MCNEIL REAL ESTATE FUND XIV LTD, 10-K405, 1999-03-31

MCNEIL REAL ESTATE FUND XIV LTD
10-K405, 1999-03-31
OPERATORS OF NONRESIDENTIAL BUILDINGS

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

FORM 10-K405

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

For the fiscal year ended December 31, 1998
-----------------------------------------------

[ ] 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 600, LB70, Dallas, Texas, 75240
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

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 40.

TOTAL OF 43 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 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 600, 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, 1998.

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, were 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.

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

<PAGE>
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 legal settlement 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, 1998, the Partnership owned
five 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:

As previously announced, the Partnership has retained PaineWebber, Incorporated
("PaineWebber") as its exclusive financial advisor to explore alternatives to
maximize the value of the Partnership, including, without limitation, a
transaction in which limited partnership interests in the Partnership are
converted into cash. The Partnership, through PaineWebber, provided financial
and other information to interested parties as part of an auction process and
until early March 1999 was conducting discussions with one bidder in an attempt
to reach a definitive agreement with respect to a sale transaction. In early
March 1999, because the Partnership had been unable to conclude negotiations for
a transaction with such bidder, the Partnership terminated such discussions and
commenced discussions with respect to a sale transaction with another
well-financed bidder who had been involved in the original auction process.
During the last full week of March, the Partnership entered into a 45 day
exclusivity agreement with such party. It is possible that the General Partner
and its affiliates will receive non-cash consideration for their ownership
interests in connection with any such transaction. There can be no assurance
regarding whether any such agreement will be reached nor the terms thereof.

On October 1, 1996, the Partnership placed Redwood Plaza on the market for sale.

Competitive Conditions:

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

<PAGE>
Forward-Looking Information:

Within this document, certain statements are made as to the expected occupancy
trends, financial condition, results of operations, and cash flows of the
Partnership for periods after December 31, 1998. All of these statements are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements are not
historical and involve risks and uncertainties. The Partnership's actual
occupancy trends, financial condition, results of operations, and cash flows for
future periods may differ materially due to several factors. These factors
include, but are not limited to, the Partnership's ability to control costs,
make necessary capital improvements, negotiate sales or refinancings of its
properties and respond to changing economic and competitive factors.

Environmental Matters:

Environmental laws create potential liabilities that may affect property owners.
The environmental laws of the federal and certain state governments, for
example, impose liability on current and certain past owners of property from
which there is a release or threat of release of hazardous substances. This
liability includes costs of investigation and remediation of the hazardous
substances and natural resource damages. Liability for costs of investigation
and remediation is strict, and may be imposed irrespective of whether the
property owner was at fault, although there are a number of defenses. Third
parties, as well as governments, may recover under these laws. Third parties,
such as adjacent property owners, also may seek to recover under the common law,
for damages to their property or health. The presence of contamination also may
affect the ability of the property owner to sell, lease, or borrow money against
the property. To date, environmental concerns, including those related to the
presence of hazardous substances, have not generally had a material effect on
the Partnership's capital expenditures, earnings or competitive position.

In connection with the proposed sale transaction as more fully described above,
in fiscal 1998, an independent environmental consultant engaged by the
Partnership completed a Phase I Environmental Site Assessment of each property
owned by the Partnership. Such environmental assessments performed on the
properties have not revealed any environmental liability that the Partnership
believes would have a material adverse effect on the Partnership's business,
assets or results of operations, except for the Redwood Plaza property in Utah
(the "Property"). The Phase I report recommended additional investigation at the
Property because of the presence of a dry cleaning plant that had been there for
approximately twenty years, and because the plant reportedly had used and stored
the chemical tetrachloroethene (PCE). Pursuant to the Partnership's request, the
consultant then conducted a Phase II Environmental Site Assessment of the
Property, and found that some of the soil and groundwater contained PCE and its
degradation products. Pursuant to the Partnership's request, the consultant then
conducted a Phase III investigation, and found the presence of contamination in
soil and groundwater samples taken at the property line. Because the Partnership
has not undertaken any groundwater or soil sampling off-site, the extent of the
contamination from the Property has not been established. To deal with this
situation, the Partnership has applied to the Utah Department of Environmental
Quality to enter the Property into the State's Voluntary Cleanup Program, to
obtain a release from the State for cleanup liabilities.

<PAGE>
The Partnership is also investigating whether prior owners or tenants of the
Property may be responsible for the remediation of the contaminants and is also
reviewing whether the cost of remediation may be covered by insurance.

Following the 1998 Phase III Environmental Site Assessment, the Partnership
asked its consultant to prepare a preliminary estimate of likely remediation
costs for the Property based on all of the information known at that time. These
estimated costs ranged from $600,000 to $1,170,000 over a period of five years.
These estimates are based on preliminary information and may change as
additional data is gathered. There also exists the potential for third party
actions, the likelihood and extent of which cannot be predicted at this time.

Accordingly, the Partnership recorded a liability for remediation costs at the
Property of $600,000 in fiscal year 1998. This estimate may be affected by,
among other things, new data and by any modifications to any remediation plan
that may be proposed by the Utah regulatory authorities. The effect of the
resolution of these matters on the results of operations of the Partnership
cannot be predicted because of the uncertainty concerning both the amount and
timing of future expenditures and future results of operations.

It is possible that these assessments with respect to the Property do not reveal
all potential environmental liabilities or that there are material environmental
liabilities of which the Partnership is unaware. Moreover, no assurances can be
given that (i) future laws, ordinances or regulations will not impose any
material environmental liability or (ii) the current environmental condition of
the Property has not been or will not be affected by tenants and occupants of
the Property, by the condition of properties in the vicinity of the Property, or
by third parties unrelated to the Partnership.

Other Information:

In August 1995, High River Limited Partnership, a Delaware limited partnership
controlled by Carl C. Icahn ("High River") made an unsolicited tender offer to
purchase from holders of Units up to approximately 45% of the outstanding Units
of the Partnership for a purchase price of $95 per Unit. In September 1996, High
River made another unsolicited tender offer to purchase any and all of the
outstanding Units of the Partnership for a purchase price of $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 tender offers made with respect to the
Partnership and not tender their Units. The General Partner believes that as of
February 1, 1999, High River has purchased approximately 12.3% of the
outstanding Units pursuant to the tender offers. In addition, all litigation
filed by High River, Mr. Icahn and his affiliates in connection with the tender
offers has been dismissed without prejudice.

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

The following table sets forth the real estate investment portfolio of the
Partnership at December 31, 1998. 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 1998 Date
Property Description of Property Debt Property Tax Acquired
- -------- ----------- ----------- ---- ------------ --------

Real Estate Investments:

Embarcadero
Club (1) Apartments
<S> <C> <C> <C> <C> <C>
College Park, GA 404 units $ 6,042,089 $ 7,501,825 $ 127,145 09/84

Tanglewood
Village (2) Apartments
Carson City, NV 130 units 2,927,160 2,642,890 40,552 06/86

Thunder Hollow (3)
Bensalem Apartments
Township, PA 301 units 7,184,754 9,152,945 301,256 11/84

Windrock (4) Apartments
El Paso, TX 150 units 3,243,929 3,360,064 128,268 10/84
------------- ------------ -----------

$ 19,397,932 $ 22,657,724 $ 597,221
============= ============ ===========

Asset Held for Sale:

Redwood Plaza Retail Center
Salt Lake City, UT 104,211 sq. ft. $ 2,192,549 $ 808,574 $ 52,694 06/84
============= ============ ===========
</TABLE>

- -----------------------------------------
Total: Apartments - 985 units
Retail centers - 104,211 sq. ft.

(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.

<PAGE>
(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>
1998 1997 1996 1995 1994
------------- ------------- -------------- ------------- ------------

Real Estate Investments:

Embarcadero Club
<S> <C> <C> <C> <C> <C>
Occupancy Rate............ 98% 99% 97% 99% 98%
Rent Per Square Foot...... $7.93 $7.54 $7.10 $6.89 $6.46

Tanglewood Village
Occupancy Rate............ 99% 95% 97% 98% 97%
Rent Per Square Foot...... $7.57 $7.47 $7.36 $7.35 $7.00

Thunder Hollow
Occupancy Rate............ 99% 97% 99% 97% 99%
Rent Per Square Foot...... $8.81 $8.44 $8.15 $7.76 $7.53

Windrock
Occupancy Rate............ 94% 96% 93% 75% 83%
Rent Per Square Foot...... $5.63 $5.57 $5.02 $5.01 $5.33

Asset Held for Sale:

Redwood Plaza
Occupancy Rate............ 97% 100% 100% 100% 98%
Rent Per Square Foot...... $6.93 $7.45 $7.13 $7.04 $6.33
</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
- ----------------------

Real Estate Investments:

Embarcadero Club Apartments
- ---------------------------

Embarcadero Club Apartments has enjoyed stable management, funds for capital
improvements, and a good location 2.5 miles from Atlanta's Hartsfield
International Airport. These factors have allowed the property to report good
operating results over the past several years. Occupancy rates at Embarcadero
Club generally are two to three percentage points above the market average.
Because tenants remain price driven, the property works carefully on its tenant
retention program, as well as continual updating of carpets, countertops and
appliances.

Tanglewood Village Apartments
- -----------------------------

Tanglewood Village Apartments is encountering new competition from new apartment
communities in the area, a new mobile home park, and especially from affordable
single family housing. These factors are limiting the rental increases that the
property is able to effect. The property improved its operating results in 1998
by implementing pass through of water and sewer costs directly to tenants.
Control of expenses will remain important to improving operating performance of
the property.

Thunder Hollow Apartments
- -------------------------

Thunder Hollow Apartments has been able to increase rental rates to a higher
level than its competitors and still maintain occupancy rates at or above the
local market's 95% average occupancy rate. 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.

Windrock Apartments
- -------------------

The occupancy rate at Windrock Apartments exceeded the 92% market average for
1998. Furthermore, only minimal multi-family construction is planned for El Paso
during 1999. Affordable single family housing is a competitive factor for the
property. The local economy remains closely tied to Mexico's economy, which has
been volatile. High unemployment and relatively inexpensive single family
housing will limit rental rate increases. 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.

<PAGE>
Asset Held for Sale:

Redwood Plaza
- -------------

Redwood Plaza completed an expansion during 1998. Just over 17,000 square feet
of space was added to the property. The largest tenant, a grocery store,
occupied the new space. In addition to the expansion, the property added a new
exterior facade. The expansion and new facade should provide positive leasing
momentum for the next several years. Occupancy is projected to remain strong
during 1999. There are only two other small strip centers in the area, and both
are fully occupied. The property's expansion and new facade fit well with the
emphasis that Salt Lake City community leaders and officials have placed on
getting the city ready to host the 2002 Winter Olympics.

The following schedule shows lease expirations for the Partnership's commercial
property for 1999 through 2008:

<TABLE>
<CAPTION>
Number of Annual % of Gross
Expirations Square Feet Rent Annual Rent
----------- ----------- ------- -----------
Asset Held for Sale:

Redwood Plaza
- -------------
<C> <C> <C> <C> <C>
1999 2 2,989 $ 22,619 4%
2000 1 3,440 32,860 6%
2001 1 3,040 55,630 9%
2002 - - - -
2003 1 20,100 203,613 34%
2004 2 16,491 82,744 14%
2005-2008 - - - -

</TABLE>
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:

<TABLE>
<CAPTION>
Nature of
Business Square Footage Lease
Use Leased Annual Rent Expiration
- ---------- -------------- ----------- ----------

Asset Held for Sale:

Redwood Plaza
- -------------

<S> <C> <C> <C>
Grocery Store 49,200 $ 110,000 2010
Government Office 20,100 203,613 2003
Discount Store 14,993 63,270 2004
</TABLE>

<PAGE>
ITEM 3. LEGAL PROCEEDINGS
- ------- -----------------

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

James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger,
Elizabeth Jung, Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil,
Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI,
Ltd., McNeil Real Estate Fund XII, Ltd., McNeil Real Estate Fund XIV, Ltd.,
McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real
Estate Fund XXI, L.P., McNeil Real Estate Fund XXII, L.P., McNeil Real Estate
Fund XXIII, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund
XXV, L.P., McNeil Real Estate Fund XXVI, L.P., and McNeil Real Estate Fund
XXVII, L.P., Hearth Hollow Associates, McNeil Midwest Properties I, L.P. and
Regency North Associates, L.P., - Superior Court of the State of California for
the County of Los Angeles, Case No. BC133799 (Class and Derivative Action
Complaint).

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

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

Defendants filed a demurrer to the consolidated and amended complaint and a
motion to strike on February 14, 1997, seeking to dismiss the consolidated and
amended complaint in all respects. A hearing on Defendant's demurrer and motion
to strike was held on May 5, 1997. The Court granted Defendants' demurrer,
dismissing the consolidated and amended complaint with leave to amend. On
October 31, 1997, the Plaintiffs filed a second consolidated and amended
complaint. The case was stayed pending settlement discussions. A Stipulation of
Settlement dated September 15, 1998 has been signed by the parties. Preliminary
Court approval was received on October 6, 1998. A hearing for Final Approval of
Settlement, initially scheduled for December 17, 1998, has been continued to May
25, 1999.

<PAGE>
Because McNeil Real Estate Fund XXIII, L.P., Hearth Hollow Associates, McNeil
Midwest Properties I, L.P. and Regency North Associates, L.P. would be part of
the transaction contemplated in the settlement and Plaintiffs claim that an
effort should be made to sell the McNeil Partnerships, Plaintiffs have included
allegations with respect to McNeil Real Estate Fund XXIII, L.P., Hearth Hollow
Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P.
in the third consolidated and amended complaint.

Plaintiff's counsel intends to seek an order awarding attorney's fees and
reimbursements of their out-of-pocket expenses. The amount of such award is
undeterminable until final approval is received from the court. Fees and
expenses shall be allocated amongst the Partnerships on a pro rata basis, based
upon tangible asset value of each such partnership, less total liabilities,
calculated in accordance with the Amended Partnership Agreements for the quarter
most recently ended.

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

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

None.
PART II

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

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

(B) Title of Class Number of Record Unit Holders

Limited partnership units 3,513 as of February 1, 1999

(C) The Partnership paid distributions totaling $499,996 ($5.78 per
Unit) and $6,146,222 ($71.02 per Unit) to the limited partners in
1998 and 1997, respectively. No distributions were paid to the
limited partners during 1996. In the last week of March 1999, the
Partnership distributed $500,169 to limited partners of record as
of March 1, 1999. The Partnership accrued distributions of
$545,928, $564,834 and $618,786 for the benefit of the General
Partner for the years ended December 31, 1998, 1997 and 1996,
respectively. These distributions are the MID pursuant to the
Amended Partnership Agreement. The Partnership paid $1,774,877 and
$500,000 of MID to the General Partner in 1997 and 1996,
respectively. No MID payments were made in 1998. 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 continue distributions to limited partners.

<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
- ------- -----------------------

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

<TABLE>
<CAPTION>
Statements of Years Ended December 31,
Operations 1998 1997 1996 1995 1994
- ------------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Rental revenue .................. $ 8,662,524 $ 8,996,989 $ 9,429,880 $ 9,188,439 $ 8,899,488
Gain on legal settlement ........ -- -- -- 39,841 --
Gain on involuntary
conversion ................... 393,795 -- -- -- 51,588
Gain on disposition of
real estate .................. -- 3,081,755 -- -- --
Total revenue ................... 9,159,934 12,289,725 9,536,634 9,350,464 8,988,225
Net income (loss) ............... (167,386) 3,328,774 (119,302) (331,176) (300,760)

Net income (loss) per
limited partnership unit ..... $ (1.91) $ 3.02 $ (1.36) $ (3.79) $ (3.44)
============ ============ ============ ============ ============

Distributions per limited
partnership unit ............. $ 5.78 $ 71.02 $ -- $ -- $ --
============ ============ ============ ============ ==============

Years Ended December 31,
Balance Sheets 1998 1997 1996 1995 1994
- ------------------ ------------ ------------ ------------ ------------ ------------
Real estate investments,
net .......................... $ 19,397,932 $ 20,251,190 $ 21,656,966 $ 30,950,884 $ 31,396,082
Assets held for sale ............ 2,192,549 1,932,910 7,942,855 -- --
Total assets .................... 25,601,245 26,325,605 34,188,885 35,275,343 35,214,866
Mortgage notes payable,
net .......................... 23,466,298 23,891,012 27,423,689 27,871,969 27,161,556
Partners' equity (deficit) ...... (114,266) 1,099,044 4,481,326 5,219,414 6,152,173

</TABLE>

See Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations. The Partnership sold Country Hills Plaza and Midvale
Plaza on April 8, 1997 and September 24, 1997, respectively.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
- ------- -----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------

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

The Partnership was formed to acquire, operate and ultimately dispose of a
portfolio of income-producing real properties. At the end of 1998, the
Partnership owned four apartment properties and one retail shopping center. The
retail shopping center is on the market for sale. All of the Partnership's
properties are subject to mortgage notes.

The Partnership sold Country Hills Plaza and Midvale Plaza on April 8, 1997 and
September 24, 1997, respectively. The Partnership distributed the net proceeds
from the sale of these two properties to the limited partners. Redwood Plaza,
the Partnership' sole remaining commercial property, remains on the market for
sale.

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

1998 compared to 1997

Revenue:

The Partnership's rental revenue decreased $334,465 or 3.7% in 1998 as compared
to 1997. However, the sale of Country Hills Plaza and Midvale Plaza during 1997
accounts for the decrease. Rental revenue earned by the Partnership's remaining
properties increased $294,987 or 3.5% in 1998 as compared to 1997. Rental
revenue increased at all four of the Partnership's residential properties, and
decreased at Redwood Plaza.

The Partnership increased both rental rates and average occupancy rates at
Tanglewood Village Apartments, Embarcadero Club Apartments and Thunder Hollow
Apartments. These properties reported increases in rental revenue of 1.3%, 4.9%
and 4.2%, respectively. Rental revenue increased 0.9% at Windrock Apartments. An
increase in vacancy losses at the El Paso property nearly offset a small
increase in rental rates. Rental revenue at Redwood Plaza decreased 5.2% in 1998
as compared to 1997. The Partnership's sole remaining commercial property
reported decreased occupancy during 1998, because of construction taking place
during 1998 that added approximately 17,000 square feet of space to the Salt
Lake City property.

Interest income decreased by $107,366 or 51% for 1998 as compared to 1997,
because of decreased balances of Partnership cash reserves invested in
interest-bearing accounts.

The Partnership recognized gains of $17,998 and $375,797 relating to fires at
Embarcadero Club Apartments and Thunder Hollow Apartments, respectively. The
gains equal insurance proceeds received in excess of the basis of the property
damaged by the fires. No such gains were recognized in 1997.

The sale of Country Hills Plaza on April 8, 1997 provided a $2,208,359 one-time
gain on sale of real estate. An additional gain of $873,396 was realized with
the September 24, 1997 sale of Midvale Plaza. No such gains were recognized in
1998.

<PAGE>
Expenses:

Partnership expenses increased $366,369 or 4.1% for the year ended December 31,
1998 as compared to the same period in 1997. However, after eliminating the
effects of expenses pertaining to Country Hills Plaza and Midvale Plaza, which
were sold during 1997, expenses at the remainder of the Partnership's properties
increased $899,256 or 10.7% for 1998 as compared to the same period in 1997. In
particular, environmental remediation expenses, personnel, and general and
administrative expenses increased, while general and administrative expenses
paid to affiliates decreased.

The Partnership established a $600,000 provision for environmental remediation
as discussed in "Item 1 - Business Environmental Matters." No such expense was
incurred during 1997.

Personnel expenses at the Partnership's remaining properties increased $97,256
or 10.8% in 1998 as compared to 1997. The Partnership increased wage and salary
rates and benefits in order to retain property personnel in a competitive job
market. The increases were concentrated at Thunder Hollow Apartments,
Embarcadero Club Apartments and Windrock Apartments. Personnel expenses
decreased at Redwood Plaza.

General and administrative expenses increased $267,369 in 1998 to $359,374. The
increase was attributable to costs incurred to explore alternatives to maximize
the value of the Partnership (see Liquidity and Capital Resources).

General and administrative expenses paid to affiliates decreased by $34,564 or
13.9% in 1998 as compared to 1997. The level of administrative reimbursements
paid to affiliates is partly a function of the number of properties the
Partnership owns. These expenses decreased due to the sale of Country Hills
Plaza and Midvale Plaza during the course of 1997. Costs associated with
investor relations services were charged to general and administrative during
1997. Such services, beginning in 1998, are now provided by an affiliate, and
the related increase in general and administrative expenses paid to affiliates
partially offset the decrease in expenses due to the reduced number of
properties under management.

1997 compared to 1996

Revenue:

Rental revenue for the year ended December 31, 1997 decreased $432,891 or 4.6%
from rental revenue earned for 1996. Excluding rental revenue derived from
Country Hills Plaza and Midvale Plaza for both 1997 and 1996, rental revenue
increased $375,765 or 4.7% in 1997 compared to 1996.

Rental revenue increased at all of the Partnership's remaining properties.
Increased occupancy at Windrock Apartments led to a 10.9% increase in rental
revenue at the El Paso property. Increased rental rates provided rental revenue
increases ranging from 3.5% to 6.1% at Embarcadero Club Apartments, Thunder
Hollow Apartments and Redwood Plaza. Rental revenues increased approximately
1.5% at Tanglewood Village Apartments as an increase in rental rates was
partially offset by increased vacancy losses.

Interest revenue nearly doubled in 1997 compared to 1996. Increased interest
income was the result of increasing amounts of cash and cash equivalents the
Partnership was able to invest in interest-bearing accounts.

<PAGE>
The sale of Country Hills Plaza on April 8, 1997 provided a $2,208,359 one-time
gain on sale of real estate. An additional gain of $873,396 was realized with
the September 24, 1997 sale of Midvale Plaza.

Expenses:

Partnership expenses decreased $694,985 or 7.2% for the year ended December 31,
1997 as compared to the same period of 1996. Expenses decreased primarily
because of the sale of Country Hills Plaza on April 8, 1997, and the sale of
Midvale Plaza on September 24, 1997. After excluding expenses related to Country
Hills Plaza and Midvale Plaza, the Partnership's expenses decreased $26,310 or
0.3% for 1997 as compared to 1996. General and administrative expenses and
general and administrative expenses paid to affiliates decreased, while property
taxes increased.

General and administrative expenses decreased 60.4% for 1997 as compared to
1996. In 1996, the Partnership incurred costs to evaluate and disseminate
information regarding an unsolicited tender offer. Similar costs were not
incurred in 1997. The decrease was partially offset by charges for investor
services, which beginning in 1997, were provided by a third party vendor instead
of by affiliates of the General Partner. The switch of investor service expenses
from affiliates to a third party vendor also accounts for most of the 15.5%
decrease in general and administrative expenses paid to affiliates. Also
contributing to the decrease in general and administrative expenses paid to
affiliates was a decrease in partnership administrative reimbursements due to
the sale of Country Hills Plaza in April 1997, and also the sale of Midvale
Plaza in September 1997.

Property taxes on the Partnership's remaining properties increased $51,293 or
9.1% in 1997 as compared to 1996. Increased assessments on Thunder Hollow
Apartments contributed to a 7.7% increase in property taxes at the Pennsylvania
property. Property taxes at Embarcadero Club Apartments in 1996 were reduced by
a one-time credit for an adjustment for prior year's property taxes. No such
adjustment was made in 1997.

Other property operating expenses increased $89,104 or 17.2% in 1997 as compared
to 1996. All of the increase in other property operating expenses is due to
increased bad-debt write-offs incurred at Country Hills Plaza and Midvale Plaza.
An evaluation of the receivables after the sale of the two properties indicated
that the Partnership was unlikely to collect approximately $89,916 of
receivables due from a single tenant that entered into bankruptcy proceedings,
and who occupied space at both properties.

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

Cash flow from operating activities decreased $40,751 or 1.7% in 1998 as
compared to 1997. The decrease is due to the sale of Country Hills Plaza and
Midvale Plaza during the course of 1997. Operating cash flow from the
Partnership's remaining properties increased almost enough to offset the loss of
the two properties during the course of 1997.

The Partnership invested $1,276,488 in capital improvements in 1998, in addition
to the $668,126 and $834,036 invested in 1997 and 1996, respectively. However,
$499,814 of the 1998 capital improvements were costs to repair damage caused by
a fire at Thunder Hollow Apartments. Proceeds from the Partnership's insurance
carrier covered all costs to reconstruct and repair the fire damage, except for
a $10,000 deductible for each fire. The Partnership has budgeted approximately
$740,000 for capital improvements in 1999. The capital improvements budgeted for
1999 are expected to be funded from cash flow from operations.
<PAGE>
The Partnership paid $1,774,877 and $500,000 of MID to the General Partner
during 1997 and 1996, respectively. No MID was paid during 1998. The balance of
accrued and unpaid MID at the end of 1998 amounted to $636,254. The General
Partner has deferred MID payments.

Two of the Partnership's properties, Country Hills Plaza and Midvale Plaza were
sold during 1997. The sale of these two properties provided $6,146,226 of cash
proceeds to the Partnership, after repayment of the mortgage notes associated
with the two properties. The net cash proceeds from the sale of the two
properties was distributed to the limited partners in two installments in
September 1997 and December 1997. The Partnership distributed an additional
$499,996 to the limited partners during 1998. The 1998 distribution was funded
from Partnership operating activities. The Partnership distributed approximately
$500,000 to the limited partners during the last week of March 1999.

Short Term Liquidity:

The Partnership expended considerable resources over the past several 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
three years have enabled the Partnership to increase its rental revenues and
reduce certain of its repairs and maintenance expenses. For 1999, the
Partnership has budgeted approximately $740,000 of capital improvements to its
real estate investments. Budgeted capital improvements for 1999 will be funded
from property operations.

At December 31, 1998, the Partnership held cash and cash equivalents of
$1,911,552. The General Partner considers this level of cash reserves to be
adequate to meet the Partnership's operating needs. The General Partner believes
that anticipated operating results for 1999 will be sufficient to fund the
Partnership's budgeted capital improvements for 1999, repay the current portion
of the Partnership's mortgage notes and provide funds for any required
environmental remediation as discussed in "Item 1 - Business - Environmental
Matters."

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 capital improvements made
by the Partnership over the past few 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 improvements are expected to increase the
competitiveness or marketability of the Partnership's properties.

<PAGE>
March 1999, because the Partnership had been unable to conclude negotiations for
a transaction with such bidder, the Partnership terminated such discussions and
commenced discussions with respect to a sale transaction with another
well-financed bidder who had been involved in the original auction process.
During the last full week of March, the Partnership entered into a 45 day
exclusivity agreement with such party. It is possible that the General Partner
and its affiliates will receive non-cash consideration for their ownership
interests in connection with any such transaction. There can be no assurance
regarding whether any such agreement will be reached nor the terms thereof.

The Partnership placed Redwood Plaza on the market for sale effective October 1,
1996.

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 years in the periods ended
December 31, 1998, 1997 and 1996, net income of $4,326 and $3,067,248 and net
loss of $1,193, respectively, were allocated to the General Partner. The limited
partners were allocated net income of $428,288 and $261,526 and a net loss of
$118,109 for the years ended December 31, 1998, 1997 and 1996, respectively.

The Partnership distributed $499,996 and $6,146,222 to the limited partners for
1998 and 1997, respectively. During the last week of March 1999, the Partnership
distributed approximately $500,000 to limited partners of record as of March 1,
1999. The General Partner will continue to monitor the cash reserves and working
capital needs of the Partnership to determine when cash flows will support
additional distributions to the Unit holders. The Partnership paid $1,774,877
and $500,000 of MID to the General Partner during 1997 and 1996, respectively.
No MID was paid during 1998.

YEAR 2000 DISCLOSURE
- --------------------

State of readiness
- ------------------

The year 2000 problem is the result of computer programs being written using two
digits rather than four to define the applicable year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in major systems failure or
miscalculations.

Management has assessed its information technology ("IT") infrastructure to
identify any systems that could be affected by the year 2000 problem. The IT
used by the Partnership for financial reporting and significant accounting
functions was made year 2000 compliant during recent systems conversions. The
software utilized for these functions are licensed by third party vendors who
have warranted that their systems are year 2000 compliant.

<PAGE>
Management is in the process of evaluating the mechanical and embedded
technological systems at the various properties. Management has inventoried all
such systems and queried suppliers, vendors and manufacturers to determine year
2000 compliance. Management will complete assessment of findings by May 1, 1999.
In circumstances of non-compliance management will work with the vendor to
remedy the problem or seek alternative suppliers who will be in compliance.
Management believes that the remediation of any outstanding year 2000 conversion
issues will not have a material or adverse effect on the Partnership's
operations. However, no estimates can be made as to the potential adverse impact
resulting from the failure of third party service providers and vendors to be
year 2000 compliant.

Cost
- ----

The cost of IT and embedded technology systems testing and upgrades is not
expected to be material to the Partnership. Because all the IT systems have been
upgraded over the last three years, all such systems were compliant, or made
compliant at no additional cost by third party vendors. Management anticipates
the costs of assessing, testing, and if necessary replacing embedded technology
components will be less than $50,000. Such costs will be funded from operations
of the Partnership.

Risks
- -----

Ultimately, the potential impact of the year 2000 issue will depend not only on
the corrective measures the Partnership undertakes, but also on the way in which
the year 2000 issue is addressed by government agencies and entities that
provide services or supplies to the Partnership. Management has not determined
the most likely worst case scenario to the Partnership. As management studies
the findings of its property systems assessment and testing, management will
develop a better understanding of what would be the worst case scenario.
Management believes that progress on all areas is proceeding and that the
Partnership will experience no adverse effect as a result of the year 2000
issue. However, there is no assurance that this will be the case.

Contingency plans
- -----------------

Management is developing contingency plans to address potential year 2000
non-compliance of IT and embedded technology systems. Management believes that
failure of any IT system could have an adverse impact on operations. However,
management believes that alternative systems are available that could be
utilized to minimize such impact. Management believes that any failure in the
embedded technology systems could have an adverse impact on that property's
performance. Management will assess these risks and develop plans to mitigate
possible failures by June, 1999.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------- ----------------------------------------------------------

Not Applicable.
<PAGE>

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

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

Financial Statements:

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

Balance Sheets at December 31, 1998 and 1997................................... 19

Statements of Operations for each of the three years in the period
ended December 31, 1998..................................................... 20

Statements of Partners' Equity (Deficit) for each of the three years
in the period ended December 31, 1998....................................... 21

Statements of Cash Flows for each of the three years in the period
ended December 31, 1998..................................................... 22

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

Financial Statement Schedule:

Schedule III - Real Estate Investments and Accumulated
Depreciation and Amortization............................................ 35

</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, 1998 and 1997, and
the related statements of operations, partners' equity (deficit) and cash flows
for each of the three years in the period ended December 31, 1998. 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, 1998 and 1997, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1998, 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 19, 1999

<PAGE>
McNEIL REAL ESTATE FUND XIV, LTD.

BALANCE SHEETS

<TABLE>
<CAPTION>
December 31,
----------------------------------
1998 1997
------------ -------------

ASSETS
- ------

Real estate investments:
<S> <C> <C>
Land ........................................................ $ 4,663,828 $ 4,663,828
Building and improvements ................................... 37,237,007 36,220,158
------------ ------------
41,900,835 40,883,986
Less: Accumulated depreciation ............................. (22,502,903) (20,632,796)
------------ ------------
19,397,932 20,251,190

Asset held for sale ............................................ 2,192,549 1,932,910

Cash and cash equivalents ...................................... 1,911,552 1,292,615
Cash segregated for security deposits .......................... 409,259 431,148
Accounts receivable ............................................ 84,539 663,087
Prepaid expenses and other assets .............................. 139,313 141,281
Escrow deposits ................................................ 607,161 664,294
Deferred borrowing costs, net of accumulated
amortization of $532,052 and $441,912 at
December 31, 1998 and 1997, respectively .................... 858,940 949,080
------------ ------------

$ 25,601,245 $ 26,325,605
============ ============

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

Mortgage notes payable, net .................................... $ 23,466,298 $ 23,891,012
Accounts payable ............................................... 106,574 69,128
Accrued interest ............................................... 161,403 164,766
Accrued property taxes ......................................... -- 101,200
Other accrued expenses ......................................... 117,056 73,912
Payable to affiliates - General Partner ........................ 873,553 211,757
Provision for environmental remediation ........................ 600,000 --
Deferred gain on involuntary conversions ....................... -- 346,114
Security deposits and deferred rental revenue .................. 390,627 368,672
------------ ------------
25,715,511 25,226,561
------------ ------------

Partners' equity (deficit):
Limited partners - 100,000 limited partnership units
authorized; 86,534 limited partnership units issued
and outstanding at December 31, 1998 and 1997 ............. 1,097,737 1,763,445
General Partner ............................................. (1,212,003) (664,401)
------------ ------------
(114,266) 1,099,044
------------ ------------
$ 25,601,245 $ 26,325,605
============ ============
</TABLE>

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

STATEMENTS OF OPERATIONS

For the Years Ended December 31,
--------------------------------------------------
1998 1997 1996
----------- ----------- -----------
Revenue:
<S> <C> <C> <C>
Rental revenue ......................... $ 8,662,524 $ 8,996,989 $ 9,429,880
Interest ............................... 103,615 210,981 106,754
Gain on involuntary conversions ........ 393,795 -- --
Gain on sales of real estate ........... -- 3,081,755 --
----------- ----------- -----------
Total revenue ........................ 9,159,934 12,289,725 9,536,634
----------- ----------- -----------

Expenses:
Interest ............................... 2,172,940 2,400,690 2,682,467
Depreciation and amortization .......... 1,870,107 1,882,343 2,185,099
Property taxes ......................... 649,915 670,709 713,729
Personnel expenses ..................... 996,078 946,896 925,738
Repairs and maintenance ................ 1,082,452 1,148,956 1,145,081
Utilities .............................. 479,295 514,372 495,851
Property management fees -
affiliates ........................... 429,016 451,074 465,738
Other property operating expenses ...... 474,818 606,017 516,913
Provision for environmental
remediation .......................... 600,000 -- --
General and administrative ............. 359,374 92,005 232,097
General and administrative -
affiliates ........................... 213,325 247,889 293,223
----------- ----------- -----------
Total expenses ....................... 9,327,320 8,960,951 9,655,936
----------- ----------- -----------

Net income (loss) ......................... $ (167,386) $ 3,328,774 $ (119,302)
=========== =========== ===========

Net income (loss) allocated to
limited partners ....................... $ (165,712) $ 261,526 $ (118,109)
Net income (loss) allocated to
General Partner ........................ (1,674) 3,067,248 (1,193)
----------- ----------- -----------

Net income (loss) ......................... $ (167,386) $ 3,328,774 $ (119,302)
=========== =========== ===========

Net income (loss) per limited
partnership unit ........................ $ (1.91) $ 3.02 $ (1.36)
=========== =========== ===========

Distributions per limited partnership
unit ................................... $ 5.78 $ 71.02 $ --
=========== =========== ===========
</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, 1998, 1997 and 1996

<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Equity
------------ ------------ ------------
<S> <C> <C> <C>
Balance at December 31, 1995 ............ $(2,546,836) $ 7,766,250 $ 5,219,414

Net loss ................................ (1,193) (118,109) (119,302)

Management Incentive Distribution........ (618,786) -- (618,786)
----------- ----------- -----------

Balance at December 31, 1996 ............ (3,166,815) 7,648,141 4,481,326

Net income .............................. 3,067,248 261,526 3,328,774

Management Incentive Distribution ....... (564,834) -- (564,834)

Distributions to limited partners ....... -- (6,146,222) (6,146,222)
----------- ----------- -----------

Balance at December 31, 1997 ............ (664,401) 1,763,445 1,099,044

Net income .............................. (1,674) (165,712) (167,386)

Management Incentive Distribution ....... (545,928) -- (545,928)

Distributions to limited partners ....... -- (499,996) (499,996)
----------- ----------- -----------

Balance at December 31, 1998 ............ $(1,212,003) $ 1,097,737 $ (114,266)
=========== =========== ===========
</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,
-------------------------------------------------------
1998 1997 1996
------------- ------------- -------------
Cash flows from operating activities:
<S> <C> <C> <C>
Cash received from tenants .............. $ 8,768,184 $ 8,962,254 $ 9,395,118
Cash paid to suppliers .................. (3,319,924) (3,253,015) (3,182,745)
Cash paid to affiliates ................. (526,473) (665,534) (744,666)
Interest received ....................... 103,615 210,981 106,754
Interest paid ........................... (2,032,182) (2,246,442) (2,450,431)
Property taxes paid ..................... (661,664) (635,937) (715,239)
------------ ------------ ------------
Net cash provided by operating
activities .............................. 2,331,556 2,372,307 2,408,791
------------ ------------ ------------

Cash flows from investing activities:
Additions to real estate
investments ........................... (1,276,488) (668,126) (834,036)
Proceeds from sales of real estate ...... -- 9,868,596 --
Insurance proceeds from gain on
involuntary conversions ............... 542,560 -- --
------------ ------------ ------------
Net cash (used in) provided by
investing activities .................... (733,928) 9,200,470 (834,036)
------------ ------------ ------------

Cash flows from financing activities:
Principal payments on mortgage
notes payable ......................... (478,695) (540,595) (588,801)
Retirement of mortgage notes
payable ............................... -- (3,722,370) --
Management incentive distribution
paid .................................. -- (1,774,877) (500,000)
Distributions to limited partners ....... (499,996) (6,146,222) --
------------ ------------ ------------

Net cash used in financing activities....... (978,691) (12,184,064) (1,088,801)
------------ ------------ ------------

Net increase (decrease) in cash
and cash equivalents .................. 618,937 (611,287) 485,954

Cash and cash equivalents at
beginning of year ..................... 1,292,615 1,903,902 1,417,948
------------ ------------ ------------

Cash and cash equivalents at end
of year ............................... $ 1,911,552 $ 1,292,615 $ 1,903,902
============ ============ ============
</TABLE>

See discussion of noncash investing and financing activities in Note 6 -
"Sale of Real Estate" and in Note 7 - "Gain on Involuntary Conversions."

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

STATEMENTS OF CASH FLOWS

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

For the Years Ended December 31,
----------------------------------------------------
1998 1997 1996
------------ ----------- ------------
<S> <C> <C> <C>
Net income (loss) ........................... $ (167,386) $ 3,328,774 $ (119,302)
----------- ----------- -----------

Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization ............ 1,870,107 1,882,343 2,185,099
Amortization of deferred
borrowing costs ........................ 90,140 95,657 95,658
Amortization of discounts on
mortgage notes payable ................. 53,981 90,949 140,521
Gain on sales of real estate ............. -- (3,081,755) --
Gain on involuntary conversions .......... (393,795) -- --
Provision for environmental
remediation ............................ 600,000 -- --
Changes in assets and liabilities:
Cash segregated for security
deposits ............................. 21,889 (31,782) (29,269)
Accounts receivable .................... 83,669 137,088 (34,898)
Prepaid expenses and other
assets ............................... 1,968 18,289 26,666
Escrow deposits ........................ 57,133 17,136 163,192
Accounts payable ....................... 37,446 (34,619) (62,687)
Accrued property taxes ................. (101,200) 219 104
Accrued interest ....................... (3,363) (32,358) (4,143)
Other accrued expenses ................. 43,144 (8,417) 2,604
Payable to affiliates - General
Partner .............................. 115,868 33,429 14,295
Security deposits and deferred
rental revenue ....................... 21,955 (42,646) 30,951
----------- ----------- -----------
Total adjustments ...................... 2,498,942 (956,467) 2,528,093
----------- ----------- -----------

Net cash provided by operating
activities ............................... $ 2,331,556 $ 2,372,307 $ 2,408,791
=========== =========== ===========
</TABLE>

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

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1998

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, 1998, the Partnership
owned five income-producing properties as described in Note 4 - Real Estate
Investments.

On October 1, 1996, the Partnership placed Redwood Plaza on the market for sale.

<PAGE>

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 on the
following page. 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.

% of Ownership Interest
Tier Partnership Partnership General Partner
---------------- ----------- ---------------

Limited partnerships:
<S> <C> <C>
Tanglewood Fund XIV Associates, L.P................ 99% 1%
Thunder Hollow Fund XIV Limited
Partnership (a).................................. 100 -
Windrock Fund XIV, L.P. (a)........................ 100 -

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

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

Adoption of Recent Accounting Pronouncements
- --------------------------------------------

The Partnership has adopted Statement of Financial Accounting Standards No. 131,
"Disclosures About Segments of an Enterprise and Related Information ("SFAS
131"). SFAS 131 requires an enterprise to report financial information about its
reportable operating segments, which are defined as components of a business for
which separate financial information is evaluated regularly by the chief
decision maker in allocating resources and assessing performance. The
Partnership does not prepare such information for internal use, since it
analyzes the performance of and allocates resources for each property
individually. The Partnership's management has determined that it operates one
line of business and it would be impracticable to report segment information.
Therefore, the adoption of SFAS 131 has no impact on the Partnership's financial
statements.

<PAGE>
Real Estate Investments
- -----------------------

Real estate investments are generally stated at the lower of depreciated cost or
fair value. Real estate investments are reviewed for impairment whenever events
or changes in circumstances indicate that their carrying amounts may not be
recoverable in accordance with Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of". When the carrying value of a property exceeds the sum
of all estimated future cash flows, an impairment loss is recognized. At such
time, a write-down is recorded to reduce the basis of the property to its
estimated fair value.

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

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

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

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.

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 on the
Statements of Operations.

<PAGE>
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 on 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 property 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
Management Incentive Distribution ("MID") 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 1998, 1997 and 1996 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 MID (see
Note 2 - "Transactions with Affiliates"); and

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

The Partnership paid distributions of $499,996 and $6,146,222 to the limited
partners in 1998 and 1997, respectively. No distributions were paid to the
limited partners in 1996. The Partnership paid or accrued distributions of
$545,928, $564,834 and $618,786 for the benefit of the General Partner in 1998,
1997 and 1996, respectively. These distributions are the MID pursuant to the
Amended Partnership Agreement. The General Partner has waived the collection
terms of reimbursable expenses and MID, and has elected for the Partnership to
pay limited partner distributions before the payment of such amounts. The
Partnership plans to distribute approximately $500,000 to the limited partners
in March 1999.

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

Net income (loss) per limited partnership unit ("Units") is computed by dividing
net income (loss) allocated to the limited partners by the weighted average
number of Units outstanding. Per Unit information has been computed based on
86,534 Units outstanding in 1998, 1997 and 1996.

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 MID
to the General Partner. The maximum MID is calculated as 1% of the tangible
asset value of the Partnership. 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. The maximum MID percentage decreases to .75% in
2000, .50% in 2001 and .25% thereafter.

<PAGE>
The MID will be paid to the extent of the lesser of the Partnership's excess
cash flow, as defined, or net operating income, as defined (the "Entitlement
Amount"), and may be paid (i) in cash, unless there is insufficient cash to pay
the distribution in which event any unpaid portion not taken in Units will be
deferred and is payable, without interest, from the first available cash and/or
(ii) in Units. A maximum of 50% of the MID may be paid in Units. The number of
Units issued in payment of the MID is based on the greater of $50 per Unit or
the net tangible asset value, as defined, per Unit. During 1998, 1997 and 1996,
no Units were issued as payment for the MID.

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 MID earned. Capital
improvements are excluded from cash flow, as defined. The majority of base
period cash flow was measured under the previous capitalization policy, while
incentive period cash flow is determined using the amended policy. Under the
amended policy, more items are capitalized, and cash flow increases. The
amendment of the capitalization policy did not materially affect the MID for
1998, 1997 or 1996 as the Entitlement Amount was sufficient to pay the MID
notwithstanding the amendment of the capitalization policy.

Any amount of 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 MID represents a return of equity to the
General Partner for increasing cash flow, as defined, and accordingly is treated
as a distribution.

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

<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1998 1997 1996
-------------- -------------- ---------------
Property management fees -
<S> <C> <C> <C>
affiliates.............................. $ 429,016 $ 451,074 $ 465,738
Charged to general and
administrative - affiliates:
Partnership administration.............. 213,325 247,889 293,223
------------- ------------- --------------

$ 642,341 $ 698,963 $ 758,961
============= ============= ==============

Charged to General Partner's deficit:
Management Incentive Distribution $ 545,928 $ 564,834 $ 618,786
============= ============= ==============
</TABLE>

<PAGE>
Payable to affiliates - General Partner at December 31, 1998 and 1997 consists
of reimbursable costs, property management fees and MID that are due and payable
from current operations. The General Partner has waived the collection terms of
reimbursable expenses and MID, and has elected for the Partnership to pay
limited partner distributions before the payment of such amounts.

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 $2,876,913,
$2,059,398 and $1,802,969 in 1998, 1997 and 1996, respectively.

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

The basis and accumulated depreciation of the Partnership's real estate
investments at December 31, 1998 and 1997 are set forth in the following tables:

<TABLE>
<CAPTION>
Buildings and Accumulated Net Book
1998 Land Improvements Depreciation Value
---- -------------- ------------ ------------ ----------------

Embarcadero Club
<S> <C> <C> <C> <C>
College Park, GA $ 1,216,712 $ 12,806,176 $ (7,980,799) $ 6,042,089
Tanglewood Village
Carson City, NV 705,859 5,173,959 (2,952,658) 2,927,160
Thunder Hollow
Bensalem Township, PA 1,837,539 13,357,311 (8,010,096) 7,184,754
Windrock
El Paso, TX 903,718 5,899,561 (3,559,350) 3,243,929
------------- ------------- ------------- -------------
$ 4,663,828 $ 37,237,007 $ (22,502,903) $ 19,397,932
============= ============= ============= =============

Buildings and Accumulated Net Book
1997 Land Improvements Depreciation Value
---- -------------- ------------ ------------ ---------------

Embarcadero Club $ 1,216,712 $ 12,552,561 $ (7,378,627) $ 6,390,646
Tanglewood Village 705,859 5,131,625 (2,682,535) 3,154,949
Thunder Hollow 1,837,539 12,744,793 (7,314,921) 7,267,411
Windrock 903,718 5,791,179 (3,256,713) 3,438,184
------------- ------------- ------------- -------------
$ 4,663,828 $ 36,220,158 $ (20,632,796) $ 20,251,190
============= ============= ============= =============
</TABLE>
<PAGE>
On October 1, 1996, the General Partner placed Country Hills Plaza, Midvale
Plaza and Redwood Plaza on the market for sale. The Partnership sold Country
Hills Plaza and Midvale Plaza on April 8, 1997 and September 24, 1997,
respectively. Redwood Plaza, located in Salt Lake City, Utah, remains on the
market for sale. The Partnership's investment in Redwood Plaza was classified as
an asset held for sale at December 31, 1998 and 1997. The net book value of the
Partnership's investment in Redwood Plaza at December 31, 1998 and 1997 was
$2,192,549 and $1,932,910, respectively.

Included in the Partnership's Statements of Operations are results of operations
for the assets held for sale. Results of operations for assets held for sale
amounted to ($339,318), $440,868 and $459,447 for 1998, 1997 and 1996,
respectively. Results of operations are operating revenues less operating
expenses including interest expense and depreciation and amortization.

The Partnership leases its commercial properties under various non-cancelable
operating leases. Future minimum rents to be received under terms of the leases
are as follows:

1999............................ $ 505,037
2000............................ 492,670
2001............................ 451,149
2002............................ 405,419
2003............................ 270,254
Thereafter...................... 805,950
-------------
$ 2,930,479
=============
Future minimum rents do not include contingent rents based on sales volume of
tenants. No contingent rents were collected for the year ended December 31,
1998. Contingent rents amounted to $2,591 and $2,462 for the years ended
December 31, 1997 and 1996, respectively. Future minimum rents also do not
include expense reimbursements for common area maintenance, property taxes, and
other expenses. These expense reimbursements amounted to $74,579, $206,243 and
$349,600 for the years ended December 31, 1998, 1997 and 1996, respectively.
These contingent rents and expense reimbursements, which are comprised of
amounts generated by assets held for sale, are included in rental revenue on the
Statements of Operations.

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

<PAGE>
NOTE 5 - MORTGAGE NOTES PAYABLE
- -------------------------------

The following table sets forth the mortgage notes of the Partnership at December
31, 1998 and 1997. All mortgage notes are secured by the related real estate
investments or asset held for sale:

<TABLE>
<CAPTION>
Mortgage Annual Monthly
Lien Interest Payments/ December 31,
Property Position (a) Rates % Maturity Date (d) 1998 1997
- -------- ------------- ------- ----------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Embarcadero Club First 7.875 57,280 12/23 $ 7,501,825 $ 7,594,425
------------ ------------

Redwood Plaza First 9.875 14,660 06/06 929,452 1,009,255
Discount (b) (120,878) (145,251)
------------ -------------
808,574 864,004
------------ -------------

Tanglewood Village First 6.750 20,176 11/18 2,642,890 2,704,333
------------ -------------

Thunder Hollow (c) First 8.150 82,131 07/03 (d) 9,309,136 9,526,308
Discount (b) (156,191) (185,799)
------------ -------------
9,152,945 9,340,509
------------ -------------

Windrock First 9.440 28,859 04/02 (d) 3,360,064 3,387,741
------------ -------------
$ 23,466,298 $ 23,891,012
============ =============
</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%. The discount on the Redwood Plaza mortgage note
is based on an effective interest rate of 14.30%.

(c) The Thunder Hollow mortgage note was obtained under the terms of a Real
Estate Mortgage Investment Conduit financing. Terms of the Thunder Hollow
mortgage note specify that prepayments in whole or part prior to July
2000 are subject to a Yield Maintenance premium, as defined.

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

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

Windrock $ 3,249,832 04/02
Thunder Hollow 8,080,794 07/03

<PAGE>
Scheduled principal maturities of the mortgage notes under existing agreements,
before consideration of discounts of $277,069, are as follows:

1999 .......................... $ 519,886
2000 .......................... 564,669
2001........................... 613,361
2002........................... 3,885,548
2003........................... 8,594,093
Thereafter .................... 9,565,810
-------------
$ 23,743,367

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 $23,928,000 and
$24,889,000 at December 31, 1998 and 1997, respectively.

NOTE 6 - SALES OF REAL ESTATE
- -----------------------------

On April 8, 1997, the Partnership sold Country Hills Plaza to an unaffiliated
purchaser for a cash sales price of $6,610,000. Cash proceeds from the sale, as
well as the gain on sale are detailed below.

<TABLE>
<CAPTION>
Gain on Sale Cash Proceeds
-------------- ---------------
<S> <C> <C>
Cash sales price....................................... $ 6,610,000 $ 6,610,000

Selling costs.......................................... (185,304) (185,304)
Mortgage discount written off.......................... (397,561)
Straight-line rent receivables written off............. (26,828)
Basis of real estate sold.............................. (3,791,948)
------------- -------------

Gain on sale of real estate............................ $ 2,208,359
============
Proceeds from sale of real estate...................... 6,424,696
Retirement of mortgage note payable.................... (2,231,440)
-------------

Net cash proceeds...................................... $ 4,193,256
=============
</TABLE>

<PAGE>

On September 24, 1997, the Partnership sold Midvale Plaza to an unaffiliated
purchaser for a cash sales price of $3,500,000. Cash proceeds from the sale, as
well as the gain on sale are detailed below.

<TABLE>
<CAPTION>
Gain on Sale Cash Proceeds
-------------- ---------------
<S> <C> <C>
Cash sales price....................................... $ 3,500,000 $ 3,500,000

Selling costs.......................................... (56,100) (56,100)
Mortgage discount written off.......................... (241,778)
Straight-line rent receivables written off............. (85,197)
Prepaid leasing commission written off................. (14,338)
Basis of real estate sold.............................. (2,229,191)
------------- -------------

Gain on sale of real estate............................ $ 873,396
============
Proceeds from sale of real estate...................... 3,443,900
Retirement of mortgage note payable.................... (1,490,930)
-------------

Net cash proceeds...................................... $ 1,952,970
=============
</TABLE>

NOTE 7 - GAIN ON INVOLUNTARY CONVERSIONS
- ----------------------------------------

On July 18, 1997, a fire caused $49,498 of damage to two units of Embarcadero
Club Apartments. In 1998, the Partnership received $39,498 of insurance
reimbursements to cover the repair and restoration costs to Embarcadero Club
Apartments. The excess of the insurance reimbursements received over the basis
of the property damaged was recorded as a $17,998 gain on involuntary
conversion. The gain on involuntary conversion was deferred on the Partnership's
December 31, 1997 Balance Sheet because it was not collected; the gain was
recognized on the Partnership's Statement of Operations for the year ended
December 31, 1998.

On November 14, 1997, a fire caused $544,716 of damage to eight units of Thunder
Hollow Apartments. In 1998, the Partnership received $503,062 of insurance
reimbursements to cover the repair and restoration costs to Thunder Hollow
Apartments. An additional $31,600 of insurance reimbursements was received in
January 1999. The excess of the insurance reimbursements received over the basis
of the property damaged was recorded as a $375,797 gain on involuntary
conversion. $328,116 of the gain was deferred on the Partnership's December 31,
1997 Balance Sheet because it was not collected; the entire $375,797 gain was
recognized on the Partnership's Statement of Operations for the year ended
December 31, 1998.

<PAGE>
NOTE 8 - ENVIRONMENTAL REMEDIATION
- ----------------------------------

In connection with the proposed sale transaction as more fully described in Note
1 - "Organization and Summary of Significant Accounting Policies", in fiscal
1998, an independent environmental consultant engaged by the Partnership
completed a Phase I Environmental Site Assessment of each property owned by the
Partnership. Such environmental assessments performed on the properties have not
revealed any environmental liability that the Partnership believes would have a
material adverse effect on the Partnership's business, assets or results of
operations, except for the Redwood Plaza property in Utah (the "Property"). The
Phase I report recommended additional investigation at the Property because of
the presence of a dry cleaning plant that had been there for approximately
twenty years, and because the plant reportedly had used and stored the chemical
tetrachloroethene (PCE). Pursuant to the Partnership's request, the consultant
then conducted a Phase II Environmental Site Assessment of the Property, and
found that some of the soil and groundwater contained PCE and its degradation
products. Pursuant to the Partnership's request, the consultant then conducted a
Phase III investigation, and found the presence of contamination in soil and
groundwater samples taken at the property line. Because the Partnership has not
undertaken any groundwater or soil sampling off-site, the extent of the
contamination from the Property has not been established. To deal with this
situation, the Partnership has applied to the Utah Department of Environmental
Quality to enter the Property into the State's Voluntary Cleanup Program, to
obtain a release from the State for cleanup liabilities.

The Partnership is also investigating whether prior owners or tenants of the
Property may be responsible for the remediation of the contaminants and is also
reviewing whether the cost of remediation may be covered by insurance.

<PAGE>
Accordingly, the Partnership recorded a liability for remediation costs at the
Property of $600,000 in fiscal year 1998. This estimate may be affected by,
among other things, new data and by any modifications to any remediation plan
that may be proposed by the Utah regulatory authorities. The effect of the
resolution of these matters on the results of operations of the Partnership
cannot be predicted because of the uncertainty concerning both the amount and
timing of future expenditures and future results of operations.

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

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

Because McNeil Real Estate Fund XXIII, L.P., Hearth Hollow Associates, McNeil
Midwest Properties I, L.P. and Regency North Associates, L.P. would be part of
the transaction contemplated in the settlement and Plaintiffs claim that an
effort should be made to sell the McNeil Partnerships, Plaintiffs have included
allegations with respect to McNeil Real Estate Fund XXIII, L.P., Hearth Hollow
Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P.
in the third consolidated and amended complaint.

<PAGE>
McNEIL REAL ESTATE FUND XIV, LTD.
SCHEDULE III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
December 31, 1998

<TABLE>
<CAPTION>
Costs
Initial Cost (b) Cumulative Capitalized
Related (b) Buildings and Write-down for Subsequent
Description Encumbrances Land Improvements Impairment (d) To Acquisition
- ----------- --------------- ---- -------------- --------------- --------------
APARTMENTS:

Embarcadero Club
<S> <C> <C> <C> <C> <C>
College Park, GA $ 7,501,825 $ 1,216,712 $ 12,806,176 $ - $ 2,724,603

Tanglewood Village
Carson City, NV 2,642,890 705,859 5,173,959 - 1,169,565

Thunder Hollow
Bensalem
Township, PA 9,152,945 1,837,539 13,357,311 - 2,944,590

Windrock
El Paso, TX 3,360,064 903,718 5,899,561 (97,632) 1,507,192
-------------- -------------- -------------- ------------ -------------

$ 22,657,724 $ 4,663,828 $ 37,237,007 $ (97,632) $ 8,345,920
============== ============== ============== ============ =============

ASSET HELD FOR SALE (c):

Redwood Plaza
Salt Lake City, UT $ 808,574
==============
</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.

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

(d) The carrying value of Windrock Apartments was written down by $97,632 for
impairment in 1991.

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, 1998

Gross Amount at
Which Carried at Close of Period Accumulated
Buildings and Depreciation
Description Land Improvements Total (a) and Amortization
- ----------- ---- ------------- --------- ----------------
APARTMENTS:

Embarcadero Club
<S> <C> <C> <C> <C>
College Park, GA $ 1,216,712 $ 12,806,176 $ 14,022,888 $ (7,980,799)

Tanglewood Village
Carson City, NV 705,859 5,173,959 5,879,818 (2,952,658)

Thunder Hollow
Bensalem
Township, PA 1,837,539 13,357,311 15,194,850 (8,010,096)

Windrock
El Paso, TX 903,718 5,899,561 6,803,279 (3,559,350)
------------- ------------- --------------- --------------

$ 4,663,828 $ 37,237,007 $ 41,900,835 $ (22,502,903)
============= ============= =============== ==============

ASSET HELD FOR SALE (c):

Redwood Plaza
Salt Lake City, UT $ 2,192,549
===============
</TABLE>

(a) For Federal income tax purposes, the properties are depreciated over lives
ranging from 5-27.5 years using ACRS or MACRS methods. The aggregate cost
of the real estate investments and the asset held for sale for Federal
income tax purposes was $39,415,903 and accumulated depreciation and
amortization was $24,273,909 at December 31, 1998.

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, 1998

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

APARTMENTS:

Embarcadero Club
<S> <C> <C> <C>
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

ASSET HELD FOR SALE (c):

Redwood Plaza
Salt Lake City, UT 1976 06/84

</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,
-----------------------------------------------------
1998 1997 1996
------------ ------------- ------------
Real estate investments:

<S> <C> <C> <C>
Balance at beginning of year ................... $ 40,883,986 $ 40,608,707 $ 52,787,046

Improvements ................................... 1,016,849 656,932 771,475

Replacements ................................... -- (381,653) --

Reclassification of assets held
for sale .................................... -- -- (12,949,814)
------------ ------------ ------------

Balance at end of year ......................... $ 41,900,835 $ 40,883,986 $ 40,608,707
============ ============ ============

Accumulated depreciation and amortization:

Balance at beginning of year ................... $ 20,632,796 $ 18,951,741 $ 21,836,162

Depreciation and amortization .................. 1,870,107 1,882,343 2,185,099

Replacements ................................... -- (201,288) --

Reclassification of assets held
for sale .................................... -- -- (5,069,520)
------------ ------------ ------------

Balance at end of year ......................... $ 22,502,903 $ 20,632,796 $ 18,951,741
============ ============ ============

Assets held for sale:

Balance at beginning of year ................... $ 1,932,910 $ 7,942,855 $ --

Reclassification of assets held
for sale ................................... -- -- 7,880,294

Improvements ................................... 259,639 11,194 62,561

Sale of assets held for sale ................... -- (6,021,139) --
------------ ------------ ------------

Balance at end of year ......................... $ 2,192,549 $ 1,932,910 $ 7,942,855
============ ============ ============
</TABLE>

<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
- ------- -----------------------------------------------------------
AND FINANCIAL DISCLOSURE
------------------------

None.

PART III

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

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

Other Principal Occupations and Other
Name and Position Age Directorships During the Past 5 Years
- ----------------- --- -------------------------------------

Robert A. McNeil, 78 Mr. McNeil is also Chairman of the
Chairman of the Board and Director of McNeil Real Estate
Board and Director Management, Inc. ("McREMI") which is an
affiliate of the General Partner. He has
held the foregoing positions since the
formation of such an entity in 1990. Mr.
McNeil received his B.A. degree from
Stanford University in 1942 and his
L.L.B. degree from Stanford Law School
in 1948. He is a member of the State Bar
of California and has been involved in
real estate financing since the late
1940's and in real estate acquisitions,
syndications and dispositions since
1960. From 1986 until active operations
of McREMI and McNeil Partners, L.P.
began in February 1991, Mr. McNeil was a
private investor. Mr. McNeil is a member
of the International Board of Directors
of the Salk Institute, which promotes
research in improvements in health care.

<PAGE>
Carole J. McNeil 55 Mrs. McNeil is Co-Chairman, with husband
Co-Chairman of the Robert A. McNeil, of McNeil Investors,
Board Inc. Mrs. McNeil has twenty years of
real estate experience, most recently as
a private investor from 1986 to 1993. In
1982, she founded Ivory & Associates, a
commercial real estate brokerage firm in
San Francisco, CA. Prior to that, she
was a commercial real estate associate
with the Madison Company and, earlier, a
commercial sales associate and analyst
with Marcus and Millichap in San
Francisco. In 1978, Mrs. McNeil
established Escrow Training Centers,
California's first accredited commercial
training program for title company
escrow officers and real estate agents
needing college credits to qualify for
brokerage licenses. She began in real
estate as Manager and Marketing Director
of Title Insurance and Trust in Marin
County, CA. Mrs. McNeil serves on the
International Board of Directors of the
Salk Institute.

Ron K. Taylor 41 Mr. Taylor is the President and Chief
President and Chief Executive Officer of McNeil Real Estate
Executive Officer Management which is an affiliate of the
General Partner. Mr. Taylor has been in
this capacity since the resignation of
Donald K. Reed on March 4, 1997. Prior
to assuming his current
responsibilities, Mr. Taylor served as a
Senior Vice President of McREMI. Mr.
Taylor has been in this capacity since
McREMI commenced operations in 1991.
Prior to joining McREMI, Mr. Taylor
served as an Executive Vice President
for a national syndication/property
management firm. In this capacity, Mr.
Taylor had the responsibility for the
management and leasing of a 21,000,000
square foot portfolio of commercial
properties. Mr. Taylor has been actively
involved in the real estate industry
since 1983.

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

<PAGE>
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, 1998, 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, 1998. 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.

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 10,631 (12.3%) of the Partnership's Units as of
February 1, 1999.

(B) Security ownership of management.

As of February 1, 1999, the General Partner and its affiliates own 872 of
the Partnership's Units, which is approximately 1% of the 86,534
outstanding Units.

None.

<PAGE>
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. 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. The maximum MID percentage decreases to .75% in
2000, .50% in 2001 and .25% thereafter.

The MID will be paid to the extent of the lesser of the Partnership's excess
cash flow, as defined, or net operating income (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, 1998, the Partnership accrued MID in the amount of $545,928.

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, 1998, the Partnership incurred $642,341 of property
management fees and reimbursements.

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

<PAGE>
PART IV

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

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

(A) Exhibits

Exhibit
Number Description
------- -----------

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 8, 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)

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)

<PAGE>

Exhibit
Number Description
------- -----------

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)

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

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 Agree-
ment, 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)

10.22 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 Item 8 - Note
1 - "Organization and Summary of
Significant Accounting Policies").

<PAGE>
Exhibit
Number Description
-------- -----------
22. Following is a list of subsidiaries
of the Partnership:

<TABLE>
<CAPTION>
Names Under
Jurisdiction of Which It Is
Name of Subsidiary Incorporation Doing Business
------------------ --------------- --------------
<S> <C> <C>
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
</TABLE>

27. Financial Data Schedule for the year
ended December 31, 1998.

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.

(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.

(B) Reports on Form 8-K. There were no reports on Form 8-K for the
quarter ended December 31, 1998.

<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

March 31, 1999 By: /s/ Robert A. McNeil
- -------------- ----------------------------------------------
Date Robert A. McNeil
Chairman of the Board and Director
(Principal Executive Officer)

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

March 31, 1999 By: /s/ Ron K. Taylor
- -------------- ----------------------------------------------
Date Ron K. Taylor
President and Director of McNeil
Investors, Inc.
(Principal Financial Officer)

March 31, 1999 By: /s/ Brandon K. Flaming
- -------------- ----------------------------------------------
Date Brandon K. Flaming
Vice President of McNeil Investors, Inc.
(Principal Accounting Officer)

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 1,911,552
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 41,900,835
<DEPRECIATION> (22,502,903)
<TOTAL-ASSETS> 25,601,245
<CURRENT-LIABILITIES> 0
<BONDS> 23,466,298
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 25,601,245
<SALES> 8,662,524
<TOTAL-REVENUES> 9,159,934
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,154,380
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,172,940
<INCOME-PRETAX> (167,386)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (167,386)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>