WEST COAST REALTY INVESTORS INC, POS AM, 1997-03-19

WEST COAST REALTY INVESTORS INC
POS AM, 1997-03-19
REAL ESTATE INVESTMENT TRUSTS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 19, 1997

REGISTRATION NO. 333-1304
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

POST-EFFECTIVE AMENDMENT NO. 2

FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------

WEST COAST REALTY INVESTORS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN GOVERNING INSTRUMENTS)

5933 WEST CENTURY BOULEVARD - NINTH FLOOR
LOS ANGELES, CALIFORNIA 90045
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

PHILIP N. GAINSBOROUGH
5933 WEST CENTURY BOULEVARD - NINTH FLOOR
LOS ANGELES, CALIFORNIA 90045
(NAME AND ADDRESS OF AGENT FOR SERVICE)

------------------------

COPIES TO:

PETER R. PANCIONE, ESQ.
GIPSON HOFFMAN & PANCIONE
1901 AVENUE OF THE STARS, SUITE 1100
LOS ANGELES, CALIFORNIA 90067

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
Delivery of the Prospectus is expected to be made pursuant to Rule 415.
Please check the following box. [X]

IF ANY OF THE SECURITIES BEING REGISTERED ARE TO BE OFFERED ON A DELAYED OR
CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF 1933, CHECK
THE FOLLOWING BOX [X].

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

================================================================================
<PAGE> 2

WEST COAST REALTY INVESTORS, INC.

CROSS REFERENCE SHEET
PURSUANT TO ITEM 1(A)
(BY REFERENCE TO REGULATION S-K ITEM 501(B))

<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
----------------------------------------- -----------------------------------------
<C> <S> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus... Cover Page

2. Inside Front and Outside Back Cover Pages
of Prospectus............................ Cover Page; Back Cover

3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges....... Prospectus Summary; The Company; Risk
Factors

4. Determination of Offering Price.......... Plan of Distribution

5. Dilution................................. Not Applicable

6. Selling Security Holders................. Management's Discussion of Financial
Condition

7. Plan of Distribution..................... Cover Page; Description of Common Stock;
Plan of Distribution

8. Use of Proceeds.......................... Compensation of Advisor and Affiliates;
Estimated Use of Proceeds; Investment
Objectives and Policies

9. Selected Financial Data.................. Selected Financial Data

10. Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... Management's Discussion and Analysis of
Financial Condition and Results of
Operations

11. General Information as to Registrant..... Cover Page; The Company; Management;
Summary of Organization Documents
12. Policy with Respect to Certain
Activities............................... Investment Objectives and Policies;
Summary of Organization Documents;
Description of Common Stock

13. Investment Policies of Registrant........ Investment Objectives and Policies;
Summary of Organization Documents

14. Description of Real Estate............... Real Property Investments

15. Operating Data........................... Selected Financial Data

16. Tax Treatment of Registrant and its
Security Holders......................... Prospectus Summary; Tax Consequences

17. Market Price of and Dividends on the
Registrant's Common Equity and Related
Stockholder Matters...................... Not Applicable

18. Description of Registrant's Securities... Cover Page; Description of Common Stock

19. Legal Proceedings........................ Not Applicable

20. Security Ownership of Certain Beneficial
Owners................................... Description of Common Stock

21. Directors and Executive Officers......... Management

22. Executive Compensation................... Compensation of Advisor and Affiliates;
Management
</TABLE>
<PAGE> 3

<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
----------------------------------------- -----------------------------------------
<C> <S> <C>

23. Certain Relationships and Related
Transactions............................. Compensation of Advisor and Affiliates;
Conflicts of Interest; Management

24. Selection, Management and Custody of
Registrant's Investments................. Investment Objectives and Policies;
Conflicts of Interest; Management
Services Provided by the Advisor; Summary
of Organization Documents

25. Policies with Respect to Certain
Transactions............................. Conflicts of Interest; Investment
Objectives and Policies; Summary of
Organization Documents

26. Limitations of Liability................. Risk Factors; Summary of Organization
Documents

27. Financial Statements and Information..... Financial Statements

28. Interests of Named Experts............... Legal Matters; Experts

29. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.............................. Summary of Organization Documents
</TABLE>
<PAGE> 4

PROSPECTUS

LOGO
WEST COAST REALTY INVESTORS, INC.

$10.00 PER SHARE

MINIMUM INVESTMENT: 100 SHARES ($1,000)
- --------------------------------------------------------------------------------

WEST COAST REALTY INVESTORS, INC. (the "Company") is a Delaware corporation
which qualifies, and since January 1, 1991 is doing business as, a "Real Estate
Investment Trust" for federal income tax purposes. The Company is advised by
West Coast Realty Advisors, Inc. (the "Advisor"), an Affiliate of Associated
Financial Group, Inc. ("AFG"). The Advisor oversees the investments of the
Company, subject to the direction of the Company's Board of Directors. A
majority of the members of the Board of Directors are independent (i.e., they
are not affiliated with the Advisor or AFG) (the "Independent Directors"). See
"Management."

The Company intends to use the net proceeds of this Offering to acquire,
improve, operate, hold for investment, sell and reinvest sales proceeds in
equity interests in income-producing residential, industrial, retail or
commercial real Properties located primarily in California and the west coast of
the United States. Properties will be acquired for cash or on a moderately
leveraged basis with aggregate mortgage indebtedness not to exceed 50% of the
Purchase Price (which is defined generally as the cost to acquire the Company's
Properties) of the Properties; however, an individual Property may be acquired
with mortgage indebtedness not to exceed 80% of its Purchase Price. If the
maximum proceeds of $15,000,000 are raised, approximately 75.39% of the proceeds
will be invested in Properties and the remaining 24.61% will be used to pay
expenses of the Offering and fees to the Advisor. See "Estimated Use of
Proceeds." As of the date of this Prospectus, the Company has acquired and owns
nine Properties, two of which have been acquired using proceeds from this
offering. See "Real Property Investments."

As of March 18, 1997, the Company has sold 345,528 Shares ($3,454,131). The
minimum subscription of 25,000 Shares was received and accepted by the Company
on July 9, 1996.

The Company has had three prior offerings of its Shares and its Affiliates
have offered and sold prior programs. The amount of securities sold by the
Company in its three prior offerings and by the Affiliates in the prior programs
was less than the maximum amount of securities offered for sale and, therefore,
were insufficient to achieve the Company's investment objectives. If the Company
does not sell the maximum number of Shares offered by this Prospectus, the
Company will acquire fewer Properties, resulting in a lack of diversification in
the number of Properties the Company may own. See "Prior Performance" and "Risk
Factors -- Uncertainty of Company Capitalization; Diversification; Possibility
of Number of Properties; Delay in Investments".

Investment in the Shares is subject to certain risks, including:

- The lack of identified investments to be acquired with the proceeds of the
offering. However, the Company has acquired and owns nine Properties.

- The payment of substantial fees to the Advisor and its Affiliates.

- The lack of participation by Shareholders in the direct management and
control of the Company.

- Various conflicts of interest.

- The Company's ability to diversify its investments.

- No active market for the Shares has developed and there is limited
liquidity to transfer the Shares.

- Certain real estate investment risks such as changes in occupancy rates,
revenues, lease payment defaults, competition, economic conditions, zoning
and tax increases; and

- Taxation of the Company as a corporation if it fails to qualify as a REIT

SEE "COMPENSATION OF ADVISOR AND AFFILIATES," "RISK FACTORS," "CONFLICTS OF
INTEREST" AND "MANAGEMENT."
(Cover page continued on next printed page)

- --------------------------------------------------------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA DOES NOT RECOMMEND
OR ENDORSE THE PURCHASE OF THESE SECURITIES.
THESE ARE SPECULATIVE SECURITIES.
================================================================================

<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
SHARES OFFERED TO THE PUBLIC PUBLIC COMMISSIONS(1) COMPANY(2)
- ----------------------------------------------------------------------- ------------ --------------- ------------
<S> <C> <C> <C>
Per Share $10.00 $.70 $9.30
Total Maximum (1,500,000) $15,000,000 $1,050,000 $13,950,000
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SHARES OFFERED TO SHAREHOLDERS THROUGH DIVIDEND REINVESTMENT PLAN, AND INITIAL SELLING PROCEEDS TO
CROSSING ARRANGEMENT PRICE COMMISSIONS COMPANY(3)
- ----------------------------------------------------------------------- ------------ --------------- ------------
<S> <C> <C> <C>
Per Share $10.00 $0 $10.00
Total $1,000,000 $0 $1,000,000
</TABLE>

================================================================================
(Footnotes continued on next printed page)

The date of this Prospectus is , 1997

<PAGE> 5

(Footnotes continued from cover)

(1) The Company will pay the Selling Agent and Selected Dealers sales
commissions of up to 7% of the offering price per Share and may pay to the
Selling Agent an additional 1% of the offering price per Share for wholesaling
compensation. The Selling Agent will also receive up to $.05 per Share from the
Company for bona fide due diligence expenses. See "Plan of Distribution."

(2) Before deducting Offering and Organizational expenses which include
legal and accounting fees, due diligence, printing expenses, Monitoring Fee,
filing fees, a nonaccountable expense allowance, and other expenses and fees
relating to the registration, marketing and distribution of all Shares pursuant
to this offering. The Advisor has agreed to pay any Offering and Organizational
expenses which exceed the greater of 4% of the gross proceeds of the offering or
$500,000.

(3) Prior to deducting expenses of the Dividend Reinvestment Plan of $50,000
to be paid by the Company.

(Cover page continued from cover)

The Company's objectives are to (i) invest in Properties which will preserve
and protect capital, (ii) provide Shareholders with cash Dividends, a portion of
which will not constitute taxable income (which due to depreciation will
constitute a return of capital which will reduce an investor's basis in the
Shares and thereby increase the gain or reduce the loss that will be incurred on
the disposition of the Shares or upon dissolution or liquidation of the
Company), (iii) provide capital gains through potential appreciation of
Properties, and (iv) provide a Crossing Arrangement and limited liquidity
through transferable shares of stock. No assurance can be given that these
objectives will be attained.

The offering of shares of Common Stock (the "Shares") will continue until
the earlier of May 1, 1998, the sale of 1,500,000 Shares or termination of the
offering by the Company's Board of Directors (which may be at any time). The
Company will pay sales commissions of up to 70 cents per Share from the gross
proceeds of this offering. No sales commissions will be paid to the Selling
Agent or Selected Dealers when qualified pension plans, profit sharing plans,
Keogh plans or individual retirement plans purchase a minimum of $500,000 of
Shares. Such entities will pay $9.30 per Share and the net proceeds to the
Company will remain the same. See "Plan of Distribution."

Proceeds received from subscribers will be placed in an interest bearing
escrow account with City National Bank, Los Angeles, California, Subscribers
have no right to withdraw their investment during the escrow period. See "Plan
of Distribution." The proceeds from sales of the Shares will remain in the
escrow account and transferred to the Company from time to time.

The Shares are freely transferable subject only to restrictions on certain
transfers which would disqualify the Company as a real estate investment trust.
However, there is no present market for the Shares except for the Crossing
Arrangement. In view of the imposition of suitability standards by state "blue
sky" administrators and certain listing standards, there is no assurance that
the Shares will be listed on the NASDAQ System or that an active market for the
Shares will develop. The Company has provided for a Crossing Arrangement which
will match buy and sell orders for the Shares. The Company has also provided for
a Dividend Reinvestment Plan which would allow purchasers of the shares to have
any Dividends paid on the Shares automatically invested in the purchase of
Shares of the Company.

See "Glossary" for the definitions of certain capitalized terms.

The Shares are being offered on a best-efforts minimum-maximum basis, (which
means there is no firm commitment to buy any Shares but best efforts will be
made to sell Shares) (the minimum amount of Shares 25,000 ($250,000) have been
sold) and the maximum amount of Shares that can be sold is 1,500,000
($15,000,000)). The Shares will be sold through Associated Securities Corp. (the
"Selling Agent"), also an Affiliate of AFG, and other broker-dealers ("Selected
Dealers") selected by the Selling Agent. The Company has agreed to indemnify the
Selling Agent and any Selected Dealers against certain civil liabilities,
including certain liabilities under the Securities Act of 1933, as amended. The
Company will pay the Selling Agent and Selected Dealers a sales commission of up
to 7% of the $10.00 per Share offering price. The Selling Agent and Selected
Dealers may also receive 5 cents per Share for bona fide due diligence expenses.
Shares may be purchased without payment of any sales commissions at $9.30 per
Share by current or retired employees, officers and directors of the Company,
the Advisor, the Selling Agent and Selected Dealers and their registered
representatives and any of their Affiliates (and the families of any of the
foregoing) and trust employee benefit plans established exclusively for the
benefit of such Persons. See "Plan of Distribution."

THE USE OF FORECASTS IN THIS OFFERING IS PROHIBITED. ANY REPRESENTATIONS TO
THE CONTRARY AND ANY PREDICTIONS, WRITTEN OR ORAL, AS TO THE AMOUNT OR CERTAINTY
OF ANY PRESENT OR FUTURE CASH BENEFIT OR TAX CONSEQUENCE WHICH MAY FLOW FROM AN
INVESTMENT IN THIS PROGRAM IS NOT PERMITTED.

UNTIL NINETY (90) DAYS AFTER THE DATE OF THIS PROSPECTUS ALL DEALERS EFFECTING
TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO
THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS.
<PAGE> 6

TABLE OF CONTENTS

PAGE
----

<TABLE>
<S> <C>
PROSPECTUS SUMMARY..................................................................... 1
The Company.......................................................................... 1
Risk Factors......................................................................... 1
Status of Offering................................................................... 1
Management: Compensation to Advisor and Affiliate.................................... 1
Shares............................................................................... 2
Investment Objectives and Policies................................................... 2
Income Tax Considerations............................................................ 2
Dividends............................................................................ 3
Dividend Reinvestment Plan........................................................... 3
Tax-Deferred Dividends............................................................... 3
Additional Considerations for Tax-Exempt Investors................................... 3
Conflicts of Interest................................................................ 3
THE COMPANY............................................................................ 4
RISK FACTORS........................................................................... 5
Continuous Operations of the Company; Shareholder Liquidation of Investment.......... 5
Substantial Payment of Fees to the Advisor and Affiliates............................ 5
Real Estate Investment Risks......................................................... 5
Leveraging of Investments............................................................ 6
Unspecified Investments.............................................................. 7
Uncertainty of Company Capitalization; Diversification; Possible Limited Numbers of
Properties; Delay in Investments.................................................. 7
Prior Experience in Raising Funds.................................................... 7
Uninsured Losses..................................................................... 8
Risks Related to Hazardous Wastes.................................................... 8
Joint Venture Investments............................................................ 8
Competition for Investments.......................................................... 8
Tax Risks............................................................................ 8
Additional Tax Risk.................................................................. 10
Reliance on Management and Conflicts of Interest..................................... 10
Limited Transferability; No Active Market For Shares May Develop..................... 10
Transferability of Shares; Application of Penny Stock Rules.......................... 10
Limited Liability, Indemnification and Possible Inadequacy of Shareholder Remedies... 11
Potential Dilution................................................................... 11
ESTIMATED USE OF PROCEEDS.............................................................. 11
COMPENSATION OF ADVISOR AND AFFILIATES................................................. 13
Selling Commissions.................................................................. 13
Acquisition Fees and Acquisition Expenses............................................ 13
Disposition Services................................................................. 13
Advisory Fee......................................................................... 13
Property Management Fee.............................................................. 14
Financing Services................................................................... 14
Subordinated Incentive Fee........................................................... 14
Reimbursements....................................................................... 14
CAPITALIZATION......................................................................... 18
SELECTED FINANCIAL DATA................................................................ 18
</TABLE>

i
<PAGE> 7

PAGE
----

<TABLE>
<S> <C>
CONFLICTS OF INTEREST.................................................................. 19
Competition by the Company with Affiliated Parties for Purchase and Sale of Real
Property.......................................................................... 19
Transactions with the Advisor or an Affiliate........................................ 19
Selling Agent........................................................................ 19
Property Management Fee.............................................................. 20
Lack of Separate Representation...................................................... 20
INVESTMENT OBJECTIVES AND POLICIES..................................................... 20
Principal Investment Objectives...................................................... 20
Use of Initial Capital............................................................... 21
Acquisition Policies................................................................. 22
Borrowing Policies -- Leveraging..................................................... 22
Reserves for Operating Expenses...................................................... 22
Management of Properties............................................................. 23
Dividends............................................................................ 23
Sale, Financing or Refinancing of Properties......................................... 24
General Restrictions................................................................. 25
REAL PROPERTY INVESTMENTS.............................................................. 25
Blockbuster Video Building........................................................... 25
Fresno Property...................................................................... 26
OPTO-22 Property..................................................................... 28
North Palm Street Property........................................................... 30
Riverside Marketplace Property....................................................... 31
Safeguard Business Systems Property.................................................. 33
Technology Drive Property............................................................ 34
Java City Property................................................................... 36
Tycom Property....................................................................... 39
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS............... 41
Results of Operations -- 1996 vs. 1995............................................... 41
Results of Operations -- 1995 vs. 1994............................................... 42
Liquidity and Capital Resources...................................................... 44
New Accounting Pronouncements........................................................ 45
MANAGEMENT............................................................................. 46
Directors and Officers of the Company................................................ 46
Board of Directors................................................................... 47
Advisor.............................................................................. 48
Property Manager..................................................................... 48
PRIOR PERFORMANCE...................................................................... 49
SERVICES PROVIDED BY THE ADVISOR AND PROPERTY MANAGER.................................. 50
Advisory Services.................................................................... 50
Property Management Services......................................................... 51
Other Services....................................................................... 51
TAX CONSEQUENCES....................................................................... 52
Opinion of Counsel................................................................... 53
Requirements for Qualification as a REIT............................................. 53
Termination or Revocation of REIT Status............................................. 57
Taxation of the Company.............................................................. 58
Taxation of Taxable U.S. Shareholders................................................ 58
Taxation of Tax-Exempt Shareholders.................................................. 60
</TABLE>

ii
<PAGE> 8

PAGE
----

<TABLE>
<S> <C>
Taxation of Non-U.S. Stockholders.................................................... 60
Statement of Stock Ownership......................................................... 61
Tax Law Changes...................................................................... 62
State and Local Taxes................................................................ 62
ERISA CONSIDERATIONS................................................................... 62
DESCRIPTION OF COMMON STOCK............................................................ 63
General.............................................................................. 63
Redemption and Prohibition of Transfer of Shares..................................... 63
SUMMARY OF ORGANIZATION DOCUMENTS...................................................... 64
Directors............................................................................ 64
Limited Liability and Indemnification of Directors, Officers, Employees and Other
Agents............................................................................ 64
Transactions with Affiliates......................................................... 65
Shareholder Limited Liability........................................................ 65
Reports to Shareholders and Rights of Examination.................................... 65
Restrictions on Investments.......................................................... 66
Other Restrictions................................................................... 66
Amendments........................................................................... 67
Meetings of Shareholders and Voting.................................................. 67
WHO SHOULD INVEST...................................................................... 67
Suitability Standards................................................................ 67
How to Subscribe..................................................................... 68
PLAN OF DISTRIBUTION................................................................... 68
Escrow Arrangements.................................................................. 69
Offering Period...................................................................... 69
Method of Subscription............................................................... 69
Transferability; Crossing Arrangement................................................ 70
Dividend Reinvestment Plan........................................................... 70
SALES MATERIAL......................................................................... 72
LEGAL MATTERS.......................................................................... 72
EXPERTS................................................................................ 72
FURTHER INFORMATION.................................................................... 72
GLOSSARY............................................................................... 72
INDEX TO FINANCIAL STATEMENTS.......................................................... 78
SUBSCRIPTION AGREEMENT................................................................. S-1
PRIOR PERFORMANCE TABLES............................................................... T-1
</TABLE>

No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus or in supplements to this Prospectus, or in literature issued by the
Company, Advisor or the Principal Distributor (which shall not be deemed to be a
part of this Prospectus), in connection with the offer contained herein, and if
given or made, that information or representation must not be relied upon. The
statements in this Prospectus or in any supplement are made as of the date of
the Prospectus or supplement, unless another time is specified. Neither the
delivery of this Prospectus or any supplement nor any sale of Shares shall,
under any circumstances, create an implication that there has been no change in
the facts since the date of the Prospectus or supplement. However, if any
material changes occur during the period when a Prospectus is required to be
delivered, this Prospectus or any supplement will be amended or supplemented
accordingly.

iii
<PAGE> 9

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus. See "Glossary" for
definitions of certain capitalized terms used in this Summary and throughout
this Prospectus.

THE COMPANY. West Coast Realty Investors, Inc. (the "Company") is a Delaware
corporation which has an unlimited life and will, therefore, continue in
business and operate for an indefinite period of time. A majority (3 of 5) of
the Company's Directors are independent of and unaffiliated with the Advisor or
AFG. Since January 1, 1991, the Company qualifies, and is doing business, as a
"Real Estate Investment Trust" under the Internal Revenue Code of 1986, as
amended (the "Code"). See "The Company," "Risk Factors," and "Tax Consequences."
The Company's principal office is located at 5933 W. Century Boulevard, Ninth
Floor, Los Angeles, California 90045, telephone: (310) 337-9700.

The Company is making the Offering of its Shares to increase its size and
the amount of the Company's investment in Properties, thereby potentially
increasing the amount of Properties it will be able to acquire and diversifying
the risk of an investment in the Company and spreading operating expenses over a
greater number of assets.

RISK FACTORS. An investment in the Shares is subject to certain risks,
including:

- The lack of identified investments to be acquired with the proceeds of
the offering.

- The payment of substantial fees to the Advisor and its Affiliates.

- The lack of participation by Shareholders in the direct management and
control of the Company.

- Various conflicts of interest.

- The Company's ability to diversify its investments.

- No active market for the Shares has developed and there is limited
liquidity to transfer the Shares.

- Certain real estate investment risks such as changes in occupancy rates,
revenues, lease payment defaults, competition, economic conditions,
zoning and tax increases; and

- Taxation of the Company as a corporation if it fails to qualify as a
REIT.

STATUS OF OFFERING. As of March 18, 1997, the Company has sold 345,528 Shares
($3,454,131). Of the net proceeds from such sale (approximately $3,075,000),
approximately $2,800,000 was used for the acquisition of the Java City and Tycom
Properties, (See "Real Property Investments -- Java City Property -- Tycom
Property"), $104,000 was used for Working Capital Reserves and the balance,
approximately $171,000, is reserved for the acquisition of additional
Properties.

MANAGEMENT: COMPENSATION TO ADVISOR AND AFFILIATE. West Coast Realty Advisors,
Inc. (the "Advisor"), will act as the Company's Advisor. The Advisor's principal
office is located at 5933 W. Century Boulevard, Ninth Floor, Los Angeles,
California 90045, telephone: (310) 337-9700.

(a) Management of the Company. Pursuant to the terms of an agreement (the
"Advisory Agreement"), the Advisor will provide investment and financial advice,
and conduct the day-to-day operations of the Company. The Advisor is an
Affiliate of AFG. While the Advisor has a limited operating history, certain of
its directors, officers and employees have substantial real estate investment
experience.

(b) Compensation of Advisor and Affiliates. The Advisor and Affiliates
will receive the following substantial fees and compensation, relating to this
offering: Sales commissions of 7% and wholesaling compensation of 1% of the
amount of Shares sold, Acquisition Fees and Acquisition Expenses equal to 6% of
the Purchase Price of Properties acquired; a subordinated disposition fee of 3%
for selling the Company's Properties; a Property Management Fee equal to 5% of
gross revenues for residential properties and 6% of gross revenues for retail,
industrial and commercial properties (which will be reduced to 3% if the Advisor
or an Affiliate does not provide any leasing or releasing services); an Advisory
Fee up to 1% of Invested Assets subordinated to an annualized 7% noncumulative,
noncompounded, quarterly dividend on the Shareholders' Adjusted Price per Share;
reasonable and competitive fees for financing services as determined by the
Independent Directors, a Subordinated Incentive Fee equal to 15% of cash from
Property sales or refinancing after the Shareholders have received a

1
<PAGE> 10

100% return of their Adjusted Price per Share plus an 8% cumulative
noncompounded return thereon; and reimbursement of Offering and Organizational
Expenses, in an amount not to exceed the greater of 40 cents per Share or
$500,000 to the extent that such nonaccountable expenses do not exceed 3% of the
gross offering proceeds. See "Services Provided by the Advisor and Property
Manager", "Management", "Prior Performance" and "Compensation of Advisor and
Affiliates."

SHARES. The Company is hereby offering shares of its Common Stock (the
"Shares") at a purchase price of $10.00 per Share. As discussed in "Dividends"
below, all Shares will be entitled to equal Dividends per Share when Dividends
are paid. Each Share will have equal voting power. See "Description of Common
Stock." AFG, the Advisor and their Affiliates may also purchase Shares pursuant
to this offering. See "Plan of Distribution -- Escrow Agreements."

INVESTMENT OBJECTIVES AND POLICIES. (a) Principal Investment Objectives. The
Company intends to acquire, improve, operate, hold for investment, sell and
reinvest such sales proceeds in equity interests in income-producing
residential, industrial, retail or commercial Properties. The Company intends to
acquire Properties located primarily in California and the west coast of the
United States; (b) Borrowing Policies -- Leveraging. Generally, Properties will
initially be acquired on an all-cash basis or with moderate mortgage
indebtedness. The aggregate amount of mortgage indebtedness the Company will
incur will not exceed 50% of the Purchase Price of Properties (which is defined
generally as the cost to acquire all the Company's Properties) or, if a Property
is financed or refinanced, 50% of the Property's Appraised Value (defined
generally as its fair market value as determined by an Appraiser) at the time of
such financing or refinancing. However, the maximum amount of mortgage
indebtedness which may be incurred for the purchase of a specific Property may
not exceed 80% of the Purchase Price of that specific Property. During the
course of this offering the Advisor may, from time to time, make certain cash
advances to the Company in connection with the acquisition of Properties. These
advances will be subject to approval by a majority of the Independent Directors
and will be on terms no less favorable to the Company than those available from
third parties. All advances will be unsecured and will be repaid solely out of
the proceeds of this offering or in Shares at a $9.30 per Share price, to the
extent that the proceeds of this offering are insufficient to repay the
advances. The Company may subsequently sell or finance any or all of the
Properties for the purpose of acquiring additional Property investments.

The Company's principal investment objectives, in the order of priority,
are to invest in Properties which: (i) preserve and protect the Company's
capital, (ii) provide Shareholders with cash Dividends a portion of which will
not constitute taxable income (which due to depreciation will constitute a
return of capital which will reduce an investor's basis in the Shares and
thereby increase the gain or reduce the loss that will be incurred on the
disposition of the Shares or upon dissolution or liquidation of the Company),
(iii) provide capital gains through potential appreciation of the Properties,
and (iv) provide market liquidity through transferable shares of stock. NO
ASSURANCE CAN BE GIVEN THAT THESE OBJECTIVES WILL BE ATTAINED.

The Company has acquired nine Properties. See "Real Property Investments"
and "Investment Objectives and Policies." Specific acquisitions of other
Properties will be described in supplements to this Prospectus. The Company is
unable to predict when Properties may be purchased or the particular income
characteristics of any Property; therefore, no estimate can be given as to the
amount of any Shareholder Dividends. See "Real Property Investments" and "Risk
Factors."

INCOME TAX CONSIDERATIONS. The Company qualifies, and since January 1, 1991 is
doing business, as a real estate investment trust (a "REIT") under Sections
856-860 of the Internal Revenue Code of 1986, as amended, (the "Code"). However,
continued qualification as a REIT depends upon future operations of the Company,
and no assurance can be given that the Company will be able to maintain its
status as a REIT. Qualification as a REIT involves the application of highly
technical and complex Code provisions of which there are only a limited number
of judicial or administrative interpretations, and the determination of various
factual matters and circumstances not entirely within the Company's control may
impact its ability to qualify as a REIT. In addition, no assurance can be given
that legislation, new regulations, administrative interpretations or court
decisions will not significantly change the tax laws with respect to the
qualification as a REIT or the federal income tax

2
<PAGE> 11

consequences of such qualification. The Company, however, is not aware of any
proposal to amend the tax laws that would significantly and adversely affect the
Company's ability to operate as a REIT.

If the Company fails to qualify as a REIT, the Company will be subject to
federal income tax (including any applicable alternative minimum tax) on its
taxable income at regular corporate rates. In addition, distributions to
stockholders would not be deductible by the Company. This treatment would reduce
the net earnings of the Company available for investment or distribution to
stockholders because of the additional tax liability of the Company for the year
or years involved. In addition, unless entitled to relief under certain
statutory provisions, the Company would also be disqualified from treatment as a
REIT for the four taxable years following the year during which qualification
was lost. In addition, the Company would no longer be required by the Code to
make any distributions. See "Risk Factors" and "Tax Consequences."

DIVIDENDS. The Directors will establish a Dividend rate based on the cash flow,
operations and financial condition of the Company. The Company has declared
Dividends on a monthly basis, and has paid Dividends on a quarterly basis. See
"Investment Objectives and Policies -- Dividends." As a result of the payment of
dividends, the Company had no accumulated earnings for any fiscal year prior to
the 1991 fiscal year, the first year the Company elected to be taxed as a REIT.

DIVIDEND REINVESTMENT PLAN. The Company has established a Dividend Reinvestment
Plan (the "Plan") for its Shareholders which gives Shareholders the option to
use any Dividend payments to purchase additional Shares. Shares acquired under
the Plan during this offering will be purchased from the Shares offered hereby
at the $10.00 per Share offering price. After the completion of this offering
and if the Shares are quoted on the NASDAQ System, the Plan will acquire
existing Shares through the Crossing Agent at a maximum price of $10.00 per
Share, if a sufficient number of Shares are available at such price. Thereafter,
Shares will be acquired in the over-the-counter public trading market at
negotiated commissions or markups. See "Description of Common Stock -- Dividend
Reinvestment Plan."

TAX-DEFERRED DIVIDENDS. Due to depreciation, the Company's cash flow and
distributions is expected to exceed Taxable Income in the early years of its
ownership of Properties. Consequently, it is expected that a portion of initial
cash flow Dividends to Shareholders will constitute a tax-deferred return of
capital. The availability of cash for Dividends will depend on the operations of
the Company. See "Tax Consequences."

ADDITIONAL CONSIDERATIONS FOR TAX-EXEMPT INVESTORS. It is presently anticipated
that Dividends paid to qualified retirement plans, Individual Retirement
Accounts and tax-exempt investors will generally not constitute "unrelated
business taxable income." However, such investors could be subject to tax on
Dividends or upon sale of their Shares if their Shares are deemed to be directly
or indirectly financed in whole or in part by indebtedness. See "Tax
Consequences -- Taxation of Tax-Exempt Shareholders." The Company intends to
conduct its operations in a manner that will not result in the Company's assets
being considered "plan assets" under the Employee Retirement Income Security Act
of 1974 ("ERISA"); however, fiduciaries of ERISA Plans and Individual Retirement
Accounts, in consultation with their advisors, should carefully consider the
impact of ERISA, the Code and the regulations thereunder on an investment in
Shares. See "ERISA Considerations."

CONFLICTS OF INTEREST. An investment in Shares may subject the Advisor and its
Affiliates to certain conflicts of interest.

- The Company may be in competition with the Advisor and its Affiliates for
investment opportunities.

- Any transactions between the Advisor and its Affiliates and the Company
must be approved by a majority of the Independent Directors, since such
transactions will not be considered at arms length.

- The Selling Agent is an Affiliate of the Advisor and may experience
conflicts in performing its due diligence, although the Selling Agent
believes it has performed the due diligence required.

- West Coast Realty Management, Inc., an Affiliate of the Advisor, is the
property manager for the Company's Properties and will receive a fee for
such services.

- The attorneys, accountants and other experts who perform services for the
Company also perform services for the Advisor and its Affiliates and will
continue to do so in the future.

See "Conflicts of Interest."

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<PAGE> 12

THE COMPANY

West Coast Realty Investors, Inc. (the "Company") has been established to
provide investors (both taxable and tax-exempt) with a professionally managed,
diversified portfolio of income-producing equity real estate investments which
present the potential for current cash flow and for capital appreciation. The
Company intends to operate indefinitely. The number of Properties and the extent
of portfolio diversification will depend upon the amount of net proceeds
available to the Company from the sale of the Shares. See "Real Property
Investments," "Management's Discussion of Financial Condition and Results of
Operations," "Risk Factors -- Possible Limited Number of Properties." Some of
the Company's equity investments may be owned by joint venture partnerships
between the Company and other parties which may be Affiliates of AFG or the
Advisor. See "Investment Objectives and Policies."

The Company has had three prior offerings at $10.00 per Share; the first
offering of 1,500,000 Shares commenced on April 20, 1990 and was completed on
November 18, 1991; the second offering of 1,500,000 Shares commenced on May 14,
1992 and was completed on May 14, 1994. The third offering of 2,000,000 Shares
commenced on June 3, 1994 and was completed on April 30, 1996. As a result of
the first offering, 268,791 Shares were sold for $2,672,586 of gross proceeds
which were used to acquire one property. As a result of the second offering,
368,524 Shares were sold for $3,681,147 of gross proceeds which were used to
acquire three Properties. As a result of the third offering 812,699 Shares were
sold for $8,120,748 and the gross proceeds which were used to acquire the fifth,
sixth, and seventh properties and a portion of the eighth Property. The Company
elected to be taxed as a REIT commencing January 1, 1991. See "Real Property
Investments," "Prior Performance" and "Management's Discussion of Financial
Condition and Results of Operations".

The current offering commenced on May 7, 1996. Through March 18, 1997
345,528 shares were sold for $3,454,131. A portion of the gross proceeds were
applied toward the purchase of the Java City and Tycom Properties.

The Company presently intends to hold each Property for a minimum of four
years and a maximum of ten years. Investments in Properties will occur during
this offering and after the completion of this offering. The net proceeds from
the sale, financing or refinancing of Properties ("Cash From Sales or
Refinancing") may be reinvested in additional Properties on a continuous basis.
Cash From Sales or Refinancings (less appropriate reserves) may be distributed
to Shareholders. No specific date is set forth in the Organization Documents for
the Company's termination and the Company anticipates continuous operations into
the foreseeable future. However, the Organization Documents permit a majority of
the Shareholders to liquidate the Company at any time.

The Company currently owns nine Properties. While the Advisor is presently
reviewing possible investment opportunities, it does not have any specific plans
for the acquisition (by the Company) of any other specific Property. See "Real
Property Investments" and "Risk Factors."

The Company qualifies, and, since January 1, 1991, is doing business, as a
REIT under Sections 856-860 of the Code. The election by the Company to be taxed
as a REIT was in its 1991 Federal Income Tax return. As of December 31, 1996,
the Company had no accumulated earnings and profits attributable to taxable
years prior to 1996. As a REIT, the Company will not be subject to federal
income tax on that portion of its taxable income which is distributed annually
to Shareholders if certain conditions are met. See "Tax Consequences" and
"Summary of Organization Documents."

The Company expects to benefit from the experience and capabilities of its
officers and Directors, and the officers and directors of the Advisor and its
Affiliates, by drawing on their experience, advice and services in the areas of
real estate investment, commercial and industrial real estate brokerage, real
estate securities and syndication, real estate development and banking and
finance, and public accountancy, as well as upon their goodwill and their
relationships with builders, developers, lenders, insurers and investors. See
"Management."

Day-to-day property management services for the Company's Properties may be
provided by outside property managers, including West Coast Realty Management
Inc. ("WCRM"), an Affiliate of the Advisor,

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<PAGE> 13

subject to review by the Advisor and the Directors. Depending on the location of
the Company's real property investments, unaffiliated independent property
management companies may also render day-to-day property management services.

While the Shares will be freely transferable, there is no present market
for the Shares and none is expected to develop during the period of this
offering in view of the suitability standards imposed on investors by certain
state "blue sky" administrators. There is no assurance that an active public
trading market will eventually develop. The Company intends to use a Crossing
Arrangement as an accommodation to and for the benefit of investors who wish to
sell their Shares prior to quotation on the NASDAQ System. See "Description of
Common Stock."

The Company is a corporation organized under the laws of the State of
Delaware on October 26, 1989. Its principal offices are located at 5933 West
Century Boulevard, Ninth Floor, Los Angeles, California 90045, telephone: (310)
337-9200.

RISK FACTORS

The purchase of Shares involves a high degree of risk. In addition to
general investment risks and those factors set forth elsewhere in this
Prospectus, prospective purchasers should carefully consider the following
factors before making a decision to purchase Shares:

CONTINUOUS OPERATIONS OF THE COMPANY; SHAREHOLDER LIQUIDATION OF
INVESTMENT. The Company's plan of business allows the Company to reinvest, in
lieu of distributing to Shareholders, the proceeds from the sale, financing and
refinancing of Properties in additional Properties. The Shareholders, therefore,
would be able to liquidate their investment only through the sale of their
Shares into the market. Such a market does not currently exist. The market value
of the Shares may never equal or exceed the Appraised Value of the Properties
held by the Company or the net proceeds which may have been available for
distribution to Shareholders upon a current sale of the Company's Properties.

SUBSTANTIAL PAYMENT OF FEES TO THE ADVISOR AND AFFILIATES. The Advisor is
entitled to receive certain transactional fees or commissions based upon the
acquisition, management and disposition of Properties of the Company or the
financing or refinancing of indebtedness relating to such Properties.
Approximately 74.8% of the minimum offering proceeds (75.39% of the maximum
offering proceeds) will be invested in Properties with the remaining 25.2% of
the minimum offering proceeds (24.61% of the maximum offering proceeds) being
paid to the Advisor and its Affiliates for fees and expenses of the offering.
The ongoing compensation paid to the Advisor in the form of an Advisory Fee will
continue indefinitely. See "Compensation of Advisor and Affiliate."

REAL ESTATE INVESTMENT RISKS. The Company will be subject to the risks
generally associated with the ownership of real property, including the
possibility that operating expenses and fixed costs may exceed property
revenues; adverse changes in economic conditions; changes in the real estate
investment climate; adverse changes in local market conditions due to changes in
general or local economic conditions and neighborhood characteristics; changes
in interest rates and in the availability, costs and terms of mortgage
financing; the need for unanticipated maintenance and renovations, particularly
in older structures; changes in real estate tax property rates and other
operating expenses; adverse changes in governmental rules and fiscal policies;
natural disasters, including earthquakes, floods or tornadoes (which may result
in uninsured losses); the financial condition of the tenants of Properties; and
other factors which are beyond the control of the Company.

The Company's real estate investments in rental properties will be subject
to the risk of the Company's ability to attract or retain tenants and a
potential decline in rental income. To the extent that the Company acquires
Properties with fixed rental payments, the Company may be prevented from varying
its investment portfolio promptly in response to changing economic conditions
during the term of such investments. Furthermore, real estate investments tend
to be long-term, and under the REIT provisions of the Code, might be subject to
minimum holding periods to avoid adverse tax consequences; consequently, the
Company will have only minimal ability to vary its Property portfolio in
response to changing economic, financial and

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<PAGE> 14

investment conditions. To the extent that the Company's rental or interest
income is based on a percentage of the gross receipts of retail tenants, its
cash flow is dependent on the retail success achieved by such tenants.

While one of the Company's objectives is to generate cash flow, there can
be no guarantee that the Properties will generate sufficient revenue to cover
operating expenses and meet any required payments on any debt obligations of the
Company. The opportunities for sale, and the profitability of any sale, of any
particular Property by the Company will be subject to the risk of adverse
changes in real estate market conditions, which may vary depending upon the
size, location and type of each Property.

In the event of a dissolution or termination of the Company, the proceeds
realized from the liquidation of Properties, if any, will be distributed to the
Shareholders, but only after the satisfaction of claims of creditors including
any fees which are then payable to the Advisor. Accordingly, the ability of
Shareholders to receive all or any portion of their investment under these
circumstances will depend on the amount of funds realized and claims to be
satisfied from those funds.

If the Company finds it necessary or desirable to provide secondary
financing to purchasers upon the sale of Properties, a liquidation of the
Company may be delayed beyond the time of disposition of its Properties until
any such financing is paid or otherwise liquidated. See "Investment Objectives
and Policies -- Sale or Refinancing of Properties."

LEVERAGING OF INVESTMENTS. The Company anticipates acquiring Properties for
cash or by incurring long-term secured borrowings on investment Properties. This
practice is often referred to as leveraging. The maximum level of leveraging to
be incurred by the Company will be limited to 80% of the Purchase Price of any
individual Property and 50% of the Purchase Price of all Properties on a
combined basis. If a Property is financed or refinanced, the maximum amount of
leveraging to be incurred by the Company will be limited to 50% of the Appraised
Value of the Property at the time of such financing or refinancing. Leveraging
may involve the use of first mortgages, junior mortgages and/or wrap-around
mortgages. The effects of leveraging are on the one hand, to increase the funds
available for investment (which in turn permits the acquisition of Properties
with a higher purchase price and/or greater diversification by allowing
investment in more Properties) and thereby to increase the aggregate amount of
tax-advantaged depreciation available to the Company; and on the other hand, to
increase the risk of loss if the Company is unable to generate sufficient funds
to repay the debt incurred. The Company may borrow through loans with fixed
interest rates or with variable interest rates which fluctuate with the market
rate of interest. Financing involving renegotiable, floating or adjustable
interest rates involves greater risks than financing where the interest rate is
fixed, since such rates could rise substantially. The higher the rate of
interest on the financing, the more difficult it will be for the Company to meet
its debt service obligations and the greater the chance of a default. If the
Company defaults on secured indebtedness, the lender may foreclose and the
Company could lose its investment in the Property. To the extent possible,
mortgage debt will be non-recourse, meaning the Company will not be liable for
any deficiency between the proceeds of foreclosure and the amount of the debt.
The Company may also use the proceeds from financing its Properties to acquire
new Properties which may themselves be leveraged. See "Investment Objectives and
Policies -- Borrowing Policies -- Leveraging." Money market fluctuations may
significantly decrease the availability and increase the cost of real estate
loans, which could result in the Company being unable to incur the optimum level
of indebtedness or paying higher costs, or both, which, in turn, could result in
less income to the Shareholders. Money market conditions may also adversely
affect the ability of the Company to sell Properties, when a sale is determined
to be in the best interest of the Company, and may affect the terms of any such
sale. If the Company acquires Properties with "due on sale" clauses, or finances
Properties containing such clauses in their mortgages, the Company's ability to
sell such Properties may be adversely affected. The Company and the Advisor are
unable to predict the effect, if any, which the money market or the federal
government's fiscal, monetary and statutory policies will have on the ability of
the Company to meet its objectives.

The Company may, under certain conditions, obtain permanent first mortgage
financing which requires a "balloon payment" at maturity. In general, it is
intended that the due date of a "balloon payment" will fall outside the
projected holding period of the Property. "Balloon" mortgages involve greater
risks than mortgages where the principal amount is payable over the term of the
loan even though periodic payments

6
<PAGE> 15

may be lower since the ability of the Company to repay at maturity the
outstanding principal amount of the "balloon" loan may depend upon the Company's
ability either to sell the related Property or to obtain adequate refinancing
which will in turn depend upon economic conditions in general and the value of
the underlying Property in particular. There is no assurance that the Company
will be able either to sell the related Property or to refinance "balloon
payment" mortgages at maturity. Further, a significant decline in the value of
the underlying Property could result in a loss of the Property through
foreclosure. See "Investment Objectives and Policies -- Principal Investment
Objectives."

Recourse for any mortgage indebtedness to be incurred by the Company is
expected to be limited to the particular Property to which the indebtedness
relates. The Federal Bankruptcy Code permits, under certain limited
circumstances, a secured creditor holding non-recourse debt to be treated as a
creditor with a recourse claim. Thus, it is possible that if the Company were
involved in a reorganization proceeding, a holder of a non-recourse loan to the
Company could obtain a Court-approved evaluation of the Property which secured
the loan, and then be treated as the holder of an unsecured claim against the
assets of the Company for any excess of the amount of the debt over the value of
the Property. While the Company intends to obtain borrowings on a non-recourse
basis, the Company might sustain a loss on its investment as a result of
foreclosure by the mortgagee of a Property if mortgage payments are not paid
when due. Also such foreclosure might also have adverse tax consequences for the
Company and the Shareholders. See "Tax Consequences."

UNSPECIFIED INVESTMENTS. The Company currently owns seven Properties. The
Company has not identified any specific Properties in which the proceeds of this
offering are to be invested.

Therefore, a prospective investor has no information as to the
identification or location of Properties, or other relevant economic and
financial data affecting Properties to be purchased by the Company with the
proceeds of this Offering, which information, if available, would be of
assistance in evaluating an investment in the Company.

The investment of the net proceeds of this offering may occur over an
extended period. During such time, the Company faces the risks of changes in
interest rates and adverse changes in the real estate market. These risks may
adversely affect the amount of funds available for Dividends and investments,
and the price at which Shareholders may sell their Shares. In addition,
substantial delays in investment in Properties could result in the Company's
disqualification as a REIT. See "Tax Consequences -- Requirements for
Qualification as a REIT."

UNCERTAINTY OF COMPANY CAPITALIZATION; DIVERSIFICATION; POSSIBLE LIMITED NUMBERS
OF PROPERTIES; DELAY IN INVESTMENTS. The Company will invest the proceeds of
this offering in a limited number of Properties, depending upon the amount of
proceeds generated by the number of Shares sold. The Company will acquire
Properties for all cash or with moderate leverage. See "Risk
Factors -- Leveraging of Investments." There is no limitation as to the amount
or percentage of the Company's assets which may be invested in any one developed
Property or group of Properties, any specific investment or the number of
purchases which may be made from any person or group of persons. The Company
intends to make real estate investments in Properties in various locations
primarily in California and the west coast of the United States, in an attempt
to achieve diversification and to minimize the effect of changes in local
economic conditions and certain other risks. The extent of diversification will
depend upon the amount of net proceeds available to the Company from the sale of
the Shares. The Company may, however, be subject to any generalized downturn in
the real estate market. The potential profitability of the Company could also be
affected by the amount of capital at its disposal for investment in Properties.

PRIOR EXPERIENCE IN RAISING FUNDS. There is a risk that the Company will not
sell the entire 1,500,000 Shares being offered and that a significant period of
time will pass between the time funds are received for investment by the Company
and an investment in Property is made. The Company in its initial offering
offered 1,500,000 Shares ($15,000,000) and sold 268,791 Shares ($2,672,586) in a
twenty month period. The minimum amount of 100,000 Shares ($1,000,000) in the
initial offering, were sold in four months. Ninety percent of the proceeds from
the initial offering were committed for investment in March, 1993 (60% of the
investments were made in February, 1991). The Company's second offering of
1,500,000 Shares ($15,000,000) sold 368,524 Shares ($3,681,147) in a period of
24 months. The minimum amount of 25,000

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<PAGE> 16

Shares ($250,000) in the second offering were sold in six months. One Hundred
percent of the proceeds from the second offering were committed for investment
by November, 1994. The Company's third offering of 2,000,000 Shares
($20,000,000) sold 812,699 Shares ($8,120,748) in a period of twenty-four
months. The minimum of 25,000 Shares ($250,000) in that offering were sold in
seven weeks. One hundred percent of the offering proceeds were committed for
investment in properties in twenty-six months. As of March 18, 1997, the Company
has sold 345,528 Shares ($3,454,131) in this offering, and approximately
$2,800,000 of such amount was used to acquire the Java City Property and the
Tycom Property. See "Real Property Investments -- Java City Property and
- -- Tycom Property." The minimum of 25,000 Shares ($250,000) in this offering
were sold in ten weeks. In addition, in prior programs sponsored by an Affiliate
of the Company, the full amount of the securities offered were not sold and it
took a significant period of time to invest the funds received. See "Prior
Performance."

UNINSURED LOSSES. The Company will arrange for its Properties to be covered by
comprehensive insurance, including liability for personal injury or property
damage occasioned by its activities, fire and extended coverage, which is
customarily obtained for similar properties. However, there are certain types of
losses (generally of a catastrophic nature such as earthquakes, floods and
tornadoes) which are either uninsurable or not insurable at economically
reasonable costs. Should such a disaster cause the destruction of a Property,
the Company could lose both its invested capital and anticipated profits in the
Property, as well as be obligated to pay any recourse financing with respect to
the Property.

RISKS RELATED TO HAZARDOUS WASTES. Federal law imposes liability on a landowner
for the presence on the premises of improperly disposed hazardous substances.
This liability is without regard to fault for or knowledge of the presence of
such substances and may be imposed jointly and severally upon all succeeding
landowners from the date of the first improper disposal (although prior to
acquisition of a Property the Company will perform due diligence to ascertain if
any hazardous waste exist). If it is ever determined that hazardous substances
are present on a Property, the Company could be required to pay all costs of any
necessary cleanup work, although under certain circumstances claims against
other responsible parties could be made by the Company.

JOINT VENTURE INVESTMENTS. The Company may make investments in Properties
through joint venture partnerships or joint participations between the Company
(or a partnership between the Company and another entity) and other parties,
including Affiliates or clients of the Advisor and sellers of real properties or
Affiliates thereof. The investment by the Company through joint ventures or
joint participations, instead of investing directly in the Properties may under
certain circumstances involve risks not otherwise present including, for
example, risks associated with the possibility that the Company's co-venturer in
an investment might become bankrupt, that such co-venturer may at any time have
economic or business interests or goals which are inconsistent with the business
interests or goals of the Company, or that such co-venturers may be in a
position to take action contrary to the instructions or the requests of the
Company or contrary to the Company's investment policies or objectives. In
connection with joint ventures, a Property seller may, as a joint venturer, have
the right to take certain actions with respect to the Property owned through the
joint venture without the Company's concurrence, including under some
circumstances the right to determine whether and when the Property will be sold.
Among other things, actions by any such co-venturer might have the result of
subjecting Property owned through the joint venture to liabilities in excess of
those contemplated by the terms of the Company. See "Conflicts of
Interest -- Transactions with the Advisor or an Affiliate," and "Summary of
Organization Documents -- Transactions with Affiliates."

COMPETITION FOR INVESTMENTS. There may be intense competition for Properties of
the type and in the areas in which the Company intends to invest. The Company
will compete for the acquisition of Properties with many other entities,
including Affiliates of the Advisor engaged in real estate investment
activities, some of which have greater assets than the Company.

TAX RISKS. The Company intends to conduct its operations in a manner which will
enable it to qualify for taxation as a REIT under the Code. Although management
of the Company believes that the Company has been so organized and has been and
will operate in such a manner, no assurance can be given that the Company will
be able to operate in a manner as to qualify or remain so qualified.
Qualification as a REIT

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<PAGE> 17

involves the application of highly technical and complex Code provisions of
which there are only a limited number of judicial or administrative
interpretations, and the determination of various factual matters and
circumstances not entirely within the Company's control may impact its ability
to qualify as a REIT. In addition, no assurance can be given that legislation,
new regulations, administrative interpretations or court decisions will not
significantly change the tax laws with respect to the qualification as a REIT or
the federal income tax consequences of such qualification. The Company, however,
is not aware of any proposal to amend the tax laws that would significantly and
adversely affect the Company's ability to operate as a REIT.

In order to qualify for the favorable federal income tax treatment afforded
to qualifying REITs, the Company must annually satisfy various requirements
(quarterly for certain requirements), including distributing to its Shareholders
substantially all of its otherwise taxable ordinary income. Following
termination of the offering, the Company intends to make Dividend distributions
to Shareholders at least quarterly. See "Investment Objectives and
Policies -- Dividends." Depending on the circumstances existing in a given year,
the Company might be required to borrow funds or to liquidate its investments in
order to satisfy its distribution requirement. See "Tax
Consequences -- Requirements for Qualification as a REIT" and "Taxation of the
Company." In addition, because the Company will be obligated to pay operating
expenses on a current basis, including certain compensation to the Advisor, the
Company might be required to borrow or liquidate investments in order to pay its
fixed expenses. Since the Company elected to be taxed as a REIT after its first
year of existence, it had a taxable year in which it was not a REIT. The Company
elected to be taxed as a REIT commencing January 1, 1991. The Company had no
accumulated earnings and profits prior to January 1, 1991.

The REIT provisions of the Code place restrictions on the Company's
investments which do not apply to other types of real estate entities. These
provisions also place restrictions on the Company's operations which will not
apply to operators of buildings with which the Company may be competing for
tenants.

The Company has received a ruling from the Internal Revenue Service that,
based on the facts contained in the request for a ruling ("Ruling Request"),
WCRM will qualify as an independent contractor under Section 856(d)(2) and
856(d)(3) of the Code if it renders services to the Company. If WCRM had not
qualified as an independent contractor, it may have been deemed to be an
Affiliate of the Company and if the Company contracted with WCRM for property
management services, the Company might have lost its eligibility to elect REIT
tax treatment. The Company has represented that the material facts contained in
the Ruling Request are currently still factually accurate. Gipson Hoffman &
Pancione, a Professional Corporation, counsel to the Company, has opined that
based upon information and undertakings supplied by the Company as described in
the "Tax Consequences" section, as well as the Company's representations
contained elsewhere in this Prospectus concerning the organization and proposed
operations of the Company, and subject to the limitations on such opinion
discussed in the "Tax Consequences" section, the Company is eligible to elect
REIT tax treatment.

Certain income, excise and penalty taxes can be imposed even if the Company
maintains its status as a REIT. For example, if the Company reinvests, rather
than distributes, net capital gains, the Company will be subject to income tax
(up to 35%) and a 4% excise tax on such gains. See "Tax Consequences -- Taxation
of the Company."

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<PAGE> 18

ADDITIONAL TAX RISK. There is a risk that the Company might be taxed as a
corporation for its 1991, 1992 and 1993 taxable years in that the Company
inadvertently failed to send to its shareholders a demand letter regarding
actual ownership of the Company's shares as required by Treasury Regulation
sec.sec. 1.857-8(d) and (e) for such years. A literal reading of the Code and
Regulations would indicate that failure to satisfy such requirement would result
in the Company being taxed as a regular corporation for its 1991, 1992 and 1993
taxable years. However, the Company's failure to satisfy this formal requirement
was inadvertent and the Company believes that it can clearly establish that it
has satisfied all of the substantive requirements which must be satisfied to
qualify for taxation as a REIT for its 1991, 1992 and 1993 taxable years,
including the actual ownership of the Company's shares. It is the Company's
understanding that the Internal Revenue Service has, at least in one situation,
not disqualified a corporation from taxation as a REIT simply because it failed
to send its shareholders the written demand letter required by Treasury
Regulation sec.sec. 1.857-8(d) and (e). Although there is no assurance that this
will occur, as a matter of administrative action, it is possible that the
Internal Revenue Service would permit the Company to be taxable as a REIT for
its 1991, 1992 and 1993 taxable years. The Company, in the future, will satisfy
all of the record keeping requirements imposed by sec.sec. 856 through 859 of
the Code.

If the Company were taxed as a regular corporation for its 1991, 1992 and
1993 taxable years, the payment of such taxes, including penalties and interest,
would be approximately $140,000, which could be material to the Company's
results of operations.

RELIANCE ON MANAGEMENT AND CONFLICTS OF INTEREST. All decisions with respect to
the management of the Company will be made by the Advisor, subject to the
direction and review of the Directors of the Company. In addition, neither the
Advisor nor any of its officers and directors nor their Affiliates will have any
obligation to give to the Company a prior right to acquire or invest in any
investment opportunities that may be available to them. See "Conflicts of
Interest -- Competition by the Company with Affiliated Parties for Purchase and
Sale of Real Property" and "Services Provided by the Advisor and Property
Manager." Shareholders have no right or power to take part in the direct
management of the Company. Accordingly, investors should not purchase Shares
unless they are willing to entrust all aspects of the management of the Company
to the Directors and the Advisor. See "Management." The Advisor may also
experience certain conflicts of interest in connection with the management of
the Company. See "Conflicts of Interest."

The Advisor and the Directors will have fiduciary duties and obligations
which will require them to manage the affairs of the Company and resolve any
conflicts of interest by exercising the utmost good faith and integrity. This is
a rapidly developing and changing area of the law, therefore, potential
investors or Shareholders who have questions concerning the duties of the
Directors and the Advisor should consult with their own counsel.

LIMITED TRANSFERABILITY; NO ACTIVE MARKET FOR SHARES MAY DEVELOP. Except under
certain circumstances, see "Description of Common Stock -- Redemption and
Prohibition of Transfer of Shares", there are no restrictions on transfer of the
Shares. However, a market is unlikely to develop during this offering and there
can be no assurance that a market will ever develop for the Shares. Therefore,
Shareholders may not be able to liquidate their investment in the Company in the
event of an emergency. In addition, Shares may not be readily accepted as
collateral for a loan. The Company intends to use a Crossing Arrangement to
match buy and sell orders for Shares as an accommodation to and for the benefit
of Shareholders who wish to sell their Shares. The Company may apply to have the
Shares quoted on the NASDAQ System; however, no assurance can be given that any
broker-dealer will act as a market maker for the Shares, that the Shares will be
accepted for quotation or that, if quoted, an active public trading market for
the Shares will thereafter develop. See "Description of Common Stock."

TRANSFERABILITY OF SHARES; APPLICATION OF PENNY STOCK RULES. There is a risk
that a market for the Company's Shares may not develop if the Company's Shares
are subject to the "Penny Stock" rules promulgated by the Securities and
Exchange Commission. A Penny Stock is defined generally as one which sells for
less than $5.00 per share. If the Company's Shares sell for less than $5.00 per
share, the development of a market in the Shares may be inhibited because of the
requirement that broker-dealers provide customers

10
<PAGE> 19

with a risk disclosure document prior to effecting any transactions in the
Shares, which requirement may prevent broker-dealers from making a market in the
Shares.

LIMITED LIABILITY, INDEMNIFICATION AND POSSIBLE INADEQUACY OF SHAREHOLDER
REMEDIES. The Company's Certificate of Incorporation and Bylaws provide that
the Directors' liability to the Company for monetary damages will be eliminated
to the fullest extent permitted under Delaware law. In addition, the Company is
obligated under its Certificate of Incorporation and Bylaws to indemnify its
Directors, officers, employees and other agents against certain liabilities
incurred in connection with their service in such capacities. Each of these
measures could reduce the legal remedies available to the Company and
Shareholders against such individuals. See "Summary of Organization
Documents -- Limited Liability and Indemnification of Directors, Officers,
Employees and Other Agents" and "Management."

POTENTIAL DILUTION. The Directors are authorized to borrow or raise capital
without Shareholder approval through the issuance of additional Shares, notes,
debentures, or other obligations of the Company that may be convertible into
Shares or that are accompanied by warrants or rights to purchase Shares. The net
proceeds of any such offering would be applied to the acquisitions of additional
Properties, the enhancement of existing Properties, or the establishment of
Working Capital Reserves. The issuance of additional Shares, the conversion of
any such obligations, or the exercise of any such warrants or rights, could
dilute existing Shareholders' equity.

ESTIMATED USE OF PROCEEDS

The Company intends to invest the net proceeds of this offering primarily
in income-producing real estate. See "Investment Objectives and Policies."

Approximately 75.39% of the of the proceeds will be available for
investment in real properties. The remainder of the offering proceeds will used
to pay sales commissions of 7% and wholesaling compensation of 1% (some of which
may be paid to Affiliates of the Advisor if they sell the Shares) and 3.3% of
the proceeds (not to exceed $500,000) will be used to pay Offering and
Organizational Expenses including a nonaccountable expense allowance which may
not exceed 3% of the gross offering proceeds (some of which may be reimbursed to
the Advisor for the payment of the Offering and Organizational Expenses). Three
percent of the proceeds will be maintained as Working Capital Reserves.

Of the balance of the net proceeds, approximately 10.28% (approximately
$1,542,000 if 1,500,000 Shares are sold) will be paid to the Advisor by Company
as Acquisition Fees and Acquisition Expenses. Acquisition Fees are normally paid
by the seller of a Property rather than the buyer. However, the price of a
Property will generally be adjusted in order to take this obligation of the
seller into consideration, so that in effect, the Company, as purchaser, will
bear all or a portion of the Acquisition Fees in the Purchase Price of the
Property. The Company also expects to pay commissions in connection with the
Sale or Disposition of the Properties which will reduce the net proceeds to the
Company of any such sales.

11
<PAGE> 20

The following tables sets forth information concerning the estimated
initial use of proceeds of this offering of Shares, assuming compensation levels
as described in "Compensation of the Advisor and Affiliates." The table does not
give effect to the use of proceeds which may be received by the Company from any
sale, financing or refinancing of its Properties.

<TABLE>
<CAPTION>
ESTIMATED AMOUNT
ASSUMING
1,500,000 SHARES SOLD
--------------------------
PERCENTAGE
OF GROSS
AMOUNT PROCEEDS
----------- ----------
<S> <C> <C>
Gross Offering Proceeds......................................... $15,000,000 100.0%
Less Public Offering Expenses: Commissions(1)................... 1,200,000 8.0%
Offering and Organizational Expenses(2)......................... 500,000 3.33%
----------- -----
Total Amount Available for Investment in Properties and
Operations.................................................... 13,300,000 88.67%
----------- -----
Net Amount Available for Net Acquisition Fees and Acquisition
Expenses:(3).................................................. 1,542,000 10.28%
Reserves:....................................................... 450,000 3.0%
----------- -----
Amount Available for Investment in Properties and Operations.... $11,308,000 75.39%
----------- -----
</TABLE>

- ---------------
(1) The Selling Agent will receive from the Company up to 8% of the $10.00 per
Share offering price for each Share sold from the proceeds of such sale for
sales commissions and wholesaling compensation, exclusive of the Monitoring
Fee and an additional .5% per Share for bona fide due diligence expenses.
The Company will be solely responsible for paying commissions to
participating Selected Dealers. See "Plan of Distribution."

(2) These amounts represent reimbursements payable to the Advisor for offering,
organization and wholesaling services. See "Plan of Distribution." The
reimbursements are limited to 40 cents per Share for each Share sold
pursuant to this offering and may include a nonaccountable expense allowance
which may not exceed 3% of the gross offering proceeds. All such expenses in
excess of this limit will be borne by the Advisor.

(3) Assumes Properties are acquired with the maximum 50% leverage. If Properties
were acquired without leverage, the maximum Acquisition Fee and Acquisition
Expenses payable would be $771,000 (5.14%) if the maximum proceeds were
raised. Acquisition Fees are generally defined as all the fees and
commissions paid by any person to any person in connection with the purchase
of any real estate by the Company, whether designated as a real estate
commission, selection fee, nonrecurring management fee, nonrecurring start
up fee, construction fee, or any fee of a similar nature, but excludes any
fees paid for the financing or refinancing of the property. Acquisition
Expenses are generally defined as those fees and expenses including legal
fees, travel and communication expenses, appraisal costs, nonrefundable
options, title fees and other similar expenses related to the selection and
acquisition of Properties.

12
<PAGE> 21

COMPENSATION OF ADVISOR AND AFFILIATES

The Advisor and its Affiliates will receive the following items of
compensation from the Company. Except as described below, and unless otherwise
authorized by a majority of the Independent Directors, no compensation or
reimbursement is to be paid to the Advisor and its Affiliates and such
compensation or reimbursements may not be recovered by reclassifying them under
a different category. These amounts were not determined by arm's-length
negotiations.

SELLING COMMISSIONS. Associated Securities Corp. (the "Selling Agent"), an
Affiliate of the Advisor, will receive a maximum of 80 cents per Share from the
Company for sales commission, and wholesaling compensation, excluding the
Monitoring Fee and 5 cents per Share from the Company for bona fide due
diligence expenses. If all of the Shares are sold by the Selling Agent, the
Selling Agent would receive a maximum of $1,200,000. However, to the extent that
the Company pays a portion of the sales commissions, wholesaling compensation
and Monitoring Fees, or due diligence expenses to Selected Dealers who are not
affiliated with the Advisor, the compensation paid to the Selling Agent will be
reduced.

ACQUISITION FEES AND ACQUISITION EXPENSES. The Advisor and/or an Affiliate will
receive Acquisition Fees (which are defined generally to mean the fees and
commissions paid by any person to any person in connection with the
investigation, selection or purchase of real estate by the Company) and
Acquisition Expenses (which are defined generally to mean those expenses
incurred in the acquisition of properties by the Company, such as legal fees,
travel fees, title insurance, etc.) in an amount which shall not exceed a
maximum of 6% of the Purchase Price of the Property being acquired. If the
maximum amount of Shares are sold, the Acquisition Fees and Acquisition Expenses
to be received by the Advisor, shall approximate a maximum of $1,542,000
($771,000 if the Properties were purchased without leverage). The total amount
of Acquisition Fees and Acquisition Expenses which may be paid by one person to
another person shall not exceed 6% of the Purchase Price of the Properties, no
matter how paid. Acquisition Fees paid to the Advisor will be reduced by all
real estate brokerage fees paid by either the Seller or the Company to any
person in connection with the transaction.

In no event will the amount of Acquisition Fees paid exceed the lesser of
the percentages set forth above or the competitive compensation which would be
paid to a real estate professional rendering similar services.

If the Company sells a Property and the proceeds from such sale are
reinvested in the acquisition of another Property, no Acquisition Fees or
Acquisition Expenses will be paid to the Advisor or an Affiliate upon the
acquisition by the Company of the new Property.

DISPOSITION SERVICES. The Company will pay a real estate commission to the
Advisor and/or an Affiliate for selling the Company's Properties. The maximum
real estate commission to be paid will be equal to the lesser of 3% of the gross
sales price of a Property or the normal and competitive rate charged by
unaffiliated parties rendering similar services. The amount of compensation the
Advisor will earn upon disposition of the Company's properties cannot be
estimated at this time, since the gross sales price of the Properties cannot be
determined at this time.

If, on the disposition of a Property, a real estate commission is paid to
an unaffiliated third party in addition to the Advisor and/or an Affiliate, the
maximum total real estate commission paid to the Advisor shall equal the lesser
of one-half of the brokerage commission paid, or 3% of the gross sales price of
the Property. However, the total real estate commission paid by the Company
shall not exceed the lesser of the reasonable and competitive commission for
such Property or an amount equal to 6% of the gross sales price of the Property.

ADVISORY FEE. The Advisor will receive quarterly, an annualized fee equal to
one percent of the amount of Invested Assets. (Invested Assets are defined
generally as the book value of the real estate owned by the Company). The
Advisory Fee will not be paid unless Shareholders have received a noncumulative,
noncompounded Dividend for such quarter equal to an 7% per annum return on
Shareholders Adjusted Price Per Share (which is defined generally as the price
paid for the Shares less the Dividends paid or deemed paid from the sale,
financing or refinancing of Properties) prior to adjustment as a result of the
Dividend paid. If the maximum amount of Shares are sold the Advisory Fee would
increase approximately $226,160 (113,080 per

13
<PAGE> 22

annum if the Properties were purchased without leverage); (i) assuming maximum
leverage of 50% when the Properties are acquired and (ii) is the amount which
would be paid during the first year the amount available for investment is fully
invested. At its option, the Advisor may elect to waive collection of all or a
portion of the Advisory Fee.

PROPERTY MANAGEMENT FEE. For residential properties the maximum Property
Management Fee payable to West Coast Realty Management Inc., an Affiliate of the
Advisor, will be 5% of the gross revenues. For retail, industrial and commercial
properties, the maximum Property Management Fee will be equal to 6% of the gross
revenues, if the Advisor or an Affiliate performs all or part of the leasing and
releasing of the Properties. However, if the Advisor or its Affiliate does not
perform any of the leasing and releasing services for retail, industrial and
commercial Properties, the maximum amount of the Property Management Fee will
not exceed 3% of the gross revenues. In no event, however, shall the Property
Management Fee exceed the normal competitive rate for those services in the
localities where the Properties are located. The amount of Property Management
Fee compensation cannot be estimated at this time since the amount of gross
revenues cannot be determined.

FINANCING SERVICES. The Advisor will receive compensation for services rendered
in securing additional or replacement financing on the Company's Properties and
in obtaining unsecured financing. The compensation paid to the Advisor and/or an
Affiliate will be determined by the Independent Directors based on terms and at
rates which are reasonable, fair and competitive with like activities and
services from unaffiliated parties. The amount of compensation cannot be
estimated at this time since the amount of financing or replacement financing
which the Company will require cannot be determined at this time.

SUBORDINATED INCENTIVE FEE. The Advisor will receive a Subordinated Incentive
Fee on the sale, financing or refinancing of the Company's Properties. The
amount of the Subordinated Incentive Fee to be paid will be determined after the
sale, financing or refinancing of a specific Property has been made and will
equal a maximum of 15% of the amount of Cash From Sales and Refinancing (which
is generally defined as the net cash remaining from the sale of a Property after
payment of the expenses related to such sale and any debt applicable to the
Property) remaining after the Company has received proceeds from the sale or
refinancing of such specific Property in an amount equal to either Offering
Proceeds (which is defined generally as the amount of funds used from the sale
of Shares to purchase the Property) or Reinvestment Proceeds (which is generally
defined as the amount of net cash received from the sale of a Property which is
reinvested in another Property) (such proceeds are deemed to be a Distribution
of Cash Available From Sales or Refinancing to Shareholders) and Shareholders
have received an amount which, when added to all prior Distributions paid to
Shareholders equals 100% of their Adjusted Price Per Share plus a cumulative
noncompounded return on their Adjusted Price Per Share equal to 8% per annum.
The amount of the Subordinated Incentive Fee cannot be estimated at this time
since the amount of Cash From Sales or Refinancings cannot be determined.

REIMBURSEMENTS. The Selling Agent and Affiliates of the Advisor will receive
reimbursement for Offering and Organizational Expenses (which are defined
generally to mean the costs expended in organizing the Company for the
registration and sale of the Shares and distributing the Shares to the public)
in an amount not to exceed a maximum amount of 40 cents per Share, not to exceed
$500,000 and may be nonaccountable to the extent that such nonaccountable
expenses do not exceed 3% of the gross offering proceeds.

14
<PAGE> 23

The following table summarizes the nature, estimated amounts and recipients
of compensation to be paid to the Advisor and its Affiliates.

<TABLE>
<CAPTION>
ESTIMATED AMOUNT ASSUMING
TYPE OF COMPENSATION AND MINIMUM/MAXIMUM NUMBER OF
ENTITY RECEIVING COMPENSATION METHOD OF COMPENSATION SHARES IS SOLD(1)
- ------------------------------ ------------------------------ ------------------------------
<S> <C> <C>
OFFERING AND ORGANIZATION STAGE
Selling Commissions (payable 70 cents per Share will be $241,870 for the minimum
to the Selling Agent) paid by the Company to the amount of Shares sold and
Selling Agent; however, a $1,200,000 if the maximum
portion may be paid to amount of Shares are sold,
Selected Dealers. excluding the Monitoring
Fee.(2)
Offering and Organization Ex- Total reimbursement not to ex- $138,211 for the minimum
pense reimbursement (payable ceed 40 cents per Share of amount of Shares sold and up
to the Selling Agent) each Share sold pursuant to to $500,000 if the maximum
this offering. amount of Shares are sold.(3)
Non-recurring Acquisition Fees The total Acquisition Fees and $359,230 for the minimum
(payable to the Advisor and/or Acquisition Expenses paid by amount of Shares sold and ap-
an Affiliate and all other the Company shall not exceed proximately $1,542,000 if the
parties, both Affiliates and 6% of the Purchase Price of maximum amount of Shares are
non-Affiliates) involved in the Property. sold.(4)(5)
the acquisition of Properties.
OPERATING STAGE(6)

Property Management Fee for For residential Properties the Not determinable at this time.
Property Management Services maximum Property Management
(payable to West Coast Realty Fee shall be 5% of the gross
Management, Inc. an Affiliate revenues. For industrial,
of the Advisor) commercial, and retail
Properties, the maximum
Property Management Fee will
be 6% of the gross revenues
where the Advisor or an
Affiliate performs all or part
of the leasing, and re-leasing
of Properties. However, if the
Advisor or its Affiliate does
not perform any portion of the
leasing and re-leasing
services for retail,
industrial and commercial
Properties, the amount of
Property Management Fee will
not exceed 3% of the gross
revenues. In no event shall
the Property Management Fee
exceed the normal competitive
rate for those services in the
localities where the
Properties are located.
Advisory Fee for Advising the Annualized fee equal to 1% of Increased per annum by
Company and Managing its Invested Assets. Such fee will approximately $52,200 if the
investments (payable to the be subordinated on a minimum amount of Shares are
Advisor) noncumulative, noncompounded sold and approximately
basis to a quarterly Dividend $228,000 if the maximum amount
payment to Shareholders equal of Shares are sold.(7)(9)
to an annualized 7% per annum
return on Shareholders
Adjusted Price Per Share. This
fee is payable quarterly.
Financing services for As determined by the Not determinable at this time.
obtaining financing (payable Independent Directors, not to
to the Advisor and/or an exceed fair and competitive
Affiliate) rates paid to unaffiliated
parties rendering similar ser-
vices.
</TABLE>

15
<PAGE> 24

Real Estate Commissions for If the Advisor or an Affiliate Not determinable at this
Selling Properties (payable to is the only party to receive a time.(8)(9)
the Advisor and/or an brokerage commission upon the
Affiliate) Property or an sale of a Property, the
amount equal to 6% of the Company will pay a commission
gross sale price. equal to the lesser of (i) 3%
of the gross sale price of a
Property or (ii) a percentage
of the sale price equal to
one-half the normal and
competitive rate charged by
unaffiliated parties ren-
dering similar services,
subject to certain
restrictions specified in the
Company's Organization Docu-
ments. Any real estate
commission which is paid to
any unaffiliated parties shall
equal the lesser of (i)
one-half of the brokerage
commission paid or (ii) 3% of
the gross sale price of the
Property; provided that the
total brokerage commissions
paid by the Company shall not
exceed the lesser of the
reasonable, customary and
competitive commission for
such Property or an amount
equal to 6% of the gross sale
price.

Subordinated Incentive Fee on After the sale, financing or Not determinable at this
Sale, Financing or Refinancing refinancing of a specific time.(9)
(payable to the Advisor and/or Property an amount equal to
an Affiliate) 15% of the amount of Cash From
Sales or Refinancing remaining
after the Company has received
proceeds from the sale or
refinancing of such specific
Property in an amount equal to
either Offering Proceeds or
Reinvestment Proceeds (such
proceeds are deemed a
Distribution of Cash Available
From Sales or Refinancing to
Shareholders) and Shareholders
have received an amount which,
when added to all
Distributions made to
Shareholders, equals 100% of
their Adjusted Price per Share
plus a cumulative (noncom-
pounded) return on their
Adjusted Price per Share
(calculated from time to time)
equal to 8% per annum.
</TABLE>

- ---------------

(1) The estimated amounts assume that a minimum of 345,528 shares (as of March
18, 1997) and a maximum of 1,500,000 Shares are sold.

(2) This assumes the Selling Agent sells all of the Shares. The amount paid to
the Selling Agent will be reduced if Shares are sold by Selected Dealers. It
cannot be determined what percentage of the Shares will be sold by the
Selling Agent and what percentage of the Shares will be sold by Selected
Dealers. The Selling Agent

16
<PAGE> 25

will also receive 5 cents per Share from the Company for bona fide due
diligence expenses. See "Plan of Distribution."

(3) The Advisor will receive reimbursement for actual and necessary Organization
and Offering Expenses which consist of expenses relating to the Company's
organization and formation, for all legal, accounting, due diligence,
printing expenses and for all other expenses relating to the registration,
marketing and distribution of this offering other than retail sales
commissions. This reimbursement is limited to 40 cents per Share for each
Share sold up to a maximum of $500,000 and may include a nonaccountable
expense allowance which may not exceed 3% of the gross offering proceeds.
All such expenses in excess of this limit will be borne by the Advisor. See
"Plan of Distribution."

(4) If the Company finances, refinances, joint ventures or sells a Property, it
may reinvest the proceeds in other Properties. See "Investment Objectives
and Policies." Whenever the proceeds from the sale, financing, or
refinancing of a Property are reinvested in another Property, no Acquisition
Fee will be paid to the Advisor or an Affiliate for the Property which was
subsequently purchased.

(5) The amount of Acquisition Fees and Acquisition Expenses (which assumes
Properties are acquired with a maximum 50% leverage; such amounts would be
approximately $179,615 and $771,000 if the Properties were acquired without
leverage) will be paid by the Company, or the seller of the Property, to the
Advisor and/or an Affiliate. See "Investment Objectives and
Policies -- Acquisition Policies" for limitations applicable to the payment
of these fees. To the extent these fees are paid by sellers of Properties,
the amount of Acquisition Fees paid by the Company will be reduced, but it
is anticipated that in such situations the Purchase Price, and therefore,
the cash payment for the purchase of Properties, will be increased.

(6) The Company will pay all expenses of its operations except for the following
expenses which shall be borne by the Advisor: (i) employment expenses of the
Chairman, President, Executive and Senior Vice Presidents and directors of
the Advisor, (ii) office expenses of the Advisor, and (iii) miscellaneous
administrative and other expenses of the Advisor not relating to the
performance of its functions as set forth in the Advisory Agreement.

(7) The amounts reflected assume maximum leverage of 50% when Properties are
acquired and are for the first year the amount available for investment is
fully invested (such amounts would be approximately $26,100 and $113,080 if
Properties were purchased without leverage). See "Estimated Use of
Proceeds."

(8) If the Advisor, Affiliates and non-Affiliates participate in a sale, the
general limitation requirements set forth in the Company's Organization
Documents will apply to the Advisor and all Affiliates involved in the
transaction.

(9) Any amounts which are payable to the Advisor but which are deferred (e.g.,
insufficient cash for distribution resulting from a sale of a Property) will
be paid when sufficient funds become available.

17
<PAGE> 26

CAPITALIZATION

The following table sets forth the capitalization of the Company at
December 31, 1996.

<TABLE>
<S> <C>
MORTGAGE DEBT.................................................................. $10,078,793
SHAREHOLDERS' EQUITY (1,550,607 Shares Outstanding)............................ 12,904,891
-----------
Total Capitalization........................................................... $22,983,684
===========
</TABLE>

SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Operating Revenues........................... $ 2,474,627 $ 1,813,126 $ 903,167 $ 362,566 $ 158,306
Income from continuing operations............ 705,636 649,605 247,068 158,490 40,287
Income from continuing operations per
share...................................... 0.49 0.58 0.35 0.38 0.15
Long-Term Debt............................... 10,078,793 9,539,180 5,161,355 2,405,526 -0-
Total Assets................................. 23,571,838 21,392,898 13,228,888 7,509,947 2,786,423
Cash Dividends per common share.............. $0.779 $0.720 $0.762 $0.539 $0.275
</TABLE>

18
<PAGE> 27

CONFLICTS OF INTEREST

The Company is subject to various conflicts of interest arising out of its
relationship with the Advisor and Affiliates of the Advisor. None of the
agreements and arrangements, including those relating to compensation, between
the Company and the Advisor and its Affiliates are the result of arm's-length
negotiations. However, the Independent Directors will review annually the
reasonableness of the compensation being paid to the Advisor. In addition, the
Advisory Agreement may be terminated by the Directors, Independent Directors or
Shareholders on 60 days' notice to the Advisor. See "Services Provided by the
Advisor and Property Manager." If the Advisory Agreement is terminated, the
Directors shall select a successor Advisor which shall be approved by the
Shareholders at the next annual meeting of Shareholders.

The Advisor is an Affiliate of AFG. It is anticipated that, in the future,
the Advisor may serve as general partner, advisor or sponsor of other public and
private programs and engage in business activities which will be competitive
with the Company. Accordingly, conflicts may arise between operating and
managing the real estate investments of the Company, and any such future real
estate programs. In addition, AFG and its Affiliates may in the future engage in
additional business activities which will be competitive with the Company.

The Advisor and its Affiliates are subject to various conflicts of interest
in the operation of the Company. These conflicts include the following:

COMPETITION BY THE COMPANY WITH AFFILIATED PARTIES FOR PURCHASE AND SALE OF REAL
PROPERTY. The Advisor and its Affiliates may engage for their own account, or
for the account of others, and other public or private real estate investment
trusts or limited partnerships, in other business ventures involving real estate
or otherwise, and neither the Company nor any Shareholder shall be entitled to
any interest in any such venture. The Company's Organization Documents expressly
provide that neither the Advisor nor any Affiliate of the Advisor will be
obligated to present to the Company any particular investment opportunity which
comes to its attention even if the opportunity is of a character which might be
suitable for investment by the Company. Additionally, the Advisor intends to
form other public and private real estate investment trusts or limited
partnerships in the future, some of which may have the same investment
objectives as the Company. However, the Advisor will not make investments for
its own account of the character suitable for investment by the Company while
the Company has sufficient funds available to make the investment.

When two entities have funds available for investment at the same time, the
Advisor or its Affiliates will review the investment portfolio of each entity
and will make the decision as to which entity will acquire the property on the
basis of such factors, among others, as the suitability of investing in the
property in light of their respective investment objectives, a review of the
investment portfolio of the entities, their respective cash flow requirements,
the effect of the acquisition on diversification of the portfolio, the size of
the investment compared to the capitalization of the entity, the policy of each
entity with respect to leverage, the amount of funds available and the length of
time such funds have been available for investment. If funds should be available
to two or more entities to purchase a given property or properties and the other
factors are deemed equally applicable to each entity, then the Advisor and its
Affiliates will acquire the properties for the entities on the basis of rotation
with the order of priority determined by the dates of formation of each entity,
and will so report to each entity not selected to acquire the property. There
are no current or prior programs which have funds available for investment in
properties.

TRANSACTIONS WITH THE ADVISOR OR AN AFFILIATE. Transactions with the Advisor
and its Affiliates and the Directors are governed by the Bylaws. The Bylaws
require that the Independent Directors must approve or ratify all transactions
with the Advisor or its Affiliates, or any transaction with any Director,
officer, employee or agent of the Company, except with respect to certain
transactions which, by their terms, are governed by the Bylaws. Transactions
with Affiliates may be considered not to be made at arms-length. The material
terms and circumstances of any transactions so approved will be included in the
Company's annual report. The Company will not acquire Properties from the
Advisor or any of its Affiliates, except as described in "Summary of
Organization Documents -- Transactions with Affiliates."

SELLING AGENT. Associated Securities Corp., a wholly owned subsidiary of AFG,
is the Selling Agent of the Shares. As an Affiliate of AFG and the Advisor, the
Selling Agent may experience conflicts in performing its

19
<PAGE> 28

obligations to exercise due diligence with respect to the statements made in
this Prospectus. The Selling Agent believes, however, that it has exercised the
degree of diligence required of it in connection with this offering.

PROPERTY MANAGEMENT FEE. West Coast Realty Management Inc., an Affiliate of AFG
and the Advisor, will receive a monthly fee not to exceed 5% of the gross
revenues from residential Properties and 3% or 6% of the gross revenues from the
retail, industrial and commercial Properties which it manages and leases.
Currently, three of the properties are subject to a 6% rate and six are subject
to a 3% rate. For further information on the Property Management Fee see
"Investment Objectives and Policies -- Management of Properties" and
"Compensation of Advisor and Affiliates".

LACK OF SEPARATE REPRESENTATION. The attorneys, accountants and other experts
who perform services for the Company also perform services for AFG, the Advisor
and certain Affiliates of the Advisor. It is anticipated that this dual
representation will continue in the future. However, should a dispute arise
between the Company and the Advisor or an Affiliate, or should it become
necessary to negotiate and prepare any material contracts and agreements between
the Company and the Advisor or an Affiliate other than those existing on the
effective date of this Prospectus, the Independent Directors may cause the
Company to retain separate counsel for those matters. Any future contracts and
agreements between the Company and the Advisor or its Affiliates will provide
that they may be terminated at the option of the Company upon 60 days' notice
without penalty to the Company.

INVESTMENT OBJECTIVES AND POLICIES

PRINCIPAL INVESTMENT OBJECTIVES. The Company primarily intends to acquire,
improve, operate and hold for investment income-producing real estate projects,
which may include residential buildings, office buildings, shopping centers,
research and development facilities, industrial parks, warehouses, or
mini-warehouses and other similar types of income-producing property. The
Company will operate on a continuous basis for an indefinite term. The Company's
principal investment objectives cannot be changed without a majority vote of the
Shareholders. The Company will not develop speculative properties; it will
acquire only properties which have been developed and are producing income. The
Company's policy will be to acquire Properties for cash or with a moderate
amount of mortgage indebtedness; however, the Company may leverage its
investments as described below in "Borrowing Policies -- Leveraging." The
Company intends to concentrate on equity investments. The Company does not
presently intend to offer Shares as consideration in exchange for Properties but
may do so with the approval of a majority of the Independent Directors. During
the course of this offering the Advisor may, from time to time, make certain
cash advances to the Company in connection with the acquisition of Properties.
These advances will be subject to approval by a majority of the Independent
Directors and will be on terms no less favorable to the Company than those
available from third parties. All advances will be unsecured and will be repaid
out of the proceeds of this offering or in Shares at a $9.30 per Share price, to
the extent that such offering proceeds are insufficient to repay all advances at
the completion of this offering.

The Company's principal investment objectives in order of priority are to
invest the net proceeds of this offering in Properties which will: (i) preserve
and protect the Company's capital, (ii) provide cash Dividends a portion of
which will not constitute taxable income (which due to depreciation will
constitute a return of capital which will reduce an investor's basis in the
Shares and thereby will result in an increase in gain or a reduction in loss to
the Shareholders on any disposition of the Shares including a disposition upon
dissolution or liquidation of the Company), (iii) provide capital gains through
potential appreciation of Properties, and (iv) provide market liquidity through
transferable shares of stock. NO ASSURANCE CAN BE GIVEN THAT THESE OBJECTIVES
WILL BE ATTAINED.

Except as described below in "Use of Initial Capital" and "Borrowing
Policies -- Leveraging," the Company does not have a policy, and there is no
limitation, as to the amount or percentage of its assets which may be invested
in any one Property or group of Properties, any specific investment or the
number of purchases which may be made from any person or group of persons. To
the extent feasible, investments will be made in various locations primarily in
California and the west coast of the United States in an attempt to achieve
diversification and to minimize the effect of changes in local economic
conditions and certain other

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<PAGE> 29

risks. See "Risk Factors." However, the extent of diversification depends upon
the amount of net proceeds available to the Company from the sale of the Shares,
and if less than the maximum net proceeds of this offering is obtained, the
number of Properties acquired and the Company's ability to diversify will be
reduced. The Company may, in the future, repurchase Shares on the open market or
in negotiated transactions if the Directors believe that the Company's Share
price makes that an attractive investment. Such repurchases, if any are made,
would only be made in compliance with conditions imposed by the Federal
Securities Exchange Act of 1934.

USE OF INITIAL CAPITAL. The Company intends to use the net proceeds of this
offering, which will be not less than a minimum of $3,454,131 as of March 18,
1997 and a maximum of $13,300,000 for the purchase of Properties, for the
payment of Acquisition Fees and for the establishment of appropriate reserves.
See "Estimated Use of Proceeds".

There can be no assurance as to when the proceeds from the offering may be
fully invested. The Advisor is presently evaluating real property for purchase.
It is intended that the time required to invest the net proceeds of this
offering will not cause the Company to be deemed an "investment company" for
purposes of the Investment Company Act of 1940, as amended. If the Company holds
sufficient uninvested funds, it may invest in short-term investments (including,
without limitation, bank or savings and loan instruments, bankers' acceptances,
repurchase agreements, GNMA and FNMA mortgage pass-through certificates,
commercial paper, short-term time deposits and money market funds managed by
subsidiaries of AFG or its Affiliates and having assets in excess of
$100,000,000) until the funds are required for the acquisition of Properties.
Any interest earned will be deemed to be earned from operations of the Company.
The Company does not intend to make investments in securities for the purpose of
exercising control of the issuer of such securities.

Before completion of this offering, when the Directors believe that a
reasonable probability exists that a Property will be acquired by the Company,
this Prospectus will be supplemented to disclose the pending acquisition of the
Property. This event will normally occur on the signing of a legally binding
purchase agreement, but it may occur before or after signing, depending on the
particular circumstances surrounding each potential acquisition. A supplement to
this Prospectus will set forth data available with respect to the acquisition,
which will include the proposed terms of purchase, a description of the Property
to be acquired and other information. Additional data will be made available
after a pending acquisition is completed by means of an additional supplement to
this Prospectus if the information can be distributed before termination of this
offering.

PROPOSED ACQUISITIONS WILL BE DISCLOSED WHEN THERE IS, IN THE COMPANY'S
JUDGMENT, A "REASONABLE PROBABILITY" THAT THE PROPERTY WILL BE ACQUIRED.
THEREFORE, INFORMATION CONCERNING A PROPOSED ACQUISITION CANNOT BE RELIED UPON
AS A COMPLETE ASSURANCE THAT THE COMPANY WILL ULTIMATELY CONSUMMATE THE PROPOSED
ACQUISITION OR THAT THE IDENTIFIED PROPERTY WILL ULTIMATELY BE ACQUIRED UPON THE
DISCLOSED TERMS AND CONDITIONS. THERE MAY BE A DELAY BETWEEN THE NEGOTIATION AND
THE COMPLETION OF A PROPERTY ACQUISITION.

To attain its stated objectives and pay cash Dividends to Shareholders, it
will be necessary for the Company to acquire Properties which will generate cash
in excess of the cash required to meet the gross operating expense of the
Company. To do this, the Company intends where possible to invest the majority
of the net proceeds of this offering in Properties with operating histories
including established rent and expense schedules. In the event that there is an
agreement with the seller of a Property assuring a minimum level of rental
income, it is likely that the seller would increase the purchase price for that
Property to reflect the agreement. Upon the expiration of any such agreement,
there would be no assurance that the Company will be able to obtain or maintain
the levels of operating income or expense which are necessary to produce the
return it was previously experiencing. Payments made to the Company pursuant to
such an agreement may be treated as income for federal income tax purposes.

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<PAGE> 30

ACQUISITION POLICIES. The Company will obtain an Appraisal of the fair market
value of any equity interest in real estate to be acquired by the Company. The
Appraisal will be made by an Independent Expert who is a member of a nationally
recognized society of appraisers. Each Appraisal will be maintained in the
records of the Company for at least five years following the acquisition of the
appraised Property and during that period will be available for inspection by
any Shareholder. The Company will not purchase any Property if the cost of the
Property (including Acquisition Fees and Acquisition Expenses) exceeds the
appraised value of the Property. It should be recognized that appraised values
are opinions and, as such, may not represent the true worth or realizable value
of the property being appraised.

It is the present policy of the Company that all investments in real
property will be made only with the prior approval of the Directors. The Advisor
and its Affiliates are prohibited from leasing or selling any Property to the
Company except with the approval of the Independent Directors, and the Advisor
and its Affiliates may not have any pecuniary interest, other than their
interest in the Company, in any Property sold or leased to the Company. However,
the Advisor or any of its Affiliates (i) may be joint venture partners with the
Company with respect to certain Property ownership, and (ii) may purchase
Property in its own name, assume loans and temporarily hold title for the
purpose of facilitating the acquisition of a Property, or for any other purpose
related to the business of the Company.

Prior to the acquisition of any Property or any interest in a Property, the
Company will be provided with evidence satisfactory to the Directors or the
Advisor, that the Company will acquire marketable title to the Property. This
evidence may include a policy of title insurance, an opinion of counsel or such
other evidence as is customary in the locality where the Property is situated.

BORROWING POLICIES -- LEVERAGING. The Company will initially acquire Properties
for cash or by borrowing from banks, other institutional lenders and private
lenders. Aggregate borrowings incurred by the Company in connection with the
financing of all Properties will not exceed 50% of the Purchase Price of the
Properties on a combined basis and the amount borrowed with respect to any
individual Property will not exceed 80% of its Purchase Price. If a Property is
financed or refinanced, the aggregate amount of borrowings the Company will
incur will not exceed 50% of the Appraised Value of the Property at the time of
such financing or refinancing. The Company may use the proceeds from any
refinancing, and the proceeds from any Property disposition, to acquire
additional Properties, the acquisition of which may also be leveraged. The
Company may also issue notes, debentures and other debt securities and mortgage
a portion of its Properties in connection with these borrowings or acquisitions.
In addition, the Company may establish a line of credit with a bank or other
lender.

Where possible, the Company will issue only nonrecourse promissory notes in
connection with the financing of Properties so that the Company would not be
generally liable on the borrowing and the lender's rights upon default would be
limited to the Property which secures the obligation. There is no assurance as
to whether, or the extent to which, the Company may enter into such nonrecourse
arrangements. The Company and the Advisor will use their best efforts to arrange
fixed interest rate permanent financing on the most favorable terms available to
the Company; however, some financing may involve renegotiable, floating or
adjustable interest rates, interest accruals or balloon payments. See "Risk
Factors -- Leveraging of Investments."

RESERVES FOR OPERATING EXPENSES. It is anticipated that approximately 3% of the
gross proceeds of the offering will initially be designated as Working Capital
Reserves to meet operating costs and expenses of the Company and its Properties,
capital expenditures and initial cash expense upon completion of the Company's
investment program. In connection with Properties requiring large initial
maintenance expenditures or Properties which are in the process of being leased
pursuant to discussions with prospective tenants, larger reserves may be
retained by the Company. To the extent that Working Capital Reserves and any
income of the Company are insufficient to defray these costs and other
obligations and liabilities, it may be necessary to attempt to finance or
refinance the Properties or, if financing or refinancing is not available on
acceptable terms, to liquidate the Company's investment in certain of its
Properties, which could result in sales on unfavorable terms as well as
jeopardize the tax status of the Company as a REIT. However, during the holding
period of a Property, the Company may increase Working Capital Reserves to meet
anticipated costs and

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<PAGE> 31

expenses and other economic contingencies. If in any fiscal quarter the
Directors should determine that Working Capital Reserves of the Company exceed
the amount it deems sufficient for the Company's operations, the reserves may be
reduced and the amount of the reduction added to the funds available for
acquisition of Properties or distributed to Shareholders, as determined by the
Board of Directors. See "Investment Objectives and Policies -- Dividends."

MANAGEMENT OF PROPERTIES. It is anticipated that each Property will be managed
by West Coast Realty Management, Inc., an Affiliate of the Advisor, which will
be responsible for the management of the Property and collection of its rental
income. Based upon the accuracy of the facts contained in the Ruling Request,
the Internal Revenue Service has issued a ruling that West Coast Realty
Management, Inc. will qualify as an "independent contractor" as defined in the
REIT provisions of the Code. If West Coast Realty Management, Inc. had not
qualified as an independent contractor, it may have been deemed to be an
Affiliate of the Company, and if the Company contracted with West Coast Realty
Management, Inc. for property management services, the Company might have lost
its eligibility to elect REIT tax treatment. The Company will use its best
efforts to ensure that the material facts contained in the Ruling Request remain
accurate. See "Management." The difference between revenues and the expenses
related to the operation of the Property, including the cost of maintenance,
repairs and improvements, administration, payroll, utilities, insurance
premiums, taxes and assessments, bookkeeping and commissions, debt service and
the Property Management Fee will be retained by the Company. In no event will
the Property Management Fee exceed the rates prevailing for comparable services
in the localities where the Properties are located. See "Compensation of Advisor
and Affiliates." If West Coast Realty Management, Inc., retains independent
management companies to perform a portion or all of the services in connection
with the management of the Properties, it will be responsible for and pay any
fees charged by these persons without additional cost to the Company. The
Property Management Fee does not include, and West Coast Realty Management, Inc.
will not be responsible to pay, any fees or expenses paid to on-site property
managers.

DIVIDENDS. The Company will declare Dividends on a monthly basis, payable to
Shareholders of record on the first of the month, and will pay those Dividends
quarterly. The Company will declare and pay Dividends in such amounts as the
Directors determine, based upon the cash flow of the Properties, the operations
of the Company and its financial condition. However, the Company's policy will
be to pay Dividends to Shareholders aggregating annually at least 95% of its
Taxable Income (which term is different from Cash Available For Distribution or
Cash From Sales or Refinancings). Commencing January 1, 1993, the Advisor and
WCRM agreed to waive their administrative services reimbursement and a portion
of the Property Management Fee, until November, 1994. The effect of the
foregoing was to increase Dividends approximately $.10 to $.15 per Share per
year. Beginning July 1, 1996, the Advisor agreed to waive a portion of its
Advisory Fees for an indefinite period. The effect of the foregoing was to
increase Dividends approximately $.02 to $.03 per Share for the period from July
1, 1996 to December 31, 1996.

The Company will seek to comply with provisions of the federal income tax
laws applicable to REITs, and, assuming compliance, income distributed as
Dividends will not be taxable to the Company under federal income tax laws.
Dividends paid by the Company will always be at the discretion of the Directors,
and will depend on the earnings and cash flow of the Company, its financial
condition and other relevant factors. Certain Dividends, or portions thereof,
may not constitute taxable income to the shareholder. See "Tax Consequences."

Dividends may be restricted under provisions of the Delaware Corporations
Code. Generally, payment of Dividends is permitted only if the Company has
sufficient retained earnings or it meets certain assets and liabilities tests.
If Dividends are paid in violation of these provisions, creditors of the
Company, if any, who are not paid by the Company may be able to recover the
amount of the Dividends, with interest, from Shareholders who had knowledge of
the facts indicating the impropriety of the Dividends.

Dividends totaling $1,128,597, $804,595, $522,614, $221,010, $74,632 and
$50,284 in 1996, 1995, 1994, 1993, 1992 and 1991, respectively, were declared
for Shareholders of record, who owned Shares on the first day of each month, and
paid in the quarter following the record date. Of such amounts, approximately

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<PAGE> 32

37%, 24%, 37%, 6%, 46% and 42% in 1996, 1995, 1994, 1993, 1992 and 1991,
respectively, constituted a return of capital. The 1994, 1995 and 1996 dividend
distributions are summarized below.

<TABLE>
<CAPTION>
RECORD DATE PER OUTSTANDING TOTAL
DATE PAID SHARE SHARES DIVIDEND
- -------- -------- -------- ----------- --------
<S> <C> <C> <C> <C>
01/01/94 04/29/94 $ 0.058 562,888 $32,648
02/01/94 04/29/94 0.060 568,404 34,104
03/01/94 04/29/94 0.062 590,966 36,640
04/01/94 08/11/94 0.063 610,195 38,442
05/01/94 08/11/94 0.064 620,421 39,707
06/01/94 08/11/94 0.065 637,315 41,426
07/01/94 10/31/94 0.065 637,315 41,426
08/01/94 10/31/94 0.065 688,203 44,733
09/01/94 10/31/94 0.065 747,876 48,612
10/01/94 01/15/95 0.065 811,034 52,717
11/01/94 01/15/95 0.065 844,800 54,913
12/01/94 01/15/95 0.065 880,700 57,246
01/01/95 04/17/95 0.060 911,986 54,719
02/01/95 04/17/95 0.060 945,136 56,708
03/01/95 04/17/95 0.060 1,009,084 60,545
04/01/95 07/14/95 0.060 1,069,217 64,153
05/01/95 07/14/95 0.060 1,109,374 66,562
06/01/95 07/14/95 0.060 1,109,874 66,592
07/01/95 10/16/95 0.060 1,116,891 67,013
08/01/95 10/16/95 0.060 1,151,911 69,115
09/01/95 10/16/95 0.060 1,204,517 72,271
10/01/95 01/15/96 0.060 1,225,398 73,524
11/01/95 01/15/96 0.060 1,261,859 75,712
12/01/95 01/15/96 0.060 1,294,683 77,681
01/01/96 04/15/96 0.060 1,325,404 79,524
02/01/96 04/15/96 0.060 1,371,794 82,308
03/01/96 04/15/96 0.060 1,401,663 84,100
04/01/96 07/15/96 0.0666 1,413,736 94,155
05/01/96 07/15/96 0.0666 1,445,236 96,253
06/01/96 07/15/96 0.0666 1,448,836 96,492
07/01/96 10/15/96 0.0666 1,448,836 96,492
08/01/96 10/15/96 0.0666 1,448,836 96,492
09/01/96 10/15/96 0.0666 1,498,246 99,784
10/01/96 01/15/97 0.0666 1,498,246 99,783
11/01/96 01/15/97 0.0666 1,500,651 99,943
12/01/96 01/15/97 0.0666 1,550,607 103,270
</TABLE>

The amount of distributions necessary to maintain taxable status as a REIT
for the years ended December 31, 1996, 1995, 1994, 1993, 1992, and 1991 was
$670,354, $617,125, $251,456, $171,223, $38,273, and $27,202.

SALE, FINANCING OR REFINANCING OF PROPERTIES. The Company anticipates holding
Properties for a minimum of four years and a maximum of ten years from the date
of each Property's acquisition. The Company is prohibited from selling any
Property to the Advisor or its Affiliates.

The Company's policy will be to purchase Properties, generally on a
moderately leveraged basis. The Company may sell or finance Properties and
reinvest the proceeds in additional Properties which may themselves be
leveraged. Should the Company sell or refinance Properties, the Company may
distribute all or part of the proceeds to the Shareholders. Properties may be
financed at any time depending upon the availability of suitable financing,
satisfactory terms and other factors. The Company also may use funds from the
sale or financing of a Property to finance improvements or additions to any
Property and may use the net proceeds of any financing to purchase the land
underlying any Property which is held subject to a ground lease.

The determination of whether a particular Property should be sold,
financed, or otherwise disposed of will be made after a consideration of
relevant factors, including performance of the Property and market conditions,
with a view toward achieving the principal investment objectives of the Company.
The Advisor and any Affiliates may not have any pecuniary interest, other than
their interest in the Company and pursuant to the other arrangements described
in this Prospectus, in any Property sold or leased by the Company

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<PAGE> 33

without the approval of a majority of the Directors, including a majority of the
Independent Directors, not otherwise interested in the transaction.

In connection with the sale of a Property, the Company may provide seller
financing as to a portion of the sales price. The terms of payment to the
Company will be affected by the then prevailing economic conditions. Therefore,
the distribution to Shareholders of the proceeds of a sale, if any, may be
delayed until the notes or other property are paid at maturity, sold, refinanced
or otherwise disposed of. In certain cases a significant portion of the
remaining balance of the sales price may be a balloon payment due at a specified
maturity date.

GENERAL RESTRICTIONS. The Bylaws contain certain restrictions on the Company's
investments and activities, including limitations on transactions with
Affiliates, which are more fully described in "Summary of Organization
Documents --"Restrictions on Investments" and "Other Restrictions."

REAL PROPERTY INVESTMENTS

BLOCKBUSTER VIDEO BUILDING.

On February 26, 1991, utilizing the proceeds received from the prior sale
of its Shares, the Company acquired the Blockbuster Video building and
underlying fee ownership in the land (the "Building") located at 6491 Edinger
Avenue in Huntington Beach, California. Huntington Beach is a thriving,
beachside community located in the northwest section of Orange County. The
Building is located on the northwest corner of Edinger Avenue and Edwards
Street -- two busy thoroughfares located in the heart of the city. The Building
is located approximately three miles away from the San Diego Freeway (Highway
405), two miles away from two major shopping malls (Westminster Mall and
Huntington Center), and one mile away from Golden West Community College.

Description. The Building is occupied by a single tenant, a Blockbuster
Video store. Blockbuster Videos, Inc., ("Blockbuster") the tenant, is a large,
Texas-based corporation that operates a national network of video rental stores.
Blockbuster is a subsidiary of the Viacomm Corporation (a component of the
Standard & Poor's 500 Index). The Blockbuster chain has built a reputation of
offering convenient video rental service featuring easy rental and return
privileges, and has established a good reputation in the communities it is
located in by refusing to rent or sell pornographic videos, or those videos
rated "X" or "NC-17" by the Motion Picture Association of America.

Base building construction was completed in January 1991. The primary
contractor was the Newport Construction Company. The total size of the lot is
18,030 square feet. The Building was constructed using a wood frame, on a
concrete slab, with a flat roof. The floors are concrete with carpet and tile
coverings. The building contains a total of 5,200 rentable square feet. Site
improvements include professional landscaping, parking lot lighting, trash
enclosures, asphalt and concrete paving, striping and buffers, and twenty-six
parking spaces located in a parking lot with street access to both Edinger
Avenue and Edwards Street. The landscaping covers approximately 2,591 square
feet or 14% of the total lot area.

The lease with Blockbuster is for ten years, and is a "triple-net" lease
with the tenant responsible for the Building's operating costs including, but
not limited to, taxes, insurance, and common area maintenance. In addition, the
builder has provided warranties on several of the site improvements. The lease
calls for rental payments of $11,180 per month for years one through five
(1991-1995), and $13,416 per month for years six through ten (1996-2000). This
is equivalent to $2.15 and $2.58 per square foot, respectively. Rental income is
recognized on a straight line basis to the extent that rental income is deemed
collectible. In addition, the tenant has the option to renew the lease for
$16,099 per month ($3.10 per square foot) for years eleven to fifteen
(2001-2005), and another option to renew the lease for $19,319 per month ($3.72
per square foot) for years sixteen to twenty (2006-2010). Rental payments began
when Blockbuster occupied the Building on February 19, 1991.

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<PAGE> 34

Total Purchase Price paid for the Building was $1,676,210. The total
acquisition cost included $1,575,000 payable to the seller, $10,000 in estimated
legal, appraisal, and closing costs, and $90,140 as an Acquisition Fee payable
to the Advisor and Descolin, Incorporated ("Descolin"). Descolin is an affiliate
of the Advisor. The Building was acquired from Edinger & Edwards, a California
General Partnership.

The funds used to acquire the Building were received from the prior sales
of the Company's Shares. Payment of the Acquisition Fee to the Advisor was
deferred until March 11, 1991, the date on which sufficient net proceeds from
the sale of the Company's Shares was sufficient to pay such fee. All other costs
and expenses, including the payment to the seller of the building, were paid on
February 26, 1991 from net proceeds from the sale of the Company's shares.

The Building was initially acquired entirely for cash, with no debt
financing involved. However, on February 8, 1994, the Company financed the
Building by incurring nonrecourse mortgage debt secured by the Building from
Standard Insurance Company in the amount of $600,000. The initial interest rate
is 8.25% per annum and at the end of the fifth year of the loan, the interest
rate will be adjusted to 350 basis points over the five-year Treasury Bond
yield. The monthly payment is currently $4,934. The loan is amortized over 25
years and matures in 10 years.

Competitive Conditions. The Building is located in the heart of Huntington
Beach, a thriving Orange County city which is adjacent to other well-known
communities such as Fountain Valley, Westminster, and Costa Mesa. Although there
are several other video stores in the area of smaller or equal size, there are
no other Blockbuster video stores within two miles of this location.

Although the building currently has a single tenant, it is readily
convertible to another use for a new, retail tenant in the event of vacancy.

Property Operations. The Advisor has determined that the Building is
adequately insured. Although the tenant is obligated by its lease to pay
property taxes, the property taxes in 1996 were approximately $18,000.

General. The material facts considered in purchasing the Building were the
desirability of its location, comparable rents in the area, the high credit
quality of the single tenant, the long-term lease that the sole tenant has
committed to, and the competitive return on investment provided by the net
income from the Building.

The computation of depreciation is based on the cost of the Blockbuster
Video Property including Acquisition Fees and Acquisition Expenses. The
allocation of the cost of the Blockbuster Video Property to the various asset
categories is estimated, based on allocations noted in the property tax
assessments. Depreciation is computed on a straight-line basis over the
component useful life of the assets.

FRESNO PROPERTY

On May 14, 1993, the Company acquired the property described below (the
"Fresno Property"). The cash to acquire the Fresno Property was received from
the sale of the Company's Shares in prior offerings.

Description. The Fresno Property was a newly developed retail building
(the "Fresno Building") with construction completed in April, 1993. The Fresno
Building is located at 1614 North Blackstone, Fresno, California. The Fresno
Building is located close to the center of Fresno, California on the northeast
corner of Blackstone and McKinley. Fresno is located in Central California. The
Fresno Building is located on a lot size of 23,855 square feet, with a building
size of 8,915 square feet. The exterior of the Fresno Building consists of
stucco and glass construction.

The Fresno Building is 100% occupied by two tenants -- Wherehouse
Entertainment, Inc. ("The Wherehouse"-- a music and video retailer), and RTO,
Inc. (which stands for "Rent To Own" -- a home furnishing and appliance rental
company) (collectively "Tenants").

The Wherehouse entered into a ten year lease which commenced April 1, 1993
and was to continue through March 31, 2003. The Wherehouse occupies
approximately 6,000 square feet of the Fresno Building.

26
<PAGE> 35

Prior to the modification of The Wherehouse lease, as described below, monthly
rental payments were to be as follows:

<TABLE>
<S> <C>
April, 1993 to March, 1998: $7,680 per month
(1.28/sq. ft./month)
April, 1998 to March, 2003: 8,820 per month
(1.41/sq. ft./month)
</TABLE>

As possible additional rent, The Wherehouse was scheduled to pay the
Company 3% of gross sales after applying a formula that involves recapture of
rent and expenses that The Wherehouse would pay as a triple net lease tenant.
There were no amounts due on this additional rent through December 1996.

On August 2, 1995, The Wherehouse filed for protection under Chapter 11 of
the U.S. Bankruptcy Code. The Wherehouse continued to pay its rent under the
terms of the original lease through January 1997. In November 1996, the Company
and The Wherehouse agreed to the terms of a new lease, subject to the approval
of the Bankruptcy Court. Under the terms of the First Amendment to Lease (the
"Amendment") dated November 30, 1996, commencing February 1, 1997, The
Wherehouse's lease was converted from a "net" lease to a "gross" lease. At a
minimum, the Company will be paid rent of $54,000 per year ($4,500 per month)
until January 31, 1998 unless the Wherehouse exercises its one time option to
terminate the lease on March 31, 1998. If the lease is not terminated, the
Company will be paid $82,800 per year ($6,900 per month) thereafter to January
31, 2003. The Amendment also provides that commencing January 20, 1997, the
gross rent will be adjusted to an amount equal to 6.5% of gross sales from the
previous eleven months, but such rent shall never be less than the rent paid
during the said period. On April 20, 1998 and each three months thereafter, the
gross rent will be adjusted to an amount equal to 8.2% of gross sales from the
previous calendar quarter, but the rent shall never be less than the rent paid
during said quarter. At this time, the Company does not feel that the gross rent
calculation will exceed the minimum rental amount payable in 1997. The
Wherehouse will also pay for any percentage increase in property taxes over and
above the amount assessed for calendar year 1996, on its pro rata share of
occupied space of the property. The terms and conditions pertaining to options
to renew the lease remain unmodified and are described below.

As a result of the Amendment, the monthly rent payments (based on minimum
rental amounts) was decreased from $1.28 per square foot to $.75 per square foot
(or $4,500 per month) effective February 1, 1997. In addition, the Company
expects to absorb an additional $18,000 in operating expenses that were
previously allocated to The Wherehouse. The total decrease in income as a result
of the Amendment is therefore estimated to be $38,160 per year until February 1,
1998 when the total decrease will be reduced to $28,800 per year. Based on
approximately 1.6 million shares of the Company outstanding, the Amendment would
decrease distributable income by approximately $.02 per share per year, and thus
is not material to the operating results of the Company.

In addition, the Wherehouse has an option to extend its lease for three
five-year periods at the end of the initial lease, or extended term, as follows:

<TABLE>
<S> <C>
February, 2003 to March, 2008: $10,140 per month
April, 2008 to March, 2013: 11,700 per month
April, 2013 to March, 2018: 13,500 per month
</TABLE>

The Bankruptcy Court gave approval to The Wherehouse's plan of
reorganization as well as the modified lease as of February 1, 1997.

RTO entered into a five year lease and occupies approximately 2,915 square
feet of the Fresno Building, with monthly rental payments as follows:

<TABLE>
<S> <C>
April, 1993 to March, 1993: Free Rent
June, 1994 to March, 1997: $3,498 per month
(1.20/sq. ft./month)
April, 1997 to March, 1998: $3,664 per month
(1.25/sq. ft./month)
</TABLE>

27
<PAGE> 36

During the term of the initial lease -- during the Company's
ownership -- rent payments will average $1.21 per square foot per month.

In addition, RTO has an option to extend the lease for two three year
periods at the end of the initial, or extended lease term as follows:

<TABLE>
<S> <C>
April, 1998 to March, 2001: $3,790 per month
April, 2001 to March, 2004: $3,935 per month
</TABLE>

The RTO lease is "triple-net," with the Tenant responsible for paying all
operating expenses including utilities, maintenance, and a pro rata portion of
real estate taxes.

The Fresno Building was acquired from an unrelated third party. In
determining the propriety of the investment in the Building, the Advisor
reviewed (1991-1992) sales information on seven similar retail buildings located
in the vicinity. Based on sales price of $1,330,000, the Fresno Building's
acquisition price was $149.18 per square foot. In contrast, the comparative
sales in the area ranged from $82.56 to $272.95 per square foot, with the
average of all seven buildings equal to $154.59 per square foot. Based on the
comparison of the price per square foot of the Fresno Building Property and the
comparative recent sales price per square foot of the seven properties
comparable in quality to the Fresno Building, it is the opinion of the Advisor
that the acquisition price of the Fresno Building was reasonable.

Property Operations. The Fresno Building is managed by West Coast Realty
Management, Inc. ("WCRM") (the "Property Manager"), an affiliate of the Company.
WCRM charges the Company 3% of the gross rents collected as a management fee for
managing the Property, as allowed by the property management agreement. In the
opinion of the Advisor, the Fresno Building is adequately insured. The property
tax in 1996 was approximately $14,000, with the tenants obligated to pay their
pro rata portion of taxes. Beginning in calendar 1997, approximately 67% of the
property taxes were absorbed by the Company as a provision of the new gross
lease with The Wherehouse.

Terms of Purchase. Total consideration for the Fresno Building paid by the
Company was $1,414,893. The total acquisition cost includes $1,330,000 payable
to the Seller, $4,838 in legal, appraisal, and closing costs, and an $80,056
Acquisition Fee paid to Descolin, Incorporated, an affiliate of the Advisor.
Long-term financing was obtained from Standard Insurance Company of Portland,
Oregon. The long-term financing totals $665,000 and matures in ten years. The
payments will be amortized over a twenty-five year life at an initial interest
rate of 8.25% per annum. At the end of the fifth year, the interest rate will
adjust to 3.25% above the five-year Treasury Bond yield (if adjusted as of June
1, 1993, this would result in an interest rate of approximately 8.65% per
annum). Payments are currently $5,244 per month. The closing costs pertaining to
the long-term financing, of $18,000 were paid by the Seller.

The purchase price was arrived at through arms-length negotiations with the
seller. The sources of funds for the purchase were proceeds from sale of the
Company's Shares, and the financing provided by Standard Insurance Company.

General. The computation of depreciation is based on the cost of the
Fresno Property, including Acquisition Fees and Acquisition Expenses. The
allocation of the cost of the Fresno Property to the various asset categories is
estimated, based on allocations noted in the appraisal report. Depreciation is
computed on a straight-line basis over 39 years, the component useful life of
the assets.

OPTO-22 PROPERTY

On September 15, 1993, the Company acquired the property described below
(the "OPTO-22 Property" or "Building"). The funds used to acquire the OPTO-22
Property were obtained from the sale of the Company's Shares and from
seller-provided financing in connection with the acquisition of the OPTO-22
Property.

Description. The OPTO-22 Property is located within the master-planned
Huntington Beach Industrial Park at 15461 Springdale (at the intersection of
Springdale Street and McFadden Avenue), Huntington Beach, California. The
Building was built in 1977, and was occupied by a company named OPTO-22 from
1979

28
<PAGE> 37

through 1992. In August 1992, OPTO-22 subleased the Building to Claremont High
School, a private school, whose sublease runs through April 1997. The Building
was deeded over to the Seller in May 1993 by the John Lusk Corporation via a
Deed in Lieu of Foreclosure.

Situated on approximately 3.34 acres of fee land, the Building is concrete
tilt-up construction. The Building has approximately 25,866 square feet of fully
improved office area, 24 foot height clearance, is fully sprinklered, and has
two overhead truck doors as well as one exterior, two-bay truck loading well. In
addition, the site contains ample parking with approximately 201 spaces, and has
three separate driveway entrances for ingress and egress.

The Huntington Beach Industrial Park is a master-planned development of the
Lusk Company. This industrial park contains over 1.5 million square feet of
space, and benefits from its close proximity to labor markets and desirable
housing as well as access to the San Diego (405) Freeway. Also located within
one mile are the Westminster Mall, Golden West Community College, and a
McDonnell Douglas Corporation facility.

The OPTO-22 Property is currently occupied by Claremont High School, a
private school, under a sublease that commenced in August 1992 and continues
until April 1997. Claremont High School is a non-profit, public benefit,
tax-exempt educational institution that serves students in the 7th through 12th
grade levels, and has been in existence since 1975. Claremont is accredited by
the Western Association of Schools and Colleges, and is also certified by the
University of California system. Since taking occupancy of the Building,
Claremont has spent an estimated $200,000 on improvements and upgrades to the
interior of the building.

The Building was previously occupied by OPTO-22, the primary lessee, which
took occupancy in 1979, and subleased the Building to Claremont High School in
August, 1992. OPTO-22's lease on the Building ends at the same time that
Claremont High School's sublease ends with OPTO-22. The primary lease on the
property currently calls for rent of $19,709.41 per month. Claremont High School
currently pays a sublease rent $3,690.59 per month higher than OPTO-22's rent.

At this time, the Company is negotiating with Claremont High School in an
attempt to retain the school as a tenant. The Company expects to at least retain
the school as a tenant on a month-to-month basis through August 1997. Failure to
re-negotiate an extension of the existing lease could require the Company to
expend $100,000 to $200,000 in capital refurbishing costs (in order to attract a
qualified tenant) and result in a vacancy at the property for two to four
months.

The lease is "triple-net" with the Tenant responsible for all operating
expenses including utilities, maintenance, taxes, and insurance.

The OPTO-22 Building was acquired from Glendale Federal Bank (the
"Seller") -- an unrelated third party. In determining the propriety of the
investment in the Building, the Advisor reviewed 1991 and 1992 sales information
on several similar properties in the vicinity. Based on the sales price of
$2,350,000, the OPTO-22's acquisition price was approximately $38.90 per square
foot. In contrast, the comparative sales in the area ranged from $42 to $65 per
square foot, with the average of all the buildings equal to $45 per square foot.
In addition, the Advisor took note that the monthly rental being paid by OPTO-22
is less than current market rents in the area, especially in comparison to the
sub-lease rent being paid to OPTO-22 by Claremont High School for this property.
Based on (1) comparison of the price per square foot of the OPTO-22 Building,
and the comparative recent sales price per square foot of several properties
comparable in quality to the OPTO-22 Building, and (2) the comparison of current
rental revenue on the building to current market rental rates for the area, it
is the opinion of the Advisor that the acquisition price of the OPTO-22 Building
is reasonable.

Property Operations. The OPTO-22 Building is managed by West Coast Realty
Management, Inc. ("WCRM") (the "Property Manager"), an Affiliate of the Company.
WCRM charges the Company 3% of the gross rents collected as a management fee for
managing the Property, as allowed by the Property Management Agreement. In the
opinion of the Advisor, the OPTO-22 Building is adequately insured. Although the
tenant is obligated by their leases to pay property taxes, the property tax in
1996 was approximately $24,000.

29
<PAGE> 38

Terms of Purchase. Total consideration for the OPTO-22 Building paid by
the Company was approximately $2,500,000. The total acquisition cost included
$2,350,000 paid to the Seller, approximately $7,000 in legal, appraisal, audit,
and closing costs, and a $143,000 Acquisition Fee paid to Descolin,
Incorporated, an affiliate of the Advisor. Financing of $1,750,000 was obtained
from the Seller, with the remainder of the acquisition costs, approximately
$779,000, paid in cash. The $1,750,000 financing was in the form of a ten year
note, that is being amortized over a thirty year period. The note has an
adjustable interest rate that began at approximately 7.0%, and will adjust to
three hundred basis points (3.00%) above the Federal Reserve Board Eleventh
District Cost of Funds Rate every year. Payments on the note are currently
$12,723 per month.

The purchase price was arrived at through arms-length negotiations with the
Seller. The source of funds for the purchase were proceeds from the sales of the
Company's Shares, and Seller-provided financing (the Seller is a large bank and
lender).

General. The computation of depreciation is based on the cost of the
OPTO-22 Property, including Acquisition Fees and Acquisition Expenses. The
allocation of the cost of the OPTO-22 Property to the various asset categories
is estimated, based on allocations in the appraisal report. Depreciation will be
computed on a straight-line basis over the component useful life of the assets.

NORTH PALM STREET PROPERTY

On March 4, 1994, the Company acquired the investment described below (the
"North Palm Street Building"). The funds to acquire the North Palm Street
Building were available as the result of the sale of the Company's Shares in a
prior offering and the proceeds from seller-provided financing in connection
with the acquisition.

Description. The North Palm Street Building is an industrial/research and
development building located at 260 North Palm Street, Brea, California. The
North Palm Street Building was built in 1989 and is located within a
master-planned business park. The North Palm Street Building is currently
occupied by two tenants:

M.L.E. Corporation ("MLE"), which occupies 27,831 square feet of the North
Palm Street Building, is a contract office furniture supplier. In addition to
the warehousing and distribution functions in the North Palm Street Building,
MLE maintains a retail showroom for both contract and walk-in customers. MLE,
which has been in business since 1982, commenced their lease on February 1, 1991
and the lease terminates on May 31, 1999. The lease calls for payments of
$11,143 per month through its term ($.40 per square foot).

Surgical Technologies Incorporated ("Surgical") occupies 14,100 square feet
(including a 1,000 square foot mezzanine office). Surgical provides contract
sterilization, assembly and packaging of medical devices. Surgical is a
subsidiary of Minnesota-based Scanlan International, which has been supplying
stainless steel surgical instruments to the medical profession since 1921. The
term of Surgical's lease is from December 15, 1993 to December 14, 1999 and
requires rent payments of $6,819 per month ($.4836 square foot) from December
15, 1993 to December 14, 1998, and $7,077 per month ($.5019 per square foot)
from December 15, 1998 to December 14, 1999.

The Surgical lease is "triple-net" with the tenant responsible for all
operating expenses including utilities, maintenance, taxes and insurance. The
MLE lease is "semi-net," with the tenant paying their pro-rated share of
expenses, taxes and maintenance over the base year 1990/1991.

The North Palm Street Building is located on Palm Street between Imperial
Highway and Lambert Road in Brea, approximately two miles west of the Orange
Freeway (State Highway 57). This is an established industrial area serving North
Orange County, California. Construction of the North Palm Street Building is
concrete tilt-up with a sandblasted exterior and glass on two levels. Five
thousand (5,000) square feet of the building is improved with an office
environment, including 1,000 square feet on the mezzanine space. A "bonus"
mezzanine of approximately 1,300 square feet is available for a future second
story office, but is not currently included in the rentable area. The North Palm
Street Building features a 24 foot minimum clearance, with a fire sprinkler
system and skylights/smoke vents equaling 2% of the roof area for high pile
storage capacity. The North Palm Street Building has four dock high truck doors
and three grade level doors, as well as parking for eighty-five cars. The North
Palm Street Building was acquired from an unrelated third party. In

30
<PAGE> 39

determining the propriety of the investment in the North Palm Street Building,
the Advisor reviewed recent (1992-1993) sales information on several similar
properties in the vicinity. Based on the sales price of $2,100,000, the North
Palm Street Building's acquisition price is approximately $50 per square foot.
In contrast, the comparative sales in the area ranged from $52 to $65 per square
foot, with the average of all buildings equal to $55 per square foot. In
addition, the long-term lease commitments that the two tenants had for this
property made this a desirable acquisition.

Property Operations. The North Palm Street Building is being managed by
West Coast Realty Management, Inc. ("WCRM") (the "Property Manager"), an
affiliate of the Company. WCRM charges the Company 3% of the gross rents
collected as a management fee for managing the North Palm Street Building, as
allowed by the Property Management Agreement. In the opinion of the Advisor, the
North Palm Street Building is adequately insured. Although the tenants are
obligated by their leases to pay property taxes, the property tax in 1996 was
approximately $24,000.

Terms of Purchase. Total consideration for the North Palm Street Building
paid by the Company was approximately $2,248,000. The total acquisition cost
included $2,100,000 paid to the Seller, $18,000 in legal, appraisal, audit and
closing costs, and a $130,000 Acquisition Fee paid to Descolin, Incorporated, an
affiliate of the Advisor. Financing of $1,000,000 was obtained from the Seller,
with the remaining acquisition costs and acquisition price being paid in cash
(approximately $1,248,000). The source of cash was funds received in connection
with the sale of the Company's shares and $600,000 in long-term refinancing
proceeds received in connection with the Blockbuster Video Building. The
$1,000,000 Seller financing was in the form of a Purchase Money Note, payable
monthly, interest only, at the rate of 8% per annum; $500,000 principal amount
of the note was due March 4, 1995 and $500,000 principal amount of the note was
due March 4, 1996. Payments were $6,666.67 per month. The $1,000,000 Sellers
note was refinanced in February 1995 by a $1,000,000 promissory note from an
insurance company at a fixed rate of 9.5% per annum amortized over 25 years,
with monthly principal and interest payments of $8,737.

The purchase price was arrived at through arms-length negotiations with the
Seller.

General. The computation of depreciation is based on the cost of the North
Palm Street Building, including Acquisition Fees and Acquisition Expenses. The
allocation of the cost of the North Palm Street Building to the various asset
categories is estimated, based on allocations in the appraisal report.
Depreciation is computed on a straight-line basis over the component useful life
of the assets.

RIVERSIDE MARKETPLACE PROPERTY

On November 29, 1994, the Company acquired the property described below
(the "Riverside Marketplace Property"). The sources of funds used to acquire the
Riverside Marketplace Property were from the sale of the Company's Shares in the
current and most recent offering, and from bank-provided financing in connection
with the acquisition.

Description. The Riverside Marketplace Property is a six-plex cinema
located at 4040 Vine Street, Riverside, California. The construction of the
Riverside Marketplace Property was completed on June 24, 1994, and is located in
a newly developed retail area (the Riverside Marketplace) containing
restaurants, including Golden Corral, Applebees, and The Old Spaghetti Factory,
retail shops, and the Riverside Marketplace Property. This area is between the
91 Freeway and the Metrolink train station in Riverside. University Avenue -- a
main thoroughfare of Riverside -- runs through the Riverside Marketplace area.
Downtown Riverside is less than six blocks away. The Riverside Marketplace is
similar in design to University Studio's CityWalk (located in Universal City,
California) and the 3rd Street Promenade (located in Santa Monica, California).
Both developments have been successful in drawing large numbers of local
residents and tourists to the clean and safe entertainment facilities that they
offer.

Lease. The sole tenant of the Company's Riverside Marketplace Property is
Sanborn Theaters, Inc. (the "Tenant"), which does business under the name of
SoCal Cinemas. The Tenant operates seven theaters housing thirty-nine screens in
the Southern California area. The Tenant's lease commenced on June 24, 1994,
which was also the completion date of construction for the Riverside Marketplace
Property and the day it

31
<PAGE> 40

opened for business. The six screen theater has seating for 1,586 and contains
30,493 square feet. There is parking available for 483 cars in an adjacent
parking lot, approximately one-half of which is owned by the Company.

The Tenant's lease is for twenty years, and is scheduled to expire on June
15, 2014. The lease calls for the following minimum rental amounts per month,
with the equivalent monthly rent per square foot set forth in the parentheses:

<TABLE>
<S> <C> <C> <C>
First Five years -- $31,250 $(1.02)
Years 6 through 10 -- $32,813 (1.08)
Years 11 through 15 -- $34,453 (1.13)
Years 16 through 20 -- $36,176 (1.19)
</TABLE>

The lease gives the Tenant the option to renew up to five consecutive terms
of five years each, with the minimum rent amount continuing to increase 5%
during each five year period.

The lease also provides that 10% of the theater's gross sales (including
concessions) would be payable to the Company, if that amount exceeds the monthly
minimum rent, less film rental costs. The lease is triple net, with all taxes,
insurance and maintenance costs to be paid by the Tenant.

Property Operations. The Riverside Marketplace Property is managed by West
Coast Realty Management, Inc. ("WCRM"), an Affiliate of the Company. WCRM
receives a property management fee for managing the Riverside Marketplace
Property equal to 3% of the gross rents collected as provided in the Property
Management Agreement. In the opinion of the Advisor, the Riverside Marketplace
Property is adequately insured. Although the Tenant is obligated to pay property
taxes, the property tax in 1996 was approximately $37,000.

Terms of Purchase. The Riverside Marketplace Property was acquired from an
unrelated third party -- Birtcher Riverside Marketplace Partners, Ltd., a
California Limited Partnership. A movie theater is an unusual real estate
investment in that comparable rental and price per square foot information for
other retail shops and restaurants in the area may not provide a readily
comparable method of evaluating the revenues and cost of this type of property.
However, there are several factors that provided a positive basis for its
acquisition, including:

1. A long-term, triple-net lease, with increased rental potential due to
revenue sharing provisions.

2. Success of similar entertainment venues in Universal City and Santa
Monica.

3. The property acquired is new construction.

4. Credit-worthiness and positive operating history of the Tenant.

5. Absence of significant theater competition in the general area.

Based on the seller's price of $3,425,000, the sales price per square foot
of the Property is $112.32. In the opinion of the Company's Advisor, the price
paid was reasonable.

The total consideration paid by the Company for the Riverside Marketplace
Property was $3,655,500. The total acquisition cost included $3,425,000 paid to
the Seller, $40,500 in legal, appraisal, and closing costs, and a $190,000
Acquisition Fee paid to the Advisor. Financing of $1,200,000 was obtained from
Chino Valley Bank, with the remaining acquisition costs, $2,445,500, paid in
cash. The source of funds for the cash payment was proceeds received from the
sale of the Company's Shares. The $1,200,000 financing is in the form of a first
trust deed and note, amortized over a twenty-eight year, three month period at a
fixed interest rate of 9.25% per annum, with payments of principal and interest
of $9,988 per month. The principal balance is fully due and payable in ten
years. Financing charges of $24,000 for the loan were paid at the close of
escrow. Such amount is not included in the costs described above.

The purchase price was arrived at through arms-length negotiations with the
Seller.

32
<PAGE> 41

General. The computation of depreciation for the Riverside Marketplace
Property is based on the cost of the property including Acquisition Fees and
Acquisition Expenses. The allocation of the cost of the Property to the various
asset categories is estimated, based on allocations in the appraisal report.
Depreciation is computed on a straight-line basis over the component useful life
of the assets.

SAFEGUARD BUSINESS SYSTEMS PROPERTY

On May 22, 1995 the Company acquired the investment described below (the
"Safeguard Business Systems Property" or the "Property"). The funds to acquire
the Safeguard Business Systems Property were available as the result of the sale
of the Company's Shares and the receipt of proceeds from insurance company
financing in connection with the acquisition.

Description. The Safeguard Business Systems Property is a two story office
building located at 14661 Franklin Avenue, Tustin, California. This area is near
the Santa Ana (Interstate 5) Freeway, and also has access to the Newport (55)
and San Diego (405) Freeways in the general vicinity. The retail development of
the Tustin Marketplace, Costco, Super K-Mart, and Tustin Auto Mall have also had
a positive influence in the area.

The sole tenant of the Property is Safeguard Business Systems (the
"Tenant"), which occupies 100% of the Property. The Tenant, which was founded in
1913, develops and manufactures economical, easy-to-use products and services
that collect, record and organize data for small businesses. The Tenant has
built what it believes to be the Country's largest distribution sales force that
specifically targets small business. In 1993, the Tenant had net sales of
approximately $197 million and earnings from continuing operations of
approximately $22 million. Safeguard also reported stockholder equity in 1993 of
approximately $156 million, and long term debt of approximately $19 million.
Safeguard is a privately held firm, and does not release complete audited
financial statements to the public.

The Property is a two story building that contains 40,000 rentable square
feet, and was built to suit for Safeguard Business Systems in 1986. Solar gray
glass accents the sandblast finish and exposed concrete walls. Granite tile
pavers and patterned concrete, coupled with an open two story lobby, provide an
entrance to the building. The interior finish is paint or textured wall
coverings, placed over drywall. A security card system is used at the front and
rear of the property. There is parking available for 149 cars. The building is
landscaped, has kitchen facilities, and men's and women's locker and shower
improvements for the benefit of the employees.

The Tenant's lease commenced October 1, 1994, and is scheduled to terminate
eleven years from that date (September 30, 2005). The rent for the current lease
year is $520,000/year (or $43,333/month), with the rent scheduled to increase 3%
per year, on the lease anniversary date. The lease is absolute triple net,
including the potential cost of repair and replacement of the roof and
structure. The Tenant has the option to renew the lease for one ten year period
at the end of the lease period, at the fair market rent in effect at that time.
The lease payments currently scheduled under the terms of the existing lease,
using October 1, 1994 as a starting point (commencement date for current lease),
are as follows:

33
<PAGE> 42

Of course, the Company's ownership of the property, and participation in
lease income, did not begin until date of acquisition. The average straightline
rent earned during the Company's projected ownership period (the remaining life
of the lease) was calculated to be $50,914/month ($6,313,382 scheduled rent
divided by one hundred twenty-four months (rounded)).

The Property was acquired from an unrelated third party -- BRS-Tustin
Safeguard Associates, A California Limited Partnership. Several methods of
economic analysis were used to determine the propriety of the purchase price,
and economic feasibility of the property, prior to acquisition. A review of
rental rates for similar size and style buildings in the nearby communities of
Costa Mesa, Irvine, and Newport Beach revealed rental rates ranging from
$1.73/sq. ft to $1.90/sq. ft. The current monthly rental rate on this building
is $1.09/sq. ft., meaning that the Property could possibly rent at a higher rate
than currently in place if exposed to the open market. Comparable market listing
and sales activity was also reviewed by the Advisor. These revealed the sales
price per square foot for similar buildings in the area to range between $88.00
and $121.00 per square foot. The $115.00 per square foot that the Company is
paying for this building is comparable to these numbers. Other positive factors
considered in acquiring the Property included:

1. A long-term, triple-net lease, with the potential for lease extension.

2. The property acquired is relatively new construction.

3. Credit-worthiness and positive operating history of the tenant.

In the opinion of the Advisor, the total sales price of $4,600,000 that the
Company paid for this property is reasonable.

Property Operations. The Safeguard Business Systems Property is managed by
West Coast Realty Management, Inc. ("WCRM"), an affiliate of the Company. WCRM
will charge the Company 3% of the gross rents collected as a management fee for
managing the Property, as allowed by the Property Management Agreement. In the
opinion of the Advisor, the Safeguard Business Systems Property is adequately
insured. Although the tenants are obligated to pay property taxes, the property
tax in 1996 was approximately $49,000.

Terms of Purchase. Total consideration paid by the Company for the
Safeguard Business Systems Property was $4,862,000. The total acquisition cost
included $4,600,000 paid to the Seller, $13,000 in legal, appraisal, and closing
costs, and a $249,000 Acquisition Fee paid to the Advisor. Financing of
$2,300,000 was obtained from Business Men's Assurance Company (an insurance
company), with the remaining acquisition costs and acquisition price being paid
in cash ($2,576,000). The source of cash was funds received in connection with
the sale of the Company's Shares. The $2,300,000 financing was in the form of a
first trust deed and note, amortized over a fifteen year period at the fixed
rate of 9.625% and fully due and payable in ten years. The loan amount
represents an assumption of an existing loan from the seller of the property.
There were no financing costs or points charged in connection with the
financing. Payments on the debt are $24,191 per month.

The purchase price was arrived at through arms-length negotiations with the
Seller.

General. The computation of depreciation for the Safeguard Business
Systems Property is based on the cost of the property, including Acquisition
Fees and Acquisition Expenses. The allocation of the cost of the Property to the
various asset categories was estimated, based on allocations in the appraisal
report. Depreciation is computed on a straight-line basis over the component
useful life of the assets.

TECHNOLOGY DRIVE PROPERTY

On October 31, 1995, the Company acquired the investment described below
(the "Technology Drive Property" or the "Property"). The funds to acquire the
Technology Drive Property were available as the result of the sale of the
Company's Shares in the current offering, and the receipt of proceeds from bank
financing assumed in connection with the acquisition.

34
<PAGE> 43

Description. The Technology Drive Property is a single story light
industrial/research & development building located at 4415 Technology Drive,
Fremont, California. This area is near the Interstate 680 and 880 Freeways (it
is one block east of Interstate 880), and is accessible via the Auto Mall
Parkway off-ramps from both freeways. The Property is located in an established
neighborhood of research and development and industrial projects.

The primary tenant of the Property is CMS Welding & Machining (the
"Tenant"). The tenant, which was founded in 1983, is a manufacturer of welded
vacuum chambers, used in the processing of semiconductors. This privately-held
company had over $7 million in revenues in 1994, and has been profitable for the
last two years. The Tenant has subleased approximately 20,000 square feet of the
space to Macotron Systems, Inc. (the "Sub-tenant"). This sub-lease commenced on
March 1, 1995, and expires March 1, 1998. The $11,000 rent per month that the
Sub-tenant pays is collected entirely by the Company, and the Tenant's rent
obligation is credited for the amount collected from the Sub-tenant. Macotron
Systems also has in excess of $7 million in annual revenues. Both leases are
guaranteed by the principals of each company.

The Property is a one story building that contains 58,727 divisible
rentable square feet located on 3.47 acres. Of the 58,727 square feet, 12,000 is
high quality office space. The manufacturing and assembly area is fully air
conditioned with 14,800 square feet of dropped ceiling. High quality concrete
and tilt-up construction was used to build the Property. Smoked glass is used
extensively to provide a modern appearance to the building. The building is
fully sprinklered for fire prevention purposes. The Property has two dock high
and two grade level doors. There is parking available for 213 cars. Each tenant
has a separate entrance area with two different reception areas.

The Tenant's lease commenced November 2, 1993, and is scheduled to
terminate on February 28, 2005. The current minimum monthly rent schedule (as of
the beginning of 1995) is as follows:

In addition to the above, the seller of the property paid the Company an
additional $15,390, after the close of escrow, as a rent supplement covering the
period from October 31, 1995 to August 15, 1996. This amount was treated as a
reduction in the cost of the property.

There are certain provisions in the lease with the primary tenant that call
for a minimum 3% rental increase and a maximum 7% rental increase based on the
Consumer Price Index for the San Francisco/Oakland area, based on the average
annual increase for the following three periods: 1/95-1/99; 1/99-1/2001; and
1/2001-1/2003. The total scheduled rent, beginning with the Company's ownership
date (October 31, 1995) is $4,140,528. This works out to an average of $36,969
per month through February 28, 2005 (112 months).

35
<PAGE> 44

The Property was acquired from unrelated third parties -- 26 Technology
Partnership, A California Limited Partnership and Jack Langston, an individual
(collectively known as "the Seller"). Several methods of economic analysis were
used to determine the propriety of the purchase price, and economic feasibility
of the property, prior to acquisition. A review of rental rates for similar size
and style buildings in Fremont (including the immediate business park) revealed
rental rates ranging from $.55 to $.72 per square foot for net leases, and
leases as high as $.80 per square foot for a gross lease. The current monthly
rental rate on this building is $.53, meaning that the Property could possibly
rent at a higher rate than currently in place if exposed to the open market.
Recent occupancy levels in the area have ranged from 90% to 95% due to
significant growth in the technology sector of the nation's economy. Comparable
market listing and sales activity was also reviewed by the Advisor. These
revealed the price per square foot for similar buildings in the area to range
between $43.47 and $88.97 per square foot. Several of the buildings that sold at
the lower range were older and of lower quality, and lacked amenities that are
present in this Property including air conditioning and fire sprinklers. The
$60.45 per square foot that the Company paid for this building is comparable to
these numbers (this number does not include acquisition costs and expenses).
Other positive factors considered in acquiring the Property included:

1. A long-term, triple-net lease, with the potential for lease
extension.

2. The property acquired is relatively new construction.

3. Credit-worthiness and positive operating history of the tenant.

In the opinion of the Advisor, the purchase price of $3,550,000 that the
Company paid the Seller for this property was reasonable.

Property Operations. The Technology Drive Property is managed by West
Coast Realty Management, Inc. ("WCRM"), an affiliate of the Company. WCRM will
charge the Company 3% of the gross rents collected as a management fee for
managing the Property, as allowed by the Property Management Agreement. In the
opinion of the Advisor, the Technology Drive Property is adequately insured.
Although the tenant is obligated to pay property taxes, the property tax in 1996
was approximately $36,000.

Terms of Purchase. Total consideration paid by the Company for the
Technology Drive Property was $3,748,000. The total acquisition cost included
$3,550,000 paid to the Seller, $17,000 in legal, appraisal, and closing costs,
and a $196,000 Acquisition Fee paid to the Advisor. Financing of $2,192,897 with
Manufacturer's Bank of Los Angeles was assumed from the Seller, with the
remaining acquisition costs and acquisition price being paid in cash
($1,570,103). The source of cash was funds received in connection with the sale
of the Company's Shares. The $2,192,897 financing was in the form of a first
trust deed and note, fully amortized over a twenty year period at the fixed rate
of 8.24%. The loan amount represents an assumption of an existing loan from the
seller of the property; the original balance of the loan was $2,200,000 and was
funded on July 1, 1995. There were no financing costs or points charged in
connection with the financing or assumption. Payments on the debt are $18,880
per month.

The purchase price was arrived at through arms-length negotiations with the
Seller.

General. The computation of depreciation for the Technology Drive Property
is based on the cost of the property, including Acquisition Fees and Acquisition
Expenses. The allocation of the cost of the Property to the various asset
categories was estimated, based on allocations in the appraisal report.
Depreciation is computed on a straight-line basis over the component useful life
of the assets.

JAVA CITY PROPERTY

On August 2, 1996, the Company acquired the investment described below (the
"Java City Property" or the "Property"). The funds to acquire the Java City
Property were available as the result of the sale of the Company's Shares in the
previous offering, and the receipt of proceeds from bank financing assumed in
connection with the acquisition.

Description. The Java City Property consists of two single story light
industrial buildings located in the Northgate Industrial Park in Sacramento,
California. The addresses of the two properties are 717 and 721

36
<PAGE> 45

West Del Paso Road. The building sites are in the northern part of Sacramento,
with access to Interstate 80, Interstate 5, and other major freeways.

The buildings are located on a site of approximately 62,173 square feet.
Total building square footage for both buildings is approximately 20,000 square
feet. The subject lot is zoned M-1 industrial by the City of Sacramento. This
zoning allows for a variety of uses, including the existing use. 721 West Del
Paso Road consists of 8,964 total square feet and 717 West Del Paso Road
consists of 11,035 total square feet. Per the provisions of the current lease,
721 West Del Paso consists of 4,347 rentable square feet of warehouse space and
4,293 rentable square feet of office space. Per the provisions of the current
lease, 717 West Del Paso consists of 5,398 rentable square feet of warehouse
space and 5,802 of rentable square feet of office space. The properties were
originally constructed in 1988. The Company believes that there are no deferred
maintenance items that need to be corrected or addressed. The buildings are
constructed using concrete footings (foundation and slab), wood frame wall
designs, and flat/tar gravel roofs. The building has sprinklers for fire
prevention and safety. There is adequate parking in the general business park
area for cars that utilize the Property.

The primary tenant of the Property is Cucina Holdings, Inc. The company
owns and operates forty-one Java City Bakery Cafes and five La Petite
Boulangerie cafes. The Company is popularly known as "Java City". Java City
outlets are located in various areas of California and Arizona, and are
generally in high-visibility, high-traffic locations. These outlets sell high
quality, specialty coffees in a pleasant retail environment setting. In
addition, these outlets sell a selection of sandwiches and baked goods that
complement the sale of coffee. Java City also operates a wholesale operation
that serves approximately seven hundred customer accounts located primarily in
Northern California. The Company's wholesale customers include supermarkets,
gourmet shops, convenience stores, restaurants, universities, airports, and
offices, some of which resell the coffee in whole bean form for home
consumption, while others brew and sell coffee beverages. Approximately 86% of
the Company's sales are from its retail cafe operations and 14% from its
wholesale operations. The tenant was effectively formed in 1993 when Cucina
Holdings, a corporation formed by current management and InterWest Partners (a
Menlo Park Based venture capital firm), purchased the assets of La Petite
Boulangerie from a private investor group in June 1993, and then purchased Java
City in September 1993. Cucina Holdings and Java City are privately held, and
not publicly traded companies.

Java City leases 100% of the rentable square feet in the two buildings
located on the Property. Each building has a separate lease, and both leases are
triple net leases. Both leases expire on August 1, 2003 and there are no options
for extension or purchase of the Property. Java City operates its administrative
offices, coffee bean processing, warehousing facilities, and a Java City retail
outlet out of these two buildings.

The lease payments due on 717 West Del Paso are noted below (rounded to the
nearest dollar):

<TABLE>
<S> <C>
August 1, 1996 to July 31, 1997 $10,004/month
August 1, 1997 to July 31, 1998 10,405/month
August 1, 1998 to July 31, 1999 10,821/month
August 1, 1999 to July 31, 2000 11,254/month
August 1, 2000 to July 31, 2001 11,704/month
August 1, 2001 to July 31, 2002 12,172/month
August 1, 2002 to July 31, 2003 12,659/month
</TABLE>

The least payments due on 721 West Del Paso are noted below (rounded to the
nearest dollar):

<TABLE>
<S> <C>
August 1, 1996 to July 31, 1997 $5,671/month
August 1, 1997 to July 31, 1998 5,898/month
August 1, 1998 to July 31, 1999 6,134/month
August 1, 1999 to July 31, 2000 6,379/month
August 1, 2000 to July 31, 2001 6,635/month
August 1, 2001 to July 31, 2002 6,900/month
August 1, 2002 to July 31, 2003 7,176/month
</TABLE>

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<PAGE> 46

There are no provisions for consumer price increase adjustments in either
lease. The overall initial rent per square foot is approximately $.76, and this
increases 4% on each lease anniversary date.

The Property was acquired from unrelated third parties -- Thomas Weborg and
Sandra Singer -- husband and wife (90% ownership), and David and Karen
Ewing -- husband and wife (10% ownership) (collectively known as the "Sellers").
Mr. Weborg is President and Chief Executive Officer of Cucina Holdings,
Inc. -- the tenant of the Property. Several methods of economic analysis were
used to determine the propriety of the purchase price, and economic feasibility
of the Property, prior to acquisition. A review of rental rates for similar size
and style buildings and uses in the same general area revealed rates ranging
from $.41 to $.81 per square foot for triple net leases. The current monthly
rent on these buildings is $.76 per square foot, meaning that the Property
currently rents near the highest rate available in this market. However,
considering the good condition of the Property, the quality of the tenant, and
the long-term lease in place, this property at this price is considered to be
desirable. Comparable market listing and sales activity were also reviewed by
the Advisor. These revealed that the price per square foot for similar buildings
in the area range from $40.00 to $97.50. Several of the buildings that were sold
in the lower range were older and of lower quality, and lacked amenities that
are present in the Property, including fire prevention sprinklers. The $86.25
per square foot that the Company is paying for the Property is considered
reasonable given the recent positive movements of price in the market, the
favorable seven year term, and the credit quality of the tenant (this number
does not include acquisition costs and expenses).

In the opinion of the Advisor, the purchase price of $1,725,000 that the
Company is paying the Sellers for this Property is reasonable.

Property Operations. The Java City Property is managed by West Coast Realty
Management Inc. ("WCRM"), an affiliate of the Company. WCRM charges the Company
3% of the gross rents collected as a management fee for managing the Property,
as allowed by the Property Management Agreement. In the opinion of the Advisor,
the Java City Property is adequately insured. Although the tenant is obligated
to pay property taxes, property tax in the first year is estimated to be $18,000
(approximately 1% of the sale price).

Terms of Purchase. Total consideration paid by the Company for the Java
City property was $1,828,500. The total acquisition cost included $1,725,000
paid to the Sellers, $25,323 in legal, appraisal, and closing costs, and $78,177
in Acquisition Fees paid to the Advisor.

There is financing on each building of the Property that is being assumed
by the Company. The financing on the 717 West Del Paso Road building is as
follows:

<TABLE>
<S> <C>
Lender: Business & Professional Bank, Sacramento, CA
Original Loan Amount: $350,000 Payment: $3,413.36/month
Interest Rate: 10% fixed rate Amortization: 25 years
Due Date: November, 2001 Assumption Fee: $3,814
Projected Balance of Debt at time of Purchase: $338,977
Other: Nonrecourse loan; no prepayment penalty
</TABLE>

The financing on the 721 West Del Paso Road building is as follows:

<TABLE>
<S> <C>
Lender: Heller First Capital Corp., Chicago, IL
Original Loan Amount: $405,000 Payment: $3,126/month
Interest Rate: 8% fixed rate Amortization: 25 years
Due Date: June, 2018 Assumption Fee: None
Projected Balance of Debt at time of Purchase: $385,488
Other: Nonrecourse; no prepayment penalty
</TABLE>

Thus, in summary, the total amount of financing/assumption fees that the
Company is paying in connection with the assumption of the above two loans is
$3,814. The balance of the debt at time of purchase was $724,465 with the
remaining cost of acquisition -- including financing fees -- being paid in cash

38
<PAGE> 47

($1,107,849). The source of cash was funds received in connection with the sale
of the Company's shares through April 30, 1996.

The purchase price was arrived at through arms-length negotiations with the
Sellers.

General. The computation of depreciation for the Java City Property is
based on the cost of the Property, including Acquisition Fees and Acquisition
Expenses. The allocation of the cost of the Property to various asset categories
is estimated, based on allocations in the appraisal report. Depreciation is
computed on a straight-line basis over the component useful life of the assets.

TYCOM PROPERTY

On January 17, 1997, the Company acquired the investment described below
(the "Tycom Property" or the "Property"). The funds to acquire the Tycom
Property were available as the result of the sale of the Company's Shares in the
current and previous offerings, and the receipt of proceeds from first trust
deed mortgage financing provided by a bank in connection with the acquisition.

Description. The Tycom Property consists of a two story building, with
underground parking, located at 17862 Fitch Street, Irvine, California. The
Building site is in the southern part of Irvine, with access to Interstate 405
(San Diego Freeway) and State Highway 55 (Costa Mesa Freeway) and is within two
miles of John Wayne Airport (the major commercial airport for Orange County).

The building is located on a site of approximately 92,783 square feet.
Total building square footage is approximately 63,225 square feet (both floors),
while the property has 164 striped parking spaces. These spaces are located both
below the building in a subterranean parking level, and on the side of the
building. The building was constructed using concrete footings foundation, and a
combination of concrete tilt-up and wood frame construction walls, with a flat
tar and gravel roof. The subject lot has been zoned "industrial" by the City of
Irvine. The zoning is designed to preserve city land appropriate for industrial
uses and to attract and preserve desirable manufacturing and
research/development areas. The building is approximately twelve years old.
There are substantial new tenant improvements that are substantially complete at
this time that will enhance the building for office usage. These improvements
include improved air conditioning, Americans with Disabilities Act compliance, a
complete fire sprinkler system, new electrical, new restrooms, and new carpet.
After completion of the improvements, the building will be allocated to
approximately 50% office, 30% research and development, and 20% manufacturing
and storage.

The sole tenant of the Property is Tycom Corporation ("Tycom" or "the
Tenant"). Tycom, a privately held company, is a manufacturer of drill bits and
assorted items used by the semi-conductor and dental industries, and has been in
business for approximately ten years. The Tenant initially purchased this
building and is investing $1.4 million in improvements and renovation. Tycom
sold the building to Brutten/Reynolds/Shidler Investment Corp. ("the Seller") on
December 19, 1996, for an unknown value. The Tenant began occupying the building
December 19, 1996, at which time the provisions of the lease became effective.

The term of the lease is eleven years, and is intended to be a "triple-net"
lease with the Tenant paying for virtually all taxes, insurance, utilities, and
other operating costs of the Property. The base rent is $37,302.75 per month.
Although the rent is fixed, there are provisions for annual rent increases over
the life of the lease based on increases in the consumer price index. The Tenant
has an option to extend the lease for an additional five years.

The Property is being acquired from an unrelated third
party -- Brutten/Reynolds/Shidler Investment Corp. Several methods of economic
analysis were used to determine the propriety of the purchase price, and
economic feasibility of the property, prior to acquisition. A review of rental
rates for similar size buildings and uses in the same general area revealed
rates ranging from $.57 to $.72 per square foot -- all on a triple net basis.
The current monthly rate is set at $.59 per square foot, meaning that the
Property is renting near the lowest rate available in this market for similar
types of buildings. In addition, this Property is occupied by a quality tenant
with a long-term lease in place. Given the fact that vacancy rates in the
surrounding area range from 3% to 5%, the potential for higher rental rates per
square foot is possible given the fact that the

39
<PAGE> 48

Property's current rental rate of $.59/square foot is considered to be on the
low side. Comparable market listing and sales activity were also reviewed by the
Advisor. These revealed the price per square foot for similar buildings in the
area to range from $67 to $77 per square foot. The $73 per square foot that the
Company is paying for the Property is reasonable, considering the approximately
$1,400,000 in tenant improvements that the Tenant has invested into the
Property, the eleven year lease term, and the credit quality of the tenant. (The
$73/square foot figure does not include acquisition fees and expenses, which
will increase the cost per square foot to $77).

In the opinion of the Advisor, the $4,625,000 that the Advisor is paying
for the Property is reasonable.

Property Operations. The Tycom Property is being managed by West Coast
Realty Management, Inc. ("WCRM"), an affiliate of the Company. WCRM will charge
the Company 3% of the gross rents collected as a management fee for managing the
Property, as allowed by the Property Management Agreement. In the opinion of the
Advisor, the Tycom Property is adequately insured. Although the tenant is
obligated to pay property taxes, property tax in the first year is estimated to
be $47,000 (approximately 1% of the sales price).

Terms of Purchase. Total consideration paid by the Company for the Tycom
Property was $4,902,500. The total acquisition cost included $4,625,000 paid to
the Seller, $10,825 in legal, appraisal, and closing costs, and a $266,675
Acquisition Fee payable to the Advisor. In addition, $37,303 was received from
the Seller for the Tenant's security deposit.

Financing was utilized in connection with the acquisition of the Tycom
Property. A short-term promissory note was provided by First National Bank of
San Diego with the following terms:

Original Loan Amount: $2,300,000

Interest Rate: Fixed at 9.25% Term of Loan: One year

Amortization: Interest Only Payments

Monthly Payment: $17,729

Due Date: February 1, 1998

Balance at One year Due Date: $2,300,000

Other: Nonrecourse; no pre-payment penalty; no finance costs or "points".

The Company plans on replacing this financing prior to the due date with a
first trust deed mortgage from a bank with the following expected terms:

Original Loan Amount: $2,300,000

Interest Rate: Fixed at 140 basis points over the five year Treasury Rate (rate
would be approximately 7.65% currently).

Term of Loan: Five year term, with option to extend the loan for an additional
three years using same interest formula, at no additional cost to the Company.

Amortization: Twenty-five years

Monthly Payment: $17,222

Balance at first three year Due Date (estimated): $2,113,653

Other: Nonrecourse; fully assumable for 1% fee; pre-payment penalty in fifth
year only; all financing costs paid by the Seller.

Thus, in summary, the purchase was funded through $2,300,000 in new
financing and $2,565,197 in cash raised from the sale of shares in the current
and previous offerings (this includes assumption of the tenant's security
deposit).

The purchase price was arrived at through arms-length negotiations with the
Seller.

General. The computation of depreciation for the Tycom Property is based on
the cost of the property, including Acquisition Fees and Acquisition Expenses.
The Allocation of the cost of the Property to various asset categories is
estimated, based on allocations in the appraisal report. Depreciation is
computed on a straight-line basis over the component useful life of the assets.
Pro forma financial information is prepared based on information contained in
the signed lease for the property, and assuming that the Seller-provided
financing will be in place for one full year (even though the Company intends on
replacing it prior to the due date with financing having more favorable terms).

40
<PAGE> 49

MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company had three prior offerings of its Shares. As of March 18, 1997,
the Company has raised $17,928,612 in capital.

The Company was organized for the purpose of investing in, improving,
holding, and managing equity interests in a diversified number of residential
and commercial properties located in California and the West Coast, while
qualifying as a Real Estate Investment Trust ("REIT"). Properties will be
acquired for cash or on a moderately leveraged basis, with aggregate
indebtedness not to exceed 50% of the Purchase Price of Properties on a combined
basis. The Company intends to hold each property for approximately four to ten
years. See "Investment Objectives and Policies".

The ownership and operation of any income-producing real estate is subject
to those risks inherent in all real estate investment, including national and
local economic conditions, the supply and demand for similar types of
properties, competitive marketing conditions, zoning changes, possible casualty
losses, and increases in real estate taxes, assessments, and operating expenses,
as well as others. See "Risk Factors".

The Company has engaged West Coast Realty Advisors, Inc. to act as the
Company's Advisor. Pursuant to the terms of the Advisory Agreement, the Advisor
provides investment and financial advice and conducts the day-to-day operations
of the Company. The Company, itself, has no employees. See "Management."

RESULTS OF OPERATIONS -- 1996 VS. 1995

Operations for the year ended December 31, 1996 represented a full year of
rental operations for all properties except Java City which was owned for only
five months.

The net income for the year ended December 31, 1996 ($705,636) was higher
than the year ended December 31, 1995 ($649,605) due to the raising of
additional funds and investment of such funds in additional income producing
properties. The Company did not have any adverse events that significantly
impacted net income during the year ended December 31, 1996, and all properties
that have been purchased by the Company have operated at levels equal to current
expectations. All tenants were current on their lease obligations.

Rental revenue increased $685,354 (41%) due to a full year's ownership of
the Technology Drive and Safeguard Building properties (as compared to partial
year ownership in 1995), and partial year ownership for the Java City property.
Interest income decreased $23,853 (25%) due to a new escrow release procedure on
the current offering where new investor funds come into the Company quarterly
rather than daily, thus lowering the amount of excess cash available for
investment.

Operating expenses increased $133,179 (78%) as a reflection of the
additional properties owned during the year. Interest expense increased $260,947
(42%) as a reflection of the additional debt incurred in connection with
property acquisition and refinancing activities. Despite the amount of debt, the
Company remains below the maximum 50% debt maximum allowed by the Company's
by-laws (debt was 48% of property cost (as defined in the by-laws) at December
31, 1996). General and administrative costs increased $106,587 (91%) due to
higher accounting, taxes, and general insurance expense costs related to the
Company's increased size. General and administrative costs increased as a
percentage of revenue going from 6.5% in 1995 to 9.0% in 1996. Much of this
increase was due to $74,361 that the Advisor was paid in 1996 due to the revised
provisions of the Advisor agreement. No advisor fees were earned in 1995.
Depreciation and amortization expense increased $104,757 (41%) as the result of
the ownership of additional properties during 1996 as compared to 1995.

The average number of shares outstanding during 1996 was 1,447,366 vs.
1,117,494 in 1995. Partly because of the greater number of shares outstanding,
the net income per share decreased from $.58 in 1995 to $.49 in 1996. If this
figure is analyzed using flow of funds -- that is net income plus depreciation
expense -- then the amount in 1996 was $.75 per share vs. $.80 in 1995.

41
<PAGE> 50

The decrease in the per share figures is largely due to the imposition of
the Advisory Fee in 1996 ($74,361) which effectively decreased net income and
flow of funds per share by $.05 per share. However, it should be noted that
although the full Advisory fee is recognized on the Statement of Income, the
Advisor agreed to waive collection of $44,061 (59%) of these fees in 1996, and
may elect to waive collection of all or a portion of the fees in the future. The
Advisor's waiver of these fees has been treated as an infusion of equity into
the Company, rather than as a reduction in expenses.

In addition to the added Advisory Fee Expense, the Company had a fairly
large drop in interest income. This was due to relatively lower interest rates
in place for most of 1996 as compared to 1995, and a slower level of new fund
raising from the sale of shares in 1996 as compared to 1995. $3,633,687 was
raised in net proceeds in 1995, while only $2,048,954 was raised in 1996. Thus,
the Company had less funds on hand awaiting investment in 1996 than in 1995.

During the year ended December 31, 1996, the Company declared dividends
totaling $1,128,597, compared to dividends of $804,595 declared for the year
ended December 31, 1995. Cash basis income for the year ended December 31, 1996
was $1,066,537. This was derived by adding depreciation and amortization expense
to net income. Thus, cash distributions this year were greater ($40,898) than
cash basis net income. In contrast, distributions in 1995 were less ($101,154)
than cash basis income. In either event, the Company continues to qualify as a
REIT.

Cash resources increased $567,172 during 1996 compared to a $954,193
increase in 1995. This was the result of normal amounts of investing, financing,
and operating activities that were expected to take place during the year. Cash
provided by operating activities increased by $819,783 with the largest
contributor being $1,066,537 in cash basis income. In contrast, 1995 saw
$2,373,143 in cash being provided by operating activities due to $905,749 in
cash basis income and $1,240,190 being received from the sale of government
securities (such securities were purchased in 1993 primarily). $1,128,597 was
declared as dividends during 1996; this is noted as a large use of cash under
financing activities. This continues the Company's trend of paying virtually all
the cash basis income out to investors in the form of quarterly dividends. Over
the last three years, cash basis income has totaled $2,337,592, while dividend
declarations have totaled $2,311,572 (98% of cash basis income). Financing
activities provided an additional $1,575,889 in cash resources to the Company
via the sale of additional shares in the Company ($2,048,954 in net proceeds),
and $724,465 in financing obtained in connection with the acquisition or
refinancing of properties, less dividends paid of $1,128,597. In contrast,
1995's cash provided by financing activities was $7,228,140 due to $3,633,687 in
proceeds from the sale of additional shares, and a $4,469,647 gross increase in
notes payable, net of dividends paid of $745,172. The sole use of cash in
investing activities in 1996 was $1,828,500 expended for the acquisition of one
property during the year. $755,000 of the funds necessary for obtaining this
property was obtained from debt financing. In contrast, $8,647,090 were used to
purchase additional rental properties in 1995 with $4,469,647 in debt financing
used to facilitate the purchases.

In summary then, the operating performance of the Company continued to
improve as additional funds were raised, additional property was acquired, and
all properties were operated profitably.

RESULTS OF OPERATIONS -- 1995 VS. 1994

Operations for the year ended December 31, 1995 represented a full year of
rental operations for the Blockbuster Video Building, Fresno Village Shopping
Center, OPTO-22 Building, Riverside Marketplace, and Brea properties, and
partial years of operations for the Technology Drive and Safeguard Building
properties.

The net income for the year ended December 31, 1995 ($649,605) was higher
than the year ended December 31, 1994 ($247,068) due to the raising of
additional funds and investment of such funds in additional income producing
properties. The Company did not have any adverse events that significantly
impacted net income during the year ended December 31, 1995, and all properties
that have been purchased by the Company have operated at levels equal to
expectations. All tenants were current on their lease obligations.

42
<PAGE> 51

Rental revenue increased $889,562 (111%) due to a full year's ownership of
the Riverside Marketplace and Brea properties (as compared to partial year
ownership in 1994), and partial year ownership for the Technology Drive and
Safeguard Business Systems properties. Interest income increased $20,397 (20%)
due to a greater amount of cash held during the year awaiting investment and
greater amounts of profits held each quarter awaiting distribution to investors
on the normal distribution timeline.

Operating expenses increased $73,042 (76%) as a reflection of the
additional properties owned during the year. Interest expense increased $317,907
(105%) as a reflection of the additional debt incurred in connection with
property acquisition and refinancing activities. Despite the amount of debt, the
Company remains below the maximum 50% debt maximum allowed by the Company's
by-laws (debt was 49% of property cost (as defined in the by-laws) at December
31, 1995). General and administrative costs increased $46,777 (66%) due to
higher accounting, taxes, and general insurance expense costs related to the
Company's increased size. General and administrative costs decreased as a
percentage of revenue from 7.8% in 1994 to 6.5% in 1995. Depreciation and
amortization expense increased $137,906 (117%) as the result of the ownership of
additional properties during 1995 as compared to 1994. 1994's results were hurt
by the recognition of $68,210 loss on government securities investments during
that year. No loss was recorded in 1995. Net income of $649,605 for 1995 was
$402,537 (163%) higher than 1994.

The average number of shares outstanding during 1995 was 1,117,494 vs.
706,684 in 1994. Despite the greater number of shares outstanding, the net
income per share increased from $.35 in 1994 to $.58 in 1995. If this figure is
analyzed using flow of funds -- that is net income plus depreciation expense and
loss on government securities investments -- then the amount in 1995 was $.80
per share vs. $.61 in 1994. The improvement in results is attributable to a
larger percentage of the Company's assets being invested in income-producing
real estate in 1995 than in 1994, as opposed to investments in relatively lower
yielding money market investments. Although the balance of cash and cash
equivalents was higher at the end of 1995 ($1,450,022) than at the end of 1994
($495,829), the average level of cash on hand during 1995 was lower. In
addition, the rate of increase in total revenues (111%) was much higher than the
rate of increase in general and administrative expenses (66%). General and
administrative expenses represented a smaller percentage of total revenues in
1995 than in 1994 (6.5% in 1995 vs. 7.8% in 1994).

During the year ended December 31, 1995, the Company declared dividends
totaling $804,095, compared to dividends of $522,614 declared for the year ended
December 31, 1994. Cash basis income for the year ended December 31, 1995 was
$905,749. This was derived by adding depreciation and amortization expense to
net income. Thus, cash distributions this year were less ($101,154) than cash
basis net income. In contrast, distributions in 1994 were greater ($89,098) than
cash basis income. In either event, the Company continues to qualify as a REIT.

Cash resources increased $954,193 during 1995 compared to a $284,966 in
1994. This was the result of normal amounts of investing, financing, and
operating activities that were expected to take place during the year. Cash
provided by operating activities increased to $2,373,143 with the largest
contributors being $905,749 in cash basis income and $1,240,190 in proceeds from
the sale of government securities. In contrast, 1994 saw $791,190 in cash being
provided by operating activities due to only $433,516 in cash basis income and
$372,104 being received from the sale of government securities (such securities
were purchased in 1993 primarily). $804,595 (88.8%) of the cash basis income
($905,749) was declared as dividends during the year; this is noted as a large
use of cash under financing activities. This continues the Company's trend of
paying virtually all the cash basis income out to investors in the form of
quarterly dividends. Financing activities provided an additional $7,228,140 in
cash resources to the Company via the sale of additional shares in the Company
($3,633,687 in net proceeds), and $4,469,647 in financing obtained in connection
with the acquisition or refinancing of properties, less cash dividends paid of
$745,172. In contrast, 1994's cash provided by financing activities was
$5,360,233 due to $3,088,804 in proceeds from the sale of additional shares, and
a $2,800,000 gross increase in notes payable, net of dividends paid of $437,803.
The sole use of cash in investing activities in 1995 was $8,647,090 expended for
the acquisition of additional properties during the year. As mentioned above,
$4,469,647 of the funds necessary for obtaining these new properties was
obtained from debt financing. In contrast, only $5,866,457 in funds were used to

43
<PAGE> 52

purchase additional rental properties in 1994. (Note: cash dividends paid were
less than dividends declared due to some dividends being reinvested in
additional shares of the Company).

In summary then, the operating performance of the Company continued to
improve as additional funds were raised, additional property was acquired, and
all properties were operated profitably.

LIQUIDITY AND CAPITAL RESOURCES.

During the year ended December 31, 1996, the Company declared dividends
totaling $1,128,596. Dividends are determined by management based on cash flows
and the liquidity position of the Company. It is the intention of management to
declare dividends, subject to the maintenance of reasonable reserves.

During the year ended December 31, 1996, the Company raised an additional
$2,048,954 in net proceeds as the result of the sale of shares from its third
and fourth public offering. In 1995, the Company raised a net $3,633,687 from a
combination of its second and third public offerings. The Company has used the
net proceeds from these offerings to purchase additional income-producing
properties and to add to the cash reserve balances of the Company as is prudent
given the amount of property now under ownership.

Management uses cash as its primary measure of the Company's liquidity. The
amount of cash that represents adequate liquidity for a "REIT", is dependent on
several factors. Among them are:

1. The relative risk of the Company's operations;

2. The condition of the Company's Properties;

3. The stage in the Company's operating cycle (e.g., money-raising,
acquisition, operating or disposition phase); and

4. The distributions to Shareholders.

The Company is adequately liquid and management believes it has the ability
to generate sufficient cash to meet both short-term and long-term liquidity
needs, based upon the above four points.

The first point refers to the risk of the Company's investments. At
December 31, 1996, the Company's excess funds were invested in a short-term
money market fund.

In February 1991, the Company purchased the Blockbuster Property without
the use of debt, and this property is occupied by an established Standard &
Poor's 500 Company. In May 1993, with the use of moderate leverage, the Company
purchased the Fresno Property, a two tenant retail center that is occupied by
two nationally known retailers. In September 1993, with the use of moderate
leverage, the Company purchased the OPTO-22 Property, a single tenant building
that is leased to an established electronics firm, and sub-leased by an
educational institution that has made significant capital improvements to the
property. In March 1994, with the use of moderate leverage, the Company acquired
the North Palm Street Property, which is occupied by two tenants who have leases
that do not expire until 1999. In November, 1994, with the use of moderate
leverage, the Company acquired the Riverside Marketplace Property, which is
leased by one tenant whose lease expires in 2014. In May 1995, with the use of
moderate leverage, the Company acquired the Safeguard Building Property, which
is leased by one tenant whose lease expires in 2005. In October 1995, with the
use of moderate leverage, the Company acquired the Technology Drive Property,
which is leased by one tenant, whose lease expires in 2005. In August 1996, with
the use of moderate leverage, the Company acquired the Java City Property, which
is leased by one tenant whose lease expires in 2003. In January 1997, with the
use of moderate leverage, the Company acquired the Tycom Property, which is
occupied by one tenant whose lease expires in 2008.

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<PAGE> 53

The aggregate fees paid to affiliates in connection with these acquisitions
were as follows:

<TABLE>
<S> <C>
Blockbuster.............................................................. 90,141
Fresno................................................................... 80,056
OPTO-22.................................................................. 135,818
North Palm Street........................................................ 127,404
Riverside Marketplace.................................................... 192,602
Safeguard Building....................................................... 259,100
Technology Drive......................................................... 195,612
Java City................................................................ 78,177
Tycom.................................................................... 257,500
---------
1,416,410
=========
</TABLE>

Fees paid to the Advisor and the Property Manager in recent years are as
follows:

<TABLE>
<CAPTION>
ADVISOR WCRM TOTAL
-------- ------- --------
<S> <C> <C> <C>
1996................................................ $173,041 $84,749 $257,790
1995................................................ 607,224 46,947 654,171
1994................................................ 495,880 16,455 512,335
</TABLE>

As to the second point regarding liquidity and use of capital resources,
all properties acquired are relatively new properties and do not have
significant deferred maintenance costs associated with their ownership. In
addition, all seven properties are occupied by "triple-lease" tenants, thus
removing much of the Company's risk pertaining to maintenance and operating
costs.

As to point three, the Company was liquid at December 31, 1996, as it is in
the money raising stage. During the year ended December 31, 1996, the Company's
cash reserves increased by $567,172, primarily due to the sale of the Company's
shares. In addition to the Company's existing reserves, the Company's operations
generated approximately $1,066,000 in cash flow (net income plus depreciation
and amortization expense) during the year ended December 31, 1996, providing an
additional source of liquidity to the Company. At its discretion, the Company
could choose to withhold a portion of this source of cash by not making or
reducing dividend payments to investors, in order to build up cash reserves.

As to point four, the amount of dividends paid to Shareholders was made at
a level consistent with the amount of net income available after application of
expenses. The Company's Advisor does not intend to distribute amounts which will
exceed the level of cash generated from operations available. Commencing January
1, 1993 until November 1994, the Advisor and WCRM, the Property Manager, waived
overhead cost allocations, and Property Management Fees. The effect of the
foregoing was to increase dividends $.10 to $.15 per Share per year. The Advisor
expects to increase the amount of dividends as additional funds are raised,
revenues are increased, and overhead expenses are spread over a larger base of
investor's funds. Beginning July 1, 1996 and continuing indefinitely, the
Advisor waived collection of a portion of the Advisor fees. The effect of the
foregoing was to increase Dividends approximately $.02 to $.03 per Share for the
period from July 1, 1996 to December 31, 1996.

Inflation and changing prices have not had a material effect on the
Company's operations. Operations in the future may be affected as the Company
acquires additional Properties.

The Company currently has no external sources of liquidity (other than
funds that potentially could be received from the sale of additional Shares).

The Company currently has no material capital commitments.

NEW ACCOUNTING PRONOUNCEMENT.

Statement of Financial Accounting Standard No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of Liabilities"
(SFAS No. 125) issued by the Financial Accounting Standards Board (FASB) is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996, and is to be applied
prospectively. Earlier or retroactive application is not permitted. The new
standard provides accounting and reporting standards for transfers and servicing
of financial assets and extinguishments of liabilities. The Company does not
expect adoption to have a material effect on its financial position or results
of operations.

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<PAGE> 54

MANAGEMENT

DIRECTORS AND OFFICERS OF THE COMPANY. While the Company has a limited
operating history, some of the Directors and officers of the Company have
substantial real estate investment experience. The Directors and officers are
elected annually by the Shareholders and Board of Directors respectively. The
Directors and Officers of the Company are:

<TABLE>
<S> <C>
Philip N. Gainsborough................... Director and Chairman of the Board
W. Thomas Maudlin, Jr. .................. Director and President
Neal E. Nakagiri......................... Secretary
Michael G. Clark......................... Vice President and Treasurer
James W. Coulter......................... Director (1)
George Young............................. Director (1)
Steve Bridges............................ Director (1)
</TABLE>

- ---------------
(1) Independent Director

PHILIP N. GAINSBOROUGH (Born 1938) has, since 1983, been Chairman of the
Board of Directors, President and Director of Associated Financial Group, Inc.
He has been active in the securities and financial services business since 1961.
He has been, and he currently serves as, Chairman of the Board of Directors,
President and Director of Associated Securities Corp. since its organization in
1982. Mr. Gainsborough is also currently the Chairman of the Board of Directors
and Director of West Coast Realty Advisors, Inc., and West Coast Realty
Management, Inc. Mr. Gainsborough is also Chairman of the Board of Directors of
Associated Planners Partnership Services, Inc., Associated Planners Investment
Advisory, Inc. and Associated Planners Insurance Services, Inc. Mr. Gainsborough
is a graduate of the University of Southern California.

W. THOMAS MAUDLIN, JR. (Born 1936) is a Director and President of West
Coast Realty Advisors, Inc., and a Director of West Coast Realty Management,
Inc. He has been active in the real estate area for the past 33 years, serving
as co-developer of high rise office buildings and shopping centers. Mr. Maudlin
has structured transactions for syndicators in apartment housing, including sale
leasebacks, all-inclusive trust deeds, buying and restructuring transactions to
suit a particular buyer, and as a buyer acting as a principal. From 1980 to
present, Mr. Maudlin has been involved in the development of real property in
numerous parts of Southern California. Mr. Maudlin is a graduate of the
University of Southern California.

NEAL E. NAKAGIRI (born 1954) serves as Executive Vice President, General
Counsel, Chief Operating Officer and Secretary of Associated Financial Group,
Inc. He is Vice President for two subsidiaries, Associated Securities Corp. and
Associated Planners Investment Advisory, Inc. He joined the "Associated" group
of companies in March, 1985. He was Vice President of Compliance with Morgan,
Olmstead, Kennedy & Gardner from 1984 to 1985. He was First Vice President and
Director of Compliance with Jefferies & Co., Inc. from 1981 to 1984. He was Vice
President and Director of Compliance at W & D Securities, Inc. from 1980 to
1983. He was an Investigator with the National Association of Securities
Dealers, Inc. from 1976 to 1980. He has a B.A. degree in Economics from UCLA
(1976) and a J.D. from Loyola Law School of Los Angeles (1991). He is a member
of the California Bar and the Compliance and Legal Division of the Securities
Industry Association.

MICHAEL G. CLARK (Born 1956) has served as Vice President/Treasurer of AFG
since January 1988, and served as Controller of AFG from March 1986 to December
1987. Mr. Clark is currently Treasurer of Associated Planners Investment
Advisory, Inc., Treasurer of Associated Planners Insurance Services, Inc.,
Treasurer of Associated Planners Partnership Services, Inc., Treasurer of West
Coast Realty Advisors, Inc., and Treasurer of Associated Securities Corp.. Prior
to joining AFG, Mr. Clark served as Controller for Quest Resources, a Los
Angeles based syndicator and operator of alternative energy projects from
October 1984 to March 1986 and as Assistant Controller for Valley Cable T.V.
from March 1982 through September 1984. In addition, Mr. Clark served as an
auditor for Arthur Young & Co. in Los Angeles from July 1978 to March 1982. Mr.
Clark is a graduate of the University of California, Santa Barbara and has a
Masters of Science degree from the California State University at Northridge.

46
<PAGE> 55

GEORGE YOUNG (Born 1937). Since 1972 has been president of his own company,
now named Internet Link Corporation. The firm specializes in integrating
Internet and Intranet communications into the productive life of enterprises.
They host and develop sites on the World Wide Web; integrate e-mail and
interactive data retrieval applications; and provide content management and
consulting services. Internet Link Corporation is affiliated with Netscape
Communications, Pacific Bell Internet Services and InterNex Information
Services. Mr. Young is a graduate of the University of Southern California.

STEVE BRIDGES (Born 1951) has served as Executive Vice President of Pacific
Building Industries, a general building contractor, from January 1995 to the
present. From July 1986 to January 1995, Mr. Bridges served as Executive Vice
President of Pathfinder Mortgage, a mortgage brokerage firm, and was responsible
for loan production and financing of construction loans. From July 1984 to July
1986 Mr. Bridges was the President of The Muller Company, a real estate
development company, and was responsible for the management of the Company,
developing, financing and joint venture relationships, the development of
800,000 square feet of industrial and commercial real estate and partnership
management. Mr. Bridges is a graduate of the University of Southern California.

JAMES W. COULTER (Born 1938) has since 1988 been a principal in Coulter &
Company, a firm which provides brokerage services and invests in real property
with an emphasis in retail, industrial and office properties. From 1981 to 1988
Mr. Coulter was a Vice President of the investment division of Bishop-Hawk,
Inc., a firm which specializes in commercial real estate. He started the
investment division in Sacramento. Prior to 1981, Mr. Coulter was involved in
real estate investments, property management and development, and served as an
officer of real estate investment trusts. Mr. Coulter is a graduate of and has a
Masters of Business Administration degree from the University of Southern
California.

Gainsborough, Maudlin, Clark, Coulter, Young, and Bridges have served in
their positions with the Company since inception. Nakagiri was named Secretary
of the Company in June 1996, replacing Mr. William T. Haas, who retired from the
Company.

BOARD OF DIRECTORS. The Directors are charged with the ultimate responsibility
for the affairs of the Company, and particularly with monitoring the
relationship between the Company and the Advisor. The Independent Directors will
make an annual determination that the Advisor's compensation is reasonable and
that total fees and expenses of the Company are reasonable, and a quarterly
determination that the Company's borrowings are appropriate.

The Directors are accountable to the Company as fiduciaries and
consequently must exercise good faith and integrity in handling Company affairs.
However, Directors will have no different or greater level of fiduciary duty and
responsibility than do directors of any other Delaware business corporation. In
addition, an Independent Director will not be subject to any greater liability
than a Director who is not independent, notwithstanding the additional
responsibilities of Independent Directors. Directors and officers of the Company
are also entitled to certain indemnity rights under the Company's Organization
Documents. See "Summary of Organization Documents -- Limited Liability and
Indemnification of Directors, Officers, Employees and Other Agents."

The Directors will each spend such time on the affairs of the Company as
their duties may require, and will meet quarterly or more frequently, as
required. Financial statements and various other financial reports of the
Company will be provided to the Directors quarterly to aid them in the discharge
of their duties. It is contemplated that the Directors will not devote a
substantial portion of their time to the discharge of their duties as Directors.

The Directors have the authority to approve or disapprove all investments
recommended to the Company by the Advisor. Prior to an investment being
consummated, all investments recommended to the Company must be approved either
by a majority of the Directors present at a meeting or by written consent of all
of the Directors. If approval is not obtained the investment will not be made.
Certain transactions with the Advisor and its Affiliates require the additional
approval of a majority of the Directors then in office who are not parties to
the transaction or affiliates of any person (other than the Company) who is a
party to the transaction.

Except for payments to Independent Directors, the Company has not paid any
remuneration to its officers and Directors. The Company pays each Independent
Director $500 dollars for each meeting of the Directors attended in person ($100
dollars if attended by telephonic means) and reimburses all Directors for

47
<PAGE> 56

their travel expense and other out-of-pocket disbursements incurred in
connection with attending any such meeting and for carrying on the business of
the Company. The aggregate remuneration paid (exclusive of reimbursement for
expenses) to the Independent Directors for the year ended December 31, 1996 was
$6,600. Directors and officers of the Company who are affiliated with the
Advisor have not received and will not receive compensation from the Company for
their services as Directors and officers of the Company. Such persons will,
however, be remunerated indirectly by reason of their relationship with the
Advisor and its affiliated companies and will be reimbursed by the Company for
their expenses in attending meetings of the Directors and for carrying on the
business of the Company.

ADVISOR. West Coast Realty Advisors, Inc. was organized in 1983 and is an
Affiliate of AFG. In order to obtain the services of persons having substantial
real estate and financial experience, there are no restrictions on the business
activities of the Advisor or any of its officers, directors or employees, and
the Advisor and such persons are free (with certain exceptions) to engage in
other business activities related to real estate investments. See "Conflicts of
Interest."

The Advisor will advise the Company and oversee its investments and
operations, subject to the direction of the Company's Directors. The Advisor's
office is located at 5933 W. Century Boulevard, Ninth Floor, Los Angeles,
California 90045 and its telephone number is (310) 670-0800.

The principal executive officers, directors and key employees of the
Advisor are as follows:

<TABLE>
<CAPTION>
NAME POSITION
----------------------------------------- -----------------------------------------
<S> <C>
Philip N. Gainsborough................... Director and Chairman of the Board
W. Thomas Maudlin, Jr.................... Director and President
Neal E. Nakagiri......................... Secretary
Michael G. Clark......................... Director and Treasurer
</TABLE>

For a description of the occupations and affiliations of Messrs.
Gainsborough, Maudlin, Nakagiri and Clark, see "Directors and Officers of the
Company" above.

PROPERTY MANAGER. West Coast Realty Management, Inc. will act as the property
manager for any Properties acquired by the Company. The principal executive
officers, directors and key employees of the Property Manager are:

Philip N. Gainsborough, Director and Chairman of the Board
W. Thomas Maudlin, Jr., Director (1)

James E. Prock, Director and President

Murli Sujanani, Secretary

David Vazquez, Treasurer

- ---------------
(1) AFG owns 75% and Mr. Maudlin owns 25% of the capital stock of West Coast
Realty Management, Inc.

The Company has received a ruling from the Internal Revenue Service as to
the independent contractor status of West Coast Realty Management, Inc. ("WCRM")
under the REIT provisions of the Code and has therefore contracted with WCRM for
the provision of property management services. (See "Tax
Consequences -- Requirements for Qualification as a REIT".)

For a description of the occupations and affiliations of Messrs.
Gainsborough, Maudlin and Haas see "Directors and Officers of the Company"
above.

JAMES E. PROCK (Born 1935) has over 30 years of experience in the real
estate and construction industries and has been President of West Coast Realty
Management, Inc. since December, 1991. From 1981 to December, 1991, Mr. Prock
was President of Keystate Properties, Inc., a real estate consulting and
brokerage firm which provided acquisition, development and disposition
management services to owners of improved and unimproved properties. Mr. Prock
has Bachelor of Civil Engineering and Master of Business Administration degrees
from the University of Southern California.

MURLI SUJANANI (Born 1950) has served as Senior Vice President/Investment
Research for AFG since 1994, and has been employed by AFG since December, 1990.
From April 1990 to November 1990, Mr. Sujanani served as Vice President/Mortgage
Securities for GMAC-Residential Funding Corporation. From June, 1983 to March,
1990, Mr. Sujanani worked for Dain Bosworth, Inc. in the corporate finance
department

48
<PAGE> 57

as a Vice President where he was responsible for partnership origination and due
diligence work. Mr. Sujanani is a graduate of St. John's University in
Minnesota.

DAVID VAZQUEZ (Born 1962) has served as Assistant Controller of AFG since
April 1995. Prior to joining AFG, Mr. Vazquez served as an auditor for BDO
Seidman LLP in Los Angeles from January 1994 through April 1995, and as an
accounting supervisor for Biggs & Co., a Los Angeles CPA firm from February 1991
through January 1994. In addition, Mr. Vazquez served as a staff accountant for
P. Leiner N.P., a manufacturer and distributor of nutritional products, from
June 1990 through February 1991. Mr. Vazquez has a Bachelor of Business
Administration degree from the California State University, Los Angeles.

PRIOR PERFORMANCE

THE INFORMATION PRESENTED IN THIS SECTION REPRESENTS THE HISTORICAL
EXPERIENCE OF REAL ESTATE PROGRAMS MANAGED BY AFFILIATES OF THE ADVISOR.
INVESTORS IN THE COMPANY SHOULD NOT ASSUME THAT THEY WILL EXPERIENCE RETURNS, IF
ANY, COMPARABLE TO THOSE EXPERIENCED BY INVESTORS IN SUCH PRIOR PROGRAMS.

AFFILIATES OF THE ADVISOR HAVE FORMED THREE LIMITED PARTNERSHIPS DESCRIBED
BELOW. AN AGGREGATE OF $14,644,650 FROM 1,326 INVESTORS WAS RAISED IN THE PRIOR
PROGRAMS. THOSE PARTNERSHIPS HAVE ACQUIRED EIGHT PROPERTIES, 100 PERCENT OF
WHICH WERE EXISTING PROPERTIES, FOR AN AGGREGATE PURCHASE PRICE OF $14,944,404.

FOR THE INVESTMENT EXPERIENCE OF THE COMPANY SEE "REAL PROPERTY
INVESTMENTS" AND "MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS".

Associated Planners Realty Fund was formed in 1986, offered an aggregate of
$7,500,000 in Units of Limited Partnership Interests and as of December 31, 1987
had sold an aggregate of $7,499,000 of its Limited Partnership Interests to 704
investors. The proceeds from the offering have been invested in five existing
properties with a total purchase price of $6,670,857. The properties were
purchased for all cash. Three of the properties are office buildings located in
Southern California which were acquired for an aggregate acquisition cost of
$3,858,723 (approximately 58% of the funds expended for investment); a shopping
center in Central California for $1,208,990 (approximately 18% of the funds
expended for investment); and a mini-warehouse in the State of Washington for
$1,603,144 (approximately 24% of the funds expended for investment).

On May 15, 1995, the mini-warehouse located in the State of Washington was
sold to Shurgard Storage Centers, Inc. Associated Planners Realty Fund netted
$1,522,182 as a result of the sale of the property. Proceeds from the sale were
distributed to the partners in accordance with the terms of the Partnership
Agreement in July 1995.

Associated Planners Realty Income Fund was formed in 1987, offered
$12,000,000 of Limited Partnership Interests and as of September 5, 1989, the
date it terminated its offering, had sold a total of $5,096,000 of its Limited
Partnership Interests to 436 investors. It has acquired one existing property, a
shopping center located in Southern California for $1,851,147 cash (which
represents approximately 36% of the amount of funds raised from investors) and,
through a joint venture with its Affiliate Associated Planners Realty Growth
Fund, a 90% interest in an industrial building located in Southern California
for $2,816,000 cash (which represents approximately 55% of funds raised from
investors). None of the properties have been sold.

Associated Planners Realty Growth Fund was formed in 1987, offered
$10,000,000 of Limited Partnership Interests and as of September 5, 1989, the
date it terminated its offering, had sold a total of $2,059,650 of its Limited
Partnership Interests to 186 Investors. It acquired one property, an office
building located in Santa Ana, California for approximately $3,293,400 (which
represented a cash investment of approximately 72% of the amount raised from
Investors), with approximately 46% of the purchase price paid in cash and the
balance through a first mortgage loan. Also, through a joint venture with its
Affiliate, Associated Planners Realty Income Fund, the Partnership purchased a
10% interest in an industrial building

49
<PAGE> 58

located in Southern California for $313,000 cash (which represented
approximately 15% of funds raised from investors).

Although the office building located in Santa Ana, California had been 70%
to 80% occupied in recent years, it had not generated positive cash flow for
Associated Planners Realty Growth Fund due to the drop in rental rates in the
area. The General Partner pursued alternative solutions to improve the cash flow
of the Santa Ana Property and the Partnership. On July 31, 1995, the holder of
the first deed of trust on the property agreed to provide relief by deferring
collection of debt payments due on the loan from September 1995 to January 1996
and adding such debt service payments to the principal balance of the loan and
adjusting the debt service payments commencing February 1, 1996. On March 4,
1996 the Partnership requested that the Lender re-structure the loan on the
ParkCenter Office Building. On April 4, 1996, the Partnership received a reply
from the Lender denying the request to modify the loan and also notified the
Partnership that an event of default had occurred under the deed of trust
securing the loan due to the Partnership's nonpayment of the March 1, 1996 loan
payment. On August 16, 1996, the Partnership and the Lender executed a
deed-in-lieu-of-=foreclosure, in connection with the Park Center Office
Building. On November 1, 1996, the Partnership's 10% interest in the San Marcos
Property was sold to Associated Planners Realty Income Fund (an affiliate) for a
gross purchase price of $188,000. The sales price of the transaction was
established by an independent appraisal of the property. Associated Planners
Realty Growth Fund was dissolved on December 4, 1996 after the final
distribution of $132,564 in proceeds to the limited partners.

The total amount of Units of Limited Partnership Interests ("Units")
offered in Associated Planners Realty Income Fund and Associated Planners Realty
Growth Fund did not generate full sale of such Units and the cash received by
those Prior Programs decreased compared to the amount of Units sold and cash
received by Associated Planners Realty Fund.

The investment objectives of Associated Planners Realty Fund ("Fund I"),
Associated Planners Realty Income Fund ("Income Fund"), Associated Planners
Realty Growth Fund ("Growth Fund") and the Company are the same except that Fund
I and Income Fund acquired their properties for cash without leverage, whereas
Growth Fund acquired, and the Company anticipates acquiring its properties, by
incurring mortgage debt, up to an aggregate of 50% of the Purchase Price of
Properties.

The Advisor will provide to each person to whom this Prospectus is
delivered, upon request and without charge, a copy of the most recent annual
report filed with the Securities and Exchange Commission within the last
twenty-four months by any of the Prior Programs. Requests for such information
should be addressed to West Coast Realty Advisors, Inc., 5933 W. Century
Boulevard, Ninth Floor, Los Angeles, California 90045. Upon request, exhibits to
the annual report will also be provided upon payment of a reasonable fee.

SERVICES PROVIDED BY THE ADVISOR
AND PROPERTY MANAGER

Many of the services to be performed by the Advisor and its Affiliates in
selecting Properties for acquisition by the Company, managing Properties and
communicating with investors are summarized below. This summary is provided to
illustrate the various functions which the Advisor and its Affiliates will
perform for the Company and is not intended to include all of the services which
may be performed by the Advisor and its Affiliates or other services provided by
third parties to the Company.

ADVISORY SERVICES

The Advisory Agreement was renewed until June 30, 1997, by a majority vote
of the Shareholders, and will thereafter be renewable annually with the approval
of a majority of the Shareholders. The Advisory Agreement is not assignable
without the consent of the parties, except for assignments by the Advisor to a
corporation or other person which controls, is controlled by or is under common
control with the Advisor, or by either the Advisor or the Company to a successor
of the business of either of the parties. The Advisory Agreement may be
terminated by the Advisor on 120 days' written notice, or by the Directors, the
Independent Directors or the Shareholders on 60 days' written notice. If for any
reason the Advisory

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Agreement is terminated, the Directors, subject to Shareholders ratification,
will appoint a new Advisor and the Company has agreed to change its name to one
which does not include "Associated Planners", "West Coast Realty" or any similar
words.

Under the terms of the Advisory Agreement, the Advisor undertakes to use
its best efforts to present an investment program consistent with the investment
policies and objectives of the Company and to obtain investments suitable to
such investment program. In performance of this undertaking, but at all times
subject to the continuing and exclusive authority of the Directors over the
management of the Company, the Advisor will: (i) obtain or furnish and supervise
the performance of such ministerial functions in connection with the
administration of the day-to-day operations of the Company as may be agreed upon
by the Advisor and the Directors; (ii) serve as the Company's investment and
financial advisor and provide research, economic and statistical data with
respect to the making, holding, administration and disposition of the Company's
investments; (iii) investigate, select and oversee outside property managers and
other independent third parties (e.g., consultants, developers, brokers,
appraisers, etc.); (iv) subject to Board approval, make investments consistent
with the policies and provisions of the Company; (v) advise in connection with
negotiations by the Company with investment banking firms, securities brokers or
dealers and other institutions or investors for public or private sales of
securities of the Company, or obtain loans for the Company; and (vi) provide, at
the Company's expense, office space, office furnishings, personnel and other
overhead items necessary and incidental to the Company's business and
operations.

PROPERTY MANAGEMENT SERVICES

The providing of property management services in connection with the
management of the Company's real property investments will, subject to the
supervision of the Advisor and the Directors, be performed by "independent
property managers" (within the meaning of the Code), including WCRM, an
Affiliate of the Advisor, as required by the REIT provisions of the Code. The
Company has received a ruling from the Internal Revenue Service as to the
independent contractor status of WCRM. See "Tax Consequences -- Requirements for
Qualification as a REIT". All or a portion of those services may be contracted
or subcontracted to other unaffiliated independent property management
companies. A separate property management agreement will be entered into with
respect to each real property investment. A copy of the form of the agreement is
filed as an exhibit to the Registration Statement filed with the Securities and
Exchange Commission, of which this Prospectus is a part. The fees payable for
property management services shall in no event be greater than rates charged for
similar services in the area of each real property investment. See "Compensation
of Advisor and Affiliates" and "Conflicts of Interest."

OTHER SERVICES

The Advisor will provide real estate brokerage services in the acquisition,
refinancing or sale of Properties by the Company. The Advisor may utilize the
services of its Affiliates acting for the Company or independent brokers acting
for sellers of Properties to the Company. The Advisor will receive Acquisition
Fees for these Property acquisition services. The Advisor will also receive a
real estate commission for services rendered in connection with the refinancing
or sale of Properties. See "Compensation of Advisor and Affiliates."

The Advisory Agreement provides for an Advisory Fee for regular advisory
services rendered by the Advisor, and a Subordinated Incentive Fee in any fiscal
year that a Property of the Company is sold, financed or refinanced. See
"Compensation of Advisor and Affiliates" for a description of these fees.

Pursuant to the Advisory Agreement, the Advisor is to pay employment
expenses of its senior executives (Chairman, President, Executive and Senior
Vice Presidents and directors), office expenses and other miscellaneous
administrative expenses not relating to the Advisor's performance of its
functions under the Advisory Agreement. The Company will be required to pay its
allocable share of all other expenses at their cost to the Advisor.

Within 60 days after the end of each calendar year, the Advisor will refund
to the Company the amount, if any, by which the Operating Expenses of the
Company during such calendar year exceeded the greater of (a) 2% of the Average
Invested Assets (which is generally defined to mean the book value of the
Company's

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real estate interests less noncash items) or (b) 25% of Net Income (which is
generally defined as the net profits of the Company) (excluding the gain from
the sale of the Properties for which the Advisor received a Subordinated
Incentive Fee).

Neither the Advisor nor any of its officers and directors nor their
Affiliates will have any obligation to give to the Company a prior right to
acquire or invest in any investment opportunities which may be available to
them. The Advisor will not make investments for its own account of the character
suitable for investment by the Company while the Company has sufficient funds
available to make the investment. The Advisor and its officers and directors
intend, to the extent consistent with the provisions of statutes, regulations
and case law governing their activities, to provide the Company with access to
review investment opportunities generated by them, which are consistent with the
Company's investment policies.

The foregoing is only a summary of the Advisory Agreement. Reference is
made to the Advisory Agreement itself, filed as an exhibit to the Registration
Statement of which this Prospectus is a part, for a complete statement of its
provisions.

TAX CONSEQUENCES

The following summary of the material federal income tax considerations of
the Offering is based on current law, is for general information only and is not
tax advice. The summary is based upon the Internal Revenue Code of 1986, as
currently amended (the "Code"), judicial decisions, administrative regulations
(the "Regulations"), and published rulings and procedures of the Treasury
Department, all of which are subject to change prospectively or retroactively.
This summary is not, and is not intended to be, a complete analysis of all
applicable provisions of the Code, the Regulations and administrative and
judicial interpretations thereof. The summary does not purport to deal with all
aspects of taxation that may be relevant to particular stockholders in light of
their personal investments or tax circumstances, or to certain types of
stockholders (including insurance companies, tax-exempt organizations, financial
institutions or broker-dealers, foreign corporations and persons who are not
citizens or residents of the United States) subject to special treatment under
the federal income tax laws. The effects of certain Code provisions on
individual investors will vary from one case to another, depending upon the
facts. In addition, there is uncertainty concerning certain of the tax aspects
of an investment in the Company, and there can be no assurance that some of the
positions taken by the Company might not be challenged by the Internal Revenue
Service (the "IRS").

The Company might also be subject to state and local taxes in jurisdictions
in which the Company might be deemed to be doing business or in which it owns
property or other interests. See "State and Local Taxes" below.

For the foregoing reasons, this summary is not intended as a substitute for
careful tax planning. Prospective Shareholders and fiduciaries and others
investing on behalf of prospective Shareholders are urged to consult their own
tax advisors with respect to the federal and state tax consequences which could
arise from the purchase of Shares in their individual situations.

The Code provides special tax treatment for an organization that qualifies
and elects to be taxed as a real estate investment trust (a "REIT"). In brief,
if certain detailed requirements imposed by the REIT provisions of the Code
(Sections 856-860) are met, entities that invest primarily in real estate assets
(i.e., real estate, mortgages or REITs) and that otherwise would be taxed as
corporations are, with certain limited exceptions, not taxed at the corporate
level on their income that is currently distributed to their shareholders. This
treatment substantially eliminates the "double taxation" (at the corporate and
shareholder levels) that typically results from the use of corporate investment
vehicles.

The Company has elected to be treated as a REIT. The first taxable year the
Company was taxable as a REIT was its taxable year ending December 31, 1991.
Except for its inadvertent failure to comply with Treasury Regulation Section
31.857-8(d) and (e) for 1991, 1992 and 1993 (See Additional Tax Risks), the
Company believes that it has been organized and has operated in such a manner as
to qualify for taxation as a REIT under Sections 856-860 of the Code for its
taxable year ending through December 31, 1995 and the Company intends to
continue to operate in such a manner in the future. No assurance can be given,
however,

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that the Company will operate in a manner so as to qualify or remain qualified
as a REIT. See "Requirements for Qualification as a REIT" below. Based on the
accuracy of the facts contained in the Ruling Request, the Company received a
ruling from the Internal Revenue Service that WCRM will qualify as an
independent contractor under Section 856(d)(2) and 856(d)(3) of the Code if it
renders property management services to the Company. The Company has represented
that it will utilize the services of WCRM only for so long as the material facts
contained in the Ruling Request remain accurate.

If the Company does not qualify as a REIT for any taxable year, it will be
subject to federal income tax as if it were a corporation, and the Shareholders
will be taxed as shareholders of a corporation. Consequently, the Company would
be subject to potentially significant tax liabilities which would reduce the
amount of Cash Available For Distribution to the Shareholders and the
Shareholders would also be taxed on Distributions from the Company.

OPINION OF COUNSEL

The Company has obtained an opinion of Gipson Hoffman & Pancione, a
Professional Corporation, counsel to the Company ("Counsel"), that based on
factual representations and various assumptions made by the Company and
calculations prepared by BDO Seidman, LLP is the opinion of Counsel that subject
to the possible disqualification of its REIT's status as a result of its
inadvertent failure to comply with Treasury Regulation Section 1.857-8(d) and
(e) for its 1991, 1992 and 1993 taxable years, the Company was organized in
conformity with the requirements for qualification and taxation as a REIT
commencing with the Company's taxable year ending December 31, 1991, and its
method of operations has, and its proposed method of operation will, enable it
to continue to qualify to be taxed as a REIT. It must be emphasized that this
qualification depends upon the Company's ability to meet the various
requirements imposed under the Code, including, but not limited to, the various
income, asset, distribution, share ownership and other tests discussed below,
the results of which will not be reviewed by Counsel. Accordingly, no assurance
can be given that the actual results of the Company's operation for any one
taxable year will satisfy such requirements. See "Failure to Qualify," below.

The opinion of Counsel, which is summarized in this Prospectus and which is
filed as an exhibit to the Company's Registration Statement of which this
Prospectus forms a part, represents such firm's judgment that it is more likely
than not that the applicable issues should be resolved in the manner indicated
if litigated by the IRS. Nevertheless, that opinion represents the views of
Counsel only, is not binding upon the IRS or the courts, and should not be taken
as an assurance that such tax consequences in fact will result. Because the
opinion is based upon facts and factual assumptions described more fully in this
section, including assumptions as to future facts concerning the actual
operations of the Company, it may be adversely affected by alterations in such
facts and by differences between actual and assumed facts. No factual
investigations have been made by Counsel. Therefore, for purposes of its
opinion, Counsel has relied upon representations made by the Directors on behalf
of the Company and by certain financial information compiled by BDO Seidman,
LLP.

The opinion of Counsel is also based upon existing law and currently
applicable Regulations, current published administrative positions of the IRS
contained in Revenue Rulings and Revenue Procedures, and judicial decisions,
which are subject to change either prospectively or retroactively. Furthermore,
the law as to many tax matters material to an investment in the Company is
uncertain. Although reasonable arguments can be made for the positions which the
Company proposes to take as to tax matters as described in this Prospectus, the
federal income tax consequences of a proposed investment in the Company cannot
be predicted with certainty, and there can be no assurance of how the law will
develop or, if litigated, how the courts will decide various issues.

REQUIREMENTS FOR QUALIFICATION AS A REIT

To qualify as a REIT for federal income tax purposes, the Company has made
a valid election to be so treated and must satisfy the requirements set forth
below. In order to qualify as a REIT, the Company may not have any accumulated
earnings and profits attributable to periods prior to its REIT status, i.e.,
prior to

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January 1, 1991. The Company has represented that it has no accumulated earnings
and profits for any period commencing prior to January'1, 1991. Once made, an
election continues in effect until voluntarily revoked or automatically
terminated by the Company's failure to qualify as a REIT for a taxable year.

1. SHARE OWNERSHIP. The Shares (i) must be transferable and (ii) must be
held by 100 or more persons during at least 335/365th of the Company's taxable
year. No more than 50% of the outstanding Shares may be owned in the aggregate,
directly or indirectly, by five or fewer individuals (as defined in the Code to
include certain entities) at any time during the last half of the Company's
taxable year. Although, the Advisor was required to purchase Shares and AFG, the
Advisor and their Affiliates (they currently own approximately 8% of the
outstanding shares) may purchase Shares, they intend to limit their investment
in Shares to the extent necessary to enable the Company to satisfy the REIT
ownership requirements and in no event will they own in the aggregate more than
35% of the outstanding Shares.

The Omnibus Budget Reconciliation Act of 1993 was enacted in August, 1993.
This act provides that qualified pension trusts generally would no longer be
treated as a single "individual" for purposes of applying the ownership test
that currently prohibits five or fewer individuals (applying certain attribution
of ownership rules) from owning more than 50% of the value of a REITs'
outstanding shares. The ownership interests instead would be treated as held by
the beneficiaries of the qualified trust, in proportion to their actuarial
interests in the trust. The act also provides that if the REIT would fail the
five or fewer test but for this new exception, and if the REIT is "predominantly
held" by qualified trusts (one such trust owns more than 25% by value, or more
than 50% by value is held by such trusts that each own more than 10%), those
qualified trusts that own more than 10% may be required to report a portion of
the dividends they receive from the REIT as UBTI.

2. NATURE OF ASSETS. On the last day of each calendar quarter, at least
75% of the value of the total assets of the Company must consist of real estate
assets (including interests in real property, interests in loans secured by
mortgages on real property or by interests in real property, shares in other
REITs, regular or residual interests in real estate mortgage investment conduits
("REMICs"), and certain options, but not mineral, oil or gas royalty interests),
cash, cash items (including receivables) and government securities
(collectively, "real estate assets"). During the one-year period beginning on
the date the Company receives new capital from the sale of Shares (other than
from sales resulting from the dividend reinvestment plan), stock or debt
instruments purchased with such capital are treated as "real estate assets" for
the purposes of the 75% asset test. Thereafter, not more than 25% of the value
of the Company's assets may consist of securities (other than government
securities). There are no investment restrictions on the remainder of the
Company's assets, except that the securities of any one nongovernmental issuer
may not represent more than 5% of the value of the Company's total assets or 10%
of the outstanding voting securities of any one issuer.

A REIT is permitted to hold assets in a "qualified REIT subsidiary" which
is a corporation that has been 100% owned by the REIT at all times during its
existence. The REIT treats all of the qualified REIT subsidiary's assets,
liabilities, and items of income, deduction and credit as its own for federal
income tax purposes, although the subsidiary will be a separate entity for state
law purposes. If the fund invests in a partnership, it will be deemed to own a
proportionate share of the partnership's assets.

After initially meeting the asset tests at the close of any quarter, the
Company will not lose its status as a REIT for failure to satisfy the asset
tests at the end of a later quarter solely by reason of changes in asset values.
If the failure to satisfy the asset tests results from an acquisition of
securities or other property during a quarter, the failure can be cured by
disposition of sufficient nonqualifying assets within 30 days after the close of
that quarter. The Company intends to maintain adequate records of the value of
its assets to ensure compliance with the asset tests, and to take such other
action, within 30 days after the close of any quarter, as may be required to
cure any noncompliance.

3. SOURCES OF INCOME. For each taxable year, the Company must meet the
following three income-based tests:

(a) 75% Test. At least 75% of the Company's gross income (excluding income
from prohibited transactions) for each taxable year must be derived from the
following: (i) rents from real property; (ii) interest

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accruing on obligations secured by mortgages on real property or interests in
real property; (iii) gain from the sale or other disposition of real property,
interests in real property and mortgages on real property (excluding gain from
the sale of "dealer property"); (iv) dividends or other distributions on, and
gain from the sale or other disposition of transferable shares of other
qualified REITs; (v) abatements and refunds of taxes on real property; (vi)
income and gain from the sale or other disposition of foreclosure property;
(vii) gain from the sale or other disposition of a real estate asset which is
not a prohibited transaction; (viii) amounts (other than amounts based in whole
or in part, on the income or profits of any person) received or accrued as
consideration for entering into agreements (A) to make loans secured by
mortgages on real property or on interests in real property, or (B) to purchase
or lease real property, interests in real property or mortgages on real
property; (ix) income from a regular or residual interests in REMICs to the
extent of the proportion in which assets of the REMICs consist of interests in
real property; and (x) income from the temporary investment of new capital in
stock or debt instruments during the one-year period beginning on the date the
Company receives the new capital.

For purposes of the 75% income test and the 95% income test described
below, "rents from real property" do not include (a) amounts determined in whole
or in part by the income or profits derived by any person from a Property; (b)
amounts from any person (e.g., partnership or corporation) in which the Company
directly or indirectly owns 10% or more of the beneficial interests; (c) amounts
received or accrued with respect to a Property if the Company furnishes or
renders noncustomary services to the tenants of such Property, other than
through an independent contractor from whom the Company does not derive or
receive any income; and (d) amounts attributable to personal property leased in
connection with a lease of real property, if more than 15% of the total rent
from the real and personal property is attributable to the personal property.
The Company, has received a ruling from the Internal Revenue Service, as to the
independent contractor status of one of its Affiliates, WCRM under the REIT
provisions of the Code and therefore has contracted with WCRM for the provision
of property management services. The rents generally will not be considered to
be based on income or profits of a tenant if they are based on a fixed
percentage of receipts or sales, or if they are based on the net income or
profits of the tenant and the tenant derives substantially all of its income
with respect to such Property from the leasing or subleasing of substantially
all of such Property and such tenant receives from subtenants only amounts which
would be treated as rents from real property if received directly by a REIT. The
Company may provide services to its tenants and the income will qualify as rents
from real property if the services are (a) customarily furnished or rendered to
tenants in connection with the rental of real property of a similar class in the
geographic market in which the Property is located and (b) of a type that a
tax-exempt organization can provide to its tenants without causing its rental
income to be unrelated business taxable income under the Code.

(b) 95% Test. At least 95% of the Company's gross income (excluding income
from prohibited transactions) for each taxable year must be derived from the
same items which qualify under the 75% income test, or from dividends, interest
or gains from the sale or other disposition of stock or other securities which
are not "dealer property" or from any combination of the foregoing.

Fees for performing services to the Company's tenants (other than for
services which are both (a) customarily furnished or rendered to tenants in real
properties of a similar class in the geographic market in which the property is
located and (b) of a type that a tax-exempt organization can provide its tenants
without causing its rental income to be unrelated business taxable income under
the Code) do not qualify under either the 75% or the 95% income test.

If the Company fails to meet either the 75% or the 95% income test during a
taxable year, it may still qualify as a REIT in such year if (i) it reports the
source and nature of each item of its gross income in its federal income tax
return for such year; (ii) the inclusion of any incorrect information in its
return is not due to fraud with intent to evade tax; and (iii) the failure to
meet such tests is due to reasonable cause and not to willful neglect. However,
in such event the Company will be subject to an excise tax equal to 100% of the
greater of the amount by which it fails either the 75% or the 95% income test
for such year.

(i) Prohibited Transactions. In determining whether the Company complies
with the 75% and 95% income tests, gross income does not include gross income
from "prohibited transactions." The term

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"prohibited transactions" generally means a sale or other disposition of real
property or interests in mortgages on real property held by the REIT primarily
for sale to customers in the ordinary course of its business ("Dealer
Property"), other than foreclosure property, unless all of the following
requirements are met:

(1) The property was held for at least four years and, except for
foreclosure property, must have been held for at least four years for the
production of rental income;

(2) Either (a) the REIT made no more than seven sales of property during
the year in question (other than foreclosure property) or (b) the aggregate
adjusted tax bases of property (other than foreclosure property) sold during the
taxable year does not exceed 10% of the aggregate tax bases of all of the assets
of the REIT as of the beginning of the taxable year and substantially all of the
marketing and development expenditures with respect to the property were made
through an independent contractor; and

(3) The cost of any improvements made by the REIT to the property or any
partner thereof during the four years prior to the sale did not aggregate in
excess of 30% of the property's net sales price.

Any gross income derived from a prohibited transaction is taken into
account in applying the 30% test described below (and the net income from any
such transaction is subject to a 100% tax). The Company intends to hold its
Properties for investment and rental with a view to long-term appreciation, to
engage in the business of owning, acquiring, managing, renovating and expanding
for rental the Properties, and to make such occasional sales of the Properties
as are consistent with the Company's investment objectives. Based on the above,
the Company believes that all of its real property will be held for rental, and
not for sale to customers, in the ordinary course of its trade or business.
However, whether property is held as Dealer Property depends on the facts and
circumstances in effect from time to time, including those relating to a
particular property. As a result, complete assurance cannot be given that the
Company can avoid being deemed to own property that the IRS later characterizes
as property held "primarily for sale to customers in the ordinary course of its
trade or business."

(ii) Foreclosure Property. "Foreclosure property," referred to above, is
real property and any personal property incident thereto, which is acquired by
the Company as the result of a bid in foreclosure, or by agreement or legal
process, following a default (or where a default as imminent) on a lease of the
property or on an indebtedness secured by that property and which the Company
elects to so treat. If the Company acquires foreclosure property, such property
will normally cease to be foreclosure property no later than two years after the
date of acquisition by the Company. However, if the Company establishes to the
satisfaction of the IRS that an extension of the two-year period is necessary
for the orderly liquidation of the Company's interest in such a foreclosure
property, the IRS may grant one or more extensions of the two-year period. Such
extensions may not extend the two-year period beyond a date which is six years
after the date on which the Company acquired such foreclosure property. If the
Company is not able to dispose of such foreclosure property within such two-year
period, as extended, then, because rents from such foreclosure properties may
not be treated as "rents from real property," the Company may not satisfy either
or both of the 75% or 95% income tests, depending on how great a portion of the
Company's gross income is represented by rental income not meeting the passive
income requirements of the Code for qualification as a REIT.

(c) 30% Test. Less than 30% of the Company's gross income may be derived
from the sale or other disposition of the following: (i) stock or securities
held by the Company for less than one year; (ii) property in a transaction which
is a prohibited transaction; and (iii) real property, including interests in
real property, and mortgages on real property held for less than four years
(other than foreclosure property and property compulsorily or involuntarily
converted through destruction, condemnation or similar event). The Company does
not intend to acquire Properties with a view to deriving short-term profits.
Nevertheless, any gains realized from the sale of a Property held less than four
years by the Company (except as provided above) must be included in the 30%
income test.

4. DISTRIBUTIONS TO SHAREHOLDERS. Each year, the Company must distribute
to its Shareholders an amount equal to (a) 95% of (i) its "REIT taxable income"
(as defined below) determined without regard to the deduction for dividends paid
and by excluding any net capital gain, and (ii) the excess of net income from
foreclosure property over the tax on such income, minus (b) any "excess noncash
income" (as defined

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below). The Company intends to make distributions to the Shareholders on a
quarterly basis sufficient to meet this 95% distribution requirement. If the
Company does not otherwise have sufficient cash to meet the 95% distribution
requirement, it might be required to borrow funds or sell its Properties in
order to make distributions.

"REIT taxable income" is the taxable income of a REIT, computed as if it
were an ordinary corporation, adjusted by certain items, including without
limitation, an exclusion equal to the amount of net income from foreclosure
property, a deduction for the 100% tax on the greater of the amount by which the
REIT fails the 75% or the 95% income test, and an exclusion for an amount equal
to any net income derived from prohibited transactions. "Excess noncash income"
means the excess of certain amounts that a REIT is required to recognize as
income in advance of receiving cash (such as income recognized under Code
Section 467 relating to rental agreements involving deferred or increasing rents
to the extent the REIT would not otherwise recognize such income under its
regular method of accounting) over five percent of the REIT taxable income
before deduction for dividends paid and excluding any net capital gain. If the
REIT enters into a long-term lease of a Property pursuant to which it receives
deferred rents or increasing rents it might recognize income under Code Section
467 during the term of the lease or upon disposition of the Property subject to
such lease.

Such distributions must be paid in the taxable year to which they relate,
or in the following taxable year (a) if declared by the Company in October,
November or December in the taxable year in question to stockholders of record
in such month and paid by the Company during January of the following taxable
year or (b) if the Company duly elects and if declared before the Company timely
files its tax return for such year and if paid on or before the first regular
dividend payment after such declaration.

The IRS has ruled that if a REIT's dividend reinvestment plan allows
shareholders of the REIT to elect to have cash distributions reinvested
automatically in newly issued shares of the REIT at a purchase price equal to at
least 95% of fair market value on the distribution date, or in shares purchased
in the open market, then such cash distributions qualify under the 95%
distribution test. The terms of the Company's Dividend Reinvestment Plan comply
with such rulings. See "Plan of Distribution -- Dividend Reinvestment Plan."
Shareholders should be aware that the amount of Dividends reinvested pursuant to
the Dividend Reinvestment Plan will be taxable income to them, regardless of the
fact that such dividends have been reinvested with the Company or have been used
to acquire shares through the Crossing Agent or on the open market (i.e., the
tax is not deferred until the Shares received from participation in the Dividend
Reinvestment Plan are sold or disposed of).

TERMINATION OR REVOCATION OF REIT STATUS

For any taxable year that the Company fails to qualify as a REIT, it would
be taxed as a corporation. Consequently, because it would not be entitled to the
deduction for dividends paid to its Shareholders in computing its taxable
income, assets of the Company and Dividends to Shareholders would be reduced to
the extent necessary to pay any resulting tax liability of the Company.
Distributions from the Company at such time would be taxable to Shareholders as
dividends to the extent of the current and accumulated earnings and profits of
the Company with any excess being treated as a reduction of tax basis in the
REIT stock and after such tax basis is exhausted as gain from the sale of stock.

If the Company's election to be treated as a REIT is terminated
automatically, the Company will not be eligible to elect REIT status until the
fifth taxable year which begins after the year for which the Company's election
was terminated, unless (i) the Company did not willfully fail to file a timely
return with respect to the termination taxable year, (ii) the inclusion of any
incorrect information in such return was not due to fraud with intent to evade
tax, and (iii) the Company establishes that failure to meet the requirements was
due to reasonable cause and not to willful neglect. While the Company has no
intention of voluntarily revoking its REIT election, if it does so, it will be
prohibited from electing REIT status for the year to which such revocation
relates and for the next four taxable years.

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TAXATION OF THE COMPANY

For any taxable year in which the Company qualifies as a REIT, it generally
will not be subject to federal income tax on that portion of its ordinary income
or capital gain which is timely distributed to Shareholders (except certain
income with respect to foreclosure property, which is taxed at the highest
corporate rate -- currently 35%). Even if the Company is treated as a REIT, it
is subject to the tax on any REIT taxable income and net capital gain not
distributed to Shareholders. The Company will be subject to tax on any net
capital gain arising from the sale of its Properties not distributed to the
Shareholders. If the Company reinvests the net capital gain from the sale of a
Property on which it recognized a net capital gain, it will be taxed on that
gain, or, in the alternative, it could distribute all or part of the net capital
gain as a capital gain dividend to the Shareholders and in that event, the
distributed capital gain would be taxable to the Shareholders and not to the
Company. Since at present the maximum rate for individuals on long-term capital
gain is twenty-eight percent (28%), which is lower than the current corporate
federal income tax rate of thirty-five percent (35%), it is anticipated that the
Company will make a capital gains distribution equal to the amount of the
capital gain so that only the lower capital gains tax rates will be incurred.
The Company may choose, however, to not distribute part or all of a capital gain
recognized by the Company and in that event the Company would pay tax on the
capital gain at the corporate tax rate, and reinvest the proceeds remaining in
additional Properties.

In addition, regardless of distributions to Shareholders, (i) if the
Company fails either or both the 75% and 95% income tests, but still maintains
its qualification as a REIT, it will be subject to a 100% tax on the greater of
the amount by which it failed the 75% test or the 95% test, multiplied by a
fraction, the numerator of which would be the Company's taxable income for the
year (with certain adjustments) and the denominator of which would be the
Company's gross income (with certain adjustments); and (ii) the Company will be
subject to a 100% tax on any net income derived from a prohibited transaction.

The Company will also be subject to the minimum tax on items of tax
preference allocable to it. Code Section 59(d) authorizes the Treasury
Department to issue Regulations allocating items of tax preference between a
REIT and its shareholders. Such Regulations have not yet been issued.

The Company will be subject to a 4% excise tax under Code Section 4981 on
the amount, if any, by which the sum of (i) 85% of its REIT ordinary income for
such year, (ii) 95% of any net capital gain for such year, and (iii) any
undistributed taxable income from prior periods exceeds the amount actually
distributed by the Company to its Shareholders during the calendar year (or
declared as a dividend during the calendar year, if distributed during the
following January) as dividends. If necessary, the Company will make its fourth
quarterly distribution prior to February 1 of the following year and will
declare such dividend before the end of the fourth quarter in order to avoid
imposition of the excise tax. If the Company reinvests net capital gains in
additional Properties it is likely to be subject to the excise tax. Imposition
of the excise tax on the Company would reduce both the amount of money available
for reinvestment by the Company and the amount of cash available for
distribution to Shareholders.

The Company has adopted a calendar taxable year for federal income tax
purposes; accordingly, the Company's taxable year will end each December 31. The
Company has elected the accrual method of accounting.

As a result of an inadvertent failure to satisfy certain technical
requirements of Treasury Regulation Section 1.857-8(b) for its 1991, 1992 and
1993 taxable years, it is possible that the Company would be treated as a
regulation corporation (and not as a REIT) for such taxable years.

TAXATION OF TAXABLE U.S. SHAREHOLDERS

1. IN GENERAL. As long as the Company qualifies as a REIT, distributions
made to its taxable U.S. Stockholders (as defined herein) out of current or
accumulated earnings and profits (and not designated as capital gain dividends)
will result in ordinary income. For this purpose, the term "U.S. Stockholder"
means a holder of Common Stock that (for United States federal income tax
purposes) (i) is a citizen or resident of the United States, (ii) is a
corporation, partnership or other entity created or organized in or under the
laws of the United States or of any political subdivision thereof, or (iii) is
an estate or trust, the income of which is subject

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to United States federal income taxation regardless of its source. For any
taxable year for which the Company qualifies for taxation as a REIT, amounts
distributed to taxable U.S. Stockholders will be taxed as described herein.
Corporate stockholders will not be entitled to the dividends received deduction.
Distributions that are designated as capital gain dividends will be taxed as
long-term capital gains (to the extent they do not exceed the Company's actual
net capital gain for the taxable year) without regard to the period for which
the stockholder has held its stock. However, corporate stockholders may be
required to treat up to 20% of certain capital gain dividends as ordinary
income. Distributions in excess of current and accumulated earnings and profits
will not be taxable to the extent that they do not exceed the adjusted tax basis
of the stockholder's shares of Common Stock, but rather, will reduce a
stockholder's adjusted tax basis in such shares. To the extent that such
distributions exceed the adjusted tax basis of a stockholder's shares of Common
Stock, they will be included in income as long-term capital gain (or short-term
capital gain if the shares of Common Stock have been held for one year or less)
assuming the shares are a capital asset in the hands of the stockholder.
Currently, the maximum tax rate for individuals on net long-term capital gain is
28%.

Capital gain realized by the Company on the sale of its assets generally
will equal the difference between the sale price and the Company's adjusted tax
basis in the asset sold, and will be recognized by the Company's stockholders to
the extent the Company maintains its qualifications as a REIT and such capital
gain is distributed to the Company's stockholders as a capital gain dividend.
The initial tax basis of such assets will be subsequently reduced by annual
depreciation deductions. Depreciation deductions reduce taxable income and thus
may effectively increase the portion of dividends which would represent a
non-taxable return of capital.

Any dividend declared by the Company in October, November or December of
any year payable to a stockholder of record on a specified date in any such
month will be treated as both paid by the Company and received by the
stockholder on December 31 of such year, provided that the dividend is actually
paid by the Company during January of the following year.

Stockholders may not include any net operating losses or capital losses of
the Company in their individual income tax returns. A stockholder will realize
capital gain or loss on the disposition of any of his Common Stock equal to the
difference between (a) the sales price for such Common Stock and (b) his
adjusted tax basis in such Common Stock. In general, any gain or loss realized
upon the sale or exchange of Common Stock by a stockholder who has held such
Common Stock for more than one year (after applying certain holding period
rules) will be treated as a long-term capital gain or long-term capital loss,
respectively. In general, any gain or loss realized upon the sale or exchange of
Common Stock by a stockholder who has held such Common Stock for one year or
less (after applying certain holding period rules) will be treated as short-term
gain or loss, respectively. However, losses incurred on the sale or exchange of
Common Stock held for less than six months will be deemed long-term capital loss
to the extent of any capital gain dividends received by the selling stockholder
with respect to such Common Stock.

2. PORTFOLIO INCOME. Dividends paid to Shareholders will constitute
portfolio income for purposes of Code Section 469 and not passive activity
income. Accordingly, such income will not be subject to reduction by losses from
passive activities (e.g., an interest in a business held as a limited partner or
any interest in a rental activity) of Shareholders who are subject to the
passive activity loss rules.

3. TAXATION OF REINVESTED DIVIDENDS. Those Shareholders who avail
themselves of the Dividend Reinvestment Plan during the offering period will
realize taxable income or gain in an amount equal to the fair market value of
the Shares acquired from the REIT through the Dividend Reinvestment Plan. Those
Shareholders who avail themselves of the Dividend Reinvestment Plan after the
offering period will realize taxable income or gain equal to the gross amount of
Dividends distributed on their behalf to the Agent, as agent for the
participants in such plan. Such distributions will retain the character of the
Company's income and gain which is distributed. Shares received pursuant to the
Dividend Reinvestment Plan will have a holding period which begins on the day
after purchase by the Agent. The tax basis of the Shares acquired through the
Dividend Reinvestment Plan will generally be the gross amount of income realized
by the Shareholder from the distribution.

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4. BACK-UP WITHHOLDING. The Company will report to its stockholders and to
the IRS the amount of dividends paid during such calendar year, and the amount
of tax withheld, if any. Under the backup withholding rules, a stockholder may
be subject to backup withholding at the rate of 31% with respect to dividends
paid unless such holder (a) is a corporation or another form of exempt entity
and, when required, demonstrates this fact, or (b) provides a taxpayer
identification number, certifies to no loss of exemption from backup
withholding, and otherwise complies with applicable requirements of the backup
withholding rules. A stockholder that does not provide the Company with a
correct taxpayer identification number may also be subject to penalties imposed
by the IRS. Any amount paid as backup withholding will be creditable against the
stockholder's income tax liability. In addition, the Company may be required to
withhold a portion of capital gain distributions to any stockholders who fail to
certify their non-foreign status to the Company. See "Taxation of Non-U.S.
Stockholders."

Additional issues may arise pertaining to information reporting and backup
withholding with respect to Non-U.S. Stockholders, and Non-U.S. Stockholders
should consult their tax advisors with respect to any such information reporting
and backup withholding requirements.

5. DIVIDEND INFORMATION. The Company will notify each Shareholder after
the end of each year as to the portion of Dividends paid that constitutes
ordinary income, return of capital, capital gain and items of tax preferences.

TAXATION OF TAX-EXEMPT SHAREHOLDERS

In Revenue Ruling 66-106, 1966-a C.B. 151, the IRS ruled that amounts
distributed by a REIT to a tax-exempt employees' pension trust did not
constitute "unrelated business taxable income" ("UBTI"). Revenue rulings are
interpretive in nature and subject to revocation or modification by the IRS.
Based upon Revenue Ruling 66-106, distributions to tax-exempt stockholders
generally should not constitute UBTI where (a) the stockholder has not financed
the acquisition of its Common Stock with "acquisition indebtedness" within the
meaning of the Code, and (b) the Common Stock is not used by the stockholder in
an unrelated trade or business. However, legislation was recently enacted which
provides that amounts distributed by a REIT to a tax-exempt employees' pension
trust which owns more than 10% of the REIT's share will be treated as UBTI in
certain circumstances.

TAXATION OF NON-U.S. STOCKHOLDERS

The rules governing United States federal income taxation of nonresident
alien individuals, foreign corporations, foreign partnership and other foreign
stockholders (collectively, "Non-U.S. Stockholders") are complex, and no attempt
will be made herein to provide more than a summary of such rules. Prospective
Non-U.S. Stockholders should consult with their own tax advisors to determine
the impact of federal, state and local income tax laws with regard to an
investment in shares, including any reporting requirements.

In general, Non-U.S. Stockholders will be subject to regular United States
income tax with respect to their investment in the Company if such investment is
"effectively connected" with the Non-U.S. Stockholder's conduct of a trade or
business in the United States. A corporate Non-U.S. Stockholder that receives
income that is (or is treated as) effectively connected with a U.S. trade or
business may also be subject to the branch profits tax under Section 884 of the
Code, which is payable in addition to regular United States corporate income
tax. The balance of this discussion will apply to Non-U.S. Stockholders whose
investment in the Company is not so effectively connected.

Distributions that are not attributable to gain from sales or exchanges of
United States real property interests and not designated as capital gain
dividends will be treated as dividends of ordinary income to the extent that
they are made out of current or accumulated earnings and profits of the Company.
Such distributions ordinarily will be subject to a withholding tax equal to 30%
of the gross amount of the distribution, subject to reduction or elimination
under an applicable tax treaty. The Company expects to withhold United States
income tax at the rate of 30% on the gross amount of any such dividends made to
a Non-U.S. Stockholder unless (i) a lower treaty rate applies and the
stockholder files an IRS Form 1001 or (ii) the Non-U.S. Stockholder files a
properly completed IRS Form 4224 with the Company claiming that the

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distribution is "effectively connected" income. Distributions which exceed
current and accumulated earnings and profits of the Company will not be taxable
to the extent that they do not exceed the adjusted tax basis of the
stockholder's Common Stock, but rather will reduce the adjusted tax basis of
such Common Stock. To the extent that such dividends exceed the adjusted tax
basis of a Non-U.S. Stockholder's Common Stock, they will give rise to tax
liability if the Non-U.S. Stockholder would otherwise be subject to tax on gain
from the sale or disposition of his Common Stock in the Company, as described
below. Because it cannot be determined at the time a distribution is made
whether or not such distribution will be in excess of current and accumulated
earnings and profits, the distributions generally will be subject to withholding
at the same rate as if distributed from earnings. However, amounts thus withheld
are refundable to a stockholder if it is subsequently determined that such
distribution was, in fact, in excess of current and accumulated earnings and
profits of the Company. A Non-U.S. Stockholder will be solely responsible, at
his or her expense, to file a U.S. tax return claiming a refund of over-withheld
tax.

For any year in which the Company qualifies as a REIT, distributions that
are attributable to gain from sales or exchanges by the Company of a United
States real property interest will be taxed to a Non-U.S. Stockholder under the
provisions of the foreign Investment in Real Property Tax Act of 1980
("FIRPTA"). Under FIRPTA, these distributions are taxed as if such gain were
"effectively connected" with a United States business. Non-U.S. Stockholders
would thus be taxed at the normal capital gain rates applicable to U.S.
Stockholders (subject to the applicable alternative minimum tax and a special
alternative minimum tax for nonresident alien individuals). Also, distributions
subject to FIRPTA may be subject to a 30% branch profits tax in the hands of a
foreign corporate stockholder not entitled to treaty exemption. The Company is
required by applicable Treasury Regulations to withhold 35% of any distribution
that could be designated by the Company as a capital gains dividend regardless
of the amount actually designated as a capital gain dividend. This amount is
creditable against the Non-U.S. Stockholder's FIRPTA tax liability. A refund may
be available if the amount exceeds the Non-U.S. Stockholder's federal tax
liability.

Gain recognized by a Non-U.S. Stockholder upon a sale of Common Stock
generally will not be taxed under FIRPTA if the Company is a "domestically
controlled REIT," defined generally as a REIT in which at all times during a
specified testing period less than 50% of the value of the Common Stock was held
directly or indirectly by foreign persons. If the Company were not a
domestically controlled REIT, sales of shares generally would not be taxed under
FIRPTA so long as (i) the Company's stock is regularly traded on an established
securities market (as defined in applicable Treasury Regulations) and (ii) the
Non-U.S. Stockholder owns less than 5% of the Company's Common Stock. It is
currently anticipated that the Company will be a "domestically controlled REIT,"
and therefore the sale of Common Stock will not be subject to taxation under
FIRPTA. However, gain not subject to FIRPTA will be taxable to a Non-U.S.
Stockholder if (i) the investment in the Common Stock is effectively connected
with the Non-U.S. Stockholder's United States trade or business, in which case
the Non-U.S. Stockholder will be subject to the same treatment as U.S.
stockholders with respect to such gain, or (ii) the Non-U.S. Stockholder is a
nonresident alien individual who was present in the United States for 183 days
or more during the taxable year and (a) such gain is attributable to an office
or fixed place of business in the United States or (b) such nonresident alien
individual has a "tax home" in the United States, and such gain is not
attributable to an office or fixed place of business located outside the United
States, in which case the nonresident alien individual will be subject to a 30%
tax on the individual's capital gains. If the gain on the sale of Common Stock
were to be subject to taxation under FIRPTA, the Non-U.S. Stockholder would be
subject to the same treatment as U.S. Stockholders with respect to such gain
(subject to the applicable alternative minimum tax and a special alternative
minimum tax in the case of nonresident alien individuals).

STATEMENT OF STOCK OWNERSHIP

The Company is required to demand annual written statements of actual stock
ownership of the Shares from the recordholders of one-half percent, one percent
or five percent of its stock depending on whether the Company has 200 or fewer
record Shareholders, 201 to 2000 record Shareholders, or more than 2000 record
Shareholders, respectively. The Company must also maintain, within the Internal
Revenue District in which it is required to file its federal income tax return,
permanent records showing the information it has received as

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to the actual ownership of such Shares and a list of those persons failing or
refusing to comply with such demand.

TAX LAW CHANGES

The anticipated income tax treatment described in this Prospectus may be
changed, perhaps retroactively, by legislative, administrative or judicial
action at any time.

STATE AND LOCAL TAXES

The tax treatment of the Company and its Shareholders in states having
taxing jurisdiction over them may differ from the federal income tax treatment.
It is possible that some jurisdictions will impose a tax liability on the
Company if it operates in such states, thereby reducing the economic return to
Shareholders. Accordingly, no discussion of state taxation of the Company, the
Shares, or the Shareholders is provided herein, nor is any representation made
as to the tax status of the Company, the Shares or the Shareholders in such
states. Each Shareholder should consult his own tax advisor as to that status of
the Shares under the respective state tax laws applicable to him.

ERISA CONSIDERATIONS

In considering an investment in the Company of a portion of the assets of a
qualified pension, profit sharing, stock bonus, or other employee benefit plan
trust subject to ERISA, a fiduciary, taking into account the facts and
circumstances of each trust, should also consider, among other matters, (i) what
assets will be deemed to constitute "plan assets" for purposes of ERISA and the
Code, particularly under the plan asset regulation (described below), and (ii)
whether the investment satisfies the standards of fiduciary conduct prescribed
by ERISA including, among other matters, the requirements that the plan's
investments be appropriately diversified, and be prudent, considering the nature
of an investment in, and the compensation structure of, the Company; the fact
that the Company has a limited history of operations; and the fact that, except
for investments from a prior offering of Shares as described in "Real Property
Investments", the specific Properties which are to be invested in have not been
identified as of the date of this Prospectus. The prudence of a particular
investment must be determined by the fiduciary (usually the trustee or
investment manager) with respect to each employee benefit plan who is
responsible for controlling, managing and investing plan assets which are to be
invested in this investment, taking into account all of the facts and
circumstances of the investment.

Section 406 of ERISA and Section 4975 of the Code prohibits certain
transactions, involving assets of an employee benefit plan subject to ERISA or
described in Section 4975 of the Code (which excludes governmental plans and
church plans) ("Benefit Plan"), between the Benefit Plan and any party in
interest or qualified person with respect to the Benefit Plan. Neither ERISA nor
the Code defines the term "plan assets." However, the Department of Labor has
issued a final regulation (29 C.F.R. Section 2510.3-101) defining the term "plan
assets" (the "plan assets regulation") for purposes of Subtitle A, and Parts 1
and 4 of Subtitle B, of Title I of ERISA and Section 4975 of the Code. The plan
asset regulation provides that assets of a Benefit Plan will not include the
assets of an equity in which the Benefit Plan invests if the entity (or the
interests therein) satisfies at least one of the sets of criteria contained in
the plan asset regulation.

Under the plan asset regulation, the assets of a Benefit Plan will not
include underlying assets of entities in which the Benefit Plan invests if the
interests in the equity the Benefit Plan acquires are "publicly offered
securities." A publicly-offered security is a security that is (1) part of a
class of securities that is widely held, (2) freely transferable, and (3) sold
as part of a public offering registered under the Securities Act of 1933 and
part of a class of securities registered under the Securities Exchange Act of
1934 within 120 days (or such later time as may be allowed by the Securities and
Exchange Commission) after the end of the fiscal year of the issuer during which
the offering of such securities to the public occurred. A class of securities is
widely held if it is owned by 100 or more persons who are independent of the
issuer and of one another. Whether a security is freely transferable is a
factual question to be determined on the basis of all relevant facts and
circumstances. The preamble to the plan asset regulation suggests that one
factor to be considered in determining whether a

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security is freely transferable is whether the investor has a reasonable
opportunity to liquidate its investment. The plan asset regulation provides that
where the minimum investment in a public offering of securities is $10,000 or
less, the presence of certain restrictions enumerated in the plan asset
regulation (the "permissible restrictions") designed to permit entities to
comply with applicable federal or state laws and to meet reasonable
administrative needs ordinarily will not affect a determination that such
securities are freely transferable.

As of March 18, 1997, there are 1,675,442 Shares of the Company
outstanding, held by 850 Shareholders. These Shares were sold pursuant to a
Registration Statement under the Securities Act of 1933. The purchase price per
Share pursuant to this offering is $10.00. The minimum offering is 25,000 Shares
($250,000), and the minimum purchase for an investor is 100 Shares ($1,000).
Although they have no present intention to do so, the Advisor and its Affiliates
may purchase Shares pursuant to this offering. It is assumed, therefore, that
the Shares are part of a class of securities that is widely-held.

The Shares will generally be transferable. However, the Company has the
power to redeem or prohibit the transfer of the Shares to the extent necessary
to prevent the Company from failing to satisfy the requirements of qualification
as a REIT under the Code, which requirements tend to enhance, not limit, the
dissemination of REIT stock. See "Tax Consequences." One of the permissible
restrictions under the plan asset regulation that will not ordinarily affect a
finding that securities are freely transferable is any restriction on, or
prohibition against, any transfer or assignment of a security which would result
in a termination or reclassification of the entity for federal or state tax
purposes. The restriction of transferability of the Shares to prevent the
Company's loss of status as a REIT for federal tax purposes falls within this
exception. Except as may be imposed by state "blue sky" administrators, there
are no other restrictions on the transferability of the Shares. The Company
intends to use a Crossing Arrangement to match buy and sell orders for Shares.

The foregoing discussion is merely a summary of issues a Benefit Plan
fiduciary should evaluate when considering an investment in the Shares. Benefit
Plan fiduciaries are urged to consult their legal advisors before investing
Benefit Plan assets in the Shares.

DESCRIPTION OF COMMON STOCK

GENERAL. As of March 18, 1997, there are 1,675,442 Shares outstanding held by
850 Shareholders. The Certificate of Incorporation authorizes the Company to
issue one class of Common Stock. The Shares being issued in this offering all
have the same rights, preferences, privileges and restrictions as the issued and
outstanding Shares. The Shares are entitled to one vote per Share. The Advisor
owns 22,505 Shares representing approximately 1.6% of the voting power of the
Company if the maximum amount of Shares is sold. AFG, the Advisor and their
Affiliates may also purchase Shares pursuant to this offering, although they
have undertaken not to acquire more than 35% of the total outstanding voting
shares at any time, in accordance with certain REIT qualification provisions of
the Code. The Shares will be fully paid and non-assessable by the Company and
may be represented by a share certificate or, at the option of the holder, may
be held in "uncertificated" form. There are currently 5,000,000 Shares
authorized by the Company Organization Documents. The Company is not precluded
from issuing additional Shares after the issuance of the Shares in this
offering. The Company does not intend to issue any equity securities which would
be senior in right and preference to the Shares, and has no authority to do so
without the affirmative vote of a majority of its outstanding voting stock. The
public offering price of the Shares was determined arbitrarily by the Directors
of the Company.

REDEMPTION AND PROHIBITION OF TRANSFER OF SHARES. For the Company to qualify as
a REIT under the Code, not more than 50% of its outstanding shares may be owned
by five or fewer individuals during the last half of a taxable year, and the
shares must be owned by 100 or more persons during at least 335 days of a
taxable year of twelve months or during a proportionate part of a shorter
taxable year. See "Tax Consequences." In order to meet these requirements, the
Company has the power to redeem a sufficient number of Shares in order to
maintain or bring the ownership of the Shares into conformity with these
requirements, and to prohibit the transfer of Shares to persons whose
acquisitions would result in a violation of these requirements. The price to be
paid in the event of the redemption of Shares will be the fair market value as
reflected in the latest

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quotations, if any, or, if no quotations are available, as determined in good
faith by the Directors. The effect of these requirements is to generally limit
direct and indirect ownership of the shares by each of the five largest
Shareholders to no more than 9.9% of the outstanding shares per holder.

SUMMARY OF ORGANIZATION DOCUMENTS

The following is a brief summary of certain provisions of the Organization
Documents (which are the Company's Certificate of Incorporation and Bylaws) not
described elsewhere in this Prospectus. The summary is, however, qualified in
its entirety by the detailed information set forth in the Organization Documents
and the Advisory Agreement, each of which is filed as an exhibit to the
Registration Statement.

DIRECTORS. The Company's Bylaws provide that the number of Directors may be
fixed from time to time by the Directors of the Company, with a minimum of three
and a maximum of five, a majority of whom must be Independent Directors. There
are currently 5 Directors, including 3 Independent Directors. Any Director may
resign at any time and may be removed with or without cause by the holders of a
majority of the Shares, or for cause by a majority of the remaining Directors.

The Directors may in their discretion issue Shares for the consideration
and on the terms as they may deem advisable. The Directors may issue debt
obligations with conversion privileges whereby the holders of the debt
obligations may acquire Shares. The Directors also may issue warrants, options
and rights to buy Shares as a part of a ratable issue to Shareholders, as part
of a public offering, or as part of a financial arrangement with parties other
than the Advisor or directors, officers or employees of the Company or the
Advisor, subject to certain limitations on the total amount of such warrants or
options and on their exercise prices.

LIMITED LIABILITY AND INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND
OTHER AGENTS. Under its Certificate of Incorporation and Bylaws and pursuant to
indemnification agreements, the Company will limit the liability of and
indemnify its Directors, officers, employees and other agents against all
liabilities incurred in connection with their serving in those capacities.
Therefore, Shareholders have a limited right of action against such persons, as
permitted by Delaware law.

Consistent with the duties and obligations of, and limitations on, the
Directors and under Delaware law, the Directors are accountable to the Company
and the Shareholders as fiduciaries and are required to perform their duties in
good faith in a manner which each Director believes to be in or not opposed to
the best interests of the Company and the Shareholders and with such care,
including reasonable inquiry, as an ordinarily prudent person in a like position
would use under similar circumstances. However, the Organizational Documents and
the Advisory Agreement provide that the officers, employees, agents, Directors,
the Advisor and their Affiliates will be indemnified against certain liabilities
incurred in connection with serving in such capacities limiting the personal
liability of Directors of the Company to the Company or its Shareholders for
monetary damages for breach of fiduciary duty if such persons were acting in
good faith and in the best interests of the Company and were performing services
or acting on behalf of the Company. Such persons will not be indemnified for
conduct which is found to be negligent, or misconduct, except for Independent
Directors who will not be indemnified for conduct which is found to be grossly
negligent or willful misconduct.

No indemnification will be provided to any agent on account of conduct
which is found to be negligent, or misconduct. In addition, no indemnification
will be provided if a court determines that such indemnification is not lawful.
Notwithstanding anything to the contrary above, the Directors, Advisors or
Affiliates and any persons acting as a broker-dealer shall not be indemnified by
the Company for any losses, liabilities or expenses arising from or out of an
alleged violation of federal or state securities laws by such party unless one
or more of the following conditions are met (i) There has been a successful
adjudication on the merits of each count involving alleged securities law
violations as to the particular indemnitee, (ii) Such claims have been dismissed
with prejudice on the merits by a court of competent jurisdiction as to the
particular indemnitee, (iii) A court of competent jurisdiction approves a
settlement of the claims against a particular indemnitee and finds that
indemnification of the settlement and the related costs should be made, and the
court considering

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the request for indemnification has been advised of the position of the
Securities and Exchange Commission and of the published position of any state
securities regulatory authority in which securities of the Company were offered
or sold as to indemnification for violations of securities laws. Any
indemnification is recoverable only out of the Company's assets and not from
Shareholders.

The Bylaw provision and the indemnification agreements are not intended to
deny or otherwise limit third party or derivative suits against the Company or
its agents, but to the extent an agent is entitled to indemnification, the
financial burden of a third party suit would be borne by the Company, and the
Company would not benefit from derivative recoveries against such person.

The Directors have obtained insurance payable by the Company in reasonable
amounts against losses arising from tort claims or other claims which may be
made against a Director, officer, employee, agent or Shareholder of the Company.

TRANSACTIONS WITH AFFILIATES. The Company's Bylaws impose certain other
restrictions upon dealings between the Company and the Advisor, any Director or
Affiliates thereof. In particular, the Company may not:

(i) purchase real property from the Advisor, any Director or Affiliates
thereof, unless a majority of the Directors (including a majority of the
Independent Directors) not otherwise interested in such transaction determines
that such transaction is fair and reasonable to the Company and such transaction
is at a price to the Company no greater than the cost of the asset to the
Advisor, a Director or an Affiliate thereof, as the case may be, or if the price
to the Company is in excess of such cost, that substantial justification exists
and such excess is not unreasonable. In no event shall the cost of such asset to
the Company exceed its current Appraised Value;

(ii) make loans to the Advisor, any Director or Affiliates thereof;

(iii) borrow money from the Advisor, any Director or Affiliates thereof
unless a majority of the Directors (including a majority of the Independent
Directors) not otherwise interested in such transaction determines that such
transaction is fair, competitive and commercially reasonable and no less
favorable to the Company than would have been obtained between unaffiliated
lenders and borrowers under the same or similar circumstances;

(iv) invest in joint ventures with the Advisor, any Director or Affiliates
thereof, unless a majority of the Directors (including a majority of the
Independent Directors) not otherwise interested in such transaction determines
that the transaction is fair and reasonable to the Company and is on
substantially the same terms and conditions as would have been obtained with
unaffiliated joint venturers; and

(v) enter into any other transaction with the Advisor, any Director or
Affiliates thereof, unless a majority of the Directors (including a majority of
the Independent Directors) not otherwise interested in such transaction
determines that the transaction is fair and reasonable to the Company and is on
terms and conditions no less favorable than would have been obtained from
unaffiliated third parties and that payments to the Directors of the Company or
to the Advisor, or its Affiliates, for services rendered in a capacity other
than as Directors or as Advisor are not in excess of their current compensation
for comparable services and are not greater than charges for comparable services
from competent unaffiliated third parties.

No Properties of the Company may be sold to the Advisor, AFG, any Director
or any Affiliate of any of the foregoing.

SHAREHOLDER LIMITED LIABILITY. Under Delaware general corporate law, a
Shareholder's liability for claims made against the Company will be limited to
the extent of the Shareholder's investment. However, a Shareholder may have an
obligation to return Dividends under certain limited circumstances. See
"Investment Policies and Objectives -- Dividends."

REPORTS TO SHAREHOLDERS AND RIGHTS OF EXAMINATION. Within 120 days following
the close of each fiscal year, and at least 30 days before the date of the
Company's annual meeting of Shareholders, an annual report of the affairs of the
Company will be provided to the Shareholders, containing a balance sheet, income
statement, statement of changes in Shareholders' equity, and a statement of cash
flows prepared on an accrual

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basis in accordance with generally accepted accounting principles with a
reconciliation with respect to information furnished to Shareholders for tax
purposes and audited by an independent certified public accountant. The Company
must also report annually on fees, commissions and other compensation paid to or
earned by the Advisor, the Directors or their Affiliates during the year and
must fully disclose all material terms, factors and circumstances surrounding
any and all transactions involving the Company and the Directors, the Advisor or
their Affiliates during the year, with the Independent Directors examining and
commenting in the report as to the fairness of any such transactions. The
Company's Annual Report will contain such disclosures. The Company will also
provide Shareholders quarterly financial statements in the form specified by
Form 10-Q promulgated by the Securities and Exchange Commission within 60 days
after the close of each of the Company's first three fiscal quarters. The
Company will provide a proxy statement in connection with the annual meeting.
Shareholders of the Company have the right under Delaware law to inspect the
Shareholder list and other books and records of the Company for a proper
purpose.

RESTRICTIONS ON INVESTMENTS. The Bylaws prohibit investments in (i) commodities
or commodity future contracts; (ii) short sales; and (iii) any security in any
company holding investments or engaging in activities prohibited by the
Company's Bylaws.

In addition to other investment restrictions imposed by the Directors from
time to time consistent with the Company's objective to qualify as a REIT, the
Company will observe the following restrictions on its investments as set forth
in its Bylaws:

(i) Not more than 10% of the Company's total assets will be invested in
unimproved real property or indebtedness secured by a deed of trust or mortgage
loans on unimproved real property.

(ii) The Company may not invest in real estate contracts of sale.

(iii) The Company may not invest in the equity securities of any
non-governmental issuer, including other real estate investment trusts or
limited partnerships, for a period in excess of 18 months although it may
repurchase and retire its own shares. Investments otherwise permitted hereunder
in entities affiliated with the Advisor, any Director or Affiliates thereof are
subject to the restrictions on joint venture investment. See "Transactions with
Affiliates" above.

(iv) The Company has no present intention of investing in any type of debt;
however, if the Company invests in debt, it may not invest in indebtedness,
including construction loans (herein called "junior debt") secured by a mortgage
on real property which is subordinate to the lien of other indebtedness (herein
called "senior debt") unless (a) the total amount of such junior debt, plus the
outstanding amount of senior debt, does not exceed 85% of the appraised value of
the property; (b) the senior debt is held by a person other than any Director,
the Advisor, or one of their Affiliates; and (c) the total junior debt
investments of the Company will not exceed 25% of the Company's assets. The
Company, however, may make junior debt investments which do not meet the 85%
limitation above; provided, however, that the aggregate of such investment would
be limited to 10% of the Company's assets (which would be included in the 25%
limitation).

These investment restrictions cannot be changed except by an amendment to
the Bylaws approved by the holders of a majority of the outstanding Shares.

OTHER RESTRICTIONS. The Company's Bylaws contain other restrictions on its
activities, including restrictions regarding the aggregate amount of
indebtedness the Company may incur, restrictions upon the type of securities the
Company may issue, and restrictions against engaging in certain activities.

With respect to the incurrence of indebtedness, the Bylaws provide that the
Company may not incur secured indebtedness such that the Company's aggregate
secured borrowings exceed 50 % of the aggregate Purchase Price of the Company's
Properties (the amount of any single Property's secured indebtedness may not
exceed 80% of the purchase price of that specific Property) or, if a Property is
financed or refinanced, 50% of the appraised value of such Property when
financed or refinanced; and, the Bylaws further provide that the Company may not
incur, in addition to the secured borrowings described above, unsecured
borrowings in excess of 20% of the Invested Assets of the Company, in the
absence of a showing that a higher level of borrowing is appropriate and an
approval by the Independent Directors of borrowing in excess of that limit. In

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no event, however, may the Company incur total indebtedness in excess of 300% of
Invested Assets. The aggregate borrowings of the Company, secured and unsecured,
shall in all respects be reasonable in relation to the net assets of the
Company, and the level of such aggregate borrowings shall be reviewed by the
Directors at least quarterly. The 20% limitation of unsecured borrowings allows
the Company the flexibility of borrowing additional funds on an unsecured basis
for any emergencies or contingencies which may occur and for which the Working
Capital Reserve is not sufficient.

The Bylaws also prohibit the issuance by the Company of (i) equity
securities redeemable at the option of holder, (ii) securities on a
deferred-payment basis, or (iii) warrants or options exercisable for securities,
except in compliance with certain provisions of the Bylaws.

Additionally, the Bylaws prohibit the Company from engaging in the trading
(as compared with investment activities), underwriting or agency distribution of
securities issued by others, from issuing debt securities in the absence of
adequate cash flow to cover debt service and from holding property primarily for
sale to customers in the ordinary course of the trade or business.

These restrictions cannot be changed except by an amendment to the Bylaws
approved by the Shareholders holding a majority of the outstanding Shares.

AMENDMENTS. The Organization Documents may be amended by the affirmative vote
of the holders of a majority of the outstanding Shares. In addition, a majority
of the Directors may, without the approval or consent of the Shareholders, adopt
any amendment to the Bylaws which they in good faith determine to be necessary
to conform the Bylaws to the requirements of the REIT provisions of the Code,
the requirements imposed by the securities administrator of any state in which
the Shares are being offered and any other applicable laws or regulations.

MEETINGS OF SHAREHOLDERS AND VOTING. The annual meeting of the Shareholders
will be held on the first Tuesday of June in each year, and special meetings may
be called by the Chairman, the President, the Board of Directors, or by one or
more Shareholders holding not less than ten percent (10%) of the voting power of
the Company. At any meeting of Shareholders, each Shareholder is entitled to one
vote for each Share. In addition to the matters discussed under "Amendments"
above, the Shareholders are entitled to decide the following matters by a
majority vote of the Shares at a meeting at which a quorum is present, or by the
written consent of a majority of the outstanding Shares without a meeting: (i)
the election or removal of Directors; (ii) increase or decrease the number of
Directors (between three and five); (iii) termination of the Advisory Agreement
upon 60 days' notice; (iv) ratification of any transaction between the Company
and any Affiliate of the Company; and (v) any amendment to the Certificate of
Incorporation. The Directors or the Independent Directors may also make certain
of these decisions without Shareholder approval.

WHO SHOULD INVEST

SUITABILITY STANDARDS

The Shares will only be sold to an investor who represents in writing that
the investor has either (i) a net worth (exclusive of home, home furnishings and
automobiles) of at least $30,000 and estimates that the investor will have gross
income during the current year of at least $30,000; or (ii) a net worth of
$75,000 (determined with the same exclusions); or (iii) that the investor is
purchasing in a fiduciary capacity for a person or entity meeting such
conditions. In the case of sales to fiduciary accounts, such conditions must be
met by the fiduciary, by the fiduciary account, or by the donor who directly or
indirectly supplies the funds for the purchase of the Units. If sales are made
to fiduciary accounts in the State of California, the suitability requirements
must be met by each beneficiary of the fiduciary account; provided however, if
the only beneficiaries of the fiduciary account are the donor's ancestors,
descendants or spouse, the suitability standards may be met by the donor to the
fiduciary account. If the fiduciary is the donor of the funds for investment,
the suitability requirements may be met by the fiduciary.

The minimum number of Shares which an investor may initially purchase is
100 ($1,000).

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The Selling Agreement between the Company and the Selling Agent requires
the Selling Agent and Selected Dealers to diligently make inquiries as required
by law of all prospective purchasers of Shares in order to ascertain whether
such purchase is suitable for such person, and to promptly transmit to the
Company a fully completed and duly executed Subscription Agreement and funds
concurrently therewith.

Certain states in which it is contemplated the Company will apply to have
the Shares qualified or registered for sale may establish suitability standards
and minimum purchase requirements different from those set by the Company. In
the event that such suitability and minimum purchase standards are higher than
those set by the Company, such facts are set forth below or will be set forth in
a sticker or supplement to the Prospectus. Unless otherwise so indicated, those
states in which the Company is authorized to sell its securities have minimum
investment requirements and investor suitability standards which come within the
standards established by the Company.

Shares will be sold to investors in the state of Arizona, who represent in
writing that the investor has either (i) a net worth (exclusive of home, home
furnishings and automobiles) of $45,000 and estimates that the investor will
have gross income during the current year of at least $45,000; or (ii) a net
worth of $150,000 (determined with the same exclusions); or (iii) that the
investor is purchasing in a fiduciary capacity for a person or entity meeting
such conditions. In the case of sales to fiduciary accounts, such conditions
must be met by the fiduciary, by the fiduciary account, or by the donor who
directly or indirectly supplies the funds for the purchase of the Units.

HOW TO SUBSCRIBE

An investor who meets the qualifications set forth above may subscribe to
acquire Shares by executing a Subscription Agreement. By subscribing for Shares,
each investor will be deemed to have made all of the representations contained
in the Subscription Agreement and will be bound by all of the terms of the
Subscription Agreement.

The Company shall finally accept or reject subscriptions within 30 days
after the Company has received subscriptions (but the admission of an investor
to the Company shall be subject to acceptance of subscriptions for the minimum
number of Shares).

PLAN OF DISTRIBUTION

A maximum of 1,500,000 Shares are offered through Associated Securities
Corp., (a member of the National Association of Securities Dealers, Inc.
("NASD")), a wholly owned subsidiary of AFG, as Selling Agent of the Shares
pursuant to a Selling Agreement. The Company is offering the Shares through the
Selling Agent and other Selected Dealers who are members of the NASD. The Shares
are being sold on a best efforts, minimum-maximum basis which means that the
Selling Agent and other Selected Dealers are not obligated to purchase any
Shares but are only required to use their best efforts to sell Shares to
investors as of March 18, 1997, the Company has sold 345,528 Shares in this
offering.

The Selling Agent and Selected Dealers will be paid a sales commission 7%
by the Company of the $10.00 per Share offering price on all Shares sold by the
Selling Agent or Selected Dealers. The Selling Agent will also receive 1% of the
$10.00 per Share offering price for wholesaling compensation and .5% of the
$10.00 per Share offering price from the Company for bona fide due diligence
expenses. Shares may be purchased without payment of any sales commissions by
current or retired employees, officers and directors of the Company, the
Advisor, the Selling Agent and Selected Dealers and their registered
representatives and any of their Affiliates (and the families of any of the
foregoing) and trust or employee benefit plans established exclusively for the
benefit of such Persons.

Notwithstanding the foregoing, no sales commission will be paid to the
Selling Agent or Selected Dealers when qualified pension plans, profit sharing
plans, Keogh plans, or individual retirement accounts purchase a minimum of
$500,000 of Shares. Such investors will purchase Shares at $9.30 per Share and
the net proceeds to the Company will not be affected. Subscriptions for Shares
will not be aggregated or combined unless the Shares will be owned by, or for
the benefit of, a single Person's pension plan, profit sharing plan, Keogh plan

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and/or individual retirement account. In addition, if a registered investment
advisor is receiving a fee for receiving investment advice regarding an
investment in the Company's Shares, the Company will not pay a sales commission
to the registered investment adviser for the sale of such Shares.

In addition to the sales commission, the Company will pay to the Selling
Agent and Selected Dealers an annual monitoring fee (the "Monitoring Fee") with
respect to all Shares sold to clients of the Selling Agent or Selected Dealers
on each April 15 commencing on April 15, 1997 in an amount equal to .15% of the
gross proceeds of all such Shares. Such fee may be payable up to a maximum of
eleven years. No portion of the Monitoring Fee for any year shall accrue in, or
be payable for, such year in which the Company is liquidated or the Shares
become publicly traded. Notwithstanding the foregoing, the Company shall not pay
the portion of the Monitoring Fee for any year which, if paid, would cause the
total underwriting compensation paid to the Selling Agent and Selected Dealers
in connection with the offering, including sales commissions, wholesaling
compensation and all Monitoring Fees, to be equal to or to exceed 10% of the
gross proceeds.

The Advisor will receive reimbursement for organization and offering
services performed by them in connection with this offering which consist of
expenses relating to the Company's organization and formation, for all legal,
accounting, due diligence, printing expenses and for all other expenses relating
to the registration, marketing and distribution of this offering, other than
retail sales commissions. This reimbursement expense allowance is limited to 40
cents per Share for each Share sold up to an aggregate of $500,000 and may be
nonaccountable to the extent that such nonaccountable expenses do not exceed 3%
of the gross offering proceeds. All such expenses in excess of this limit will
be borne by the Advisor.

The total payments made by the Company or any of its Affiliates to the
Advisor, Selling Agent and the Selected Dealers in connection with this
offering, including all Offering and Organization Expenses, will not exceed
14.5% of the gross proceeds obtained from the sale of Shares.

The Selling Agreement, which may be terminated by the Company on 60 days'
notice without penalty, contains cross-indemnity clauses with respect to certain
liabilities between the Company and the Selling Agent, including liabilities
under the Securities Act of 1933. The indemnities of the Company inure to the
benefit of all Selected Dealers participating in the offering. Selected Dealers
participating in this offering may be deemed to be "underwriters" as that term
is defined in the Securities Act of 1933.

ESCROW ARRANGEMENTS. Funds received by the Company from prospective investors
will be placed in an interest bearing escrow account at City National Bank as
escrow agent during the offering and the Company will issue Shares periodically
(but not less often than quarterly) as agreed between the Company and the
Selling Agent. Accrued interest will be paid by the Company to those Subscribers
whose funds are paid into the escrow account within 30 days after funds are
withdrawn from such escrow account and computed from the date each investor's
subscription payment is collected in the escrow account.

AFG, the Advisor or any Affiliate may purchase as many Shares as they wish
(provided that their collective holdings do not exceed 35% of the Shares), but
presently have no intention to purchase any Shares. Shares purchased by AFG, the
Advisor or any Affiliate shall be only for investment and without present
intention to resell, and shall only be purchased on the same terms and
conditions on which the Shares are offered to the public, except that no sales
commissions shall be payable upon any such purchase of Shares. Any Shares
purchased by AFG, the Advisor or any Affiliate may be included in satisfying the
minimum offering requirement.

Investors will be issued Shares not later than the last calendar day of the
month following the month in which funds are released from the escrow account to
the Company.

OFFERING PERIOD. If the Company does not terminate this offering earlier, the
offering of Shares will continue until the earlier of 24 months from the initial
date of this Prospectus or 1,500,000 Shares are sold.

METHOD OF SUBSCRIPTION. To purchase Shares, an investor must complete and
execute an application to purchase Shares as set forth in the Subscription
Agreement included with this Prospectus. Shares will only be sold to an investor
who makes a minimum purchase of 100 Shares ($1,000). Additional Shares may only
be purchased in 10-Share ($100) increments, except that smaller increments will
be made available for Dividend

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Reinvestment Plans, IRA and Keogh plan rollovers. Any purchase of Shares must be
accompanied by tender of the full sum of $10.00 per Share for each Share
purchased. Once the subscription is submitted to the Company, the investor will
not have a right to revoke the subscription. Subscriptions will be accepted or
rejected by the Company within 30 days after the receipt by the escrow agent of
the purchase price. If the subscription is rejected for any reason, the
investor's subscription will be promptly returned without interest.

TRANSFERABILITY; CROSSING ARRANGEMENT. Except under certain circumstances as
set forth in "Redemption and Prohibition of Transfer of Shares" above, there are
no restrictions on transfer of the Shares; however, a market is unlikely to
develop during this offering and there can be no assurance that a market will
therefore develop for the Shares. However, the Company intends to use a Crossing
Arrangement pursuant to which Associated Securities Corp. (the "Crossing
Agent"), an Affiliate of AFG, will match buy and sell orders for Shares at
negotiated commissions or markups. The Crossing Arrangement is expected to
continue for a period of approximately two years but may continue longer.

Upon receipt of a sell order from a current Shareholder, the Crossing Agent
will arrange for the sale of the Shares to one or more persons who have placed
orders to purchase Shares either through the Crossing Arrangement or through the
Dividend Reinvestment Plan. Neither the Company nor the Crossing Agent can
guarantee that sales of Shares will be effected through this Crossing
Arrangement. The Crossing Agent will not solicit sell orders from any existing
Shareholder.

Shareholders who wish to sell their Shares through this Crossing
Arrangement should contact the Company directly, at the following address or
telephone number:

5933 W. Century Boulevard, Ninth Floor
Los Angeles, California 90045
(310) 337-9700

There is no requirement that Shareholders utilize the services of the
Crossing Agent in the sale of their Shares. Other broker-dealers may offer
similar services to selling Shareholders, and there can be no assurance that the
price per Share received from the Crossing Agent will be the best possible
price. The Company may, from time to time, change the terms of the crossing
arrangement in such fashion as it believes appropriate.

The Company may apply for quotation of the Shares on the NASDAQ System, but
there can be no assurance that it will apply, that the application will be
approved or that an active public trading market for the Shares will thereafter
develop. See "Risk Factors -- Limited Transferability."

West Coast Realty Advisors, Inc. is the transfer agent and registrar for
the Shares. The actual issuance of a stock certificate evidencing the Shares is
optional under the transfer agent's system. IRA and Keogh Account investors will
not be issued share certificates. Shareholders who do not elect to receive a
stock certificate will own Shares in "uncertificated" form, and will be treated
in the same manner as Shareholders who elect to receive a stock certificate.
Owning Shares in an "uncertificated" form will (a) eliminate the physical
handling and safekeeping responsibilities inherent in owning transferable stock
certificates, and (b) eliminate the need to return a duly executed stock
certificate to the transfer agent to effect a transfer. Transfers can be
effected simply by mailing a duly executed stock power to the transfer agent.

DIVIDEND REINVESTMENT PLAN. The fund has established a Dividend Reinvestment
Plan (the "Plan") which is designed to enable Shareholders to have Dividends
automatically invested in Shares of the Company. In order to participate in the
Plan, investors must designate in the Subscription Agreement received with this
Prospectus the manner in which they would like their Dividends reinvested.
Shareholders may elect to participate in the Plan at any time. If a Shareholder
does not indicate a Dividend reinvestment option, Dividends will be paid to such
Shareholder in cash.

Associated Securities Corp. will act as the Plan's agent (the "Agent") for
participating Shareholders. During this offering, the Agent will purchase Shares
for participating Shareholders from the Selling Agent at a

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price of $10.00 per Share. Of the Shares being offered by this Prospectus, one
hundred thousand shares have been reserved for the Crossing Arrangement and the
Plan.

From the completion of this offering until the Shares are quoted on the
NASDAQ System, the Agent will receive any cash Dividends payable to the
participating Shareholders and use these amounts to purchase Shares for
participants through the Crossing Agent who will match the Shares owned by
Shareholders who wish to sell, with purchases to be made by the Plan. The Plan
will not pay in excess of $9.30 per Share to the Crossing Agent. If an
insufficient number of Shares are presented for sale to the Plan at an
acceptable price, the purchases for the participants will be made either pro
rata or by lot and the remaining amount of cash Dividends not used to purchase
Shares will be returned to the appropriate Shareholders.

If listed on the NASDAQ System, the Agent will purchase Shares for
participants in the over-the-counter trading market at negotiated commissions or
markups, to the extent Shares are available. Purchases will generally be made
within 30 days after the funds are received by the Agent, and pending
investment, funds temporarily will be held in non-interest bearing accounts for
administrative convenience. If Shares are not reasonably available in the market
during such period, the Agent will return a participating Shareholder's pro rata
portion of the remaining funds. If a participant's Dividend is not large enough
to buy a full Share, such participant will be credited with a fractional Share
computed to six decimal places. The Agent will add the Shares purchased to each
participant's capital account as Shares in "uncertificated" form, unless the
participant requests certificates for full Shares in writing. The purchased
Share(s) will then participate in the Plan to the extent of any future
Dividends. Participants will have the right to vote all Shares held in their
Plan accounts, whether in certificates or uncertificated form.

Following each reinvestment under the Plan, each participant will be sent a
confirmation showing the amount of Dividends reinvested, the service and any
brokerage charges deducted, the number and price of Shares purchased, and the
balance of Shares held by the Agent in the participant's account under the Plan.
In addition, each participant will be provided annually with tax information
regarding the reinvestment of Dividends pursuant to the Plan, including
information with respect to income earned on Shares under the Plan for each
calendar year which will be shown on a Form 1099-DIV United States Information
Return.

The Plan and the reinvestment of Dividends in additional Shares thereunder
has been structured to enable the Company to qualify as a REIT under the
applicable provisions of the Code. Therefore, any Dividends to which a
participating Shareholder is entitled will be taxable to the Shareholder
substantially to the same extent as if the Dividends had been received in cash
rather than reinvested in the Company. See "Tax Consequences -- Requirements for
Qualification as a REIT -- Distributions to Shareholders."

Participation in the Plan will start with the next Dividend payable after
receipt of a participant's authorization. Copies of the Company's most current
Prospectus, during the period in which this offering is still in progress, will
be available to any Shareholder on written request to the Company at its
principal office.

A Shareholder's participation in the Plan will continue until terminated by
the Shareholder, the Company or the Agent. A Shareholder may terminate
participation in the Plan at any time by delivering written notice before the
record date for the next Dividend to the Agent at: 5933 W. Century Boulevard,
Ninth Floor, Los Angeles, California 90045. Within 30 days after notice of
termination, the Agent will send a confirmation to the participant evidencing
the whole and fractional Shares in such Shareholder's account. Any future
Dividends will then be paid directly to the Shareholder. The Company may
terminate the Plan for any reason by sending written notice to each
participating Shareholder at the address shown on the Agent's records.

The foregoing summary is qualified in its entirety by reference to the
Plan, a copy of which has been filed as an exhibit to the Registration
Statement. Experience under the Plan may indicate changes are desirable.
Accordingly, the Company reserves the right to amend any aspect of the Plan
effective with respect to any Dividend paid subsequent to notice of the change
sent to participants in the Plan at least 30 days prior to any Dividend record
date. The Company also reserves the right to change the Agent for any reason at
any time with like notice.

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SALES MATERIAL

The Company may utilize certain sales material in connection with this
offering. In certain jurisdictions, sales material may not be available. This
material may include other material relating to the offering, property brochures
and articles and publications concerning real estate and REITs.

Other than a sales brochure which will accompany the Prospectus, the
Company has not authorized the use of sales material. This offering is made only
by means of this Prospectus. Although the information contained in sales
material does not conflict with any of the information contained in this
Prospectus, the sales material does not purport to be complete, and should not
be considered as part of this Prospectus or as incorporated in this Prospectus
by reference, or as forming the basis of this offering.

LEGAL MATTERS

The legality of the securities offered hereby will be passed upon for the
Company by Gipson Hoffman & Pancione, a Professional Corporation, Los Angeles,
California. Gipson Hoffman & Pancione has also rendered an opinion with respect
to certain federal income tax matters as referred to under "Tax Consequences."

EXPERTS

The financial statements and schedules of the Company included in this
Prospectus and in the Registration Statement have been audited by BDO Seidman,
LLP, and Hunicutt Okamoto & Associates, independent certified public
accountants, to the extent and for the periods set forth in their reports
appearing elsewhere herein and in the Registration Statement, and are included
in reliance upon such reports given upon the authority of said firms as experts
in auditing and accounting.

FURTHER INFORMATION

This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits relating thereto which the Company has
filed with the Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, under the Securities Act of 1933, and to which reference
is hereby made. Copies of the exhibits are on file at the offices of the
Securities and Exchange Commission in Washington, D.C. and may be obtained, upon
payment of the fee prescribed by the Commission, or may be examined without
charge at the offices of the Commission.

GLOSSARY

"ACQUISITION EXPENSES" means all expenses, including but not limited to
legal fees and expenses, travel and communication expenses, costs of appraisals,
nonrefundable option payments on property not acquired, accounting fees and
expenses, title insurance, and miscellaneous expenses related to the selection
and acquisition of properties, whether or not acquired.

"ACQUISITION FEES" means all fees and commissions paid by any person to any
person in connection with the investigation, selection, purchase or improvement
of real estate by the Company, whether designated as a real estate commission,
selection fee, non-recurring management fee, non-recurring start-up fee,
construction fee, or any fee of a similar nature, however designated, but not to
include any fees or expenses paid to any party upon financing or refinancing
where the proceeds of such financing or refinancing are not reinvested in real
estate.

"ADJUSTED PRICE PER SHARE" means, with respect to the Shares, $10.00 per
share less all Dividends or other distributions paid out of Cash From Sales or
Refinancings of Properties; and adjusted for any stock split, Dividends in
Shares or combinations or reclassifications resulting in an increase or decrease
in the number of Shares outstanding.

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"ADVISOR" means any Person whom the Company employs or appoints or with
whom the Company contracts under the provisions of Article VII hereof and who is
responsible for directing or performing the day-to-day business affairs of the
Company, including a person to which an Advisor subcontracts substantially all
said functions.

"ADVISORY AGREEMENT" means an agreement between the Company and its Advisor
that provides for the payment of any regular advisory or incentive compensation,
other than an agreement that provides for compensation based only on the
acquisition, disposition or refinancing of Company properties.

"ADVISORY FEE" means the fee paid to the Advisor for day-to-day advice and
services in managing and carrying on the business and operations of the Company
pursuant to the Advisory Agreement with the Company, as described in
"Compensation of Advisor and Affiliates."

"AFFILIATES" means an Affiliate of another Person includes any of the
following (a) any Person directly or indirectly controlling, controlled by or
under common control with such other Person, (b) any person directly or
indirectly owning, controlling or holding with power to vote 10% or more of the
outstanding voting securities of such other Person, (c) any executive officer,
director, trustee or general partner of such other Person, (d) any legal entity
for which such Person acts as an officer, director, trustee or partner, and (e)
any Person 10% or more of whose outstanding voting securities are directly or
indirectly owned, controlled or held with power to vote by such other Person.

"AFG" means Associated Financial Group, Inc., the sponsor of the Company.

"ANNUAL REPORT" means the Annual Report distributed to shareholders which
shall contain financial statements prepared in accordance with generally
accepted accounting principles which are audited and reported upon by
independent certified public accountants.

"APPRAISAL" means the value of, as of the date of the Appraisal of real
property in its existing state or in a state to be created, as determined by an
Independent Expert. The Directors may in good faith rely on a previous Appraisal
made on behalf of other Persons, provided, (a) it meets these standards and was
made in connection with an investment in which the Company acquires an entire or
participating interest, or (b) it was prepared not earlier than two years prior
to the acquisition by the Company of its interest in the real property. In
appraising Properties, appraisers may take into consideration each of the
specific terms and conditions of a purchase, including any leaseback or other
guarantee arrangement. An Appraisal may not necessarily represent the cash value
of the Property but may consider the value of the income stream from the
Property plus discounted value of the fee interest, and other terms of the
purchase.

"AVERAGE INVESTED ASSETS" means the average of the aggregate book value,
for any period, of the assets of the Company invested, directly or indirectly,
in equity interests in and loans secured by real estate, before reserves for
depreciation or bad debts or other similar non-cash reserves. Average Invested
Assets is computed by taking the average of such values at the end of each month
during such period.

"BYLAWS" means these Bylaws and all amendments, restatements, or
modifications thereof. References in these Bylaws to "herein," "hereof," and
"hereunder" shall be deemed to refer to these Bylaws and shall not be limited to
the particular text, article, or section in which such words appear.

"CASH AVAILABLE FOR DISTRIBUTION" means for any period cash from operations
(consisting of net income from operations plus depreciation and amortization
expenses) for such period.

"CASH FROM SALES OR REFINANCINGS" means net cash realized by the Company
from the Sale or Disposition of any Property after retirement of applicable
secured debt and the payment of all expenses related to the transaction. Cash
from Sales or Refinancings shall not include amounts withheld for Working
Capital Reserves.

"CERTIFICATE OF INCORPORATION" means the articles of incorporation for the
Company, as they may be amended from time to time, as filed with the Delaware
Secretary of State.

"CODE" means the Internal Revenue Code of 1986, as amended.

73
<PAGE> 82

"COMPANY" means West Coast Realty Investors, Inc.

"COMPETITIVE COMMISSION" means the real estate or brokerage commission paid
for the purchase or sale of a Property which is reasonable, customary and
competitive in light of the size, type and location of the Property.

"CONSTRUCTION FEE" means a fee or other remuneration for acting as general
contractor and/or construction manager to construct improvements, supervise and
coordinate projects or to provide major repairs or rehabilitation on a Company's
Property.

"CROSSING ARRANGEMENT" means the matching of buy orders and sell orders of
the Company's Shares at negotiated commissions or markups.

"DEVELOPMENT FEE" means a fee for the packaging of the Company's Property,
including negotiating and approving plans, and undertaking to assist in
obtaining zoning and necessary variances and necessary financing for the
specific Property, either initially or at a later date.

"DIRECTORS" means as of any particular time, the members of the board of
directors of the Company holding office at such time.

"DISTRIBUTION" means any dividend or other distribution of cash distributed
to anyone, including Shareholders, arising from their interests in the Company.

"DIVIDEND" means any Distribution made to Shareholders arising from their
interests in the Company.

"INDEPENDENT DIRECTORS" means Directors of the Company who are not
associated and have not been associated within the last two years, directly or
indirectly, with the Advisor or Sponsor of the Company, (a) a Director shall be
deemed to be associated with the Sponsor or Advisor if he or she: (i) owns an
interest in the Sponsor, Advisor, or any of their Affiliates; or (ii) is
employed by the Sponsor, Advisor or any of their Affiliates; or (iii) is an
officer or director of the Sponsor, Advisor, or any of their Affiliates; or (iv)
performs services, other than as a Director, for the Company; or (v) is a
Director for more than three REITS organized by the Sponsor or advised the
Advisor; or (vi) has any material business or professional relationship with the
Sponsor, Advisor, or any of their Affiliates; (b) for purposes of determining
whether or not the business or professional relationship is material, the gross
revenue derived by the prospective Independent Director from the Sponsor and
Advisor and Affiliates shall be deemed material per se if it exceeds 5% of the
prospective Independent Directors (i) annual gross revenue, derived from all
sources, during either of the last two years; or (ii) net worth, on a fair
market value basis, (c) an indirect relationship shall include circumstances in
which a Director's spouse, parents, children, siblings, mothers- or
fathers-in-law, sons- or daughters-in-law, or brothers- or sisters-in-law is or
has been associated with the Sponsor, Advisor, any of their Affiliates, or the
Company.

"INDEPENDENT EXPERT" means a Person with no material current or prior
business or personal relationship with the Advisor or Directors who is engaged
to a substantial extent in the business of rendering opinions regarding the
value of assets of the type held by the Company.

"INVESTED ASSETS" means for any fiscal quarter, the total assets (other
than intangibles) of the Company valued at cost before deducting depreciation or
other noncash reserves, less liabilities. Invested assets is computed by taking
the average of such values at the end of each month during such quarter.

"MONITORING FEE" means the annual fee paid by the Company to the Selling
Agent with respect to Shares sold to clients of the Selling Agent or Selected
Dealer in an amount equal to .15% of the gross proceeds from the sale of such
Shares, payable beginning on April 15, 1997 and on or before April 15 of each
succeeding year.

"NET INCOME" means for any period, the total revenues applicable to such
period, less expenses applicable to such period, other than additions to
reserves for depreciation or bad debts or other similar non-cash reserves. If
the Company's Advisor receives an incentive fee as provided in Section 8.3(l)
hereof, Net Income, for purposes of calculating Operating Expenses, shall
exclude the gain from the sale or disposition of the Company's assets.

74
<PAGE> 83

"OFFERING PROCEEDS" means the total amount of proceeds received by the
Company pursuant to the sale of its Shares in any public offering of the
Company's Shares.

"OPERATING EXPENSES" means the aggregate annual expenses of every character
paid or incurred by the Company as determined in accordance with generally
accepted accounting principles, as determined by independent accountants
selected by the Directors, including regular and incentive compensation payable
to the Advisor, excluding, however, the following: (a) the expenses of raising
capital such as Organization and Offering Expenses, legal, audit, underwriting,
brokerage, listing, registration and other fees, printing and such other
expenses, and tax incurred in connection with the issuance, distribution,
transfer, registration, and stock exchange listing of the Company's securities;
(b) interest (i. e., the cost of money borrowed by the Company; (c) taxes on
income, taxes and assessments on real property and all other taxes applicable to
the Company; (d) subordinated incentive fees based upon the excess of the sales
prices of Properties over their purchase prices as provided for in Section
8.3(l) of the bylaws; (e) Acquisition Fees, Acquisition Expenses, real estate
commissions on resale of Property, and other expenses connected with the
acquiring, financing, refinancing, disposing of, maintaining, managing and
owning real estate equity interests, mortgage loans, or other property
(including the costs of foreclosure, insurance premiums, legal services,
maintenance, repair and improvement of property); and (f) non-cash expenditures
(including depreciation, amortization and bad debt reserve).

"ORGANIZATION AND OFFERING EXPENSES" means all the actual and necessary
expenses incurred by and to be paid from the assets of the Company in connection
with and in preparing the Company's securities for registration and subsequently
offering and distributing them to the public, including, but not limited to,
total underwriting and brokerage discount, the Monitoring Fee and commissions
(including fees of the underwriters' attorneys), expenses for printing,
engraving, mailing, salaries, registrars, trustees, escrow holders,
depositaries, experts, expenses of qualification of the sale of the securities
under Federal and State laws, including taxes and fees, accountants' and
attorneys' fees.

"ORGANIZATION DOCUMENTS" means the Certificate of Incorporation and the
Bylaws of the Company.

"ORIGINAL INVESTED CAPITAL" means the total cash investment (either as a
down payment, mortgage reduction payment or capital expense) in a Property.

"PERSON" means any natural person, partnership, corporation, association,
trust, limited liability company or other legal entity.

"PROPERTY" or "PROPERTIES" means all properties or any interest in an
property acquired directly or indirectly by the Company, including any direct or
indirect investment in any interest in land, leasehold interests, and buildings,
structures, improvements, fixtures, equipment and furnishings in connection with
land, leasehold interests and rights or interests in land, whether equity or
debt, or any entity, partnership or venture whose principal purpose is to make
any such investment or investments. Reference to a "Property" shall be to any
one of them.

"PROPERTY MANAGEMENT FEE" means the fee payable to West Coast Realty
Management, Inc., an Affiliate of the Advisor, or other entities for property
management services pursuant to a property management agreement.

"PROSPECTUS" means this Prospectus and any Supplements hereto.

"PURCHASE PRICE" means the amount actually paid or allocated to the
purchase, development, construction or improvement of a Property exclusive of
Acquisition Fees and Acquisition Expenses.

"REAL ESTATE COMMISSION" means the real estate brokerage commission payable
to the Advisor, Descolin Incorporated, or an Affiliate, upon sale of a Property
pursuant to the Advisory Agreement as described in "Compensation of Advisor and
Affiliates."

"REAL ESTATE INVESTMENT TRUST" or "REIT" means a real estate investment
trust, as defined in Part II, Subchapter M of Chapter 1 (Sections 856-860) of
the Code.

"REINVESTMENT PROCEEDS" means the amount of proceeds from the sale,
financing or refinancing of a Property used to acquire an additional Property.

75
<PAGE> 84

"ROLLUP" means a transaction involving the acquisition, merger, conversion
or consolidation either directly or indirectly of the Company and the issuance
of securities of a Rollup Entity. Such term does not include (a) a transaction
involving securities of the Company that have been listed for at least twelve
months on a national securities exchange or traded through the National
Association of Securities Dealers Automated Quotation National Market System or
(b) a transaction involving the conversion to corporate, trust or association
form of only the Company if, as a consequence of the transaction, there will be
no significant adverse change in any of the following (i) the Shareholders'
voting rights, (ii) the term of existence of the Company, (iii) compensation to
the Sponsor or Advisor, or (iv) the Company's investment objectives.

"ROLLUP ENTITY" means a partnership, REIT, corporation, trust or other
entity that will be created or would survive after the successful completion of
a proposed Rollup transaction.

"RULING REQUEST" means the request made by the Company to the Internal
Revenue Service that West Coast Realty Management, Inc. is an independent
contractor.

"SALE OR DISPOSITION" means any: (i) disposition of a Company asset not in
the ordinary course of its business, including without limitation, sales,
exchanges or other dispositions of real or personal property; (ii)
condemnations; (iii) recovery of damage awards and insurance proceeds (other
than business or rental interruption insurance proceeds); or (iv) any borrowings
or mortgage financings or refinancings (other than any financing upon the
initial acquisition of Properties). The disposition of a Property by transfer
back to the seller or an Affiliate thereof, whether in the form of a rescission,
exchange or resale or pursuant to an option or an arrangement entered into at or
prior to the time of taking title to the Property, shall not, if the proceeds
from such transfer back are reinvested in other Property, constitute a Sale or
Disposition and shall not result in Cash From Sales or Refinancings.

"SELECTED DEALERS" means members of the National Association of Securities
Dealers, Inc., participating in the offering. See "Plan of Distribution."

"SELLING AGENT" means Associated Securities Corp.

"SHAREHOLDERS" means the beneficial holders of the Company's Shares.

"SHARES" means shares of common stock of the Company.

"SPONSOR" means any person directly or indirectly instrumental in
organizing the Company, wholly or in part, or who will manage or participate in
the management of the Company and its Affiliates.

"SPONSOR" does not include any unaffiliated person whose only relationship
with the Company is that of an independent property manager receiving
compensation from the Company as such, and unaffiliated third parties such as
attorneys, tax preparers, accountants and underwriters whose only compensation
from the Company is for the professional services rendered in connection with
the offering of the Company's securities or the operations of the Company. A
person may also be a Sponsor of the Company by (a) taking the initiative
directly or indirectly in founding or organizing the business or enterprise of
the Company, either alone or in conjunction with one or more other persons, (b)
receiving a material participation in the Company in connection with the
founding or organization of the business of the Company in consideration of
services or property or both services and property, (c) having a substantial
number of relationships and contacts with the Company, (d) possessing
significant rights to control the Company's properties, (e) receiving fees for
providing services to the Company which are paid on a basis that is not
customary in the industry, or (f) providing goods or services to the Company on
a basis which was not negotiated at arms' length with the Company.

"SUBORDINATED INCENTIVE FEE" means the fee payable to the Advisor pursuant
to the Advisory Agreement upon the sale, financing or refinancing of a Property,
as described in "Compensation of Advisor and Affiliates."

"TAXABLE INCOME" means the real estate investment trust taxable income of
the Company for federal income tax purposes, determined without regard to the
deduction for dividends paid and by excluding any net capital gain.

76
<PAGE> 85

"UNIMPROVED REAL PROPERTY" means the real property which has the following
three characteristics: (a) An equity interest in real property which was not
acquired for the purpose of producing rental or other operating income; (b) Has
no development or construction in process on such land; and (c) No development
or construction on such land is planned in good faith to commence on such land
within one year.

"WCRM" means West Coast Realty Management, Inc.

"WORKING CAPITAL RESERVES" means cash reserves of the Company as needed for
normal operations, repairs, maintenance, and other contingencies.

77
<PAGE> 86

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
West Coast Realty Investors
Audited Financial Statements
Report of Independent Certified Public Accountants...................................... F-1
Balance Sheets as of December 31, 1996 and 1995......................................... F-2
Statements of Income for the years ended December 31, 1996, December 31, 1995
and December 31, 1994................................................................ F-3
Statements of Stockholders' Equity for the years ended December 31, 1996, December 31,
1995
and December 31, 1994................................................................ F-4
Statements of Cash Flows for the years ended December 31, 1996, December 31, 1995 and
December 31, 1994..................................................................... F-5
Summary of Accounting Policies.......................................................... F-6
Notes to Financial Statements........................................................... F-8
Schedule III -- Real Estate and Accumulated Depreciation................................ F-15
Schedule IV -- Mortgage Loans on Real Estate............................................ F-17

Java City Property
Report on Independent Certified Public Accountants........................................ F-19
Summary of Historical Information Relating to Operating Revenues and Specified Expenses... F-20
Notes to Summary of Historical Information Relating to Operating Revenues and Specified
Expenses................................................................................ F-21
Estimated Twelve Month Pro Forma Statement of Taxable Operating Income (unaudited)........ F-22
Estimated Twelve Month Pro Forma Statement of Cash Available from Operations
(unaudited)............................................................................. F-22
Notes to Pro Forma Statements............................................................. F-23

Tycom Property
Report of Independent Certified Public Accountants........................................ F-24
Summary of Historical Information Relating to Operating Revenues and Specified Expenses... F-25
Notes to Summary of Historical Information Relating to Operating Revenues and Specified
Expenses................................................................................ F-26
Estimated Twelve Month Pro Forma Statement of Taxable Operating Income (unaudited)........ F-27
Estimated Twelve Month Pro Forma Statement of Cash Available From Operations
(unaudited)............................................................................. F-27
Notes to Pro Forma Statements............................................................. F-28

West Coast Realty Investors, Inc.
Pro Forma Balance Sheet as of December 31, 1996 (unaudited)............................... F-29
Notes to Pro Forma Balance Sheet as of December 31, 1996 (unaudited)...................... F-30
Pro Forma Statement of income for the year ended December 31, 1996 (unaudited)............ F-31
Notes to Pro Forma Income Statement for year ended December 31, 1996 (unaudited).......... F-32
</TABLE>

78
<PAGE> 87

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

West Coast Realty Investors, Inc.
Los Angeles, California

We have audited the accompanying balance sheets of West Coast Realty
Investors, Inc., as of December 31, 1996 and 1995 and the related statements of
income, stockholders' equity, and cash flows for each of the years ended
December 31, 1996, 1995 and 1994. We have also audited the schedules listed in
the accompanying index. These financial statements and schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of West Coast Realty Investors,
Inc. at December 31, 1996 and 1995, and the results of its operations and its
cash flows for each of the years ended December 31, 1996, 1995 and 1994 in
conformity with generally accepted accounting principles.

Also in our opinion, the schedules present fairly, in all material
respects, the information set forth there.

BDO SEIDMAN, LLP

Los Angeles, California

February 28, 1997

F-1
<PAGE> 88

WEST COAST REALTY INVESTORS, INC.

BALANCE SHEETS
------------------------

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
Rental properties, net of accumulated depreciation (Notes 2 and
3)............................................................ $21,118,203 $19,650,165
Cash and cash equivalents....................................... 2,017,194 1,450,022
Accounts receivable............................................. 247,948 132,148
Loan origination fees, net of accumulated amortization of
$21,161 and $19,087........................................... 102,622 119,969
Other assets.................................................... 85,871 40,594
----------- -----------
Total assets.................................................... $23,571,838 $21,392,898
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable.............................................. $ 13,922 $ 25,419
Due to related party (Note 4)................................. 46,285 167,314
Dividends payable (Note 7).................................... 302,760 226,649
Security deposits and prepaid rents........................... 124,734 109,068
Other liabilities............................................. 100,453 90,431
Notes payable (Note 5)........................................ 10,078,793 9,539,180
----------- -----------
Total liabilities............................................... 10,666,947 10,158,061
----------- -----------

Commitments

Stockholders' equity
Common Stock, $.01 par -- shares authorized, 5,000,000; shares
issued, 1,550,607 and 1,322,404............................ 15,506 13,224
Additional paid-in capital.................................... 13,861,763 11,771,030
Distributions in excess of earnings........................... (972,378) (549,417)
----------- -----------
Total stockholders' equity...................................... 12,904,891 11,234,837
----------- -----------
Total liabilities and stockholders' equity...................... $23,571,838 $21,392,898
=========== ===========
</TABLE>

See accompanying summary of accounting policies and notes to financial
statements.

F-2
<PAGE> 89

WEST COAST REALTY INVESTORS, INC.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------
1996 1995 1994
---------- ---------- --------
<S> <C> <C> <C>
REVENUES:
Rental (Notes 2 and 3).............................. $2,377,530 $1,692,176 $802,614
Interest............................................ 97,097 120,950 100,553
---------- -------- --------
2,474,627 1,813,126 903,167
---------- -------- --------
COSTS AND EXPENSES
Operating........................................... 302,858 169,679 96,637
Interest............................................ 880,978 620,031 302,124
General and administrative.......................... 224,254 117,667 70,890
Depreciation and amortization....................... 360,901 256,144 118,238
Loss on government securities....................... -- -- 68,210
---------- -------- --------
1,768,991 1,163,521 656,099
---------- -------- --------
Net income............................................ $ 705,636 $ 649,605 $247,068
========== ======== ========
Net income per share (Note 7)......................... $ .49 $ .58 $ .35
========== ======== ========
</TABLE>

See accompanying summary of accounting policies and notes to financial
statements.

F-3
<PAGE> 90

WEST COAST REALTY INVESTORS, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
DISTRIBUTIONS
COMMON STOCK ADDITIONAL IN EXCESS
--------------------- PAID-IN OF
SHARES AMOUNT CAPITAL EARNINGS
--------- ------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1993............... 562,885 $ 5,629 $ 5,038,512 $ (118,881)

Issuance of stock for cash, net of
costs and sales commissions of
$399,416............................ 349,101 3,491 3,085,313 --
Net income for the year................ -- -- -- 247,068
Equity contribution by Affiliates
through expense reimbursements (Note
4b)................................. -- -- 17,622 --
Dividends declared ($.762 per share)
(Note 7)............................ -- -- -- (522,614)
--------- ------- ----------- ---------
BALANCE, December 31, 1994............... 911,986 9,120 8,141,447 (394,427)

Issuance of stock for cash, net of
costs and sales commissions of
$423,603............................ 410,418 4,104 3,629,583 --
Net income for the year................ -- -- -- 649,605
Dividends declared ($.72 per share)
(Note 7)............................ -- -- -- (804,595)
--------- ------- ----------- ---------
BALANCE, December 31, 1995............... 1,322,404 13,224 11,771,030 (549,417)

Issuance of stock for cash, net of
costs and sales commissions of
$246,599............................ 228,203 2,282 2,046,672 --
Equity contributions by affiliates
through expense reimbursements (Note
4b)................................. -- -- 44,061
Net income for the year................ -- -- -- 705,636
Dividends declared ($.779 per share
(Note 7))........................... -- -- -- (1,128,597)
--------- ------- ----------- ---------
BALANCE, December 31, 1996............... 1,550,607 $15,506 $13,861,763 $ (972,378)
========= ======= =========== =========
</TABLE>

See accompanying summary of accounting policies and notes to financial
statements.

F-4
<PAGE> 91

WEST COAST REALTY INVESTORS, INC.

STATEMENTS OF CASH FLOWS
------------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income........................................ $ 705,636 $ 649,605 $ 247,068
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.................. 360,901 256,144 118,238
Interest expense on amortization of loan
origination fees............................. 21,161 11,454 6,335
Increase (decrease) from changes in:
Government securities........................ -- 1,240,190 440,314
Accounts receivable.......................... (115,800) (62,784) (19,001)
Other assets................................. (45,277) 30,469 (49,185)
Accounts payable............................. (11,497) 10,731 14,688
Due to related party......................... (121,029) 130,378 (16,412)
Other liabilities............................ 10,022 35,133 36,900
Security deposits and prepaid rent........... 15,666 71,823 12,245
------------ ------------ ------------
Net cash provided by operating activities........... 819,783 2,373,143 791,190
------------ ------------ ------------

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to rental properties.................... (1,828,500) (8,647,090) (5,866,457)
------------ ------------ ------------
Net cash used in investing activities............... (1,828,500) (8,647,090) (5,866,457)
------------ ------------ ------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock, net....... 2,048,954 3,633,687 3,088,804
Equity contribution by Affiliates through expense
reimbursements................................. 44,061 -- 17,622
Dividends declared and paid....................... (1,052,925) (745,172) (437,803)
Increase in notes payable......................... 755,000 4,469,647 2,800,000
Payments on note payable.......................... (215,387) (91,822) (44,171)
Increase in loan origination fees................. (3,814) (38,200) (64,219)
------------ ------------ ------------
Net cash provided by financing activities........... 1,575,889 7,228,140 5,360,233
------------ ------------ ------------
Net increase in cash and cash equivalents........... 567,172 954,193 284,966

CASH AND CASH EQUIVALENTS, beginning of year........ 1,450,022 495,829 210,863
------------ ------------ ------------

CASH AND CASH EQUIVALENTS, end of year.............. $ 2,017,194 $ 1,450,022 $ 495,829
============ ============ ============
</TABLE>

See accompanying summary of accounting policies and notes to financial
statements.

F-5
<PAGE> 92

WEST COAST REALTY INVESTORS, INC.

SUMMARY OF ACCOUNTING POLICIES

BUSINESS

West Coast Realty Investors, Inc., (the "Company") is a corporation formed
on October 26, 1989 under the laws of the State of Delaware. The Company exists
as a Real Estate Investment Trust ("REIT") under Sections 856 to 860 of the
Internal Revenue Code. The Company has complied with all requirements imposed on
REIT's for the 1996, 1995 and 1994 tax years; however, qualification as a REIT
for future years is dependent upon future operations of the Company. The Company
was organized to acquire interests in income-producing residential, industrial,
retail or commercial properties located primarily in California and the west
coast of the United States. The Company intends to acquire property for cash on
a moderately leveraged basis with aggregate mortgage indebtedness not to exceed
fifty percent of the purchase price of all properties on a combined basis, or
eighty percent individually and intends to own and operate such properties for
investment over an anticipated holding period of five to ten years.

RENTAL PROPERTIES AND DEPRECIATION

Assets are stated at lower of cost or net realizable value. Depreciation is
computed using the straight-line method over their estimated useful lives of
31.5 to 39 years for financial income tax reporting purposes.

In the event that facts and circumstances indicate that the cost of an
asset may be impaired, an evaluation of recoverability would be performed. If an
evaluation is required, the estimated future undiscounted cash flows associated
with the asset would be compared to the carrying amount to determine if a
write-down to market value is required.

INVESTMENTS

The difference between historical cost and market value are reported as
unrealized gains or losses in the statements of income.

LOAN ORIGINATION FEES

Loan origination fees are capitalized and amortized over the life of the
loan.

RENTAL INCOME

Rental income is recognized on a straight line basis to the extent that
rental income is deemed collectable. Where there is uncertainty of collecting
higher scheduled rental amounts, due to the tendency of tenants to renegotiate
their leases for lower amounts, rental income is recognized as the amounts are
collected.

CASH AND CASH EQUIVALENTS

The Company considers cash in the bank, liquid money market funds, and all
highly liquid certificates of deposits, with original maturities of three months
or less, to be cash and cash equivalents.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the

F-6
<PAGE> 93

WEST COAST REALTY INVESTORS, INC.

SUMMARY OF ACCOUNTING POLICIES -- (CONTINUED)

reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

RECLASSIFICATIONS

For comparative purposes, certain prior year amounts have been reclassified
to conform to the current year presentation.

NEW ACCOUNTING PRONOUNCEMENT

Statement of Financial Accounting Standard No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities"
(SFAS No. 125) issued by the Financial Accounting Standards Board (FASB) is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996, and is to be applied
prospectively. Earlier or retroactive application is not permitted. The new
standard provides accounting and reporting standards for transfers and servicing
of financial assets and extinguishments of liabilities. The Company does not
expect adoption to have a material effect on its financial position or results
of operations.

F-7
<PAGE> 94

WEST COAST REALTY INVESTORS, INC.

NOTES TO FINANCIAL STATEMENTS

1. GENERAL

On October 30, 1989, West Coast Realty Advisors, Inc. (the "Advisor")
purchased 1,000 shares of the Company's common stock for $10,000. On August 30,
1990, the Company reached its minimum initial offering funding level of
$1,000,000. As of December 31, 1996, the Company has raised $15,479,714 in
capital.

Sales commissions and wholesaling fees, representing 7% of the gross
proceeds from the sale of common shares, were paid to Associated Securities
Corp. ("ASC"), a member of the National Association of Securities Dealers, Inc.
("NASD") and an affiliate of the Advisor.

Dividends are accrued approximately based upon the previous quarter's
income from operations before depreciation and amortization.

2. RENTAL PROPERTIES

The Company owns the following income-producing properties:

<TABLE>
<CAPTION>
ACQUISITION
LOCATION (PROPERTY NAME) DATE PURCHASED COST
------------------------------------------ ------------------- -----------
<S> <C> <C>
Huntington Beach, California (Blockbuster) February 26, 1991 $ 1,676,210
Fresno, California May 14, 1993 1,414,893
Huntington Beach, California (OPTO-22) September 15, 1993 2,500,001
Brea, California March 4, 1994 2,248,343
Riverside, California November 29, 1994 3,655,500
Tustin, California (Safeguard) May 22, 1995 4,862,094
Fremont, California (Technology Drive) October 31, 1995 3,747,611
Sacramento, California (Java City) August 2, 1996 1,828,500
</TABLE>

The major categories of property are:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1996 1995
----------- -----------
<S> <C> <C>
Land............................................ $ 7,401,126 $ 6,586,920
Buildings and improvements...................... 14,532,025 13,517,732
----------- -----------
21,933,151 20,104,652
Less accumulated depreciation................... 814,948 454,487
----------- -----------
Net rental properties........................... $21,118,203 $19,650,165
=========== ===========
</TABLE>

A significant portion of the Company's rental revenue was earned from
tenants whose individual rents represented more than 10% of total rental
revenue. Specifically:

Five tenants accounted for 23%, 19%, 18%, 12% and 10% in 1996;

Four tenants accounted for 24%, 20%, 15% and 10% in 1995;

Four tenants accounted for 29%, 18%, 17% and 14% in 1994.

The following unaudited pro forma information are presented to illustrate
the effect of the three properties acquired during 1996 and 1995, as discussed
above and the property acquired in 1997, as discussed in note 10, as if the
acquisitions occurred on January 1 of each year presented.

F-8
<PAGE> 95

WEST COAST REALTY INVESTORS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. RENTAL PROPERTIES -- (CONTINUED)

<TABLE>
<CAPTION>
PRO FORMAS FOR THE YEARS
ENDED DECEMBER 31,
--------------------------
1996 1995
---------- -----------
<S> <C> <C>
Revenues:
Rental......................................................... $2,948,961 $ 2,851,554
Interest....................................................... 7,097 950
---------- ----------
2,956,058 2,852,504
---------- ----------
Costs and Expenses:
Operating...................................................... 320,171 214,359
Interest....................................................... 1,130,255 1,032,764
General and administrative..................................... 224,254 117,667
Depreciation and amortization.................................. 551,399 553,696
---------- ----------
2,226,079 1,918,486
---------- ----------
Net income....................................................... $ 729,979 $ 934,018
========== ==========
Net income per share............................................. $ .45 $ .54
========== ==========
</TABLE>

3. FUTURE MINIMUM RENTAL INCOME

As of December 31, 1996, future minimum rental income under the existing
leases that have remaining noncancelable terms in excess of one year are as
follows:

<TABLE>
<CAPTION>
AMOUNT
-------------
<S> <C>
1997.................................................. $2,123,959
1998.................................................. 2,037,591
1999.................................................. 1,976,664
2000.................................................. 1,864,724
2001.................................................. 1,771,212
Thereafter............................................ 15,255,711
-----------
Total....................................... $25,029,861
===========
</TABLE>

Future minimum rental income does not include lease renewals or new leases
that may result after a noncancelable-lease expires.

4. RELATED PARTY TRANSACTIONS

The Advisor has an agreement with the Company to provide advice on
investments and to administer the day-to-day operations of the Company. At
December 31, 1996, the Advisor owned 22,556 shares of the Company. Property
management services for the Company's properties are provided by West Coast
Realty Management, Inc. ("WCRM"), an affiliate of the Advisor.

Certain officers and directors of the Company are also officers and
directors of the Advisor and its affiliates.

F-9
<PAGE> 96

WEST COAST REALTY INVESTORS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. RELATED PARTY TRANSACTIONS -- (CONTINUED)
The following related party transactions are included in the statement of
income:

(a) In accordance with the advisory agreement, syndication fees earned
by the Advisor totaled $82,864, $150,429 and $173,874 in 1996, 1995, and
1994.

(b) Overhead expenses reimbursed to the Advisor totaled $12,000,
$12,000 and $2,000 in 1996, 1995 and 1994. In 1994, the Advisor waived
$10,000 of these costs which are included in additional paid-in capital.

(c) Sales commissions paid in accordance with the selling agreement to
ASC totaled $163,735, $301,706 and $172,098 for 1996, 1995 and 1994.

(d) Acquisition fees related to the purchase of real estate totaled
$78,177, $444,795 and $320,006 in 1996, 1995 and 1994 (Note 2). These fees
were split, in accordance with the advisory agreement, between the Advisor
and an affiliate.

(e) Property management fees earned by WCRM totaled $84,749, $46,947
and $24,077 in 1996, 1995, and 1994. In 1994, WCRM waived $7,622 in
property management fees.

(f) Advisory fees earned by WCRA totaled $74,361 in 1996. WCRA waived
collection of $44,061 of these fees, which are included in additional
paid-in capital.

The Corporation had related party accounts payables as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1995
------- --------
<S> <C> <C>
Associated Financial Group, Inc................................ $ -- $ 40,143
Associated Securities Corp..................................... 396 --
West Coast Realty Advisors..................................... 21,050 111,802
West Coast Realty Management................................... 24,839 15,369
-------- -------
$46,285 $167,314
======== =======
</TABLE>

5. NOTES PAYABLE

Notes payable are made up of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1996 1995
----------- ----------
<S> <C> <C>
8.25% promissory note secured by a Deed of Trust on the
Fresno Property, monthly principal and interest
payments are $5,244, due August 1, 2003................ $ 628,471 $ 639,182
Variable rate promissory note secured by a Deed of Trust
on the OPTO-22 property, interest rate adjustments are
monthly and are based on the 11th District cost of
funds plus 3% (7.835% at December 31, 1996), and may
never go below 6.5% or above 11.0%, monthly principal
and interest payments vary depending upon interest
rates and are currently $12,723, due October 1, 2003... 1,708,362 1,721,993
8.25% promissory note secured by a Deed of Trust on the
Blockbuster property, interest rate adjusts to the
5-year Treasury rate plus 350 basis points on February
1, 1999, monthly principal and interest payments are
$4,934, due February 1, 2004........................... 569,132 579,923
</TABLE>

F-10
<PAGE> 97

WEST COAST REALTY INVESTORS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31,
1996 1995
---------- ----------
<S> <C> <C>
</TABLE>

5. NOTES PAYABLE -- (CONTINUED)

<TABLE>
<S> <C> <C>
9.25% promissory note secured by a Deed of Trust on the
Riverside property, monthly principal and interest
payments are $9,988, due November 8, 2004.............. 1,177,053 1,185,778
Variable rate promissory note secured by a Deed of Trust
on the Brea property, interest rate is 9.5% until March
1, 2000 (and each succeeding March 1st) when the
interest rate adjusts to the Moody's corporate bond
index daily rate plus 0.125% monthly principal and
interest payments vary depending upon interest rates
and are currently $8,737, due March 1, 2020............ 981,338 992,379
9.625% promissory note secured by a Deed of Trust on the
Safeguard property, monthly principal and interest
payments are $24,191, due February 1, 2005............. 2,155,575 2,234,231
8.24% promissory note secured by a Deed of Trust on the
Fremont property, interest rate equaled the Treasury
rate plus 1.65% at loan closing, monthly principal and
interest payments are currently $18,898, due August 1,
2015................................................... 2,140,311 2,185,694
10% promissory note secured by a Deed of Trust on the
Java City property, monthly principal and interest
payments are $3,413, due November 1, 2001.............. 336,273 --
8% promissory note secured by a Deed of Trust on the Java
City property, monthly principal and interest payments
are $3,126, due June 1, 2018........................... 382,278 --
---------- ----------
$10,078,793 $9,539,180
========== ==========
</TABLE>

The above carrying amounts with the exception of the note on the Fresno
property are reasonable estimates of fair values of notes payable based on
current lending rates in the industry for mortgage loans with similar terms and
maturities. The fair value of the Fresno note is approximately $580,000
calculated by discounting the expected future cash outflows on the note to the
present based on a current lending rate of 10%, which is the approximate
industry lending rate on properties of this type in this location.

The aggregate annual future maturities at December 31, 1996 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, AMOUNT
----------------------------------------------------------------------- -----------
<S> <C>
1997................................................................... $ 210,320
1998................................................................... 228,391
1999................................................................... 248,287
2000................................................................... 269,435
2001................................................................... 582,090
Thereafter............................................................. 8,540,270
----------
Total........................................................ $10,078,793
==========
</TABLE>

F-11
<PAGE> 98

WEST COAST REALTY INVESTORS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

6. DIVIDEND REINVESTMENT PLAN

The Company has established a Dividend Reinvestment Plan (the "Plan")
whereby cash dividends will, upon election of the shareholders, be used to
purchase additional shares of the Company. The shareholders' participation in
the Plan may be terminated at any time.

7. NET INCOME AND DIVIDENDS PER SHARE

Net Income Per Share was computed using the weighted average number of
outstanding shares of 1,447,366, 1,117,494, and 706,684 for 1996, 1995 and 1994.

Dividends declared during 1996 were as follows:

<TABLE>
<CAPTION>
AMOUNT
OUTSTANDING PER TOTAL
RECORD DATE SHARES UNIT DIVIDEND
------------------------------------------------ ----------- ------- ----------
<S> <C> <C> <C>
January 1, 1996................................. 1,325,404 $ 0.060 $ 79,524
February 1, 1996................................ 1,371,794 0.060 82,308
March 1, 1996................................... 1,401,663 0.060 84,100
April 1, 1996................................... 1,413,736 0.0666 94,155
May 1, 1996..................................... 1,445,236 0.0666 96,253
June 1, 1996.................................... 1,448,836 0.0666 96,492
July 1, 1996.................................... 1,448,836 0.0666 96,492
August 1, 1996.................................. 1,448,836 0.0666 96,492
September 1, 1996............................... 1,498,246 0.0666 99,784
October 1, 1996................................. 1,498,246 0.0666 99,784
November 1, 1996................................ 1,500,651 0.0666 99,943
December 1, 1996................................ 1,550,607 0.0666 103,270
----------
Total................................. $1,128,597
==========
</TABLE>

Dividends declared during 1995 were as follows:

<TABLE>
<CAPTION>
OUTSTANDING AMOUNT TOTAL
RECORD DATE SHARES PER UNIT DIVIDEND
--------------------------------------------------- ----------- -------- --------
<S> <C> <C> <C>
January 1, 1995.................................... 911,986 $ 0.060 $ 54,719
February 1, 1995................................... 945,136 0.060 56,708
March 1, 1995...................................... 1,009,084 0.060 60,545
April 1, 1995...................................... 1,069,217 0.060 64,153
May 1, 1995........................................ 1,109,374 0.060 66,562
June 1, 1995....................................... 1,109,874 0.060 66,592
July 1, 1995....................................... 1,116,891 0.060 67,013
August 1, 1995..................................... 1,151,911 0.060 69,115
September 1, 1995.................................. 1,204,517 0.060 72,271
October 1, 1995.................................... 1,225,398 0.060 73,524
November 1, 1995................................... 1,261,859 0.060 75,712
December 1, 1995................................... 1,294,683 0.060 77,681
-------
Total.................................... $804,595
=======
</TABLE>

F-12
<PAGE> 99

WEST COAST REALTY INVESTORS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. NET INCOME AND DIVIDENDS PER SHARE -- (CONTINUED)
Dividends declared during 1994 were as follows:

<TABLE>
<CAPTION>
OUTSTANDING AMOUNT TOTAL
RECORD DATE SHARES PER UNIT DIVIDEND
--------------------------------------------------- ----------- -------- --------
<S> <C> <C> <C>
January 1, 1994.................................... 562,888 $ 0.058 $ 32,648
February 1, 1994................................... 568,404 0.060 34,104
March 1, 1994...................................... 590,966 0.062 36,640
April 1, 1994...................................... 610,195 0.063 38,442
May 1, 1994........................................ 620,421 0.064 39,707
June 1, 1994....................................... 637,315 0.065 41,426
July 1, 1994....................................... 637,315 0.065 41,426
August 1, 1994..................................... 688,203 0.065 44,733
September 1, 1994.................................. 747,876 0.065 48,612
October 1, 1994.................................... 811,034 0.065 52,717
November 1, 1994................................... 844,800 0.065 54,913
December 1, 1994................................... 880,700 0.065 57,246
--------
Total.................................... $522,614
========
</TABLE>

Dividends are paid in the fiscal quarter following the record date.

The Company has followed the practice of making distributions to
shareholders in amounts approximately equal to its cash basis net income. Since
cash flows are sheltered from tax by depreciation and amortization expense,
distributions to shareholders are in excess of net income. Accordingly, certain
distributions result in a nontaxable return of capital. Distributions per
beneficial share are reportable by shareholders on their individual income tax
returns as shown below:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Taxable ordinary income.................................... $.487 $.549 $.469
Nontaxable return of capital............................... .292 .171 .270
----- ----- -----
$.779 $.720 $.739
===== ===== =====
</TABLE>

8. TAXES ON INCOME

For the taxable years 1995 and 1994, the Company elected to be treated as a
REIT on the filings of the 1995 and 1994 tax returns and will elect the same for
1996.

9. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

The Company had a noncash financing activity related to unpaid dividends
declared of $302,996, $226,649, and $164,876 for 1996, 1995 and 1994.

Cash paid for interest during year ended December 31, 1996, 1995 and 1994
was $857,042, $569,746, and $277,288.

F-13
<PAGE> 100

WEST COAST REALTY INVESTORS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

10. SUBSEQUENT EVENTS

(a) From January 2 to January 14, 1997, a total of $1,179,423 in proceeds
from the sale of shares in the Company's current offering was released from an
escrow account to the Company, and 117,987 shares were issued to investors.

(b) On January 17, 1997, the Company acquired an industrial building
located in Irvine, California for $4,902,500. The acquisition was accomplished
with the use of $2,300,000 in debt financing, and the remainder with proceeds
from the Company's current offering.

(c) On January 15, 1997, the Company paid dividends totaling $302,997
($0.0666 per share per monthly record date), payable to shareholders of record
on October 1, November 1, and December 1, 1996, respectively (Note 7).

F-14
<PAGE> 101

WEST COAST REALTY INVESTORS, INC.

SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 1996

Information required by Rule 12-28 is as follows:

<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH
INITIAL COST COST CARRIED AT CLOSE OF PERIOD
---------------------- CAPITALIZED -----------------------------------
BUILDING SUBSEQUENT TO BUILDING
& ACQUISITION &
IMPROVE- IMPROVE- IMPROVE- TOTAL
DESCRIPTION ENCUMBRANCES LAND MENTS MENTS LAND MENTS COST
- -------------------------- ------------ --------- ---------- ------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Retail Building,
Huntington Beach, CA.... 569,132 1,005,965 670,245 0 1,005,965 670,245 1,676,210
Retail Building,
Shopping Center,
Fresno, CA.............. 628,471 553,647 861,245 0 553,647 861,245 1,414,893
Industrial Building
Huntington Beach, CA.... 1,708,362 1,132,159 1,367,842 0 1,132,159 1,367,842 2,500,001
Industrial Building
Brea, CA................ 981,338 808,423 1,439,920 0 808,423 1,439,920 2,248,343
Entertainment Center
Riverside, CA........... 1,177,053 768,667 2,886,833 0 768,667 2,886,833 3,655,500
Office Building
Tustin, CA.............. 2,155,575 1,089,796 3,772,298 0 1,089,796 3,772,298 4,862,094
Light Industrial Bldg,
Fremont, CA............. 2,140,311 1,228,262 2,519,349 0 1,228,262 2,519,349 3,747,611
Office and Light
Industrial Bldgs
Sacramento, CA.......... 718,551 814,206 1,014,294 0 814,206 1,014,294 1,828,500
-
--------- --------- --------- --------- --------- ---------
Total............. 10,078,793 7,401,125 14,532,026 0 7,401,125 14,532,026 21,933,152
========= ========= ========= = ========= ========= =========

LIFE ON
WHICH
DEPRECIATION
YEAR IS COMPUTED
ACCUMULATED CONSTRUCTION DATE BUILDING/
DESCRIPTION DEPRECIATION COMPLETED ACQUIRED IMPROVEMENTS
- -------------------------- ----------- ------------ -------- ------------
<S> <C> <C> <C> <C>
Retail Building,
Huntington Beach, CA.... 125,015 1991 2/91 31.5
Retail Building,
Shopping Center,
Fresno, CA.............. 80,055 1993 5/93 39.0
Industrial Building
Huntington Beach, CA.... 115,450 1976 9/93 39.0
Industrial Building
Brea, CA................ 104,617 1989 3/94 39.0
Entertainment Center
Riverside, CA........... 154,215 1994 11/94 39.0
Office Building
Tustin, CA.............. 153,146 1986 5/95 39.0
Light Industrial Bldg,
Fremont, CA............. 72,683 1993 10/95 39.0
Office and Light
Industrial Bldgs
Sacramento, CA.......... 9,767 1988 8/96 39.0

-------
Total............. 814,948
=======
</TABLE>

F-15
<PAGE> 102

WEST COAST REALTY INVESTORS, INC.

SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION -- (CONTINUED)

DECEMBER 31, 1996

A reconciliation of the total cost for the years ending December 31, 1994,
1995 and 1996 follows:

<TABLE>
<S> <C>
Balance at December 31, 1993................................... 5,591,104
1994 Additions................................................. 5,866,457
-----------

Balance at December 31, 1994................................... 11,457,561
1995 Additions................................................. 8,647,091
-----------

Balance at December 31, 1995................................... 20,104,652
1996 Additions................................................. 1,828,499
-----------

Balance at December 31, 1996................................... $21,933,151
===========
</TABLE>

A reconciliation of accumulated depreciation for the years ending December

<TABLE>
<S> <C>
31, 1994, 1995 and 1996 follows:

Balance at December 31, 1993...................................... 85,210
1994 Depreciation................................................. 115,372
--------

Balance at December 31, 1994...................................... 200,582
1995 Depreciation................................................. 253,905
--------

Balance at December 31, 1995...................................... 454,487
1996 Depreciation................................................. 360,461
--------

Balance at December 31, 1996...................................... $814,948
========
</TABLE>

F-16
<PAGE> 103

WEST COAST REALTY INVESTORS, INC.

SCHEDULE IV -- MORTGAGE LOANS ON REAL ESTATE

DECEMBER 31, 1996

Information required by Rule 12-29 is as follows:

<TABLE>
<CAPTION>
FINAL PERIODIC DELINQUENT
INTEREST MATURITY PAYMENT PRIOR FACE CARRYING PRINCIPAL/
DESCRIPTION RATE DATE TERMS LIENS AMOUNT AMOUNT INTEREST
- ---------------------------------- -------- --------- ---------------- ----- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Retail Building................... 8.25% 8/1/2003 Equal monthly None $ 665,000 $ 628,471 None
Fresno, CA payments to
First Deed of Trust Maturity
Balloon Payment
due 8/2003
Industrial Building............... Variable 10/1/2003 Variable Monthly None $1,750,000 $1,708,362 None
Huntington Beach, California Payments to
First Deed of Trust Maturity
Balloon Payment
due 10/2003
Retail Building................... Variable 2/1/2004 Variable Monthly None $ 600,000 $ 569,132 None
Huntington Beach, California Payments to
First Deed of Trust Maturity; 25 yr
Amortization
Balloon payment
due 2/2004
Industrial Building............... Variable 3/1/2020 Variable Rate; None $1,000,000 $ 981,338 None
Brea, CA 25 yr
First Deed of Trust amortization
Entertainment Center.............. 9.25% 11/8/2004 Equal Monthly None $1,200,000 $1,177,053 None
Riverside, CA payments
First Deed of Trust amortized over
28 yrs, 3 months
Balloon Payment
due 11/2004
Office Building................... 9.625% 2/2/2005 Fixed Rate; None $2,300,000 $2,155,575 None
Tustin, CA 15 year
First Deed of Trust amortization
Balloon Payment
due 2/2005
Light Industrial Bldg............. Variable 8/1/2015 Variable Monthly None $2,200,000 $2,140,311 None
Fremont, CA Payments 20
First Deed of Trust years
amortization
Office and Light Industrial 10% 11/1/2001 Fixed Rate; None $ 350,000 $ 336,273 None
Bldg............................ 25 year
Sacramento, CA amortization
First Deed of Trust Balloon payment
due 11/2001
Office and Light Industrial 8% 6/1/2018 Fixed Rate; None $ 405,000 $ 382,278 None
Bldg............................ 25 year
Sacramento, CA amortization,
First Deed of Trust Balloon payment
due 6/2018
---------- ----------
10,470,000 10,078,793
========== ==========
</TABLE>

F-17
<PAGE> 104

WEST COAST REALTY INVESTORS, INC.

SCHEDULE IV -- MORTGAGE LOANS ON REAL ESTATE (CONTINUED)

DECEMBER 31, 1996

A reconciliation of mortgage loans payable for the years ending December
31, 1994, 1995, and 1996 follows:

<TABLE>
<S> <C>
Balance at December 31, 1993.................................... 2,405,526
1994 Additions.................................................. 2,800,000
1994 Paydowns................................................... (44,171)
----------
Balance at December 31, 1994.................................... 5,161,355
1995 Additions.................................................. 4,469,647
1995 Paydowns................................................... (91,822)
----------
Balance at December 31, 1995.................................... $9,539,180
1996 Additions.................................................. 755,000
1996 Paydowns................................................... (215,387)
----------
Balance at December 31, 1996.................................... 10,078,793
==========
</TABLE>

F-18
<PAGE> 105

INDEPENDENT AUDITORS' REPORT

Shareholders

West Coast Realty Investors, Inc.

We have audited the accompanying summary of historical information relating
to operating revenues and specified expenses of 717 and 721 West Del Paso Road
(the Property) for the three months ended March 31, 1996 and for the year ended
December 31, 1995. These financial statements are the responsibility of 717 and
721 West Del Paso's management. Our responsibility is to express an opinion on
these financial statements based upon our audits.

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

The accompanying summary of historical information relating to operating
revenues and specified expenses was prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission and excludes
certain material expenses, described in Note 2, that would not be comparable to
those resulting from the proposed future operations of the Property.

In our opinion, the summary of historical information relating to operating
revenues and specified expenses referred to above presents fairly, in all
material respects, the operating revenues and specified expenses, exclusive of
expenses described in Note 2, of the Property for the three months ended March
31, 1996 and the year ended December 31, 1995 in conformity with generally
accepted accounting principles.

HUNNICUTT OKAMOTO & ASSOCIATES

May 21, 1996

Woodland Hills, California

F-19
<PAGE> 106

717 AND 721 WEST DEL PASO ROAD

SUMMARY OF HISTORICAL INFORMATION RELATING TO

OPERATING REVENUES AND SPECIFIED EXPENSES

FOR THE THREE MONTHS ENDED MARCH 31, 1996

AND YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
THREE
MONTHS
ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
1996 1995
--------- ------------
<S> <C> <C>
Operating Revenues:
Rental income...................................................... $45,219 $176,815
------- --------
Total operating revenue............................................ 45,219 176,815
------- --------
Specified Expenses:
Operating expenses................................................. 2,700 170
Interest expense................................................... 15,985 63,931
------- --------
Total specified expenses........................................... 18,685 64,101
------- --------
Excess of operating revenues over specified expenses................. $26,534 $112,714
======= ========
</TABLE>

See accompanying notes to summary of historical information

F-20
<PAGE> 107

717 AND 721 WEST DEL PASO ROAD

SUMMARY OF HISTORICAL INFORMATION RELATING TO

OPERATING REVENUES AND SPECIFIED EXPENSES

NOTE 1 -- THE PROPERTY

717 and 721 West Del Paso Road (the Property) is comprised of two adjacent
single story light industrial buildings located in the city of Sacramento,
California. The two properties are located in the same industrial park. The 717
West Del Paso Road property has a rental area approximating 11,200 square feet.
The 721 West Del Paso Road property has a rental area approximating 8,640 square
feet. Both properties are currently leased to Java City, a California
corporation. The owners of the Property are also shareholders of the corporate
tenant. Both leases have lease terms expiring in 2003. The lease agreements
provide that specified expenses including insurance, repairs and maintenance and
property taxes of the Property are paid by the lessee. However, the lease of 721
West Del Paso Road provides that the lessor shall keep the foundation, roof and
structural portions of the exterior walls in good order, condition and repair.
During the three months ended March 31, 1996 and the year ended December 31,
1995 the lessor incurred $2,700 and $170, respectively in roof repairs to the
721 West Del Paso Road property. These specified expenses incurred by the
Property are included as operating expenses in the accompanying summary.

Minimum rental income, under the existing leases, is $183,800, $191,200,
$198,800, $206,800, $215,100, $223,700 for the years ended December 31, 1996
through December 31, 2001 and $371,500 for years thereafter.

The Property is expected to be acquired by West Coast Realty Investors,
Inc. in July 1996. The property is expected to be acquired subject to the
assumption of two promissory notes. The first note has an outstanding balance of
approximately $341,800 as of March 31, 1996 and is due in 2001. The note rate is
10%. Interest expense incurred during the three months ended March 31, 1996 and
the year ended December 31, 1995 was $8,654 and $33,640, respectively. The
second note has an outstanding balance of approximately $387,900 as of March 31,
1996 and is due in 2018. The note rate is 8%. Interest expense incurred during
the three months ended March 31, 1996 and during the year ended December 31,
1995 was $7,331 and $30,291, respectively.

NOTE 2 -- BASIS OF PRESENTATION

The summary of historical information relating to operating revenues and
specified expenses of the Property excludes the following items, which are to
comparable to the future operations of the Property under the ownership of West
Coast Realty Investors, Inc.

(a) Depreciation of building, improvements and equipment

(b) Nonrecurring income and expenses

Rental income is recognized when earned and expenses are recognized when
incurred.

F-21
<PAGE> 108

WEST COAST REALTY INVESTORS, INC.

ESTIMATED TWELVE MONTH PRO FORMA STATEMENT

OF TAXABLE OPERATING INCOME (NOTE 1)

BASED ON ACQUISITION OF JAVA CITY PROPERTY

<TABLE>
<CAPTION>
JAVA CITY PROPERTY
HISTORICAL OPERATING AUDITED FINANCIAL RESULTS PRO FORMA ESTIMATED
RESULTS FOR WCRI FOR THE YEAR ENDED ADJUSTMENTS PRO FORMA
DECEMBER 31, 1996 DECEMBER 31, 1995 (NOTE 2) RESULTS
-------------------- -------------------------- ----------- ----------
<S> <C> <C> <C> <C>
REVENUE:
Rental Income.............. $2,377,530 $176,815 $ (53,017)(a) $2,501,328
Interest Income............ 97,097 (36,000)(b) 61,097
---------- -------- --------- ----------
2,474,627 176,815 (89,017) 2,562,425
---------- -------- --------- ----------
COSTS AND EXPENSES:
Operating.................. 302,858 170 3,714(c) 306,742
Interest................... 880,978 63,931 (27,402)(d) 917,507
General and
Administrative.......... 224,254 224,254
Depreciation and
amortization............ 360,901 13,674(e) 374,575
---------- -------- --------- ----------
1,768,991 64,101 (10,014) 1,823,078
---------- -------- --------- ----------
Taxable Operating Income..... $ 705,636 $112,714 $ (79,003) $ 739,347
========== ======== ========= ==========
</TABLE>

WEST COAST REALTY INVESTORS, INC.

STATEMENT OF CASH AVAILABLE FROM OPERATIONS (NOTE 1)

<TABLE>
<S> <C>
Pro Forma Taxable Net Operating Income.......................................... $ 739,347
Add: Depreciation............................................................... 374,575
----------
Pro Forma Cash Available from Operations.............................. $1,113,922
==========
</TABLE>

See accompanying notes to pro forma financial statements

F-22
<PAGE> 109

WEST COAST REALTY INVESTORS, INC.

JAVA CITY PROPERTY

NOTES TO PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 -- BASIS OF PRESENTATION

The preceding unaudited pro forma statements are based on information
obtained from the lease and Agreement to Purchase documents pertaining to the
property located at 717 and 721 West Del Paso Road, Sacramento, California (the
"Jave City Property" or the "Property").

The pro forma statements use the audited financial statements for the year
ended December 31, 1996 as a base for preparing the estimated pro forma
operations for the Property during its first full year of operations. The
Property's current tenant, Cucina Holdings, Inc. (doing business as Java City),
leases the space in the two separate buildings. The leases on both buildings
expire October 31, 2003. The lease are triple net in nature.

The pro forma results reflect a full year of operations for the Property
assuming that it was acquired on January 1, 1996. They contain certain
adjustments which are expected to be incurred in the Property's first year of
operations.

There can be no assurance that the foregoing results will be obtained.

The Company acquired the property from a party who is also the President of
Cucina Holdings, Inc. The Company is unaware of any material factors which would
cause the reported financial information not to be indicative of future
operating results.

NOTE 2 -- PRO FORMA ADJUSTMENTS

The significant pro forma adjustments are as follows:

(a) To adjust rental income to reflect only a full year of rental income.
$88,450 in rental income from August 2, 1996 (date of acquisition) to December
31, 1996 is already included in the Historical Operating Results for WCRI for
the year ended December 31, 1996. In calculating this amount, the total
remaining minimum monthly rent from January 1, 1995 to October 31, 2003 is
recognized on a straight-line basis in accordance with generally accepted
accounting principles.

(b) To eliminate interest income not earned due to assumed application of
funds toward purchase of Java City Property.

(c) To reflect approximate property management fees of 3% of rental income
in the first year of the lease for the period prior to acquisition (January 1 to
August 1, 1996).

(d) To adjust interest expense to reflect a full year of expense.

(e) To adjust depreciation expense for amount that pertains to the period

January 1 to August 1, 1996.

F-23
<PAGE> 110

INDEPENDENT AUDITORS' REPORT

Shareholders

West Coast Realty Investors, Inc.

We have audited the accompanying summary of historical information relating
to operating revenues and specified expenses of Tycom Property (the Property)
for the period January 12, 1996 to December 17, 1996. These financial statements
are the responsibility of Tycom Property's management. Our responsibility is to
express an opinion on these financial statements based upon our audit.

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

In our opinion, the summary of historical information relating to operating
revenues and specified expenses referred to above presents fairly, in all
material respects, the operating revenues and specified expenses, exclusive of
expenses described in Note 2, of the Property for the period January 12, 1996
until December 17, 1996 in conformity with generally accepted accounting
principles.

HUNNICUT OKAMOTO & ASSOCIATES

January 17, 1997

Woodland Hills, California

F-24
<PAGE> 111

TYCOM PROPERTY

SUMMARY OF HISTORICAL INFORMATION RELATING TO

OPERATING REVENUES AND SPECIFIED EXPENSES

FOR THE PERIOD JANUARY 12, 1996 TO DECEMBER 17, 1996

<TABLE>
<S> <C>
Operating Revenues:
Rental income................................................................... $ --
--------
Total operating revenue......................................................... --
--------
Specified Expenses:
Operating expenses.............................................................. 19,800
--------
Total specified expenses........................................................ 19,800
========
Excess of specified expenses over operating revenues............................ $(19,800)
========
</TABLE>

See accompanying notes to summary of historical information.

F-25
<PAGE> 112

TYCOM PROPERTY

NOTES TO SUMMARY OF HISTORICAL INFORMATION RELATING TO

OPERATING REVENUES AND SPECIFIED EXPENSES

NOTE 1 -- THE PROPERTY

The Tycom Property (the Property) is comprised of a two story building with
underground parking located in the city of Irvine, California. The Tycom
Property has a rental area approximating 63,255 square feet.

The sole tenant of the Property is Tycom Corporation. Tycom Corporation
acquired the Property in January 1996. The Property was vacant prior to Tycom
Corporation's acquisition.

Tycom Corporation substantially improved the Property subsequent to
acquisition. Tycom Corporation did not occupy the Property until on or about
December 17, 1996 when Tycom Corporation sold the property to an unrelated third
party (Seller) and entered into a lease agreement to occupy the Property under
an eleven year term. Accordingly, the management of the Property from January
12, 1996 until December 17, 1996, Tycom Corporation, did not incur any operating
revenues or specified expenses of the Property other than utility expenses. The
utility expenses are shown as operating expenses on the accompanying summary of
historical information relating to operating revenues and specified expenses.

The lease agreement entered into between Tycom Corporation and the Seller,
among other things, provides minimum rental income of $298,422, $447,633,
$447,633, $447,633, $447,633, for the years ended December 31, 1997 through
December 31, 2001 and $2,704,450 for years thereafter.

The Property was acquired by West Coast Realty Investors, Inc. in January
1997 from the Seller.

NOTE 2 -- BASIS OF PRESENTATION

The summary of historical information relating to operating revenues and
specified expenses of the Property excludes the following items, which are not
comparable to the future operations of the Property under the ownership of West
Coast Realty Investors, Inc.

(a) Interest expense on mortgages

(b) Depreciation of buildings, improvements and equipment

Rental income is recognized when earned and expenses are recognized when
incurred.

F-26
<PAGE> 113

WEST COAST REALTY INVESTORS, INC.

ESTIMATED UNAUDITED TWELVE MONTH PRO FORMA STATEMENT

OF TAXABLE OPERATING INCOME (NOTE 1)
BASED ON ACQUISITION OF THE TYCOM PROPERTY

<TABLE>
<CAPTION>
TYCOM PROPERTY -- AUDITED
HISTORICAL OPERATING FINANCIAL RESULTS PRO FORMA ESTIMATED
RESULTS FOR WCRI FOR THE PERIOD JANUARY 12, ADJUSTMENTS PRO FORMA
DECEMBER 31, 1996 1996 TO DECEMBER 17, 1996 (NOTE 2) RESULTS
---------------------- --------------------------- ----------- ----------
<S> <C> <C> <C> <C>
REVENUE:
Rental Income............ $2,377,530 $ 447,633(a) $2,825,163
Interest Income.......... 97,097 (90,000)(b) 7,097
---------- ------- -------- ----------
2,474,627 0 280,725 2,832,260
---------- ------- -------- ----------
COSTS AND EXPENSES:
Operating................ 302,858 19,800 13,429(c) 316,287
(19,800)(f)
Interest................. 880,978 212,748(d) 1,093,726
General and
Administrative........ 224,254 224,254
Depreciation and
amortization.......... 360,901 176,824(e) 537,725
---------- ------- -------- ----------
1,768,991 19,800 383,201 2,171,992
---------- ------- -------- ----------
Taxable Operating Income... $ 705,636 $ (19,800) $ (25,568) $ 660,268
========== ======= ======== ==========
</TABLE>

WEST COAST REALTY INVESTORS, INC.

UNAUDITED STATEMENT OF CASH AVAILABLE FROM OPERATIONS (NOTE 1)

<TABLE>
<S> <C>
Pro Forma Taxable Net Operating Income.......................................... $ 660,268
Add: Depreciation............................................................... 537,725
----------
Pro Forma Cash Available from Operations........................................ $1,197,993
==========
</TABLE>

See accompanying notes to unaudited pro forma financial statements

F-27

<PAGE> 114

WEST COAST REALTY INVESTORS, INC.

TYCOM PROPERTY

NOTES TO PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 -- BASIS OF PRESENTATION

The preceding unaudited pro forma statements are based on information
obtained from the lease and Agreement to Purchase documents pertaining to the
property located at 17862 Fitch Street, Irvine, California (the "Tycom Property"
or the "Property").

The pro forma statements use the audited financial statements for the
period from January 12, 1996 to December 17, 1996 as a base for preparing the
estimated pro forma operations for the Property during its first full year of
operations. The Property's current tenant, Tycom Corporation, leases 100% of the
space in the building. The lease on the building expires December, 2007. The
lease is triple net in nature.

The pro forma results reflect a full year of operations for the Property
assuming that it was acquired January 1, 1996. They contain certain adjustments
which are expected to be incurred in the Property's first year of operations.

There can be no assurance that the foregoing results will be obtained.

The Company acquired the property from a third party. The Company is
unaware of any material factors which would cause the reported financial
information not to be indicative of future operating results.

NOTE 2 -- PRO FORMA ADJUSTMENTS

The significant pro forma adjustments are as follows:

(a) To reflect a full year's worth of rental income per provisions of
the lease with the Property's tenant. In calculating the amount, the total
remaining minimum monthly rent from December 1996 to December 2007 is
recognized on a straight-line basis in accordance with generally accepted
accounting principles.

(b) To eliminate interest income not earned due to assumed application
of funds toward purchase of Tycom Property.

(d) To reflect interest expense incurred in connection with debt on
the Tycom property.

(e) The computation of depreciation is based on the cost of the
Property including estimated Acquisition Fees and Expenses, and is for the
initial twelve months subsequent to the purchase. The allocation of the
cost of the property to the various asset categories and lives is based on
the allocations contained in the final appraisal report for the Property.
Depreciation has been computed on a straight-line basis over the component
useful life of the assets.

<TABLE>
<CAPTION>
DEPRECIABLE LIFE COST DEPRECIATION
---------------- ---------- ------------
<S> <C> <C> <C>
Building and Improvements...................... 39 $1,932,500 $ 49,551
Tenant Improvements............................ 11 1,400,000 127,273
Land........................................... -- 1,570,000 --
---------- --------
$4,902,500 $176,824
========== ========
</TABLE>

(f) To eliminate operating expenses incurred in period prior to

ownership since this lease is triple-net in nature.

F-28
<PAGE> 115

WEST COAST REALTY INVESTORS

UNAUDITED PRO FORMA BALANCE SHEET

DECEMBER 31, 1996

<TABLE>
<CAPTION>
HISTORICAL
DECEMBER 31, PRO FORMA PRO FORMA
1996 ADJUSTMENTS BALANCE
------------ ---------- ----------
<S> <C> <C> <C>
ASSETS
RENTAL REAL ESTATE............................. 21,118,203 4,902,500(2) 26,020,703
CASH AND CASH EQUIVALENTS...................... 2,017,194 1,000,000(1) 451,997
(2,565,197)(2)
ACCOUNTS RECEIVABLE............................ 247,948 247,948
OTHER ASSETS................................... 188,493 188,493
---------- ----------
23,571,838 26,909,141
---------- ----------

LIABILITIES AND STOCKHOLDERS' EQUITY

DUE TO RELATED PARTY............................. 46,285 46,285
DIVIDENDS PAYABLE.............................. 302,760 302,760
SECURITY DEPOSITS AND PREPAID RENTS............ 124,734 37,303(2) 162,037
OTHER LIABILITIES.............................. 114,375 114,375
NOTES PAYABLE.................................. 10,078,793 2,300,000(2) 12,378,793
---------- ----------
TOTAL LIABILITIES...................... 10,666,947 13,004,250
---------- ----------

COMMITMENTS AND CONTINGENCIES

COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL.... 13,877,269 1,000,000(1) 14,877,269
DISTRIBUTIONS IN EXCESS OF EARNINGS............ (972,378) (972,378)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY............. 12,904,891 13,904,891
---------- ----------
23,571,838 26,909,141
---------- ----------
</TABLE>

F-29
<PAGE> 116

WEST COAST REALTY INVESTORS, INC.

NOTES TO UNAUDITED PRO FORMA BALANCE SHEET

DECEMBER 31, 1996

The pro forma Balance Sheet assumes that the Tycom Property was acquired on
December 31, 1996. This statement reflects certain changes to the balance sheet
that would be reflected if the property was acquired on that date.

NOTE 1 -- ADDITIONAL EQUITY RAISED

The Company would not have had enough funds available to acquire the
property as of December 31, 1996. Therefore, an assumption was made that the
Company had raised an additional $1.0 million in investor proceeds, from the
sale of approximately 112,360 shares. This would be sufficient funds to acquire
the Property and maintain a reserve account of 3% of all funds raised. In
reality, between November 6, 1996 and January 14, 1997 the Company received
approximately $1,475,000 in net proceeds from the sale of shares sold from
August 1 to December 29, 1996.

NOTE 2 -- ACQUISITION OF TYCOM PROPERTY

These adjustments reflect the effect of acquiring the Tycom Property,
including an increase in security deposits, notes payable and rental real
estate, and a net decrease in cash and cash equivalents.

F-30
<PAGE> 117

WEST COAST REALTY INVESTORS, INC.

UNAUDITED PRO FORMA STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 1996

INTRODUCTION

The following unaudited pro forma financial statement is presented to
illustrate the acquisition of the Java City and Tycom Properties as described in
this offering, on the results of operations of the Company.

The unaudited pro forma statement of income has been prepared as if all the
aforementioned properties had been acquired and occupied by their respective
tenants on January 1, 1996.

The unaudited pro forma financial statements are not necessarily indicative
of the Company's future operations and should be read in conjunction with the
other financial statements and notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL CONDENSED
DECEMBER 31, JAVA CITY TYCOM ADJUSTMENTS DECEMBER 31,
1996 (I) (II) (NOTE 1) 1996
------------ --------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
REVENUE:
Rental..................................... $ 2,377,530 $ 176,815 -- $ (53,017)(a) $ 2,948,961
447,633(b)
Interest................................... 97,097 (90,000)(c) 7,097
----------- --------- --------- --------- -----------
2,474,627 176,815 -- 304,616 2,956,058
----------- --------- --------- --------- -----------
EXPENSES:
Operating.................................. 302,858 170 19,800 3,714(d) 320,171
13,429(e)
(19,800)(j)
Interest................................... 880,978 63,931 (27,402)(f) 1,130,255
212,748(g)
Depreciation and amortization.............. 360,901 13,674(h) 551,399
176,824(i)
General and administrative................. 224,254 224,254
----------- --------- --------- --------- -----------
1,768,991 64,101 19,800 373,187 2,226,079
----------- --------- --------- --------- -----------
Net income................................... $ 705,636 $ 112,714 $ (19,800) (68,571) $ 729,979
----------- --------- --------- --------- -----------
Net income per share......................... $ 0.49 Net Income Per Share................ $0.45
=========== ===========
Weighted Average Shares Used For Pro
Weighted Average Shares Used for Historical
Calculation................................ 1,447,366 Forma Calculation (Note 2).......... 1,612,404
=========== ===========
</TABLE>

- ---------------

(I) Year ended December 31, 1995 (audited)

(II) Period January 12, 1996 to December 17, 1996 (audited)

F-31
<PAGE> 118

WEST COAST REALTY INVESTORS, INC.

NOTES TO UNAUDITED PRO FORMA STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 1996 (UNAUDITED)

BASIS OF PRESENTATION

The pro forma Statements of Income reflects operations for the Company
assuming that the, Java City, and Tycom properties were acquired on January 1,
1996. This statement contains certain adjustments which are expected to be
incurred in those properties' first year of operations, reflected in the
Statement of Income for the year ended December 31, 1996.

There can be no assurance that the foregoing results will be obtained.

1. PRO FORMA ADJUSTMENTS

The adjustments to the pro forma statement of income are as follows:

a. To adjust rental income for the Java City property to recognize rental
income on a straight-line basis for 1995 using lease rates in effect
from January 1, 1995 to August 1, 2003.

b. To reflect one year of rental income for Tycom Property.

c. To eliminate interest income to reflect funds used for the acquisition
of properties.

d. To reflect additional property management fees for the Java City
Property.

e. To reflect one year of property management fees for the Tycom
Property.

f. To adjust interest expense on Java City Property to reflect a full
year of expense.

g. To reflect interest expense on Tycom Property for first year of
mortgage debt.

h. To reflect depreciation expense on the Java City Property for January 1
to August 1, 1996.

i. To reflect depreciation expense on the Tycom Property for its first
year of ownership.

j. To eliminate operating expenses incurred on the Tycom Property by
prior ownership, since the Company will be operating and leasing the
property on a triple-net basis.

2. PER SHARE AMOUNTS

The pro forma income statement assumes that the Java City, and Tycom
properties were owned as of January 1, 1996. The Company used approximately $3.7
million in cash to acquire these properties. However, as of January 1, 1996, the
Company actually had approximately $1.1 million available for the acquisition of
additional properties. The properties were acquired primarily using funds raised
subsequent to January 1, 1996. Therefore, the weighted average shares
outstanding as of December 31, 1996, was calculated assuming that an additional
$2.9 million in shares (290,000 shares) were outstanding as of January 1, 1996,
and that no additional shares were issued throughout the year. This is assumed
to be the minimum number of shares that would be sold given the offering
expenses and reserves that are allocated against shares sold.

F-32
<PAGE> 119

PRIOR PERFORMANCE TABLE

The Tables below present information on past performance regarding
partnerships for which the Advisor or its Affiliates served as general partner
and which were sponsored by Affiliates of the Advisor or the Advisor. A
potential investor may therefore evaluate the experience of the Advisor and its
Affiliates and their record in meeting the investment objectives of the
partnership. These tables should be carefully reviewed by a potential investor
in considering an investment in the Company. The tables provide information as
of December 31, 1996. The tables are:

Table IV -- Results of Completed Programs

Associated Planners Realty Growth Fund, a partnership in which West Coast
Realty Advisors served as general partner, was dissolved in 1996.

Table V -- Sales or Disposals of Properties

Table V summaries the sales or disposals of properties made by prior
programs affiliated with the Company for the three years ended December 31,
1996. The table presents information concerning the cash and other consideration
received from the sale or disposition of its property, its cost and net
operating cash received. IT SHOULD NOT BE ASSUMED THAT INVESTORS IN THE OFFERING
COVERED BY THIS PROSPECTUS WILL EXPERIENCE RESULTS COMPARABLE TO THOSE
EXPERIENCED IN PRIOR OFFERINGS.

Factors which the Company considered in determining whether the prior
limited partnership had investment objectives similar to those of the Company
were the type and standards of real property investments and benefits of the
prior partnerships. The Company included Associated Planners Realty Fund ("Fund
I") and Associated Planners Realty Growth Fund ("Growth Fund") prior performance
since they had similar investment objectives in that they sought to preserve and
protect invested capital and provide capital appreciation. Fund I acquired
properties for cash, without borrowings, while the Growth Fund acquired property
using moderate leverage.

PERSONS WHO PURCHASE SHARES IN THE COMPANY WILL NOT THEREBY ACQUIRE ANY
OWNERSHIP INTEREST IN THE PARTNERSHIPS TO WHICH THESE TABLES RELATE. THE
INCLUSION OF THESE TABLES IN THE PROSPECTUS DOES NOT IMPLY THAT THE COMPANY WILL
MAKE INVESTMENTS COMPARABLE TO THOSE REFLECTED IN THE TABLES AND RETURNS
COMPARABLE TO THOSE EXPERIENCED BY INVESTORS IN THE PARTNERSHIPS REFERRED TO. IN
ADDITION, NONE OF THE INFORMATION CONTAINED IN THE TABLES HAS BEEN AUDITED BY
INDEPENDENT ACCOUNTANTS. (SEE "PRIOR PERFORMANCE" ON PAGE 49 OF THE PROSPECTUS.)

T-1

<PAGE> 120

TABLE IV

RESULTS OF COMPLETED PROGRAMS

JANUARY 1, 1992 TO DECEMBER 31, 1996

Program Name: Associated Planners Realty Growth Fund

Dollar Amount Raised: $2,059,650

Number of Properties Purchased: One and 10% interest in another property
co-owned with an affiliated company (Associated Planners Realty Income
Fund)

Date of Closing of Offering: September 5, 1989

Date of First Sale of Property: August 16, 1996 (property deeded back to
lender)

Date of Final Sale of Property: November 1, 1996

Tax and Distribution Data Per $1,000 Investment Through December 31, 1996

Federal Income Tax Results:

Ordinary income (loss)

-- from operations: ($483)

-- from recapture: $198

Capital Gain (loss): ($567)

Deferred Gain: None

Capital: None

Ordinary: None

Cash Distributions to Investors

Source (on GAAP basis)

-- Investment income: $7

-- Return of Capital: $141

Source (on cash basis)

-- Sales: $64

-- Refinancing: None

-- Operations: $84

-- Other: None

Receivable on Net Purchase Money Financing: None

T-2
<PAGE> 121

TABLE V.
SALES OR DISPOSALS OF PROPERTIES

JANUARY 1, 1994 TO DECEMBER 31, 1996

(NOT COVERED BY INDEPENDENT AUDITOR'S REPORT)

<TABLE>
<CAPTION>
COST OF
PROPERTIES
INCLUDING
CLOSING
AND
SOFT COSTS
SELLING PRICE, NET OF ----------
CLOSING COSTS AND GAAP ADJUSTMENTS
--------------------------------------------------------------
CASH ADJUSTMENTS
RECEIVED MORTGAGE PURCHASE MONEY RESULTING
NET OF BALANCE MORTGAGE TAKEN FROM ORIGINAL
DATE DATE OF CLOSING AT TIME BACK BY APPLICATION MORTGAGE
PROPERTY ACQUIRED SALE COSTS OF SALE PROGRAM OF GAAP TOTAL FINANCING
- ------------------------------- -------- ------- ---------- --------- -------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(1)Shurgard Mini-Warehouse..... 5/8/88 5/15/95 $1,510,976 none none none $1,510,976(2) none
Puyallup, Washington
(3)Santa Ana Office Building... 11/17/89 8/16/96 0 1,674,918 none (1,674,918) 0 $1,675,000
Santa Ana, California
(4)San Marcos Building......... 11/17/89 11/1/96 188,000 none none none $ 188,000(5) none
San Marcos, California

<CAPTION>
TOTAL
ACQUISITION EXCESS
COST, (DEFICIENCY)
CAPITAL OF PROPERTY
IMPROVEMENT, OPERATING CASH
CLOSING AND RECEIPTS OVER
PROPERTY SOFT COSTS TOTAL CASH EXPENDITURES
- ------------------------------- ----------- ---------- -----------------
<S> <C<C> <C> <C>
(1)Shurgard Mini-Warehouse..... $1,639,005 $1,639,005 $ 863,373
Puyallup, Washington
(3)Santa Ana Office Building... $1,563,972 $3,238,972 $ 68,600
Santa Ana, California
(4)San Marcos Building......... $ 311,878 $ 311,878 $ 181,447
San Marcos, California
</TABLE>

- ---------------

(1) This property was owned by Associated Planners Realty Fund.

(2) The gain on sale was $116,749. The gain was entirely capital gain. The gain
was not reported on an installment basis.

(3) This property was owned by Associated Planners Realty Growth Fund. It was
transferred back to the mortgage lender in a deed-lieu-of-foreclosure
transaction.

(4) 10% of this property was owned by Associated Planners Realty Growth Fund.
The amounts here reflect that 10% interest. This was sold to Associated
Planners Realty income Fund, on affiliated partnership, prior to dissolution
of the Growth Fund.

(5) The loss on sale was $77,948. The loss was entirely capital loss.

T-3
<PAGE> 122

- --------------------------------------------------------------------------------

WEST COAST REALTY INVESTORS, INC.

SUBSCRIPTION AGREEMENT

TO: WEST COAST REALTY INVESTORS, INC.

The buyer identified below hereby orders ___________ shares of West Coast
Realty Investors, Inc. at $__________ per share for a total purchase price
of $_________.

The undersigned:

(1) Warrants that prior to any offer of sale or sale of shares of West Coast
Realty Investors, Inc. (the "Company"), Buyer has received a copy of the
Prospectus of the Company.

(2) Under penalties of perjury, certifies that (i) the Social Security or Tax
I.D. number shown below is correct and (ii) he or she has not been notified
that he or she is subject to backup withholding, (if you have been so
notified, strike out all of (ii) above).

(3) REPRESENTATIONS AND WARRANTIES: By executing this Subscription Agreement
the Subscriber represents and warrants to the Company, the Advisor and
Associated Securities Corp. that:

(a) The Subscriber hereby confirms the Subscriber's understanding that the
Company has full right to accept or reject this Subscription Agreement
promptly after it is received by the Company and provided that, in the
case of rejection, the payment of the Subscriber is promptly returned.
Upon acceptance of this Subscription Agreement by the Company, the
Subscriber will receive a confirmation of acceptance.

(b) If the Subscriber is acting in a representative capacity for a
corporation, partnership or trust or as an agent for any person
or entity, the Subscriber has full power and authority to execute this
Subscription Agreement in that capacity and on behalf of the
corporation, trust, person or entity.

(c) The Subscriber is not entitled to cancel, terminate or revoke this
Subscription Agreement and that this Subscription Agreement shall
survive the Subscriber's death or disability.

(d) The Subscriber meets the suitability standards set forth in the
Prospectus.

REGISTRATION (if a custodial account, also give address of beneficiary below);*

Please Type or Print the Following Information
Registered Name(s)
(As it is to appear on _________________________________________________
certificate of ownership) _________________________________________________

Street Address (Residence) _________________________________________________

City, State, Zip Code _________________________________________________

Telephone Number _________________________________________________

Name and/or Mailing Address for Distributions or Investor Reports if different
from above

Name _________________________________________________

_________________________________________________

Mailing Address _________________________________________________

City, State, Zip Code _________________________________________________

MANNER IN WHICH TITLE IS TO BE HELD:
Check One:
<TABLE>
<CAPTION>
<S> <C> <C>
[ ] Individual Ownership [ ] Pension/Profit Sharing Plan* [ ] Custodian Under
[ ] Joint Tenants with Right [ ] Keogh Plan* UTMA___________ (State)*
of Survivorship (both sign) [ ] Trust (taxable)* [ ] UGMA ___________ (State)
[ ] Community Property [ ] Trust (non-taxable)* [ ] Sole Proprietorship
[ ] Tenants in common (all sign) [ ] Partnership [ ] Other (Please Explain)
[ ] Individual Retirement Account* [ ] Corporation __________________________
</TABLE>

------------------------------------------------------
*Trustee/Custodian must sign as Investor

- --------------------------------------------------------------------------------

S-1
<PAGE> 123

- --------------------------------------------------------------------------------

DIVIDEND DISTRIBUTION METHOD: Subscribers have the option of receiving their
quarterly distributions in cash or, under the terms of the Dividend Reinvestment
Plan, Subscribers may have their dividends automatically reinvested in
additional Shares of the Company. Please elect the method of dividend
distribution you would like by checking the appropriate box below. If no box is
checked, dividends will automatically be paid in cash. Please check one of the
following boxes:
[ ] Paid in cash.
[ ] Reinvested in additional Shares of the Company.
[ ] Other ____________ (Please Provide Details)

-----------------------------------------------------------

- ------------------------------------ -----------------------------------
(Date) (Social Security or Tax I.D. Number)

- ------------------------------------ -----------------------------------
(Signature) (Signature)

All shares will be held in safekeeping
on your behalf by the Transfer Agent
unless you specifically request by
an "X" below that a certificate be issued.
Management urges that for the sake of
convenience shares be held in safekeeping
and a certificate not be issued.

-- Issue certificate [ ]

DEALER INFORMATION

- -----------------------------------
Authorized Representative Name and
Number

- ----------------------------------- ------------------------------------
Broker/Dealer Name Street Address (Branch Office)

- ----------------------------------- ------------------------------------
Street Address (Home Office) City and State (Branch Office)

( )
- ----------------------------------- ------------------------------------
City and State (Home Office) Representative Telephone Number

Company Use Only:

ACCEPTED:
WEST COAST REALTY INVESTORS, INC.

By _____________________________________
Authorized Officer

Fund No. ______ $_______ Date ___ /___ /___ Title Code _________________

Abbrev. Name _____________ Br. No. __________ Rep. No. ___________________

__________________________ By _____________________________________________

CHECKS SHOULD BE MADE PAYABLE TO: "CITY NATIONAL BANK-WEST COAST REALTY
INVESTORS, INC."

MAIL TO: 5933 W. Century Boulevard
Ninth Floor
Los Angeles, California 90045

Rev. 5/97

- -------------------------------------------------------------------------------

S-2
<PAGE> 124

=============================================================

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR IN SUPPLEMENTS TO THIS PROSPECTUS, OR IN LITERATURE ISSUED BY THE
COMPANY, ADVISOR OR THE PRINCIPAL DISTRIBUTOR (WHICH SHALL NOT BE DEEMED TO BE
PART OF THIS PROSPECTUS), IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND IF
GIVEN OR MADE, THAT INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON. THE
STATEMENTS IN THIS PROSPECTUS OR IN ANY SUPPLEMENT ARE MADE AS OF THE DATE OF
THE PROSPECTUS OR SUPPLEMENT, UNLESS ANOTHER TIME IS SPECIFIED. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY SUPPLEMENT NOR ANY SALE OF SHARES SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE FACTS SINCE THE DATE OF THE PROSPECTUS OR SUPPLEMENT. HOWEVER, IF ANY
MATERIAL CHANGES OCCUR DURING THE PERIOD WHEN A PROSPECTUS IS REQUIRED TO BE
DELIVERED, THIS PROSPECTUS OR ANY SUPPLEMENT WILL BE AMENDED OR SUPPLEMENTED
ACCORDINGLY.

-------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUMMARY....................................... 1
THE COMPANY.............................................. 4
RISK FACTORS............................................. 5
ESTIMATED USE OF PROCEEDS................................ 11
COMPENSATION OF ADVISOR AND AFFILIATES................... 13
CAPITALIZATION........................................... 18
SELECTED FINANCIAL DATA.................................. 18
CONFLICTS OF INTEREST.................................... 19
INVESTMENT OBJECTIVES AND POLICIES....................... 20
REAL PROPERTY INVESTMENTS................................ 25
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.................................. 41
MANAGEMENT............................................... 45
PRIOR PERFORMANCE........................................ 48
SERVICES PROVIDED BY THE ADVISOR AND PROPERTY MANAGER.... 49
TAX CONSEQUENCES......................................... 51
ERISA CONSIDERATIONS..................................... 61
DESCRIPTION OF COMMON STOCK.............................. 62
SUMMARY OF ORGANIZATION DOCUMENTS........................ 63
WHO SHOULD INVEST........................................ 66
PLAN OF DISTRIBUTION..................................... 67
SALES MATERIAL........................................... 71
LEGAL MATTERS............................................ 71
EXPERTS.................................................. 71
FURTHER INFORMATION...................................... 71
GLOSSARY................................................. 71
INDEX TO FINANCIAL STATEMENTS............................ 77
SUBSCRIPTION AGREEMENT................................... S-1
PRIOR PERFORMANCE TABLES................................. T-1
</TABLE>

=============================================================
=============================================================
25,000 SHARES

LOGO

WEST COAST REALTY INVESTORS, INC.

$10.00 PER SHARE

MINIMUM INVESTMENT: 100 SHARES ($1,000)
-------------------------------------
PROSPECTUS
-------------------------------------

, 1997

=============================================================
<PAGE> 125

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 30. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses in connection with the offering are as follows:

<TABLE>
<S> <C>
Securities and Exchange Commission
Registration Fee.................................................................. $ 5,517
NASD Filing Fee................................................................... 2,100
Accounting Fees and Expenses...................................................... 95,000
Blue Sky Fees and Expenses........................................................ 35,000
Legal Fees and Expenses........................................................... 100,000
Investor/Dealer Printed Materials................................................. 100,000
Prospectus Printing............................................................... 100,000
Mailgrams, Western Union, Postage and Miscellaneous............................... 62,383
---------
Total........................................................................... 500,000
=========
</TABLE>

ITEM 31. SALES TO SPECIAL PARTIES.

Not Applicable.

ITEM 32. RECENT SALES OF UNREGISTERED SECURITIES.

On October 30, 1989, 1,000 shares of Registrant's Common Stock were sold
for cash (without commissions) to Registrant's Advisor, West Coast Realty
Advisors, Inc., pursuant to the exemption from registration under Section 4(2)
of the Securities Act of 1933, as amended.

ITEM 33. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant has the power to indemnify its directors, officers,
employees, and certain other persons against liability for certain acts pursuant
to Section 145 of the Delaware Corporations Code. Indemnification of the
directors, officers, employees and agents is provided for in the Certificate of
Incorporation and the Bylaws of the Registrant and is incorporated herein by
reference to Exhibits 3.1, 3.1.1, 3.2, 3.2.1 and 3.2.2 filed herewith.

ITEM 34. TREATMENT OF PROCEEDS FROM STOCK BEING RETURNED.

Not applicable.

ITEM 35. FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements:

<TABLE>
<CAPTION>
<S> <C>
West Coast Realty Investors
Audited Financial Statements
Report of Independent Certified Public Accountants
Balance Sheets as of December 31, 1996 and 1995
Statements of Income for the years ended December 31, 1996, December 31, 1995 and
December 31, 1994
Statements of Stockholders' Equity for the years ended December 31, 1996,
December 31, 1995 and December 31, 1994
Statements of Cash Flows for the years ended December 31, 1996, December 31, 1995
and December 31, 1994
</TABLE>

II-1
<PAGE> 126

<TABLE>
<CAPTION>
<S> <C>
Summary of Accounting Policies
Notes to Financial Statements
Schedule III -- Real Estate and Accumulated Depreciation
Schedule IV -- Mortgage Loans on Real Estate

Java City Property
Report on Independent Certified Public Accountants
Summary of Historical Information Relating to Operating Revenues and Specified
Expenses
Notes to Summary of Historical Information Relating to Operating Revenues and
Specified Expenses
Estimated Twelve Month Pro Forma Statement of Taxable Operating Income (unaudited)
Estimated Twelve Month Pro Forma Statement of Cash Available from Operations
(unaudited)
Notes to Pro Forma Statements (unaudited)

Tycom Property
Report of Independent Certified Public Accountants
Summary of Historical Information Relating to Operating Revenues and Specified
Expenses
Notes to Summary of Historical Information Relating to Operating Revenues and
Specified Expenses
Estimated Twelve Month Pro Forma Statement of Taxable Operating Income (unaudited)
Estimated Twelve Month Pro Forma Statement of Cash Available from Operations
(unaudited)
Notes to Pro Forma Statements (unaudited)

West Coast Realty Investors, Inc.
Pro Forma Balance Sheet as of December 31, 1996 (unaudited)
Notes to Pro Forma Balance Sheet as of December 31, 1996 (unaudited)
Pro Forma Statement of Income for the year ended December 31, 1996 (unaudited)
Notes to Pro Forma Statement of Income for year ended December 31, 1996 (unaudited)
</TABLE>

(b) Exhibits:

<TABLE>
<S> <C>
1.1 Amended Form of Selling Agreement.(2)
1.2 Amended Form of Selected Dealer Agreement.(2)
3.1 Certificate of Incorporation (incorporated by reference to the Company's Registration
Statement on Form S-11, File No. 33-32466).(1)
3.1.1 Amendment to Certificate of Incorporation (incorporated by reference to the Company's
Registration Statement on Form S-11, File No. 33-45802).(1)
3.2 Bylaws (incorporated by reference to the Company's Registration Statement on Form
S-11, File No. 33-32466).(1)
3.2.1 Amendment to Bylaws (incorporated by reference to the Company's Registration
Statement on Form S-11, File No. 33-45802).(1)
3.2.2 Amended and Restated Bylaws (incorporated by reference to the Company's Registration
Statement on Form S-11, File No. 33-45802).(1)
3.2.3 Amended and Restated Bylaws.(1)
4 Form of Share Certificate (incorporated by reference to the Company's Registration
Statement on Form S-11, File No. 33-32466).(1)
5 Opinion re: legality (including consent).(1)
8 Opinion re: tax matters (including consent).(1)
10.1 Executed copy of Advisory Agreement (incorporated by reference to the Company's
Registration Statement on Form S-11, File No. 33-32466).(1)
</TABLE>

II-2
<PAGE> 127

<TABLE>
<S> <C>
10.1.1 Executed Copy of Amendment to Advisory Agreement (incorporated by reference to the
Company's Registration Statement on Form S-11, File No. 33-45802).(1)
10.1.2 Amended and Restated Advisory Agreement (incorporated by reference to the Company's
Registration Statement on Form S-11, File No. 33-45802).(1)
10.1.3 Second Amended and Restated Advisory Agreement (incorporated by reference to the
Company's Registration Statement on Form S-11, File No. 33-75260).(1)
10.1.4 Third Amended and Restated Advisory Agreement (incorporated by reference to the
Company's Registration Statement on Form S-11, File No. 33-75260).(1)
10.2 Executed Copy of Escrow Instructions.(1)
10.3 Form of Dividend Reinvestment Plan (incorporated by reference to the Company's
Registration Statement on Form S-11, File No. 33-3246).(1)
10.4 Form of Property Management Agreement for Property Manager (incorporated by reference
to the Company's Registration Statement on Form S-11, File No. 33-32466).(1)
10.4.1 Amended and Restated Property Management Agreement (incorporated by reference to the
Company's Registration Statement on Form S-11, File No. 33-45802).(1)
10.4.2 Second Amended and Restated Property Management Agreement.(1)
10.5 Form of Sure Pay Agreement for Automatic Reinvestment Plan (incorporated by reference
to the Company's Registration Statement on Form S-11, File No. 33-32466).(1)
10.6 Agreement to Purchase Property (6491 Edinger Avenue, Huntington Beach, California)
incorporated by reference to the Company's Registration Statement on Form S-11, File
No. 33-32466).(1)
10.7 Lease Re: Property (6491 Edinger Avenue, Huntington Beach, California) incorporated
by reference to the Company's Registration Statement on Form S-11, File No.
33-32466).(1)
10.8 Internal Revenue Service Ruling (6491 Edinger Avenue, Huntington Beach, California)
incorporated by reference to the Company's Registration Statement on Form S-11, File
No. 33-32466).(1)
10.9 Agreement of Purchase and Sale and Joint Escrow Instructions By and Between
Shaw-Nelson San Clemente No. 7 ("Seller") and Associated Planners Realty Investors,
Inc. ("Buyer") (incorporated by reference to the Company's Current Report on Form 8-K
dated January 17, 1992).(1)
10.10 Standard Form Lease Between Shaw/Nelson San Clemente No. 7, a California Limited
Partnership and Societe Endo Technic, a California Corporation, dba Endo Technic
Corporation (incorporated by reference to the Company's Current Report on Form 8-K
dated January 17, 1992).(1)
10.11.1 Lease and Assignment thereof regarding the OPTO-22 Property. (Incorporated by
reference to the Company's Registration Statement on Form S-11, File No.
33-45802).(1)
10.12 Agreement of Purchase and Sale and Escrow Instructions between IBG Palm Associates, a
California General Partnership and the Company dated January 6, 1994 re: the North
Palm Street Property. (Incorporated by reference to the Company's Registration
Statement on Form S-11, File No. 33-45802).(1)
10.12.1 Leases and Assignment thereof regarding the North Palm Street Property. (Incorporated
by reference to the Company's Registration Statement on Form S-11, File No.
33-45802).(1)
10.13 Real Estate Purchase Agreement between K & I Associates and West Coast Realty
Investors, Inc. dated March 1, 1993. (Incorporated by reference to Exhibit 10.13 to
Registrant's Current Report on Form 8-K dated May 5, 1994).(1)
10.13.1 Leases re: Fresno Property. (Incorporated by reference to Exhibit 10.13.1 to
Registrant's Current Report on Form 8-K dated May 5, 1994).(1)
10.13.2 First Amendment to lease re The Wherehouse.(1)
10.14 Agreement of Purchase and Sale of Real Property and Escrow Instructions Between
Birtcher Riverside Market Place Properties, Ltd. and West Coast Realty Investors,
Inc. (Incorporated by reference to Exhibit 10.14 to Registrant's Current Report on
Form 8-K dated November 29, 1994).(1)
10.14.1 Riverside Market Place Lease and Assignment thereof (Incorporated by reference to
Exhibit 10.14.1 to Registrant's Current Report on Form 8-K dated November 29,
1994).(1)
10.14.2 Exhibits to Agreement of Purchase and Sale of Real Property and Escrow Instructions
Between Birtcher Riverside Market Place Properties and West Coast Realty Investors,
Inc. (Incorporated by reference to Exhibit 10.14.2 to Registrant's Current Report on
Form 8-K dated November 29, 1994, as amended).(1)
10.14.3 Appraisal for Riverside Market Place Property. (Incorporated by reference to Exhibit
10.14.2 to Registrant's Current Report on Form 8-K dated November 29, 1994, as
amended).(1)
</TABLE>

II-3
<PAGE> 128

<TABLE>
<S> <C>
10.15 Purchase and Sale Contract between BRS-Tustin Safeguard Associates and West Coast
Realty Investors, Inc. (Incorporated by reference to Exhibit 10.15 to Registrant's
Current Report on Form 8-K dated May 22, 1995).(1)
10.15.1 Standard Industrial Lease -- Net between BRS-Tustin Safeguard Associates and
Safeguard Business Systems, Inc. (Incorporated by reference to Exhibit 10.15.1 to
Registrant's Current Report on Form 8-K dated May 22, 1995).(1)
10.15.2 Loan Assignment and Assumption Agreement between BRS-Tustin Safeguard Associates,
West Coast Realty Investors, Inc. and Businessmen's Assurance Company of America
(Incorporated by reference to Exhibit 10.15.2 to Registrant's Current Report on Form
8-K dated May 22, 1995).(1)
10.15.3 Appraisal of Safeguard Business Systems Property (Incorporated by reference to
Exhibit 10.15.3 to Registrant's Current Report on Form 8-K dated May 22, 1995).(1)
10.16 Purchase and Sale Agreement Dated August 28, 1995 between 26 Technology Partnership,
L.P. (co-owner), Jack M. Langston (President of the General Partner of 26 Technology
Partnership, L.P. and co-owner), and West Coast Realty Investors, Inc. (Incorporated
by reference to Exhibit 1 to Registrant's Current Report on Form 8-K dated September
21, 1995).(1)
10.16.1 Appraisal Report for An Industrial Building 4400-4415 Technology Drive, Fremont,
California. (Incorporated by reference to Exhibit 2 to Registrant's Current Report on
Form 8-K dated September 21, 1995).(1)
10.16.2 Standard Industrial Lease between CMS Welding & Machining and 26 Technology
Partnership, L.P. dated November 2, 1993. (Incorporated by reference to Exhibit 3 to
Registrant's Current Report on Form 8-K dated September 21, 1995).(1)
10.16.3 Promissory note secured by deed of trust dated July 1, 1995, including assignment of
leases, environmental indemnity agreement, and other supporting documents.
(Incorporated by reference to Exhibit 4 to Registrant's Current Report on Form 8-K
dated September 21, 1995).(1)
10.16.4 Environmental Site Assessment for 4415 and 4425 Technology Drive dated February 24,
1995. (Incorporated by reference to Registrant's Current Report on Form 8-K dated
September 21, 1995).(1)
10.17 Agreement of Purchase and Sale and Joint Escrow Instructions for 717 and 721 West Del
Paso Road (with exhibits) (Incorporated by reference to Exhibit 1 to Registrant's
Current Report on Post-effective Amendment No. 1 dated October 1, 1996).(1)
10.17.1 Standard Industrial Lease-Net dated April 10, 1989 (as amended) on 717 West Del Paso
Road.(1)
10.17.2 Guarantee of a portion of the Rent on 717 West Del Paso Road (Incorporated by
reference to Exhibit 2 to Registrant's Current Report on Post-effective Amendment No.
1 dated October 1, 1996).(1)
10.17.3 An Appraisal of An Office/Industrial Facility at 717 and 721 West Del Paso Road,
Sacramento, California, dated June 5, 1996 (Incorporated by reference to Exhibit 3 to
Registrant's Current Report on Post-effective Amendment No. 1 dated October 1,
1996).(1)
10.18 Purchase and Sale Contract dated November 18, 1996 between West Coast Realty
Investors and Shidler West Investment Corporation (Incorporated by reference to
Exhibit 1 to Registrant's Current Report on Form 8-K dated January 17, 1997).(1)
10.18.1 Appraisal Report for an Office/Industrial Facility at 17862 Fitch Street, Irvine,
California. (Incorporated by reference to Exhibit 2 to Registrant's Current Report on
Form 8-K dated January 17, 1997).(1)
10.18.2 Commercial lease between Tycom Corporation and Shidler West Investment Corporation
dated December 18, 1996. (Incorporated by reference to Exhibit 3 to Registrant's
Current Report on Form 8-K dated January 17, 1997).(1)
10.18.3 Promissory note secured by deed of trust dated January 9, 1997, including Rider to
Promissory Note, secured by deed of trust on property at 17862 Fitch Street, Irvine.
(Incorporated by reference to Exhibit 4 to Registrant's Current Report on Form 8-K
dated January 17, 1997).(1)
24.1 Consent of BDO Seidman, LLP.(2)
24.2 Consent of Gipson Hoffman & Pancione included in Exhibits 5 and 8 hereto.
24.3 Consent of Hunnicutt Okamoto & Associates.(2)
25 Description of Graphic and Image Material.(2)
</TABLE>

- ---------------
(1) Previously filed.

(2) Filed herewith.

II-4
<PAGE> 129

ITEM 36. UNDERTAKINGS.

A. Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.

B. The undersigned Registrant hereby undertakes:

1. To file, during any period in which offers or sales are being made,
a Post-Effective Amendment to this Registration Statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
Post-Effective Amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.

2. To remove from registration by means of a Post-Effective Amendment
any of the securities being registered which remain unsold at the
termination of the offering.

C. The Registrant undertakes to file a sticker supplement pursuant to Rule
424(c) under the Securities Act of 1933 during the distribution period
describing each property not identified in the prospectus at such time as there
arises a reasonable probability that such property will be acquired and to
consolidate all such stickers into a Post-Effective Amendment filed at least
once every three months with the information contained in such Amendment
provided simultaneously to the existing shareholders of the Registrant. Each
sticker supplement will disclose all compensation and fees received by the
Advisor or its Affiliates in connection with any such acquisition. The
Post-Effective Amendment will include audited financial statements meeting the
requirements of Rule 3-14 of Regulation S-X only for properties acquired during
the distribution period.

D. The Registrant also undertakes to file after the end of the distribution
period a current report on Form 8-K, containing the financial statements and any
additional information required by Rule 3-14 of Regulation S-X, to reflect each
commitment (i.e, the signing of a binding purchase agreement) made after the end
of the distribution period involving the use of 10 percent or more (on a
cumulative basis) of the net proceeds of the offering and to provide the
information contained in such report to the Registrant's shareholders at least
once each quarter after the distribution period of the offering has ended.

E. The Registrant hereby undertakes to provide to the principal
underwriter, at the closing specified in the Selling Agent Agreement,
certificates in such denominations and registered in such names as required by
the underwriters to permit prompt delivery to each purchaser.

F. The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of a registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each Post-Effective Amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement

II-5
<PAGE> 130

relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

(3) That all Post-Effective Amendments will comply with the applicable
forms, rules and regulations of the Commission in effect at the time such
Post-Effective Amendments are filed.

G. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions referred to in Item 33 hereof, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in said Act and is, therefore, unenforceable. If a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the said Act and will be governed by the
final adjudication of such issue.

H. The undersigned Registrant hereby undertakes that it will provide its
Shareholders the financial statements required by Form 10K and Form 10Q
promulgated under the Securities Exchange Act of 1934.

I. The Registrant undertakes to send to each Shareholder on an annual basis
a detailed statement of any transaction with the Advisor or its Affiliates, and
of fees, commissions, compensation and other benefits paid, or accrued to the
Advisor or its Affiliates for the fiscal year completed, showing the amount paid
or accrued to each recipient and the services performed.

II-6
<PAGE> 131

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-11 and has duly caused this
Post-Effective Amendment No. 2 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Los Angeles, California
on March 19, 1997.

WEST COAST REALTY INVESTORS, INC.
a Delaware corporation

By */s/ Philip N. Gainsborough

------------------------------------
Philip N. Gainsborough
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-11 of West Coast Realty Investors, Inc. has
been signed by the following persons in the capacities and on the date
indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------- ------------------------ ---------------

<S> <C> <C>
*/s/ Philip N. Gainsborough Director and March 19, 1997
- ------------------------------------------------- Chief Executive Officer
Philip N. Gainsborough

*/s/ W. Thomas Maudlin, Jr. Director and March 19, 1997
- ------------------------------------------------- President
W. Thomas Maudlin, Jr.

*/s/ Michael G. Clark Vice President, March 19, 1997
- ------------------------------------------------- Treasurer and Chief
Michael G. Clark Financial Officer

*/s/ Steve Bridges Director March 19, 1997
- -------------------------------------------------
Steve Bridges

*/s/ James W. Coulter Director March 19, 1997
- -------------------------------------------------
James W. Coulter

*/s/ George Young Director March 19, 1997
- -------------------------------------------------
George Young

/s/ Michael G. Clark
- -------------------------------------------------
*Michael G. Clark
(As attorney-in-fact
pursuant to Power of
Attorney previously filed)
</TABLE>

II-7
<PAGE> 132

EXHIBIT INDEX

Exhibit
Number
- -------
<TABLE>
<S> <C>
1.1 Amended Form of Selling Agreement.(2)
1.2 Amended Form of Selected Dealer Agreement.(2)
3.1 Certificate of Incorporation (incorporated by reference to the Company's Registration
Statement on Form S-11, File No. 33-32466).(1)
3.1.1 Amendment to Certificate of Incorporation (incorporated by reference to the Company's
Registration Statement on Form S-11, File No. 33-45802).(1)
3.2 Bylaws (incorporated by reference to the Company's Registration Statement on Form
S-11, File No. 33-32466).(1)
3.2.1 Amendment to Bylaws (incorporated by reference to the Company's Registration
Statement on Form S-11, File No. 33-45802).(1)
3.2.2 Amended and Restated Bylaws (incorporated by reference to the Company's Registration
Statement on Form S-11, File No. 33-45802).(1)
3.2.3 Amended and Restated Bylaws.(1)
4 Form of Share Certificate (incorporated by reference to the Company's Registration
Statement on Form S-11, File No. 33-32466).(1)
5 Opinion re: legality (including consent).(1)
8 Opinion re: tax matters (including consent).(1)
10.1 Executed copy of Advisory Agreement (incorporated by reference to the Company's
Registration Statement on Form S-11, File No. 33-32466).(1)
10.1.1 Executed Copy of Amendment to Advisory Agreement (incorporated by reference to the
Company's Registration Statement on Form S-11, File No. 33-45802).(1)
10.1.2 Amended and Restated Advisory Agreement (incorporated by reference to the Company's
Registration Statement on Form S-11, File No. 33-45802).(1)
10.1.3 Second Amended and Restated Advisory Agreement (incorporated by reference to the
Company's Registration Statement on Form S-11, File No. 33-75260).(1)
10.1.4 Third Amended and Restated Advisory Agreement (incorporated by reference to the
Company's Registration Statement on Form S-11, File No. 33-75260).(1)
10.2 Executed Copy of Escrow Instructions.(1)
10.3 Form of Dividend Reinvestment Plan (incorporated by reference to the Company's
Registration Statement on Form S-11, File No. 33-3246).(1)
10.4 Form of Property Management Agreement for Property Manager (incorporated by reference
to the Company's Registration Statement on Form S-11, File No. 33-32466).(1)
10.4.1 Amended and Restated Property Management Agreement (incorporated by reference to the
Company's Registration Statement on Form S-11, File No. 33-45802).(1)
10.4.2 Second Amended and Restated Property Management Agreement.(1)
10.5 Form of Sure Pay Agreement for Automatic Reinvestment Plan (incorporated by reference
to the Company's Registration Statement on Form S-11, File No. 33-32466).(1)
10.6 Agreement to Purchase Property (6491 Edinger Avenue, Huntington Beach, California)
incorporated by reference to the Company's Registration Statement on Form S-11, File
No. 33-32466).(1)
10.7 Lease Re: Property (6491 Edinger Avenue, Huntington Beach, California) incorporated
by reference to the Company's Registration Statement on Form S-11, File No.
33-32466).(1)
10.8 Internal Revenue Service Ruling (6491 Edinger Avenue, Huntington Beach, California)
incorporated by reference to the Company's Registration Statement on Form S-11, File
No. 33-32466).(1)
10.9 Agreement of Purchase and Sale and Joint Escrow Instructions By and Between
Shaw-Nelson San Clemente No. 7 ("Seller") and Associated Planners Realty Investors,
Inc. ("Buyer") (incorporated by reference to the Company's Current Report on Form 8-K
dated January 17, 1992).(1)
10.10 Standard Form Lease Between Shaw/Nelson San Clemente No. 7, a California Limited
Partnership and Societe Endo Technic, a California Corporation, dba Endo Technic
Corporation (incorporated by reference to the Company's Current Report on Form 8-K
dated January 17, 1992).(1)
10.11.1 Lease and Assignment thereof regarding the OPTO-22 Property. (Incorporated by
reference to the Company's Registration Statement on Form S-11, File No.
33-45802).(1)
10.12 Agreement of Purchase and Sale and Escrow Instructions between IBG Palm Associates, a
California General Partnership and the Company dated January 6, 1994 re: the North
Palm Street Property. (Incorporated by reference to the Company's Registration
Statement on Form S-11, File No. 33-45802).(1)
10.12.1 Leases and Assignment thereof regarding the North Palm Street Property. (Incorporated
by reference to the Company's Registration Statement on Form S-11, File No.
33-45802).(1)
10.13 Real Estate Purchase Agreement between K & I Associates and West Coast Realty
Investors, Inc. dated March 1, 1993. (Incorporated by reference to Exhibit 10.13 to
Registrant's Current Report on Form 8-K dated May 5, 1994).(1)
10.13.1 Leases re: Fresno Property. (Incorporated by reference to Exhibit 10.13.1 to
Registrant's Current Report on Form 8-K dated May 5, 1994).(1)
10.13.2 First Amendment to lease re The Wherehouse.(1)

</TABLE>
<PAGE> 133

Exhibit
Number
- -------
<TABLE>
<S> <C>

10.14 Agreement of Purchase and Sale of Real Property and Escrow Instructions Between
Birtcher Riverside Market Place Properties, Ltd. and West Coast Realty Investors,
Inc. (Incorporated by reference to Exhibit 10.14 to Registrant's Current Report on
Form 8-K dated November 29, 1994).(1)
10.14.1 Riverside Market Place Lease and Assignment thereof (Incorporated by reference to
Exhibit 10.14.1 to Registrant's Current Report on Form 8-K dated November 29,
1994).(1)
10.14.2 Exhibits to Agreement of Purchase and Sale of Real Property and Escrow Instructions
Between Birtcher Riverside Market Place Properties and West Coast Realty Investors,
Inc. (Incorporated by reference to Exhibit 10.14.2 to Registrant's Current Report on
Form 8-K dated November 29, 1994, as amended).(1)
10.14.3 Appraisal for Riverside Market Place Property. (Incorporated by reference to Exhibit
10.14.2 to Registrant's Current Report on Form 8-K dated November 29, 1994, as
amended).(1)
10.15 Purchase and Sale Contract between BRS-Tustin Safeguard Associates and West Coast
Realty Investors, Inc. (Incorporated by reference to Exhibit 10.15 to Registrant's
Current Report on Form 8-K dated May 22, 1995).(1)
10.15.1 Standard Industrial Lease -- Net between BRS-Tustin Safeguard Associates and
Safeguard Business Systems, Inc. (Incorporated by reference to Exhibit 10.15.1 to
Registrant's Current Report on Form 8-K dated May 22, 1995).(1)
10.15.2 Loan Assignment and Assumption Agreement between BRS-Tustin Safeguard Associates,
West Coast Realty Investors, Inc. and Businessmen's Assurance Company of America
(Incorporated by reference to Exhibit 10.15.2 to Registrant's Current Report on Form
8-K dated May 22, 1995).(1)
10.15.3 Appraisal of Safeguard Business Systems Property (Incorporated by reference to
Exhibit 10.15.3 to Registrant's Current Report on Form 8-K dated May 22, 1995).(1)
10.16 Purchase and Sale Agreement Dated August 28, 1995 between 26 Technology Partnership,
L.P. (co-owner), Jack M. Langston (President of the General Partner of 26 Technology
Partnership, L.P. and co-owner), and West Coast Realty Investors, Inc. (Incorporated
by reference to Exhibit 1 to Registrant's Current Report on Form 8-K dated September
21, 1995).(1)
10.16.1 Appraisal Report for An Industrial Building 4400-4415 Technology Drive, Fremont,
California. (Incorporated by reference to Exhibit 2 to Registrant's Current Report on
Form 8-K dated September 21, 1995).(1)
10.16.2 Standard Industrial Lease between CMS Welding & Machining and 26 Technology
Partnership, L.P. dated November 2, 1993. (Incorporated by reference to Exhibit 3 to
Registrant's Current Report on Form 8-K dated September 21, 1995).(1)
10.16.3 Promissory note secured by deed of trust dated July 1, 1995, including assignment of
leases, environmental indemnity agreement, and other supporting documents.
(Incorporated by reference to Exhibit 4 to Registrant's Current Report on Form 8-K
dated September 21, 1995).(1)
10.16.4 Environmental Site Assessment for 4415 and 4425 Technology Drive dated February 24,
1995. (Incorporated by reference to Registrant's Current Report on Form 8-K dated
September 21, 1995).(1)
10.17 Agreement of Purchase and Sale and Joint Escrow Instructions for 717 and 721 West Del
Paso Road (with exhibits).(1)
10.17.1 Standard Industrial Lease-Net dated April 10, 1989 (as amended) on 717 West Del Paso
Road.(1)
10.17.2 Guarantee of a portion of the Rent on 717 West Del Paso Road.(1)
10.17.3 An Appraisal of An Office/Industrial Facility at 717 and 721 West Del Paso Road,
Sacramento, California, dated June 5, 1996.(1)
10.17.4 Amendment No. 1 to Form S-11 Registration Statement dated April 16, 1996.(1)
10.18 Purchase and Sale Contract dated November 18, 1996 between West Coast Realty
Investors and Shidler West Investment Corporation (Incorporated by reference to
Exhibit 1 to Registrant's Current Report on Form 8-K dated January 17, 1997).(1)
10.18.1 Appraisal Report for an Office/Industrial Facility at 17862 Fitch Street, Irvine,
California. (Incorporated by reference to Exhibit 2 to Registrant's Current Report on
Form 8-K dated January 17, 1997).(1)
10.18.2 Commercial lease between Tycom Corporation and Shidler West Investment Corporation
dated December 18, 1996. (Incorporated by reference to Exhibit 3 to Registrant's
Current Report on Form 8-K dated January 17, 1997).(1)
10.18.3 Promissory note secured by deed of trust dated January 9, 1997, including Rider to
Promissory Note, secured by deed of trust on property at 17862 Fitch Street, Irvine.
(Incorporated by reference to Exhibit 4 to Registrant's Current Report on Form 8-K
dated January 17, 1997).(1)
24.1 Consent of BDO Seidman, LLP.(2)
24.2 Consent of Gipson Hoffman & Pancione included in Exhibits 5 and 8 hereto.
24.3 Consent of Hunnicutt Okamoto & Associates.(2)
25 Description of Graphic and Image Material.(2)
</TABLE>

- ---------------
(1) Previously filed.

(2) Filed herewith.

<PAGE> 1

EXHIBIT 24.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

West Coast Realty Investors, Inc.

Los Angeles, California

We hereby consent to the use in the Prospectus, constituting a part of this
Post-Effective Amendment No. 2 to the Form S-11 Registration Statement, our
report dated February 28, 1997, relating to the financial statements of West
Coast Realty Investors, Inc., which are contained in that Prospectus.

We also consent to the reference to us under the caption "Experts" in the
Prospectus.

/s/ BDO Seidman, LLP

- ------------------------------------------------------

Los Angeles, California

March 18, 1997

<PAGE> 1

EXHIBIT 24.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use of our reports dated May 21, 1996, and January 17,
1997 in the Post-Effective Amendment No. 2 to the Registration Statement
333-1304 on Form S-11 of West Coast Realty Investors, Inc., included herein. We
also consent to the reference to us under the caption "Experts" in the
Prospectus.

/s/ HUNNICUTT OKAMOTO & ASSOCIATES

- ------------------------------------------------------

Woodland Hills, California

March 18, 1997

<PAGE> 1

EXHIBIT 25

DESCRIPTION OF GRAPHIC AND IMAGE MATERIAL

1. Location: Inside Front Cover Page of the Prospectus (Upper left)

Item: Photograph

Description:
Exterior of building at 14661 Franklin Avenue, Tustin, CA looking
northwest from the southeast. The address is printed just below the
photograph.

2. Location: Inside Front Cover of the Prospectus (Middle)

Item: Photograph

Description:
Exterior of the building at 4040 Vine Street, Riverside, CA looking
east from the west. The address is printed just below the
photograph.

3. Location: Inside Front Cover of the Prospectus (Lower right)

Item: Photograph

Description:
Exterior of building at 260 North Palm Street, Brea, CA looking
northeast from the southwest. The address is printed just below the
photograph.

4. Location: Inside Back Cover Page of the Prospectus (Upper left)

Item: Photograph

Description:
Exterior of the building at 4415 Technology Drive, Fremont, CA
looking west from the east. The address is printed just below the
photograph.

5. Location: Inside Back Cover Page of the Prospectus (Upper right)

Item: Photograph

Description:
Exterior of building at 6491 Edinger, Huntington Beach, CA looking
northwest from the southeast. The address is printed just below the
photograph.

6. Location: Inside Back Cover Page of the Prospectus (Middle)

Item: Photograph

Description:
Exterior of building at 1614 North Blackstone Street, Fresno, CA
looking east from the west. The address is printed just below the
photograph.

7. Location: Inside Back Cover Page of the Prospectus (Bottom)

Item: Photograph

Description:
Exterior of the building at 15461 Springdale Street, Huntington
Beach, CA looking west from the east. The address is printed just
below the photograph.