JMB INCOME PROPERTIES LTD XII, 10-Q, 1995-11-13

JMB INCOME PROPERTIES LTD XII
10-Q, 1995-11-13
REAL ESTATE

Previous: INSTITUTIONAL FIDUCIARY TRUST, 497, 1995-11-13

Next: MAY LIMITED PARTNERSHIP 1984-3, 10-Q, 1995-11-13

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarter ended September 30, 1995 Commission file #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 . . . . . . . . . . . . . 26

Item 6. Exhibits and Reports on Form 8-K. . . . . . 27

<TABLE>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 1995 AND DECEMBER 31, 1994

(UNAUDITED)

ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . $ 25,137,031 8,222,359
Short-term investments (note 1). . . . . . . . . . . . . . . 1,953,199 14,176,812
Rents and other receivables, net of allowance for
doubtful accounts of $351,920 at September 30,
1995 and $925,820 at December 31, 1994 . . . . . . . . . . 2,545,862 2,162,206
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . 661,586 226,598
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . 508,365 708,332
Casualty insurance receivable. . . . . . . . . . . . . . . . -- 853,000
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . 30,806,043 26,349,307
------------ -----------
Investment properties, at cost (note 2):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,554,359 22,425,036
Buildings and improvements . . . . . . . . . . . . . . . . . 168,277,881 170,873,378
------------ -----------
188,832,240 193,298,414
Less accumulated depreciation. . . . . . . . . . . . . . . . (51,096,875) (46,792,110)
------------ -----------
Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . 137,735,365 146,506,304

Investment in unconsolidated ventures,
at equity (notes 1 and 6). . . . . . . . . . . . . . . . . . 4,826,137 5,719,465
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 7,723,114 8,340,547
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 2,470,089 2,406,764
------------ -----------
$183,560,748 189,322,387
============ ===========

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

CONSOLIDATED BALANCE SHEETS - CONTINUED

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

SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- -----------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . $ 29,374,405 29,539,123
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 2,829,216 3,863,132
Construction costs payable . . . . . . . . . . . . . . . . . -- 342,324
Accrued interest . . . . . . . . . . . . . . . . . . . . . . 508,869 --
Accrued real estate taxes. . . . . . . . . . . . . . . . . . 241,487 --
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . 10,854 64,806
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . 32,964,831 33,809,385
Tenant security deposits . . . . . . . . . . . . . . . . . . . 500,454 509,493
Long-term debt, less current portion . . . . . . . . . . . . . 64,196,878 64,470,886
Advances from affiliates (note 3(d)) . . . . . . . . . . . . . -- 435,000
------------ -----------
Commitments and contingencies (notes 1, 2, 3 and 5)

Total liabilities. . . . . . . . . . . . . . . . . . . 97,662,163 99,224,764
Venture partners' subordinated equity in ventures. . . . . . . 21,518,003 21,616,287
Partners' capital accounts:
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . 11,123 11,123
Cumulative net earnings. . . . . . . . . . . . . . . . . . 562,762 669,602
------------ -----------
573,885 680,725
------------ -----------
Limited partners (189,684 interests):
Capital contributions, net of offering costs . . . . . . . 171,306,452 171,306,452
Cumulative net loss. . . . . . . . . . . . . . . . . . . . (30,912,152) (28,347,981)
Cumulative cash distributions. . . . . . . . . . . . . . . (76,587,603) (75,157,860)
------------ -----------
63,806,697 67,800,611
------------ -----------
Total partners' capital accounts . . . . . . . . . . . 64,380,582 68,481,336
------------ -----------
$183,560,748 189,322,387
============ ===========
<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 NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994

(UNAUDITED)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
----------------------------------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . $10,303,525 7,112,044 24,668,441 22,042,900
Interest income. . . . . . . . . . . . . 363,073 270,177 1,005,930 634,543
----------- ---------- ----------- ----------
10,666,598 7,382,221 25,674,371 22,677,443
----------- ---------- ----------- ----------
Expenses:
Mortgage and other interest. . . . . . . 2,226,549 2,365,946 6,831,569 7,103,814
Depreciation . . . . . . . . . . . . . . 1,496,163 1,391,434 4,304,765 4,174,200
Property operating expenses. . . . . . . 3,187,195 3,581,524 9,189,851 10,567,816
Professional services. . . . . . . . . . 1,815 17,992 227,424 236,088
Amortization of deferred
expenses . . . . . . . . . . . . . . . 332,764 264,320 1,002,752 791,399
General and administrative . . . . . . . 151,975 54,577 323,388 185,696
Provision for value impairment
(note 2(b)). . . . . . . . . . . . . . 5,500,000 -- 5,500,000 --
----------- ---------- ----------- ----------
12,896,461 7,675,793 27,379,749 23,059,013
----------- ---------- ----------- ----------
Operating loss . . . . . . . . . . (2,229,863) (293,572) (1,705,378) (381,570)
Partnership's share of
operations of unconsolidated
ventures (notes 1 and 6) . . . . . . . . (161,363) (2,252) 356,672 304,009
Venture partners' share of
ventures' operations before
extraordinary item (note 1). . . . . . . (1,213,874) (66,476) (1,322,305) 443,142
----------- ---------- ----------- ----------
Net operating earnings
(loss) before extra-
ordinary item. . . . . . . . . . (3,605,100) (362,300) (2,671,011) 365,581

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

CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
----------------------------------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------
Extraordinary item (net of
venture partners' share of
$1,588,537) (note 3(d)). . . . . . . . . -- -- -- (2,300,838)
----------- ---------- ----------- ----------
Net loss . . . . . . . . . . . . . $(3,605,100) (362,300) (2,671,011) (1,935,257)
=========== ========== =========== ==========
Net earnings (loss) per
limited partnership
interest (note 1):
Net operating earnings
(loss) . . . . . . . . . . . . $ (18.25) (1.93) (13.52) 1.78
Extraordinary item . . . . . . . -- -- -- (11.64)
----------- ---------- ----------- ----------

Net loss . . . . . . . . . . $ (18.25) (1.93) (13.52) (9.86)
=========== ========== =========== ==========

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

NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994

(UNAUDITED)
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(2,671,011) (1,935,257)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 4,304,765 4,174,200
Amortization of deferred expenses. . . . . . . . . . . . . . . 1,002,752 791,399
Partnership's share of operations of unconsolidated
ventures . . . . . . . . . . . . . . . . . . . . . . . . . . (356,672) (304,009)
Venture partners' share of ventures' operations
and extraordinary item . . . . . . . . . . . . . . . . . . . 1,322,305 (2,031,679)
Provision for value impairment (note 2(b)) . . . . . . . . . . 5,500,000 --
Write-off of assets. . . . . . . . . . . . . . . . . . . . . . -- 1,174,125
Extraordinary item, net of insurance recoveries
of $1,174,125. . . . . . . . . . . . . . . . . . . . . . . . -- 3,889,375
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . (383,656) 354,022
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . (434,988) (603,566)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . 199,967 403,775
Casualty insurance receivable. . . . . . . . . . . . . . . . . 853,000 (413,421)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . (63,325) (30,584)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . (1,033,916) 138,609
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . 508,869 --
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . 241,487 119,108
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . (53,952) 32,935
Tenant security deposits . . . . . . . . . . . . . . . . . . . (9,039) 87,315
------------ -----------
Net cash provided by operating activities. . . . . . . . . 8,926,586 5,846,347
------------ -----------
Cash flows from investing activities:
Net sales and maturities of short-term investments . . . . . . . 12,223,613 2,389,100
Additions to investment properties,
net of related payables. . . . . . . . . . . . . . . . . . . . (1,206,974) (4,334,860)
Partnership's distributions from unconsolidated
ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,250,000 --
Payment of deferred expenses . . . . . . . . . . . . . . . . . . (554,495) (906,514)
------------ -----------
Net cash provided by (used in) investing activities. . . . 11,712,144 (2,852,274)
------------ -----------

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 . . . . . . . . . . . . . . (438,726) (426,144)
Advances from affiliate. . . . . . . . . . . . . . . . . . . . . (435,000) --
Venture partners' contributions to venture . . . . . . . . . . . 42,811 547,208
Distributions to venture partners. . . . . . . . . . . . . . . . (1,463,400) (45,000)
Distributions to limited partners. . . . . . . . . . . . . . . . (1,429,743) (1,429,743)
------------ -----------
Net cash used in financing activities. . . . . . . . . . . (3,724,058) (1,353,679)
------------ -----------
Net increase in cash and cash equivalents. . . . . . . . . 16,914,672 1,640,394

Cash and cash equivalents, beginning of year . . . . . . . 8,222,359 1,470,860
------------ -----------
Cash and cash equivalents, end of period . . . . . . . . .$ 25,137,031 3,111,254
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . .$ 6,322,700 7,103,815
============ ===========
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

SEPTEMBER 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 nine months ended
September 30:
1995 1994
----------------------- --------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------

Net loss . . . .$2,671,011 2,039,103 1,935,257 3,385,875
Net loss
per limited
partnership
interest. . . .$ 13.52 10.32 9.86 17.14
========== ========= ========= =========

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 ($18,528,768 and $4,529,080 at September 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. Reference
is made to Note 3(b) for further discussion of the current status of this
investment property through future operations and sale. In addition, due
to the uncertainty of the Partnership's ability to recover the net carrying
value of the Plaza Hermosa investment property through future operations
and sale over its revised expected holding period, the Partnership made, as
a matter of prudent accounting practice, a provision for value impairment
as of September 30, 1995 of $5,500,000. Such provision reduced the net
carrying value of the investment property to its then estimated fair value.

Reference is made to Note 2(b).

Certain amounts in the 1994 consolidated financial statements have
been reclassified to conform to the 1995 presentation.

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 to be held and used 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. Any long-lived assets identified "to be
disposed of" would no longer be depreciated but adjustments for impairment
loss would be made in each period as necessary to report those assets at
the lower of historical cost and fair value less costs to sell. In certain
situations, such estimated fair value could be less than the existing non-
recourse debt which is secured by the property.

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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The Partnership expects to adopt SFAS 121 no later than the first
quarter of 1996. Although the Partnership has not fully completed its
assessment of the full impact of adopting SFAS 121, it is not anticipated
that any significant additional provisions for value impairment would be
required for the properties owned by the Partnership and its consolidated
ventures, or by the Partnership's unconsolidated ventures, in the first
period of implementation of SFAS 121. 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.

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 September 30,
1995.

(b) Plaza Hermosa

During 1986, the Partnership acquired a shopping center in Hermosa
Beach, California for $18,290,000, of which $11,890,000 was paid in cash at
closing and the balance 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. In
December 1994 upon expiration of the letter of credit facility, the
Partnership obtained a long-term replacement letter of credit with a new
lender and 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.

In 1995, the leases of tenants occupying approximately 14,500 square
feet (approximately 15% 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. As a result of reduced projected
cash flows, the upcoming maturity of the letter of credit facility in 1997
and the expected holding period of the property, there is uncertainty as to
the Partnership's ability to recover the net carrying value of the Plaza
Hermosa investment property through future operations or sale over its
revised expected holding period. Therefore, the Partnership has made, as a

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

matter of prudent accounting practice, a provision for value impairment at
September 30, 1995 of $5,500,000. Such provision reduced the net carrying
value of the investment property to its then estimated fair value.

(3) VENTURE AGREEMENTS

(a) General

The Partnership at September 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.

(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. San Jose and the Agency have been able to agree, in
principle, upon mutually acceptable terms for the transfer of the garage.
Under the agreement, San Jose anticipates receiving replacement parking
spaces for its tenants in a near-by city-owned parking structure for an
extended period of time in addition to the aforementioned purchase price of
$4,090,000. However, San Jose still must negotiate terms to an acceptable
contract and there can be no assurance that such a contract will ultimately
be finalized. If such a contract is executed on the proposed terms, San
Jose anticipates the transfer of the garage to occur in March 1996. Upon
such a transfer, San Jose would recognize a gain for financial reporting
and Federal income tax purposes.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

In October 1995, San Jose elected to repay the mortgage obligations
(originally scheduled to mature in September 2000) securing the portion of
the complex on which the 100-130 Buildings are located as well as a portion
of the garage. The outstanding principal balances, at the time of
repayment, were $2,418,722 of which the Partnership's share was $1,209,361.

After reviewing and analyzing San Jose's potential options with regard to
its investment in the 100-130 Park Center Plaza portion of the complex, San
Jose determined that it was in the best interest of the venture to repay
the mortgage obligations secured by this portion of the complex. Tenants
occupying approximately 88,000 square feet (approximately 20% of the
buildings) of the Park Center Plaza investment property have leases that
expire in 1996, 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 has worked with consultants to
analyze ways in which such a potential life safety hazard could be reduced.

In order to reduce any potential life safety hazard that may occur during
unusually intense earthquake conditions, San Jose is undergoing a voluntary
upgrade to the 130 Park Center Plaza building and the parking garage below
the 100-130 buildings for seismic purposes. San Jose estimates the cost of
the structural upgrade to be $1,200,000 of which the Partnership's share is
$600,000. Such work is scheduled to begin in November 1995 and should be
completed by mid 1996.

San Jose 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.

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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(d) Topanga

In 1985, the Partnership acquired a 58% interest in 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.

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 (which does not include costs associated with the space taken back
by Robinson-May as discussed below), 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 has been or 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 pursuant to their leases over a
ten year period commencing in 1995. As of September 30, 1995, Topanga has
incurred approximately $6.6 million of the estimated $7.7 million of costs
to repair the mall. Approximately, $10.3 million of the $11.9 million of
total costs has been reimbursed through insurance proceeds. Approximately
$2.8 million of additional insurance proceeds were collected as a final
settlement during the third quarter of 1995. Such amount represents
recoveries under the joint venture's business interruption policy and is
reflected as rental income in the accompanying consolidated financial
statements. All of the mall's 114 shops and the four major department
stores are open. Subsequent to the earthquake, sales at the mall shops
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 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 had been 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 currently expects to 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. First Financial does not
anticipate further increasing its initial cash investment in Encino.

The first mortgage loan on the property matured November 1, 1995.
Effective November 1, 1995, Encino and the existing lender has amended and
restated the existing mortgage loan. The new principal balance of the
amended note at November 1, 1995 is $24,970,148. This amount is comprised
of the current outstanding principal portion of $28,970,148 on the original
$30,000,000 note less the required $4,000,000 principal paydown by Encino,
all of which was advanced by First Financial, of which the Partnership's
share is $2,500,000. The amended loan has an interest rate of 8.67% and a
term of two years resulting in a maturity date of November 1, 1997. The
new monthly installments of principal and interest will be $209,077.

Due to the uncertainty of Encino's ability to recover the net carrying
value of the First Financial office building investment property through
future operations and sale during the estimated holding period. Encino
recorded, as a matter of prudent accounting practice, a provision for value
impairment of such investment of approximately $6,475,000, all of which is
allocable to First Financial. The Partnership's share of such provision to
First Financial is approximately $4,047,000. Such provision was recorded
at December 31, 1994 to reduce the net carrying value of the investment
property to its then estimated recoverable value.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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. All testing and repairs necessary
to comply with such ordinance have been completed as of October 1995. The
current estimated final cost of such testing and repairs is approximately
$900,000 (of which the Partnership's share is approximately $562,500).

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.

(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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Fees, commissions and other expenses required to be paid by the
Partnership to the General Partners and their affiliates as of September
30, 1995 and for the nine months ended September 30, 1995 and 1994 are as
follows:
Unpaid at
September 30,
1995 1994 1995
-------- ------ -------------
Property management
and leasing fees. . . . . $ 49,150 136,636 --
Insurance commissions. . . 70,488 61,436 --
Reimbursement
(at cost) for
out-of-pocket
expenses. . . . . . . . . 5,083 4,756 594
-------- ------- -----
$124,721 202,828 594
======== ======= =====

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 $172,607 and $108,499 for the nine months ended September 30,
1995 and for the twelve months ended December 31, 1994, respectively, all
of which has been paid as of September 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 $7,625,000 as of
September 30, 1995. All amounts deferred or currently payable do not bear
interest.

The Topanga venture has incurred approximately $38,000 of interest
expense on affiliated venture partner advances (note 3(d)) for the nine
months ended September 30, 1994, all of which was paid to an affiliate of
the former venture partner as of September 30, 1995.

The Managing General Partner of the Partnership has determined to use
independent third parties to perform certain administrative services
beginning in the fourth quarter of 1995. Use of such third parties 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 nine months ended September 30, 1995 and 1994 is as follows:

1995 1994
---------- -----------
Total income. . . . . . . . $6,889,719 7,079,634
========== ===========
Operating earnings. . . . . $ 713,343 608,018
========== ===========
Net earnings to
the Partnership . . . . . $ 356,672 304,009
========== ===========

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 September 30,
1995 and for the three and nine months ended September 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 September 30, 1995, the Partnership had cash and cash equivalents
of approximately $25,137,000. Such funds and short-term investments of
approximately $1,953,000 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, the repayment of debt
of which the Partnership's share was $1,209,361 (as discussed below and in
Note 3(b)) at the Park Center Financial Plaza, and the 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 $3,414,000 for tenant improvements and other capital
expenditures. 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 $2,782,000. Such budgeted amounts exclude earthquake
costs at Topanga Plaza (as discussed below and in Note 3(d)). 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 $7,625,000 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 continue to be reduced. 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. San Jose and the Agency have been able to agree, in
principle, upon mutually acceptable terms for the transfer of the garage.
Under the agreement, San Jose anticipates receiving replacement parking
spaces for its tenants in a near-by city-owned parking structure for an
extended period of time in addition to the aforementioned purchase price of
$4,090,000. However, San Jose still must negotiate terms to an acceptable
contract and there can be no assurance that such a contract will ultimately
be finalized. If such a contract is executed on the proposed terms, San
Jose anticipates the transfer of the garage to occur in March 1996. Upon
such a transfer, San Jose would recognize a gain for financial reporting
and Federal income tax purposes.

In October 1995, San Jose elected to repay its mortgage obligations
(originally scheduled to mature in September 2000) securing the portion of
the complex on which the 100-130 Buildings are located as well as a portion
of the garage. The outstanding principal balances, at the time of
repayment, were $2,418,722 of which the Partnership's share was $1,209,361.

Reference is made to Note 3(b). After reviewing and analyzing San Jose's
potential options with regard to its investment in the 100-130 Park Center
Plaza portion of the complex, San Jose determined that it was in the best
interest of the venture to repay the mortgage obligations secured by this
portion of the complex. Tenants occupying approximately 88,000 square feet
(approximately 20% of the buildings) of the Park Center Plaza investment
property have leases that expire in 1996, 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 has worked with consultants to
analyze ways in which such a potential life safety hazard could be reduced.

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 (which does not include costs associated with the space taken back
by Robinson-May as discussed below), 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 September 30, 1995, Topanga has incurred approximately $6.6 million
of the estimated $7.7 million of costs to repair the mall. Approximately
$10.3 million of the $11.9 million of total costs has been reimbursed
through insurance proceeds. Approximately $2.8 million of additional
insurance proceeds were collected as a final settlement during the third
quarter of 1995. Such amount represents recoveries under the joint
venture's business interruption policy and is reflected as rental income in
the accompanying consolidated financial statements. All of the mall's 114
shops and the four major department stores are open. Subsequent to the
earthquake, sales at the mall shops 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 had been 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 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 joint venture partner in early
1995 from available cash at the venture.

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. In December 1994, upon expiration of the letter of credit
facility, the Partnership obtained a long-term replacement letter of credit
with a new lender and simultaneously retired the 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 14,500 square
feet (approximately 15% 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. As a result of reduced projected
cash flow, the upcoming maturity of the letter of credit facility in 1997
and the expected holding period of the property, there is uncertainty as to
the Partnership's ability to recover the net carrying value of the Plaza
Hermosa investment property through future operations or sale over its
revised expected holding period. Therefore, the Partnership has made, as a
matter of prudent accounting practice, a provision for value impairment at
September 30, 1995 of $5,500,000. Such provision reduced the net carrying
value of the investment property to its then estimated fair value.
Reference is made to Notes 1 and 2(b).

At September 30, 1995, the First Financial Plaza office building is
approximately 88% 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 92% 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 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 testing by the structural engineer indicated that some of the
building's joint weldings suffered damage which, in accordance with the
ordinance, were required to be repaired. Encino's structural engineer has
informed Encino that the damage detected did not pose a life safety risk
for the building's tenants. All testing and repairs necessary to comply
with such ordinance have been completed as of October 1995. The current
estimated total cost of such testing and repairs is approximately $900,000
(of which the Partnership's share is approximately $562,500).

The first mortgage loan on the property matured November 1, 1995.
Effective November 1, 1995, Encino and the existing lender have amended and
restated the existing mortgage loan. The new principal balance of the
amended note at November 1, 1995 is $24,970,148. This amount is comprised
of the current outstanding principal portion of $28,970,148 on the original
$30,000,000 note less the required $4,000,000 principal paydown by Encino,
all of which was advanced by First Financial, of which the Partnership's
share is $2,500,000. The amended loan has an interest rate of 8.67% and a
term of two years resulting in a maturity date of November 1, 1997. The
new monthly installments of principal and interest, based on a 23 year
amortization, will be $209,077.

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. In an effort to
reduce partnership operating expenses, the Partnership has elected to make
semi-annual rater than quarterly distributions of operating cash flow
beginning in November 1995. 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. After reviewing the remaining properties
and their competitive marketplace, the General Partners of the Partnership
expect to be able to liquidate the remaining assets as quickly as
practicable. Therefore, the affairs of the Partnership are expected to be
wound up no later than 1999 (sooner if the properties are sold in the near
term), barring unforeseen economic developments.

RESULTS OF OPERATIONS

The increase in cash and cash equivalents and the corresponding
decrease in short-term investments as of September 30, 1995 as compared to
December 31, 1994 is primarily due to approximately $18,529,000 of the
Partnership's U.S. Government obligations being classified as cash
equivalents at September 30, 1995, whereas approximately $4,529,000 of such
U.S. Government obligations were classified as cash equivalents at December
31, 1994. Reference is made to Note 1. The aggregate increase in cash and
cash equivalents and short-term investments as of September 30, 1995 as
compared to December 31, 1994 is primarily due to the temporary investment
of approximately $2.8 million of insurance proceeds received during the
third quarter of 1995 at the Topanga Plaza Shopping Center. Reference is
made to Note 3(d).

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

The increase in prepaid expenses at September 30, 1995 as compared to
December 31, 1994 is primarily due to the prepayment of real estate taxes
of approximately $395,000 at 40 Broad Street.

The decrease in escrow deposits at September 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. Reference is made to Note 3(d).

The decreases in land, buildings and improvements, and deferred
expenses at September 30, 1995 as compared to December 31, 1994 are
primarily due to the provision for value impairment of $5,500,000 recorded
at the Plaza Hermosa investment property at September 30, 1995 to reduce
the net carrying value of the property to its then estimated fair value due
to the uncertainty of the Partnership's ability to recover the net carrying
value of the investment property through future operations or sale.
Reference is made to Notes 1 and 2(b).

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

The decrease in accounts payable as of September 30, 1995 as compared
to December 31, 1994 is primarily due to the payment of certain earthquake
repair costs at Topanga Plaza and First Financial Plaza.

The decrease in construction costs payable at September 30, 1995 as
compared to December 31, 1994 is due to the timing of payment of
construction costs incurred at Topanga Plaza. Reference is made to Note
3(d).

The increase in accrued interest as of September 30, 1995 as compared
to December 31, 1994 is primarily due to the mortgage payments being made
one month in arrears (in conformity to the loan schedule) at Topanga Plaza
in 1995.

The increase in accrued real estate taxes as of September 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 unearned rents at September 30, 1995 as compared to
December 31, 1994 is primarily due to the timing of tenant rental payments
at Plaza Hermosa.

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

The increases in rental income and venture partners' share of
ventures' operations for the three and nine months ended September 30, 1995
as compared to the three and nine months ended September 30, 1994 are
primarily due to the receipt of insurance proceeds of approximately
$2,800,000, in the third quarter of 1995, relating to business interruption
at Topanga Mall following the earthquake in early 1994. Reference is made
to Note 3(d).

The increase in interest income for the three and nine months ended
September 30, 1995 as compared to the three and nine months ended September
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 nine
months ended September 30, 1995 as compared to the three and nine months
ended September 30, 1994 is primarily due to a decrease in provision for
doubtful accounts of approximately $702,000 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 $128,000 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
nine months ended September 30, 1995 as compared to the three and nine
months ended September 30, 1994 is primarily due to the capitalization of
certain expenses related to the December 1994 refinancing at Plaza Hermosa.

Reference is made to Note 2(b).

The increases in general and administrative expenses for the three and
nine months ended September 30, 1995 as compared to the three and nine
months ended September 30, 1994 are attributable primarily to an increase
in reimbursable costs to affiliates of the General Partners in 1995 and the
recognition of certain additional prior year reimbursable costs to such
affiliates. Reference is made to Note 5.

The decrease in Partnership's share of operations of unconsolidated
ventures for the three months ended September 30, 1995 as compared to the
three months ended September 30, 1994 is primarily due to the write-off of
receivables relating to a certain tenant at the San Jose investment
property.

The extraordinary item for the nine months ended September 30, 1994 is
due to the earthquake damage at Topanga Plaza in 1994. Reference is made
to 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% 76%

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

3. 40 Broad Street
New York, New York . . . . 82% 82% 82% 80% 76% 77% 77%

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

5. First Financial Plaza
Encino (Los Angeles),
California . . . . . . . .84%(1) 91%(1) 89%(1) 89%(1) 93%(1) 86%(1) 88%(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:November 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:November 9, 1995

<ARTICLE> 5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED
SEPTEMBER 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995

<CASH> 25,137,031
<SECURITIES> 1,953,199
<RECEIVABLES> 3,715,813
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30,806,043
<PP&E> 188,832,240
<DEPRECIATION> 51,096,875
<TOTAL-ASSETS> 183,560,748
<CURRENT-LIABILITIES> 32,964,831
<BONDS> 64,196,878
<COMMON> 0
0
0
<OTHER-SE> 64,380,582
<TOTAL-LIABILITY-AND-EQUITY> 183,560,748
<SALES> 24,668,441
<TOTAL-REVENUES> 25,674,371
<CGS> 0
<TOTAL-COSTS> 14,497,368
<OTHER-EXPENSES> 550,812
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,831,569
<INCOME-PRETAX> 1,705,378
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,671,011
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,671,011
<EPS-PRIMARY> 13.52
<EPS-DILUTED> 13.52

</TABLE>