MCNEIL REAL ESTATE FUND XXIV LP, 10-K405, 1998-03-30

MCNEIL REAL ESTATE FUND XXIV LP
10-K405, 1998-03-30
REAL ESTATE

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

FORM 10-K405

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

For the fiscal year ended December 31, 1997
-----------------------------------------------

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

For the transition period from ______________ to_____________

Commission file number 0-14267
--------

McNEIL REAL ESTATE FUND XXIV, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

California 74-2339537
- --------------------------------------------------------------------------------
(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 ]

All of the registrant's 40,000 outstanding limited partnership units are held by
non-affiliates. 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 37

TOTAL OF 38 PAGES
<PAGE>
PART I

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

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

McNeil Real Estate Fund XXIV, L.P. (the "Partnership"), formerly known as
Southmark Equity Partners, Ltd., was organized on October 19, 1984 as a limited
partnership under the provisions of the California Revised Limited Partnership
Act to acquire and operate commercial and residential properties. 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
General Partner was elected at a meeting of limited partners on March 30, 1992,
at which time an amended and restated partnership agreement (the "Amended
Partnership Agreement") was adopted. Prior to March 30, 1992, the general
partner of the Partnership was Southmark Investment Group, Inc. (the "Original
General Partner"), a wholly-owned subsidiary of Southmark Corporation
("Southmark"). The principal place of business for the Partnership and the
General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240.

On January 8, 1985, the Partnership registered with the Securities and Exchange
Commission ("SEC") under the Securities Act of 1933 (File No. 2-93979) and
commenced a public offering for sale of $40,000,000 of limited partnership units
("Units"). The Units represent equity interests in the Partnership and entitle
the holders thereof to participate in certain allocations and distributions of
the Partnership. The sale of Units closed on December 15, 1985 with 40,000 Units
sold at $1,000 each, or gross proceeds of $40,000,000 to the Partnership. The
Partnership subsequently filed a Form 8-A Registration Statement with the SEC
and registered its Units under the Securities Exchange Act of 1934 (File No.
0-14267).

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, the General
Partner nor the Original General Partner were included in the filing.
Southmark's reorganization plan became effective August 10, 1990. Under the
plan, most of Southmark's assets, which included Southmark's interests in the
Original General Partner, were sold or liquidated for the benefit of creditors.

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

On February 14, 1991, pursuant to the asset purchase agreement as amended on
that date, McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of
McNeil, acquired the assets relating to the property management and partnership
administrative business of Southmark and its affiliates and commenced management
of the Partnership's properties pursuant to an assignment of the existing
property management agreements from the Southmark affiliates.

<PAGE>
On March 30, 1992, the limited partners approved a restructuring proposal that
provided for (i) the replacement of the Original General Partner with a new
general partner, McNeil Partners, L.P.; (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; (iii) the approval of an amended
property management agreement with McREMI, the Partnership's property manager;
and (iv) the approval to change the Partnership's name to McNeil Real Estate
Fund XXIV, L.P. Under the Amended Partnership Agreement, the Partnership began
accruing an asset management fee, retroactive to February 14, 1991, which is
payable to the General Partner. For a discussion of the methodology for
calculating the asset management fee, see Item 13 Certain Relationships and
Related Transactions. The proposals approved at the March 30, 1992 meeting were
implemented as of that date.

Concurrent with the approval of the restructuring, the General Partner acquired
from Southmark and its affiliates, for aggregate consideration of $43,193, (i)
the right to receive payment on the advances owing from the Partnership to
Southmark and its affiliates in the amount of $642,581, and (ii) the general
partner interest of the Original General Partner. None of the Units are owned by
the General Partner or its affiliates.

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

General:

The Partnership is engaged in the ownership, operation and management of
residential and retail real estate. At December 31, 1997, the Partnership owned
seven revenue-producing properties as described in Item 2 - Properties. Six of
the Partnership's seven properties were acquired in transactions involving
payment of all cash to the sellers. A large portion of the Partnership's rental
revenue is attributable to one property, Southpointe Plaza Shopping Center.
Southpointe Plaza Shopping Center contributed approximately 25% of the total
Partnership rental revenue in 1997, 27% in 1996 and 30% in 1995.

The Partnership does not directly employ any personnel. The General Partner
conducts the business of the Partnership directly and through its affiliates.
The Partnership reimburses affiliates of the General Partner for such services
rendered in accordance with the Amended Partnership Agreement. See Item 8 - Note
2 "Transactions With Affiliates."

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

Business Plan:

<PAGE>
a purchaser in any of the transactions contemplated above. Any transaction will
be subject to certain conditions including (i) approval by the limited partners
of the Partnership, and (ii) receipt of an opinion from an independent financial
advisory firm as to the fairness of the consideration received by the
Partnership pursuant to such transaction. Finally, there can be no assurance
that any transaction will be consummated, or as to the terms thereof.

The Partnership has placed Island Plaza, Southpointe Plaza and Springwood Plaza
on the market for sale effective April 1, 1996, October 1, 1996 and August 1,
1997, respectively. The Partnership has received offers from non-affiliates to
purchase Island Plaza for $1.85 million and Southpointe Plaza for $6.8 million.

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 incidental 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 the competitive conditions at each of the
Partnership's properties.

Forward-Looking Information:

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

Environmental Matters:

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

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 $150 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 $268.13 per unit.
In addition High River made unsolicited tender offers for certain other
partnerships controlled by the General Partner. The Partnership recommended that
the limited partners reject the tender offers made with respect to the
Partnership and not tender their Units. The General Partner believes that as of
January 31, 1998, High River has purchased approximately 9% 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.

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

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

The following table sets forth the real estate investment portfolio of the
Partnership at December 31, 1997. All of the buildings and the land on which
they are located are owned by the Partnership in fee and are unencumbered by
mortgage indebtedness, with the exception of Southpointe Plaza Shopping Center,
which is subject to a first lien deed of trust as set forth more fully in Item 8
- - Note 5 - "Mortgage Note Payable." See also Item 8 - Note 4 - "Real Estate
Investments" and 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 1997 Date
Property Description of Property Debt Property Taxes Acquired
- -------- ----------- ----------- ---- -------------- --------
Real Estate Investments:
<S> <C> <C> <C> <C> <C>
Pine Hills Apartments
Livingston, TX 128 units $ 2,419,669 $ - $ 39,163 10/85

Riverbay Plaza Retail Center
Riverview, FL 73,065 sq. ft. 5,040,544 - 64,985 4/85

Sleepy Hollow Apartments
Cleveland, TX 112 units 2,570,878 - 63,537 8/85

Towne Center Retail Center
Derby, KS 94,320 sq. ft. 1,366,827 - 33,758 7/85
------------ ------------ ------------
$ 11,397,918 $ - $ 201,443
============ ============ ============
Assets Held for Sale:

Island Plaza Retail Center
Ft. Myers, FL 60,076 sq. ft. $ 1,810,259 $ - $ 40,481 4/85

Southpointe Plaza Retail Center
Sacramento, CA 83,506 sq. ft. 6,433,611 5,293,017 92,272 11/85

Springwood Plaza Retail Center
Dellwood, MO 88,323 sq. ft. 2,691,777 - 78,915 9/85
----------- ------------ ------------
$ 10,935,647 $ 5,293,017 $ 211,668
============ ============ ============
</TABLE>

- ---------------------------------------
Total: Apartments - 240 units
Retail Centers - 399,290 sq. ft.

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

<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
-------------- --------------- -------------- ------------- ----------

Real Estate Investments:
<S> <C> <C> <C> <C> <C>
Pine Hills
Occupancy Rate............ 98% 94% 99% 99% 98%
Rent Per Square Foot...... $7.10 $6.93 $6.76 $6.44 $6.06

Riverbay Plaza
Occupancy Rate............ 100% 94% 94% 92% 88%
Rent Per Square Foot...... $7.97 $7.15 $6.85 $8.55 $7.03

Sleepy Hollow
Occupancy Rate............ 100% 92% 100% 99% 95%
Rent Per Square Foot...... $7.24 $7.14 $7.32 $6.91 $6.76

Towne Center
Occupancy Rate............ 56% 100% 100% 100% 53%
Rent Per Square Foot...... $3.30 $3.21 $3.59 $3.21 $2.93

Assets Held for Sale:

Island Plaza
Occupancy Rate............ 81% 86% 79% 80% 84%
Rent Per Square Foot...... $7.25 $6.45 $6.20 $7.09 $7.56

Southpointe Plaza
Occupancy Rate............ 88% 83% 97% 90% 86%
Rent Per Square Foot...... $12.32 $13.46 $14.18 $14.35 $13.41

Springwood Plaza
Occupancy Rate............ 87% 96% 80% 72% 80%
Rent Per Square Foot...... $5.95 $6.03 $4.49 $4.59 $4.96
</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 other 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:

Pine Hills
- ----------

Pine Hills is a two-story apartment community located in the small town of
Livingston, approximately 60 miles north of Houston, Texas. There is no
comparable competition within the area at present, however there is an abundance
of affordable alternative housing such as mobile homes and rental houses.
Although the property is located on a busy thoroughfare near an interstate
highway, visibility is poor as the property frontage is limited to a driveway
which leads to the main entrance. The vacant land in front of Pine Hills is
currently on the market for sale. If the property is developed, it could have an
impact on Pine Hills' future performance. The Partnership expects to maintain
occupancy in the mid 90% range in 1998.

Riverbay Plaza
- --------------

Riverbay Plaza is a single-story retail shopping center located at the busiest
intersection of a rural area near Riverview, Florida. It is anchored by a
grocery store and a drugstore and there are two out parcels in front of the
center that draw customers to the center. The Partnership recently renovated and
expanded the grocery anchor tenant's space. Currently, there is only one
competing shopping center in the area, and it is not as well maintained as
Riverbay Plaza. There are currently two proposed shopping center developments
within five miles of Riverbay Plaza. Any future development is not expected to
have a significant impact on the property due to the high occupancy rates in the
area and the renovation and expansion of the grocery anchor tenant's space. The
Partnership expects to maintain occupancy in the high 90% range in 1998.

Sleepy Hollow
- -------------

Sleepy Hollow is a two-story apartment community located in the small town of
Cleveland, approximately 30 miles north of Houston, Texas. Although the property
is located on a busy thoroughfare approximately three miles from an interstate
highway, visibility is poor as the property frontage is limited to a driveway
which leads to the main entrance. The driveway is shared with a comparable
apartment community that completed exterior renovations, resulting in a decrease
in Sleepy Hollow's occupancy in 1996. Occupancy improved in 1997 after Sleepy
Hollow completed its own exterior upgrades. A new luxury apartment community
opened in 1997 and another community is scheduled to open in early 1998. In
addition, low interest rates and the availability of affordable alternative
housing such as mobile homes and rental houses have softened the local real
estate market. The Partnership expects to maintain occupancy in the low 90%
range in 1998 by offering discounts and concessions to tenants.

<PAGE>
Towne Center
- ------------

Towne Center is a retail strip shopping center located in a suburb 10 miles
south of Wichita, Kansas. The property is one of five strip shopping centers
located in Derby, and it is by far the largest. In 1994, the center became 100%
occupied due to the leasing of a large space that comprised 42% of the leasable
area and had been vacant for several years. The lease on this space expired in
1997 and was not renewed. Although demand for retail space in Derby is limited,
space available is also limited and smaller spaces are not difficult to lease.
However, since there is a shortage of tenants requiring large spaces, management
is currently investigating the possibility of dividing the large vacated space
into three smaller spaces. The Partnership anticipates increasing occupancy to
the low 70% range by the end of 1998. Management has concluded that, based on
the projected future cash flows of the property, no impairment of value exists.

Assets Held for Sale:

Island Plaza
- ------------

Island Plaza is a 60,076 square foot, single-story retail strip shopping center
located near a major intersection of a suburban market in Ft. Myers, Florida.
The property is set back from its frontage road behind three out parcels. The
center was anchored by a grocery chain which occupied 30,800 square feet. Two
new grocery-anchored shopping centers were developed within the area and have
brought strong competition to Island Plaza. The competitors' grocery anchors
occupy approximately 65,000 square feet--more than twice the square footage of
Island Plaza's anchor. As a result, the grocery anchor tenant at Island Plaza
filed for reorganization under the U.S. bankruptcy laws. In order to keep the
anchor open and maintain the viability of Island Plaza, it was necessary to
negotiate a modification of the lease during 1995, resulting in a reduction in
rent. In 1997, the anchor tenant vacated Island Plaza. Although the prior anchor
is continuing to pay rent at the higher pre-bankruptcy rate, the property
currently does not have an anchor tenant to draw customers to the shopping
center. Additionally, road construction completed during 1995 moved the flow of
traffic away from Island Plaza toward the two new shopping centers previously
described.

In 1998, the Partnership will market the vacant anchor space to attract a new
traffic-producing anchor tenant. Management will continue to maintain the
current tenants and renew any leases as they come due. Leases for tenants
occupying 21% of the shopping center will expire in 1998, and several of these
leases will be renewed at lower rates to accommodate the reduction in shoppers
at the center. The Partnership placed Island Plaza on the market for sale
effective April 1, 1996 and has received an offer from a non-affiliate to
purchase the center for $1.85 million. Based on this offer, the Partnership
recorded a $220,000 write-down for impairment of value during the fourth quarter
of 1997 to record the shopping center at its fair value less costs to sell.

<PAGE>
Southpointe Plaza
- -----------------

Southpointe Plaza is a retail strip shopping center located in the southern
quadrant of Sacramento, California. The property is easily accessible and highly
visible from the highway. The declining economic conditions in the adjacent
neighborhood have resulted in increased criminal activity. The center has strong
anchor tenants which, while doing well, seem to be destination stores and do not
generate a lot of foot traffic for the center. Upscale shoppers prefer to shop
at the new shopping centers built to the south of the property, adjacent to
newer housing. Occupancy at the center improved in 1997, however management
reduced rents for tenants who were paying rents above market. The Partnership
anticipates increasing occupancy to the mid 90% range by the end of 1998 through
aggressive leasing by an unaffiliated real estate brokerage firm.

Springwood Plaza
- ----------------

Springwood Plaza is a multi-leveled strip shopping center located in a suburb of
St. Louis, Missouri. The center is anchored by a popular local grocery chain and
contains fifteen other retail spaces. The area surrounding the property has been
in a slow state of decline for the past few years. Occupancy, which had declined
in 1994, increased in 1995 and 1996 due to capital improvements made to improve
the appearance of the center. Most of the comparable properties in the area are
superior to Springwood Plaza. However, with continued attention to the
appearance of the property and rental rates lower than the newer centers in the
area, management expects to maintain occupancy in the low to mid 90% range in
1998.

The following schedule shows lease expirations for each of the Partnership's
commercial properties for 1998 through 2007:
<TABLE>
<CAPTION>
Number of Annual % of Gross
Expirations Square Feet Rent Annual Rent
----------- ----------- ------------- -----------
Real Estate Investments:
<C> <C> <C> <C> <C>
Riverbay Plaza
1998 3 3,281 $ 20,140 4%
1999 1 755 7,550 2%
2000 4 8,720 69,027 14%
2001 - - - -
2002 1 1,201 13,812 3%
2003 1 1,200 11,400 2%
2004 2 41,197 258,726 54%
2005 - 2007 - - - -

Towne Center
1998 4 11,087 $ 65,269 26%
1999 5 9,229 62,911 25%
2000 2 2,992 17,764 7%
2001 1 2,768 15,584 6%
2002 2 25,660 91,736 36%
2003 - 2007 - - - -

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Number of Annual % of Gross
Expirations Square Feet Rent Annual Rent
----------- ----------- ------------- -----------
Assets Held for Sale:
<C> <C> <C> <C> <C>
Island Plaza
1998 7 9,817 $ 80,236 21%
1999 2 3,415 28,672 7%
2000 3 3,250 22,575 6%
2001 - - - -
2002 1 2,370 16,590 4%
2003 - - - -
2004 1 30,800 241,032 62%
2005 - 2007 - - - -

Southpointe Plaza
1998 3 6,512 $ 88,494 10%
1999 3 5,488 70,877 8%
2000 2 3,872 46,522 5%
2001 3 7,382 77,740 9%
2002 7 24,408 294,171 34%
2003 2 19,848 182,487 21%
2004 1 1,304 15,648 2%
2005 - 2006 - - - -
2007 1 1,872 45,000 5%

Springwood Plaza
1998 2 3,284 $ 26,840 7%
1999 4 54,335 273,537 67%
2000 4 7,161 49,866 12%
2001 2 4,475 32,960 8%
2002 1 7,100 26,625 6%
2003 - 2007 - - - -
</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
- ---------- -------------- ------------ ----------

Real Estate Investments:

Riverbay Plaza
- --------------
<S> <C> <C> <C>
Grocery Store 40,297 $ 248,250 2004
Drugstore 13,500 101,250 2042

Towne Center
- ------------

Grocery Store 22,660 $ 61,616 2002
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Nature of
Business Square Footage Lease
Use Leased Annual Rent Expiration
- --------- -------------- ----------- ----------
Assets Held for Sale:

Island Plaza
- ------------
<S> <C> <C> <C>
Grocery Store 30,800 $ 241,032 2004

Southpointe Plaza
- -----------------

Sporting Goods 10,000 $ 50,000 2002
Toy Store 14,850 95,098 2003

Springwood Plaza
- ----------------

Grocery Store 46,558 $ 217,679 1999

</TABLE>

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

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

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

<PAGE>
in a course of conduct to prevent the acquisition of Units by an affiliate of
Carl Icahn by disseminating purportedly false, misleading and inadequate
information. Plaintiffs further allege that Defendants acted to advance their
own personal interests at the expense of the Partnerships' public unit holders
by failing to sell Partnership properties and failing to make distributions to
unitholders.

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

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

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 3,258 as of January 31, 1998

(C) Distributions paid to limited partners totaled $500,000 in 1997 and
$750,016 in 1996. No distributions were paid to the General Partner in
1997 or 1996. During the last week of March 1998, the Partnership
distributed approximately $1,500,000 to the limited partners of record
as of March 1, 1998. See Item 7 - Management's Discussion and Analysis
of Financial Condition and Results of Operations, and Item 8 Note 1 -
"Organization and Summary of Significant Accounting Policies -
Distributions."

<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 1997 1996 1995 1994 1993
- ------------------ ------------- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Rental revenue............... $ 4,186,633 $ 4,136,447 $ 4,058,503 $ 4,127,396 $ 3,903,950
Write-down for impairment
of real estate (220,000) (700,000) (1,500,085) - -
Net income (loss)............ 430,179 (608,182) (1,694,787) (65,511) (30,846)

Net income (loss) per limited
partnership unit.......... $ 10.65 $ (15.05) $ (41.95) $ (1.62) $ (.76)
============ ============ ============= ============ ============

Distributions per limited
partnership unit.......... $ 12.50 $ 18.75 $ - $ - $ -
============ =========== ============= ============ ============

As of December 31,
Balance Sheets 1997 1996 1995 1994 1993
- -------------- ------------- ------------- -------------- ------------- -------------
Real estate investments, net... 11,397,918 $ 12,971,315 $ 22,816,356 $ 25,251,693 $ 25,836,338
Assets held for sale........... 10,935,647 8,408,672 - - -
Total assets................... 25,301,732 23,771,150 25,912,389 27,674,971 28,067,428
Mortgage note payable.......... 5,293,017 5,421,763 5,538,527 5,660,558 5,874,740
Partners' equity............... 17,911,284 17,981,105 19,339,303 21,034,090 21,099,601

</TABLE>

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

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

The Partnership was formed to engage in the business of acquiring and operating
revenue-producing real properties and holding the properties for investment.
Since completion of its capital formation and property acquisition phases in
1985, when it completed the purchase of seven properties, the Partnership has
operated its properties for production of income.

<PAGE>
Island Plaza, a retail strip shopping center located in Ft. Myers, Florida, has
experienced strong competition from two grocery-anchored shopping centers in the
area. The competitors' grocery anchors occupy more than twice the square footage
of Island Plaza's anchor. As a result, the grocery anchor tenant at Island Plaza
filed for reorganization under the U.S. bankruptcy laws. In order to keep the
anchor open and maintain the viability of Island Plaza, it was necessary to
negotiate a modification of the lease during 1995, resulting in a reduction in
rent. Additionally, road construction completed during 1995 moved the flow of
traffic away from Island Plaza toward the two new shopping centers previously
described. These events caused a decline in anticipated future cash flows that
were considered to be an impairment; accordingly, the Partnership recorded a
write-down for impairment of real estate of $1,500,085 during the fourth quarter
of 1995.

The General Partner placed Island Plaza Shopping Center on the market for sale
effective April 1, 1996 and has received an offer from a non-affiliate to
purchase the center for $1.85 million. Based on this offer, the Partnership
recorded a $220,000 write-down for impairment of value during the fourth quarter
of 1997 to record the shopping center at its fair value less costs to sell.

The General Partner placed Southpointe Plaza Shopping Center on the market for
sale effective October 1, 1996. Based on an offer from a non-affiliate to
purchase the center, the Partnership recorded a $700,000 write-down for
impairment of value during the fourth quarter of 1996 to record the shopping
center at its fair value less costs to sell.

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

1997 compared to 1996

Revenue:

Total revenue increased by $197,959 in 1997 as compared to 1996. The increase
was mainly due to a greater gain on involuntary conversion, property tax refund
and other revenue being recorded in 1997, as discussed below.

Rental revenue in 1997 increased by $50,186 as compared to 1996. The slight
increase was mainly due to increased rental rates at all of the properties
except for Southpointe Plaza where expiring leases were renewed at lower market
rates in 1997.

A gain on involuntary conversion of $149,585 was recognized in 1997 relating to
fire damage that occurred at Riverbay Plaza Shopping Center. In 1996, a $45,134
gain on involuntary conversion relating to wind and hail damage suffered at Pine
Hills Apartments was recorded.

In 1997, the assessed taxable value of Southpointe Plaza was reduced by taxing
authorities, resulting in a $39,700 refund of prior years' property taxes. The
Partnership received $20,433 in refunds of prior years' property taxes for Towne
Center Shopping Center in 1996.

In 1997, the Partnership received $30,000 in deposits forfeited by prospective
buyers of Southpointe Plaza and Island Plaza. No such income was received in
1996.

<PAGE>
Expenses:

Total expenses decreased by $840,402 in 1997 as compared to 1996. The decrease
was mainly due to a $700,000 write-down for impairment of real estate recorded
in 1996 as compared to a write-down for impairment of $220,000 in 1997. In
addition, there was a decrease in depreciation and amortization expense and
general and administrative expenses, partially offset by an increase in
utilities, as discussed below.

Depreciation and amortization expense in 1997 decreased by $281,194 in relation
to 1996. The decrease was due to Island Plaza, Southpointe Plaza and Springwood
Plaza being classified as assets held for sale by the Partnership effective
April 1, 1996, October 1, 1996 and August 1, 1997, respectively. In accordance
with the Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of," the Partnership ceased
recording depreciation on these assets at the time they were placed on the
market for sale.

In 1997, utilities increased by $31,190 as compared to 1996, mainly due to an
increase in water and sewer rates at a majority of the properties. In addition,
there was an increase in water usage at Riverbay Plaza due to the expansion of a
major tenant's space at the shopping center.

General and administrative expenses decreased by $93,903 in 1997 as compared to
1996. The decrease was mainly due to a decrease in costs incurred relating to
evaluation and dissemination of information regarding an unsolicited tender
offer. This decrease was partially offset by approximately $18,000 of costs
incurred for investor services which were paid to an unrelated third party in
1997. In 1996, such costs were paid to an affiliate of the General Partner and
were included in general and administrative - affiliates on the Statements of
Operations.

In 1997, the Partnership recorded a $220,000 write-down for impairment of Island
Plaza Shopping Center. In 1996, the Partnership recorded a $700,000 write-down
for impairment of Southpointe Plaza Shopping Center.

1996 compared to 1995

Revenue:

Total revenue increased by $90,253 in 1996 as compared to 1995. The increase was
due to an increase in rental revenue and a gain on involuntary conversion,
partially offset by decreases in interest income and property tax refunds, as
discussed below.

Rental revenue for 1996 increased slightly by $77,944 in relation to 1995. The
increase was mainly due to an approximately $136,000 increase in rental revenue
at Springwood Plaza due to an increase in occupancy in 1996. This increase was
partially offset by a decrease of approximately $60,000 at Southpointe Plaza due
to a decrease in occupancy in 1996. See Item 2 - Properties for a more detailed
analysis of occupancy and rents per square foot.

Interest income decreased by $18,116 in 1996 as compared to 1995. The decrease
was due to a lower amount of cash available for short-term investment as a
result of cash distributions paid to the limited partners in 1996.

<PAGE>
A gain on involuntary conversion of $45,134 was recognized in the first quarter
of 1996 relating to wind and hail damage suffered at Pine Hills Apartments. No
such gain was recognized in 1995.

In 1996, the Partnership received $20,433 in refunds of prior years' property
taxes for Towne Center Shopping Center. In 1995, the Partnership received
$35,142 in refunds of prior years' property taxes for Riverbay Plaza,
Southpointe Plaza and Springwood Plaza shopping centers.

Expenses:

Total expenses decreased by $996,352 in 1996 as compared to 1995. The decrease
was mainly due to a greater write-down for impairment of real estate being
recorded in 1995. In addition, there was a decrease in depreciation and
amortization and general and administrative - affiliates, partially offset by an
increase in other property operating expenses, as discussed below.

Depreciation and amortization expense for 1996 decreased by $176,093 in relation
to 1995. The decrease was due to Island Plaza and Southpointe Plaza being
classified as assets held for sale by the Partnership effective April 1, 1996
and October 1, 1996, respectively. In accordance with the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," the Partnership ceased recording depreciation on these assets
at the time they were placed on the market for sale.

Other property operating expenses increased by $110,678 in 1996 as compared to
1995. The increase was partially due to an increase in bad debts due to the
bankruptcy filing by a tenant at Southpointe Plaza. In addition, there was an
increase in amortization of leasing commissions in 1996. Two tenants at
Southpointe Plaza and one tenant at Springwood Plaza vacated prior to the
expiration of their leases, resulting in the balance of their prepaid leasing
commissions being fully amortized in 1996.

General and administrative - affiliates for 1996 decreased by $101,615 in
relation to 1995. The decrease was mainly due to a decrease in overhead expenses
allocated to the Partnership by McREMI. In addition, there was a decrease in
asset management fees as a result of a decrease in the Partnership's tangible
asset value, on which the fees are based.

In 1996, the Partnership recorded a $700,000 write-down for impairment of
Southpointe Plaza Shopping Center. In 1995, the Partnership recorded a
$1,500,085 write-down for impairment of Island Plaza Shopping Center.

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

The Partnership's primary source of cash flows is from operating activities
which generated $1,504,410 of cash through operating activities in 1997,
$1,153,592 in 1996 and $1,215,207 in 1995. The increased cash generated through
operating activities in 1997 as compared to 1996 and 1995 was mainly due to an
increase in cash received from tenants due to an increase in rental revenue and
an increase in collections of prior year receivables. In addition, there was a
decrease in cash paid to affiliates in 1997.

In 1997, the Partnership received $226,747 of net insurance proceeds for damage
caused by a fire at Riverbay Plaza Shopping Center. In 1996, the Partnership
received $75,000 of net insurance proceeds for wind and hail damage suffered at
Pine Hills Apartments.
<PAGE>
The Partnership spent $537,986, $484,810 and $432,154 on capital additions to
its real estate investments and assets held for sale in 1997, 1996 and 1995,
respectively. The increase in expenditures in 1997 in relation to 1996 and 1995
was primarily due to costs incurred at Riverbay Plaza to repair a portion of the
property destroyed by fire. This increase was partially offset by a decrease in
tenant improvements completed at Springwood Plaza Shopping Center in 1997. In
addition to the $537,986 spent in 1997, $1,622,873 of tenant improvements were
completed at Riverbay Plaza, for which the Partnership has not yet reimbursed
the tenant.

The Partnership distributed $500,000 and $750,016 of cash from operations to the
limited partners in 1997 and 1996, respectively. No distributions were paid to
the limited partners in 1995.

In 1996, the Partnership repaid $642,581 of advances from affiliates.

Short-term liquidity:

At December 31, 1997, the Partnership held cash and cash equivalents of
$2,180,029. This balance provides a reasonable level of working capital for the
Partnership's immediate needs in operating its properties.

For the Partnership as a whole, management projects positive cash flow from
operations in 1998. The Partnership has budgeted approximately $619,000 for
necessary capital improvements for all properties in 1998, which are expected to
be funded from available cash reserves or from operations of the properties. The
present cash balance is believed to provide an adequate reserve for property
operations.

In 1997, improvements totaling $1,622,873 were performed at Riverbay Plaza to
renovate and expand an anchor tenant's space. These costs were paid by the
tenant and have not yet been reimbursed by the Partnership. The Partnership has
arranged to obtain a mortgage loan secured by Riverbay Plaza to pay these costs
and expects to receive such funds in April 1998.

Additional efforts to maintain and improve partnership liquidity have included
continued attention to property management activities. The objective has been to
obtain maximum occupancy rates while holding expenses to levels necessary to
maximize cash flows. The Partnership has made capital expenditures on its
properties where improvements were expected to increase the competitiveness and
marketability of the properties.

Only one property, Southpointe Plaza Shopping Center, is encumbered with
mortgage debt. The Partnership has placed Southpointe Plaza on the market for
sale and has received an offer from a non-affiliate to purchase the center for
$6.8 million. Although the mortgage note matured in 1997, the Partnership has
continued to make regularly scheduled monthly payments on the note and plans to
continue doing so until the property can be sold. In accordance with the terms
of the mortgage note agreement, when the Partnership is in default of the terms
of the agreement, the lender can require the Partnership to make additional
payments in the amount of Southpointe Plaza's cash flows from operations.
Although to date, the lender has not required payments of such amounts, if the
lender does require their payment, all amounts would be applied to the
outstanding principal balance, per the mortgage note agreement.

During the last week of March 1998, the Partnership distributed approximately
$1,500,000 to the limited partners of record as of March 1, 1998.

<PAGE>
Long-term liquidity:

While the outlook for maintenance of adequate levels of liquidity is favorable,
should operations deteriorate and present cash resources become insufficient to
fund current needs, the Partnership would require other sources of working
capital. No such sources have been identified. The Partnership has no
established lines of credit from outside sources. Other possible actions to
resolve cash deficiencies include refinancings, deferral of capital expenditures
on Partnership properties except where improvements are expected to increase the
competitiveness and marketability of the properties, arranging financing from
affiliates or the ultimate sale of the properties.
Sales and refinancings are possibilities only.

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

<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
Page
Number
------

INDEX TO FINANCIAL STATEMENTS

Financial Statements:

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

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

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

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

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

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

Financial Statement Schedule -

Schedule III - Real Estate Investments and Accumulated
Depreciation and Amortization............................................ 32

</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 XXIV, L.P.:

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

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of McNeil Real Estate Fund XXIV,
L.P. as of December 31, 1997 and 1996, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.

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

/s/ Arthur Andersen LLP

Dallas, Texas
March 20, 1998

<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.

BALANCE SHEETS

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

ASSETS
- -------
<S> <C> <C>
Real estate investments:
Land..................................................... $ 1,624,347 $ 2,409,114
Buildings and improvements............................... 17,771,163 19,449,373
-------------- -------------
19,395,510 21,858,487
Less: Accumulated depreciation and amortization......... (7,997,592) (8,887,172)
-------------- -------------
11,397,918 12,971,315

Assets held for sale........................................ 10,935,647 8,408,672

Cash and cash equivalents................................... 2,180,029 1,615,604
Cash segregated for security deposits....................... 84,737 82,466
Accounts receivable, net of allowance for doubtful
accounts of $24,095 and $41,151 at December 31,
1997 and 1996, respectively.............................. 588,578 550,752
Prepaid expenses and other assets, net...................... 114,823 142,341
-------------- -------------
$ 25,301,732 $ 23,771,150
============== =============

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

Mortgage note payable....................................... $ 5,293,017 $ 5,421,763
Accounts payable and accrued expenses....................... 181,540 202,045
Payable to tenant........................................... 1,622,873 -
Payable to affiliates....................................... 192,735 74,343
Security deposits and deferred rental revenue............... 100,283 91,894
-------------- -------------
7,390,448 5,790,045
-------------- -------------

Partners' equity (deficit):
Limited partners - 40,000 limited partnership
units authorized and outstanding at
December 31, 1997 and 1996............................. 17,935,844 18,009,967
General Partner.......................................... (24,560) (28,862)
-------------- -------------
17,911,284 17,981,105
-------------- -------------
$ 25,301,732 $ 23,771,150
============== =============
</TABLE>

See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.

STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

For the Years Ended December 31,
----------------------------------------------------
1997 1996 1995
-------------- -------------- ---------------
<S> <C> <C> <C>
Revenue:
Rental revenue.......................... $ 4,186,633 $ 4,136,447 $ 4,058,503
Interest................................ 99,777 105,722 123,838
Gain on involuntary conversion.......... 149,585 45,134 -
Property tax refund..................... 39,700 20,433 35,142
Other revenue........................... 30,000 - -
------------- ------------- --------------
Total revenue......................... 4,505,695 4,307,736 4,217,483
------------- ------------- --------------

Expenses:
Interest................................ 387,432 427,365 433,768
Depreciation and amortization........... 910,119 1,191,313 1,367,406
Property taxes.......................... 413,111 423,275 402,569
Personnel costs......................... 297,655 273,780 284,238
Repairs and maintenance................. 435,291 399,778 421,102
Property management fees -
affiliates............................ 241,025 226,592 232,136
Utilities............................... 244,238 213,048 201,597
Other property operating expenses....... 296,725 316,234 205,556
General and administrative.............. 102,067 195,970 213,635
General and administrative -
affiliates............................ 527,853 548,563 650,178
Write-down for impairment
of real estate........................ 220,000 700,000 1,500,085
------------- ------------- --------------
Total expenses........................ 4,075,516 4,915,918 5,912,270
------------- ------------- --------------

Net income (loss).......................... $ 430,179 $ (608,182) $ (1,694,787)
============= ============= ==============

Net income (loss) allocable to
limited partners........................ $ 425,877 $ (602,100) $ (1,677,839)
Net income (loss) allocable to
General Partner......................... 4,302 (6,082) (16,948)
------------- ------------- --------------
Net income (loss).......................... $ 430,179 $ (608,182) $ (1,694,787)
============= ============= ==============

Net income (loss) per limited
partnership unit........................ $ 10.65 $ (15.05) $ (41.95)
============= ============= ==============

Distributions per limited partnership
unit.................................... $ 12.50 $ 18.75 $ -
============= ============= ==============
</TABLE>

See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.

STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

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

<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Equity
--------------- -------------- --------------
<S> <C> <C> <C>
Balance at December 31, 1994.............. $ (5,832) $ 21,039,922 $ 21,034,090

Net loss.................................. (16,948) (1,677,839) (1,694,787)
------------- ------------- -------------

Balance at December 31, 1995.............. (22,780) 19,362,083 19,339,303

Net loss.................................. (6,082) (602,100) (608,182)

Distributions to limited partners......... - (750,016) (750,016)
------------- ------------- -------------

Balance at December 31, 1996.............. (28,862) 18,009,967 17,981,105

Net income................................ 4,302 425,877 430,179

Distributions to limited partners......... - (500,000) (500,000)
------------- -------------- --------------

Balance at December 31, 1997.............. $ (24,560) $ 17,935,644 $ 17,911,284
============= ============= =============
</TABLE>

See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.

STATEMENTS OF CASH FLOWS

Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1997 1996 1995
--------------- --------------- ----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Cash received from tenants.............. $ 4,177,736 $ 3,977,657 $ 4,050,223
Cash paid to suppliers.................. (1,363,390) (1,370,950) (1,323,776)
Cash paid to affiliates................. (650,486) (760,339) (861,503)
Interest received....................... 99,777 105,722 123,838
Interest paid........................... (380,361) (398,254) (399,056)
Property taxes paid..................... (408,866) (420,677) (409,661)
Property tax refund..................... - 20,433 35,142
Other revenue........................... 30,000 - -
------------- ------------- --------------
Net cash provided by operating
activities.............................. 1,504,410 1,153,592 1,215,207
------------- ------------- --------------

Cash flows from investing activities:
Net proceeds received from
insurance company..................... 226,747 75,000 -
Additions to real estate investments
and assets held for sale.............. (537,986) (484,810) (432,154)
------------- ------------- --------------
Net cash used in investing activities...... (311,239) (409,810) (432,154)
------------- ------------- --------------

Cash flows from financing activities:
Principal payments on mortgage
note payable.......................... (128,746) (116,764) (122,031)
Repayment of advances from
affiliates............................ - (642,581) -
Distributions to limited partners....... (500,000) (750,016) -
------------- ------------- --------------
Net cash used in financing activities...... (628,746) (1,509,361) (122,031)
------------- ------------- --------------

Net increase (decrease) in cash
and cash equivalents.................... 564,425 (765,579) 661,022

Cash and cash equivalents at
beginning of year....................... 1,615,604 2,381,183 1,720,161
------------- ------------- --------------

Cash and cash equivalents at end
of year................................. $ 2,180,029 $ 1,615,604 $ 2,381,183
============= ============= ==============

</TABLE>

See discussion of noncash investing and financing activities in Note 4 - "Real
Estate Investments" and Note 7 - "Gains on Involuntary Conversions."

See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.

STATEMENTS OF CASH FLOWS

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

<TABLE>
<CAPTION>
For the Years Ended December 31,
-----------------------------------------------------
1997 1996 1995
-------------- ---------------- ----------------
<S> <C> <C> <C>
Net income (loss).......................... $ 430,179 $ (608,182) $ (1,694,787)
------------- -------------- --------------

Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization........... 910,119 1,191,313 1,367,406
Allowance for doubtful accounts......... (17,056) 41,151 (77,044)
Amortization of deferred borrowing
costs................................. 7,770 31,079 31,079
Amortization of deferred gain........... - - (17,000)
Gain on involuntary conversion.......... (149,585) (45,134) -
Write-down for impairment
of real estate........................ 220,000 700,000 1,500,085
Changes in assets and liabilities:
Cash segregated for security deposits. (2,271) 12,314 (8,929)
Accounts receivable................... (20,770) (158,323) 44,989
Prepaid expenses and other
assets, net......................... 19,748 13,070 (1,828)
Accounts payable and accrued
expenses............................ (20,505) (27,583) 35,015
Payable to affiliates................. 118,392 14,816 20,811
Security deposits and deferred
rental revenue...................... 8,389 (10,929) 15,410
------------- ------------- --------------

Total adjustments................. 1,074,231 1,761,774 2,909,994
------------- ------------- --------------

Net cash provided by operating
activities.............................. $ 1,504,410 $ 1,153,592 $ 1,215,207
============= ============= ==============
</TABLE>

See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

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

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

McNeil Real Estate Fund XXIV, L.P. (the "Partnership"), formerly known as
Southmark Equity Partners, Ltd., was organized on October 19, 1984, as a limited
partnership under the provisions of the California Revised Limited Partnership
Act to acquire and operate commercial and residential properties. The general
partner of the Partnership is McNeil Partners, L.P. ( the "General Partner"), a
Delaware limited partnership, an affiliate of Robert A. McNeil. The General
Partner was elected at a meeting of limited partners on March 30, 1992, at which
time an amended and restated partnership agreement (the "Amended Partnership
Agreement") was adopted. The principal place of business for the Partnership and
the General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240.

The Partnership is engaged in diversified real estate activities, including the
ownership, operation and management of residential and commercial properties. At
December 31, 1997, the Partnership owned seven revenue-producing properties as
described in Note 4 - "Real Estate Investments." Six of the Partnership's seven
properties were acquired in transactions involving payment of all cash to the
sellers. A large portion of the Partnership's rental revenue is attributable to
one property, Southpointe Plaza Shopping Center. Southpointe Plaza Shopping
Center contributed approximately 25% of the total Partnership rental revenue in
1997, 27% in 1996 and 30% in 1995.

<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.

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

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

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

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

Assets Held for Sale
- --------------------

Assets held for sale are stated at the lower of depreciated cost or fair value
less costs to sell. Depreciation on these assets ceases at the time they are
placed on the market for sale.

Depreciation and Amortization
- -----------------------------

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 capitalized and are amortized over the terms of the related
tenant lease, using the straight-line method.

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

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

<PAGE>
Deferred Borrowing Costs
- ------------------------

Loan fees and other related costs incurred to obtain long-term financing on real
property are capitalized and are included in prepaid expenses and other assets
on the Balance Sheets. Amortization is recorded using a method that approximates
the effective interest method over the term of the related mortgage note
payable. Amortization of deferred borrowing costs 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 revenue
is recognized as earned.

The Partnership leases its commercial properties under non-cancelable operating
leases. Certain leases provide concessions and/or periods of escalating or free
rent. Rental revenue is recognized on a straight-line basis over the life of the
related leases. The excess of the rental revenue 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
- --------------------------------------

The Amended Partnership Agreement generally provides that net income and net
loss (other than net income arising from sales or refinancing) shall be
allocated 1% to the General Partner and 99% to the limited partners.

For financial statement purposes, net income arising from sales or refinancing
shall be allocated 1% to the General Partner and 99% to the limited partners.

For tax reporting purposes, net income arising from sales or refinancing shall
be allocated as follows: (a) first, amounts of such net income shall be
allocated among the General Partner and limited partners in proportion to, and
to the extent of, the portion of such partners' share of the net decrease in
Partnership Minimum Gain determined under Treasury Regulations, (b) second, to
the General Partner and limited partners in proportion to, and to the extent of,
the amount by which their respective capital account balances are negative by
more than their respective remaining shares of the Partnership's Minimum Gain
attributable to properties still owned by the Partnership and (c) third, 1% of
such net income shall be allocated to the General Partner and 99% of such net
income shall be allocated to the limited partners.

<PAGE>
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 1997, 1996, and 1995 have been made
in accordance with these provisions.

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

At the discretion of the General Partner, distributable cash (other than cash
from sales or refinancing) shall be distributed to the limited partners until
the limited partners have received distributions of cash flow equal to a 10% per
annum cumulative return on their Adjusted Invested Capital, as defined, and then
100% to the limited partners as a class. At the discretion of the General
Partner, cash from sales or refinancing shall be distributed to limited
partners: (first) in an amount which when added to prior distributions from all
sources to such limited partners is equal to a cumulative preferred return of
10% per annum; and (second) to limited partners in an amount which when added to
prior distributions of cash from sales and refinancing to such limited partners
is equal to such limited partners' Original Invested Capital, as defined; and
(third) to the limited partners on a per limited partnership unit ("Unit")
basis.

In connection with a Terminating Disposition, as defined, cash from sales or
refinancing and any remaining reserves shall be allocated among, and distributed
to, the General Partner and limited partners in proportion to, and to the extent
of, their positive capital account balances after the net income has been
allocated pursuant to the above.

The Partnership distributed $500,000 and $750,016 to the limited partners in
1997 and 1996, respectively. No distributions were made to the partners in 1995.

During the last week of March 1998, the Partnership plans to distribute
approximately $1,500,000 to the limited partners of record as of March 1, 1998.

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

Net income (loss) per limited partnership unit is computed by dividing net
income (loss) allocated to the limited partners by the weighted average number
of Units outstanding. Per Unit information has been computed based on 40,000
Units outstanding in 1997, 1996 and 1995.

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

The Partnership pays property management fees equal to 5% of the gross rental
receipts for its residential properties and 6% of gross rental receipts for its
commercial properties 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 also choose to provide leasing services
for the Partnership's commercial properties, in which case McREMI will receive
property management fees from such commercial properties equal to 3% of the
property's gross rental receipts plus leasing commissions based on the
prevailing market rate for such services where the property is located.

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

Under the terms of the Amended Partnership Agreement, the Partnership is paying
an asset management fee to the General Partner. Through 1999, the asset
management fee is calculated as 1% of the Partnership's tangible asset value.
Tangible asset value is determined by using the greater of (i) an amount
calculated by applying a capitalization rate of 9 percent to the annualized net
operating income of each property or (ii) a value of $10,000 per apartment unit
for residential properties and $50 per gross square foot for commercial
properties to arrive at the property tangible asset value. The property tangible
asset value is then added to the book value of all other assets excluding
intangible items. The fee percentage decreases subsequent to 1999.

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

<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1997 1996 1995
-------------- -------------- ---------------
<S> <C> <C> <C>
Property management fees................... $ 241,025 $ 226,592 $ 232,136
Charged to general and administrative -
affiliates:
Partnership administration.............. 210,751 233,066 310,258
Asset management fee.................... 317,102 315,497 339,920
------------- ------------- --------------
$ 768,878 $ 775,155 $ 882,314
============= ============= ==============
</TABLE>

In 1996, the Partnership repaid $642,581 of non-interest bearing advances from
affiliates.

Payable to affiliates at December 31, 1997 and 1996 consisted primarily of
unpaid property management fees, Partnership general and administrative expenses
and asset management fees and is due and payable from current operations.

NOTE 3 - TAXABLE INCOME (LOSS)
- ------------------------------

McNeil Real Estate Fund XXIV, L.P. 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 $5,529,886 in 1997,
$6,081,071 in 1996 and $5,490,840 in 1995.

<PAGE>
NOTE 4 - REAL ESTATE INVESTMENTS
- --------------------------------

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

<TABLE>
<CAPTION>
Accumulated
Buildings and Depreciation Net Book
1997 Land Improvements and Amortization Value
---- -------------- ------------ ---------------- ---------------
<S> <C> <C> <C> <C>
Pine Hills Apartments
Livingston, TX $ 605,145 $ 3,764,012 $ (1,949,488) $ 2,419,669
Riverbay Plaza
Riverview, FL 294,546 7,451,775 (2,705,777) 5,040,544
Sleepy Hollow Apartments
Cleveland, TX 363,051 4,370,296 (2,162,469) 2,570,878
Towne Center
Derby, KS 361,605 2,185,080 (1,179,858) 1,366,827
------------- ------------- ------------- -------------

$ 1,624,347 $ 17,771,163 $ (7,997,592) $ 11,397,918
============= ============= ============= =============

Accumulated
Buildings and Depreciation Net Book
1996 Land Improvements and Amortization Value
---- -------------- ------------ ---------------- ---------------

Pine Hills Apartments $ 605,145 $ 3,735,664 $ (1,756,654) $ 2,584,155
Riverbay Plaza 294,546 5,670,698 (2,495,310) 3,469,934
Sleepy Hollow Apartments 363,051 4,297,494 (1,952,845) 2,707,700
Springwood Plaza (a) 784,767 3,579,942 (1,605,337) 2,759,372
Towne Center 361,605 2,165,575 (1,077,026) 1,450,154
------------- ------------- ------------- -------------

$ 2,409,114 $ 19,449,373 $ (8,887,172) $ 12,971,315
============= ============= ============= =============
</TABLE>

(a) On August 1, 1997 the General Partner placed Springwood Plaza, located in
Dellwood, Missouri, on the market for sale. Springwood Plaza was
classified as such at December 31, 1997 with a net book value of
$2,691,777.

The General Partner placed Island Plaza on the market for sale effective April
1, 1996 and has received an offer from a non-affiliate to purchase the center
for $1.85 million. Based on this offer, the Partnership recorded a $220,000
write-down for impairment of value during the fourth quarter of 1997 to record
the shopping center at its fair value less costs to sell. The shopping center
was classified as an asset held for sale by the Partnership at December 31, 1997
and 1996. The net book value of Island Plaza was $1,810,259 and December 31,
1997 and $2,016,188 at December 31, 1996.

The General Partner placed Southpointe Plaza on the market for sale effective
October 1, 1996. Based on an offer from a non-affiliate to purchase the center,
the Partnership recorded a $700,000 write-down for impairment of value during
the fourth quarter of 1996 to record the shopping center at its fair value less
costs to sell. The Partnership has received an additional offer from a
non-affiliate to purchase the center for $6.8 million. The shopping center was
classified as an asset held for sale by the Partnership at December 31, 1997 and
1996. The net book value of Southpointe Plaza was $6,433,611 at December 31,
1997 and $6,392,484 at December 31, 1996.

The results of operations for the assets held for sale at December 31, 1997 were
$626,063, $317,577 and $169,474 for the years ended December 31, 1997, 1996 and
1995, respectively. Results of operations are operating revenues less operating
expenses including depreciation and amortization and interest expense.

The Partnership leases its commercial properties under non-cancelable operating
leases. Future minimum rents to be received as of December 31, 1997 are as
follows:
Real Estate Assets Held
Investments For Sale
----------- ------------

1998.................................... $ 871,921 $ 1,538,864
1999.................................... 791,955 1,339,067
2000.................................... 714,426 1,056,416
2001.................................... 668,770 930,977
2002.................................... 621,136 717,576
Thereafter.............................. 5,350,982 930,714
---------- -----------
Total $ 9,019,190 $ 6,513,614
========== ===========
<PAGE>
Future minimum rents do not include contingent rentals based on sales volume of
tenants. Contingent rents amounted to $38,404, $32,518 and $8,426 for the years
ended December 31, 1997, 1996 and 1995, respectively. Future minimum rents also
do not include expense reimbursements for common area maintenance, property
taxes and other expenses. These expense reimbursements amounted to $526,529,
$548,716 and $444,862 for the years ended December 31, 1997, 1996 and 1995,
respectively. These contingent rents and expense reimbursements, which include
amounts related to the assets held for sale, are included in rental revenue on
the Statements of Operations.

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

The following sets forth the mortgage note payable of the Partnership, related
to Southpointe Plaza Shopping Center, at December 31, 1997 and 1996. The
mortgage note payable is secured by the related real estate investment.

<TABLE>
<CAPTION>
Mortgage Annual Monthly
Lien Interest Payments/ December 31,
Property Position (a) Rate %(b) Maturity 1997 1996
- -------- --------------------- ----------------- ------------ -----------

<S> <C> <C> <C> <C> <C> <C>
Southpointe Plaza First 7.137 $41,931 9/97 $ 5,293,017 $ 5,421,763
=========== ==========
</TABLE>

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

(b) The interest rate varies monthly based on the monthly weighted average
cost of savings, borrowings and advances by the Federal Home Loan Bank of
San Francisco, with a minimum rate of 5% and a maximum interest rate of
13%. The rate listed above represents the interest rate in effect at
December 31, 1997.

The Partnership has placed Southpointe Plaza on the market for sale and has
received an offer from a non-affiliate to purchase the center for $6.8 million.
Although the mortgage note matured in 1997, the Partnership has continued to
make regularly scheduled monthly payments on the note and plans to continue
doing so until the property can be sold. In accordance with the terms of the
mortgage note agreement, when the Partnership is in default of the terms of the
agreement, the lender can require the Partnership to make additional payments in
the amount of Southpointe Plaza's cash flows from operations. Although to date,
the lender has not required payments of such amounts, if the lender does require
their payment, all amounts would be applied to the outstanding principal
balance, per the mortgage note agreement.

Based on borrowing rates currently available to the Partnership for a mortgage
loan with similar terms and average maturities, the fair value of the mortgage
note payable was approximately $4,953,000 at December 31, 1997 and $5,081,000 at
December 31, 1996.

<PAGE>
NOTE 6 - LEGAL PROCEEDINGS
- --------------------------

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

<PAGE>
NOTE 7 - GAINS ON INVOLUNTARY CONVERSIONS
- -----------------------------------------

In December 1995, wind and hail damage occurred at Pine Hills Apartments. During
1996, reimbursements totaling $75,000 were received from the insurance carrier,
and repairs to the property were completed. In 1996, the Partnership recognized
a $45,134 gain on involuntary conversion, which represents the amount of
insurance reimbursements received in excess of the basis of the property
damaged.

In February 1997, a fire occurred at Riverbay Plaza Shopping Center. One
tenant's space (less than 3% of the total leasable square footage of the center)
was completely destroyed. In addition, there was damage to the roof and several
tenant spaces incurred water and smoke damage. During 1997, reimbursements
totaling $226,747 were received from the insurance carrier and repairs were
completed. The Partnership recognized a $149,585 gain on involuntary conversion
which represents the amount of insurance reimbursements received in excess of
the basis of the property damaged.

<PAGE>

McNEIL REAL ESTATE FUND XXIV, L.P.

REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
December 31, 1997

<TABLE>
<CAPTION>
Costs
Initial Cost Cumulative Capitalized
Related Buildings and Write-down for Subsequent
Description Encumbrances Land Improvements Impairment (b) To Acquisition
- ----------- --------------- -------------- -------------- -------------- --------------
APARTMENTS:
<S> <C> <C> <C> <C> <C>
Pine Hills
Livingston, TX $ - $ 605,145 $ 3,917,607 $ (692,000) $ 538,405

Sleepy Hollow
Cleveland, TX - 363,051 4,010,076 - 360,220

RETAIL CENTERS:

Riverbay Plaza
Riverview, FL - 294,546 4,736,097 - 2,715,678

Towne Center
Derby, KS - 361,605 2,359,900 (500,000) 325,180
-------------- -------------- -------------- ------------ -------------

$ - $ 1,624,347 $ 15,023,680 $ (1,192,000) $ 3,939,483
============== ============== ============== ============ =============

Assets Held for Sale (c):

Island Plaza
Fort Myers, FL $ -

Southpointe Plaza
Sacramento, CA 5,293,017

Springwood Plaza
Dellwood, MO -

$ 5,293,017
==============
</TABLE>

(b) The carrying values of Pine Hills Apartments and Towne Center Shopping
Center were reduced by $692,000 and $500,000, respectively, in 1991. The
carrying value of Island Plaza Shopping Center was reduced by $1,500,085 in
1995. The carrying value of Southpointe Plaza Shopping Center was reduced
by $700,000 in 1996. The carrying value of Island Plaza Shopping Center was
further reduced by $220,000 in 1997.

(c) Assets held for sale are stated at lower of cost or fair value less cost 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 ceases at the time the assets are placed on
the market for sale.

See accompanying notes to Schedule III.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.
SCHEDULE III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
December 31, 1997

<TABLE>
<CAPTION>
Gross Amount at
Which Carried at Close of Period Accumulated
Buildings and Depreciation
Description Land Improvements Total (a) and Amortization
- ----------- ---- ------------- --------- ----------------
APARTMENTS:
<S> <C> <C> <C> <C>
Pine Hills
Livingston, TX $ 605,145 $ 3,764,012 $ 4,369,157 $ (1,949,488)

Sleepy Hollow
Cleveland, TX 363,051 4,370,296 4,733,347 (2,162,469)

RETAIL CENTERS:

Riverbay Plaza
Riverview, FL 294,546 7,451,775 7,746,321 (2,705,777)

Towne Center
Derby, KS 361,605 2,185,080 2,546,685 (1,179,858)
------------- ------------- --------------- -------------

$ 1,624,347 $ 17,771,163 $ 19,395,510 $ (7,997,592)
============= ============= =============== =============

Assets Held for Sale (c):

Island Plaza
Fort Myers, FL $ 1,810,259

Southpointe Plaza
Sacramento, CA 6,433,611

Springwood Plaza
Dellwood, MO 2,691,777
---------------

$ 10,935,647
===============
</TABLE>

(a) For Federal income tax purposes, the properties are depreciated over lives
ranging from 7-39 years using ACRS or MACRS methods. The aggregate cost of
real estate investments for Federal income tax purposes was $38,707,198 and
accumulated depreciation was $17,616,612 at December 31, 1997.

See accompanying notes to Schedule III.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.
SCHEDULE III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
December 31, 1997

<TABLE>
<CAPTION>
Date of Date Depreciable
Description Construction Acquired Lives (Years)
- ----------- ------------ -------- -------------
APARTMENTS:
<S> <C> <C> <C>
Pine Hills
Livingston, TX 1984 10/85 5-25

Sleepy Hollow
Cleveland, TX 1983 08/85 5-25

RETAIL CENTERS:

Riverbay Plaza
Riverview, FL 1983 04/85 5-25

Towne Center
Derby, KS 1976 07/85 5-25

Assets Held for Sale (c):

Island Plaza
Fort Myers, FL 1985 04/85

Southpointe Plaza
Sacramento, CA 1982-84 11/85

Springwood Plaza
Dellwood, MO 1974 09/85

</TABLE>

See accompanying notes to Schedule III.

<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.

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,
----------------------------------------------------
1997 1996 1995
-------------- -------------- ----------------
Real estate investments:

<S> <C> <C> <C>
Balance at beginning of year............... $ 21,858,487 $ 35,244,771 $ 36,312,702

Improvements............................... 2,052,205 458,752 432,154

Reclassification to assets held for sale... (4,368,709) (13,794,699) -

Write-off of damaged basis................. (146,473) (50,337) -

Write-down for impairment
of real estate.......................... - - (1,500,085)
------------- ------------- --------------

Balance at end of year..................... $ 19,395,510 $ 21,858,487 $ 35,244,771
============= ============= ==============

Accumulated depreciation and amortization:

Balance at beginning of year............... $ 8,887,172 $ 12,428,415 $ 11,061,009

Depreciation............................... 910,119 1,191,313 1,367,406

Reclassification to assets held for sale... (1,730,388) (4,712,085) -

Write-off of damaged basis................. (69,311) (20,471) -
------------- ------------- --------------

Balance at end of year..................... $ 7,997,592 $ 8,887,172 $ 12,428,415
============= ============= ==============

Assets Held for Sale:

Balance of beginning of year............... $ 8,408,672 $ - $ -

Reclassification to assets held for sale... 2,638,321 9,082,614 -

Improvements............................... 108,654 26,058 -

Write-down for impairment
of real estate.......................... (220,000) (700,000) -
-------------- ------------- --------------

Balance at end of year..................... $ 10,935,647 $ 8,408,672 $ -
============= ============= ==============
</TABLE>

<PAGE>

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

None.

PART III

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

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

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

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

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

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

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

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

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

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, was known by the Partnership to own more than 5% of
the Units, other than High River Limited Partnership which owns 3,648
Units at January 31, 1998 (approximately 9% of the outstanding Units). The
business address for High River Limited Partnership is 100 South Bedford
Road, Mount Kisco, New York 10549.

<PAGE>
(B) Security ownership of management.

Neither the General Partner nor any of the officers or directors of its
general partner own any limited partnership units.

None.

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

The amendments to the Partnership compensation structure included in the Amended
Partnership Agreement provide for an asset management fee to replace all other
forms of general partner compensation other than property management fees and
reimbursements of certain costs. Through 1999, the asset management fee is
calculated as 1% of the Partnership's tangible asset value. Tangible asset value
is determined by using the greater of (i) an amount calculated by applying a
capitalization rate of 9 percent to the annualized net operating income of each
property or (ii) a value of $10,000 per apartment unit for residential
properties and $50 per gross square foot for commercial properties to arrive at
the property tangible asset value. The property tangible asset value is then
added to the book value of all other assets excluding intangible items. The fee
percentage decreases subsequent to 1999. For the year ended December 31, 1997,
the Partnership paid or accrued $317,102 of such asset management fees.

The Partnership pays property management fees equal to 5% of the gross rental
receipts of residential properties and 6% for commercial properties to McREMI,
an affiliate of the General Partner, for providing property management services.
Additionally, the Partnership reimburses McREMI for its costs, including
overhead, of administering the Partnership's affairs. For the year ended
December 31, 1997, the Partnership paid or accrued $451,776 of such 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
<TABLE>
<CAPTION>

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

<S> <C>
4. Amended and Restated Limited Partnership
Agreement of McNeil Real Estate Fund XXIV,
L.P. dated March 30, 1992 (incorporated by
reference to the Current Report of the
registrant on Form 8-K dated March 30, 1992,
as filed on April 10, 1992).

4.1 Amendment No. 1 to the Amended and Restated
Limited Partnership Agreement of McNeil Real
Estate Fund XXIV, L.P. dated June 1995
(incorporated by reference to the Quarterly
Report of the registrant on Form 10-Q dated
June 30, 1995, as filed on August 14, 1995).

10.3 Promissory Note dated March 23, 1987, between
Southmark Equity Partners, Ltd. and Great
Western Savings relating to Southpointe Plaza
Shopping Center. (1)

10.4 Property Management Agreement dated March
30, 1992, between McNeil Real Estate Fund
XXIV, L.P. and McNeil Real Estate Management,
Inc. (2)

10.5 Amendment of Property Management Agreement
dated March 5, 1993, by McNeil Real Estate
Fund XXIV, L.P. and McNeil Real Estate
Management, Inc. (2)

11. Statement regarding computation of net income
per limited partnership unit (see Item 8 -
Note 1 - "Organization and Summary of
Significant Accounting Policies").

(1) Incorporated by reference to the Quarterly
Report of the registrant on Form 10-Q for the
period ended March 31, 1991, as filed on May
14, 1991.

</TABLE>

<PAGE>

(2) Incorporated by reference to the Annual
Report of the registrant on form 10-K for the
period ended December 31, 1992, as filed on
March 30, 1993.

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

<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.
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 XXIV, L.P.

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

By: McNeil Investors, Inc., General Partner

March 30, 1998 By: /s/ Robert A. McNeil
- -------------- -----------------------------------------
Date Robert A. McNeil
Chairman of the Board and Director
Principal Executive Officer

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

March 30, 1998 By: /s/ Ron K. Taylor
- -------------- -----------------------------------------
Date Ron K. Taylor
President and Director of McNeil
Investors, Inc.
(Principal Financial Officer)

March 30, 1998 By: /s/ Carol A. Fahs
- -------------- -----------------------------------------
Date Carol A. Fahs
Vice President of McNeil Investors, Inc.
(Principal Accounting Officer)

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,180,029
<SECURITIES> 0
<RECEIVABLES> 612,673
<ALLOWANCES> (24,095)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 19,395,510
<DEPRECIATION> (7,997,592)
<TOTAL-ASSETS> 25,301,732
<CURRENT-LIABILITIES> 0
<BONDS> 5,293,017
0
0
<COMMON> 0
<OTHER-SE> 17,911,284
<TOTAL-LIABILITY-AND-EQUITY> 25,301,732
<SALES> 4,186,633
<TOTAL-REVENUES> 4,505,695
<CGS> 1,928,045
<TOTAL-COSTS> 2,838,164
<OTHER-EXPENSES> 629,920
<LOSS-PROVISION> 220,000
<INTEREST-EXPENSE> 387,432
<INCOME-PRETAX> 430,179
<INCOME-TAX> 0
<INCOME-CONTINUING> 430,179
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 430,179
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>