JMB INCOME PROPERTIES LTD XII, 10-Q, 1994-11-14

JMB INCOME PROPERTIES LTD XII
10-Q, 1994-11-14
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarter ended September 30, 1994 Commission file number 0-16108

JMB INCOME PROPERTIES, LTD. - XII
(Exact name of registrant as specified in its charter)

Illinois 36-3337796
(State of organization) (IRS Employer Identification No.)

900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code 312/915-1987

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
(or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

Item 1. Financial Statements. . . . . . . . . . . . 3

Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations . . . . . . . . . 17

PART II OTHER INFORMATION

Item 5. Other Information . . . . . . . . . . . . . 23

Item 6. Exhibits and Reports on Form 8-K. . . . . . 24

<TABLE>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 1994 AND DECEMBER 31, 1993
(UNAUDITED)

ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . $ 3,111,254 1,470,860
Short-term investments (note 1). . . . . . . . . . . . . . . . . 19,577,216 21,966,316
Rents and other receivables, net of allowance for
doubtful accounts of $970,656 at September 30,
1994 and $481,694 at December 31, 1993 . . . . . . . . . . . . 1,671,721 2,025,743
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . 871,284 267,718
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . 989,752 1,393,527
Casualty insurance receivable (note 3(d)). . . . . . . . . . . . 413,421 --
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . . . 26,634,648 27,124,164
------------ -----------
Investment properties, at cost (note 2):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,074,253 23,074,253
Buildings and improvements . . . . . . . . . . . . . . . . . . . 179,312,166 176,419,717
------------ -----------
202,386,419 199,493,970
Less accumulated depreciation. . . . . . . . . . . . . . . . . . 45,898,953 41,724,753
------------ -----------
Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . . . 156,487,466 157,769,217

Investment in unconsolidated ventures,
at equity (notes 1 and 6). . . . . . . . . . . . . . . . . . . . 4,024,305 3,720,296
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . 4,903,973 4,788,858
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . 1,679,619 1,649,035
------------ -----------

$193,730,011 195,051,570
============ ===========

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------

SEPTEMBER 30, DECEMBER 31,
1994 1993
------------ -----------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . . . $ 7,020,163 6,972,571
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 3,593,025 969,433
Construction costs payable . . . . . . . . . . . . . . . . . . . 269,114 537,400
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . 50,738 17,803
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . . . 10,933,040 8,497,207
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . 497,547 410,232
Long-term debt, less current portion . . . . . . . . . . . . . . . 87,139,133 87,612,869
Advances from affiliates (note 3(d)) . . . . . . . . . . . . . . . 735,000 735,000
------------ -----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . 99,304,720 97,255,308
Venture partners' subordinated equity in ventures. . . . . . . . . 21,937,821 22,872,422
Partners' capital accounts:
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . 11,123 11,123
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . 616,530 642,630
------------ -----------
627,653 653,753
------------ -----------
Limited partners (189,684 interests):
Capital contributions, net of offering costs . . . . . . . . . 171,306,452 171,306,452
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . (24,765,357) (23,784,830)
Cumulative cash distributions. . . . . . . . . . . . . . . . . (74,681,278) (73,251,535)
------------ -----------
71,859,817 74,270,087
------------ -----------
Total partners' capital accounts . . . . . . . . . . . . . 72,487,470 74,923,840
------------ -----------
Commitments and contingencies (notes 2, 3 and 5)
$193,730,011 195,051,570
============ ===========

<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)

<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------------------------------------
1994 1993 1994 1993
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . $ 7,112,044 7,249,951 22,042,900 21,911,071
Interest income. . . . . . . . . . . . 270,177 258,505 634,543 670,556
----------- ---------- ---------- ----------
7,382,221 7,508,456 22,677,443 22,581,627
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest. . . . . . 2,365,946 2,297,249 7,103,814 6,893,450
Depreciation . . . . . . . . . . . . . 1,391,434 1,297,090 4,174,200 3,891,473
Property operating expenses. . . . . . 3,581,524 3,584,858 10,567,816 10,506,877
Professional services. . . . . . . . . 17,992 49,538 236,088 260,586
Amortization of deferred expenses. . . 264,320 121,058 791,399 352,352
General and administrative . . . . . . 54,577 37,335 185,696 126,452
----------- ---------- ---------- ----------
7,675,793 7,387,128 23,059,013 22,031,190
----------- ---------- ---------- ----------
Operating earnings (loss). . . . (293,572) 121,328 (381,570) 550,437
Partnership's share of operations
of unconsolidated ventures
(notes 1 and 6). . . . . . . . . . . . (2,252) (7,581,153) 304,009 (7,113,878)
Venture partners' share of ventures'
operations before extraordinary
item (note 1). . . . . . . . . . . . . (66,476) 156,095 443,142 350,656
----------- ---------- ---------- ----------
Net operating earnings (loss)
before extraordinary item. . . (362,300) (7,303,730) 365,581 (6,212,785)
Extraordinary item (net of venture
partners' share of $993,667)
(note 3(d)). . . . . . . . . . . . . . -- -- (1,372,208) --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . $ (362,300) (7,303,730) (1,006,627) (6,212,785)
=========== ========== ========== ==========
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------------------------------------
1994 1993 1994 1993
----------- ---------- ----------- -----------

Net earnings (loss) per
limited partnership
interest (note 1):
Net operating earnings
(loss) . . . . . . . . . . . $ (1.93) (36.96) 1.78 (31.44)
Extraordinary item . . . . . . -- -- (6.94) --
----------- ---------- ---------- ----------

Net earnings (loss). . . . $ (1.93) (36.96) (5.16) (31.44)
=========== ========== ========== ==========

Cash distributions per
limited partnership
interest . . . . . . . . . . . $ 2.50 2.50 7.50 10.00
=========== ========== ========== ==========

<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993

(UNAUDITED)
<CAPTION>
1994 1993
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,006,627) (6,212,785)
Items not requiring (providing) cash or
cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 4,174,200 3,891,473
Amortization of deferred expenses. . . . . . . . . . . . . . . 791,399 352,352
Partnership's share of operations of
unconsolidated ventures. . . . . . . . . . . . . . . . . . . (304,009) 7,113,878
Venture partners' share of ventures' operations
and extraordinary item . . . . . . . . . . . . . . . . . . . (1,436,809) (350,656)
Write-off of assets. . . . . . . . . . . . . . . . . . . . . . 1,174,125 --
Extraordinary item . . . . . . . . . . . . . . . . . . . . . . 2,365,875 --
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . 354,022 (382,643)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . (603,566) (751,717)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . 403,775 (1,545,788)
Casualty insurance receivable. . . . . . . . . . . . . . . . . (413,421) --
Accrued rents receivable . . . . . . . . . . . . . . . . . . . (30,584) 91,567
Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . -- --
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 138,609 (158,669)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . -- (157,852)
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . 119,108 326,432
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . 32,935 (74,268)
Tenant security deposits . . . . . . . . . . . . . . . . . . . 87,315 14,264
------------ -----------
Net cash provided by operating activities. . . . . . . . . 5,846,347 2,155,588
------------ -----------

Cash flows from investing activities:
Net sales and maturities (purchases) of
short-term investments . . . . . . . . . . . . . . . . . . . . 2,389,100 (762,626)
Additions to investment properties,
net of related payables. . . . . . . . . . . . . . . . . . . . (4,334,860) (7,766,450)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . (906,514) (731,876)
------------ -----------
Net cash used in investing activities. . . . . . . . . . . (2,852,274) (9,260,952)
------------ -----------
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1994 1993
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . (426,144) (286,119)
Decrease in other long-term liabilities. . . . . . . . . . . . . -- (9,650,000)
Proceeds from refinancings of debt (note 3(d)) . . . . . . . . . -- 18,400,000
Advances from affiliate. . . . . . . . . . . . . . . . . . . . . -- 735,000
Venture partners' contributions to venture . . . . . . . . . . . 547,208 68,159
Distributions to venture partners. . . . . . . . . . . . . . . . (45,000) (1,906,324)
Distributions to limited partners. . . . . . . . . . . . . . . . (1,429,743) --
------------ -----------
Net cash provided by (used in)
financing activities . . . . . . . . . . . . . . . . . . (1,353,679) 7,360,716
------------ -----------
Net increase in cash and cash equivalents. . . . . . . . . $ 1,640,394 255,352
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . $ 7,103,815 7,051,302
============ ===========
Non-cash investing and financing activities:
Change in accounts payable . . . . . . . . . . . . . . . . . . $ 2,365,875 --
------------ -----------
Total extraordinary item - earthquake damage
at Topanga Mall (note 3(d)). . . . . . . . . . . . . . . $ 2,365,875 --
============ ===========

<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 1994 AND 1993

(UNAUDITED)

Readers of this quarterly report should refer to the
Partnership's audited financial statements for the fiscal year
ended December 31, 1993 which are included in the
Partnership's 1993 Annual Report, as certain footnote
disclosures which would substantially duplicate those
contained in such audited financial statements have been
omitted from this report.

(1) BASIS OF ACCOUNTING

The accompanying consolidated financial statements
include the accounts of the Partnership and its ventures,
Topanga Plaza Partnership ("Topanga"), JMB-40 Broad Street
Associates ("Broad Street"), JMB First Financial Associates
("First Financial") and First Financial's venture, JMB Encino
Partnership, ("Encino") (note 3). The effect of all
transactions between the Partnership and its ventures have
been eliminated in the consolidated financial statements. The
equity method of accounting has been applied in the
accompanying consolidated financial statements with respect to
the Partnership's venture interest in JMB/San Jose Associates
("San Jose"). Accordingly, the accompanying consolidated
financial statements do not include the accounts of San Jose.

The Partnership's records are maintained on the accrual
basis of accounting as adjusted for Federal income tax
purposes. The accompanying consolidated financial statements
have been prepared from such records after making appropriate
adjustments to present the Partnership's accounts in
accordance with generally accepted accounting principles
("GAAP") and to consolidate the accounts of the ventures as
described above. Such adjustments are not recorded on the
records of the Partnership. The net effect of these items is
summarized as follows for the nine months ended September 30:

1994 1993
----------------------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------
Net loss . . . $ 1,006,627 3,385,875 6,212,785 2,032,289
Net loss per
limited
partnership
interest. . . $ 5.16 17.14 31.44 10.29
=========== ========== ========== ==========

The net loss per limited partnership interest is based on
the number of limited partnership interests outstanding at the
end of each period (189,684).

Statement of Financial Accounting Standards No. 95
requires the Partnership to present a statement which
classifies cash receipts and payments according to whether
they stem from operating, investing or financing activities.
The required information has been segregated and

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

accumulated according to the classifications specified in the
pronouncement. Partnership distributions from its
unconsolidated ventures are considered cash flow from
operating activities only to the extent of the Partnership's
cumulative share of net earnings. The Partnership records
amounts held in U.S. Government obligations at cost, which
approximates market. For the purposes of these statements,
the Partnership's policy is to consider all such amounts held
with original maturities of three months or less as cash
equivalents with any remaining amounts (generally with
original maturities of one year or less) reflected as short-
term investments being held to maturity. None of the
Partnership's investments in U.S. Government obligations were
classified as cash equivalents at September 30, 1994 and
December 31, 1993.

In response to the uncertainties relating to the San Jose
joint venture's ability to recover the net carrying value of
certain buildings within the Park Center Plaza investment
property through future operations or sale, San Jose, as a
matter of prudent accounting practice, recorded a provision
for value impairment at September 30, 1994 on the 100-130 Park
Center Plaza building and certain parking areas, and the 170
Almaden building of $944,335, in the aggregate, to reduce the
net carrying values to the then outstanding balances of
related non-recourse debt. San Jose also recorded a provision
for value impairment on the 150 Almaden and 185 Park Avenue
buildings and certain parking areas of $15,549,935 at
September 30, 1993 to reduce the net carrying value to the
then outstanding balance of the related non-recourse debt.
These provisions are in addition to similar provisions for
other portions of the complex taken in earlier years and
previously reported. Reference is made to note 3(b) for
further discussion of the current status of this investment
property.

No provision for State or Federal income taxes has been
made as the liability for such taxes is that of the investors
rather than the Partnership. However, in certain
circumstances, the Partnership has been required under
applicable law to remit directly to the tax authorities
amounts representing withholding from distributions paid to
partners.

(2) INVESTMENT PROPERTIES

(a) General

The Partnership has acquired, either directly or through
joint ventures, three shopping centers, two office buildings
and an office complex. The Partnership sold, through
JMB/Rivers, its interest in Mid Rivers Mall in January 1992.
All the remaining properties were in operation at September
30, 1994.

(b) Plaza Hermosa

During September 1986, the Partnership acquired a
multi-building neighborhood shopping center in Hermosa Beach,
California. The Partnership's purchase price for the shopping
center was $18,290,000, of which $11,890,000 was paid in cash
at closing. The balance of the purchase price is represented
by bond financing in the amount of $6,400,000. This financing
is secured by a letter of credit facility which is ultimately
secured by a deed of trust on the property. The letter of
credit facility expired December 31, 1993; however, the
Partnership subsequently signed an agreement with the issuer
of the letter of credit to extend its expiration date to
December 31, 1994. The Partnership has reached an agreement
in principle for a long-term replacement letter of credit with
a new lender and is in the process of negotiating the loan
documents. The existing bond financing is due and payable
upon the expiration of the letter of credit, and accordingly,
has been classified as a current liability at September

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

30, 1994 and December 31, 1993. There can be no assurance
that any such replacement financing will be finalized, in
which case the Partnership expects to retire the bond
financing with its current cash reserves.

(3) VENTURE AGREEMENTS

(a) General

The Partnership at September 30, 1994 is a party to four
operating venture agreements. The terms of the joint venture
agreements generally provide that the Partnership will be
allocated or distributed profit and losses, cash flow from
operations and sale or refinancing proceeds in the ratio of
its interest in the joint ventures as determined by the
relative value of the partners' respective capital
contributions. Under certain circumstances, either pursuant
to the venture agreements or due to the Partnership's
obligations as a general partner, the Partnership may be
required to make additional cash contributions to the
ventures. There are certain risks associated with the
Partnership's investments made through joint ventures
including the possibility that the Partnership's joint venture
partners in an investment might become unable or unwilling to
fulfill their financial or other obligations, or that such
joint venture partners may have economic or business interests
or goals that are inconsistent with those of the Partnership.

(b) San Jose

The Partnership has acquired, through San Jose, an
interest in an existing office building complex in San Jose,
California (Park Center Financial Plaza) consisting of ten
office buildings, a parking and retail building (185 Park
Avenue) and two parking garage structures.

The partners of San Jose are the Partnership and JMB
Income Properties, Ltd.-XI, another partnership sponsored by
the Managing General Partner of the Partnership ("JMB-XI").
The terms of San Jose's partnership agreement generally
provide that contributions, distributions, cash flow, sale or
refinancing proceeds and profits and losses will be
distributed or allocated to the Partnership and JMB-XI in
their respective 50% ownership percentages.

During August 1994, San Jose received notification from
the Redevelopment Agency of the City of San Jose of its offer
to purchase one of the parking garage structures in the office
building complex for an approved Agency project for
$4,090,000. The price offered is deemed by the Agency to be
just compensation in compliance with applicable State and
Federal laws. San Jose is currently investigating its options
with regard to the Agency's offer, including the impact of any
purchase on garage spaces leased to tenants of other
Partnership properties in the complex. Should the Agency
proceed to purchase the property, San Jose would likely
recognize a gain for financial reporting and Federal income
tax purposes. However, there can be no assurance that this
proceeding will be consummated on any terms.

San Jose notified the tenants in and invitees to the Park
Center complex in San Jose that some of the buildings,
particularly the 100-130 Park Center Plaza Buildings and the
garage below them, could pose a life safety hazard under
certain unusually intense earthquake conditions. While the
buildings and the garage were designed to comply with the
applicable codes for the period in which they were
constructed, and there is no legal requirement to upgrade the
buildings for seismic purposes, San Jose is working with
consultants to analyze ways in which such a potential life

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

safety hazard could be eliminated. In addition, tenants
occupying approximately 110,000 square feet (approximately 26%
of the building) of the Park Center Plaza investment property
have leases that expire in 1995, for which there can be no
assurance of renewals. However, since the costs of both re-
leasing space and any seismic program could be substantial,
San Jose has commenced discussions with the appropriate lender
for additional loan proceeds to pay for all or a portion of
these costs. San Jose is also continuing to discuss terms for
a possible loan extension (which would likely include a
partial paydown of the outstanding principal balance of
approximately $2.5 million) with the mortgage lender on the
150 Almaden and 185 Park Avenue buildings and certain parking
areas as the mortgage loan secured by this portion of the
complex matured in October 1993 and was only extended to
December 1, 1993. San Jose and the lender have been able to
agree, in principle, upon mutually acceptable terms for a
further loan extension. However, San Jose still must
negotiate terms to an acceptable set of loan documents before
the loan can be extended. Should a final loan agreement not
be reached and as San Jose does not have its share of the
outstanding loan balance in its reserves in order to retire
the loan, it is possible that the lender would exercise its
remedies and seek to acquire title to this portion of the
complex. Furthermore, should lender assistance be required to
fund significant costs at the 100-130 Park Center Plaza
buildings but not be obtained, San Jose has decided not to
commit any additional significant amounts to this portion of
the complex since the likelihood of recovering such funds
through increased capital appreciation is remote. The result
would be that the Partnership would no longer have an
ownership interest in this portion of the complex.

As a result, there is uncertainty about the ability to
recover the net carrying value of the property through future
operations and sale and accordingly, San Jose has made
provisions for value impairment on the 100-130 Park Center
Plaza buildings and certain parking areas and the 170 Almaden
building of $944,335 in the aggregate. Such provisions at
September 30, 1994 were recorded to reduce the net carrying
value of these buildings to the then outstanding balance of
the related non-recourse financing. Additionally, in
September 1993, San Jose recorded a provision for value
impairment on the 150 Almaden and 185 Park Avenue buildings
and certain parking areas of $15,549,935 to reduce the net
carrying value of these buildings to the then outstanding
balance of related non-recourse financing. In the event the
lender on any portion of the complex exercised its remedies as
discussed above, the result would likely be that San Jose
would no longer have an ownership interest in such portion.

The property is managed by an affiliate of the General
Partners of the Partnership for a fee calculated as 3% of
gross receipts.

The Broad Street venture agreement provides that the
Partnership will be allocated or distributed profits and
losses, cash flow from operations and sale or refinancing
proceeds in the ratio of its capital contributions to Broad
Street, which is 68.56%. The Partnership and the venture
partner (JMB Income Properties, Ltd-X, a partnership sponsored
by the Managing General Partner of the Partnership) are
current with respect to their required capital contributions
to Broad Street.

The downtown New York City market remains extremely
competitive due to the significant amount of space available
primarily resulting from the layoffs, cutbacks and
consolidations by financial service companies and related
businesses which dominated this market. Rental rates in the
downtown market are currently at depressed levels and this can
be expected to continue for the foreseeable future while the
current vacant space is gradually absorbed. Little, if any,
new construction is planned for downtown over the next few
years and it is expected that the building will

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

continue to be adversely affected by the lower than originally
projected effective rental rates now achieved upon releasing
of existing leases which expire over the next few years.

The property is managed by an affiliate of the General
Partners of the Partnership for a fee calculated as 2% of
gross receipts of the property.

(d) Topanga

In December 1985, the Partnership acquired, through a
joint venture partnership with an affiliate of the developer,
a 58% interest in an existing two-level enclosed mall regional
shopping center known as Topanga Plaza in the Woodland Hills
area of Los Angeles, California. The aggregate purchase price
for the Partnership's interest in the venture was
approximately $25,263,000, which was paid in cash at closing.
Under the terms of the joint venture agreement, the
Partnership generally will be allocated or distributed 58% of
profits and losses, cash flow from operations and sale or
refinancing proceeds.

The shopping center is subject to a long-term management
agreement with an affiliate of the joint venture partner.
Under the terms of the management agreement, the manager is
entitled to receive a management fee based on a formula which
relates to direct and general overhead costs and expenses
incurred in the operation of the property.

During 1994, the manager of Topanga Plaza, an affiliate of
the joint venture partner, was sold to an unaffiliated third
party, who will assume management at the property on the same
terms as existed prior to the sale.

As of the date of this report, 108 of the mall's 114
shops have opened, and the remaining shops are expected to
open during the upcoming weeks as tenants complete their
repairs. Only three of the four major department stores (who
own their own stores) have been able to open and it may take
several months before the entire center is again open and
operating. One department store, Robinson-May, has had a
portion of their store condemned by city inspectors. One
consequence of this partial condemnation is that Robinson-May
has taken back the approximately 25,000 square feet of that
store which was leased to the joint venture in 1989. Pursuant
to the terms of the lease agreement with the joint venture,
Robinson-May was allowed to terminate the lease in the event
there was substantial damage to its existing store (as
defined). This is expected to represent a loss of
approximately $150,000 in annual net income from

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

subleases of the eight tenants which had subleased this space.

However, Topanga was insured in case of this event, and
received, in July 1994, insurance proceeds in the amount of
$2,500,000 for the cost of the unamortized tenant improvements
and the loss of the rents related to this space. As a result
of the termination of the leasehold for this space from
Robinson-May, Topanga has written off approximately $1.2
million, which primarily relates to the unamortized leasehold
improvements discussed above. Topanga has recorded an
extraordinary loss of $2,366,000 which includes Topanga's
share of repair cost of $2.1 million, and approximately
$260,000 of other contingencies. The earthquake will result
in some adverse effect on the operations of the center in the
near term; the extent and length of which and the degree to
which such may be subject to insurance recoveries is not
presently determinable.

The Partnership and its joint venture partner refinanced
in January 1992, the existing mortgage notes with replacement
financing from the existing mortgage holder in the amount of
approximately $59,000,000 which was funded in four stages.
Included in the initial funding was the $1,600,000 repayment
of advances by an affiliate of the venture partner, the
$1,500,000 refinancing of a portion of the existing mortgage
and $2,300,000 representing a return to the Partnership of
prior contributions used to fund previous costs incurred
relating to fire, life and safety regulations and certain
releasing costs. The second funding occurred on December 2,
1992 in the amount of $16,000,000, which was used to paydown
interim lines of credit used for certain renovation costs and
operational capital expenditures. The third funding of
$18,400,000 occurred on February 1, 1993, a portion of which
was used to paydown interim lines of credit used for certain
renovation costs and the remainder to fund additional
renovation costs. The fourth stage refinanced the remaining
portion of the existing mortgage of $14,000,000 upon its
maturity in June 1993. The loan, aggregating $59,000,000,
represents the new loan of $43,500,000 and the refinancing of
the existing loans of $15,500,000. The term of the new loan
began June 1, 1993 with monthly principal and interest
payments and matures January 31, 2002. It carries an interest
rate of 10.125%. The Topanga joint venture funded certain
renovation costs through a line of credit bearing interest at
10.125% with various maturity dates. The line of credit was
paid by the additional loan fundings discussed above.

The joint venture partner had agreed to advance the joint
venture funds for expenses incurred for certain redevelopment
costs related to the 1992 expansion of Topanga Plaza. The
balance of these advances was $735,000 at September 30, 1994
and December 31, 1993. Such advances will be repaid to the
joint venture partner as funds are made available from
operations. Construction period interest of approximately $0
and $131,000, has been capitalized for the nine months ended
September 30, 1994 and 1993, respectively.

The shopping center is subject to fire, life and safety
code and ordinance requirements, which have changed since the
property's original construction. Accordingly, the
Partnership intends to comply with such revised regulations
and fund certain retrofit costs. In conjunction with the
renovation, a substantial portion of certain retrofit costs
have been completed. The Partnership will fund any remaining
costs from operations over the next several years, as tenant
leases expire, until the entire building conforms to such
requirements.

(e) First Financial

On May 20, 1987, the Partnership, through First
Financial, a joint venture with JMB Income Properties, Ltd.-
XIII (a partnership sponsored by an affiliate of the Managing
General Partner), acquired an interest in a general
partnership ("Encino") with an affiliate of the developer
("Venture

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Partner") which owns an office building in Encino (Los
Angeles), California. First Financial is obligated to make an
initial investment in the aggregate amount of $49,850,000 of
which approximately $49,812,000 of such contributions have
been made to Encino. The Partnership's share of the remaining
amounts, approximately $24,000, will be contributed when the
Venture Partner complies with certain requirements.

All of Encino's operating profits and losses before
depreciation have been allocated to First Financial in 1994
and 1993.

The terms of the First Financial partnership agreement
provide that annual cash flow, net sale or refinancing
proceeds, and tax items will be distributed or allocated, as
the case may be, to the Partnership in proportion to its 62.5%
share of capital contributions.

The office building is managed by an affiliate of the
Venture Partner for a fee based upon a percentage of rental
receipts (as defined) of the property.

(4) PARTNERSHIP AGREEMENT

The Partnership Agreement provides that the General
Partners shall receive as a distribution from the sale of a
real property by the Partnership amounts equal to the
cumulative deferrals of any portion of their 10% cash
distribution and 2-1/2% of the selling price, and that the
remaining proceeds (net after expenses and retained working
capital) be distributed 85% to the Limited Partners and 15% to
the General Partners. However, the Limited Partners shall
receive 100% of such net sale proceeds until the Limited
Partners (i) have received cash distributions of sale or
refinancing proceeds in an amount equal to the Limited
Partners' aggregate initial capital investment in the
Partnership, (ii) have received cumulative cash distributions
from the Partnership's operations which, when combined with
sale or refinancing proceeds previously distributed, equal a
6% annual return on the Limited Partners' average capital
investment for each year (their initial capital investment as
reduced by sale or refinancing proceeds previously
distributed) commencing with the second fiscal quarter of 1986
and (iii) have received cash distributions of sale and
refinancing proceeds and of the Partnership's operations, in
an amount equal to the Limited Partners' initial capital
investment in the Partnership plus a 10% annual return on the
Limited Partners' average capital investment. Accordingly,
approximately $773,000 of sale proceeds from the sale of the
Partnership's interest in Mid Rivers Mall during 1992 has been
deferred by the General Partners (note 5).

(5) TRANSACTIONS WITH AFFILIATES

Certain of the Partnership's properties are managed by
affiliates of the General Partners. In October 1994, one of
the affiliated property managers agreed to sell substantially
all of its assets to an unaffiliated third party. In
addition, substantially all of the management personnel of the
property manager will also become management personnel of the
purchaser or its affiliates if the sale is completed. The
sale is subject to certain closing conditions. In the event
that the sale is completed, it is expected that the successor
to the affiliated property manager's assets would act as the
property manager of 40 Broad Street after the sale on the same
terms that existed prior to the sale.

Fees, commissions and other expenses required to be paid
by the Partnership to the General Partners and their
affiliates as of September 30, 1994 and for the nine months
ended September 30, 1994 and 1993 are as follows:

JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Unpaid at
September 30,
1994 1993 1994
-------- ------- -------------
Property management
and leasing fees. . . . $136,636 256,695 --
Insurance commissions. . 61,436 84,981 --
Reimbursement
(at cost) for
out-of-pocket
expenses. . . . . . . . 4,756 18,977 68
-------- ------- ---
$202,828 360,653 68
======== ======= ===

The Managing General Partner and its affiliates are
entitled to reimbursement for salaries and direct expenses of
officers and employees of the Managing General Partner and its
affiliates relating to the administration of the Partnership
and the operation of the Partnership's investment properties.
The amount of such salaries and direct expenses aggregated
$33,381 and $72,561 for the nine months ended September 30,
1994 and for the twelve months ended December 31, 1993,
respectively, all of which has been paid as of September 30,
1994.

In accordance with the subordination requirements of the
Partnership Agreement, the General Partners have deferred
payment of their distributions of net cash flow and sales
proceeds from the Partnership. The amount of such deferred
distributions was approximately $7,414,000 as of September 30,
1994. All amounts deferred or currently payable do not bear
interest.

The Topanga venture has incurred approximately $38,000
and $199,000 of interest expense on affiliated venture partner
advances (note 3(d)) for the nine months ended September 30,
1994 and 1993, respectively, all of which was paid to an
affiliate of the venture partner as of September 30, 1994.

(6) UNCONSOLIDATED VENTURES - SUMMARY INFORMATION

The summary income statement information for the San Jose
venture for the nine months ended September 30, 1994 and 1993
is as follows:

1994 1993
---------- -----------
Total income. . . . . . . . $7,079,634 7,530,458
========== ===========
Operating earnings (loss) . $ 608,018 (14,227,757)
========== ===========
Net earnings (loss) to
the Partnership . . . . . $ 304,009 (7,113,878)
========== ===========

(7) ADJUSTMENTS

In the opinion of the Managing General Partner, all
adjustments (consisting solely of normal recurring
adjustments) necessary for a fair presentation have been made
to the accompanying figures as of September 30, 1994 and for
the three and nine months ended September 30, 1994 and 1993.

PART I. FINANCIAL INFORMATION

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

LIQUIDITY AND CAPITAL RESOURCES

All references to "Notes" are to Notes to Consolidated
Financial Statements contained in this report.

At September 30, 1994, the Partnership had cash and cash
equivalents of approximately $4,019,000. Such funds and
short-term investments of approximately $19,577,000 are
available for working capital requirements including the
funding of the Partnership's share of earthquake repair costs
at the Topanga Plaza and of releasing costs and capital
improvements at the Park Center Financial Plaza, 40 Broad
Street and First Financial Plaza properties investment as
discussed below, any funds which may be required at the Plaza
Hermosa Shopping Center if the Partnership retires the debt
when the letter of credit facility, which secures the
property, expires as discussed in Note 2(b). The Partnership
and its consolidated ventures have currently budgeted in 1994
approximately $3,618,000 for tenant improvements and other
capital expenditures which does not include the improvements
or additions related to the renovation of Topanga Plaza as
discussed below and in Note 3(d). Such budgeted amounts also
exclude the Partnership's share of the January 17, 1994
earthquake repair costs at Topanga Plaza which are estimated
to be approximately $2,100,000 (as discussed below and in Note
3(d)). The Partnership's share of such items and its share of
similar items for its unconsolidated ventures in 1994 is
currently budgeted to be approximately $2,729,000. Actual
amounts expended in 1994 may vary depending on a number of
factors including actual leasing activity, results of property
operations, liquidity considerations and other market
conditions over the course of the year. Due to these
commitments, the Partnership reduced the operating
distribution beginning with the first quarter of 1993.
Additionally, as more fully described in Notes 4 and 5,
distributions to the General Partners have been deferred in
accordance with the subordination requirements of the
Partnership agreement. The source of capital for such items
and for both short-term and long-term future liquidity and
distributions is expected to be through cash generated by the
Partnership's investment properties and through the sale of
such investments. To the extent that a property does not
produce adequate amounts of cash to meet its needs, the
Partnership may withdraw funds from the working capital
reserve which it maintains. The Partnership's and its
ventures' mortgage obligations are all non-recourse.
Therefore, the Partnership and its Ventures are not obligated
to pay mortgage indebtedness unless the related property
produces sufficient net cash flow from operations or sale.

Overall cash flow returns at 40 Broad Street for the next
few years are expected to be lower than originally projected
because an additional 13% of the leased and occupied space
expires during the next two years. In addition, a tenant,
occupying approximately 37,000 square feet (approximately 15%
of the building), did not renew its lease when it expired in
September 1993. Furthermore, Broad Street had renewed and
expanded another tenant, effective July 1, 1993, whose lease
was scheduled to expire in December 1994. This tenant had
expanded from approximately 18,000 square feet to
approximately 35,000 square feet at a market effective rental
rate which was lower than its previous lease. The Partnership
will continue its aggressive leasing program; however, the
downtown New York City market remains extremely competitive
due to the significant amount of space available primarily
resulting from the layoffs, cutbacks and consolidations by
financial service companies and related businesses which
dominated this market. In addition to competition for tenants
in the downtown Manhattan market from other buildings in the
area, there is increasing competition from less expensive
alternatives to Manhattan. Rental rates in the downtown
market are currently at depressed
levels and this can be expected to continue for the
foreseeable future while the current vacant space is gradually
absorbed. Little, if any, new construction is planned for
downtown over the next few years and it is expected that the
building will continue to be adversely affected by the lower
than originally projected effective rental rates now achieved
upon releasing of existing leases which expire over the next
few years. Reference is made to Note 3(c) for further
discussion of the current status of this investment property.

San Jose notified the tenants in and invitees to the Park
Center complex that some of the buildings, particularly the
100-130 Park Center Plaza Buildings and the garage below them,
could pose a life safety hazard under certain unusually
intense earthquake conditions. While the buildings and the
garage were designed to comply with the applicable codes for
the period in which they were constructed, and there is no
legal requirement to upgrade the buildings for seismic
purposes, San Jose is working with consultants to analyze ways
in which such a potential life safety hazard could be
eliminated. In addition, tenants occupying approximately
110,000 square feet (approximately 26% of the building) of the
Park Center Plaza investment property have leases that expire
in 1995, for which there can be no assurance of renewals.
However, since the costs of both re-leasing space and any
seismic program could be substantial, San Jose has commenced
discussions with the appropriate lender for additional loan
proceeds to pay for all or a portion of these costs.

San Jose is also continuing to discuss terms for a
possible loan extension (which would likely include a partial
paydown of the outstanding principal balance of approximately
$2.5 million) with the mortgage lender on the 150 Almaden and
185 Park Avenue buildings and certain parking areas as the
mortgage loan secured by this portion of the complex matured
on October 1, 1993 and was only extended to December 1, 1993.
San Jose and the lender have been able to agree, in principle,

upon mutually acceptable terms for a further loan extension.
However, San Jose still must negotiate terms to an acceptable
set of loan documents before the loan can be extended. Should
a final agreement not be reached and as San Jose does not have
its share of the outstanding loan balance in its reserves in
order to retire the loan, it is possible that the lender would
exercise its remedies and seek to acquire title to this
portion of the complex. Furthermore, should lender assistance
be required to fund significant costs at the 100-130 Park
Center Plaza buildings but not be obtained, San Jose has
decided not to commit any additional amounts to this portion
of the complex since the likelihood of recovering such funds
through increased capital appreciation is remote. The result
would be that San Jose would no longer have an ownership
interest in this portion of the complex.

As a result, there is uncertainty about the ability to
recover the net carrying value of the property through future
operations and sale and accordingly, San Jose has made
provisions for value impairment on the 100-130 Park Center
Plaza buildings and certain parking areas and the 170 Almaden
building of $944,335 in the aggregate. Such provisions at
September 30, 1994 were recorded to reduce the net carrying
value of these buildings to the then outstanding balance of
the related non-recourse financing. Additionally, in
September 1993, San Jose recorded a provision for value
impairment on the 150 Almaden and 185 Park Avenue buildings
and certain parking areas of $15,549,935 to reduce the net
carrying value of these buildings to the then outstanding
balance of related non-recourse
financing. In the event the lender on any portion of the
complex exercised its remedies as discussed above, the result
would likely be that San Jose would no longer have an
ownership interest in such portion.

On January 17, 1994, an earthquake occurred in Los
Angeles, California. The epicenter was located in the town of
Northridge which is approximately 6 miles from Topanga Plaza
Shopping Center. Consequently, significant portions of the
mall, including the 4 major department stores who own their
own buildings, suffered some casualty damage. The
approximately 360,000 square feet of mall shops owned by the
Topanga Partnership did not suffer major structural damage.
The estimated cost of the repairs at Topanga for which the
joint venture is responsible is approximately $9.8 million.
The majority of this cost will be subject to recovery under
the joint venture's earthquake insurance policy. The
deductible on the building improvements, furniture and
fixtures, and business interruption coverages due to loss of
rents is approximately $2.1 million. The Partnership
anticipates that it will pay for its share of insurance
deductibles from its reserves without any material effect on
its projected operations for 1994. As of September 30, 1994,
Topanga has incurred approximately $6.2 million of the
estimated $9.8 million of costs to repair the mall.
Approximately $5.8 million has been reimbursed through
insurance proceeds. The remaining amount of approximately
$400,000 has been classified as a casualty insurance
receivable in the accompanying consolidated financial
statements. As of the date of this report, 108 of the mall's
114 shops have opened, and the remaining shops are expected to
open during the upcoming weeks as tenants complete their
repairs. Subsequent to the earthquake, sales at the mall
shops have temporarily increased due to the greater extent of
damage at a nearby competing mall. Only three of the four
major department stores have been able to open and it may take
several weeks or months before the entire center is open and
operating. One department store, Robinson-May, has had a
portion of their store condemned by city inspectors. One
consequence of this partial condemnation is that Robinson-May
has taken back the approximately 25,000 square feet of that
store which was leased to the joint venture in 1989. Pursuant
to the terms of the lease agreement with the joint venture,
Robinson-May is allowed to terminate the lease in the event
there is substantial damage to its existing store (as
defined). This is expected to represent the loss of
approximately $150,000 in annual net income from subleases of
the eight tenants which had subleased this space. However,
Topanga was insured in case of such event, and received, in
July 1994, insurance proceeds in the amount of $2,500,000 for
the cost of the unamortized tenant improvements and the loss
of rents related to this space. As a result of the
termination of the leasehold for this space from Robinson-May,
Topanga has written off approximately $1.2 million, which
primarily relates to the unamortized leasehold improvements
discussed above. Topanga has recorded an extraordinary loss
of $2,366,000 which includes Topanga's share of repair cost of
$2.1 million, and approximately $260,000 of other
contingencies. The earthquake will result in some adverse
effect on the operations of the center in the near term; the
extent and length of which and the degree to which such may be
subject to insurance recoveries is not presently determinable.

The Partnership and its joint venture partner completed a
renovation at the Topanga Plaza Shopping Center during 1992 of
approximately $40,000,000. In conjunction with this
renovation and remerchandising, the Partnership secured an
extension of the operating covenant for the Nordstrom's
department store to the year 2000 from an original expiration
date in 1994. In addition, the Broadway store has also
committed to operate in the center until the year 2000. The
Partnership and its joint venture partner have refinanced the
existing mortgage notes with replacement financing from the
existing mortgage holder in the aggregate amount of
approximately $59,000,000 which was funded in four stages.
See Note 3(d) for further discussion of the refinancing of
this loan.

During 1994, the manager of the Topanga Plaza, an
affiliate of the joint venture partner, was sold to an
unaffiliated third party, who will assume management at the
property on the same terms as existed prior to the sale.

The Plaza Hermosa Shopping Center was developed with
proceeds raised through a municipal bond financing. This
financing, with an outstanding balance of $6,400,000 at
September 30, 1994, is secured by a letter of credit facility
which is ultimately secured by a deed of trust on the
property. The letter of credit facility expired December 31,
1993; however, the Partnership signed an agreement with the
issuer of the letter of credit to extend its expiration date
to December 31, 1994. The Partnership has reached an
agreement in principle for a long-term replacement letter of
credit with a new lender and is in the process of negotiating
the loan documents. The existing bond financing is due and
payable upon the expiration of the letter of credit, and
accordingly, has been classified as a current liability at
September 30, 1994 and December 31, 1993. There can be no
assurance that any such replacement financing will be
finalized in which case the Partnership expects to retire the
bond financing with its current cash reserves.

In 1995, the leases of tenants occupying approximately
29,000 square feet (approximately 31% of the property) at the
Plaza Hermosa Shopping Center expire. Although the
Partnership has received indications that some of these
tenants will renew, there can be no assurance that such
renewals will take place.

At September 30, 1994, the First Financial Plaza office
building is approximately 89% occupied. In July 1993,
Mitsubishi vacated its approximate 8,100 square feet prior to
its lease expiration of January 1997 and continues to pay rent
pursuant to its lease obligation. Including the Mitsubishi
lease, the building is 93% leased as of the date of this
report. The Los Angeles office market in general and the
Encino submarket in particular remain extremely competitive
resulting in higher rental concessions granted to tenants and
decreased market rental rates. The decline in rental rates
has stabilized in 1994. Furthermore, due to the continued
recession in southern California and concerns regarding
certain tenants' ability to perform under their current
leases, the venture has granted rent deferrals and other forms
of rent relief to several tenants, including First Financial
Housing, an affiliate of the unaffiliated venture partner.
The property incurred minimal damage as a result of the
earthquake in southern California on January 17, 1994.
However, the venture has begun to conduct inspections of
certain joints in the steel frame of the building. It is not
possible to predict the extent of repairs, if any, that may be
required. The mortgage note is scheduled to mature in
November 1995. There is no assurance that the venture will be
able to extend, refinance or obtain alternative financing when
the note matures. The Partnership is examining a possible
sale of the property should the refinancing not take place.
There can be no assurance that a sale of the property will
occur.

There are certain risks associated with the Partnership's
investments made through joint ventures including the
possibility that the Partnership's joint venture partners in
an investment might become unable or unwilling to fulfill
their financial or other obligations, or that such joint
venture partners may have economic or business interests or
goals that are inconsistent with those of the Partnership.

Though the economy has recently shown signs of
improvement and financing is generally becoming more available
for certain types of higher-quality properties in healthy
markets, real estate lenders are typically requiring a lower
loan-to-value ratio for mortgage financing than in the past.
This has made it difficult for owners to refinance real estate
assets at their current debt levels unless the value of the
underlying property has appreciated significantly. As a
consequence, and due to the weakness of some of the local real
estate markets in which the Partnership's properties operate,
the Partnership is taking steps to preserve its working
capital.

RESULTS OF OPERATIONS

The increase in cash and cash equivalents at September
30, 1994 as compared to December 31, 1993 is primarily due to
the receipt of approximately $2,500,000 of insurance proceeds
(which will be utilized for capital costs at the center) related
to the space taken back by Robinson-May at Topanga Plaza as discussed in
Note 3(d).

The decrease in rents and other receivables at September
30, 1994 as compared to December 31, 1993 is primarily due to
an increase in the allowance for doubtful accounts of
approximately $450,000 at Topanga Plaza primarily due to
tenant operating difficulties and disputes related to the
January 1994 earthquake as discussed above.

The increase in prepaid expenses at September 30, 1994 as
compared to December 31, 1993 is primarily due to the
prepayment of real estate taxes of approximately $479,000 at
40 Broad Street and prepayment of insurance of approximately
$270,000 at Topanga Plaza, partially offset by the
amortization of insurance premiums at 40 Broad Street, Topanga
Plaza and Plaza Hermosa.

The decrease in escrow deposits at September 30, 1994 as
compared to December 31, 1993 is primarily due to the payment
of tenant improvements of approximately $416,000 related to
the renewal and expansion of a certain tenant in 1993 at 40
Broad Street.

The casualty insurance receivable balance at September
30, 1994 represents a portion of repair costs to be reimbursed
through insurance proceeds at Topanga Plaza. See Note 3(d).

The increase of deferred expenses at September 30, 1994
as compared to December 31, 1993 is primarily due to the
payment of lease commissions at 40 Broad Street.

The increase in accounts payable at September 30, 1994 as
compared to December 31, 1993 is primarily due to
approximately $3 million of earthquake repair costs accrued at
Topanga Plaza.

The decrease in construction costs payable at September
30, 1994 as compared to December 31, 1993 is due at the timing
of payment of construction costs incurred at Topanga Plaza.

The increase in unearned rents at September 30, 1994 as
compared to December 31, 1993 is primarily due to the
prepayment of rents at Plaza Hermosa.

The increase in rental income for the nine months ended
September 30, 1994 as compared to the nine months ended
September 30, 1993 is primarily due to approximately
$1,326,000 of insurance proceeds related to the lost rental
income due to the space taken back by Robinson- May at Topanga
Plaza, partially offset by 40 Broad Street achieving lower
effective rental rates upon renewals or upon re-leasing of
space previously occupied by tenants paying higher rental
rates.

The decrease in interest income for the nine months ended
September 30, 1994 as compared to the nine months ended
September 30, 1993 is primarily due to lower average invested
balances in U.S. Government obligations in 1994 partially
offset by a higher rate of interest earned in 1994.

Depreciation expense increased for the three and nine
months ended September 30, 1994 as compared to the three and
nine months ended September 30, 1993 primarily due to fixed
asset additions during the last quarter of 1993 at Topanga
Plaza and 40 Broad Street.

The increase in amortization of deferred expenses for the
three and nine months ended September 30, 1994 as compared to
the three and nine months ended September 30, 1993 is
primarily due to the capitalization of certain expenses
related to the renovation of Topanga Plaza.

The increase in Partnership's share of operations of
unconsolidated ventures for the three and nine months ended
September 30, 31, 1994 as compared to the three and nine
months ended September 30, 1993 is primarily
due to a provision for value impairment recorded at the San
Jose investment property at September 30, 1993 of which the
Partnership's share was approximately $7,775,000, partially
offset by the provision for value impairment recorded at the
San Jose investment property at September 30, 1994, of which
the Partnership's share is approximately $472,000. See Note
3(b).

The increase in venture partners' share of ventures'
operations for the nine months ended September 30, 1994 as
compared to the nine months ended September 30, 1993 is
primarily due to losses resulting from the earthquake at
Topanga Plaza partially offset by the venture partners' share
of insurance proceeds related to space taken back by Robinson-
May at Topanga Plaza. See Note 3(d).

The extraordinary item for the nine months ended
September 30, 1994 is due to the earthquake damage at Topanga
Plaza. See Note 3(d).
<TABLE>
PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION

OCCUPANCY

The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties.

<CAPTION>
1993 1994
-------------------------------------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Park Center Financial Plaza
San Jose, California . . . . . . . . . . . 89% 88% 84% 84% 83% 83% 83%

2. Topanga Plaza
Los Angeles, California. . . . . . . . . . 85% 82% 89% 94% 90% 92% 92%

3. 40 Broad Street
New York, New York . . . . . . . . . . . . 82% 82% 67% 79% 80% 83% 83%

4. Plaza Hermosa Shopping Center
Hermosa Beach, California. . . . . . . . . 95% 92% 92% 92% 81% 91% 92%

5. First Financial Plaza
Encino (Los Angeles), California . . . . . 85% 88% 84% 85% 84% 91% 89%

</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

4-A. Mortgage loan agreement between Topanga
and Connecticut General Life Insurance Company dated January
31, 1992 relating to Topanga Plaza in Los Angeles, California
is hereby incorporated herein by reference to Exhibit 4-A to
the Partnership's report for December 31, 1992 on Form 10-K
(File No. 0-16108) dated March 19, 1993.

4-B. Mortgage loan agreement between First
Financial and The Prudential Insurance Company of America
dated November 2, 1987 relating to First Financial Plaza in
Encino, California is hereby incorporated herein by reference
to Exhibit 4-B to the Partnership's report for December 31,
1992 on Form 10-K (File No. 0-16108) dated March 19, 1993.

4-C. Mortgage loan modification agreement
between Topanga and Connecticut General Life Insurance dated
January 31, 1993 relating to Topanga Plaza in Los Angeles,
California is hereby incorporated herein by reference to
Exhibit 4 of the Partnership's report on Form 10-Q (File No.
0-16108) dated November 11, 1993.

10-A. Acquisition documents including the
venture agreement relating to the purchase by the Partnership
of Topanga Plaza in Los Angeles, California, are hereby
incorporated by reference to the Partnership's report on Form
8-K (File No. 0-16108) dated December 31, 1985.

10-B. Acquisition documents including the
venture agreement relating to the purchase by the Partnership
of First Financial Plaza in Encino, California are hereby
incorporated by reference to the Partnership's report on Form
8-K (File No. 0-16108) dated June 3, 1987.

10-C. Acquisition documents including the
venture agreement relating to the purchase by the Partnership
of 40 Broad Street in New York, New York, are hereby
incorporated by reference to the Partnership's report on Form
8-K (File No. 0-16108) dated December 31, 1985.

10-D. Sale documents and exhibits thereto
relating to the sale of the Partnership's interest in Mid
Rivers Mall in St. Peters (St. Louis), Missouri are hereby
incorporated by reference to the Partnership's report on Form
8-K (File No. 0-16108) dated February 18, 1992.

27. Financial Data Schedule

(b) Reports on Form 8-K

The following reports on Form 8-K were
filed since the beginning of the last quarter of the period
covered by this report.

(i) None
SIGNATURES

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

JMB INCOME PROPERTIES, LTD. - XII

BY: JMB Realty Corporation
(Managing General Partner)

By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date:November 10, 1994

Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.

GAILEN J. HULL
Gailen J. Hull, Principal Accounting
Officer
Date:November 10, 1994

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS INCLUDED IN SUCH REPORT.
</LEGEND>

<CIK> 0000765813
<NAME> JMB INCOME PROPERTIES, LTD. - XII

<S> <C>
<PERIOD-TYPE> QTR-3
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994

<CASH> 3,111,254
<SECURITIES> 19,577,216
<RECEIVABLES> 3,946,178
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 26,634,648
<PP&E> 202,386,419
<DEPRECIATION> (45,898,953)
<TOTAL-ASSETS> 193,730,011
<CURRENT-LIABILITIES> (10,933,040)
<BONDS> (87,139,133)
<COMMON> 0
0
0
<OTHER-SE> (72,487,470)
<TOTAL-LIABILITY-AND-EQUITY> (193,730,011)
<SALES> (22,042,900)
<TOTAL-REVENUES> (22,677,443)
<CGS> 0
<TOTAL-COSTS> 15,533,415
<OTHER-EXPENSES> 421,784
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,103,814
<INCOME-PRETAX> 381,570
<INCOME-TAX> 0
<INCOME-CONTINUING> (365,581)
<DISCONTINUED> 0
<EXTRAORDINARY> 1,372,208
<CHANGES> 0
<NET-INCOME> 1,006,627
<EPS-PRIMARY> 5.16
<EPS-DILUTED> 0

</TABLE>