortgage note receivable.................................... - 1,550,000
Prepaid expenses and other assets........................... 181,856 214,497
Escrow deposits............................................. 1,663,701 1,401,648
Deferred borrowing costs, net of accumulated
amortization of $1,144,486 and $895,853 at
December 31, 1997 and 1996, respectively................. 1,731,025 1,979,658
------------- -------------

$ 44,051,144 $ 47,650,109
============= =============
LIABILITIES AND PARTNERS' DEFICIT
- ---------------------------------

Mortgage notes payable, net................................. $ 49,745,307 $ 50,600,006
Accounts payable............................................ 99,710 -
Accrued property taxes...................................... 1,136,213 928,103
Accrued interest............................................ 361,422 368,556
Other accrued expenses...................................... 251,555 271,227
Deferred gain on involuntary conversion..................... - 474,376
Payable to affiliates - General Partner..................... 591,289 279,716
Security deposits and deferred rental revenue............... 603,703 556,428
------------- -------------
52,789,199 53,478,412
------------- -------------
Partners' deficit:
Limited partners - 110,200 limited partnership
units authorized, 110,170 limited partnership
units issued and outstanding........................... (5,509,025) (3,029,682)
General Partner.......................................... (3,229,030) (2,798,621)
------------- -------------
(8,738,055) (5,828,303)
------------- -------------

$ 44,051,144 $ 47,650,109
============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.

STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1997 1996 1995
-------------- -------------- ---------------
Revenue:
<S> <C> <C> <C>
Rental revenue.......................... $ 19,947,518 $ 19,732,110 $ 19,123,434
Interest................................ 194,375 232,840 246,964
Gain on legal settlement................ - - 70,817
Gain on involuntary conversions......... 474,376 - 125,967
------------- ------------- --------------
Total revenue......................... 20,616,269 19,964,950 19,567,182
------------- ------------- --------------

Expenses:
Interest................................ 4,776,243 4,796,060 4,856,024
Depreciation............................ 3,944,030 4,173,260 3,919,845
Property taxes.......................... 1,489,209 1,392,027 1,436,453
Personnel expenses...................... 2,419,481 2,437,597 2,511,799
Repairs and maintenance................. 2,697,986 2,621,322 2,377,270
Property management fees -
affiliates............................ 992,361 978,168 946,627
Utilities............................... 1,630,672 1,634,169 1,556,159
Other property operating expenses....... 1,069,019 1,130,177 1,261,940
General and administrative.............. 166,130 338,298 296,175
General and administrative -
affiliates............................ 453,876 537,697 733,886
Loss on sale of real estate............. - 220,157 -
------------- ------------- --------------
Total expenses........................ 19,639,007 20,258,932 19,896,178
------------- ------------- --------------

Net income (loss).......................... $ 977,262 $ (293,982) $ (328,996)
============= ============= ==============

Net income (loss) allocated to limited
partners................................ $ 270,649 $ (1,455,679) $ (1,012,998)
Net income allocated to the
General Partner......................... 706,613 1,161,697 684,002
------------- ------------- --------------

Net income (loss).......................... $ 977,262 $ (293,982) $ (328,996)
============= ============= ==============

Net income (loss) per limited
partnership unit........................ $ 2.46 $ (13.21) $ (9.19)
============= ============= ==============

Distributions per limited partnership
unit.................................... $ 24.96 $ - $ -
============= ============= ==============

</TABLE>
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.

STATEMENTS OF PARTNERS' DEFICIT

For the Years Ended December 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Deficit
---------------- ---------------- ----------------
<S> <C> <C> <C>
Balance at December 31, 1994.............. $ (2,439,996) $ (561,005) $ (3,001,001)

Net income (loss)......................... 684,002 (1,012,998) (328,996)

Management Incentive Distribution......... (1,070,763) - (1,070,763)
-------------- -------------- --------------

Balance at December 31, 1995.............. (2,826,757) (1,574,003) (4,400,760)

Net income (loss)......................... 1,161,697 (1,455,679) (293,982)

Management Incentive Distribution......... (1,133,561) - (1,133,561)
-------------- -------------- --------------

Balance at December 31, 1996.............. (2,798,621) (3,029,682) (5,828,303)

Net income ............................... 706,613 270,649 977,262

Management Incentive Distribution......... (1,137,022) - (1,137,022)

Distributions to limited partners......... - (2,749,992) (2,749,992)
-------------- -------------- --------------

Balance at December 31, 1997.............. $ (3,229,030) $ (5,509,025) $ (8,738,055)
============== ============== ==============
</TABLE>

See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.

STATEMENTS OF CASH FLOWS

Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1997 1996 1995
-------------- -------------- ---------------
Cash flows from operating activities:
<S> <C> <C> <C>
Cash received from tenants.............. $ 19,915,413 $ 19,717,808 $ 19,040,536
Cash received from legal settlement..... - - 70,817
Cash paid to suppliers.................. (7,954,190) (8,488,048) (7,922,261)
Cash paid to affiliates................. (1,367,871) (1,507,719) (1,671,044)
Interest received....................... 194,375 232,840 246,964
Interest paid........................... (4,485,836) (4,557,296) (4,542,671)
Property taxes paid and escrowed........ (1,446,817) (1,349,638) (1,336,619)
------------- ------------- --------------
Net cash provided by operating
activities.............................. 4,855,074 4,047,947 3,885,722
------------- ------------- --------------

Cash flows from investing activities:
Additions to real estate
investments........................... (2,064,414) (2,398,428) (3,582,582)
Insurance proceeds from fire and
hail damage........................... 546,069 - 185,094
Proceeds from sale of real estate....... - 2,042,384 -
Mortgage note receivable................ 1,550,000 (1,550,000) -
------------- ------------- --------------
Net cash provided by (used in)
investing activities.................... 31,655 (1,906,044) (3,397,488)
------------- ------------- --------------

Cash flows from financing activities:
Principal payments on mortgage
notes payable......................... (903,607) (829,604) (748,502)
Management Incentive Distribution....... (903,815) (1,370,360) (879,994)
Distributions to limited partners....... (2,749,992) - -
------------- ------------- --------------
Net cash used in financing
activities.............................. (4,557,414) (2,199,964) (1,628,496)
------------- ------------- --------------

Net increase (decrease) in cash
and cash equivalents.................... 329,315 (58,061) (1,140,262)

Cash and cash equivalents at
beginning of year....................... 3,001,521 3,059,582 4,199,844
------------- ------------- --------------

Cash and cash equivalents at end
of year................................. $ 3,330,836 $ 3,001,521 $ 3,059,582
============= ============= ==============
</TABLE>

See discussion of noncash investing activity in Note 6 - "Sale of Real Estate."

See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.

STATEMENTS OF CASH FLOWS

Reconciliation of Net Income (Loss) to
Net Cash Provided by Operating Activities

<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1997 1996 1995
-------------- --------------- ---------------
<S> <C> <C> <C>
Net income (loss).......................... $ 977,262 $ (293,982) $ (328,996)
------------- ------------- -------------

Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation............................ 3,944,030 4,173,260 3,919,845
Amortization of discounts on
mortgage notes payable................ 48,908 38,788 40,372
Amortization of deferred borrowing
costs................................. 248,633 206,160 201,762
Gain on involuntary conversions......... (474,376) - (125,967)
Loss on sale of real estate............. - 220,157 -
Changes in assets and liabilities:
Cash segregated for security
deposits............................ (50,853) (37,140) (39,808)
Accounts receivable................... (32,264) 54,496 (49,903)
Insurance proceeds receivable......... 16,491 - -
Prepaid expenses and other
assets.............................. 32,641 9,462 (12,693)
Escrow deposits....................... (262,053) 16,741 142,995
Accounts payable...................... 99,710 (266,777) (147,117)
Accrued property taxes................ 208,110 (34,148) 27,518
Accrued interest...................... (7,134) (6,184) 71,219
Other accrued expenses................ (19,672) (34,795) 113,070
Payable to affiliates - General
Partner............................. 78,366 8,146 9,469
Security deposits and deferred
rental revenue...................... 47,275 (6,237) 63,956
------------- ------------- --------------

Total adjustments................. 3,877,812 4,341,929 4,214,718
------------- ------------- --------------

Net cash provided by operating
activities............................ $ 4,855,074 $ 4,047,947 $ 3,885,722
============= ============= ==============
</TABLE>

See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.

NOTES TO FINANCIAL STATEMENTS

December 31, 1997

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------

Organization

McNeil Real Estate Fund IX, Ltd. (the "Partnership") was organized on May 1,
1978 as a limited partnership under the provisions of the California Uniform
Limited Partnership Act. The general partner of the Partnership is McNeil
Partners L.P. (the "General Partner"), a Delaware limited partnership, an
affiliate of Robert A. McNeil. The Partnership is governed by an amended and
restated partnership agreement dated November 12, 1991, as amended (the "Amended
Partnership Agreement"). The principal place of business for the Partnership and
the General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240.

The Partnership is engaged in real estate activities, including the ownership,
operation and management of residential real estate and other real estate
related assets. At December 31, 1997, the Partnership owned 13 income-producing
properties as described in Note 4 - "Real Estate Investments."

Basis of Presentation
- ---------------------

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

The Partnership's financial statements include the accounts of the tier
partnerships listed on the next page for the years ended December 31, 1997, 1996
and 1995. These single asset tier partnerships were formed to accommodate the
refinancings of the related properties. The ownership interest of the
Partnership and the General Partner in each tier partnership is detailed below.
The Partnership retains effective control of each tier partnership. The General
Partner's minority interest is not presented because it is either negative or
immaterial.
<PAGE>
<TABLE>
<CAPTION>
% of Ownership Interest
Tier Partnership Partnership General Partner
---------------- ----------- ---------------

Limited partnerships:
<S> <C> <C>
Cherry Hills Fund IX Limited Partnership (a) ................ 100% -
Forest Park Fund IX Associates Limited Partnership (b)....... 99 1%
Lantern Tree Fund IX Limited Partnership (a) ................ 100 -
Meridian West Fund IX Limited Partnership (a)................ 100 -
Pennbrook Fund IX Associates, L.P............................ 99 1
Rockborough Fund IX Limited Partnership (a).................. 100 -
Rolling Hills Fund IX Associates, L.P........................ 99 1
Williamsburg Fund IX Limited Partnership (a)................. 100 -

General partnerships:
Berkley Hills Associates..................................... 99 1
Ruskin Place Fund IX Associates.............................. 99 1
Sherwood Forest Fund IX Associates........................... 99 1
</TABLE>

(a) The general partner of these partnerships is a corporation whose stock is
100% owned by the Partnership.

(b) Forest Park Fund IX Associates Limited Partnership assigned all of its
interest and rights to the Partnership on December 22, 1992.

Real Estate Investments
- -----------------------

Real estate investments are generally stated at the lower of depreciated cost or
fair value. Real estate investments are reviewed for impairment whenever events
or changes in circumstances indicate that their carrying amounts may not be
recoverable. When the carrying value of a property exceeds the sum of all
estimated future cash flows, an impairment loss is recognized. At such time, a
write-down is recorded to reduce the basis of the property to its estimated fair
value.

The Partnership's method of accounting for real estate investments is in
accordance with Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" ("SFAS 121"), which the Partnership adopted effective January 1, 1996. The
adoption of SFAS 121 did not have a material impact on the accompanying
financial statements.

Improvements and betterments are capitalized and expensed through depreciation
charges. Repairs and maintenance are charged to operations as incurred.

Asset Held for Sale
- -------------------

The asset held for sale is stated at the lower of depreciated cost or fair value
less costs to sell. Depreciation ceased at the time the asset was placed on the
market for sale.

<PAGE>
Depreciation
- ------------

Buildings and improvements are depreciated using the straight-line method over
the estimated useful lives of the assets, ranging from 3 to 32 years.

Cash and Cash Equivalents
- -------------------------

Cash and cash equivalents include cash on hand and cash on deposit with
financial institutions with original maturities of three months or less.
Carrying amounts for cash and cash equivalents approximate fair value.

Escrow Deposits
- ---------------

The Partnership is required to maintain escrow accounts in accordance with the
terms of various mortgage agreements. These escrow accounts are controlled by
the mortgagee and are used for payment of property taxes, hazard insurance,
capital improvements and/or property replacements. Carrying amounts for escrow
deposits approximate fair value.

Deferred Borrowing Costs
- ------------------------

Loan fees and other related costs incurred to obtain long-term financing on real
property are capitalized and amortized using a method that approximates the
effective interest method over the terms of the related mortgage notes payable.
Amortization of deferred borrowing costs is included in interest expense on the
Statements of Operations.

Discounts on Mortgage Notes Payable
- -----------------------------------

Discounts on mortgage notes payable are amortized over the remaining terms of
the related mortgage notes using the effective interest method. Amortization of
discounts on mortgage notes payable is included in interest expense on the
Statements of Operations.

Rental Revenue
- --------------

The Partnership leases its properties under short-term operating leases. Lease
terms generally are less than one year in duration. Rental revenue is recognized
as earned.

Income Taxes
- ------------

No provision for Federal income taxes is necessary in the financial statements
of the Partnership because, as a partnership, it is not subject to Federal
income tax and the tax effect of its activities accrues to the partners. See
Note 3 - "Taxable Loss."

<PAGE>
Allocation of Net Income and Net Loss
- -------------------------------------

The Amended Partnership Agreement provides for net income or net loss of the
Partnership for both financial statement and income tax reporting purposes to be
allocated as indicated below. For allocation purposes, net income and net loss
of the Partnership are determined prior to deductions for depreciation.

(a) First, 5% of all deductions for depreciation shall be allocated to
the General Partner, and 95% of all deductions for depreciation shall
be allocated to the limited partners;

(b) then, an amount of net income equal to the cumulative amount of
Management Incentive Distribution ("MID") paid to the General Partner
for which no income has previously been allocated (see Note 2 -
"Transactions with Affiliates") shall be allocated to the General
Partner; however, if all or a portion of the MID consists of limited
partnership units ("Units"), the amount of net income so allocated to
the General Partner shall be equal to the amount of cash the General
Partner would have otherwise received;

(c) then, any remaining net income shall be allocated to the General Partner
and to the limited partners so that the total amount of net income
allocated to the General Partner pursuant to paragraph (b) above and
this paragraph (c), and to the limited partners pursuant to this
paragraph (c), shall be in the ratio of 5% to the General Partner and
95% to the limited partners.

(d) Net loss shall be allocated 95% percent to the limited partners and 5%
to the General Partner.

Federal income tax law provides that the allocation of loss to a partner will
not be recognized unless the allocation is in accordance with a partner's
interest in the partnership or the allocation has substantial economic effect.
Internal Revenue Code Section 704(b) and accompanying Treasury Regulations
establish criteria for allocations of Partnership deductions attributable to
debt. The Partnership's tax allocations for 1997, 1996 and 1995 have been made
in accordance with these provisions.

Distributions
- -------------

Pursuant to the Amended Partnership Agreement and at the sole discretion of the
General Partner, distributions during each taxable year shall be made as
follows:

(a) first, to the General Partner, an amount equal to the MID; and

(b) any remaining distributable cash, as defined, shall be distributed 100%
to the limited partners.

<PAGE>
The Partnership paid distributions of $2,749,992 to the limited partners in
1997. No distributions were paid to the limited partners in 1996 or 1995. The
Partnership paid or accrued distributions of $1,137,022, $1,133,561 and
$1,070,763 for the benefit of the General Partner for the years ended December
31, 1997, 1996 and 1995, respectively. These distributions are the MID pursuant
to the Amended Partnership Agreement. The General Partner has waived the
collection terms of reimbursable expenses and MID, and has elected for the
Partnership to pay limited partner distributions before the payment of such
amounts. During the last week of March 1998, the Partnership plans to distribute
approximately $2,300,000 to limited partners of record as of March 1, 1998.

Net Income (Loss) Per Limited Partnership Unit
- ----------------------------------------------

Net income (loss) per limited partnership unit is computed by dividing net
income (loss) allocated to the limited partners by the weighted average number
of Units outstanding. Per Unit information has been computed based on 110,170
Units outstanding in 1997, 1996, and 1995.

NOTE 2 - TRANSACTIONS WITH AFFILIATES
- -------------------------------------

The Partnership pays property management fees equal to 5% of the gross rental
receipts of the Partnership's properties to McNeil Real Estate Management, Inc.
("McREMI"), an affiliate of the General Partner, for providing property
management and leasing services for the Partnership's properties.

The Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.

Under terms of the Amended Partnership Agreement, the Partnership is paying a
MID to the General Partner. The maximum MID is calculated as 1% of the tangible
asset value of the Partnership. The maximum MID percentage decreases subsequent
to 1999. Tangible asset value is determined by using the greater of (i) an
amount calculated by applying a capitalization rate of 9% to the annualized net
operating income of each property or (ii) a value of $10,000 per apartment unit
to arrive at the property tangible asset value. The property tangible asset
value is then added to the book value of all other assets excluding intangible
items.

The MID will be paid to the extent of the lesser of the Partnership's excess
cash flow as defined, or net operating income, as defined (the "Entitlement
Amount"), and may be paid (i) in cash, unless there is insufficient cash to pay
the distribution in which event any unpaid portion not taken in Units will be
deferred and is payable, without interest, from the first available cash and/or
(ii) in Units. A maximum of 50% of the MID may be paid in Units. The number of
Units issued in payment of the MID is based on the greater of $50 per Unit or
the net tangible asset value, as defined, per Unit. During 1997, 1996 and 1995,
no Units were issued as payment for the MID.

<PAGE>
During 1991, the Partnership amended its capitalization policy and began
capitalizing certain costs of improvements and betterments that under policies
of prior management had been expensed when incurred. The purpose of the
amendment was to more properly recognize items which were capital in nature. The
effect of the amendment standing alone was evaluated at the time the change was
made and determined not to be material to the financial statements of the
Partnership in 1991, nor was it expected to be material in any future year.
However, the amendment can have a material effect on the calculation of the
Entitlement Amount which determines the amount of MID earned. Capital
improvements are excluded from cash flow, as defined. The majority of base
period cash flow was measured under the previous capitalization policy, while
incentive period cash flow is determined using the amended policy. Under the
amended policy, more items are capitalized, and cash flow increases. Had base
period cash flow been measured on a basis comparable with incentive period cash
flow, MID for the year ended December 31, 1995 would have been reduced by
$111,248. The amendment of the capitalization policy did not materially affect
the MID for 1997 or 1996 because the Entitlement Amount was sufficient to pay
the MID notwithstanding the amendment to the capitalization policy.

Any amount of the MID which is paid to the General Partner in Units will be
treated as if cash is distributed to the General Partner and is then contributed
to the Partnership by the General Partner. The MID represents a return of equity
to the General Partner for increasing cash flow, as defined, and accordingly is
treated as a distribution.

Compensation and reimbursements paid or accrued for the benefit of the General
Partner or its affiliates are as follows:

For the Years Ended December 31,
--------------------------------------
1997 1996 1995
----------- ---------- -----------

Property management fees -
affiliates......................... $ 992,361 $ 978,168 $ 946,627
Charged to general and
administrative - affiliates:
Partnership administration......... 453,876 537,697 733,886
---------- ---------- ----------

$ 1,446,237 $ 1,515,865 $ 1,680,513
========== ========== ==========

Charged to General Partner's deficit:
Management Incentive Distribution.. $ 1,137,022 $ 1,133,561 $ 1,070,763
========== ========== ==========

Payable to affiliates - General Partner at December 31, 1997, 1996 and 1995
consists of MID, reimbursable costs and property management fees which are due
and payable from current operations. The General Partner has waived the
collection terms of reimbursable expenses and MID, and has elected for the
Partnership to pay limited partner distributions before the payment of such
amounts.

<PAGE>
NOTE 3 - TAXABLE LOSS
- ---------------------

McNeil Real Estate Fund IX, Ltd. is a partnership and is not subject to Federal
and state income taxes. Accordingly, no recognition has been given to income
taxes in the accompanying financial statements of the Partnership since the
income or loss of the Partnership is to be included in the tax returns of the
individual partners. The tax returns of the Partnership are subject to
examination by Federal and state taxing authorities. If such examinations result
in adjustments to distributive shares of taxable income or loss, the tax
liability of the partners could be adjusted accordingly.

The Partnership's net assets and liabilities for tax purposes exceeded the net
assets and liabilities for financial reporting purposes by $10,256,886 in 1997,
$9,965,434 in 1996 and $9,613,062 in 1995.

NOTE 4 - REAL ESTATE INVESTMENTS
- --------------------------------

The basis and accumulated depreciation of the Partnership's real estate
investments at December 31, 1997 and 1996 are set forth in the following tables:

<TABLE>
<CAPTION>
Buildings and Accumulated Net Book
1997 Land Improvements Depreciation Value
---- -------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Berkley Hills
Madison, TN $ 246,988 $ 6,220,925 $ (4,288,137) $ 2,179,776
Cherry Hills
Wichita, KS 514,205 9,077,853 (5,446,503) 4,145,555
Forest Park Village
Columbus, OH 716,395 9,476,403 (6,534,031) 3,658,767
Heather Square
Dallas, TX 853,746 7,532,362 (4,589,173) 3,796,935
Lantern Tree
Omaha, NE 217,809 3,419,718 (2,273,390) 1,364,137
Meridian West
Puyallup, WA 253,167 4,935,765 (3,017,699) 2,171,233
Pennbrook
Dallas, TX 692,515 6,277,433 (3,923,455) 3,046,493
Rockborough
Addison, TX 427,932 3,894,836 (2,251,909) 2,070,859
Rolling Hills
Louisville, KY 557,249 9,010,108 (6,062,834) 3,504,523
Ruskin Place
Lincoln, NE 920,061 5,296,955 (3,508,282) 2,708,734
Westgate
Lansing, MI 390,482 6,341,774 (4,148,250) 2,584,006
Williamsburg
Shreveport, LA 283,754 5,327,953 (3,423,289) 2,188,418
------------- ------------- ------------- -------------

$ 6,074,303 $ 76,812,085 $ (49,466,952) $ 33,419,436
============= ============= ============= =============
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Buildings and Accumulated Net Book
1996 Land Improvements Depreciation Value
---- -------------- -------------- ---------------- --------------

<S> <C> <C> <C> <C>
Berkley Hills $ 246,988 $ 6,067,612 $ (3,965,414) $ 2,349,186
Cherry Hills 514,205 8,867,317 (5,049,666) 4,331,856
Forest Park Village 716,395 9,211,812 (6,046,027) 3,882,180
Heather Square 853,746 7,432,783 (4,243,663) 4,042,866
Lantern Tree 217,809 3,356,298 (2,102,815) 1,471,292
Meridian West 253,167 4,880,604 (2,789,274) 2,344,497
Pennbrook 692,515 6,188,400 (3,621,595) 3,259,320
Rockborough 427,932 3,737,808 (2,062,361) 2,103,379
Rolling Hills 557,249 8,777,777 (5,546,753) 3,788,273
Ruskin Place 920,061 5,066,855 (3,243,658) 2,743,258
Sheraton Hills (a) 296,531 6,547,390 (4,057,852) 2,786,069
Westgate 390,482 6,304,118 (3,833,520) 2,861,080
Williamsburg 283,754 5,227,543 (3,165,948) 2,345,349
------------- ------------- ------------- -------------

$ 6,370,834 $ 81,666,317 $ (49,728,546) $ 38,308,605
============= ============= ============= =============
</TABLE>

(a) On August 1, 1997, the General Partner placed Sheraton Hills Apartments,
located in Nashville, Tennessee, on the market for sale. Accordingly,
Sheraton Hills Apartments is classified as an asset held for sale on the
Partnership's December 31, 1997 balance sheet. The net book value of
Sheraton Hills Apartments is $3,009,553 at December 31, 1997.

The results of operations for Sheraton Hills Apartments are $797,974, $146,983,
and $154,785 for 1997, 1996 and 1995, respectively. Results of operations are
operating revenues including gain on involuntary conversion, less operating
expenses including depreciation and interest expense.

NOTE 5 - MORTGAGE NOTES PAYABLE
- -------------------------------

The table below sets forth the mortgage notes payable of the Partnership at
December 31, 1997 and 1996. All mortgage notes are secured by real estate
investments.

<TABLE>
<CAPTION>
Mortgage Annual Monthly
Lien Interest Payments/ December 31,
Property Position (a) Rates % Maturity Date (g) 1997 1996
- -------- ------------ ------- ----------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Berkley Hills First 8.750 $26,005 12/23 $ 3,196,776 $ 3,227,638
-------------- -------------

Cherry Hills (e) First 8.150 39,353 07/03 4,563,841 4,659,767
Discount (b) (87,777) (102,442)
------------- -------------
4,476,064 4,557,325
------------- -------------
</TABLE>
<PAGE>

Mortgage Annual Monthly
Lien Interest Payments/ December 31,
Property Position (a) Rates % Maturity Date (g) 1997 1996
- -------- ------------ ------- ----------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Forest Park Village (f) First 9.125 $59,732 02/98 $ 5,861,401 6,034,650
------------- -------------

Heather Square First 9.625 38,250 03/09 3,146,577 3,294,874
------------- -------------

Lantern Tree (e) First 8.150 20,416 07/03 2,367,704 2,417,470
Discount (b) (45,580) (53,147)
------------- -------------
2,322,124 2,364,323
------------- -------------

Meridian West (e) First 8.150 28,471 07/03 3,301,837 3,371,237
Discount (b) (63,003) (74,114)
------------- -------------
3,238,834 3,297,123
------------- -------------

Pennbrook First 9.450 27,209 02/00 3,131,813 3,160,860
------------- -------------

Rockborough (e) First 8.150 18,789 07/03 2,179,027 2,224,827
Discount (b) (41,934) (48,911)
------------- -------------
2,137,093 2,175,916
------------- -------------

Rolling Hills First 9.250 55,389 11/24 6,584,044 6,637,002
------------- -------------

Ruskin Place First 8.750 36,348 10/24 4,504,429 4,544,544
------------- -------------

Sheraton Hills (c) First (d) (d) 10/98 2,747,663 2,794,397
------------- -------------

Westgate First 8.000 44,114 09/23 5,767,941 5,833,019
------------- -------------

Williamsburg (e) First 8.150 23,128 07/03 2,682,164 2,738,540
Discount (b) (51,616) (60,205)
--------------- -------------
2,630,548 2,678,335
--------------- -------------
Total $ 49,745,307 $ 50,600,006
=============== =============
</TABLE>

<PAGE>
(a) The debt is non-recourse to the Partnership.

(b) Mortgage discounts are based on an effective interest rate of 8.62%.

(c) The mortgage encumbering Sheraton Hills Apartments contains provisions
which may give the lender the right to accelerate the mortgage debt as a
result of the November 12, 1991, restructuring of the Partnership. The
General Partner has requested that the lender waive its right to accelerate
the mortgage debt. The lender may require the payment of fees or additional
interest as a condition to granting such a waiver. In the event the waiver
is not obtained and the mortgage debt is accelerated, the Partnership would
be required to satisfy the outstanding mortgage debt, which totaled
$2,747,663 at December 31, 1997. In such event, the Partnership will
attempt to arrange alternative sources of mortgage financing. However, such
refinancing may be at an interest rate which is higher or is otherwise on
terms which are less favorable than those provided for by the current
mortgage. Furthermore, if alternative financing cannot be obtained, the
lender could foreclose on Sheraton Hills Apartments. The General Partner
believes the likelihood of this outcome is remote.

(d) The Sheraton Hills mortgage note bears interest at a variable rate,
adjusted at six-month intervals equal to the six-month treasury bill weekly
average rate plus 3.0% per annum, not to exceed 12.75% per annum. The
monthly payment is also adjusted each six months so that the mortgage note
will fully amortize over a period of 30 years. At December 31, 1997, the
interest rate was 8.36%, and the monthly payment of principal and interest
was $23,239.

(e) Financing was obtained under the terms of a Real Estate Mortgage Investment
Conduit financing. The mortgage notes payable are cross-collateralized and
may not be prepaid in whole or in part before July 1998. Any prepayments
made during the sixth or seventh loan years are subject to a Yield
Maintenance Premium, as defined. Additionally, the Partnership must pay a
release payment equal to 25% of the prepaid balance which will be applied
to the remaining mortgage notes in the collateral pool.

(f) The Partnership refinanced the Forest Park Village mortgage note on
March 20, 1998. See Note 9 - "Subsequent Event."

(g) Balloon payments on the Partnership's mortgage notes are due as follows:

Property Balloon Payment Date
-------- --------------- ----

Forest Park Village .................... $ 5,831,000 02/98
Sheraton Hills.......................... 2,661,000 10/98
Pennbrook............................... 3,059,000 02/00
Cherry Hills............................ 3,875,000 07/03
Lantern Tree............................ 2,010,000 07/03
Meridian West........................... 2,804,000 07/03
Rockborough............................. 1,850,000 07/03
Williamsburg............................ 2,278,000 07/03

<PAGE>
Scheduled principal maturities of the mortgage notes payable under existing
agreements, before consideration of discounts of $289,910, are shown below.

1998.................................... $ 9,355,346
1999.................................... 812,434
2000.................................... 3,912,038
2001.................................... 923,348
2002.................................... 1,006,377
Thereafter.............................. 34,025,674
-----------
$ 50,035,217
===========

Based on borrowing rates currently available to the Partnership for mortgage
loans with similar terms and average maturities, the fair value of the mortgage
notes payable was approximately $52,907,000 and $50,250,000 at December 31, 1997
and 1996, respectively.

NOTE 6 - SALE OF REAL ESTATE
- ----------------------------

On July 30, 1996, the Partnership sold Westridge Apartments to an unaffiliated
purchaser for a purchase price of $2,110,500. The Partnership agreed to finance
a portion of the sales price by accepting a short-term, $1,550,000 purchase
money mortgage note. The mortgage note accrued interest at 10.0% per annum and
required monthly interest-only payments. On February 5, 1997, the purchaser
repaid the $1,550,000 mortgage note to the Partnership. See Note 7 - "Mortgage
Note Receivable." Cash proceeds from the sale, as well as the loss on sale of
Westridge Apartments, are presented below.

Loss on Sale Cash Proceeds

Cash sales price....................... $ 2,110,500 $ 2,110,500
Selling costs.......................... (68,116) (68,116)
Basis of real estate sold.............. (2,262,541)
-----------

Loss on sale of real estate............ $ (220,157)
===========

Net cash proceeds received in 1996..... (492,384)
---------

Net cash proceeds received in 1997..... $ 1,550,000
==========

NOTE 7 - MORTGAGE NOTE RECEIVABLE
- ---------------------------------

In connection with the sale of Westridge Apartments (see Note 6 - "Sale of Real
Estate"), the purchaser financed a portion of the sales price by entering into a
short-term, $1,550,000 mortgage note payable to the Partnership until the
purchaser could arrange permanent financing. The Partnership's mortgage note
receivable was secured by a non-recourse lien against Westridge Apartments. The
table below sets forth the terms of the mortgage note receivable at December 31,
1997 and 1996.

<PAGE>
<TABLE>
<CAPTION>
Mortgage Annual Monthly
Lien Interest Payment/ December 31,
Property Position Rate % Maturity Date 1997 1996
-------- ----------- ------ ------------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
Westridge First 10.0% $12,917 05/97 $ - $ 1,550,000
============ ===========
</TABLE>

On February 5, 1997, the purchaser paid the $1,550,000 mortgage note receivable
together with all accrued and unpaid interest thereon.

NOTE 8 - GAIN ON INVOLUNTARY CONVERSIONS
- ----------------------------------------

On April 24, 1996, a fire damaged 12 units at Sheraton Hills Apartments. The
cost to repair the fire damage was $562,560, of which, the Partnership received
$546,069 in insurance reimbursements. The Partnership recognized a $474,376 gain
on involuntary conversion equal to the insurance proceeds received less the
adjusted basis of the property damaged by the fire. Because the insurance
proceeds had not yet been received at December 31, 1996, the gain on involuntary
conversion was deferred and reported on the Partnership's December 31, 1996
balance sheet. The deferred gain on involuntary conversion was recognized in
1997 when the insurance proceeds were received. Reconstruction of the damaged
units was completed during the third quarter of 1996.

On November 3, 1995, two units at Cherry Hills Apartments were damaged by a fire
that caused $55,495 in damages. The Partnership received a $40,428 insurance
reimbursement to cover the cost to repair Cherry Hills Apartments. The insurance
reimbursement received in excess of the basis of the property damaged was
recorded as a $16,961 gain on involuntary conversion.

On May 5, 1995, Westridge Apartments incurred hail damage of $150,938. The
Partnership received $144,666 in insurance reimbursements to cover the cost to
repair Westridge Apartments. Insurance reimbursements received in excess of the
basis of the property damaged were recorded as a $109,006 gain on involuntary
conversion.

NOTE 9 - SUBSEQUENT EVENT
- -------------------------

On March 20, 1998, the Partnership refinanced the Forest Park Village mortgage
note. The new note, in the amount of $5,925,000, bears interest at a variable
rate equal to 1.75% plus the London Interbank Offered Rate per annum. The new
mortgage note requires monthly interest only payments and quarterly principal
payments in the amount necessary to reduce the principal balance of the note by
5% annually. The new Forest Park Village mortgage note matures March 20, 2001.

<PAGE>
NOTE 10 - LEGAL PROCEEDINGS
- ---------------------------

The action involves purported class and derivative actions brought by limited
partners of each of the fourteen limited partnerships that were named as nominal
defendants as listed above (the "Partnerships"). Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their fiduciary duties and certain obligations under the respective Amended
Partnership Agreement. Plaintiffs allege that Defendants have rendered such
Units highly illiquid and artificially depressed the prices that are available
for Units on the resale market. Plaintiffs also allege that Defendants engaged
in a course of conduct to prevent the acquisition of Units by an affiliate of
Carl Icahn by disseminating purportedly false, misleading and inadequate
information. Plaintiffs further allege that Defendants acted to advance their
own personal interests at the expense of the Partnerships' public unit holders
by failing to sell Partnership properties and failing to make distributions to
unitholders.

<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.
SCHEDULE III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
December 31, 1997
<TABLE>
<CAPTION>
Costs
Initial Cost (b) Cumulative Capitalized
Related (b) Buildings and Write-down for Subsequent
Description Encumbrances Land Improvements Impairment To Acquisition
- ----------- --------------- -------------------------------- -------------- --------------
APARTMENTS:

Real Estate Investments:
<S> <C> <C> <C> <C> <C>
Berkley Hills
Madison, TN $ 3,196,776 $ 246,988 $ 4,779,121 $ - $ 1,441,804

Cherry Hills
Wichita, KS 4,476,064 514,205 7,373,589 - 1,704,264

Forest Park Village
Columbus, OH 5,861,401 716,395 7,095,131 - 2,381,272

Heather Square
Dallas, TX 3,146,577 853,746 6,087,281 - 1,445,081

Lantern Tree
Omaha, NE 2,322,124 217,809 2,467,872 - 951,846

Meridian West
Puyallup, WA 3,238,834 253,167 3,787,807 - 1,147,958

Pennbrook
Dallas, TX 3,131,813 692,515 4,708,479 - 1,568,954

Rockborough
Addison, TX 2,137,093 427,932 2,924,451 - 970,385

Rolling Hills
Louisville, KY 6,584,044 557,249 6,156,595 - 2,853,513

Ruskin Place
Lincoln, NE 4,504,429 899,372 3,792,676 - 1,524,968

Westgate
Lansing, MI 5,767,941 390,482 4,963,710 - 1,378,064

Williamsburg
Shreveport, LA 2,630,548 283,754 4,203,172 - 1,124,781
-------------- -------------- -------------- ------------ -------------

$ 46,997,644 $ 6,053,614 $ 58,339,884 $ - $ 18,492,890
============== ============== ============== ============ =============

Asset Held for Sale (c):

Sheraton Hills
Nashville, TX $ 2,747,663
=============
</TABLE>
See accompanying notes to Schedule III.
<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.
SCHEDULE III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
December 31, 1997
<TABLE>
<CAPTION>
Gross Amount at
Which Carried at Close of Period Accumulated
Buildings and Depreciation
Description Land Improvements Total (a) and Amortization
- ----------- -------------- -------------- --------------- ----------------
APARTMENTS:

Real Estate Investments:
<S> <C> <C> <C> <C>
Berkley Hills
Madison, TX $ 246,988 $ 6,220,925 $ 6,467,913 $ (4,288,137)

Cherry Hills
Wichita, KS 514,205 9,077,853 9,592,058 (5,446,503)

Forest Park Village
Columbus, OH 716,395 9,476,403 10,192,798 (6,534,031)

Heather Square
Dallas, TX 853,746 7,532,362 8,386,108 (4,589,173)

Lantern Tree
Omaha, NE 217,809 3,419,718 3,637,527 (2,273,390)

Meridian West
Puyallup, WA 253,167 4,935,765 5,188,932 (3,017,699)

Pennbrook
Dallas, TX 692,515 6,277,433 6,969,948 (3,923,455)

Rockborough
Addison, TX 427,932 3,894,836 4,322,768 (2,251,909)

Rolling Hills
Louisville, KY 557,249 9,010,108 9,567,357 (6,062,834)

Ruskin Place
Lincoln, NE 920,061 5,296,955 6,217,016 (3,508,282)

Westgate
Lansing, MI 390,482 6,341,774 6,732,256 (4,148,250)

Williamsburg
Shreveport, LA 283,754 5,327,953 5,611,707 (3,423,289)
-------------- -------------- ---------------- -------------

$ 6,074,303 $ 76,812,085 $ 82,886,388 $ (49,466,952)
============== ============== ================ =============

Asset Held for Sale (c):

Sheraton Hills
Nashville, TN $ 3,009,553
================
</TABLE>
See accompanying notes to Schedule III
<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.
SCHEDULE III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
December 31, 1997

Date of Date Depreciable
Description Construction Acquired lives (years)
- ------------- ------------- -------- -------------
APARTMENTS:

Real Estate Investments:
<S> <C> <C> <C>
Berkley Hills
Madison, TN 1970 06/79 3-25

Cherry Hills
Wichita, KS 1974 06/80 3-32

Forest Park Village
Columbus, OH 1970 12/79 3-25

Heather Square
Dallas, TX 1978 10/79 3-32

Lantern Tree
Omaha, NE 1974 07/79 3-28

Meridian West
Puyallup, WA 1977 01/80 3-31

Pennbrook
Dallas, TX 1978 01/80 3-31

Rockborough
Addison, TX 1978 01/80 3-31

Rolling Hills
Louisville, KY 1974 09/79 3-27

Ruskin Place
Lincoln, NE 1973 12/79 3-27

Westgate
Lansing, MI 1974 12/79 3-28

Williamsburg
Shreveport, LA 1975 12/79 3-28

Asset Held for Sale (c):

Sheraton Hills
Nashville, TN 1971 06/79

</TABLE>
See accompanying notes to Schedule III.

<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.
SCHEDULE III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
December 31, 1997

(a) For Federal income tax purposes, the properties are depreciated over lives
ranging from 5-27.5 years using ACRS or MACRS methods. The aggregate cost
of real estate investments for Federal income tax purposes was $92,572,312
and accumulated depreciation was $54,190,231 at December 31, 1997.

(b) The initial cost and encumbrances reflect the present value of future loan
payments discounted, if appropriate, at a rate estimated to be the
prevailing interest rate at the date of acquisition or refinancing.

(c) The asset held for sale is carried at the lower of depreciated cost or fair
value less costs to sell. Historical cost, net of accumulated depreciation
and cumulative write-downs, becomes the new cost basis when the asset is
classified as "Asset Held for Sale." Depreciation ceases at the time the
asset is placed on the market for sale.

<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.

Notes to Schedule III

Real Estate Investments and Accumulated Depreciation

A summary of activity for the Partnership's real estate investments and
accumulated depreciation is as follows:

<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1997 1996 1995
-------------- -------------- ---------------
Real estate investments:
- ------------------------
<S> <C> <C> <C>
Balance at beginning of year............... $ 88,037,151 $ 90,563,393 $ 87,104,715

Improvements............................... 2,064,414 2,398,428 3,582,582

Assets replaced............................ - (277,307) (123,904)

Reclassification of asset held for sale.... (7,215,177)

Sale of real estate........................ - (4,647,363) -
------------- ------------- --------------

Balance at end of year..................... $ 82,886,388 $ 88,037,151 $ 90,563,393
============= ============= ==============

Accumulated depreciation:

Balance at beginning of year............... $ 49,728,546 $ 48,129,231 $ 44,274,163

Depreciation............................... 3,944,030 4,173,260 3,919,845

Assets replaced............................ - (189,123) (64,777)

Reclassification of asset held for sale.... (4,205,624)

Sale of real estate........................ - (2,384,822) -
------------- ------------- --------------

Balance at end of year..................... $ 49,466,952 $ 49,728,546 $ 48,129,231
============= ============= ==============

Asset Held for Sale:

Balance at beginning of year............... $ - $ - $ -

Reclassification of asset held for sale.... 3,009,553 - -

Improvements............................... - - -

Depreciation and amortization.............. - - -
------------- ------------- --------------

Balance at end of year..................... $ 3,009,553 $ - $ -
============= ============= ==============
</TABLE>

<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------- ---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
None.
PART III

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

Neither the Partnership nor the General Partner has any directors or executive
officers. The names and ages of, as well as the positions held by, the officers
and directors of McNeil Investors, Inc., the general partner of the General
Partner, are as follows:
<TABLE>
<CAPTION>

Other Principal Occupations and Other
Name and Position Age Directorships During the Past 5 Years
- ----------------- --- -------------------------------------
<S> <C>
Robert A. McNeil, 77 Mr. McNeil is also Chairman of the
Chairman of the Board and Director of McNeil Real Estate
Board and Director Management, Inc. ("McREMI") which is an
affiliate of the General Partner. He has
held the foregoing positions since the
formation of such entity in 1990. Mr.
McNeil received his B.A. degree from
Stanford University in 1942 and his
L.L.B. degree from Stanford Law School
in 1948. He is a member of the State Bar
of California and has been involved in
real estate financing since the late
1940's and in real estate acquisitions,
syndications and dispositions since
1960. From 1986 until active operations
of McREMI and McNeil Partners, L.P.
began in February 1991, Mr. McNeil was a
private investor. Mr. McNeil is a member
of the International Board of Directors
of the Salk Institute, which promotes
research in improvements in health care.

Carole J. McNeil 54 Mrs. McNeil is Co-Chairman, with husband
Co-Chairman of the Robert A. McNeil, of McNeil Investors,
Board Inc. Mrs. McNeil has twenty years of
real estate experience, most recently as
a private investor from 1986 to 1993. In
1982, she founded Ivory & Associates, a
commercial real estate brokerage firm in
San Francisco, CA. Prior to that, she
was a commercial real estate associate
with the Madison Company and, earlier, a
commercial sales associate and analyst
with Marcus and Millichap in San
Francisco. In 1978, Mrs. McNeil
established Escrow Training Centers,
California's first accredited commercial
training program for title company
escrow officers and real estate agents
needing college credits to qualify for
brokerage licenses. She began in real
estate as Manager and Marketing Director
of Title Insurance and Trust in Marin
County, CA. Mrs. McNeil serves on the
International Board of Directors of the
Salk Institute.
</TABLE>
<PAGE>

Other Principal Occupations and Other
Name and Position Age Directorships During the Past 5 Years
- ----------------- --- -------------------------------------
<S> <C>
Ron K. Taylor 40 Mr. Taylor is the President and Chief
President and Chief Executive Officer of McNeil Real Estate
Executive Officer Management which is an affiliate of the
General Partner. Mr. Taylor has been in
this capacity since the resignation of
Donald K. Reed on March 4, 1997. Prior
to assuming his current
responsibilities, Mr. Taylor served as a
Senior Vice President of McREMI. Mr.
Taylor has been in this capacity since
McREMI commenced operations in 1991.
Prior to joining McREMI, Mr. Taylor
served as an Executive Vice President
for a national syndication/property
management firm. In this capacity, Mr.
Taylor had the responsibility for the
management and leasing of a 21,000,000
square foot portfolio of commercial
properties. Mr. Taylor has been actively
involved in the real estate industry
since 1983.
</TABLE>

Each director shall serve until his successor shall have been duly elected and
qualified.

ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------

No direct compensation was paid or payable by the Partnership to directors or
officers (since it does not have any directors or officers) for the year ended
December 31, 1997, nor was any direct compensation paid or payable by the
Partnership to directors or officers of the general partner of the General
Partner for the year ended December 31, 1997. The Partnership has no plans to
pay any such remuneration to any directors or officers of the general partner of
the General Partner in the future.

See Item 13 - Certain Relationships and Related Transactions for amounts of
compensation and reimbursements paid by the Partnership to the General Partner
and its affiliates.

<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------- --------------------------------------------------------------

(A) Security ownership of certain beneficial owners.

No individual or group, as defined by Section 13(d)(3) of the Securities
Exchange Act of 1934, known to the Partnership is the beneficial owner
of more than 5% of the Partnership's securities, except as noted in
below:

1. A group of limited partnerships affiliated with Liquidity
Financial Corporation, all of whose outstanding stock is owned
by Richard G. Wollack and Brent R. Donaldson, 2200 Powell
Street, Suite 700, Emeryville, California, 94608, collectively
own 6,389 Units (5.8%) as of January 31, 1998.

2. High River Limited Partnership, 100 S. Bedford Road, Mount
Kisco, New York, 10549, owns 15,616 Units (14.2%) as of
January 31, 1998.

(B) Security ownership of management.

The General Partner and the officers and directors of its general
partner, collectively, own 5,715 Units (5.2%) as of January 31, 1998.

None.

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

Under the terms of the Amended Partnership Agreement, the Partnership is paying
the MID to the General Partner. The maximum MID is calculated as 1% of the
tangible asset value of the Partnership. The maximum MID percentage decreases
subsequent to 1999. Tangible asset value is determined by using the greater of
(i) an amount calculated by applying a capitalization rate of 9% to the
annualized net operating income of each property or (ii) a value of $10,000 per
apartment unit to arrive at the property tangible asset value. The property
tangible asset value is then added to the book value of all other assets
excluding intangible items.

The MID will be paid to the lesser of the Partnership's excess cash flow, as
defined, or net operating income (the "Entitlement Amount"), and may be paid in
(i) cash, unless there is insufficient cash to pay the distribution, in which
event any unpaid portion not taken in Units will be deferred and is payable,
without interest, from the first available cash and/or (ii) in Units. A maximum
of 50% of the MID may be paid in Units. The number of Units issued in payment of
the MID is based on the greater of $50 per Unit or the net tangible asset value,
as defined, per Unit. For the year ended December 31, 1997, the Partnership paid
or accrued MID for the General Partner in the amount of $1,137,022.

<PAGE>
During 1991, the Partnership amended its capitalization policy and began
capitalizing certain costs of improvements and betterments which under policies
of prior management had been expensed when incurred. The purpose of the
amendment was to more properly recognize items which were capital in nature. The
effect of the amendment standing alone was evaluated at the time the change was
made and determined not to be material to the financial statements of the
Partnership in 1991, nor was it expected to be material in any future year.
However, the amendment can have a material effect on the calculation of the
Entitlement Amount which determines the amount of MID earned. Capital
improvements are excluded from cash flow, as defined. The majority of base
period cash flow was measured under the previous capitalization policy, while
incentive period cash flow is determined using the amended policy. Under the
amended policy, more items are capitalized, and cash flow increases. Had base
period cash flow been measured on a basis comparable with incentive period cash
flow, MID for the year ended December 31, 1995 would have been reduced by
$111,248. The amendment of the capitalization policy did not materially affect
the MID for 1997 or 1996 because the Entitlement Amount was sufficient to pay
the MID notwithstanding the amendment to the capitalization policy.

The Partnership pays property management fees equal to 5% of gross rental
receipts of the Partnership's properties to McREMI for providing property
management and leasing services for the Partnership's properties. The
Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs. For the year ended December 31, 1997,
the Partnership incurred $1,446,237 of property management fees and
reimbursements.

See Item 1 - Business, Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations, and Item 8 - Note 2 -
"Transactions with Affiliates."

<PAGE>
PART IV

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

See accompanying Index to Financial Statements at Item 8 - Financial Statements
and Supplementary Data.

(A) The following exhibits are incorporated by reference and are an integral
part of this Form 10-K.

Exhibits
- --------
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------

<S> <C>
3. Limited Partnership Agreement (Incorporated
by reference to the Annual Report on Form 10-K
for the fiscal year ended September 30, 1987).

3.1 Amended and Restated Limited Partnership
Agreement dated November 12, 1991
(Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter year ended
September 30, 1991).

3.2 Amendment No. 1 to the Amended and Restated
Partnership Agreement of McNeil Real Estate
Fund IX, Ltd., dated to be effective as of
July 31, 1993. (5)

3.3 Amendment No. 2 to the Amended and Restated
Partnership Agreement of McNeil Real Estate
Fund IX, Ltd., dated March 28, 1994. (5)

10.1 Mortgage Note, dated September 26, 1989,
between Rolling Hills Fund IX Associates L.P.
and Newport Mortgage Corporation. (1)

10.2 Mortgage Note, dated August 11, 1988,
between Sherwood Forest Fund IX Associates and
American Mortgages, Inc. (1)

10.3 Assignment and Assumption Agreement, dated
as of November 12, 1991, between Pacific
Investors Corporation and McNeil Partners,
L.P. regarding Sherwood Forest Fund IX
Associates. (2)

10.4 Assignment and Assumption Agreement, dated
as of November 12, 1991, between Pacific
Investors Corporation and McNeil Partners,
L.P. regarding Berkley Hills Associates. (2)

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

<S> <C>
10.5 Assignment and Assumption Agreement, dated
as of November 12, 1991, between Pacific
Investors Corporation and McNeil Partners,
L.P. regarding Ruskin Place Fund IX
Associates. (2)

10.6 Assignment and Assumption Agreement, dated
as of November 12, 1991, between Rolling Hills
Apartment Corp. and McNeil Partners, L.P.
regarding Rolling Hills Fund IX Associates,
L.P. (2)

10.7 Assignment and Assumption Agreement, dated
as of November 12, 1991, between Pacific
Investors Corporation, Robert A. McNeil and
McNeil Partners, L.P. regarding McNeil Real
Estate Fund IX, Ltd. (2)

10.8 Termination Agreement, dated as of November
12, 1991, between Ruskin Place Fund IX
Associates and McNeil Real Estate Management,
Inc. (2)

10.9 Termination Agreement, dated as of November
12, 1991, between Rolling Hills Fund IX
Associates, L.P. and McNeil Real Estate
Management, Inc. (2).

10.10 Termination Agreement, dated as of November
12, 1991, between Sherwood Forest Fund IX
Associates and McNeil Real Estate Management,
Inc. (2)

10.11 Termination Agreement, dated as of November
12, 1991, between Berkley Hills Associates and
McNeil Real Estate Management, Inc. (2)

10.12 Property Management Agreement, dated as of
November 12, 1991, between McNeil Real Estate
Fund IX, Ltd. and McNeil Real Estate
Management, Inc. (2)

10.13 Property Management Agreement, dated as of
November 12, 1991, between Ruskin Place Fund
IX Associates and McNeil Real Estate
Management, Inc. (2)

10.14 Property Management Agreement, dated as of
November 12, 1991, between Rolling Hills Fund
IX Associates, L.P. and McNeil Real Estate
Management, Inc. (2)

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------

<S> <C>

10.15 Property Management Agreement, dated as of
November 12, 1991, between Sherwood Forest
Fund IX Associates, L.P. and McNeil Real
Estate Management, Inc. (2)

10.16 Property Management Agreement, dated as of
November 12, 1991, between Berkley Hills
Associates and McNeil Real Estate Management,
Inc. (2)

10.17 Asset Management Agreement, dated as of
November 12, 1991, between McNeil Real Estate
Fund IX, Ltd. and McNeil Partners, L.P. (2)

10.18 Amendment of Property Management Agreement
dated March 5, 1993 between the Partnership
and McNeil Real Estate Management, Inc. (3)

10.19 Property management agreement, dated as of
January 28, 1993, between Pennbrook Fund IX,
L.P. and McNeil Real Estate Management, Inc.
(3)

10.20 Amendment of Property Management Agreement
dated March 5, 1993 between Pennbrook Fund IX
Associates, L.P. and McNeil Real Estate
Management, Inc. (3)

10.21 Loan Agreement dated June 24, 1993 between
Lexington Mortgage Company and McNeil Real
Estate Fund IX, Ltd., et. al. (4)

10.22 Master Property Management Agreement, dated
as of June 24, 1993, between McNeil Real
Estate Management, Inc. and McNeil Real Estate
Fund IX, Ltd. (5)

10.23 Mortgage Note, dated September 28, 1989,
between Ruskin Place Fund IX Associates and
American Mortgages, Inc. (6)

10.24 Modification of Mortgage Note, dated July
28, 1994, between Ruskin Place Fund IX
Associates and American Mortgages, Inc. (6)

10.25 Deed of Trust Note, dated November 3, 1988,
between Berkley Hills Associates and American
Mortgages, Inc. (6)

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
10.26 Modification of Deed of Trust Note, dated
July 28, 1994, between Berkley Hills
Associates and American Mortgages, Inc. (6)

10.27 Loan Agreement, dated December 30, 1992,
between Forest Park Fund IX Associates Limited
Partnership, McNeil Partners, L.P., McNeil
Real Estate Fund IX, Ltd. and Collateral
Mortgage, Ltd. (6)

10.28 Promissory Note, dated February 5, 1979,
between Summers-The Heather Apartments Company
and The Mutual Benefit Life Insurance Company.
(6)

10.29 Promissory Note, dated September 2, 1988,
between McNeil Real Estate Fund IX, Ltd. and
FNB Mortgage Corp. (6)

10.30 Multifamily Note, dated January 29, 1993,
between Pennbrook Fund IX Associates, L.P. and
Washington Mortgage Financial Group, Ltd. (6)

10.31 Modification of Mortgage Note, dated June
30, 1993, between Sherwood Forest Fund IX
Associates and American Mortgages, Inc. (6)

11. Statement regarding computation of net income
(loss) per limited partnership unit (see Note
1 to Financial Statements).
</TABLE>

<PAGE>

22. Following is a list of subsidiaries of the Partnership:

Names Under
Jurisdiction Which It Is
Name of Subsidiary of Incorporation Doing Business
------------------ ---------------- --------------
<S> <C> <C>
Berkley Hills Associates Tennessee None

Cherry Hills Fund IX
Limited Partnership Delaware None

Forest Park Fund IX
Associates Limited
Partnership Ohio None

Lantern Tree Fund IX
Limited Partnership Delaware None

Meridian West Fund IX
Limited Partnership Delaware None

Pennbrook Fund IX
Associates, L.P. Texas None

Rockborough Fund IX
Limited Partnership Delaware None

Rolling Hills Fund IX
Associates, L.P. Kentucky None

Ruskin Place
Fund IX Associates Nebraska None

Sherwood Forest
Fund IX Associates Michigan None

Williamsburg Fund IX
Limited Partnership Delaware None
</TABLE>

The Partnership has omitted instruments with respect to long-term
debt where the total amount of the securities authorized
thereunder does not exceed 10% of the total assets of the
Partnership. The Partnership agrees to furnish a copy of each such
instrument to the Commission upon request.

(1) Incorporated by reference to the Annual Report of McNeil Real
Estate Fund IX, Ltd. (File No. 0-9026) on Form 10-K for the period
ended December 31, 1990, as filed with the Securities and Exchange
Commission on March 29, 1991.

<PAGE>

(2) Incorporated by reference to the Annual Report of McNeil Real
Estate Fund IX, Ltd. (File No. 0-9026), on Form 10-K for the
period ended December 31, 1991, as filed with the Securities and
Exchange Commission on March 30, 1992.

(3) Incorporated by reference to the Annual Report of McNeil Real
Estate Fund IX, Ltd. (File No. 0-9026), on Form 10-K for the
period ended December 31, 1992, as filed with the Securities and
Exchange Commission on March 30, 1993.

(4) Incorporated by reference to the Annual Report of McNeil Real
Estate Fund XI, Ltd. (File No. 0-9783), on Form 10-K for the
period ended December 31, 1993, as filed with the Securities and
Exchange Commission on March 30, 1994.

(5) Incorporated by reference to the Annual Report of McNeil Real
Estate Fund IX, Ltd. (File No. 0-9026), on Form 10-K for the
period ended December 31, 1993, as filed with the Securities and
Exchange Commission on March 30, 1994.

(6) Incorporated by reference to the Annual Report of McNeil Real
Estate Fund IX, Ltd. (File No. 0-9026), on Form 10-K for the
period ended December 31, 1994, as filed with the Securities and
Exchange Commission on March 30, 1995.

27. Financial Data Schedule for the year ended December 31, 1997.

(B) Reports on Form 8-K. There were no reports on Form 8-K filed during the
quarter ended December 31, 1997.

<PAGE>
McNEIL REAL ESTATE FUND IX, LTD.
A Limited Partnership

SIGNATURE PAGE

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.

McNEIL REAL ESTATE FUND IX, LTD.

By: McNeil Partners, L.P., General Partner

By: McNeil Investors, Inc.,
General Partner

March 31, 1998 By: /s/ Robert A. McNeil
- -------------- ----------------------------------
Date Robert A. McNeil
Chairman of the Board and Director
(Principal Executive Officer)

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 31, 1998 By: /s/ Ron K. Taylor
- -------------- -----------------------------------
Date Ron K. Taylor
President and Director of
McNeil Investors, Inc.
(Principal Financial Officer)

March 31, 1998 By: /s/ Brandon K. Flaming
- -------------- -----------------------------------
Date Brandon K. Flaming
Vice President of McNeil
Investors, Inc.
(Principal Accounting Officer)

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 3,330,836
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 82,886,388
<DEPRECIATION> (49,466,952)
<TOTAL-ASSETS> 44,051,144
<CURRENT-LIABILITIES> 0
<BONDS> 49,745,307
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 44,051,144
<SALES> 19,947,518
<TOTAL-REVENUES> 20,616,269
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 14,862,764
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,776,243
<INCOME-PRETAX> 977,262
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 977,262
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>