JMB INCOME PROPERTIES LTD XII, 10-Q, 1995-08-14

JMB INCOME PROPERTIES LTD XII
10-Q, 1995-08-14
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 June 30, 1995 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 . . . . . . . . . 19

PART II OTHER INFORMATION

Item 5. Other Information . . . . . . . . . . . . . 25

Item 6. Exhibits and Reports on Form 8-K. . . . . . 26

<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, 1995 AND DECEMBER 31, 1994

(UNAUDITED)

ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . $ 5,282,061 8,222,359
Short-term investments (note 1). . . . . . . . . . . . . . . 18,235,213 14,176,812
Rents and other receivables, net of allowance for
doubtful accounts of $327,017 at June 30,
1995 and $925,820 at December 31, 1994 . . . . . . . . . . 2,400,833 2,162,206
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . 868,164 226,598
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . 435,065 708,332
Casualty insurance receivable. . . . . . . . . . . . . . . . -- 853,000
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . 27,221,336 26,349,307
------------ -----------
Investment properties, at cost (note 2):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,425,036 22,425,036
Buildings and improvements . . . . . . . . . . . . . . . . . 171,529,647 170,873,378
------------ -----------
193,954,683 193,298,414
Less accumulated depreciation. . . . . . . . . . . . . . . . (49,600,712) (46,792,110)
------------ -----------
Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . 144,353,971 146,506,304

Investment in unconsolidated ventures,
at equity (notes 1 and 6). . . . . . . . . . . . . . . . . . 4,987,500 5,719,465
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 8,131,637 8,340,547
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 2,384,126 2,406,764
------------ -----------
$187,078,570 189,322,387
============ ===========

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

CONSOLIDATED BALANCE SHEETS - CONTINUED

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

JUNE 30, DECEMBER 31,
1995 1994
------------ -----------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . $ 29,429,580 29,539,123
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 3,637,498 3,863,132
Construction costs payable . . . . . . . . . . . . . . . . . -- 342,324
Accrued real estate taxes. . . . . . . . . . . . . . . . . . 54,962 --
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . 71,629 64,806
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . 33,193,669 33,809,385
Tenant security deposits . . . . . . . . . . . . . . . . . . . 509,289 509,493
Long-term debt, less current portion . . . . . . . . . . . . . 64,301,795 64,470,886
Advances from affiliates (note 3(d)) . . . . . . . . . . . . . -- 435,000
------------ -----------
Commitments and contingencies (notes 1, 2, 3 and 5)

Total liabilities. . . . . . . . . . . . . . . . . . . 98,004,753 99,224,764
Venture partners' subordinated equity in ventures. . . . . . . 20,611,554 21,616,287
Partners' capital accounts:
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . 11,123 11,123
Cumulative net earnings. . . . . . . . . . . . . . . . . . 706,966 669,602
------------ -----------
718,089 680,725
------------ -----------
Limited partners (189,684 interests):
Capital contributions, net of offering costs . . . . . . . 171,306,452 171,306,452
Cumulative net earnings (loss) . . . . . . . . . . . . . . (27,451,256) (28,347,981)
Cumulative cash distributions. . . . . . . . . . . . . . . (76,111,022) (75,157,860)
------------ -----------
67,744,174 67,800,611
------------ -----------
Total partners' capital accounts . . . . . . . . . . . 68,462,263 68,481,336
------------ -----------
$187,078,570 189,322,387
============ ===========

<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, 1995 AND 1994
(UNAUDITED)

<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
----------------------------------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . $ 7,131,830 6,873,070 14,364,916 13,604,981
Interest income. . . . . . . . . . . . . 340,896 185,525 642,857 364,366
----------- ---------- ----------- ----------
7,472,726 7,058,595 15,007,773 13,969,347
----------- ---------- ----------- ----------
Expenses:
Mortgage and other interest. . . . . . . 2,300,069 2,364,890 4,605,020 4,737,868
Depreciation . . . . . . . . . . . . . . 1,398,419 1,382,533 2,808,602 2,782,766
Property operating expenses. . . . . . . 2,908,392 3,440,339 6,002,656 6,986,292
Professional services. . . . . . . . . . 129,471 135,499 225,609 218,096
Amortization of deferred
expenses . . . . . . . . . . . . . . . 330,172 272,099 669,988 527,079
General and administrative . . . . . . . 114,337 38,736 171,413 131,119
----------- ---------- ----------- ----------
7,180,860 7,634,096 14,483,288 15,383,220
----------- ---------- ----------- ----------
Operating earnings (loss). . . . . 291,866 (575,501) 524,485 (1,413,873)
Partnership's share of
operations of unconsolidated
ventures (notes 1 and 6) . . . . . . . . 208,164 133,390 518,035 306,261
Venture partners' share of
ventures' operations before
extraordinary item (note 1). . . . . . . (97,184) 317,904 (108,431) 704,946
----------- ---------- ----------- ----------
Net operating earnings
(loss) before extra-
ordinary item. . . . . . . . . . 402,846 (124,207) 934,089 (402,666)
Extraordinary item (net of
venture partners' share of
$1,588,537) (note 3(d)). . . . . . . . . -- -- -- (2,300,838)
----------- ---------- ----------- ----------
Net earnings (loss). . . . . . . . $ 402,846 (124,207) 934,089 (2,703,504)
=========== ========== =========== ==========

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

CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
----------------------------------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------

Net earnings (loss) per
limited partnership
interest (note 1):
Net operating earnings
(loss) . . . . . . . . . . . . $ 2.04 (.63) 4.73 (2.04)
Extraordinary item . . . . . . . -- -- -- (11.64)
----------- ---------- ----------- ----------

Net loss . . . . . . . . . . $ 2.04 (.63) 4.73 (13.68)
=========== ========== =========== ==========

Cash distributions per
limited partnership
interest . . . . . . . . . . . . $ 2.50 2.50 5.00 5.00
=========== ========== =========== ==========

<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

SIX MONTHS ENDED JUNE 30, 1995 AND 1994

(UNAUDITED)

<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . .$ 934,089 (2,703,504)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 2,808,602 2,782,766
Amortization of deferred expenses. . . . . . . . . . . . . . . 669,988 527,079
Partnership's share of operations of unconsolidated
ventures, net of distributions . . . . . . . . . . . . . . . 731,965 (306,261)
Venture partners' share of ventures' operations
and extraordinary item . . . . . . . . . . . . . . . . . . . 108,431 (2,293,483)
Write-off of assetts . . . . . . . . . . . . . . . . . . . . . -- 1,174,125
Extraordinary item, net of insurance recoveries
of $1,174,125. . . . . . . . . . . . . . . . . . . . . . . . -- 3,889,375
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . (238,627) (223,155)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . (641,566) (693,518)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . 273,267 (11,977)
Casualty insurance receivable. . . . . . . . . . . . . . . . . 853,000 (773,078)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 22,638 (33,732)
Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . -- 964,870
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . (225,634) 170,720
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . 54,962 --
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . 6,823 60,998
Tenant security deposits . . . . . . . . . . . . . . . . . . . (204) 89,929
------------ -----------
Net cash provided by operating activities. . . . . . . . . 5,357,734 2,621,154
------------ -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of short-term
investments. . . . . . . . . . . . . . . . . . . . . . . . . . (4,058,401) 7,787,798
Additions to investment properties,
net of related payables. . . . . . . . . . . . . . . . . . . . (998,593) (4,081,359)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . (461,078) (720,585)
------------ -----------
Net cash provided by (used in) investing activities. . . . (5,518,072) 2,985,854
------------ -----------

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

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

1995 1994
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . (278,634) (280,539)
Advances from affiliate. . . . . . . . . . . . . . . . . . . . . (435,000) --
Venture partners' contributions to venture . . . . . . . . . . . 41,236 510,744
Distributions to venture partners. . . . . . . . . . . . . . . . (1,154,400) --
Distributions to limited partners. . . . . . . . . . . . . . . . (953,162) (953,162)
------------ -----------
Net cash used in financing activities. . . . . . . . . . . (2,779,960) (722,957)
------------ -----------
Net increase (decrease) in cash and cash equivalents . . . (2,940,298) 4,884,051

Cash and cash equivalents, beginning of year . . . . . . . 8,222,359 1,470,860
------------ -----------
Cash and cash equivalents, end of period . . . . . . . . .$ 5,282,061 6,354,911
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . .$ 4,563,673 4,737,868
============ ===========
Non-cash investing and financing activities:
Change in accounts payable . . . . . . . . . . . . . . . . . .$ -- 3,189,483
Change in accounts receivable. . . . . . . . . . . . . . . . . -- 699,892
------------ -----------
Total extraordinary item - earthquake damage
at Topanga Mall (note 3(d)). . . . . . . . . . . . . . .$ -- 3,889,375
============ ===========

<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, 1995 AND 1994

(UNAUDITED)

Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1994
which are included in the Partnership's 1994 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:
1995 1994
----------------------- --------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------

Net earnings
(loss). . . . . $934,089 (1,703,204) (2,703,504) (2,257,250)
Net earnings
(loss) per
limited
partnership
interest. . . .$ 4.73 (8.62) (13.68) (11.42)
==================== ======================

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 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 pronounce-
ment. 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 ($2,096,466 and $4,529,080 at June 30, 1995 and December 31, 1994,
respectively) 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.

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.

During March 1995, Statement of Financial Accounting Standards No. 121
("SFAS 121") "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" was issued. SFAS 121, when effective,
will require that the Partnership record an impairment loss on its long-
lived assets (primarily its consolidated investments in land, buildings and
improvements) whenever their carrying value cannot be fully recovered
through estimated undiscounted future cash flows from operations and sale.
The amount of the impairment loss to be recognized would be the difference
between the long-lived asset's carrying value and the asset's estimated
fair value less costs to sell.

The amount of any impairment loss recognized by the Partnership under
its current accounting policy has been limited to the excess, if any, of
the property's carrying value over the outstanding balance of the
property's non-recourse indebtedness. An impairment loss under SFAS 121
would be determined without regard to the nature or the balance of such
non-recourse indebtedness. Upon the disposition of a property for which an
impairment loss has been recognized under SFAS 121, the Partnership would
recognize, at a minimum, a net gain for financial reporting purposes to the
extent of any excess of the then outstanding balance of the property's non-
recourse indebtedness over the then carrying value of the property,
including the effect of any reduction for impairment loss under SFAS 121.

The Partnership expects to adopt SFAS 121 no later than the first
quarter of 1996. Although the Partnership has not currently assessed the
full impact of adopting SFAS 121, the amount of any such required
impairment loss could be materially higher than the amounts that have been
recorded in the past or may be recorded in 1995 under the Partnership's
current impairment policy. In addition, upon the disposition of an
impaired property, the Partnership would generally recognize more net gain
for financial reporting purposes under SFAS 121 than it would have under
the Partnership's current impairment policy, without regard to the amount,
if any, of cash proceeds received by the Partnership in connection with the
disposition. Although implementation of this new accounting statement
could significantly impact the Partnership's reported earnings, there would
be no impact on cash flows. Further, any such impairment loss would not be
recognized for Federal income tax purposes.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 its interest in Mid Rivers Mall in January
1992. All the remaining properties were in operation at June 30, 1995.

(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 was represented by bond financing in the amount of $6,400,000. This
financing was secured by a letter of credit facility which was ultimately
secured by a deed of trust on the property. The letter of credit facility
expired December 31, 1994; however, in December 1994, the Partnership
signed an agreement for a long-term replacement letter of credit with a new
lender and in conjunction with the new letter of credit, simultaneously
retired the original bond financing and issued new bonds to the existing
bondholders in their aggregate amount of $6,400,000. The new letter of
credit expires in December 1997. The new bond financing is due and payable
upon the new expiration date of the letter of credit.

The property is managed by an affiliate of the General Partners of the
Partnership for a fee calculated as 4% of gross receipts of the property.

(3) VENTURE AGREEMENTS

(a) General

The Partnership at June 30, 1995 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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(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. During 1995, the Agency filed a condemnation action in court
to secure their position in obtaining the garage pursuant to the laws of
eminent domain. However, San Jose is continuing to hold discussions with
the Agency and continues to investigate its options with regard to the
Agency's offer. San Jose is also reviewing the impact of any purchase on
garage spaces leased to tenants of other Partnership properties in the
complex. Although the Partnership expects the Agency to purchase the
property in 1995, it is uncertain at this time whether a transfer of the
garage to the Agency will occur or upon what terms. Upon such a transfer,
San Jose would recognize a gain for financial reporting and Federal income
tax purposes.

Tenants occupying approximately 55,000 square feet (approximately 13%
of the buildings) of the Park Center Plaza investment property have leases
that expire in 1995, for which there can be no assurance of renewals. New
leases will likely require expenditures for lease commissions and tenant
improvements prior to tenant occupancy which would result in a decrease in
cash flow from operations over the near term. San Jose notified the
tenants in and invitees to the Park Center Plaza 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. However, since the costs of any seismic program at the 100-130
Park Center Plaza buildings could be substantial, San Jose is continuing
discussions with the appropriate lender for additional loan proceeds to pay
for all or a portion of these costs. Should lender assistance be required
to fund significant costs at the 100-130 Park Center Plaza buildings but
not be obtained, San Jose may decide not to commit any additional amounts
to this portion of the complex, since such amounts are likely to be large
in comparison to the Partnership's current equity in this portion of the
complex and 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, certain parking areas and the 170 Almaden building

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

of $944,335 in the aggregate. Such provisions at September 30, 1994 were
recorded to reduce the net carrying values of these buildings to the then
outstanding balances of the related non-recourse financing.

During the fourth quarter of 1994, San Jose finalized a loan
modification and extension to November 30, 2001 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 extended to December 1, 1993. The refinancing resulted in
a partial paydown of the outstanding principal balance in the amount of
$2.5 million of which the Partnership's share was $1.25 million.

The property was managed by an affiliate of the General Partners of
the Partnership for a fee calculated as 3% of gross receipts until December
1994 when the affiliated property manager sold substantially all of its
assets and assigned its interests in its management contracts to an
unaffiliated third party who continues to manage under the same terms as
existed prior to the sale. In addition, certain of the management
personnel of the property manager became management personnel of the
purchaser and its affiliates.

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 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 effective rental rates now
achieved upon re-leasing of existing leases which expire over the next few
years. In addition, new leases will likely require expenditures for lease
commissions and tenant improvements prior to tenant occupancy. This
decline in rental rates, the increase in re-leasing time and the costs upon
re-leasing will result in a continued decrease in cash flow from operations
over the near term.

Until December 1994, the property was managed by an affiliate of the
General Partners of the Partnership for a fee calculated as 2% of gross
receipts of the property (see note 5).

(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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The shopping center was 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 assumed management at the property
on the same terms as existed prior to the sale.

As of June 30, 1995, Topanga has incurred approximately $6.4 million of the
estimated $7.7 million of costs to repair the mall. Approximately, $7.4
million of the $11.9 million of total costs has been reimbursed through
insurance proceeds and approximately $2.8 million of additional insurance
proceeds are expected to be recovered over the next year. All of the
mall's 114 shops and the four major department stores are open. Subsequent
to the earthquake, sales at the mall shops have increased due to the
greater extent of damage at a nearby competing mall. However, in August
1995, the competing mall was re-opened. The re-opening of this mall is
expected to have an adverse effect on Topanga's future sales. One
department store, Robinson-May, had a portion of their store condemned by
city inspectors in 1994. One consequence of this partial condemnation is
that Robinson-May took back in 1994 the approximately 25,000 square feet of
that store which was leased to the joint venture in 1990. 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 the loss of
approximately $150,000 in annual net income from subleases of the eight
tenants which had subleased this space. Topanga was insured in case of
such event and received, in July 1994, insurance proceeds in the amount of
$2,500,000 (net of the related deductible) 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 wrote off, in 1994, approximately $1.2 million of unamortized
leasehold improvements discussed above. Topanga recorded in 1994, an
extraordinary loss of $2,889,000 (of which the Partnership's share was
approximately $1,676,000) which included Topanga's share of repair cost of
approximately $2.1 million, and approximately $789,000 of other costs. The
earthquake did result in some adverse effect on the operations of the
center in early 1994.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The joint venture partner had agreed to advance the joint venture
funds for expenses incurred for certain redevelopment costs related to a
potential future expansion of Topanga Plaza which is still being studied by
the joint venture. The balance of these advances was $435,000 at December
31, 1994. Such advances were repaid to the former joint venture partner in
early 1995 from available cash at the venture.

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 ("Encino
Venture Partner"). Encino 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
Encino Venture Partner complies with certain requirements.

The first mortgage loan on the property matures November 1, 1995.
First Financial, on Encino's behalf, continues to discuss the terms of a
possible extension or renegotiation of the mortgage loan with the existing
lender upon such maturity. Encino has entered into a commitment letter
with the existing lender to extend substantially all of the mortgage loan
for a two year period. There can be no assurance that the loan will be
extended on these or any other terms. Based upon such uncertainty, Encino
may not be able to recover the net carrying value of the investment
property through future operations or sale. Accordingly, the Encino
venture, as a matter of prudent accounting practice, has made a provision
for value impairment of approximately $6,475,000, (approximately $4,047,000
is allocable to the Partnership), all of which is allocable to First
Financial. Such provision was recorded at December 31, 1994 to reduce the
net carrying value of the property based upon an estimated sales price
should the Encino venture be unable to extend or refinance the mortgage
loan at maturity.

The First Financial office building appeared to have experienced only
minor cosmetic damage as a result of the January 17, 1994 Northridge
earthquake in southern California. On February 22, 1995, the city council
of the city of Los Angeles passed an ordinance requiring certain buildings
(identified by building type and location) to perform testing on the welded
steel moment connections to determine if the earthquake had weakened such
joint weldings and to repair such joint weldings if weakness is detected.
This property qualified for the testing under the ordinance, and therefore,
Encino has retained a structural engineer to perform the testing. Results
of the initial testing by the structural engineer indicate that some of the
building's joint weldings have suffered damage which, in accordance with
the recently enacted ordinance, must be repaired. Encino's structural
engineer has informed Encino that the damage detected does not pose a life
safety risk for the building's tenants. While a complete determination of

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

the requirements to comply with such ordinance is not as yet completed, it
is currently estimated that the cost of such repairs will be approximately
$1,000,000 (of which the Partnership's share is approximately $625,000).
Encino expects to complete testing and commence such repairs in August 1995
and it expects them to be completed by the end of 1995.

All of Encino's operating profits and losses before depreciation have
been allocated to First Financial in 1995 and 1994.

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 or their assignees for fees computed as a percentage
of certain rents received by the properties. In December 1994, one of the
affiliated property managers sold substantially all of its assets and
assigned its interest in its management contracts to an unaffiliated third
party. In addition, certain of the management personnel of the property
manager became management personnel of the purchaser and its affiliates.
The successor to the affiliated property manager's assets is the property
manager of the 40 Broad Street property 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 June 30,
1995 and for the six months ended June 30, 1995 and 1994 are as follows:

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Unpaid at
June 30,
1995 1994 1995
-------- ------ -------------
Property management
and leasing fees. . . . . $35,608 90,873 926
Insurance commissions. . . 58,726 46,818 --
Reimbursement
(at cost) for
out-of-pocket
expenses. . . . . . . . . 2,781 463 371
------- ------- -----
$97,115 138,154 1,297
======= ======= =====

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 $59,111 and $108,499 for the six months ended June 30, 1995 and
for the twelve months ended December 31, 1994, respectively, all of which
has been paid as of June 30, 1995.

In accordance with the subordination requirements of the Partnership
Agreement, the General Partners have deferred payment of their distri-
butions of net cash flow and sales proceeds from the Partnership. The
amount of such deferred distributions was approximately $7,570,000 as of
June 30, 1995. All amounts deferred or currently payable do not bear
interest.

The Topanga venture has incurred approximately $0 and $27,000 of
interest expense on affiliated venture partner advances (note 3(d)) for the
six months ended June 30, 1995 and 1994, respectively, all of which was
paid to an affiliate of the former venture partner as of June 30, 1995.

Subsequent to June 30, 1995, the Managing General Partner of the
Partnership has determined to use an independent third party or parties to
perform certain of these administrative services beginning in late 1995.
Use of a third party, rather than reimbursement to the Managing General
Partner and its affiliates, is not expected to have a material effect on
the operations of the Partnership.

(6) UNCONSOLIDATED VENTURES - SUMMARY INFORMATION

The summary income statement information for the San Jose venture for
the six months ended June 30, 1995 and 1994 is as follows:

1995 1994
---------- -----------
Total income. . . . . . . . $4,701,761 4,720,324
========== ===========
Operating earnings. . . . . $1,036,070 612,523
========== ===========
Net earnings to
the Partnership . . . . . $ 518,035 306,261
========== ===========

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED

(7) 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, 1995
and for the three and six months ended June 30, 1995 and 1994.

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, 1995, the Partnership had cash and cash equivalents of
approximately $5,282,000. Such funds and short-term investments of
approximately $18,235,000 are available for working capital requirements
including the funding of the Partnership's share of remaining earthquake
repair costs at the Topanga Plaza, re-leasing costs and capital
improvements and repairs at the Park Center Financial Plaza, 40 Broad
Street and First Financial Plaza as discussed below and the expected loan
paydown at First Financial Plaza (as discussed below and in Note 3(e)).
The Partnership and its consolidated ventures have currently budgeted in
1995 approximately $2,171,000 for tenant improvements and other capital
expenditures. Such budgeted amounts exclude earthquake costs at Topanga
Plaza (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 1995 is currently budgeted to be approximately $2,537,000. Actual
amounts expended in 1995 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. Additionally, as more fully described in Notes 4 and 5,
distributions of approximately $7,570,000 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. In such regard, reference is made to
the Partnership's property specific discussions below. 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 in previous years. 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 market from
other buildings in the area, there is increasing competition from less
expensive alternatives to downtown. 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. It is expected that the building will continue to be
adversely affected by the lower effective rental rates achieved upon re-
leasing of existing leases which expire over the next few years. (In 1995
and 1996, the leases of tenants occupying approximately 16% of the building
expire and there can be no assurance that such tenants will renew.) In
addition, new leases will likely require expenditures for lease commissions
and tenant improvements prior to tenant occupancy. This decline in rental
rates, the increase in re-leasing time and the costs upon re-leasing will
result in a continued decrease in cash flow from operations over the near
term. Reference is made to Note 3(c) for further discussion of the current
status of this investment property.

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. During 1995, the Agency filed a condemnation action in court
to secure their position in obtaining the garage pursuant to the laws of
eminent domain. However, San Jose is continuing to hold discussions with
the agency and continues to investigate its options with regard to the
Agency's offer. San Jose is also reviewing the impact of any purchase on
garage spaces leased to tenants of other Partnership properties in the
complex. Although the Partnership expects the Agency to proceed to
purchase the property in 1995, it is uncertain at this time when a transfer
of the garage to the Agency will occur or upon what terms. Upon such a
transfer, San Jose would recognize a gain for financial reporting and
Federal income tax purposes.

Tenants occupying approximately 55,000 square feet (approximately 13%
of the buildings) of the Park Center Plaza investment property have leases
that expire in 1995, for which there can be no assurance of renewals. In
addition, new leases will likely require expenditures for lease commissions
and tenant improvements prior to tenant occupancy. These anticipated costs
upon re-leasing will result in a decrease in cash flow from operations over
the near term. San Jose notified the tenants in and invitees to the
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 minimized. However, since the costs of any seismic program could
be substantial, San Jose is continuing discussions with the appropriate
lender for additional loan proceeds to pay for all or a portion of these
costs. Furthermore, should lender assistance be required to fund
significant costs at the 100-130 Park Center Plaza buildings but not be
obtained, the Partnership may decide not to commit any additional amounts
to this portion of the complex since such amounts are likely to be large in
comparison to the Partnership's current equity in this portion of the
complex and 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 continued 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, 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 values of these
buildings to the then outstanding balances of the related non-recourse
financing.

On January 17, 1994, an earthquake occurred in Los Angeles,
California. The epicenter was located in the town of Northridge, which is
approximately six miles from Topanga Plaza Shopping Center. Consequently,
significant portions of the mall, including the four major department
stores who own their own buildings, suffered some casualty damage. The
approximate 360,000 square feet of mall shops owned by the Topanga
Partnership did not suffer major structural damage. The estimated costs at
Topanga for which the joint venture is responsible is approximately $11.9
million, of which approximately $7.7 million is construction related. The
remaining amounts represent lost revenues and various operating and
administrative costs incurred as a result of the earthquake. The majority
of these costs are subject to recovery under the joint venture's earthquake
insurance policy. The deductible on the earthquake casualty and business
interruption coverages is approximately $2.1 million which is expected to
be funded by Topanga from operations in 1995 and/or offset by other
insurance recoveries. Included in this deductible are approximately $1.5
million of expenses incurred in 1994 that will be billed back to tenants
over a ten year period commencing in 1995. As of June 30, 1995, Topanga
has incurred approximately $6.4 million of the estimated $7.7 million of
costs to repair the mall. Approximately $7.4 million of the $11.9 million
of total costs has been reimbursed through insurance proceeds and
approximately $2.8 million of additional insurance proceeds are expected to
be recovered over the next year. All of the mall's 114 shops and the four
major department stores are open. Subsequent to the earthquake, sales at
the mall shops have increased due to the greater extent of damage at a
nearby competing mall. However, in August 1995, the competing mall was re-
opened. The re-opening of this mall is expected to have an adverse effect
on Topanga's sales. One department store, Robinson-May, had a portion of
their store condemned by city inspectors. One consequence of this partial
condemnation is that Robinson-May took back the approximately 25,000 square
feet of that store which was leased to the joint venture in 1990. 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
the loss of approximately $150,000 in annual net income from subleases of
the eight tenants which had subleased this space. Topanga was insured in
case of such event and received, in July 1994, insurance proceeds in the
amount of $2,500,000 (net of the related deductible) 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 wrote off, in 1994, approximately $1.2 million of
unamortized leasehold improvements discussed above. Topanga recorded, in
1994, an extraordinary loss of $2,889,000 (of which the Partnership's
share was approximately $1,676,000) which included Topanga's share of
repair cost of approximately $2.1 million, and approximately $789,000 of
other costs. The earthquake did result in some adverse effect on the
operations of the center in early 1994.

The joint venture partner had agreed to advance the joint venture
funds for expenses incurred for certain redevelopment costs related to a
potential future expansion of Topanga Plaza. The balance of these advances
was $435,000 at December 31, 1994. Such advances were repaid to the joint
venture partner in early 1995.

During 1994, the manager of the Topanga Plaza, an affiliate of the
joint venture partner, was sold to an unaffiliated third party, who assumed
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 was secured by a letter
of credit facility which was ultimately secured by a deed of trust on the
property. The letter of credit facility expired December 31, 1994,
however; in December 1994, the Partnership signed an agreement for a long-
term replacement letter of credit with a new lender and in conjunction with
the new letter of credit, simultaneously retired this original bond
financing and issued new bonds to the existing bondholders in their
original aggregate amount of $6,400,000. The new letter of credit expires
in December 1997. The new bond financing is due and payable upon the
expiration of the letter of credit.

In 1995, the leases of tenants occupying approximately 19,000 square
feet (approximately 20% 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. In addition, new leases will likely require expenditures
for lease commissions and tenant improvements prior to tenant occupancy.
These anticipated costs upon re-leasing will result in a decrease in cash
flow from operations over the near term.

At June 30, 1995, 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 94% leased as of the date of this report.

The Los Angeles office market in general and the Encino submarket in
particular are showing signs of strengthening as vacancy rates decrease and
rental rates stabilize.

The mortgage note secured by the First Financial Plaza office building
is scheduled to mature in November 1995. The venture continues to hold
discussions with the lender regarding an extension and modification of this
loan. The lender has indicated a willingness to extend the mortgage loan
two years and reduce the interest rate provided the joint venture agrees to
pay down the loan in the amount of $4 million. However, there can be no
assurance that such an extension or mortgage loan can be obtained at
maturity. The venture is also examining a possible sale of the property
should a loan extension not take place. There can be no assurance that a
sale of the property will occur. Based upon such uncertainty, Encino may
not be able to recover the net carrying value of the investment property
through future operations or sale. Accordingly, Encino as a matter of
prudent accounting practice, has made a provision for value impairment of
approximately $6,475,000, (of which approximately $4,047,000 is allocated
to the Partnership), all of which is allocable to First Financial joint
venture. Such provision was recorded at December 31, 1994 to reduce the
net carrying value of the property based upon an estimated sales price
should the Encino Venture be unable to extend or refinance the mortgage
loan at maturity.

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.

While the real estate markets are recuperating, highly competitive
market conditions continue to exist in most locations. The Partnership's
approach has been to aggressively and creatively manage the Partnership's
real estate assets to attract and retain tenants. Net effective rents to
the landlord from renewal tenants are much more favorable than lease terms
which can be negotiated with new tenants. However, the Partnership's
capital resources must also be preserved and allocated in such a manner as
to maximize the total value of the portfolio. As a result of the real
estate market conditions discussed above, the Partnership continues to
conserve its working capital. All expenditures are carefully analyzed and
certain capital projects are deferred when appropriate. The Partnership
has also sought or is seeking additional loan modifications where
appropriate. By conserving working capital, the Partnership will be in a
better position to meet the future needs of its properties since outside
sources of capital may be limited.

Due to these factors, the Partnership has held its remaining
investment properties longer than originally anticipated in an effort to
maximize the return to the Limited Partners.

RESULTS OF OPERATIONS

The decrease in cash and cash equivalents and the corresponding
increase in short-term investments as of June 30, 1995 as compared to
December 31, 1994 is primarily due to approximately $2,096,000 of the
Partnership's U.S. Government obligations being classified as cash
equivalents at June 30, 1995, whereas approximately $4,529,000 of such U.S.
Government obligations were classified as cash equivalents at December 31,
1994. See Note 1.

The increase in rents and other receivables as of June 30, 1995 as
compared to December 31, 1994 is primarily due to the timing of rental
payments received at Topanga Plaza and First Financial Plaza.

The increase in prepaid expenses at June 30, 1995 as compared to
December 31, 1994 is primarily due to the prepayment of real estate taxes
of approximately $843,000 at 40 Broad Street, partially offset by the
amortization of insurance premiums at 40 Broad Street, Topanga Plaza and
Plaza Hermosa.

The decrease in escrow deposits at June 30, 1995 as compared to
December 31, 1994 is primarily due to the release of certain escrowed funds
at Topanga Plaza.

The casualty insurance receivable balance at December 31, 1994
represents a portion of repair costs reimbursed through insurance proceeds
in 1995 at Topanga Plaza.

The decrease in investment in unconsolidated ventures as of June 30,
1995 as compared to December 31, 1994 is primarily due to the Partnership's
receipt of distributions of $1,250,000 from the Park Center Plaza
investment properties.

The decrease in construction costs payable at June 30, 1995 as
compared to December 31, 1994 is due to the timing of payment of
construction costs incurred at Topanga Plaza.

The increase in accrued real estate taxes as of June 30, 1995 as
compared to December 31, 1994 is primarily due to the timing of payment of
real estate taxes at Plaza Hermosa and First Financial Plaza.

The decrease in advances from affiliates as of June 30, 1995 as
compared to December 31, 1994 is due to the repayment of such advances to
the previous venture partner at Topanga Plaza. See Note 3(d).

The increase in rental income for the three and six months ended June
30, 1995 as compared to the three and six months ended June 30, 1994 is
primarily due to increased rental income at Topanga Plaza due to the
recovery of operations from the impact of the earthquake damage incurred in
early 1994. See Note 3(d).

The increase in interest income for the three and six months ended
June 30, 1995 as compared to the three and six months ended June 30, 1994
is primarily due to higher average invested balances in U.S. Government
obligations and higher effective yields earned on such investments in 1995.

The decrease in property operating expenses for the three and six
months ended June 30, 1995 as compared to the three and six months ended
June 30, 1994 is primarily due to a decrease in provision for doubtful
accounts of approximately $441,000 as a result of the resolution of tenant
rent disputes in 1994 associated with the earthquake damage in addition to
the decrease in various operating expenses in 1995 as compared to 1994 due
to the earthquake at Topanga Plaza, a real estate tax refund of
approximately $99,000 at Plaza Hermosa and higher repairs and maintenance
expense in 1994 at 40 Broad Street.

The increase in amortization of deferred expenses for the three and
six months ended June 30, 1995 as compared to the three and six months
ended June 30, 1994 is primarily due to the capitalization of certain
expenses related to the refinancing at Plaza Hermosa. See Note 2(b).

The increase in Partnership's share of operations of unconsolidated
ventures for the three and six months ended June 30, 1995 as compared to
the three and six months ended June 30, 1994 is primarily due to a decrease
in real estate tax expense and an increase in interest income from
investments in U.S. Government obligations at the San Jose investment
property.

The decrease in venture partners' share of ventures' operations for
the three and six months ended June 30, 1995 as compared to the three and
six months ended June 30, 1994 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 in 1994. See Note 3(d).

The extraordinary item for the six months ended June 30, 1994 is due
to the earthquake damage at Topanga Plaza in 1994. 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>
1994 1995
-------------------------------------------------------------
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 . . . 83% 83% 83% 84% 74% 77%

2. Topanga Plaza
Los Angeles, California. . 90% 92% 92% 95% 95% 96%

3. 40 Broad Street
New York, New York . . . . 82% 82% 82% 80% 76% 76%

4. Plaza Hermosa
Shopping Center
Hermosa Beach, California. 81% 91% 92% 95% 93% 93%

5. First Financial Plaza
Encino (Los Angeles),
California . . . . . . . .84%(1) 91%(1) 89%(1) 89%(1) 93%(1) 86%(1)

<FN>

(1) The percentage represents physical occupancy. Mitsubishi (8,109 square feet) vacated its space in July
1993 prior to its lease expiration of January 1997 and continues to pay rent pursuant to its lease obligation.

</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.

4-D. Letter of credit agreement between JMB Income
Properties, Ltd-XII and Dresdner Bank AG dated November 15, 1994 relating
to the letter of credit extension at Plaza Hermosa is hereby incorporated
herein by reference to the Partnership's report on Form 10-K (File No. 0-
16108) dated March 27, 1995.

4-E. Mortgage loan agreement, Amended and Restated
Deed of Trust, Security Agreement with assignment of Rents and Fixture
Filing and Real Estate tax escrow and Security Agreement between San Jose
and Connecticut General Life Insurance Co. dated November 30, 1994 is
hereby incorporated herein by reference to the Partnership's report on Form
10-K (File No. 0-16108) dated March 27, 1995.

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.

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:August 9, 1995

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 9, 1995

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE REGISTRANT'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE
30, 1995 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995

<CASH> 5,282,061
<SECURITIES> 18,235,213
<RECEIVABLES> 3,704,062
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 27,221,336
<PP&E> 193,954,683
<DEPRECIATION> 49,600,712
<TOTAL-ASSETS> 187,078,570
<CURRENT-LIABILITIES> 33,193,669
<BONDS> 64,301,795
<COMMON> 0
0
0
<OTHER-SE> 68,462,263
<TOTAL-LIABILITY-AND-EQUITY> 187,078,570
<SALES> 14,364,916
<TOTAL-REVENUES> 15,007,773
<CGS> 0
<TOTAL-COSTS> 9,481,246
<OTHER-EXPENSES> 397,022
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,605,020
<INCOME-PRETAX> 524,485
<INCOME-TAX> 0
<INCOME-CONTINUING> 934,089
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 934,089
<EPS-PRIMARY> 4.73
<EPS-DILUTED> 4.73

</TABLE>