VISTA PROPERTIES
10-Q, 1997-08-18
REAL ESTATE
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-Q


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


                  For the quarterly period ended June 30, 1997


                         Commission file number 0-11890


                                VISTA PROPERTIES
             (Exact name of registrant as specified in its charter)


    California                                             13-3179078
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                          Identification No.)


                   411 West Putnam Avenue Greenwich, CT 06830
                    (Address of principal executive offices)


                                 (203) 862-7000
              (Registrant's telephone number, including area code)



                                      NONE
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by checkmark  whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months  (or for such shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.    Yes [ X ]   No [   ]
<PAGE>
                                VISTA PROPERTIES
                             (A limited partnership)
                             (Debtor-in-Possession)

                            FORM 10-Q - JUNE 30, 1997




                                      INDEX



PART I - FINANCIAL INFORMATION

    ITEM 1 - FINANCIAL STATEMENTS

         BALANCE SHEETS - June 30, 1997 and December 31, 1996


         STATEMENTS OF OPERATIONS - For the three months ended June 30, 1997 and
            1996  and  for  the  six  months   ended  June  30,  1997  and  1996


         STATEMENT OF PARTNERS' DEFICIT - For the six months ended June 30, 1997


         STATEMENTS OF CASH FLOWS - For the six months  ended June 30,  1997 and
            1996 

         NOTES TO FINANCIAL STATEMENTS

    ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS  


PART II - OTHER INFORMATION

    ITEM 1 - LEGAL PROCEEDINGS 

    ITEM 5 - OTHER INFORMATION

    ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K  

SIGNATURES   
<PAGE>
 PART I - FINANCIAL INFORMATION

 ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                     VISTA PROPERTIES
                                 (A limited partnership)
                                  (Debtor-in-Possession)

                                      BALANCE SHEETS



                                                           June 30,         December 31,
                                                             1997               1996
                                                        -------------     -------------
<S>                                                     <C>               <C>
ASSETS

     Real estate, net ..............................    $  92,152,513     $  93,890,271
     Receivables and other assets ..................       10,958,558        10,151,747
     Cash and cash equivalents .....................        5,183,096         3,121,247
                                                        -------------     -------------

                                                        $ 108,294,167     $ 107,163,265
                                                        =============     =============

LIABILITIES AND PARTNERS' DEFICIT

Liabilities subject to compromise
     Deferred interest payable .....................    $ 122,538,704     $ 115,022,636
     Mortgage loans payable ........................       99,160,000        99,160,000
     Due to affiliates .............................        1,969,628         1,889,508
     Accounts payable and accrued expenses .........          672,184           544,797
     Prepaid rents .................................           63,262           209,927
                                                        -------------     -------------

         Total liabilities subject to compromise ...      224,403,778       216,826,868
                                                        -------------     -------------

Commitments and contingencies

Partners' deficit
     Limited partners' deficit (as restated) (92,810
         units issued and outstanding) .............     (113,888,075)     (107,506,527)
     General partners' deficit (as restated) .......       (2,221,536)       (2,157,076)
                                                        -------------     -------------

         Total partners' deficit ...................     (116,109,611)     (109,663,603)
                                                        -------------     -------------

                                                        $ 108,294,167     $ 107,163,265
                                                        =============     =============
                           See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                VISTA PROPERTIES
                                            (A limited partnership)
                                             (Debtor-in-Possession)

                                            STATEMENTS OF OPERATIONS

                                              For the three months ended           For the six months ended
                                                       June 30,                             June 30,
                                            ------------------------------      ------------------------------
                                                 1997              1996              1997              1996
                                            ------------      ------------      ------------      ------------
<S>                                         <C>               <C>               <C>               <C>
Revenues
     Rental income ....................     $  4,926,969      $  5,305,419      $  9,819,199      $ 10,380,933
     Interest income ..................           28,050            15,790            41,320            37,925
     Other income .....................              200           273,176               200           273,226
                                            ------------      ------------      ------------      ------------
                                               4,955,219         5,594,385         9,860,719        10,692,084
                                            ------------      ------------      ------------      ------------
Costs and expenses
     Mortgage loan interest expense ...        4,021,003         3,853,590         8,302,555         8,904,078
     Operating expense ................        1,876,860         2,064,519         4,122,891         4,050,507
     Depreciation and amortization ....        1,339,215         1,245,373         2,656,975         2,640,113
     Ground rent ......................          175,000           175,000           350,000           350,000
     Property management fees .........          148,937           161,278           283,711           297,499
     Administrative expenses ..........           50,268            58,893           103,753            98,551
                                            ------------      ------------      ------------      ------------
                                               7,611,283         7,558,653        15,819,885        16,340,748
                                            ------------      ------------      ------------      ------------

                                              (2,656,064)       (1,964,268)       (5,959,166)       (5,648,664)

Gain on foreclosure of property, net ..             --              31,573              --          19,429,198
                                            ------------      ------------      ------------      ------------
                                              (2,656,064)       (1,932,695)       (5,959,166)       13,780,534
Reorganization items
     Professional fees ................         (310,041)             --            (486,842)             --
                                            ------------      ------------      ------------      ------------
Net (loss) income .....................     $ (2,966,105)     $ (1,932,695)     $ (6,446,008)     $ 13,780,534
                                            ============      ============      ============      ============


Net (loss) income attributable to
     Limited partners .................     $ (2,936,444)     $ (1,913,368)     $ (6,381,548)     $ 13,642,729
     General partners .................          (29,661)          (19,327)          (64,460)          137,805
                                            ------------      ------------      ------------      ------------
                                            $ (2,966,105)     $ (1,932,695)     $ (6,446,008)     $ 13,780,534
                                            ============      ============      ============      ============

Net (loss) income per unit of limited
     partnership interest (92,810 units
     outstanding) .....................     $     (31.64)     $     (20.62)     $     (68.76)     $     147.00
                                            ============      ============      ============      ============

                                       See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                        VISTA PROPERTIES
                                    (A limited partnership)
                                     (Debtor-in-Possession)

                                 STATEMENT OF PARTNERS' DEFICIT


                                              General            Limited             Total
                                              Partners'          Partners'           Partners'
                                              Deficit            Deficit             Deficit
                                           -------------      -------------      -------------
<S>                                        <C>                <C>                <C>

Balance, January 1, 1997 .............     $  (2,621,126)     $(107,042,477)     $(109,663,603)

Reallocation of partners' equity .....           464,050           (464,050)              --
                                           -------------      -------------      -------------

Balance, January 1, 1997 (as restated)        (2,157,076)      (107,506,527)      (109,663,603)

Net loss for the six months ended
    June 30, 1997 ....................           (64,460)        (6,381,548)        (6,446,008)
                                           -------------      -------------      -------------

Balance, June 30, 1997 ...............     $  (2,221,536)     $(113,888,075)     $(116,109,611)
                                           =============      =============      =============

                               See notes to financial statements.


</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                     VISTA PROPERTIES
                                 (A limited partnership)
                                  (Debtor-in-Possession)

                                 STATEMENTS OF CASH FLOWS


                                                              For the six months ended
                                                                      June 30,
                                                          ------------------------------
                                                               1997              1996
                                                          ------------      ------------
<S>                                                       <C>               <C>
 INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS

Cash flows from operating activities
     Net (loss) income ..............................     $ (6,446,008)     $ 13,780,534
     Adjustments to reconcile net (loss) income to
         net cash provided by operating activities
            Gain on foreclosure of property, net ....             --         (19,429,198)
            Deferred mortgage loan interest .........        7,516,068         3,960,534
            Depreciation and amortization ...........        2,656,975         2,640,113
            Straight-line adjustment for stepped
                lease rentals .......................         (282,230)         (185,175)
     Changes in assets and liabilities
         Receivables and other assets ...............         (735,962)         (343,023)
         Due to affiliates ..........................           80,120           177,499
         Accounts payable and accrued expenses ......          127,387           180,849
         Prepaid rents ..............................         (146,665)         (179,207)
                                                          ------------      ------------

            Net cash provided by operating activities        2,769,685           602,926
                                                          ------------      ------------

Cash flows from investing activities
     Proceeds from foreclosure of property, net .....             --             306,573
     Additions to real estate .......................         (707,836)       (1,510,046)
                                                          ------------      ------------

            Net cash used in investing activities ...         (707,836)       (1,203,473)
                                                          ------------      ------------

Net increase (decrease) in cash and cash equivalents         2,061,849          (600,547)

Cash and cash equivalents, beginning of period ......        3,121,247         2,404,119
                                                          ------------      ------------

Cash and cash equivalents, end of period ............     $  5,183,096      $  1,803,572
                                                          ============      ============


Supplemental disclosure of cash flow information
     Interest paid ..................................     $    786,488      $  4,943,544
                                                          ============      ============

                            See notes to financial statements.

</TABLE>
<PAGE>

                                VISTA PROPERTIES
                             (A limited partnership)
                             (Debtor-in-Possession)

                          NOTES TO FINANCIAL STATEMENTS


1         INTERIM FINANCIAL INFORMATION

         The summarized  financial  information  contained  herein is unaudited;
         however, in the opinion of management, all adjustments (consisting only
         of normal recurring accruals) necessary for a fair presentation of such
         financial  information have been included.  The accompanying  financial
         statements,  footnotes and  discussions  should be read in  conjunction
         with  the  financial  statements,  related  footnotes  and  discussions
         contained in the Vista Properties (the "Partnership")  annual report on
         Form  10-K for the  year  ended  December  31,  1996.  The  results  of
         operations  for the six months ended June 30, 1997 are not  necessarily
         indicative of the results to be expected for the full year.

2         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Leases

         The  Partnership  accounts  for all of its leases  under the  operating
         method. Under this method, revenue is recognized as rentals become due,
         except  for  stepped   leases  where   revenue  is   recognized   on  a
         straight-line basis over the life of the lease.

         Depreciation

         Depreciation is computed using the straight-line method over the useful
         life of the  property,  which is estimated to be 40 years for buildings
         and 20 years for improvements. The cost of the buildings represents the
         initial cost of the buildings to the Partnership  plus  acquisition and
         closing  costs.  Repairs and  maintenance  are charged to operations as
         incurred.

         Write-down for impairment

         A  write-down  for  impairment  is  established  based upon a quarterly
         review of each of the properties in the Partnership's  portfolio.  Real
         estate  property  is  carried  at the  lower  of  depreciated  cost  or
         estimated fair value. In performing this review,  management  considers
         the estimated  fair value of the property  based upon the  undiscounted
         future  cash  flows,  as  well as  other  factors  such as the  current
         occupancy, the prospects for the property and the economic situation in
         the region where the property is located. Because this determination of
         estimated fair value is based upon future economic events,  the amounts
         ultimately  realized upon a disposition may differ  materially from the
         carrying value.

         A write-down is inherently  subjective  and is based upon  management's
         best estimate of current  conditions  and  assumptions  about  expected
         future conditions. The Partnership may provide for losses in the future
         and such provisions could be material.

         A write-down  for  impairment was not required for the six months ended
         June 30, 1997 and 1996.
<PAGE>
                                VISTA PROPERTIES
                             (A limited partnership)
                             (Debtor-in-Possession)

                          NOTES TO FINANCIAL STATEMENTS

         Recently issued accounting pronouncement

         The Financial  Accounting Standards Board issued Statement of Financial
         Accounting  Standards No. 128, "Earnings per Share" in February,  1997.
         This pronouncement  establishes  standards for computing and presenting
         earnings  per  share,  and is  effective  for  the  Partnership's  1997
         year-end  financial  statements.   The  Partnership's   management  has
         determined that this standard will have no impact on the  Partnership's
         computation  or   presentation  of  net  income  per  unit  of  limited
         partnership interest.

3         PETITION FOR RELIEF UNDER CHAPTER 11

         On June 19,  1997,  the  Partnership  filed a  voluntary  petition  for
         reorganization  under Chapter 11 of the  Bankruptcy  Code in the United
         States  Bankruptcy Court for the Northern  District of California.  The
         filing of this petition acts as a stay of the foreclosure proceeding on
         the New York Property  (Note 6). The  bankruptcy  petition was filed to
         enable the  Partnership  to reorganize its affairs under the protection
         of Chapter 11 and to propose and confirm a plan of reorganization.  The
         Bankruptcy  Court has entered  orders  approving  the  retention by the
         Partnership  of  reorganization  counsel and  accountants.  Pursuant to
         order of the Bankruptcy Court dated June 26, 1997, the president of the
         management  general partner of the Partnership,  has been designated as
         the  individual  responsible  for the  duties  and  obligations  of the
         Partnership,  as debtor and debtor in possession in the  reorganization
         proceeding.


4         CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES

         IR  Vista  Realty  Corp.,   the  Management   General  Partner  and  IR
         Acquisitions Corp., the Acquisitions  General Partner, are wholly-owned
         subsidiaries  of Presidio  Capital  Corp.  ("Presidio").  The Associate
         General Partner is Asta Associates Limited  Partnership,  whose general
         partner is Z Square G Partners II, a general  partnership  comprised of
         former officers and directors of Integrated.  Affiliates of the general
         partners are also engaged in businesses  related to the acquisition and
         operation  of  real  estate.  Presidio  is also  the  parent  of  other
         corporations  that are or may be in the future  engaged  in  businesses
         that may be in competition with the Partnership. Accordingly, conflicts
         of  interest  may  arise  between  the   Partnership   and  such  other
         businesses.

         Wexford  Management  LLC  ("Wexford"),  has  been  engaged  to  perform
         administrative  services  to  Presidio  and  its  direct  and  indirect
         subsidiaries as well as the Partnership.  For the six months ended June
         30, 1997,  reimbursable expenses to Wexford by the Partnership amounted
         to $12,450.  Wexford is engaged to perform  similar  services for other
         entities which may be in competition with the Partnership.
<PAGE>
                                VISTA PROPERTIES
                             (A limited partnership)
                             (Debtor-in-Possession)

                          NOTES TO FINANCIAL STATEMENTS

         The  Partnership  has entered into a supervisory  management  agreement
         with IR Vista Management Corp.  ("Vista  Management"),  an affiliate of
         the Management and Acquisitions  General  Partners,  to perform certain
         functions   relating  to  the  management  of  the  properties  of  the
         Partnership. A portion of the property management fees payable to Vista
         Management were paid to an unaffiliated  local management company which
         was  engaged  to  provide  local  property  management  for  one of the
         Partnership's  properties.  For the  quarters  ended June 30,  1997 and
         1996,  $148,936  and  $161,278,   respectively,  was  earned  for  such
         services,  of which  $98,885 and  $60,000 was paid to the  unaffiliated
         local management company for the quarters ended June 30, 1997 and 1996,
         respectively.  Fees  are not  charged  for  properties  net  leased  to
         tenants.  The amount due to affiliates of $1,969,628  and $1,889,508 at
         June  30,  1997  and  December  31,  1996,   respectively,   represents
         management  fees payable to Vista  Management for management  services.
         The Management  General Partner  suspended payment of these fees during
         1991 in  order  to slow  the  depletion  of the  Partnership's  working
         capital reserve balance.

         The general partners are entitled to receive 1% of  distributable  cash
         from the  operations,  sales,  financing  and working  capital  reserve
         account,  and an  allocation  of 1% of the  net  income  or loss of the
         Partnership.  Such amounts  allocated  and  distributed  to the general
         partners shall be apportioned  10% to the Management  General  Partner,
         10%  to the  Acquisitions  General  Partner  and  80% to the  Associate
         General Partner.

         For the quarters ended June 30, 1997 and 1996,  the Management  General
         Partner,  Acquisitions  General  Partner and Associate  General Partner
         were  allocated  net losses of $2,966,  $2,966 and  $23,729 and $1,933,
         $1,933 and $15,461, respectively.

5         REAL ESTATE

         Real estate is summarized as follows:
<TABLE>
<CAPTION>
                                                     June 30,       December 31,
                                                       1997             1996
                                                 -------------     ------------
<S>                                              <C>               <C>

                Buildings and improvements       $ 145,179,953     $144,472,117
                Accumulated depreciation           (53,027,440)     (50,581,846)
                                                 -------------     ------------

                                                 $  92,152,513     $ 93,890,271
                                                 =============     ============ 
</TABLE>
<PAGE>
                                VISTA PROPERTIES
                             (A limited partnership)
                             (Debtor-in-Possession)

                          NOTES TO FINANCIAL STATEMENTS

 
         The net lease  tenant at the  Irving,  Texas  property,  a three  story
         office building, assumed the lease after a default by the Partnership's
         original  tenant.  The annual net lease  rental was reduced to $459,000
         from $776,000.  Due to the soft market conditions in the Irving,  Texas
         area and the estimated net realizable value of the building, management
         recorded  a  write-down  for  impairment  of  $3,000,000  during  1991.
         Management has determined that no additional  write-down for impairment
         is required for the quarters ended June 30, 1997 or 1996.
 
        Florida property foreclosure

         On  January  12,  1996,  the  Partnership  entered  into  a  Settlement
         Agreement (the  "Settlement  Agreement") with AEW #2 Trust ("AEW") with
         respect to a pending  foreclosure  of the mortgage  loan made by AEW to
         the Partnership in the original  principal  amount of $21,360,000  (the
         "Loan"). The Loan was secured by a first mortgage lien on the leasehold
         estate on a parcel of land  located in Orange  County  Florida  and the
         improvements located thereon (the "Florida Property").

         The Loan became due and payable in accordance with its terms on October
         26, 1995 and the Loan was not  satisfied  on such date.  As of November
         30, 1995, the outstanding indebtedness of the Loan was comprised of the
         principal  amount of  $21,360,000  plus  accrued  and  unpaid  interest
         thereon in the amount of  $14,454,058.  The amount of such  outstanding
         indebtedness  exceeded the fair market value of the Florida Property as
         of such date. The Lender  commenced an action to foreclose its mortgage
         on December 7, 1995 and a certificate of title was issued in connection
         with such action on February 26, 1996.

         Under the terms of the Settlement  Agreement,  AEW agreed to pay to the
         Partnership a fee not to exceed $400,000 and to bear  substantially all
         costs and  expenses  relating to the  consummation  of the  foreclosure
         action  provided  the  Partnership  agreed  to  cooperate  with  AEW in
         connection  with  the  foreclosure   action.   On  May  21,  1996,  the
         Partnership received $306,572 with respect to this fee.

         As a result of the above transaction, the Partnership recognized during
         the six months ended June 30, 1996, a gain from the  foreclosure of the
         Florida   Property  of   $19,429,198   ($207.25  per  unit  of  limited
         partnership interest).

         New York property

         The holder of the mortgage  loan on the New York  property has asserted
         that such  mortgage  loan  became due and  payable  during 1996 and the
         lender is currently  attempting  to foreclose on the New York  property
         (Note 6). In order to protect its interest in the property, on June 19,
         1997 the  Partnership  filed a voluntary  petition  for  reorganization
         under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
         Court for the Northern District of California (Note 3).
<PAGE>
                                VISTA PROPERTIES
                             (A limited partnership)
                             (Debtor-in-Possession)

                          NOTES TO FINANCIAL STATEMENTS


6         MORTGAGE LOANS PAYABLE

         New York PM Note

         The New York PM Note permits the  Partnership  to defer payment of some
         or all of the interest accrued on the New York PM Note, provided, among
         other things, that the Partnership does not defer interest in an amount
         that any time exceeds the  aggregate  debt service that would have been
         due for the immediately  preceding 84-month period. In August 1996, the
         Partnership  received  notice  from the  holder of the New York PM Note
         asserting that the interest  deferred  exceeded the permitted  deferral
         and that the full debt  service  payment for  interest  accrued  during
         August 1996 (in the amount of  $1,239,700)  would be due and payable on
         September 1, 1996 and that, if such payment was not  received,  the New
         York Lender would be entitled to accelerate the indebtedness secured by
         the New York  Mortgage and exercise all available  remedies  (including
         the  commencement  of  a  foreclosure   action  against  the  New  York
         Property).  The Partnership  did not have sufficient  funds to make the
         requested  payment on September 1, 1996,  and, in October 1996, the New
         York  Lender  declared  the  entire  outstanding  principal  balance of
         $90,160,000,   together  with  all  accrued  and  unpaid   interest  of
         approximately $104,882,000, immediately due and payable, and thereafter
         commenced an action to foreclose upon the New York Property.  The total
         outstanding  indebtedness (including related deferred interest payable)
         significantly  exceeds the estimated  fair market value of the New York
         Property.

         The  Partnership  was notified on November 12, 1996 that on November 7,
         1996 the  Supreme  Court of the State of New York in the  County of New
         York  appointed  Darrell  Paster,  of Ferrer,  Paster &  Enriquez  as a
         receiver of all earnings,  revenues,  rents, issues, profits and income
         with  respect  to the New York  Property  during  the  pendency  of the
         foreclosure  action.  On May 9,  1997  the  lender  moved  for  summary
         judgement on the  foreclosure  issue. On June 19, 1997, the Partnership
         filed a voluntary petition for  reorganization  under Chapter 11 of the
         Bankruptcy Code in the United States  Bankruptcy Court for the Northern
         District of  California.  The filing of this petition acts as a stay of
         the  foreclosure  proceeding.  This  bankruptcy  petition  was filed to
         enable the  Partnership  to reorganize its affairs under the protection
         of  Chapter  11 and to propose  and  confirm a plan of  reorganization.
         Consequently,  the Partnership ceased accruing interest on the New York
         PM Note as of June 19, 1997.  At a hearing  held before the  Bankruptcy
         Court on July 29, 1997, the Bankruptcy  Court denied the  Partnership's
         request to permit  the  Partnership  to  collect  and use the rents and
         other  income of the New York  Property and approved the request of the
         New York  Lender  that the  Receiver  remain in place and  continue  to
         collect  the rents and income and to manage,  maintain  and operate the
         New York Property.
<PAGE>
                                VISTA PROPERTIES
                             (A limited partnership)
                             (Debtor-in-Possession)

                          NOTES TO FINANCIAL STATEMENTS

6         MORTGAGE LOANS PAYABLE (continued)

         A foreclosure  of the New York Property would result in adverse tax and
         economic  consequences to limited partners. If the New York Property is
         foreclosed  upon,  the  Partnership   estimates  that  as  required  by
         generally  accepted   accounting   principles,   the  Partnership  will
         recognize  a gain of  approximately  $103,000,000  ($1,099  per unit of
         limited partnership  interest).  In addition, the Partnership estimates
         that  each  limited   partner   would   recognize  a  taxable  gain  of
         approximately $1,412 per unit of limited partnership interest,  with no
         cash available for  distribution to the Partners.  Any such foreclosure
         also would have a significant  impact on future operating  revenues and
         expenses and cash flow resulting from operations would be significantly
         reduced.

         Texas PM Note

         The Texas PM Note permits the  Partnership  to defer payment of some or
         all of the interest accrued on the Texas PM Note, provided, among other
         things,  that the Partnership does not defer interest in an amount that
         at any time  exceeds  $8,500,000.  The  Partnership  does not expect to
         exceed that  maximum  deferral  amount  prior to the  maturity  date in
         December  1998.  At  that  time,  unless  the  Partnership  is  able to
         refinance  the Texas  Mortgage  or agree  with the  holder of the Texas
         Mortgage (the "Texas Lender") on a restructuring of the Texas Mortgage,
         the Texas Lender may accelerate the  indebtedness  secured by the Texas
         Mortgage  and   exercise  all   available   remedies   (including   the
         commencement  of  a  foreclosure   against  the  Texas   Property).   A
         foreclosure of the Texas Mortgage  would have  significant  adverse tax
         consequences to the limited  partners of the  Partnership  with no cash
         available  for  distribution  to the limited  partners.  As of June 19,
         1997, the Partnership ceased accruing interest on the Texas PM Note. In
         June  1997,  the  Partnership  and the  Texas  Lender  entered  into an
         agreement,  pursuant to which,  among other things, the Partnership and
         the Texas Lender  agreed to the terms and  conditions  whith respect to
         the treatment of the claim of the Texas Lender against the  Partnership
         in the reorganization  proceeding under a plan of reorganization and to
         support the confirmation and vote in favor of a plan of  reorganization
         proposed  by the  Partnership  containing  the  agreed  upon  terms and
         conditions.  Additionally, under the agreement, the Texas Lender agreed
         to consent to the Partnership's use of the rent and other income of the
         Texas  Property to the extent  necessary  to make payment of the ground
         rent and  partial  interest  payments  on a monthly  basis  during  the
         pendency of the  reorganization  case,  and the  Partnership  agreed to
         grant the Texas Lender adequate protection for the Partnership's use of
         such  cash  upon  customary  terms and  conditions.  A hearing  seeking
         approval  of  the  foregoing   arrangement  will  be  held  before  the
         Bankruptcy Court on September 18, 1997.
<PAGE>
                                VISTA PROPERTIES
                             (A limited partnership)
                             (Debtor-in-Possession)

                          NOTES TO FINANCIAL STATEMENTS

6         MORTGAGE LOANS PAYABLE (continued)

         There is no assurance that the Partnership will be able to successfully
         avoid  a  foreclosure  of  the  New  York  Property,  or  refinance  or
         restructure the Texas Mortgage prior to maturity.  If both the New York
         Property and the Texas Property are foreclosed,  the Partnership  would
         lose all sources of revenue and would be forced to dissolve.

7         PARTNERS' DEFICIT

         The General  Partners  hold a 1% equity  interest  in the  Partnership.
         However,  at the inception of the  Partnership,  the General  Partners'
         equity account was credited with only the actual capital contributed in
         cash,  $39,700.  The  Partnership's  management  determined  that  this
         accounting does not appropriately reflect the Limited Partners' and the
         General  Partners'  relative  participations  in the  Partnership's net
         assets,  since it does not  reflect  the  General  Partners'  1% equity
         interest in the  Partnership.  Thus, the  Partnership  has restated its
         financial  statements to reallocate  $464,050 (1% of the gross proceeds
         raised at the  Partnership's  formation) of the partners' equity to the
         General Partners' equity account.  This reallocation was made as of the
         inception of the Partnership and all periods presented in the financial
         statements  have  been  restated  to  reflect  the  reallocation.   The
         reallocation  has no impact on the  Partnership's  financial  position,
         results of operations,  cash flows,  distributions to partners,  or the
         partners' tax basis capital accounts.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS


         Liquidity and capital resources

         All cash  flow from  properties  is  currently  held in  reserve  to be
         applied to debt service.  The Partnership uses working capital reserves
         to pay  administrative  expenses.  As of June 30, 1997,  such  reserves
         aggregated  approximately  $79,800.   Reserves,  which  were  initially
         provided  from the net  proceeds of the  Partnership's  initial  public
         offering,  increased  during  1996 as a result of the  receipt of (i) a
         cooperation  payment  (approximately  $307,000) in connection  with the
         foreclosure  of the Florida Loan and (ii) $272,000 from the  settlement
         of a claim against Integrated in Integrated's Chapter 11 proceedings.

         The  Partnership  suspended  payment of property  management fees to an
         affiliate of the  Management  General  Partner in 1991 in order to slow
         the depletion of the Partnership's working capital reserve balance. For
         the six months ended June 30, 1997,  $80,120 of fees were  deferred due
         to the  suspension  of property  management  fee  payments as described
         above.

         With the exception of the  Partnership's  working  capital  reserves of
         approximately  $79,800,  cash and cash  equivalents  for the six months
         ended June 30, 1997 are being held by the managing  agent  appointed by
         the  Receiver  prior to being  applied  to the  operations  of, and the
         Partnership's mortgage obligation on, the New York Property.

         The Partnership presently owns the Texas Property,  which is net leased
         to Showbiz Pizza Time, Inc., and the New York Property, which is leased
         to  approximately  30  tenants.  Occupancy  rates at the  Partnership's
         properties  are 100% and  99.8%  for the  Texas  Property  and New York
         Property,  respectively. The net lease of the Texas Property expires in
         1998. At the New York  Property,  one tenant  occupies 17% of the total
         square  footage and this lease  expires in 1997.  The  Receiver and the
         Partnership  have  agreed in  principle  on the terms of the renewal of
         such  tenant's  lease  through  the year  2007.  As of June  30,  1997,
         substantially  all of the tenants at each  property  are meeting  their
         obligations and the expiring leases are subject to renegotiation.

         The Texas Mortgage  permits the Partnership to defer payment of some or
         all of the  interest  accrued on the Texas  Mortgage,  provided,  among
         other things, that the Partnership does not defer interest in an amount
         that at any time exceeds $8,500,000. The Partnership does not expect to
         exceed that  maximum  deferral  amount  prior to the  maturity  date in
         December  1998.  At  that  time,  unless  the  Partnership  is  able to
         refinance  the Texas  Mortgage  or agree  with the  holder of the Texas
         Mortgage (the "Texas Lender") on a restructuring of the Texas Mortgage,
         the Texas Lender may accelerate the  indebtedness  secured by the Texas
         Mortgage  and   exercise  all   available   remedies   (including   the
         commencement  of a  foreclosure  against the Texas  Property).  In June
         1997, the  Partnership  and the Texas Lender entered into an agreement,
         pursuant to which,  among other things,  the  Partnership and the Texas
<PAGE>
         Liquidity and capital resources (continued)

         Lender agreed to the terms and conditions with respect to the treatment
         of the  claim  of the  Texas  Lender  against  the  Partnership  in the
         reorganization proceeding under a plan of reorganization and to support
         the confirmation and vote in favor of a plan of reorganization proposed
         by the Partnership  containing the agreed upon terms and conditions.  A
         foreclosure of the Texas Mortgage  would have  significant  adverse tax
         consequences to the limited  partners of the  Partnership  with no cash
         available  for  distribution  to the limited  partners.  As of June 19,
         1997, the Partnership ceased accruing interest on the Texas PM Note.

         The mortgage loan on the New York Property  permits the  Partnership to
         defer  payment of some or all of the  interest  accrued on the New York
         Mortgage,  provided,  among other things, that the Partnership does not
         defer interest in an amount that at any time exceeds the aggregate debt
         service that would have been due for the immediately preceding 84-month
         period. In August 1996, the Partnership received notice from the holder
         of the New York  Mortgage  that the  interest  deferred on the New York
         Mortgage exceeded the permitted deferral and that the full debt service
         payment  for  interest  accrued  during  August  1996 (in the amount of
         $1,239,700)  would be due and payable on September 1, 1996 and that, if
         such payment was not received, the New York Lender would be entitled to
         accelerate  the  indebtedness  secured  by the New  York  Mortgage  and
         exercise  all  available  remedies  (including  the  commencement  of a
         foreclosure action against the New York Property).  The Partnership did
         not have  sufficient  funds to make the payment on  September  1, 1996,
         and,  in  October  1996,  the  New  York  Lender  declared  the  entire
         outstanding principal balance of $90,160,000, together with all accrued
         and unpaid interest of approximately $104,882,000,  immediately due and
         payable,  and thereafter  commenced an action to foreclose upon the New
         York  Property.  At  such  time,  the  total  outstanding  indebtedness
         significantly  exceeded the estimated fair market value of the New York
         Property.

         The  Partnership  was  notified on or about  November  12, 1996 that on
         November  7,  1996 the  Supreme  Court of the  State of New York in the
         County  of New York  appointed  Darrell  Paster,  of  Ferrer,  Paster &
         Enriquez  as a  receiver  of all  earnings,  revenues,  rents,  issues,
         profits and income  with  respect to the New York  Property  during the
         pendency of the foreclosure action. On May 9, 1997 the lender moved for
         summary  judgement on the  foreclosure  issue.  On June 19,  1997,  the
         Partnership filed a voluntary petition for reorganization under Chapter
         11 of the Bankruptcy Code in the United States Bankruptcy Court for the
         Northern District of California.  The filing of this petition acts as a
         stay of the foreclosure proceeding.  This bankruptcy petition was filed
         to  enable  the   Partnership  to  reorganize  its  affairs  under  the
         protection  of  Chapter  11 and  to  propose  and  confirm  a  plan  of
         reorganization.  Consequently, the Partnership ceased accruing interest
         on the New York PM Note as of June 19,  1997.  At a hearing held before
         the Bankruptcy  Court on July 29, 1997, the Bankruptcy Court denied the
         Partnership's  request to permit the Partnership to collect and use the
         rents  and other  income  of the New York  Property  and  approved  the
         request of the New York  Lender that the  Receiver  remain in place and
         continue  to collect the rents and income and to manage,  maintain  and
         operate the New York Property.
<PAGE>
         Liquidity and capital resources (continued)

         A  foreclosure  of the New York  Property  would  result in adverse tax
         consequences  to  limited  partners.   If  the  New  York  Property  is
         foreclosed  upon,  the  Partnership   estimates  that  as  required  by
         generally accepted accounting  principles,  it will recognize a gain of
         approximately  $103,000,000  ($1,099  per Unit of  limited  partnership
         interest).  In addition,  the  Partnership  estimates that each limited
         partner  would  recognize a taxable  gain of  approximately  $1,412 per
         Unit, with no cash available for distribution to the partners. Any such
         foreclosure  also would have a significant  impact on future  operating
         revenues  and  expenses  and  cash  flow  from   operations   would  be
         significantly reduced.

         There is no assurance that the Partnership will be able to successfully
         avoid  a  foreclosure  of  the  New  York  Property,  or  refinance  or
         restructure  the Texas Mortgage prior to the date that the  Partnership
         will have deferred the maximum  amount of interest that may be deferred
         under the terms of the Texas  Mortgage.  If both the New York  Property
         and the Texas Property are foreclosed,  the Partnership  would lose all
         sources of revenue and would be forced to  dissolve.  See  Treatment of
         Gain or Loss on Sale or Other Disposition of Property and Tax Treatment
         of Mortgage Foreclosure at pp. 72-73 of the Prospectus.

         On January  12,  1996,  the  Partnership  entered  into the  Settlement
         Agreement with AEW with respect to a pending foreclosure of the Florida
         Loan made by AEW to the Partnership in the original principal amount of
         $21,360,000.  The Florida Loan was secured by a first  mortgage lien on
         the  leasehold  estate on a parcel of land  located  in Orange  County,
         Florida, and the improvements located thereon.

         The Florida Loan became due and payable in accordance  with its term on
         October 26, 1995 and the Florida  Loan was not  satisfied on such date.
         As of November 30, 1995, the  outstanding  indebtedness  of the Florida
         Loan was comprised of the principal  amount of $21,360,000 plus accrued
         and unpaid  interest in the amount of  $14,454,058.  The amount of such
         outstanding  indebtedness exceeded the fair market value of the Florida
         Property as of such date.  AEW  commenced  an action to  foreclose  its
         mortgage on December 7, 1995 and a  certificate  of title was issued in
         connection with such action on February 26, 1996.

         Under the terms of the Settlement  Agreement,  AEW agreed to pay to the
         Partnership  a fee in an  amount  not to  exceed  $400,000  and to bear
         substantially  all costs and expenses  relating to the  consummation of
         the foreclosure action provided the Partnership  cooperated with AEW in
         connection with the foreclosure  action.  After related  expenses,  the
         Partnership received $306,572 from AEW on May 22, 1996.

         As a result of the above transaction, the Partnership recognized during
         the six months ended June 30, 1996, a gain from the  disposition of the
         Florida   Property  of   $19,429,198   ($207.25  per  unit  of  limited
         partnership interest).
<PAGE>
         Liquidity and capital resources (continued)

         Real estate market

         The Management General Partner believes that the real estate market has
         not fully recovered from the adverse economic conditions of the 1980's,
         which caused a substantial decline in real estate values. Market values
         have been slow to recover and technological changes also may reduce the
         office  space  needs of many  users.  As a  result,  the  Partnership's
         potential  for  realizing  the  full  value  of its  investment  in its
         properties is at risk.

         Write-down for impairment

         A  write-down  for  impairment  is  established  based upon a quarterly
         review of each of the properties in the Partnership's  portfolio.  Real
         estate  property  is  carried  at the  lower  of  depreciated  cost  or
         estimated fair value. In performing this review,  management  considers
         the estimated  fair value of the property  based upon the  undiscounted
         future  cash  flows,  as  well as  other  factors  such as the  current
         occupancy, the prospects for the property and the economic situation in
         the region where the property is located. Because this determination of
         estimated fair value is based upon future economic events,  the amounts
         ultimately  realized upon a disposition may differ  materially from the
         carrying value.

         The write-down is inherently  subjective and is based upon management's
         best estimate of current  conditions  and  assumptions  about  expected
         future conditions. The Partnership may provide for losses in the future
         and such provisions could be material.

         Results of operations

         The  Partnership's  net loss  increased for the three months ended June
         30, 1997  compared to the same period in the prior year,  primarily due
         to lower  rental  revenue  and other  income and higher  mortgage  loan
         interest and professional  fees (legal) incurred in connection with the
         reorganization.

         The  Partnership  experienced  a net loss for the six months ended June
         30, 1997  compared to net income for the same period in the prior year,
         primarily  due  to a  gain  on  foreclosure  of  the  Florida  Property
         (foreclosed upon in February 1996), recorded in the earlier period.

         Revenues  decreased  for the three and six months  ended June 30, 1997,
         compared to the same periods in the prior year,  primarily due to lower
         rental  income from the New York Property and cash proceeds of $273,000
         received  in April  1996  relating  to proofs  of  claims  filed in the
         Integrated bankruptcy.

         Costs and  expenses  increased  for the three and six months ended June
         30,  1997 for the same period in the prior  year,  primarily  due to an
         increase in  professional  fees (legal) and receiver  fees  incurred in
         connection with the reorganization.
<PAGE>
         Results of operations (continued)

         Inflation

         Inflation   is  not   expected  to  have  a  material   impact  on  the
         Partnership's  operations and financial  position  during its period of
         ownership of its properties.  However,  leases at the New York property
         generally have  provisions  which provide for rent increases to reflect
         increases in certain operating expenses and real estate taxes.
<PAGE>
PART II - OTHER INFORMATION




ITEM 1.  LEGAL PROCEEDINGS


(a)      See  Management's  Discussion  and Analysis of Financial  Condition and
         Results of Operations and Notes to Financial  Statements - Note 5 which
         is herein incorporated by reference.


ITEM 5.  OTHER INFORMATION

(a)      On July 25, 1997, Wexford Management LLC ("Wexford"), the administrator
         for Presidio Capital Corp. ("Presidio",  the parent company of IR Vista
         Realty Corp. and IR Acquisitions  Corp. the Management and Acquisitions
         General Partners,  respectively,  of Vista Properties,  received notice
         from Presidio Holding Company, LLC, which stated that it was the holder
         of 63% of the outstanding Class A common shares of Presidio and that it
         was seeking to remove the three current Class A directors and replacing
         them with Edward Scheetz, David Hamamoto and David King effective as of
         12:00 p.m. on September 2, 1997. There exists  substantial  doubt as to
         the effectiveness of such notice. On August 15, 1997,  Presidio applied
         to the Judge of the High  Court in the  British  Virgin  Islands  for a
         declaration that the written  resolution of Presidio Holding LLC, dated
         July 25, 1997 was invalid and of no effect insofar as it purports to be
         a written resolution of the Class A Members of Presidio.

         As of August 18, 1997, there have been no changes in the composition of
         the officers and directors of the general  partners.  In addition,  the
         administrative services agreement with Wexford remains in effect and is
         scheduled to terminate in November 1997.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K


(a)       Exhibits:    None.

          Reports on Form 8-K:   None.
<PAGE>

                                   SIGNATURES


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



                                         VISTA PROPERTIES

                                         By:    IR Vista Realty Corp.
                                                Management General Partner




Dated:     August 18, 1997               By:    /s/ Frederick Simon
                                                -------------------
                                                Frederick Simon
                                                Director and President
                                                (Principal Executive Officer)



Dated:     August 18, 1997               By:    /s/ Jay L. Maymudes
                                                -------------------
                                                Jay L. Maymudes
                                                Vice President, Secretary and
                                                Treasurer
                                                (Principal Financial Officer and
                                                Principal Accounting Officer)

<TABLE> <S> <C>

<ARTICLE> 5
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-END>                               JUN-30-1997
<CASH>                                       5,183,096
<SECURITIES>                                         0
<RECEIVABLES>                               10,958,558
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0
<PP&E>                                               0
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                             108,294,167
<CURRENT-LIABILITIES>                          672,184
<BONDS>                                    222,120,337
                                0
                                          0
<COMMON>                                             0
<OTHER-SE>                               (116,531,244)
<TOTAL-LIABILITY-AND-EQUITY>               108,294,167
<SALES>                                              0
<TOTAL-REVENUES>                             9,860,719
<CGS>                                                0
<TOTAL-COSTS>                                4,122,891
<OTHER-EXPENSES>                             3,881,281
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                           8,724,188
<INCOME-PRETAX>                            (6,867,641)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                               (6,867,641)
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                        0
        

</TABLE>


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