JMB INCOME PROPERTIES LTD XII, 10-Q, 1994-08-15

JMB INCOME PROPERTIES LTD XII
10-Q, 1994-08-15
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 June 30, 1994Commission 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 . . . . 16

PART II OTHER INFORMATION

Item 5. Other Information . . . . . . . . . . . . . 21

Item 6. Exhibits and Reports on Form 8-K. . . . . . 22

<TABLE>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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

CONSOLIDATED BALANCE SHEETS

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

ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1994 1993
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . $ 6,354,911 1,470,860
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . 14,178,518 21,966,316
Rents and other receivables, net of allowance for doubtful accounts of
$825,297 at June 30, 1994 and $481,694 at December 31, 1993. . . . . . . . . 2,248,898 2,025,743
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 961,236 267,718
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,405,504 1,393,527
Casualty insurance receivable (note 3(d)). . . . . . . . . . . . . . . . . . . 773,078 --
------------ -----------
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . 25,922,145 27,124,164
------------ -----------

Investment properties, at cost (note 2):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,074,253 23,074,253
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . 177,978,912 176,419,717
------------ -----------
201,053,165 199,493,970
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . 44,507,519 41,724,753
------------ -----------

Total investment properties, net of accumulated depreciation. . . . . . 156,545,646 157,769,217

Investment in unconsolidated ventures, at equity (notes 1 and 6) . . . . . . . . . 4,026,557 3,720,296
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,982,364 4,788,858
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,682,767 1,649,035
------------ -----------

$193,159,479 195,051,570
============ ===========
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS - CONTINUED

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
JUNE 30, DECEMBER 31,
1994 1993
------------ -----------
Current liabilities:
Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 964,870 --
Current portion of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . 7,004,878 6,972,571
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,506,028 969,433
Construction costs payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 363,486 537,400
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,801 17,803
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . 11,918,063 8,497,207
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,161 410,232
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . . 87,300,023 87,612,869
Advances from affiliates (note 3(d)) . . . . . . . . . . . . . . . . . . . . . . . 735,000 735,000
------------ -----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,453,247 97,255,308
Venture partners' subordinated equity in ventures. . . . . . . . . . . . . . . . . 21,191,420 22,872,422
Partners' capital accounts:
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,123 11,123
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 544,395 642,630
------------ -----------
555,518 653,753
------------ -----------
Limited partners (189,684 interests):
Capital contributions, net of offering costs . . . . . . . . . . . . . . . . . 171,306,452 171,306,452
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,142,461) (23,784,830)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . (74,204,697) (73,251,535)
------------ -----------
70,959,294 74,270,087
------------ -----------
Total partners' capital accounts . . . . . . . . . . . . . . . . . . . . 71,514,812 74,923,840
------------ -----------
Commitments and contingencies (notes 2, 3 and 5)
$193,159,479 195,051,570
============ ===========

<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 SIX MONTHS ENDED JUNE 30, 1994 AND 1993
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------------------------------------------
1994 1993 1994 1993
------------ ---------- ------------------------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,873,070 7,551,237 13,604,981 14,661,120
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . 185,525 211,279 364,366 412,051
----------- ---------- ---------- ----------
7,058,595 7,762,516 13,969,347 15,073,171
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . 2,364,890 2,289,355 4,737,868 4,596,201
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,382,533 1,298,485 2,782,766 2,594,383
Property operating expenses. . . . . . . . . . . . . . . . . . . . 3,440,339 3,561,327 6,986,292 6,922,019
Professional services. . . . . . . . . . . . . . . . . . . . . . . 135,499 112,448 218,096 211,048
Amortization of deferred expenses. . . . . . . . . . . . . . . . . 272,099 116,342 527,079 231,294
General and administrative . . . . . . . . . . . . . . . . . . . . 38,736 72,807 131,119 144,117
----------- ---------- ---------- ----------
7,634,096 7,450,764 15,383,220 14,699,062
----------- ---------- ---------- ----------
Operating earnings (loss) . . . . . . . . . . . . . . . . (575,501) 311,752 (1,413,873) 374,109
Partnership's share of operations of unconsolidated ventures
(notes 1 and 6). . . . . . . . . . . . . . . . . . . . . . . . . . 133,390 160,391 306,261 467,275
Venture partners' share of ventures' operations before extraordinary
item (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . 317,904 40,174 704,946 194,561
----------- ---------- ---------- ----------
Net operating earnings (loss) before extraordinary item. . (124,207) 512,317 (402,666) 1,035,945
Extraordinary item (net of venture partners' share of $1,486,800) (note 3(d))-- -- (2,053,200) --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . . . . . . . . . . . . . $ (124,207) 512,317 (2,455,866) 1,035,945
=========== ========== ========== ==========
Net earnings (loss) per limited partnership
interest (note 1):
Net operating earnings (loss). . . . . . . . . . . . . . $ (.63) 2.59 (2.04) 5.24
Extraordinary item . . . . . . . . . . . . . . . . . . . -- -- (10.39) --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . . . . . . . . . . . $ (.63) 2.59 (12.43) 5.24
=========== ========== ========== ==========
Cash distributions per limited partnership interest. . . . $ 2.50 2.50 5.00 7.50
=========== ========== ========== ==========
<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

SIX MONTHS ENDED JUNE 30, 1994 AND 1993

(UNAUDITED)
<CAPTION>
1994 1993
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(2,455,866) 1,035,945
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,782,766 2,594,383
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527,079 231,294
Partnership's share of operations of unconsolidated ventures . . . . . . . . . . . . . . . (306,261) (467,275)
Venture partners' share of ventures' operations and extraordinary item . . . . . . . . . . (2,191,746) (194,561)
Extraordinary item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,540,000 --
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (223,155) (464,684)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (693,518) (885,774)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,977) 4,057
Casualty insurance receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (773,078) --
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33,732) 61,795
Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 964,870 --
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,720 (129,474)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (157,852)
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,998 (204,811)
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,929 15,476
------------ -----------

Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . . . . 1,447,029 1,438,519
------------ -----------

Cash flows from investing activities:
Net sales and maturities (purchases) of short-term investments . . . . . . . . . . . . . . . 7,787,798 (2,418,790)
Additions to investment properties, net of related payables. . . . . . . . . . . . . . . . . (2,907,234) (7,096,655)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (720,585) (348,963)
------------ -----------
Net cash provided by (used in) investing activities. . . . . . . . . . . . . . . . . 4,159,979 (9,864,408)
------------ -----------

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . (280,539) (154,345)
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 . . . . . . . . . . . . . . . . . . . . . . . . . 510,744 40,653
Distributions to limited partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (953,162) (1,429,743)
------------ -----------
Net cash provided by (used in) financing activities. . . . . . . . . . . . . . . . . (722,957) 7,941,565
------------ -----------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . .$ 4,884,051 (484,324)
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . .$ 4,737,868 4,754,053
============ ===========
Non-cash investing and financing activities:
Write-off of assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 1,174,125 --
Change in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,365,875 --
------------ -----------
Total extraordinary item - earthquake damage at Topanga Mall (note 3(d)) . . . . . .$ 3,540,000 --
============ ===========

<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

JUNE 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 six months ended June 30:

1994 1993
------------------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------
Net earnings
(loss). . . . . .$(2,455,866)(2,257,250) 1,035,945 (1,278,990)
Net earnings
(loss) per
limited partner-
ship interest . .$ (12.43) (11.42) 5.24 (6.47)
=========== ========= =========== ========

The net earnings (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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

according to whether they stem from operating, investing or financing
activities. The required information has been segregated and 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 ($5,937,817 at June 30, 1994 and
none at December 31, 1993) 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.

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 June 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.
Subsequent to the end of the quarter, the Partnership has reached an agreement
in principle for a 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 June 30, 1994 and December 31,
1993. There can be no assurance that any such replacement financing will be
finalized, in which case the Partnership will need to retire the bond
financing with its current cash reserves.

(3) VENTURE AGREEMENTS

(a) General

The Partnership at June 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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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.

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 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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

net carrying value of these buildings to the then outstanding balance of the
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 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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

insurance deductibles from its reserves without any material effect on its
projected operations for 1994. As of June 30, 1994, Topanga has incurred
approximately $4.8 million of the estimated $9.8 million of costs to repair
the mall. Approximately $4 million has been reimbursed through insurance
proceeds. The remaining amount of approximately $800,000 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. Only two 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 subleases of the eight tenants which had subleased 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 unamortized leasehold improvements. Topanga has recorded
an extraordinary loss of $3,540,000 which includes Topanga's share of repair
cost of $2.1 million, the write-off of approximately $1.2 million of
unamortized leasehold improvements and approximately $240,000 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 has agreed to advance the joint venture funds
for expenses incurred for certain redevelopment costs related to the expansion
of Topanga Plaza. The balance of these advances was $735,000 at June 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 six
months ended June 30, 1994 and 1993, respectively.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 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).

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(5) TRANSACTIONS WITH AFFILIATES

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

Unpaid at
1994 1993 June 30, 1994
------- ------ -------------
Property management and
leasing fees. . . . . $ 90,873 124,023 --
Insurance commissions. 46,818 58,358 --
Reimbursement (at cost)
for out-of-pocket
expenses. . . . . . . 463 4,937 34
-------- ------- ---
$138,154 187,318 34
======== ======= ===

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
$21,154 and $72,561 for the six months ended June 30, 1994 and for the twelve
months ended December 31, 1993, respectively, of which $72,561 is unpaid as of
June 30, 1994 and all of which has been paid as of the date of this report.

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 $7,360,000 as of June 30, 1994. All
amounts deferred or currently payable do not bear interest.

The Topanga venture has incurred approximately $27,000 and $199,000 of
interest expense on affiliated venture partner advances (note 3(d)) for the
six months ended June 30, 1994 and 1993, respectively, all of which was paid
to an affiliate of the venture partner as of June 30, 1994.

(6) UNCONSOLIDATED VENTURES - SUMMARY INFORMATION

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

1994 1993
---------- ---------
Total income. . . . . . . . . . . .$4,720,324 5,176,907
========== =========
Operating earnings. . . . . . . . .$ 612,523 934,549
========== =========
Net earnings to the Partnership . .$ 306,262 467,274
========== =========

(7) SUBSEQUENT EVENT - PARK CENTER PLAZA

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. The price offered is deemed by the Agency to be just compensation in
compliance with applicable State and Federal laws. San Jose

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED

is currently investigating its options with regard to the Agency's offer.
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.

(8) ADJUSTMENTS

In the opinion of the Managing General Partner, all adjustments (con-
sisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of June 30, 1994
and for the three and six months ended June 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 June 30, 1994, the Partnership had cash and cash equivalents of
approximately $6,355,000. Such funds and short-term investments of
approximately $14,179,000 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), and to repay the bank overdrafts at 40 Broad Street and Topanga Plaza
(which were repaid subsequent to the end of the quarter). The Partnership and
its consolidated ventures have currently budgeted in 1994 approximately
$4,271,000 for tenant improvements and other capital expenditures which does
not include the improvements or additions related to the renovation of Topanga
Plaza to be funded through the existing loan 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
$3,056,000. 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 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 a provision for value impairment on the 150
Almaden and 185 Park Avenue buildings and certain parking areas of
$15,549,935. Such provision at December 31, 1993 is recorded to reduce the
net carrying value of these buildings to the then outstanding balance of the
related non-recourse financing. The provision was in addition to similar
impairments to other portions of the complex taken in earlier years and
previously reported. 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. See Note
3(b) for further discussion of this investment property.

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 June 30, 1994, Topanga has
incurred approximately $4.8 million of the estimated $9.8 million of costs
to repair the mall. Approximately $4 million has been reimbursed through
insurance proceeds. The remaining amount of approximately $800,000 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 two 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. 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 unamortized leasehold improvements. Topanga has recorded
an extraordinary loss of $3,540,000 which includes Topanga's share of repair
cost of $2.1 million, the write-off of approximately $1.2 million of
unamortized leasehold improvements and approximately $240,000 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.

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 June 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. Subsequent to the end of the quarter,
the Partnership has reached an agreement in principle for a 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 June 30, 1994 and December 31, 1993. There can be no assurance
that any such replacement financing will be finalized in which case the
Partnership will need 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 June 30, 1994, the First Financial Plaza office building is
approximately 91% 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
and other recently executed leases, the building is 94% leased. The Los
Angeles office market in general and the Encino submarket in particular have
been 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 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
structural steel frame of the building. It is too early to predict the extent
to which additional costs, if any, may be required.

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 and corresponding decrease in
short-term investments at June 30, 1994 as compared to December 31, 1993 is
primarily due to a portion of the Partnership's investments in U.S. Government
obligations at June 30, 1994 having an original maturity of three months or
less. See Note 1.

The increase in rents and other receivables at June 30, 1994 as compared
to December 31, 1993 is primarily due to the timing of receipt of tenant
receivables of approximately $206,000 at Topanga Plaza.

The increase in prepaid expenses at June 30, 1994 as compared to December
31, 1993 is primarily due to the prepayment of real estate taxes of
approximately $928,000 due at 40 Broad Street, partially offset by the
amortization of insurance premiums at 40 Broad Street and Plaza Hermosa.

The casualty insurance receivable balance at June 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 June 30, 1994 as compared to
December 31, 1993 is primarily due to the payment of lease commissions at 40
Broad Street.

The increase in bank overdrafts at June 30, 1994 as compared to December
31, 1993 is due to bank overdrafts at Topanga Plaza and 40 Broad Street.

The increase in accounts payable at June 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 June 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 June 30, 1994 as compared to December
31, 1993 is primarily due to the prepayment of rents at Plaza Hermosa.
<PAGE>
The decrease in rental income for the three and six months ended June 30,
1994 as compared to the three and six months ended June 30, 1993 is primarily
due to 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 three and six months ended June
30, 1994 as compared to the three and six months ended June 30, 1993 is
primarily due to lower average invested balances in U.S. Government
obligations in 1994.

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

The decrease in property operating expenses for the three months ended
June 30, 1994 as compared to the three months ended June 30, 1993 is primarily
due to a decrease of approximately $160,000 in real estate taxes at 40 Broad
Street. The increase in property operating expenses for the six months ended
June 30, 1994 as compared to the six months ended June 30, 1993 is primarily
due to increased repairs and maintenance at 40 Broad Street (which are
partially recoverable from tenants).

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

The decrease in Partnership's share of operations of unconsolidated
ventures for the three and six months ended June 30, 31, 1994 as compared to
the three and six months ended June 30, 1993 is primarily due to a decrease in
parking income at Park Center Plaza.

The increase in venture partners' share of ventures' operations for the
three and six months ended June 30, 1994 as compared to the three and six
months ended June 30, 1993 is primarily due to losses resulting from the
earthquake at Topanga Plaza.

The extraordinary item for the six months ended June 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%

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

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

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

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

</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.

(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:August 12, 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:August 12, 1994