MCNEIL REAL ESTATE FUND XIV LTD, 10-K405, 1996-03-29

MCNEIL REAL ESTATE FUND XIV LTD
10-K405, 1996-03-29
OPERATORS OF NONRESIDENTIAL BUILDINGS

Previous: SACRAMENTO HOTEL PARTNERS L P, 10KSB40, 1996-03-29

Next: HARLEYSVILLE NATIONAL CORP, 10-K, 1996-03-29

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, 1995
------------------------------------------------

[ ] 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 0-12915
--------

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

California 94-2822299
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code (214) 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 ]

85,662 of the registrant's 86,534 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 43.

TOTAL OF 46 PAGES

<PAGE>
PART I

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

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

McNeil Real Estate Fund XIV, Ltd. (the "Partnership") was organized April 30,
1982 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 ("McNeil"). The Partnership is governed by an
amended and restated partnership agreement of limited partnership dated
September 20, 1991, as amended (the "Amended Partnership Agreement"). Prior to
September 20, 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 April 30, 1982 (the "Original Partnership
Agreement"). The principal place of business for the Partnership and the General
Partner is 13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240.

On February 14, 1983, a Registration Statement on Form S-11 was declared
effective by the Securities and Exchange Commission whereby the Partnership
offered for sale $35,000,000 of limited partnership units ("Units"), with the
General Partners' right to increase the offering up to $50,000,000. 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 17, 1984, with 86,101 Units sold at $500 each,
or gross proceeds of $43,050,500 to the Partnership, including the original
general partners' purchase of 200 Units for $100,000. In 1992, 483 Units were
issued to the General Partner in payment of the fixed portion of the Management
Incentive Distribution ("MID"). In 1993, 30 Units were relinquished. An
additional 20 Units were relinquished in 1994, leaving 86,534 Units outstanding
at December 31, 1995.

SOUTHMARK BANKRUPTCY AND CHANGE IN GENERAL PARTNER
- --------------------------------------------------

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, including Southmark's interests in the Corporate General
Partner, are being sold or liquidated for the benefit of creditors.

In accordance with Southmark's reorganization plan, on October 12, 1990,
Southmark, McNeil and various of their affiliates entered into an asset purchase
agreement 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.

<PAGE>

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.

On September 20, 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 alters 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 the 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 the 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, $30,118
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 $9,723 which, when combined with the cash
proceeds from Southmark, resulted in a gain on settlement of litigation of
$39,841.

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

General:

The Partnership is engaged in diversified real estate activities, including the
ownership, operation and management of residential and retail real estate and
other real estate related assets. At December 31, 1995, the Partnership owned
seven 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. In accordance with the
Amended Partnership Agreement, the Partnership reimburses 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."

<PAGE>

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.

Business Plan:

The Partnership's anticipated plan of operations for 1996 is to preserve or
increase the net operating income of its properties whenever possible, while at
the same time making whatever capital expenditures are reasonable under the
circumstances in order to preserve and enhance the value of the Partnership's
properties. The General Partner is evaluating market and other economic
conditions to determine the optimum time to commence an orderly liquidation of
the Partnership's properties in accordance with the terms of the Amended
Partnership Agreement. In conjunction therewith, the General Partner will
continue to explore potential avenues to enhance the value of the limited
partners' Units, which may include, among other things, asset sales or
refinancings of the Partnership's properties followed by distributions. See Item
7 - Management's Discussion and Analysis of Financial Condition and Results of
Operations.

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 discussion of competitive conditions at the Partnership's
properties.

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.

<PAGE>

In August 1995, High River Limited Partnership, a Delaware limited partnership
controlled by Carl C. Icahn ("High River") made an unsolicited tender offer (the
"HR Offer") to purchase from holders of Units up to approximately 45% of the
outstanding Units of the Partnership for a purchase price of $95 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 HR Offer made with respect to the Partnership
and not tender their Units pursuant to the HR Offer. The HR Offer terminated,
after numerous extensions, on October 6, 1995. The General Partner believes that
as of February 29, 1996, High River has purchased approximately 8.46% of the
outstanding Units pursuant to the HR Offer. In addition, all litigation filed by
High River, Mr. Icahn and his affiliates in connection with the HR Offer has
been dismissed without prejudice.

ITEM 2. PROPERTIES
- ------- ----------

The following table sets forth the real estate investment portfolio of the
Partnership at December 31, 1995. 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 Item 8 -
Schedule III - "Real Estate Investments and Accumulated Depreciation and
Amortization." In the opinion of management, the properties are adequately
covered by insurance.

<TABLE>
<CAPTION>
Net Basis 1995 Date
Property Description of Property Debt Property Tax Acquired
- -------- ----------- ------------- ------------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Country Hills
Plaza Retail Center
Ogden, UT 127,262 sq. ft. $ 3,946,779 $ 1,879,090 $ 97,178 6/84

Embarcadero
Club (1) Apartments
College Park, GA 404 units 7,162,036 7,759,181 132,653 9/84

Midvale Plaza Retail Center
Midvale, UT 100,051 sq. ft. 2,219,582 1,355,277 48,051 6/84

Redwood Plaza Retail Center
Salt Lake City, UT 86,369 sq. ft. 1,980,755 955,187 51,594 6/84

Tanglewood
Village (2) Apartments
Carson City, NV 130 units 3,406,827 2,815,481 40,452 6/86

Thunder Hollow (3) Apartments
Bensalem, PA 301 units 8,353,167 9,671,886 247,910 11/84

Windrock (4) Apartments
El Paso, TX 150 units 3,881,738 3,435,867 101,345 10/84
------------ ------------ ----------
$ 30,950,884 $ 27,871,969 $ 719,183
============ ============ ==========
</TABLE>
- -----------------------------------------
Total: Apartments - 985 units
Retail Centers - 313,682 sq. ft.

<PAGE>

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

(2) Tanglewood Village Apartments is owned by Tanglewood Fund XIV Associates,
L.P. which is wholly-owned by the Partnership and the General Partner.

(3) Thunder Hollow Apartments is owned by Thunder Hollow Fund XIV Limited
Partnership which is wholly-owned by the Partnership.

(4) Windrock Apartments is owned by Windrock Fund XIV, L.P. 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>
1995 1994 1993 1992 1991
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Country Hills Plaza
Occupancy Rate............ 100% 100% 97% 99% 99%
Rent Per Square Foot...... $7.38 $6.83 $6.88 $7.01 $6.95

Embarcadero Club
Occupancy Rate............ 99% 98% 88% 89% 85%
Rent Per Square Foot...... $6.89 $6.46 $6.12 $5.77 $5.76

Midvale Plaza
Occupancy Rate............ 100% 100% 96% 96% 92%
Rent Per Square Foot...... $4.96 $5.61 $4.97 $4.81 $4.99

Redwood Plaza
Occupancy Rate............ 100% 98% 76% 100% 98%
Rent Per Square Foot...... $7.04 $6.33 $5.28 $4.38 $4.68

Tanglewood Village
Occupancy Rate............ 98% 97% 99% 97% 95%
Rent Per Square Foot...... $7.35 $7.00 $6.64 $6.18 $5.92

Thunder Hollow
Occupancy Rate............ 97% 99% 100% 96% 91%
Rent Per Square Foot...... $7.76 $7.53 $7.18 $6.76 $6.61

Windrock
Occupancy Rate............ 75% 83% 91% 90% 95%
Rent Per Square Foot...... $5.01 $5.33 $5.11 $4.80 $4.67
</TABLE>

Occupancy rate represents all units leased divided by the total number of units
for residential properties and square footage leased divided by total square
footage for retail properties as of December 31 of the given year. Rent per
square foot represents all revenue, except interest, derived from the property's
operations divided by the leasable square footage of the property.

<PAGE>

Competitive Conditions at Properties
- ------------------------------------

Country Hills Plaza has been able to achieve above market levels of occupancy
and net rental rates. Current occupancy is 100%. Of the four leases due to
expire in 1996, the Partnership expects only one tenant will vacate its space,
but the Partnership anticipates re-leasing the space during 1996. Two new retail
centers were opened to the north and south of Country Hills along the same major
artery that Country Hills is located; however, Country Hills continues to hold a
strong market position. Country Hills enjoys a good location next to a
university and a major medical center. Capital improvements made during 1995
have given the property an updated, 90's look.

The area surrounding Embarcadero Club Apartments has rebounded from the 1991
Eastern Airlines bankruptcy. Embarcadero Club is 2.5 miles from Atlanta's
Hartsfield International Airport. Area occupancy has improved to 95%, and
concessions granted to tenants are becoming rare. Embarcadero Club's occupancy
rate is at 99%, and concessions are no longer required to maintain that
occupancy rate. Embarcadero Club competes with both low end and high end
properties. Renovations in excess of $1,000,000 in the past four years have
added significantly to the property's competitiveness. No new construction is
planned for the area.

The anchor tenant at Midvale Plaza vacated its space during 1995. Although the
tenant continues to pay rent in accordance with the tenant's lease, the "dark"
space at the property has a negative impact on the property. The Partnership is
working with the tenant to either sublease the anchor space or to find a
replacement tenant. The property remains 100% leased with two leases coming up
for renewal in 1996. The property enjoys an excellent location at the
intersection of two main thoroughfares. The principal problem for the property
is to maintain its clean appearance and curb appeal relative to newer retail
centers in the area. In this regard, capital expenditures will be necessary to
update the appearance of the property.

The area surrounding Redwood Plaza is transforming from a middle to low income
area to a growing commercial district. Local businesses, such as McDonnell
Douglas, Litton Industries and Unisys, as well as one of the property's tenants,
the Utah Motor Vehicle Division, provide strong lunch time traffic to the
property. The Motor Vehicle Division is one of only three offices in the Salt
Lake Valley where motorists may renew their licenses. Two small corner retail
centers are being constructed in the immediate vicinity of the property, but
these developments should only add to the property's appeal as the prime retail
site in the area. Occupancy is projected to decrease slightly during 1996 while
the Partnership works to replace two of its tenants with stronger businesses.

Tanglewood Village Apartments rental rates have increased ahead of its Carson
City competition due to the addition of a new swimming pool, renovation of the
clubhouse, and a unique floor plan mix. Occupancy rates for both the Carson City
area and Tanglewood Village average a strong 96%. Tanglewood Village has shown
strong earnings growth the past two years due to capital improvements. The
property is well located in an area projected to have a strong rental market for
the next three years.

Thunder Hollow Apartments has been able to maintain occupancy rates in line with
the local market's 94% to 96% average occupancy rate even though it typically
has been able to obtain rental rates higher than its competition. The property
has some of the largest floor plans in its market, an especially attractive
feature for tenants with children. There has been no new multi-family
development in the market for several years. Competition is limited in this
market, but further increases in rental rates may be difficult to achieve due to
the predominantly blue collar demographics of the area and an overbuilt single
family home market.

<PAGE>
The occupancy rate at Windrock Apartments fell by year end to 75%. The decrease
is attributable to the local economy. El Paso's unemployment rate is 11.8%, and
one of the major employers, Fort Bliss, has scheduled further layoffs for 1996.
Additionally, the local economy is tied closely to Mexico's economy which has
been very unstable due to the peso's devaluation. Windrock's average occupancy
rate has usually trailed market averages by 3 to 5%. Windrock offers some
unusually large floor plans in a secluded setting, but lack of washer/dryer
connections and limited parking space have been handicaps for the property as it
competes with newer properties with full amenity packages. Capital improvements
completed and planned are necessary for Windrock to compete with newer
properties in the area.

The following schedule shows lease expirations for each of the Partnership's
commercial properties for 1996 through 2005:

<TABLE>
<CAPTION>
Number of Annual % of Gross
Expirations Square Feet Rent Annual Rent
----------- ----------- ----------- -----------
<C> <C> <C> <C> <C>
Country Hills Plaza
1996 4 6,239 $ 64,553 8%
1997 3 5,518 54,106 7%
1998 1 1,638 18,018 2%
1999 2 4,664 44,528 6%
2000 2 2,801 30,267 4%
2001 0 - - -
2002 1 1,615 16,958 2%
2003 0 - - -
2004 1 37,123 120,279 16%
2005 0 - - -

Midvale Plaza
1996 2 6,092 $ 39,666 9%
1997 1 3,078 41,400 10%
1998 2 8,571 69,100 16%
1999 0 - - -
2000 1 4,131 30,204 7%
2001 1 25,143 69,144 16%
2002 0 - - -
2003 0 - - -
2004 1 15,818 67,345 16%
2005 0 - - -

Redwood Plaza
1996 5 13,342 $ 88,708 18%
1997 2 5,549 31,643 6%
1998 3 5,330 36,051 7%
1999 2 2,999 21,743 4%
2000 1 24,873 55,964 11%
2001 0 - - -
2002 0 - - -
2003 1 20,100 203,613 41%
2004 1 14,993 63,270 13%
2005 0 - - -
</TABLE>

<PAGE>

No residential tenant leases 10% or more of the available rental space. The
following schedule reflects information on commercial tenants occupying 10% or
more of the leasable square feet for each property:

Nature of
Business Square Footage Lease
Use Leased Annual Rent Expiration
- --------- -------------- ----------- ----------
<S> <C> <C> <C>
Country Hills Plaza
Grocery Store 67,100 $416,808 2013
Discount Store 37,123 120,279 2004

Midvale Plaza

Grocery Store 25,143 69,144 2001
Discount Store 15,818 67,345 2004
Home Supply Store 37,122 102,971 2006

Redwood Plaza

Grocery Store 24,873 55,964 2000
Government Office 20,100 203,613 2003
Discount Store 14,993 63,270 2004

</TABLE>

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:

1) High River Limited Partnership v. McNeil Partners, L.P., McNeil Investors,
Inc., McNeil Pacific Investors 1972, Ltd., McNeil Real Estate Fund V, Ltd.,
McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil
Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real
Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate
Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., Robert A. McNeil and
Carole J. McNeil (L95012) - High River ("HR") filed this action in the
United States District Court for the Southern District of New York against
McNeil Partners, L.P., McNeil Investors, Inc. and Mr. and Mrs. McNeil (as
defined in this Section 1, collectively, the "Defendants") requesting,
among other things, names and addresses of the limited partners in the
partnerships referenced above (as defined in this Section 1, the
"Partnerships"). The District Court issued a preliminary injunction against
the Partnerships requiring them to commence mailing materials relating to
the HR tender offer on August 14, 1995.

On August 18, 1995, the Defendants filed an Answer and Counterclaim. The
Counterclaim principally asserts (1) the HR tender offers have been
undertaken in violation of the federal securities laws, on the basis of
material, non-public, and confidential information, and (2) that the HR
offer documents omit and/or misrepresent certain material information about
the HR tender offers. The Counterclaim seeks a preliminary and permanent
injunction against the continuation of the HR tender offers and,
alternatively, ordering corrective disclosure with respect to allegedly
false and misleading statements contained in the tender offer documents.

<PAGE>

This action was dismissed without prejudice in November 1995.

2) High River Limited Partnership v. McNeil Partners, L.P., McNeil Investors,
Inc., McNeil Pacific Investors 1972, Ltd., McNeil Real Estate Fund V, Ltd.,
McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil
Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real
Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate
Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., Robert A. McNeil and
Carole J. McNeil - United States District Court for the Southern District
of New York, (Case No. 95 Civ. 9488) (Second Action).

On November 7, 1995, High River filed a second complaint with the District
Court which alleges, inter alia, that McNeil Partners, L.P.'s (the "General
Partner") Schedule 14D-9 filed in connection with the High River tender
offers was materially false and misleading, in violation of Sections 14(d)
and 14(e) of the Securities Exchange Act of 1934, 15 U.S.C. Section 78n(d)
and (e), and the SEC Regulations promulgated thereunder; and that High
River further alleges that the General Partner has wrongfully refused to
admit High River as a limited partner to the ten partnerships referenced
above. Additionally, High River purports to assert claims derivatively on
behalf of McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund XI,
Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XXIV, L.P.
and McNeil Real Estate Fund XXV, L.P., for breach of contract and breach of
fiduciary duty, asserting that the General Partner has charged these
partnerships excessive fees. High River's complaint seeks, inter alia,
preliminary injunctive relief requiring the General Partner to admit High
River as a limited partner in each of the ten partnerships referenced above
and to transfer the tendered units of interest in the partnerships to High
River; an unspecified award of damages payable to High River and an
additional unspecified award of damages payable to certain of the
partnerships; an order that defendants must discharge their fiduciary
duties and must account for all fees they have received from certain of the
partnerships; and attorneys' fees.

On January 31, 1996, this action was dismissed without prejudice.

3) Robert Lewis v. McNeil Partners, L.P., McNeil Investors, Inc., Robert A.
McNeil et al - In the District Court of Dallas County, Texas, A-14th
Judicial District, Cause No. 95-08535 (Class Action) - Plaintiff, Robert
Lewis, is a limited partner with McNeil Pacific Investors Fund 1972, Ltd.,
McNeil Real Estate Fund X, Ltd. and McNeil Real Estate Fund XV, Ltd.

Plaintiff brings this action on his own behalf and as a class action on
behalf of the class of all limited partners of McNeil Pacific Investors
Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund
IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI,
Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd.,
McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P. and
McNeil Real Estate Fund XXV, Ltd. (as defined in this Section 3, the
"Partnerships") as of August 4, 1995.

<PAGE>

Plaintiff alleges that McNeil Partners, L.P., McNeil Investors, Inc.,
Robert A. McNeil and other senior officers (as defined in this Section 3,
collectively, the "Defendants") breached their fiduciary duties by, among
other things, (1) failing to attempt to sell the properties owned by the
Partnerships (as defined in this Section 3, the "Properties") and extending
the lives of the Partnerships indefinitely, contrary to the Partnerships'
business plans, (2) paying distributions to themselves and generating fees
for their affiliates, (3) refusing to make significant distributions to the
class members, despite the fact that the Partnerships have positive cash
flows and substantial cash balances, and (4) failing to take steps to
create an auction market for equity interests of the Partnerships, despite
the fact that a third party bidder filed tender offers for approximately
forty-five percent (45%) of the outstanding units of each of the
Partnerships. Plaintiff also claims that Defendants have breached the
partnership agreements of the Partnerships by failing to take steps to
liquidate the Properties and by their alteration of the Partnerships'
primary purposes, their acts in contravention of these agreements, and
their use of the assets of the Partnerships for their own benefit instead
of for the benefit of the Partnerships.

The Defendants deny that there is any merit to Plaintiff's allegations and
intend to vigorously defend this action.

4) James F. Schofield, Gerald C. Gillett and Donna S. Gillett v. McNeil
Partners, L.P., McNeil Investors, Inc., McNeil Real Estate Management,
Inc., Robert A. McNeil, Carole J. McNeil, McNeil Real Estate Fund V, Ltd.,
McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil
Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real
Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate
Fund XXIV, L.P., McNeil Real Estate Fund XXV, 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) and United States District Court,
Southern District of New York, Case No. 95CIV.6711 (Class and Derivative
Action Complaint)

These are corporate/securities class and derivative actions brought in
state and federal court by limited partners of each of the nine (9) limited
partnerships that are named as nominal defendants as listed above (as
defined in this Section 4, the "Partnerships"). Plaintiffs allege that
McNeil Investors, Inc., its affiliate McNeil Real Estate Management, Inc.
and four (4) of their senior officers and/or directors (as defined in this
Section 4, collectively, the "Defendants") have breached their fiduciary
duties. Specifically, Plaintiffs allege that Defendants have caused the
Partnerships to enter into several wasteful transactions that have no
business purpose or benefit to the Partnerships and which have rendered
such units highly illiquid and artificially depressed the prices that are
available for units on the limited resale market. Plaintiffs also allege
that Defendants have engaged in a course of conduct to prevent the
acquisition of units by Carl Icahn by disseminating false, misleading and
inadequate information. Plaintiffs further allege that Defendants have
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 and, thereby, have
breached the partnership agreements.

The Defendants deny that there is any merit to Plaintiff's allegations and
intend to vigorously defend these actions.

<PAGE>

5) Alfred Napoletano v. McNeil Partners, L.P., McNeil Investors, Inc., Robert
A. McNeil, Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd.,
McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil
Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real
Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate
Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund
XXV, L.P. - Superior Court of the State of California, County of Los
Angeles, Case No. BC133849 (Class Action Complaint)

Plaintiff brings this class action on behalf of a class of all persons and
entities who are current owners of units and/or are limited partners in one
or more of the partnerships referenced above (as defined in this Section 5,
the "Partnerships"). Plaintiff alleges that McNeil Partners, L.P., McNeil
Investors, Inc., Robert A. McNeil and other senior officers (as defined in
this Section 5, collectively, the "Defendants") have breached their
fiduciary duties to the class members by, among other things, (1) taking
steps to prevent the consummation of the High River tender offers, (2)
failing to take steps to maximize unitholders' or limited partners' values,
including failure to liquidate the properties owned by the Partnerships,
(3) managing the Partnerships so as to extend indefinitely the present fee
arrangements, and (4) paying itself and entities owned and controlled by
the general partner excessive fees and reimbursements of general and
administrative expenses.

The Defendants deny that there is any merit to Plaintiff's allegations and
intend to vigorously defend this action.

6) Warren Heller v. McNeil Partners, L.P., McNeil Investors, Inc., Robert A.
McNeil, Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil
Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real
Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate
Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund
XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV,
L.P. - Superior Court of the State of California, County of Los Angeles,
Case No. BC133957 (Class Action Complaint)

Plaintiff brings this class action on behalf of a class of all persons and
entities who are current owners of units and/or are limited partners in one
or more of the partnerships referenced above (as defined in this Section 6,
the "Partnerships"). Plaintiff alleges that McNeil Partners, L.P., McNeil
Investors, Inc., Robert A. McNeil and other senior officers (as defined in
this Section 6, collectively, the "Defendants") have breached their
fiduciary duties to the class members by, among other things, (1) taking
steps to prevent the consummation of the High River tender offers, (2)
failing to take steps to maximize unitholders' or limited partners' values,
including failure to liquidate the properties owned by the Partnerships,
(3) managing the Partnerships so as to extend indefinitely the present fee
arrangements, and (4) paying itself and entities owned and controlled by
the general partner excessive fees and reimbursements of general and
administrative expenses.

The Defendants deny that there is any merit to Plaintiff's allegations and
intend to vigorously defend this action.

For a discussion of the Southmark bankruptcy, see Item 1 - Business and Item 8 -
Note 10 - "Gain on Legal Settlement."

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

None.
<PAGE>
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 4,222 as of February 16, 1995

(C) No distributions were made to the limited partners during 1995 or 1994, and
none are anticipated in 1996. The Partnership accrued distributions of
$601,583 and $573,908 for the benefit of the General Partner for the years
ended December 31, 1995 and 1994, respectively, all of which remains unpaid
at December 31, 1995. These distributions are the Contingent MID pursuant
to the Amended Partnership Agreement. Payment of Contingent MID
distributions was suspended at the beginning of 1994. The General Partner
anticipates resuming partial payment of Contingent MID distributions in
1996. See Item 8 - Note 2 - "Transactions with Affiliates." See also Item 7
- Management's Discussion and Analysis of Financial Condition and Results
of Operations for a discussion of the likelihood that the Partnership will
resume 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.
<TABLE>
<CAPTION>
Statements of Years Ended December 31,
Operations 1995 1994 1993 1992 1991
- ------------------ ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Rental revenue............... $ 9,188,439 $ 8,899,488 $ 8,881,991 $ 8,942,919 $ 8,868,731
Gain on legal settlement..... 39,841 - - - -
Gain on involuntary
conversion................ - 51,588 - - -
Gain on disposition
of real estate............ - - 627,902 - -
Total revenue................ 9,350,464 8,988,225 9,539,165 9,046,359 9,010,613
Loss on disposition of
real estate............... - - - - -
Loss before extraordinary
item...................... (331,176) (300,760) (626,596) (1,622,555) (1,496,182)
Extraordinary gain on
extinguishment of debt.... - - - 76,242 -
Net loss..................... (331,176) (300,760) (626,596) (1,546,313) (1,496,182)

Net loss per limited
partnership unit:
Loss before extraordinary
item...................... $ (3.79) $ (3.44) $ (7.17) $ (18.55) $ (17.20)
Extraordinary gain on
extinguishment of debt.... - - - .87 -
------------ ------------ ------------- ------------ ------------

Net loss..................... $ (3.79) $ (3.44) $ (7.17) $ (17.68) $ (17.20)
============ ============ ============= ============ ============
</TABLE>
<PAGE>

As of December 31,
Balance Sheets 1995 1994 1993 1992 1991
- -------------- ------------- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Real estate investments,
net......................... $ 30,950,884 $ 31,396,082 $ 32,248,606 $ 36,625,427 $ 37,615,712
Total assets................... 35,275,343 35,214,866 35,514,281 39,408,958 41,781,329
Mortgage notes payable,
net......................... 27,871,969 27,161,556 27,520,265 30,144,223 30,316,531
Partners' equity............... 5,219,414 6,152,173 7,026,841 8,125,447 9,751,259
</TABLE>

See Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations. The Partnership sold Ridgewood Park Apartments on June
15, 1993.

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. On June 15, 1993, the Partnership
sold its investment in Ridgewood Park Apartments for a cash sales price of
$4,433,000. At the end of 1995, the Partnership owned four apartment properties
and three retail shopping centers. All of the Partnership's properties are
subject to mortgage notes.

On March 13, 1995, the Partnership refinanced Windrock Apartments with a new
$3,450,000 mortgage note. Proceeds from the new mortgage were used to pay off
the prior first and second mortgage notes encumbering Windrock Apartments, to
fund various escrows for the payment of property taxes, insurance, repairs and
replacements, and to pay for loan fees and other costs associated with obtaining
the new mortgage note. Residual proceeds of approximately $824,000 were added to
the Partnership's cash reserves. The Partnership's next maturing mortgage note
does not come due until April 1, 2002.

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

1995 compared to 1994

Revenue:

The Partnership's rental revenue increased $288,951 or 3.2% in 1995 compared to
1994. Rental revenue increased at five of the Partnership's seven properties.
Base rental rates increased at all four of the Partnership's residential
properties. Occupancy rates increased at Tanglewood Village and Embarcadero
Club, leading to rental revenue gains of 5.0% and 6.6%, respectively. The
Partnership's capital improvement program has improved the attractiveness of

<PAGE>

both properties to current and potential tenants. Although occupancy decreased
at Thunder Hollow, rental revenue still increased 3.1%. Rental losses, such as
vacancy, discounts or other concessions, increased at Windrock Apartments,
leading to a 5.9% decrease in rental revenue at the El Paso property. A weak
local economy, as well as competition from newer apartment communities
contributed to the decrease in rental revenue at Windrock.

All three of the Partnership's Utah strip shopping centers ended 1995 100%
leased. Good locations and a strong Utah economy have enabled the three
properties to continue to provide positive cash flow for the Partnership.
Capital improvements and an excellent location have enabled Country Hills to not
only compete with newer developments, but to increase occupancy and expense
recoveries from its tenants. Rental revenue at the Ogden property increased 8.1%
in 1995. Redwood Plaza increased its rental revenue by 11.1% as occupancy
significantly improved. Redwood Plaza has limited competition in a location that
is experiencing strong commercial growth. Midvale Plaza's anchor tenant vacated
its space in June 1995. Although the tenant continues to pay rent to the
Partnership, the "dark" space at the center has a negative impact on the
remaining tenants. Additionally, percentage rents and expense recoveries have
decreased significantly since the anchor tenant vacated. Rental revenue at the
suburban Salt Lake City property decreased 11.7% in 1995. Management is working
with the anchor tenant to either sublease the dark space or to find a
replacement tenant for the Partnership's own account. Midvale Plaza will likely
need capital improvement funds to update the property's appearance before it can
effectively compete with newer properties in the area.

Interest revenue increased more than three-fold to $122,184 during 1995. Steps
taken during the course of 1994 and 1995 to raise the Partnership's cash
reserves have resulted in increased funds invested in interest-bearing accounts.

The Partnership received $39,841 in cash and securities from Southmark
Corporation in settlement of the Partnership's claims in the Southmark
bankruptcy case. Proceeds from the settlement were recorded as a gain on legal
settlement in the second quarter of 1995.

Expenses:

Partnership expenses increased $392,655 or 4.2% in 1995 compared to 1994. On a
combined basis, increased expenses were concentrated in depreciation and
amortization, and general and administrative expenses.

Depreciation and amortization expense increased $180,712 or 9.1% in 1995
compared to 1994. Because of the $4.22 million invested in capital improvements
over the past three years, depreciation charges continue to increase. $1.74
million was invested in capital improvements during 1995. These capital
improvements are generally being depreciated over lives ranging from five to ten
years.

General and administrative expense increased $113,231 to $195,036 in 1995. The
Partnership incurred $150,133 of costs relating to evaluation and dissemination
of information with regards to an unsolicited tender offer. See Item 3 - Legal
Proceedings. General and administrative expenses paid to affiliates increased
$26,368 or 7.6% in 1995. Administrative expenses paid to affiliates increased
due to a reduction in the number of properties managed by McREMI over which such
costs are allocated.

<PAGE>

All other expense line items, both individually and as a group, increased less
than 4.2% in 1995 compared to 1994.

1994 compared to 1993

Revenue:

Excluding Ridgewood Park Apartments, rental revenues increased $497,152 or 5.9%.
Rental revenues increased at six of the Partnership's seven properties. The
Partnership was able to raise base rental rates at all of its properties except
Country Hills Plaza. Five of the Partnership's properties also reported
increased average occupancy rates for 1994 compared to 1993. Average occupancy
rates for 1994 at Country Hills Plaza and Windrock Apartments were unchanged
from 1993 rates. On a percentage basis, the largest rental revenue increases
were 19.8% and 12.9% at Redwood Plaza and Midvale Plaza, respectively. Both of
these Utah shopping centers showed positive results from new tenants. All four
of the Partnership's apartment properties recorded increased rental revenue
ranging from 4.2% to 5.6% through a combination of increased rental rates and
increased occupancy rates. Country Hills Plaza recorded a .7% decrease in rental
revenue primarily due to a $25,000 decrease in expense reimbursements received
from tenants.

The Partnership recorded a $51,588 gain on involuntary conversion in 1994. The
gain relates to freeze damage incurred at Thunder Hollow Apartments on January
9, 1994. The Partnership incurred damages of $69,335. Insurance proceeds of
$79,467 were received to repair the damages. The excess of insurance proceeds
over the adjusted basis of the property destroyed resulted in a gain of $51,588.

Expenses:

Expenses incurred by the Partnership during 1994 decreased $876,776 or 8.6%
compared to 1993. Most of the decrease, however, is attributable to the sale of
Ridgewood Park Apartments in June 1993. Excluding expenses attributable to
Ridgewood Park Apartments, expenses decreased $248,851 or 2.6%.

Excluding interest on the Ridgewood Park mortgage, interest expense for 1994
decreased $306,338 or 10.1% compared to 1993. The decrease is attributable to
the 1993 modification of the Embarcadero Club mortgage note and the 1993
refinancing of the Tanglewood Village mortgage note. The interest rates on these
two mortgage notes were reduced to 7.875% from 10% and to 6.75% from 12% for
Embarcadero Club and Tanglewood Village, respectively. The interest expense on
the Partnership's remaining mortgage notes decreased slightly as regularly
scheduled principal payments continue to reduce the principal balances of the
notes.

Depreciation and amortization expense increased $205,393 or 11.5% in 1994
compared to 1993, excluding depreciation on Ridgewood Park for 1993. The
increase is attributed to the addition of $2.5 million of depreciable capital
expenditures at the Partnership's properties during 1994 and 1993.

Personnel expenses and property management fees, excluding charges incurred at
Ridgewood Park Apartments, increased $90,353 or 6.9% in 1994 compared to 1993.
Personnel expenses have increased and are expected to continue to increase due
to the Partnership's effort to increase occupancy rates by the continuous
refurbishment of residential units and upgrade of services offered to tenants.
Such improvements are partially achieved through higher maintenance standards
that require additional personnel and maintenance expenditures. Increased
personnel expenses can also be attributed to on-site personnel performing
certain maintenance procedures that were formerly contracted to vendors.
Property management fees increased due to the increase in the rental receipts at
the properties, which are the basis for computing such fees.

<PAGE>

Expenses for property taxes, repairs and maintenance, utilities and other
property operating expenses decreased in 1994 compared to 1993 due to the sale
of Ridgewood Park Apartments in 1993. These expenses for 1994 showed only minor
variances from 1993 after elimination of the effect of Ridgewood Park Apartments
on the 1993 amounts.

General and administrative expenses decreased $65,668 or 45% in 1994 compared to
1993. This decrease is due to savings the Partnership achieved through a new tax
processing and reporting system and a reduction in legal and professional fees.
General and administrative expenses paid to affiliates decreased $81,498 or 19%
in 1994 compared to 1993 due to elimination of the Fixed MID effective July 1,
1993. Fixed MID for 1993 totaled $71,182. Cost reimbursements paid to McREMI are
based upon the number of properties owned by the Partnership. These expenses
decreased $10,316 due to the sale of Ridgewood Park Apartments in 1993.

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

During the three year period ended December 31, 1995, the Partnership
experienced losses totaling $1,258,532. However, during the same three year
period, the Partnership generated $4,515,549 of cash flow from operating
activities. Cash flow from operations decreased $679,504 to $1,627,898 in 1995
compared to 1994. The largest factor in the decrease was a $725,523 increase in
cash paid to affiliates. At the beginning of 1994, the General Partner decided
not to collect administrative reimbursements or MID payments until the
Partnership's cash position improved. The cash position of the Partnership did
improve during the course of 1994 to the point that the General Partner
determined to resume payment of administrative reimbursements in early 1995.
Therefore, cash paid to affiliates in 1995 includes administrative
reimbursements accrued for 1995 and 1994. For 1995, MID payments remained
suspended.

The $725,523 increase in cash paid to affiliates was partially offset by a
$311,465 or 3.5% increase in cash received from tenants. Approximately half of
the increased cash flow originated at Embarcadero Club Apartments. Increased
rental receipts have been particularly noteworthy, given the capital
improvements made at the suburban Atlanta property over the past three years. To
a lesser extent, Country Hills Plaza and Redwood Plaza, Tanglewood Village
Apartments and Thunder Hollow Apartments also reported increased receipts from
tenants.

The Partnership invested $1.74 million in capital improvements in 1995, in
addition to the $1.17 million and $1.31 million invested in 1994 and 1993,
respectively. The Partnership has budgeted an additional $1.07 million for
capital improvements and recurring replacements in 1996. In 1993, the
Partnership realized $290,152 from the sale of Ridgewood Apartments, after
repayment of the Ridgewood Park mortgage loan. No additional Partnership
properties are currently being marketed for sale.

In March 1995, the Partnership refinanced Windrock Apartments in a transaction
that yielded approximately $824,000 of financing proceeds to the Partnership,
after funding the required escrows and paying deferred borrowing costs related
to the financing. The Partnership's next mortgage balloon payment does not occur
until 2002.

In 1993, the Partnership paid Contingent MID to the General Partner in the
amount of $571,879. For 1994 and 1995, the General Partner elected to defer
receipt of the Contingent MID payments until such time as the Partnership's cash
position improves. The Contingent MID deferred for 1994 and 1995 amounted to
$573,908 and $601,583, respectively.

<PAGE>

Short-term liquidity:

The Partnership expended considerable resources during the past three years to
restore its properties to good operating condition. These expenditures have been
necessary to maintain the competitive position of the Partnership's aging
properties in each of their markets. The capital improvements made during the
past three years have enabled the Partnership to increase its rental revenues
and reduce certain of its repairs and maintenance expenses. The Partnership has
budgeted an additional $1.07 million of capital improvements for 1996, to be
funded from property operations and cash reserves.

At December 31, 1995, the Partnership held cash and cash equivalents of
$1,417,948. The General Partner considers this level of cash reserves to be
adequate to meet the Partnership's operating needs. The General Partner
anticipates resuming MID payments if the Partnership's properties continue to
perform as projected. The General Partner believes that anticipated operating
results for 1996 will be sufficient to fund the Partnership's budgeted capital
improvements for 1996 and to repay the current portion of the Partnership's
mortgage notes.

The General Partner has established a revolving credit facility not to exceed
$5,000,000 in the aggregate which is available on a "first-come, first-served"
basis to the Partnership and other affiliated partnerships if certain conditions
are met. Borrowings under the facility may be used to fund deferred maintenance,
refinancing obligations and working capital needs. There is no assurance that
the Partnership will be able to receive funds from the facility because no
amount will be reserved for any particular partnership. As of December 31, 1995,
$2,662,819 was available from the facility. However, additional funds could
become available as other partnerships repay borrowings. This commitment by the
General Partner will terminate on September 20, 1996.

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 $4.2 million of capital
improvements made by the Partnership during the past three years will yield
improved cash flow from property operations in the future. If the Partnership's
cash position deteriorates, the General Partner may elect to defer certain of
the capital improvements, except where such improvements are expected to
increase the competitiveness or marketability of the Partnership's properties.

As an additional source of liquidity, the General Partner may attempt to sell
Partnership properties judged to be mature considering the circumstances of the
market where the properties are located, as well as the Partnership's need for
liquidity. However, there can be no guarantee that the Partnership will be able
to sell any of its properties for an amount sufficient to retire the related
mortgage note and still provide cash proceeds to the Partnership, or that such
cash proceeds could be timed to coincide with the liquidity needs of the
Partnership. In this regard, the Partnership sold Ridgewood Park Apartments in
Virginia Beach, Virginia in 1993. Currently no Partnership properties are being
marketed for sale.

<PAGE>

Income Allocations and Distributions:

Terms of the Amended Partnership Agreement specify that net losses for financial
reporting purposes are allocated 99% to the limited partners and 1% to the
General Partner. Net income for financial reporting purposes is allocated to the
General Partner in an amount equal to the greater of (a) 1% of net income or (b)
the cumulative amount of the contingent portion of the MID paid for which no
income allocation has previously been made; any remaining net income is
allocated to the limited partners. Therefore, for the three year period ended
December 31, 1995, ($3,312), ($3,008) and ($6,266), respectively, was allocated
to the General Partner. The limited partners received allocations of net loss of
($327,864), ($297,752) and ($620,330) for the three year period ended December
31, 1995, 1994 and 1993, respectively.

Distributions to Unit holders have been suspended since 1986 as part of
management's policy of maintaining adequate cash reserves. Distributions to Unit
holders will remain suspended for the foreseeable future. The General Partner
will continue to monitor the cash reserves and working capital needs of the
Partnership to determine when cash flows will support distributions to the Unit
holders. The Partnership paid $571,879 of Contingent MID distributions to the
General Partner during 1993. No Contingent MID was paid during 1994 and 1995 due
to the General Partner's decision to defer payment of Contingent MID until such
time as the Partnership's cash position is improved. The Partnership anticipates
resuming MID payments during 1996 if the Partnership's properties continue to
perform as projected.

<PAGE>

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

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

Financial Statements:

<S> <C>
Report of Independent Public Accountants......... 19

Balance Sheets at December 31, 1995 and 1994..... 20

Statements of Operations for each of the three
years in the period ended December 31, 1995... 21

Statements of Partners' Equity (Deficit) for
each of the three years in the period ended
December 31, 1995............................. 22

Statements of Cash Flows for each of the three
years in the period ended December 31, 1995... 23

Notes to Financial Statements.................... 25

Financial Statement Schedule:

Schedule III - Real Estate Investments and
Accumulated Depreciation and Amortization.. 38

</TABLE>

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

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

We have audited the accompanying balance sheets of McNeil Real Estate Fund XIV,
Ltd. (a California limited partnership) as of December 31, 1995 and 1994, and
the related statements of operations, partners' equity (deficit) and cash flows
for each of the three years in the period ended December 31, 1995. 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 XIV,
Ltd. as of December 31, 1995 and 1994, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1995, 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. The 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 6, 1996

<PAGE>
McNEIL REAL ESTATE FUND XIV, LTD.

BALANCE SHEETS

<TABLE>
<CAPTION>
December 31,
-----------------------------------
1995 1994
-------------- --------------
ASSETS
- ------
<S> <C> <C>
Real estate investments:
Land..................................................... $ 6,833,471 $ 6,833,471
Building and improvements................................ 45,953,575 44,237,251
-------------- -------------
52,787,046 51,070,722
Less: Accumulated depreciation and amortization......... (21,836,162) (19,674,640)
-------------- -------------
30,950,884 31,396,082

Cash and cash equivalents................................... 1,417,948 1,045,158
Cash segregated for security deposits....................... 370,097 372,157
Accounts receivable......................................... 350,823 394,285
Prepaid expenses and other assets........................... 200,574 230,521
Escrow deposits............................................. 844,622 655,767
Deferred borrowing costs, net of accumulated
amortization of $250,597 and $170,822 at
December 31, 1995 and 1994, respectively................. 1,140,395 1,120,896
-------------- -------------

$ 35,275,343 $ 35,214,866
============== =============

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
- ------------------------------------------

Mortgage notes payable, net................................. $ 27,871,969 $ 27,161,556
Accounts payable............................................ 166,434 155,071
Accrued property taxes...................................... 100,877 84,880
Accrued interest............................................ 201,267 203,282
Other accrued expenses...................................... 79,725 81,605
Payable to affiliates - General Partner..................... 1,255,290 991,530
Security deposits and deferred rental revenue............... 380,367 384,769
-------------- -------------
30,055,929 29,062,693
-------------- -------------

Partners' equity (deficit):
Limited partners - 100,000 limited partnership
units authorized; 86,534 limited partnership
units issued and outstanding at December 31,
1995 and 1994.......................................... 7,766,250 8,094,114
General Partner.......................................... (2,546,836) (1,941,941)
-------------- -------------
5,219,414 6,152,173
-------------- -------------

$ 35,275,343 $ 35,214,866
============== =============
</TABLE>

See accompanying notes to financial statements.

<PAGE>
McNEIL REAL ESTATE FUND XIV, LTD.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1995 1994 1993
-------------- -------------- ---------------
<S> <C> <C> <C>
Revenue:
Rental revenue.......................... $ 9,188,439 $ 8,899,488 $ 8,881,991
Interest................................ 122,184 37,149 29,272
Gain on legal settlement................ 39,841 - -
Gain on involuntary conversion.......... - 51,588 -
Gain on disposition of real estate...... - - 627,902
------------- ------------- --------------
Total revenue......................... 9,350,464 8,988,225 9,539,165
------------- ------------- --------------

Expenses:
Interest................................ 2,694,731 2,720,260 3,240,023
Depreciation and amortization........... 2,171,607 1,990,895 1,882,342
Property taxes.......................... 719,183 711,473 740,008
Personnel expenses...................... 984,852 964,656 971,186
Repairs and maintenance................. 1,038,206 996,159 1,105,212
Utilities............................... 469,550 479,218 580,063
Property management fees -
affiliates............................ 456,139 441,082 444,682
Other property operating expenses....... 579,641 557,110 626,947
General and administrative.............. 195,036 81,805 147,473
General and administrative -
affiliates............................ 372,695 346,327 427,825
------------- ------------- --------------
Total expenses........................ 9,681,640 9,288,985 10,165,761
------------- ------------- --------------

Net loss................................... $ (331,176) $ (300,760) $ (626,596)
============= ============= ==============

Net loss allocated to limited
partners................................ $ (327,864) $ (297,752) $ (620,330)
Net loss allocated to General
Partner................................. (3,312) (3,008) (6,266)
------------- ------------- --------------

Net loss................................... $ (331,176) $ (300,760) $ (626,596)
============= ============= ==============

Net loss per limited partnership unit...... $ (3.79) $ (3.44) $ (7.17)
============= ============= ==============

</TABLE>

See accompanying notes to financial statements.

<PAGE>
McNEIL REAL ESTATE FUND XIV, LTD.

STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

For the Years Ended December 31, 1995, 1994 and 1993

<TABLE>
<CAPTION>
Total
Partners'
General Limited Equity
Partner Partners (Deficit)
---------------- ---------------- ---------------
<S> <C> <C> <C>
Balance at December 31, 1992.............. $ (886,749) $ 9,012,196 $ 8,125,447

Net loss.................................. (6,266) (620,330) (626,596)

Contingent Management Incentive
Distribution........................... (472,010) - (472,010)
-------------- -------------- --------------

Balance at December 31, 1993.............. (1,365,025) 8,391,866 7,026,841

Net loss.................................. (3,008) (297,752) (300,760)

Contingent Management Incentive
Distribution........................... (573,908) - (573,908)
-------------- -------------- --------------

Balance at December 31, 1994.............. (1,941,941) 8,094,114 6,152,173

Net loss.................................. (3,312) (327,864) (331,176)

Contingent Management Incentive
Distribution........................... (601,583) - (601,583)
-------------- -------------- --------------

Balance at December 31, 1995.............. $ (2,546,836) $ 7,766,250 $ 5,219,414
============== ============== ==============

</TABLE>

See accompanying notes to financial statements.

<PAGE>
McNEIL REAL ESTATE FUND XIV, LTD.

STATEMENTS OF CASH FLOWS

Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1995 1994 1993
--------------- --------------- ---------------
<S> <C> <C> <C>
Cash flows from operating activities:
Cash received from tenants.............. $ 9,215,001 $ 8,903,536 $ 8,730,793
Cash paid to suppliers.................. (3,400,938) (2,983,226) (3,343,526)
Cash paid to affiliates................. (1,166,657) (441,134) (938,615)
Interest received....................... 122,184 37,149 29,272
Interest paid........................... (2,477,133) (2,516,551) (3,100,661)
Property taxes paid..................... (704,400) (692,372) (797,014)
Cash received from legal
settlement............................ 39,841 - -
------------- ------------- --------------
Net cash provided by operating
activities............................ 1,627,898 2,307,402 580,249
------------- ------------- --------------

Cash flows from investing activities:
Additions to real estate
investments........................... (1,743,497) (1,166,250) (1,309,934)
Net proceeds from sale of real
estate investment..................... - - 4,483,152
Insurance proceeds from gain on
involuntary conversion................ 17,088 79,467 -
------------- ------------- --------------
Net cash provided by (used in)
investing activities.................. (1,726,409) (1,086,783) 3,173,218
------------- ------------- --------------

Cash flows from financing activities:
Principal payments on mortgage
notes payable......................... (536,941) (494,746) (358,559)
Deferred borrowing costs paid........... (107,525) (12,065) (919,231)
Retirement of mortgage note due
to sale of real estate investment..... - - (4,193,000)
Net proceeds from refinancing of
mortgage notes payable................ 1,115,767 - 1,808,095
Contingent Management
Incentive Distribution................ - - (571,879)
------------- ------------- --------------
Net cash provided by (used in)
financing activities................. 471,301 (506,811) (4,234,574)
------------- ------------- --------------

Net increase (decrease) in cash
and cash equivalents.................. 372,790 713,808 (481,107)

Cash and cash equivalents at
beginning of year..................... 1,045,158 331,350 812,457
------------- ------------- --------------

Cash and cash equivalents at end
of year............................... $ 1,417,948 $ 1,045,158 $ 331,350
============= ============= ==============
</TABLE>

See accompanying notes to financial statements.

<PAGE>
McNEIL REAL ESTATE FUND XIV, LTD.

STATEMENTS OF CASH FLOWS

Reconciliation of Net Loss to Net Cash Provided by Operating Activities

<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1995 1994 1993
--------------- --------------- ---------------
<S> <C> <C> <C>
Net loss................................... $ (331,176) $ (300,760) $ (626,596)
------------- ------------- -------------
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization........... 2,171,607 1,990,895 1,882,342
Amortization of deferred
borrowing costs....................... 88,026 71,255 82,547
Amortization of discounts on
mortgage notes payable................ 131,587 136,037 119,506
Gain on disposition of real estate...... - - (627,902)
Gain on involuntary
conversion............................ - (51,588) -
Changes in assets and liabilities:
Cash segregated for security
deposits............................ 2,060 10,172 (66,720)
Accounts receivable................... 43,462 13,906 2,366
Prepaid expenses and other
assets.............................. 29,947 26,897 (27,073)
Escrow deposits....................... (188,855) 50,534 (85,977)
Accounts payable...................... 11,363 (20,014) 12,590
Accrued property taxes................ 15,997 6,810 3,114
Accrued interest...................... (2,015) (3,583) (62,689)
Other accrued expenses................ (1,880) 10,350 31,413
Payable to affiliates - General
Partner............................. (337,823) 346,275 (66,107)
Security deposits and deferred
rental revenue...................... (4,402) 20,216 9,435
------------- ------------- --------------
Total adjustments................. 1,959,074 2,608,162 1,206,845
------------- ------------- --------------

Net cash provided by operating
activities............................ $ 1,627,898 $ 2,307,402 $ 580,249
============= ============= ==============
</TABLE>

See accompanying notes to financial statements.

<PAGE>
McNEIL REAL ESTATE FUND XIV, LTD.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995

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

Organization
- ------------

The Partnership is engaged in diversified real estate activities, including the
ownership, operation and management of residential and commercial real estate
and other real estate related assets. At December 31, 1995, the Partnership
owned seven 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 following
listed tier partnerships. 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 is detailed below. The
Partnership retains effective control of each tier partnership. The General
Partner's minority interest is not presented as it is either negative or
immaterial.

<TABLE>
<CAPTION>
% of Ownership Interest
Tier Partnership Partnership General Partner
---------------- ----------- ---------------
<S> <C> <C>
Limited partnerships:
Tanglewood Fund XIV Associates, L.P. (b)........... 99 1
Thunder Hollow Fund XIV Limited
Partnership (a) (b).............................. 100 -
Windrock Fund XIV, L.P. (a) (c).................... 100 -

General partnerships:
Embarcadero Associates (b)......................... 99 1
</TABLE>

<PAGE>

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

(b) Included in the financial statements for the years ended December 31, 1995,
1994 and 1993.

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

Real estate investments are generally stated at the lower of cost or net
realizable value. Real estate investments are monitored on an ongoing basis to
determine if the property has sustained a permanent impairment in value. At such
time, a write-down is recorded to reduce the basis of the property to its net
realizable value. A permanent impairment is determined to have occurred when a
decline in property value is considered to be other than temporary based upon
management's expectations with respect to projected cash flows and prevailing
economic conditions.

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

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of." This statement
requires that long-lived assets and certain identifiable intangibles to be held
and used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. This statement is effective for financial statements for fiscal
years beginning after December 15, 1995. The Partnership has not adopted the
principles of this statement within the accompanying financial statements;
however, it is not anticipated that adoption will have a material effect on the
carrying value of the Partnership's long-lived assets.

Depreciation
- ------------

Buildings and improvements are depreciated using the straight-line method over
the estimated useful lives of the assets, ranging from 5 to 25 years. Tenant
improvements are amortized over the terms of the related tenant leases using the
straight-line method.

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.

<PAGE>
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.
Amortization of deferred borrowing costs is included in interest expense in 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 is included in interest expense in the Statements of
Operations.

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

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

The Partnership leases its commercial properties under non-cancelable operating
leases. Certain leases provide concessions and/or periods of escalating or free
rent. Rental income is recognized on a straight-line basis over the term of the
related lease. The excess of rental income recognized over the contractual
rental payments is recorded as accrued rent receivable and is included in
accounts receivable on the Balance Sheets.

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.

Allocation of Net Income and Net Loss
- -------------------------------------

Net losses of the Partnership for both financial statement and income tax
reporting purposes are allocated 99% to the limited partners and 1% to the
General Partner.

Net income of the Partnership for both financial statement and income tax
reporting purposes is allocated to the General Partner in an amount equal to the
greater of (a) 1% of net income or (b) the cumulative amount paid for the
contingent portion of the Management Incentive Distribution for which no income
allocation has previously been made (see Note 2 - "Transactions with
Affiliates"). Any remaining net income is allocated to the limited partners.

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 allocation of partnership deductions attributable to
debt. The Partnership's tax allocations for 1995, 1994 and 1993 have been made
in accordance with these provisions.

<PAGE>
Distributions
- -------------

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

(a) First, to the General Partner, in an amount equal to the contingent portion
of the Management Incentive Distribution (see Note 2 - "Transactions with
Affiliates"); and

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

No distributions were paid to the limited partners in 1995, 1994 or 1993. The
Partnership accrued distributions of $601,583, $573,908 and $472,010 for the
benefit of the General Partner for the contingent portion of the Management
Incentive Distribution in 1995, 1994 and 1993, respectively.

Net Loss Per Limited Partnership Unit
- -------------------------------------

Net loss per limited partnership unit ("Units") is computed by dividing net loss
allocated to the limited partners by the weighted average number of Units
outstanding. Per Unit information has been computed based on 86,534 Units
outstanding in 1995 and 1994, and 86,554 Units outstanding in 1993.

Reclassifications
- -----------------

Certain reclassifications have been made to prior period amounts to conform with
current year presentation.

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

The Partnership pays property management fees equal to 5% of the Partnership's
gross rental receipts to McNeil Real Estate Management, Inc. ("McREMI"), an
affiliate of the General Partner, for providing property management services for
the Partnership's residential and commercial properties and leasing services for
its residential properties. McREMI may choose to perform leasing services for
the Partnership's commercial properties, in which case McREMI will receive a
property management fee equal to 3% of the gross rental receipts of the
Partnership's commercial properties plus a commission for performing leasing
services equal to the prevailing market rate for such services in the area where
the property is located.

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
Management Incentive Distribution ("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 for residential property
and $50 per gross square foot for commercial property to arrive at the property

<PAGE>
tangible asset value. The property tangible asset value is then added to the
book value of all other assets excluding intangible assets. Prior to July 1,
1993, the MID consisted of two components: (i) the fixed portion which was
payable without respect to the net income of the Partnership and was equal to
25% of the maximum MID (the "Fixed MID") and (ii) a contingent portion which was
payable only to the extent of the lesser of the Partnership's excess cash flow,
as defined, or net operating income (the "Entitlement Amount") and is equal to
up to 75% of the maximum MID (the "Contingent MID").

Effective July 1, 1993, the General Partner amended the Amended Partnership
Agreement as a settlement to a class action complaint. This amendment eliminated
the Fixed MID and made the entire MID payable to the extent of the Entitlement
Amount. In all other respects, the calculation and payment of the MID remained
the same.

Fixed MID was payable in Units unless the Entitlement Amount exceeded the amount
necessary to pay the Contingent MID, in which case, at the General Partner's
option, the Fixed MID was paid in cash to the extent of such excess. Prior to
its elimination in June 1993, a Fixed MID payment in the amount of $71,182 was
made to the General Partner.

Contingent MID will be paid to the extent of 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. In 1993, the Partnership paid Contingent MID
to the General Partner in the amount of $571,879. No payments for Contingent MID
were made during 1994 or 1995 because the General Partner elected to defer MID
payments until the Partnership's cash position improves.

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 does have a material effect on the calculation of the
Entitlement Amount which determines the amount of Contingent MID earned and the
amount of Fixed MID payable in cash. 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. The amendment of the capitalization policy did not
materially affect the MID for 1993, 1994 or 1995 as the Entitlement Amount was
sufficient to pay Contingent MID notwithstanding the amendment of the
capitalization policy.

Any amount of the MID that 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 Fixed MID was treated as a fee
payable to the General Partner by the Partnership for services rendered. The
Contingent MID represents a return of equity to the General Partner for
increasing cash flow, as defined, and accordingly is treated as a distribution.

<PAGE>

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

For the Years Ended December 31,
----------------------------------------------------
1995 1994 1993
-------------- -------------- ---------------
<S> <C> <C> <C>
Property management fees -
affiliates.............................. $ 456,139 $ 441,082 $ 444,682
Charged to general and
administrative - affiliates:
Partnership administration.............. 372,695 346,327 356,643
Fixed Management Incentive
Distribution.......................... - - 71,182
------------- ------------- --------------

$ 828,834 $ 787,409 $ 872,507
============= ============= ==============

Charged to General Partner's deficit:
Contingent Management Incentive
Distribution $ 601,583 $ 573,908 $ 472,010
============= ============= ==============
</TABLE>

Payable to affiliates - General Partner at December 31, 1995 and 1994 consists
of reimbursable costs, property management fees and Contingent MID that are due
and payable from current operations.

NOTE 3 - TAXABLE LOSS
- ---------------------

McNeil Real Estate Fund XIV, 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 $1,331,413, $873,565
and $33,231 in 1995, 1994 and 1993, respectively.

<PAGE>

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

The basis and accumulated depreciation of the Partnership's real estate
investments at December 31, 1995 and 1994 are set forth in the following tables:

<TABLE>
<CAPTION>
Buildings and Accumulated Net Book
1995 Land Improvements Depreciation Value
---- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Country Hills Plaza
Ogden, UT $ 767,662 $ 5,457,141 $ (2,278,024) $ 3,946,779
Embarcadero Club
College Park, GA 1,216,712 12,161,392 (6,216,068) 7,162,036
Midvale Plaza
Midvale, UT 783,169 2,772,471 (1,336,058) 2,219,582
Redwood Plaza
Salt Lake City, UT 618,812 2,460,573 (1,098,630) 1,980,755
Tanglewood Village
Carson City, NV 705,859 4,831,955 (2,130,987) 3,406,827
Thunder Hollow
Bensalem Township, PA 1,837,539 12,670,168 (6,154,540) 8,353,167
Windrock
El Paso, TX 903,718 5,599,875 (2,621,855) 3,881,738
------------- ------------- ------------- -------------
$ 6,833,471 $ 45,953,575 $ (21,836,162) $ 30,950,884
============= ============= ============= =============

Buildings and Accumulated Net Book
1994 Land Improvements Depreciation Value
---- -------------- -------------- -------------- --------------

Country Hills Plaza $ 767,662 $ 5,300,904 $ (2,063,184) $ 4,005,382
Embarcadero Club 1,216,712 11,902,589 (5,649,515) 7,469,786
Midvale Plaza 783,169 2,739,409 (1,220,276) 2,302,302
Redwood Plaza 618,812 2,357,577 (966,546) 2,009,843
Tanglewood Village 705,859 4,646,636 (1,881,198) 3,471,297
Thunder Hollow 1,837,539 12,021,468 (5,552,918) 8,306,089
Windrock 903,718 5,268,668 (2,341,003) 3,831,383
------------- ------------- ------------- -------------
$ 6,833,471 $ 44,237,251 $ (19,674,640) $ 31,396,082
============= ============= ============= =============

</TABLE>

During the fourth quarter of 1992, the General Partner placed Ridgewood Park
Apartments on the market for sale. Ridgewood Park Apartments was sold on June
15, 1993 (see Note 6 - "Disposition of Property").

<PAGE>

The Partnership leases its commercial properties under various non-cancelable
operating leases. Future minimum rents to be received for commercial properties
as of December 31, 1995, are as follows:

<S> <C>
1996 ........................................... $ 1,539,000
1997 ........................................... 1,420,000
1998 ........................................... 1,318,000
1999 ........................................... 1,224,000
2000 ........................................... 1,179,000
Thereafter ..................................... 7,205,000
----------
$13,885,000
==========
</TABLE>

Future minimum rents do not include contingent rentals based on sales volume of
tenants. Contingent rents amounted to $3,489, $45,121 and $30,816 for the years
ended December 31, 1995, 1994 and 1993, respectively. Future minimum rents also
do not include expense reimbursements for common area maintenance, property
taxes, and other expenses. These expense reimbursements amounted to $370,814,
$318,587 and $311,298 for the years ended December 31, 1995, 1994 and 1993,
respectively.

The Partnership's real estate investments are encumbered by mortgage notes as
discussed in Note 5 - "Mortgage Notes Payable."

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

The following table sets forth the mortgage notes of the Partnership at December
31, 1995 and 1994. All mortgage notes are secured by real estate investments:

Mortgage Annual Monthly
Lien Interest Payments/ December 31,
Property Position (a) Rates % Maturity Date (e) 1995 1994
- -------- --------------- ------- ---------------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Country Hills Plaza First 9.000 $ 24,742 07/04 (e) $ 2,344,625 $ 2,426,470
Discount (b) (465,535) (515,620)
------------- --------------
1,879,090 1,910,850
------------- --------------

Embarcadero Club First (c) 7.875 57,280 12/23 7,759,181 7,832,352
------------- --------------

Midvale Plaza First 9.500 20,589 09/06 1,660,294 1,745,200
Discount (b) (305,017) (339,703)
------------- --------------
1,355,277 1,405,497
------------- --------------
</TABLE>

<PAGE>

Mortgage Annual Monthly
Lien Interest Payments/ December 31,
Property Position (a) Rates % Maturity Date (e) 1995 1994
- -------- ------------- -------- ----------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Redwood Plaza First 9.875 $14,660 06/06 $ 1,147,137 $ 1,206,551
Discount (b) (191,950) (214,359)
------------- --------------
955,187 992,192
------------- --------------

Tanglewood Village First (c) 6.750 20,176 11/18 2,815,481 2,865,689
------------- --------------

Thunder Hollow First (c) 8.150 82,131 07/03 (e) 9,911,243 10,081,354
Discount (b) (239,357) (263,764)
------------- --------------
9,671,886 9,817,590
------------- --------------

Windrock First (c) 9.440 28,859 04/02 (e) 3,435,867 -
First (c) 13.250 22,517 03/95 - 1,897,386
Second (c) 12.000 4,400(d) 03/95 - 440,000
------------- --------------
3,435,867 2,337,386
------------- --------------

$ 27,871,969 $ 27,161,556
============= ==============
</TABLE>

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

(b) The discount on the Thunder Hollow mortgage note is based on an effective
interest rate of 8.62%. All other discounts are based on effective
interest rates ranging from 12% to 14.4%.

(d) These payments were for interest only.

(e) Balloon payments on the mortgage notes are due as follows:

Property Balloon Payment Date
---------------- --------------- -----
<S> <C> <C>
Windrock (First) $3,249,832 04/02
Thunder Hollow 8,080,794 07/03
Country Hills 1,253,951 07/04
</TABLE>

<PAGE>

Scheduled principal maturities of the mortgage notes under existing agreements,
before consideration of discounts of $1,201,859, are as follows:

<S> <C>
1996 ............................... $ 588,898
1997 ............................... 641,320
1998 ............................... 698,580
1999 ............................... 761,011
2000 ............................... 829,088
Thereafter ......................... 25,554,931
----------
$29,073,828
==========
</TABLE>

Based on borrowing rates currently available to the Partnership for mortgage
loans with similar terms and average maturities, the fair value of the
Partnership's mortgage notes payable was approximately $28,470,000 at December
31, 1995.

NOTE 6 - DISPOSITION OF PROPERTY
- --------------------------------

On June 15, 1993, the Partnership sold its investment in Ridgewood Park
Apartments to an unaffiliated buyer for a cash sales price of $4,433,000. In a
separate transaction, the Partnership received $50,392 from the City of Virginia
Beach as compensation for the granting of an easement across the land on which
Ridgewood Park Apartments is located. Cash proceeds from these two transactions,
as well as the gain on sale of Ridgewood Park Apartments is detailed below.

<TABLE>
<CAPTION>
Gain on Sale Cash Proceeds
------------ -------------
<S> <C> <C>
Sales Price .................................... $ 4,433,000 $ 4,433,000
Condemnation proceeds .......................... 50,392 50,392
Selling costs .................................. (240) (240)
Basis of real estate sold ...................... (3,855,250) -
----------

Gain on sale ................................... $ 627,902
========== ----------
Proceeds from sale of real estate investment ... 4,483,152
Retirement of mortgage note taken "subject to" . (4,193,000)
----------

Net cash proceeds .............................. $ 290,152
==========

</TABLE>

<PAGE>

NOTE 7 - REFINANCING OF MORTGAGE NOTES
- --------------------------------------

On March 13, 1995, the Partnership refinanced the Windrock mortgage note. The
new mortgage note, in the amount of $3,450,000, bears interest at 9.44% per
annum, and requires monthly principal and interest payments of $28,859. The
maturity date of the new mortgage note is April 1, 2002. Cash proceeds from the
refinancing transaction are as follows:

<S> <C>
New loan proceeds ..................................... $ 3,450,000
Existing first lien retired ........................... (1,894,233)
Existing second lien retired .......................... (440,000)
----------

Cash proceeds from refinancing ........................ $ 1,115,767
==========
</TABLE>

The Partnership incurred $107,525 of deferred borrowing costs related to the
refinancing of the Windrock mortgage note. The Partnership was also required to
use $184,172 of the refinancing proceeds to fund various escrow accounts for the
payment of property taxes, hazard insurance and capital improvements.

On June 24, 1993, the General Partner refinanced a portfolio of properties via a
Real Estate Mortgage Investment Conduit ("REMIC"). This REMIC consists of a pool
of properties from various partnerships affiliated with the General Partner. One
of the Partnership's properties, Thunder Hollow Apartments, was included in the
REMIC. The properties in the REMIC are not cross-collateralized across
partnerships. The new mortgage note, in the amount of $10,300,000, bears an
interest rate of 8.15% discounted to yield an effective interest rate of 8.62%.
The new mortgage note matures in July 2003. Following is a summary of the cash
proceeds relating to the refinancing:

<S> <C>
New loan proceeds ..................................... $10,300,000
Existing debt retired ................................. (8,456,569)
Mortgage discount ..................................... (299,304)
----------

Cash proceeds from refinancing ........................ $ 1,544,127
==========
</TABLE>

The Partnership incurred $698,718 of deferred borrowing costs related to the
refinancing. The Partnership was also required to use $134,793 of the
refinancing proceeds to fund various escrow accounts for the payment of property
taxes, hazard insurance and recurring replacements.

<PAGE>

On October 18, 1993, the General Partner refinanced the Tanglewood Village
mortgage note. The new mortgage note, in the amount of $2,916,400, bears an
interest rate of 6.75%. The new mortgage note matures in November 2018.
Following is a summary of the cash proceeds relating to the refinancing:

<S> <C>
New loan proceeds ..................................... $ 2,916,400
Existing debt retired ................................. (2,813,562)
----------

Cash proceeds from refinancing ........................ $ 102,838
==========
</TABLE>

The Partnership incurred $118,113 of deferred borrowing costs related to the
refinancing.

On November 30, 1993, the Partnership and the Embarcadero Club mortgage note
holder modified the terms of the Embarcadero Club mortgage note by increasing
the principal balance of the mortgage note $161,130 to $7,900,000, decreasing
the interest rate to 7.875% from 10.00% and decreasing the monthly debt service
payments to $57,280 from $67,914. As a result of the modification, the default
that had existed on the Embarcadero Club mortgage note since July 1, 1993 was
removed. The Embarcadero Club mortgage note may not be prepaid in whole or in
part before December 1, 1998 except with the prior written approval of the
Federal Housing Administration. In the event of prepayment, a penalty shall be
charged on the amount of the prepayment, ranging from 5% in the first year after
the modification, to 1% in the fifth year. The maturity date of the Embarcadero
Club mortgage note, December 1, 2023, was not changed by the modification.

The Partnership incurred $102,400 of deferred borrowing costs related to the
modification.

NOTE 8 - GAIN ON INVOLUNTARY CONVERSION
- ---------------------------------------

On January 9, 1994, freezing weather caused $111,835 of damage to Thunder Hollow
Apartments. The Partnership received $94,317 in insurance reimbursements to
cover the cost to repair Thunder Hollow Apartments. Insurance reimbursements
received in excess of the basis of the property damaged were recorded as a
$51,588 gain on involuntary conversion.

<PAGE>

NOTE 9 - LEGAL PROCEEDINGS
- --------------------------

This action was dismissed without prejudice in November 1995.

<PAGE>

and McNeil Real Estate Fund XXV, L.P., for breach of contract and breach of
fiduciary duty, asserting that the General Partner has charged these
partnerships excessive fees. High River's complaint seeks, inter alia,
preliminary injunctive relief requiring the General Partner to admit High
River as a limited partner in each of the ten partnerships referenced above
and to transfer the tendered units of interest in the partnerships to High
River; an unspecified award of damages payable to High River and an
additional unspecified award of damages payable to certain of the
partnerships; an order that defendants must discharge their fiduciary
duties and must account for all fees they have received from certain of the
partnerships; and attorneys' fees.

On January 31, 1996, this action was dismissed without prejudice.

The Defendants deny that there is any merit to Plaintiff's allegations and
intend to vigorously defend this action.

<PAGE>

The Defendants deny that there is any merit to Plaintiff's allegations and
intend to vigorously defend these actions.

<PAGE>

The Defendants deny that there is any merit to Plaintiff's allegations and
intend to vigorously defend this action.

Plaintiff brings this class action on behalf of a class of all persons and
entities who are current owners of units and/or are limited partners in one
or more of the partnerships referenced above (as defined in this Section 6,
the "Partnerships"). Plaintiff alleges that McNeil Partners, L.P., McNeil
Investors, Inc., Robert A. McNeil and other senior officers (as defined in
this Section 6, collectively, the "Defendants") have breached their
fiduciary duties to the class members by, among other things, (1) taking
steps to prevent the consummation of the High River tender offers, (2)
failing to take steps to maximize unitholders' or limited partners' values,
including failure to liquidate the properties owned by the Partnerships,
(3) managing the Partnerships so as to extend indefinitely the present fee
arrangements, and (4) paying itself and entities owned and controlled by
the general partner excessive fees and reimbursements of general and
administrative expenses.

The Defendants deny that there is any merit to Plaintiff's allegations and
intend to vigorously defend this action.

7) HCW Pension Real Estate Fund, Ltd. et al. v. Ernst & Young, BDO Seidman et
al (Case #92-06560-A). This suit was filed on behalf of the Partnership and
other affiliated partnerships (the "Affiliated Partnerships") on May 26,
1992, in the 14th Judicial District Court of Dallas County. The petition
sought recovery against the Partnership's former auditors, BDO Seidman, for
negligence and fraud in failing to detect and/or report overcharges of
fees/expenses by Southmark, the former general partner. The former auditors
asserted counterclaims against the Affiliated Partnerships based on alleged
fraudulent misrepresentations made to the auditors by the former management
of the Affiliated Partnerships (Southmark) in the form of client
representation letters executed and delivered to the auditors by Southmark
management. The counterclaims sought recovery of attorneys' fees and costs
incurred in defending this action. The original petition also alleged
causes of action against certain former officers and directors of the
Partnership's original general partner for breach of fiduciary duty, fraud
and conspiracy relating to the improper assessment and payment of certain
administrative fees/expenses. On January 11, 1994 the allegations against
the former officers and directors were dismissed.

The trial court granted summary judgment in favor of Ernst & Young and BDO
Seidman on the fraud and negligence claims based on the statute of
limitations. The Affiliated Partnerships appealed the summary judgment to
the Dallas Court of Appeals. In August 1995, the Appeals Court upheld all
of the summary judgments in favor of BDO Seidman. In exchange for the
plaintiff's agreement not to file any motions for rehearing or further
appeals, BDO Seidman agreed that it will not pursue the counterclaims
against the Partnership.

<PAGE>

NOTE 10 - GAIN ON LEGAL SETTLEMENT
- ----------------------------------

The Partnership filed claims with the United States Bankruptcy Court for the
Northern District of Texas, Dallas Division (the "Bankruptcy Court") against
Southmark Corporation ("Southmark"), an affiliate of a previous general partner,
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.

NOTE 11 - PRO FORMA DISCLOSURE (UNAUDITED)
- ------------------------------------------

The following pro forma information for the year ended December 31, 1993
reflects the results of operations of the Partnership as if the sale of
Ridgewood Park Apartments had occurred as of January 1, 1993. The pro forma
information is not necessarily indicative of the results of operations that
actually would have occurred or those which might be expected to occur in the
future.

<S> <C>
Total revenues ........................................ $ 8,423,092
Loss before extraordinary items ....................... (1,117,365)
Net loss .............................................. (1,117,365)
Net loss per limited partnership unit ................. (12.78)

</TABLE>

<PAGE>

McNEIL REAL ESTATE FUND XIV, LTD.
SCHEDULE III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
December 31, 1995
<TABLE>
<CAPTION>

Cumulative Costs
Initial Cost (b) Write-down Capitalized
Related (b) Buildings and and Permanent Subsequent
Description Encumbrances Land Improvements Impairment To Acquisition
- ----------- --------------- ------------- --------------- ------------- --------------
APARTMENTS:
<S> <C> <C> <C> <C> <C>
Embarcadero Club
College Park, GA $ 7,759,181 $ 1,216,712 $ 10,081,573 $ - $ 2,079,819

Tanglewood Village
Carson City, NV 2,815,481 705,859 4,004,394 - 827,561

Thunder Hollow
Bensalem
Township, PA 9,671,886 1,837,539 10,412,721 - 2,257,447

Windrock
El Paso, TX 3,435,867 903,718 4,490,001 (97,632) 1,207,506

COMMERCIAL CENTERS:

Country Hills Plaza
Ogden, UT 1,879,090 767,662 3,046,427 - 2,410,714

Midvale Plaza
Midvale, UT 1,355,277 783,169 2,533,937 - 238,534

Redwood Plaza
Salt Lake City, UT 955,187 618,812 1,822,551 - 638,022
-------------- -------------- -------------- ------------ -------------

$ 27,871,969 $ 6,833,471 $ 36,391,604 $ (97,632) $ 9,659,603
============== ============== ============== ============ =============
</TABLE>

(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.

See accompanying notes to Schedule III.

<PAGE>

McNEIL REAL ESTATE FUND XIV, LTD.
SCHEDULE III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
December 31, 1995

<TABLE>
<CAPTION>
Gross Amount at
Which Carried at Close of Period Accumulated
Buildings and Depreciation
Description Land Improvements Total (a) and Amortization
- ----------- -------------- -------------- ---------------- ----------------
APARTMENTS:
<S> <C> <C> <C> <C>
Embarcadero Club
College Park, GA $ 1,216,712 $ 12,161,392 $ 13,378,104 $ (6,216,068)

Tanglewood Village
Carson City, NV 705,859 4,831,955 5,537,814 (2,130,987)

Thunder Hollow
Bensalem
Township, PA 1,837,539 12,670,168 14,507,707 (6,154,540)

Windrock
El Paso, TX 903,718 5,599,875 6,503,593 (2,621,855)

COMMERCIAL CENTERS:

Country Hills Plaza
Ogden, UT 767,662 5,457,141 6,224,803 (2,278,024)

Midvale Plaza
Midvale, UT 783,169 2,772,471 3,555,640 (1,336,058)

Redwood Plaza
Salt Lake City, UT 618,812 2,460,573 3,079,385 (1,098,630)
-------------- -------------- ---------------- -------------

$ 6,833,471 $ 45,953,575 $ 52,787,046 $ (21,836,162)
============== ============== ================ =============
</TABLE>

(a) For Federal income tax purposes, the properties are depreciated over lives
ranging from 15-25 years using ACRS or MACRS methods. The aggregate cost of
real estate investments for Federal income tax purposes was approximately
$53,371,042 and accumulated depreciation was $26,169,640 at December 31,
1995.

See accompanying notes to Schedule III.

<PAGE>

McNEIL REAL ESTATE FUND XIV, LTD.
SCHEDULE III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
December 31, 1995

Date of Date Depreciable
Description Construction Acquired lives (years)
- ----------- ------------ -------- -------------
APARTMENTS:
<S> <C> <C> <C> <C>
Embarcadero Club
College Park, GA 1970/74 09/84 5-25

Tanglewood Village
Carson City, NV 1979 06/86 5-25

Thunder Hollow
Bensalem
Township, PA 1973 11/84 5-25

Windrock
El Paso, TX 1971 10/84 5-25

COMMERCIAL CENTERS:

Country Hills Plaza
Ogden, UT 1979 06/84 5-25

Midvale Plaza
Midvale, UT 1976 06/84 5-25

Redwood Plaza
Salt Lake City, UT 1976 06/84 5-25

</TABLE>

See accompanying notes to Schedule III.

<PAGE>
McNEIL REAL ESTATE FUND XIV, LTD.

Notes to Schedule III

Real Estate Investments and Accumulated Depreciation and Amortization

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

<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1995 1994 1993
-------------- ------------- ---------------

Real estate investments:
- ------------------------
<S> <C> <C> <C>
Balance at beginning of year............... $ 51,070,722 $ 49,948,804 $ 48,643,644

Improvements............................... 1,743,497 1,166,250 1,305,160 (1)

Replacements............................... (27,173) (44,332) -
------------- ------------- --------------

Balance at end of year..................... $ 52,787,046 $ 51,070,722 $ 49,948,804
============= ============= ==============

Accumulated depreciation and amortization:
- ------------------------------------------

Balance at beginning of year............... $ 19,674,640 $ 17,700,198 $ 15,914,696

Depreciation and amortization.............. 2,171,607 1,990,895 1,785,502 (1)

Replacements............................... (10,085) (16,453) -
------------- ------------- --------------

Balance at end of year..................... $ 21,836,162 $ 19,674,640 $ 17,700,198
============= ============= ==============
</TABLE>

(1) The improvements and depreciation figures for 1993 do not include
improvements or depreciation expense incurred in 1993 for Ridgewood Park
Apartments prior to the sale of Ridgewood Park Apartments in June 1993.

<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:

Other Principal Occupations and Other
Name and Position Age Directorships During the Past 5 Years
- ----------------- --- -------------------------------------
<S> <C> <C>
Robert A. McNeil, 75 Mr. McNeil is also Chairman of the Board and Director of McNeil Real
Chairman of the Estate Management, Inc. ("McREMI") which is an affiliate of the General
Board and Director 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 acquisitions, mortgage financing and real estate
syndications 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 has been a member of the International Board of
Directors of the Salk Institute, which promotes research in improvements
in health care.

Carole J. McNeil 52 Mrs. McNeil is Co-Chairman, with husband Robert A. McNeil, of McNeil
Co-Chairman of the Investors, Inc. Mrs. McNeil has twenty years of real estate experience,
Board 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 agent and
analyst with Marcus and Millichap in San Francisco. In 1978, Mrs. McNeil
established the Escrow Training Company, 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> <C>
Donald K. Reed, 50 Mr. Reed is President, Chief Executive Officer and Director of McREMI
Director, President, which is an affiliate of the General Partner. Prior to joining McREMI in
and Chief Executive March 1993, Mr. Reed was President, Chief Operating Officer and Director
Officer of Duddlesten Management Corporation and Duddlesten Realty Advisors, Inc.,
with responsibility for a management portfolio of office, retail,
multi-family and mixed-use land projects representing $2 billion in asset
value. He was also Chief Operating Officer, Director and member of the
Executive Committee of all Duddlesten affiliates. Mr. Reed started with the
Duddlesten companies in 1976 and served as Senior Vice President and Chief
Financial Officer and as Executive Vice President and Chief Operating
Officer of Duddlesten Management Corporation before his promotion to
President in 1982. He was President and Chief Operating Officer of
Duddlesten Realty Advisors, Inc., which has been engaged in real estate
acquisitions, marketing and dispositions, since its formation in 1989.

Ron K. Taylor 38 Mr. Taylor is a Senior Vice President of McREMI and has been in this
Vice President capacity since McREMI commenced active operations in 1991. He also serves
as Acting Chief Financial Officer of McREMI since the resignation of
Robert C. Irvine on January 31, 1996. Mr. Taylor is primarily responsible
for Asset Management functions at McREMI, including property dispositions,
commercial leasing, real estate finance and portfolio management. Prior
to joining McREMI, Mr. Taylor served as an Executive Vice President for a
national syndication/property management company. Mr. Taylor has been
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, 1995, 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, 1995. 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 for the following:

High River Limited Partnership, 100 S. Bedford Road, Mount Kisco, New
York, 10549, which owns 7,318 (8.46%) of the Partnership's Units as of
February 29, 1996.

(B) Security ownership of management.

As of February 29, 1996, the General Partner and its affiliates own 872 of
the Partnership's Units, which is approximately 1% of the 86,534
outstanding Units.

None.

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

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
for residential property and $50 per gross square foot for commercial property
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
assets. Prior to July 1, 1993 the MID consisted of two components: (i) the fixed
portion which was payable without respect to the net income of the Partnership
and was equal to 25% of the maximum MID (the "Fixed MID") and (ii) a contingent
portion which was payable only to the extent of the lesser of the Partnership's
excess cash flow, as defined, or net operating income (the "Entitlement Amount")
and is equal to up to 75% of the maximum MID (the "Contingent MID").

Effective July 1, 1993, the General Partner amended the Amended Partnership
Agreement as a settlement to a class action complaint. This amendment eliminates
the Fixed MID portion and makes the entire MID payable to the extent of the
Entitlement Amount. In all other respects, the calculation and payment of the
MID remain the same.

Contingent MID will be paid to the extent of 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. For the year ended December 31, 1995, the
Partnership accrued Contingent MID in the amount of $601,583.

<PAGE>

The Partnership pays property management fees equal to 5% of gross rental
receipts of the Partnership's properties to McREMI, an affiliate of the General
Partner, for providing property management services for the Partnership's
residential and commercial properties and leasing services for the Partnership's
residential properties. The Partnership reimburses McREMI for its costs,
including overhead, of administering the Partnership's affairs. For the year
ended December 31, 1995, the Partnership paid or accrued $828,834 in 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 STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
- -------- -----------------------------------------------------------------

See accompanying Index to Financial Statements at Item 8.

(A) Exhibits

Exhibit
Number Description
------- -----------
<S> <C>
3. Partnership Agreement dated April
30, 1982, and amended September 15,
1982, October 13, 1982, and February
1, 1983. (1)

3.1 Amended and Restated Limited
Partnership Agreement dated
September 20, 1991. (3)

3.2 Amendment No. 1 to the Amended and
Restated Partnership Agreement of
McNeil Real Estate Fund XIV, 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 XIV, Ltd.,
dated March 28, 1994. (5)

10.1 Security Deed Note, dated
November 16, 1988, between
Embarcadero Associates and American
Mortgages, Inc. (1)

10.2 Property Management Agreement, dated
September 12, 1991, between McNeil
Real Estate Fund XIV, Ltd. and
McNeil Real Estate Management,
Inc. (3)

10.3 Property Management Agreement,
dated September 12, 1991, between
Embarcadero Associates and McNeil
Real Estate Management, Inc. (3)

10.4 Property Management Agreement,
dated September 12, 1991, between
Tanglewood Village Associates and
McNeil Real Estate Management, Inc.
(3)

10.5 Termination Agreement, dated
September 20, 1991, between McNeil
Real Estate Fund XIV, Ltd. and
McNeil Real Estate Management,
Inc. (3)
</TABLE>

<PAGE>

Exhibit
Number Description
------- -----------
<S> <C>
10.6 Termination Agreement, dated
September 20, 1991, between
Embarcadero Associates and McNeil
Real Estate Management, Inc. (3)

10.7 Termination Agreement, dated
September 20, 1991, between
Tanglewood Village Associates and
McNeil Real Estate Management,
Inc. (3)

10.8 Asset Management Agreement, dated
September 20, 1991, between McNeil
Real Estate Fund XIV, Ltd. and
McNeil Partners, L.P. (3)

10.9 Assignment and Assumption Agreement
Relating to McNeil Real Estate Fund
XIV, Ltd., dated September 20, 1991,
between McNeil Partners, L.P. and
Pacific Investors Corporation. (3)

10.10 Assignment and Assumption
Agreement Relating to
Embarcadero Associates, dated
September 20, 1991, between McNeil
Partners, L.P. and Pacific Investors
Corporation. (3)

10.11 Assignment and Assumption Agreement
Relating to Tanglewood Village
Associates, dated September 20,
1991, between McNeil Partners, L.P.
and Pacific Investors Corporation.
(3)

10.12 Amendment to Certificate of Limited
Partnership filed September 25,
1991, with the Secretary of State of
the State of California. (3)

10.13 Revolving Credit Agreement, dated
August 6, 1991, between McNeil
Partners, L.P. and certain
partnerships, including the
Registrant. (3)

10.14 Amendment of Property Management
Agreement dated March 5, 1993
between McNeil Real Estate Fund
XIV, Ltd. and McNeil Real Estate
Management, Inc. (2)
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
10.15 Loan Agreement dated June 24, 1993
between Lexington Mortgage Company
and McNeil Real Estate Fund XIV,
Ltd., et. al. (4)

10.16 Master Property Management
Agreement, dated as of June 24,
1993, between McNeil Real Estate
Management, Inc. and Thunder Hollow
Fund XIV, Ltd. (5)

10.17 Multifamily Note dated March 13,
1995 between Washington Mortgage
Financial Group, Ltd. and Windrock
Fund XIV, L.P. (6)

10.18 Property Management Agreement
dated February 2, 1995 between
Windrock Fund XIV, L.P. and McNeil
Real Estate Management, Inc. (6)

10.19 Promissory Note, dated May 22, 1976,
between Price Rentals, Inc. and
Aetna Life Insurance Company. (6)

10.20 Promissory Note, dated August 19,
1976, between Midvale Plaza Company
and Aetna Life Insurance Company.(6)

10.21 Promissory Note, dated May 5, 1978,
between Price Country Hills
Company and First Security State
Bank. (6)

10.22 Deed of Trust Note, dated October
1, 1993, between Tanglewood Fund
XIV Associates Limited Partnership
and Love Funding Corporation. (6)

11. Statement regarding computation
of Net Income (Loss) per Limited
Partnership Unit (see Note 1 to
Financial Statements).
22. Names Under
Jurisdiction of Which It Is
Name of Subsidiary Incorporation Doing Business
------------------ --------------- --------------

Embarcadero Associates Georgia None

Tanglewood Fund XIV
Associates, L.P. Nevada None

Thunder Hollow Fund XIV
Limited Partnership Delaware None

Windrock Fund XIV, L.P. Texas None

27. Financial Data Schedule for the year
ended December 31, 1995.
</TABLE>

<PAGE>
The Partnership has omitted instruments with respect to
long-term debt where the total amount of 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.

<S> <C>
(1) Incorporated by reference to the
Annual Report of McNeil Real Estate
Fund XIV, Ltd., on Form 10-K for
the period ended December 31, 1990,
as filed on March 29, 1991.

(2) Incorporated by reference to the
Annual Report of McNeil Real Estate
Fund XIV, Ltd., (Commission file
number 0-12915) on Form 10-K for the
period ended December 31, 1992, as
filed with the Securities and
Exchange Commission on March 30,
1993.

(3) Incorporated by reference to the
Annual Report of McNeil Real Estate
Fund XIV, Ltd. (Commission file
number 0-12915) for the period ended
December 31, 1991, as filed with the
Securities and Exchange Commission
on March 30, 1992.

(4) Incorporated by reference to the
Annual Report of McNeil Real Estate
Fund XI, Ltd. (Commission file
number 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 XIV, Ltd. (Commission file
number 0-12915) 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 XIV, Ltd. (Commission file
number 0-12915) for the period ended
December 31, 1994, as filed with the
Securities and Exchange Commission
on March 30, 1995.
</TABLE>

(B) Reports on Form 8-K. There were no reports on Form 8-K for the
quarter ended December 31, 1995.

<PAGE>

McNEIL REAL ESTATE FUND XIV, 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 XIV, LTD.

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

By: McNeil Investors, Inc., General Partner

<S> <C>
March 29, 1996 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 29, 1996 By: /s/ Donald K. Reed
- -------------- --------------------------------------------------
Date Donald K. Reed
President and Director of McNeil Investors, Inc.

March 29, 1996 By: /s/ Ron K. Taylor
- -------------- -------------------------------------------------
Date Ron K. Taylor
Acting Chief Financial Officer
of McNeil Investors, Inc.

March 29, 1996 By: /s/ Brandon K. Flaming
- -------------- -------------------------------------------------
Date Brandon K. Flaming
Chief Accounting Officer of McNeil Real Estate
Management, Inc.

</TABLE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,417,948
<SECURITIES> 0
<RECEIVABLES> 350,823
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 52,787,046
<DEPRECIATION> (21,836,162)
<TOTAL-ASSETS> 35,275,343
<CURRENT-LIABILITIES> 0
<BONDS> 27,871,969
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 35,275,343
<SALES> 9,188,439
<TOTAL-REVENUES> 9,350,464
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,986,909
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,694,731
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (331,176)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (331,176)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>