UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  Form 10-QSB/A


(Mark One)

[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

             For the quarterly period ended June 30, 2000


[_]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

             For the transition period ended ______________to________________



                        Commission file number: 333-55753



                         Baron Capital Properties, L.P.

        (Exact name of small business issuer as specified in its charter)



             Delaware                                    31-1584691

   (State or other jurisdiction                        (IRS Employer
of incorporation or organization)                    Identification No.)

                    7826 Cooper Road, Cincinnati, Ohio 45242

                    (Address of principal executive offices)

                                 (513) 984-5001

                          (Issuer's telephone number)

Check  whether the Issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

         Yes  [X]    No [_]

As of the date of this Report, the Registrant has outstanding 3,909,347 units of
limited partnership interest ("Operating Partnership Units").

<PAGE>

                         PART I - FINANCIAL INFORMATION


Item 1.       Financial Statements

              See following pages.

                                       2
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Cont'd)



                          INDEX TO FINANCIAL STATEMENTS




                                                                      PAGE


CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

   Balance Sheets                                                     F-2

   Statements of Operations                                           F-3

   Statement of Partners' Capital                                     F-4

   Statements of Cash Flows                                           F-5

   Notes to Financial Statements                                    F-6-F-14


                                      F-1
<PAGE>

                             BARON CAPITAL PROPERTIES, L.P.
                              Consolidated Balance Sheets
                          June 30, 2000 and December 31, 1999


<TABLE>
<CAPTION>
                                                                                 June 30,      December 31,
Assets:                                                                            2000            1999
                                                                               ------------    ------------
                                                                               (Unaudited)
     Rental Apartments:
<S>                                                                            <C>             <C>
       Land                                                                    $  7,695,392    $ 1,178,693
       Depreciable property                                                      31,873,043      6,189,095
                                                                               ------------    -----------
                                                                                 39,568,435      7,367,788
       Less accumulated depreciation                                             (6,414,750)    (1,453,177)
                                                                               ------------    -----------
                                                                                 33,153,685      5,914,611

     Investment In Partnerships                                                   4,277,247        930,970

     Cash and Cash Equivalents                                                      124,166         27,552
     Restricted Cash                                                                762,969         52,089
     Interest Receivable                                                          1,338,564         36,997
     Other Receivables                                                              113,797          3,724
     Due from Baron Capital Trust                                                   305,997        296,010
     Advances to Affiliates                                                       6,905,011          5,141
     Other Property and Equipment                                                   281,220        134,981
     Other Assets                                                                   802,951        188,692
                                                                               ------------    -----------
                                                                                 48,065,606      7,590,767
                                                                               ============    ===========


     Liabilities:

       Mortgages payable                                                       $ 25,203,107    $ 4,278,117
       Accounts payable and accrued liabilities                                   2,191,097      1,078,353
       Note payable                                                                 190,000        100,000
       Notes payable, affiliates                                                  3,778,779         50,000
       Capital lease obligation                                                      40,775         42,369
       Security deposits                                                            227,066         40,308
                                                                               ------------    -----------
           Total liabilities                                                     31,630,824      5,589,147



     Minority Partners                                                              536,900           --


     Partners' Capital:

        General Partner issued and outstanding 39,488 and 18,962 partnership
           units as of June 30, 2000 and December 31, 1999 respectively            (125,614)       (33,362)
        Limited Partners: issued and outstanding, 3,909,347 and 1,877,246
           partnership units as of June 30, 2000 and December 31, 1999
           respectively, of which 757,746 are subject to escrow restrictions     16,023,496      2,034,982
                                                                               ------------    -----------
        Total Partners' Capital                                                  15,897,882      2,001,620
                                                                               ------------    -----------
                                                                               $ 48,065,606    $ 7,590,767
                                                                               ============    ===========
</TABLE>


                 See notes to consolidated financial statements


                                       F-2
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.
                      Consolidated Statements of Operations
            For the Three and Six Months Ended June 30, 2000 and 1999


<TABLE>
<CAPTION>
                                                                   Six                Six            Three              Three
                                                                  Months            Months           Months            Months
                                                                  Ended              Ended           Ended              Ended
                                                                 June 30,          June 30,         June 30,          June 30,
                                                                   2000              1999             2000              1999
                                                               -------------     ------------     -------------     ------------
                                                                (unaudited)      (unaudited)       (unaudited)       (unaudited)
                                                               -------------     ------------     -------------     ------------

<S>                                                            <C>               <C>              <C>               <C>
     Revenue:
       Property:
          Rental                                               $  1,744,759      $   512,133      $  1,477,091      $   254,783
          Equity in net loss of unconsolidated partnership          (78,994)         (29,093)          (41,154)         (25,667)
       Interest and other income                                    368,134           79,140           342,594           38,104
                                                               ------------      -----------      ------------      -----------
                                                                  2,033,899          562,180         1,778,531          267,220
                                                               ------------      -----------      ------------      -----------

     Real Estate Expenses:
         Depreciation                                               319,217           72,907           278,392           36,454
         Interest                                                   555,515          144,491           470,056           71,305
         Repairs and maintenance                                    280,564           37,726           107,251           20,250
         Personnel                                                  265,376           57,471           262,266           28,431
         Property Taxes                                             147,818           41,276           127,914           20,680
         Property Insurance                                          38,030           10,718            32,670            3,512
         Utilities                                                  144,154           29,601           130,780           18,050
         Other                                                      209,751          131,570           204,076          122,356
                                                               ------------      -----------      ------------      -----------
                                                                  1,960,425          525,760         1,613,405          321,038
                                                               ------------      -----------      ------------      -----------

     Provision for property impairment                            8,356,638             --           8,356,638             --

     Administrative Expenses:
         Personnel, including officer's compensation                535,461          369,372           375,843           96,711
         Professional services                                      249,539          244,663            88,419           33,169
         Other                                                      173,025           68,068           213,024           25,120
                                                               ------------      -----------      ------------      -----------
                                                                    958,025          682,103           677,285          155,000
                                                               ------------      -----------      ------------      -----------


          Total expenses                                         11,275,088        1,207,863        10,647,329          476,038
                                                               ------------      -----------      ------------      -----------

     Net Loss                                                  ($ 9,241,189)     ($  645,683)     ($ 8,868,798)     ($  208,818)
                                                               ============      ===========      ============      ===========

     Net Loss per Unit Basic and Diluted                             ($3.25)          ($0.36)           ($2.34)          ($0.11)
     Weighted Average Number of Units Outstanding                 2,841,809        1,787,878         3,789,877        1,836,939
</TABLE>


                 See notes to consolidated financial statements


                                      F-3
<PAGE>

                         BARON CAPITAL PROPERTIES, L. P.
                         Statement of Partners' Capital
                     For the Six Months Ended June 30, 2000

<TABLE>
<CAPTION>
                                                            General Partner                Limited Partners
                                                         ---------------------       ---------------------------
                                                          Units        Amount          Units           Amount            Total
                                                         -------     ---------       ---------      ------------      -----------

<S>                                                      <C>         <C>             <C>            <C>               <C>
     Partners' Capital, December 31, 1999                18,962      ($ 33,362)      1,877,246      $  2,034,982      $ 2,001,620


       Capital contributions - Trust                        273           --            26,990           230,118          230,118
       Net loss                                                        (93,345)           --          (9,147,844)      (9,241,189)
       Credit for estimated fair value of services
          performed by officer                                           1,093            --             107,157          108,250
       Exchange Units issued                             24,742           --         2,449,525        22,799,083       22,799,083
       Adjustment Original Investors escrowed units      (4,489)          --          (444,414)             --               --
                                                         ------      ---------       ---------      ------------      -----------


     Partners' Capital, June 30, 2000 (Unaudited)        39,488      ($125,614)      3,909,347      $ 16,023,496      $15,897,882
                                                         ======      =========       =========      ============      ===========
</TABLE>


                 See notes to consolidated financial statements


                                      F-4
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.
                      Consolidated Statements of Cash Flows
                 For the Six Months Ended June 30, 2000 and 1999

<TABLE>
<CAPTION>
                                                                     Six Months Ended June 30,
                                                                       2000            1999
                                                                   ------------     ------------
                                                                    (Unaudited)      (Unaudited)
<S>                                                                <C>              <C>
     Cash Flows from Operating Activities:
        Net loss                                                   ($9,241,189)     ($  645,683)
        Adjustments to reconcile net loss to net cash
                used by operating activities:
              Provision for officer's compensation                     108,540             --
              Depreciation                                             319,217           94,721
              Provision for property impairment                      8,356,638             --
              Equity in net loss of unconsolidated partnership          78,994           29,093
              (Increase) decrease in operating assets:
                 Property Management Reimbursements                       --             38,476
                 Other receivables                                      (2,885)          35,801
                 Other assets                                          (70,543)         (51,102)
               Increase (decrease) in operating liabilities:
                 Accounts payable and accrued liabilities              118,826          236,672
                 Security deposits                                       3,512             (840)
                                                                   -----------      -----------
                    Net cash used by operating activities             (328,890)        (262,862)
                                                                   -----------      -----------

     Cash Flows from Investing Activities:
        Investment in partnerships                                     (11,681)        (885,000)
        Cash distributions from partnerships                           293,000           27,000
        Purchases of other property and equipment                      (26,197)          (1,514)
        Increase in restricted cash                                    (48,610)        (113,166)
        Advances to affiliates                                            --            249,914
                                                                   -----------      -----------
                    Net cash provided by investing activities          206,512         (722,766)
                                                                   -----------      -----------

     Cash Flows from Financing Activities:
        Partners' Capital Contributions                                230,118        1,074,000
        Distributions Paid                                                --            (65,000)
        Proceeds from mortgage financing                                  --            273,499
        Proceeds from notes payable                                     90,000             --
        Proceeds from notes payable, affiliates                           --           (275,000)
        Payments on mortgages payable                                  (99,242)         (22,141)
        Payments on capital lease obligation                            (1,594)            --
        Other                                                             --             20,000
                                                                   -----------      -----------
                    Net cash provided by financing activities          219,282        1,005,358
                                                                   -----------      -----------

     Net Increase in Cash and Cash Equivalents                          96,904           19,730

     Cash and Cash Equivalents, Beginning                               27,552           77,724
                                                                   -----------      -----------

     Cash and Cash Equivalents, Ending                             $   124,456      $    97,454
                                                                   ===========      ===========

     Supplemental Disclosure of Cash Flow Information:
          Cash paid for mortgage and other interest                $   555,515      $   144,491
                                                                   ===========      ===========
</TABLE>


                 See notes to consolidated financial statements


                                      F-5
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Cont'd)


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation

         The  consolidated  balance sheet as of June 30, 2000, the  consolidated
         statements  of  operations  for the six and three months ended June 30,
         2000 and 1999,  the  statement of partners'  capital for the six months
         ended June 30, 2000, and the consolidated  statements of cash flows for
         the six months  ended June 30, 2000 and 1999 have been  prepared by the
         Partnership's management. In the opinion of management, all adjustments
         (which  include  reclassifications  and normal  recurring  adjustments)
         necessary  to  present  fairly  the  financial  position,   results  of
         operations  and  cash  flows  at June  30,  2000  and  for  the  period
         presented,  have been made. The results of operations for the three and
         six months ended June 30, 2000 are not  necessarily  indicative  of the
         operating results for the full year.

         Certain information and footnote  disclosures  normally included in the
         financial  statements  prepared in accordance  with generally  accepted
         accounting  principles have been condensed or omitted.  It is suggested
         that these  consolidated  financial  statements be read in  conjunction
         with the Partnership's  financial statements and notes thereto included
         in the Partnership's December 31, 1999 Form 10-KSB.

         Organization

         Baron Capital  Properties,  L.P. (the  "Partnership"  or the "Operating
         Partnership"),   a  Delaware  limited  partnership,  is  the  operating
         partnership  of Baron  Capital Trust (the  "Trust").  Together with the
         Trust, the Partnership constitutes a real estate company which has been
         organized  to   indirectly   acquire   equity   interests  in  existing
         residential  apartment  properties  located in the United States and to
         provide or acquire debt financing secured by mortgages on such types of
         property. The Partnership,  with the Trust,  acquires,  owns, operates,
         manages and improves  residential  apartment  properties  for long-term
         ownership,  and thereby seeks to maximize  current and long-term income
         and the value of its assets.

         The Trust,  as General  Partner of the  Partnership,  is  authorized to
         cause the Partnership to issue additional units of limited  partnership
         interests   ("Units")  in  the  Partnership  for  any  purpose  of  the
         Partnership  at any  time  to  such  persons  and  on  such  terms  and
         conditions  as may be  determined by the Trust in its sole and absolute
         discretion.  Since  Units  are  exchangeable  by unit  holders  into an
         equivalent  number of common  shares of  beneficial  interest  ("Common
         Shares") in the Trust,  the maximum  number of Units that may be issued
         by the Partnership is limited to the number of authorized shares of the
         Trust,  which is 25,000,000,  less shares issued by the Trust directly,
         excluding Common Shares issued in exchanges of Units for Common Shares.

         As described  below,  in exchange for a cash  capital  contribution  in
         1998,  each of the  founders,  Gregory K.  McGrath and Robert S. Geiger
         (the "Original Investors"), has been issued 378,873 Units, all of which
         have been  deposited  into an  institutional  escrow account for six to
         nine years, subject to earlier release under certain conditions.


                                      F-6
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Cont'd)


         The Partnership commenced operations on February 3, 1998, at which time
         it received an initial limited partnership capital contribution.

NOTE 2.  BASIS OF PRESENTATION

         The accompanying  consolidated  financial statements have been prepared
         in conformity  with  generally  accepted  accounting  principles  which
         assume that the  Partnership  will continue on a going  concern  basis,
         including the  realization of assets and  liquidation of liabilities in
         the ordinary course of business. For six months ended June 30, 2000 and
         the year ended December 31, 1999 the Partnership incurred net losses of
         $9,241,189 and  $2,641,250  and negative cash flows from  operations of
         $328,890 and $555,711. The auditors' report for the year ended December
         31,  1999  was  qualified  to  express  substantial  doubt  as  to  the
         Partnership's ability to continue as a going concern.

         Management's  plans to continue its  operations  and become  profitable
         encompass the following:

         o  The Trust  plans to  attempt  to raise  capital  through  additional
            public or  private  offerings  of  Common  Shares  and/or  Operating
            Partnership Units within the next 12 months.

         o  The  Partnership  intends to continue to acquire  rental  properties
            with proceeds  from any future public or private  offering of Common
            Shares and/or  Partnership Units. The operating results of the Trust
            and the Operating Partnership will depend primarily upon income from
            the  residential  apartment  properties  in which they  directly  or
            indirectly  acquire  an equity or  subordinated  mortgage  interest.
            Operating   results  in  respect   of  equity   interests   will  be
            substantially  influenced  by the demand  and supply of  residential
            apartment  units  in  their  primary  market  and  sub-markets,  and
            operating  expense levels.  Operating results in respect of mortgage
            and  other  debt  interests   will  depend  upon  interest   income,
            including, in certain cases,  participation interest,  whose payment
            will depend upon the operating  performance,  sale or refinancing of
            the underlying  properties.  The operating  results of the Trust and
            Operating  Partnership  will also  depend upon the pace and price at
            which they can acquire and improve additional property interests.

         o  The Partnership intends to review its entire portfolio of properties
            to determine the potential for restructuring and refinancing various
            first mortgage loans and to evaluate certain properties for possible
            sale due to  recent  performance  that  negatively  impacts  overall
            operating  results.  The  Partnership  will  also  explore  possible
            business  combinations  with other  apartment  owners to  facilitate
            continued  growth  to give it the  economies  of scale  and the size
            required  for the Trust to list its  Common  Shares on a  recognized
            securities exchange.

         o  The  Partnership  will also  negotiate with the firms which are owed
            accounts  payable for  services  performed  in  connection  with the
            Exchange  Offering  in order to  extend  payment  terms  and,  where
            possible, to reduce the amounts due.


                                      F-7
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Cont'd)


         See Note 6 regarding the  completion of the Exchange  Offering on April
         7, 2000  under  which the Trust,  through  the  Operating  Partnership,
         acquired additional interests in residential apartment properties.

         In view of these matters,  realization of a major portion of the assets
         in the  accompanying  consolidated  balance sheet is dependent upon the
         continued  operations  of the  Partnership,  which in turn is dependent
         upon the  Partnership's  ability  to meet  its  capital  and  financing
         requirements,  and the  success  of its future  operations.  Management
         believes  that the actions  presently  being  taken by the  Partnership
         provide  the  opportunity  for the  Partnership  to continue as a going
         concern.  However,  there can be no assurance that  management  will be
         successful in the implementation of its plans to raise adequate amounts
         of  capital or that  future  operations  will  become  profitable.  The
         accompanying  consolidated  financial  statements  do not  include  any
         adjustments that might result from the outcome of this uncertainty.

NOTE 3.  RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998,  the FASB  issued  SFAS 133,  Accounting  for  Derivative
         Instruments  and Hedging  Activities,  which has been  deferred by SFAS
         137,  Accounting for Derivative  Instruments  and Hedging  Activities -
         Deferral of the Effective  Date of FASB  Statement No. 133, and amended
         by the  issuance  in June  2000 of SFAS  138,  Accounting  for  Certain
         Derivative Instruments and Certain Hedging Activities,  an amendment of
         FASB  Statement  No.  133.  SFAS 133  requires  that  every  derivative
         instrument  be recorded on the balance  sheet as an asset or  liability
         measured  at its fair  value  and  that  changes  in the fair  value of
         derivative  instruments  be  recognized  currently  in earnings  unless
         specific hedge  accounting  criteria are met. SFAS 133 is effective for
         fiscal years beginning after June 15, 2000.

         Historically,   the   Operating   Partnership   has  not  entered  into
         derivatives  contracts  to  hedge  existing  risks  or for  speculative
         purposes.  Accordingly,  the  Operating  Partnership  does  not  expect
         adoption of the new standard on January 1, 2001 to affect its financial
         statements.

NOTE 4.  COMMITMENTS AND CONTINGENCIES

         Officers' Compensation

         Gregory K. McGrath,  a founder of the Trust and the Partnership and the
         President,  sole shareholder and sole director of Baron Advisors, Inc.,
         a  Delaware  corporation  that  serves as a trustee of the Board of the
         Trust,  serves as Chief  Executive  Officer of the Trust.  He agreed to
         serve as Chief  Executive  Officer of the Trust for its initial year of
         operations in exchange for compensation in the form of Common Shares or
         Units in an amount  not to exceed  25,000  Common  Shares or Units,  as
         applicable, to be determined by the Executive Compensation Committee of
         the Board of the Trust  based  upon his  performance,  in  addition  to
         benefits and eligibility for participation in any option plan and bonus
         incentive   compensation   plan  which  may  be   implemented   by  the
         Partnership.  During 1998,  1999 and the first two quarters of 2000, no
         Common Shares of the Trust or Units of the  Partnership  were issued to
         Mr.  McGrath  as  compensation.   However,  in  order  to  reflect  all
         appropriate  administrative expenses of the Partnership, a provision of
         $108,250 has been made in the accompanying financial statements for


                                      F-8
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Cont'd)


         the estimated fair value of the services rendered by Mr. McGrath as the
         Chief Executive Officer for the first two quarters of 2000. This amount
         has been  charged to the  compensation  expense,  with a  corresponding
         credit to partners' capital.  These estimates of the fair value of such
         services  were  determined  by  management  based upon an  analysis  of
         compensation paid to chief executive officers of a number of comparable
         real estate investment trusts.  Compensation and benefits for the Chief
         Executive Officer are determined annually by the Executive Compensation
         Committee of the Board of the Trust.

         Robert  S.  Geiger,  the  other  founder  of the  Trust  and  Operating
         Partnership,  serves as the Chief Operating  Officer of the Trust,  the
         Operating  Partnership  and Baron  Advisors,  Inc.  His initial  annual
         salary was set at $100,000,  in addition to benefits,  and  eligibility
         for  participation  in any Common Share option plan and bonus incentive
         compensation  plan implemented by the Trust.  Since August 1, 2000, Mr.
         Geiger has received no compensation.

NOTE 5.  RELATED PARTY TRANSACTIONS

         Intercompany Line

         The Partnership has an  intercompany  line with the Trust,  its general
         partner.  The  intercompany  loan is due on demand and is  non-interest
         bearing.  The balance  outstanding on the intercompany  line as of June
         30, 2000 was $305,997 and $296,010 as of December 31, 1999.

         Accrued Interest Receivable, Affiliates

         Certain  of  the  Exchange   Partnerships  acquired  by  the  Operating
         Partnership in the Exchange Offering hold  subordinated  notes due from
         limited partnerships  controlled by Mr. McGrath. See "Note 6. Partners'
         Capital." These debt  instruments  have varying  interest rates and the
         interest  is accrued  and/or  paid on a monthly  basis.  As of June 30,
         2000, the Partnership was due $1,338,564 on these notes.

NOTE 6.  PARTNERS' CAPITAL

         Partners' Capital Contributions

         During  the six months  ended June 30,  2000,  the  Partnership  issued
         26,990 Units of limited partner interest to the Trust at $8.53 per unit
         based upon net proceeds of $230,118.

         In addition, the Partnership issued to the Trust 25,015 general partner
         Units  during the six months  ended June 30, 2000 as an  allocation  to
         adjust the  general  partner  interest  to 1% of the total  outstanding
         Partnership  Units.  This issuance has been treated as an allocation of
         the capital  contributions by the Trust, and no value has been ascribed
         to these general partner Units for accounting purposes.


                                      F-9
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Cont'd)


         Exchange Offering

         In April 2000,  pursuant to a  registration  statement on Form S-4, the
         Operating  Partnership  completed an exchange  offering (the  "Exchange
         Offering") under which it acquired additional  interests in residential
         apartment   properties.   In  the  Exchange  Offering,   the  Operating
         Partnership  issued 2,449,525  registered  Operating  Partnership Units
         (with  an  initial  assigned  value of  $24,495,249)  in  exchange  for
         substantially  all outstanding  units of limited  partnership  interest
         owned by individual  limited partners  ("Exchange Limited Partners") in
         23 limited partnerships (the "Exchange  Partnerships"),  which directly
         or  indirectly  own equity  and/or debt  interests in one or more of 26
         residential  apartment properties located in the southeast and mid-west
         United States.  Prior to the completion of the Exchange  Offering,  the
         Exchange  Partnerships  were managed by corporate general partners (the
         "Corporate  General  Partners"),  which were  controlled  by Gregory K.
         McGrath, who is a founder and the Chief Executive Officer of the Trust,
         a founder and principal  unitholder of the Operating  Partnership,  and
         the President,  sole  shareholder  and sole director of Baron Advisors,
         Inc., a Delaware  corporation  that serves as a trustee of the Board of
         the Trust.

         Following  the  completion  of  the  Exchange  Offering,  the  Exchange
         Partnerships  continue to own the same  property  interests  they owned
         prior to the  offering;  substantially  all of the limited  partnership
         interests in the 23 Exchange  Partnerships  are owned by the  Operating
         Partnership;  Mr. McGrath, for nominal  consideration,  assigned to the
         Trust all of the equity stock in 18 of the Corporate  General  Partners
         and granted to the Board of the Trust a management  proxy  coupled with
         an interest to vote the shares of the remaining five Corporate  General
         Partners;  the  Corporate  General  Partner  of  each  of the  Exchange
         Partnerships  has  assigned  to the  Operating  Partnership  all of its
         economic  interest in the Exchange  Partnerships;  and Mr.  McGrath has
         caused  each  Corporate  General  Partner to waive its right to receive
         from  its  Exchange   Partnership  any  ongoing  fees,  effective  upon
         completion of the Exchange Offering. As a result of the foregoing,  the
         Operating  Partnership (and indirectly the Trust) own substantially all
         of the economic  interest  represented by the equity and debt interests
         owned by the  Exchange  Partnerships  and  control  management  of such
         partnerships.

         The Exchange  Offering expired on April 7, 2000. Under the terms of the
         Exchange Offering,  Exchange Limited Partners in a particular  Exchange
         Partnership  were  entitled  to  participate  in the  offering  only if
         limited  partners  holding  at  least  90%  of  the  units  of  limited
         partnership  interest  in that  partnership  affirmatively  elected  to
         accept the offering.  Exchange Limited  Partners holding  approximately
         97.4%  of  the  outstanding  units  of  limited   partnership  in  such
         partnerships   accepted  the   offering,   and  each  of  the  Exchange
         Partnerships exceeded the 90% requirement.  As a result,  following the
         completion of the Exchange Offering,  the limited partnership interests
         of nine  Exchange  Partnerships  are owned  entirely  by the  Operating
         Partnership  (in the case of nine  Exchange  Partnership  in which  all
         Exchange Limited Partners  accepted the offering) and substantially all
         of  the  limited  partnership   interests  in  the  other  14  Exchange
         Partnerships are owned by the Operating Partnership, with the remaining
         limited  partnership  interests  being  retained  by  Exchange  Limited
         Partners who elected not to accept the offering or failed to respond to
         the offering.


                                      F-10
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Cont'd)


         Operating Partnership Limited Partnership Units

         In  connection  with  the  formation  of the  Trust  and the  Operating
         Partnership,  their two  founders,  Mr.  McGrath  and Mr.  Geiger  (the
         "Original  Investors"),  each  subscribed  for 601,080 Units of limited
         partnership interest in the Operating Partnership (a total of 1,202,160
         Units).  In  consideration  for the Units  subscribed  for by them, the
         Original  Investors  made  a  $100,000  capital   contribution  to  the
         Operating  Partnership.  The  number  of  Units  subscribed  for by the
         Original  Investors  represented  19% of the maximum Common Shares that
         would  have  been  outstanding  following  the  completion  of the Cash
         Offering and the Exchange  Offering,  assuming  that the Trust had sold
         all Common Shares (2,500,000) offered in the Cash Offering and that the
         Operating   Partnership   had  issued  the  maximum   number  of  Units
         (2,500,000)  offered in the Exchange  Offering,  calculated  on a fully
         diluted  basis  assuming all then  outstanding  Units (other than those
         acquired by the Trust) had been exchanged into an equivalent  number of
         Common Shares.  The Original  Investors  deposited the Units subscribed
         for by them into an  institutional  security  escrow account for six to
         nine years, subject to earlier release under certain conditions.

         The  subscription  agreement  entered  into by the  Original  Investors
         provided  that if, as of May 31, 2000,  the number of Units  subscribed
         for by the Original Investors  represents a percentage greater than 19%
         of the then  outstanding  Common Shares,  calculated on a fully diluted
         basis,  each of the Original  Investors would be required to return any
         excess Units to the Operating Partnership for cancellation.  Therefore,
         as of May 31, 2000, an adjustment, reducing the number of Units held in
         escrow by 444,414,  was made to accurately  reflect the number of Units
         held by the Original Investors.

         The fair value of the Units issued to the Original  Investors  amounted
         to  $100,000,  based  upon a  determination  made  by  the  Independent
         Trustees  of the Trust as of the date of  subscription  for these Units
         (February  3,  1998).  The  determination  of the fair  value took into
         consideration  that at the time of the  subscription for the Units, the
         Trust and the Operating  Partnership were development  stage companies,
         with no cash or other significant tangible assets, operating history or
         revenue and no certainty of successful  offerings or future operations;
         the  founders  had at risk their  initial  capital  contributions  plus
         certain additional  unreimbursed advances to cover certain offering and
         operating  expenses;  the  founders  have  significant  experience  and
         developed  know-how  critical  to the  success  of the  Trust  and  the
         Operating   Partnership;   and  the  founders'  Units  are  subject  to
         significant  transfer  restrictions.   The  Operating  Partnership  has
         accounted for the Units as being issued and outstanding, but subject to
         escrow  restrictions,   in  the  accompanying   consolidated  financial
         statements,  and has included the Units as  outstanding  in determining
         the weighted average shares outstanding for purposes of calculating net
         loss per partnership  unit in the accompanying  consolidated  financial
         statements.  Because  the  release  of the  Units  from  escrow  is not
         dependent upon the achievement of any specified  level of profits,  the
         release of the Units from escrow is not  considered to be  compensatory
         and,  accordingly,  no  accounting  measurement  will be  given  to the
         release of the Units from escrow.

         Under the  subscription  agreement,  the Original  Investors  agreed to
         waive future  administrative  fees for managing  Exchange  Partnerships
         which  participated in the Exchange  Offering;  agreed to assign to the
         Operating Partnership the right to receive all residual economic rights
         attributable  to  the  general   partner   interests  in  the  Exchange
         Partnerships;  and,  in order to  permit  management  by


                                      F-11
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Cont'd)


         the  Operating  Partnership  of the  properties  owned by the  Exchange
         Partnerships,   caused  the   Exchange   Partnerships   to  cancel  the
         partnerships' prior property management agreements and agreed to forego
         the right to have a property management firm controlled by the Original
         Investors assume the property  management role in respect of properties
         in which the Trust or the Operating Partnership invest.

         Following the Exchange Offering, the Operating Partnership controls all
         of  the   Exchange   Partnerships   by  virtue  of  its   ownership  of
         substantially all of the limited partnership  interests therein,  which
         provides the  Operating  Partnership  the ability to remove the general
         partner  under the  provisions  of the  limited  partnership  agreement
         pertaining to each Exchange Partnership that authorize limited partners
         holding  over 50% of total  partnership  interest to remove the general
         partner.

         Distributions

         There were no distributions in the six months ended June 30, 2000.

NOTE 7.  NET LOSS PER UNIT

         The Partnership  computes per unit data in accordance with Statement of
         Financial  Accounting  Standards  No.  128 (SFAS  128),  "Earnings  Per
         Share."  SFAS 128  requires  dual  presentation  of basic  and  diluted
         earnings per share on the face of the income statement.

         Basic net loss per unit equals net loss divided by the weighted average
         units outstanding  during the year. The computation of diluted net loss
         per unit that includes dilutive limited partnership unit equivalents in
         the weighted average units outstanding has not been presented, as it is
         anti-dilutive for both the three and six months ended June 30, 2000 and
         1999.

         The  components  used in  calculating  basic  net  loss per unit are as
         follows:

                                                         Weighted
                                                          Average       Loss
                                          Net Loss         Units      Per Unit

     Three Months Ended June 30, 2000    ($8,868,798)    3,789,877    ($2.34)
     Three Months Ended June 30, 1999    ($  208,818)    1,836,939    ($0.11)
     Six Months Ended June 30, 2000      ($9,241,189)    2,841,809    ($3.25)
     Six Months Ended June 30, 1999      ($  645,683)    1,787,878    ($0.36)

NOTE 8.  PRO FORMA FINANCIAL INFORMATION (UNAUDITED)

         The unaudited pro forma condensed consolidated statements of operations
         have been prepared  assuming that the Exchange  Offering had been fully
         subscribed as of January 1, 2000.

         The pro forma  information  is not  necessarily  indicative of what the
         Operating  Partnership's results of operations would have been assuming
         the  completion  of the described  transaction  at the


                                      F-12
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Cont'd)


         beginning of the period  indicated,  nor does it purport to project the
         Operating Partnership's results of operations for any future period.

       Unaudited Pro Forma Condensed Consolidated Statements of Operations
                     For the Six Months ended June 30, 2000

                                Statement of
                              Operations as of     Pro Forma
                                June 30, 2000     Adjustments       Pro Forma
                              ----------------   -------------   ---------------

    Total Revenues                $2,034,000     $1,486,000(1)     $3,520,000
    Cost and Expenses             $2,918,000     $1,350,000(2)     $4,268,000
    Non-Recurring Expense         $8,357,000     $8,357,000(3)
                                 -----------     ----------       -----------
    Net Income (loss)            ($9,241,000)                     ($  748,000)
    Weighted Average Number
      of Partnership Units         2,841,809                        2,841,809

    Net Loss Per Unit                 ($3.25)                          ($0.26)

         Pro Forma Adjustments

         The unaudited pro forma  condensed  consolidated  financial  statements
         represent the acquisition of the Exchange  Partnerships,  which will be
         accounted for under the purchase method of accounting.  The Partnership
         has  estimated  the  adjustments  necessary to allocate  the  aggregate
         purchase price over the recorded book value of these partnerships. Such
         allocations  are subject to final  determination  based upon valuations
         provided by the  Partnership  and other  valuations of fair value as if
         the  acquisitions  were  effective  January  1,  2000.  Therefore,  the
         allocations reflected in the unaudited pro forma condensed consolidated
         financial  statements  may differ from amounts  ultimately  determined.
         Differences   between  the  amounts   included  herein  and  the  final
         allocations are not expected to have a material effect on the unaudited
         pro forma financial statements.

         Pro forma depreciation for the period ended June 30, 2000 is based upon
         assets at fair value at January 1, 2000,  primarily  based upon 30-year
         asset lives.

         Summary pro forma  adjustments  to present  comparative  per share data
         assume that the Exchange Offering had been consummated  January 1, 2000
         (assumes Units outstanding for entire period). The escrowed Units owned
         by the Original Investors are not included in the pro forma computation
         of basic loss per share  because  there is no assurance  that the Units
         will be released from escrow and their inclusion would be antidilutive.

         The pro forma adjustments detailed above are as follows:

         1) The  Exchange  Partnerships  provide an  additional  $1.4 million in
            revenue if assumed to have been included from January 1, 2000.

         2) The  Exchange  Partnerships  incur an  additional  $1.35  million in
            expenses if assumed to have been included from January 1, 2000.


                                      F-13
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Cont'd)


         3) A one-time  Provision  for Property  Impairment  of $8.4 million was
            recognized  at the end of the  second  quarter  to  account  for the
            excess of the exchanged value over the estimated equity value of the
            Exchange Partnerships.

NOTE 9.  SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

         In April  2000,  in  connection  with the  completion  of the  Exchange
         Offering,  the Operating Partnership acquired indirect equity interests
         in 13 rental  properties  and  subordinated  mortgage  interests  in 10
         additional  properties  through the  acquisition of  substantially  all
         partnership interests in the Exchange Partnerships,  which own land and
         depreciable  property,   accrued  interest,   advances,  other  assets,
         mortgages and notes payable, as follows:

                  Land and Depreciable Property          $32,474,270
                  Accrued Interest - Affiliate             1,338,564
                  Advances to Affiliates                   6,843,286
                  Other Assets                               736,604
                                                         -----------
                  Total Assets                           $41,392,724

                  Mortgages Payable                      $19,725,536
                  Notes Payable - Affiliate                3,639,638
                  Total Liabilities                      $23,365,174
                                                         ===========
                  Equity                                 $18,027,550
                                                         ===========


                                      F-14
<PAGE>

                         BARON CAPITAL PROPERTIES, L.P.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (Cont'd)


Item 2.  Management's Discussion and Analysis or Plan of Operation

         The  following  discussion  should  be read  in  conjunction  with  the
         Condensed   Consolidated   Financial   Statements   of  Baron   Capital
         Properties,  L.P. (the "Registrant" or the "Operating Partnership") and
         the Notes thereto. (See ITEM 1 - FINANCIAL STATEMENTS.)

         Forward-looking Statements

         This  Management's  Discussion  and Analysis or Plan of  Operation  and
         other   sections  of  this  Report  contain   certain   forward-looking
         statements  within the meaning of the Securities  Litigation Reform Act
         of  1995  that  are  based  on  current  expectations,   estimates  and
         projections about the Registrant's  business,  management's beliefs and
         assumptions made by management. Words such as "expects", "anticipates",
         "intends", "plans", "believes", "seeks", "estimates", and variations of
         such words and  similar  expressions  are  intended  to  identify  such
         forward-looking  statements.  These  statements  are not  guarantees of
         future  performance  and  involve  certain  risks,   uncertainties  and
         assumptions that are difficult to predict.  Therefore,  actual outcomes
         and results may differ  materially from what is expressed or forecasted
         in such forward-looking statements due to numerous factors,  including,
         but not limited to those discussed in this Management's  Discussion and
         Analysis or Plan of Operation  section of this Report, as well as those
         discussed  elsewhere  in  this  Report  and  from  time  to time in the
         Registrant's  other  Securities  and  Exchange  Commission  filings and
         reports.  In  addition,  such  statements  could be affected by general
         domestic and international  economic  conditions.  The  forward-looking
         statements  contained in this Report speak only as of the date on which
         they are made, and the Registrant  does not undertake any obligation to
         update any forward-looking statement to reflect events or circumstances
         after the date of this Report.

         Results of Operations

         The  Operating  Partnership  commenced  operations in the first half of
         1998. The Operating Partnership and its affiliate,  Baron Capital Trust
         (the "Trust"), a Delaware business trust, constitute an affiliated real
         estate company which has been organized to acquire equity  interests in
         residential apartment properties located in the United States and/or to
         provide or acquire  mortgage  loans  secured by such types of property.
         The  Operating  Partnership  conducts  all of the  Trust's  real estate
         operations  and  holds  all  direct  or  indirect  property   interests
         acquired.

         The Trust is the sole  general  partner of the  Operating  Partnership,
         and,  in such  capacity,  the  Trust  controls  the  activities  of the
         Operating  Partnership.  The  Trust has  elected  to be taxed as a real
         estate investment trust for federal income tax purposes.

         In May 1998,  pursuant to a  registration  statement on Form SB-2,  the
         Trust  commenced  a public  offering  of  2,500,000  common  shares  of
         beneficial  interest  ("Trust Common Shares" or "Common  Shares") at an
         offering price of $10.00 per


                                       3
<PAGE>

         share (maximum proceeds of $25,000,000) ("Cash Offering").  In the Cash
         Offering,  which expired on May 31, 2000, the Trust sold 702,076 Common
         Shares, for total cash proceeds of $7,020,763. The Trust contributed to
         the Operating  Partnership the net cash proceeds  ($5,467,858) from the
         issuance of Common Shares in exchange for an equivalent number of units
         of  limited   partnership   interest  in  the   Operating   Partnership
         ("Operating  Partnership  Units" or "Units").  As of February 12, 2001,
         the Trust  owned  702,076  Operating  Partnership  Units,  representing
         approximately 18.0% of the then outstanding Units.

         The Operating Partnership has acquired substantially all the beneficial
         interests  in  16  residential  apartment  properties,   including  the
         Heatherwood I Apartments (67 studio,  one bedroom and two bedroom units
         located  in  Kissimmee,   Florida)  in  June  1998;  Crystal  Court  II
         Apartments  (80 studio,  one bedroom and two bedroom  units  located in
         Lakeland,  Florida) in July 1998;  Riverwalk Apartments (50 two bedroom
         units  located in New  Smyrna,  Florida)  in  September,  1998;  and 13
         properties  acquired  as part of the  Exchange  Offering  in April 2000
         (discussed below). In July 1998 the Operating Partnership also acquired
         a minority  limited  partnership  interest  in 13 real  estate  limited
         partnerships  then  managed by  affiliates  of  Gregory  K.  McGrath (a
         founder  and Chief  Executive  Officer of the  Trust,  a founder of the
         Operating  Partnership,  and the President,  sole  shareholder and sole
         director of Baron Advisors, Inc., a Delaware corporation that serves as
         a trustee of the Board of the Trust), including certain of the Exchange
         Partnerships  which participated in the Exchange Offering and which are
         now managed by the Trust.

         During 1998 and 1999, the Operating  Partnership  also acquired a total
         of 40% of the limited partnership interests in Alexandria  Development,
         L.P. (the "Alexandria Partnership"),  which owns Alexandria Apartments,
         a 168-unit residential  apartment property (the "Alexandria  Property")
         under  construction in Alexandria,  Kentucky.  As of February 12, 2001,
         112 of the 168 residential units (approximately 67%) had been completed
         and were in the rent-up stage. Of the completed  units,  107 units have
         been rented. In September 2000, the Alexandria Partnership entered into
         an agreement to sell the  Alexandria  Property in exchange for $510,000
         cash, record title to 20 acres of undeveloped  property located in Vero
         Beach, Florida and the assumption by the contemplated  purchaser of the
         existing  first  mortgage  loan  secured  by a  first  mortgage  on the
         Alexandria Property with a principal balance as of February 12, 2001 of
         approximately  $8,650,000.  If the sale,  which is  subject  to certain
         closing  conditions,  is  completed,  the  Operating  Partnership  will
         receive 40% of the net proceeds and other consideration  payable to the
         Alexandria Partnership.

         In September  1998, the Trust entered into an agreement with three real
         estate development companies (Brentwood at Southgate,  Ltd., Burlington
         Residential,  Ltd. and The Shoppes at Burlington,  Ltd.) to acquire two
         luxury residential  apartment  properties in the development stage upon
         the completion of  construction.  The three  development  companies are
         controlled by Mr. McGrath.  One of the residential  properties has been
         sold to a third party with the Trust's consent.  The remaining property
         is  scheduled  to have a total of 396 units,  comprised of one, two and
         three


                                       4
<PAGE>

         bedroom/one or two bathroom  apartments.  Construction  of the property
         (the "Burgundy Hills Property"), located in Florence, Kentucky (part of
         the Cincinnati  metropolitan  area), is expected to be completed by the
         end of the  first  quarter  of  2004.  The  Trust  has a right of first
         negotiation to purchase the property from the development  company upon
         completion and a right of first refusal to purchase the property on the
         same terms offered by a third party.  The purchase price is expected to
         be  approximately  $30,000,000.  It is contemplated  that a significant
         portion of that amount would be covered by first mortgage financing. At
         the current time the Trust does not have adequate resources to close on
         the  transaction  and it is  uncertain  whether  the  Trust  will  have
         adequate  resources  to complete the  transaction  upon  completion  of
         construction.

         In  connection  with the  transaction,  the Trust (along with its Chief
         Executive  Officer)  agreed to  co-guarantee up to 35% (or a maximum of
         approximately  $6,000,000)  of long-term  first  mortgage  construction
         financing provided by KeyBank National Association  ("KeyBank").  As of
         February 12, 2001,  approximately  $5,300,000 of the construction  loan
         had  been  drawn  down,   resulting  in   outstanding   guarantees   of
         approximately $1,900,000. The interest rate on the construction loan is
         KeyBank's  prime rate  (currently  8.5%) or the LIBOR rate plus 2%. The
         Trust  also  agreed  that,  if the  loan  is not  repaid  prior  to the
         expiration  of the  guarantee,  it  would  either  buy out  the  bank's
         position on the entire amount of the construction loan or arrange for a
         third party to do so.

         In September  2000, the Trust  received  notice from counsel to KeyBank
         that  Burlington  Residential,  Ltd.  ("Borrower"),  the  owner  of the
         Burgundy Hills  Property,  had defaulted on its loan for failure to pay
         current interest due and meet certain equity requirements and covenants
         under the loan agreement,  adverse changes in the financial  conditions
         of the Borrower and the Trust,  and the Trust's failure to meet certain
         tangible  net worth  tests set  forth in the loan  agreements.  KeyBank
         indicated  that it was  exercising  its right to  accelerate  the loan.
         According to Mr.  McGrath,  KeyBank agreed to forego further action for
         at least 60 days while the parties  attempted to reach an  arrangement.
         The extension  expired in November 2000 and,  according to Mr. McGrath,
         is currently  being extended on a  month-to-month  basis.  The Borrower
         paid  down  the  outstanding  accrued  interest  and a  portion  of the
         principal and is currently  negotiating  a new  long-term  construction
         facility with another  institutional lender to replace the KeyBank loan
         (and the Bank One loan described below).  It anticipates  completion of
         the refinancing in the first quarter of 2001.

         Bank  One  has  provided  additional  institutional  financing  in  the
         principal amount of $1,576,000 to the Borrower.  The loan is secured by
         a security interest in partnership interests in the Borrower.  Due to a
         default in payment of interest due,  Bank One has been assigned  rental
         payments and has taken over day-to-day management of the property. This
         loan is expected to be paid off with the  proposed  new first  mortgage
         financing  referenced above. There can be no assurance that refinancing
         will be  available  or will be  available  on  commercially  reasonable
         terms, that KeyBank will


                                       5
<PAGE>

         not seek to  enforce  its  right  to  accelerate  the  loan  and  begin
         foreclosure  proceedings  against the Burgundy Hills Property,  or that
         BankOne  will not seek to enforce its right to take over control of the
         Borrower.

         In addition,  in April 2000,  pursuant to a  registration  statement on
         Form S-4, the Operating Partnership completed an exchange offering (the
         "Exchange  Offering") under which it acquired  additional  interests in
         residential  apartment  properties.   In  the  Exchange  Offering,  the
         Operating  Partnership  issued  2,449,525  registered  Units  (with  an
         initial  assigned value of $24,495,249)  in exchange for  substantially
         all  outstanding  units  of  limited  partnership   interest  owned  by
         individual limited partners ("Exchange Limited Partners") in 23 limited
         partnerships (the "Exchange  Partnerships").  The Exchange Partnerships
         directly or indirectly  own equity and/or debt interests in one or more
         of 26 residential  apartment  properties  (the  "Exchange  Properties")
         located in the southeast and mid-west United States.

         Holders  of  Operating  Partnership  Units  (other  than the Trust) are
         entitled  to  exchange  all or a portion of their Units at any time and
         from time to time for an  equivalent  number  of  Common  Shares of the
         Trust, so long as the exchange would not cause the exchanging  party to
         own (taking into account certain ownership attribution rules) in excess
         of 5% of the then  outstanding  Common  Shares,  subject to the Trust's
         right to cash out any  holder of Units who  requests  an  exchange  and
         subject to certain other exceptions.

         Prior  to  the  completion  of  the  Exchange  Offering,  the  Exchange
         Partnerships were managed by corporate general partners (the "Corporate
         General Partners"), which were controlled by Mr. McGrath.

         Following  the  completion  of  the  Exchange  Offering,  the  Exchange
         Partnerships  continue to own the same  property  interests  they owned
         prior to the  offering;  substantially  all of the limited  partnership
         interests  in the 23 Exchange  Partnership  are owned by the  Operating
         Partnership;  Mr. McGrath, for nominal  consideration,  assigned to the
         Trust all of the equity stock in 18 of the Corporate  General  Partners
         and granted to the Board of the Trust a management  proxy  coupled with
         an interest to vote the shares of the remaining five Corporate  General
         Partners;  the  Corporate  General  Partner  of  each  of the  Exchange
         Partnerships  assigned to the Operating Partnership all of its economic
         interest in the  partnership;  and Mr.  McGrath  caused each  Corporate
         General  Partner  to waive  its  right  to  receive  from its  Exchange
         Partnership  any  ongoing  fees,   effective  upon  completion  of  the
         exchange. As a result of the foregoing,  the Operating Partnership (and
         indirectly the Trust) own  substantially  all of the economic  interest
         represented  by the equity  and debt  interests  owned by the  Exchange
         Partnerships and control management of such partnerships.

         Certain of the  Exchange  Partnerships  own direct or  indirect  equity
         interests in 16 Exchange  Properties  which  consist of an aggregate of
         1,012  residential  units  (comprised of studio and one, two, three and
         four-bedroom units). Certain of the Exchange Partnerships own direct or
         indirect mortgage interests in 10 Exchange


                                       6
<PAGE>

         Properties,  which consist of an aggregate of 813 existing  residential
         units  (studio  and one and two  bedroom)  and 168 units (two and three
         bedroom) under development.  Of the Exchange Properties,  21 properties
         are located in Florida,  three properties in Ohio and one property each
         in Georgia and Indiana.

         Consolidated Balance Sheet as of June 30, 2000 Compared to December 31,
         1999

         Due to the  completion  of the Exchange  Offering the balance sheet for
         the  Operating   Partnership   reflects  large   increases  in  assets,
         liabilities and partners' capital. During the six months ended June 30,
         2000,  total  assets  increased  to  $48.1  million  while  liabilities
         increased to $31.6 million.  As mentioned  above the Exchange  Offering
         increased the number of  properties in which the Operating  Partnership
         indirectly  owns an  equity  and/or  mortgage  interest  by  adding  26
         Exchange Properties. The Operating Partnership now has rental apartment
         assets in excess of $39.5  million,  which are subject to $25.2 million
         in first mortgage debt.

         Partners' capital increased to $15.9 million due to the issuance in the
         Exchange  Offering of 2,449,525 Units with an initial assigned value of
         $24.5  million  reduced by a one-time  write off charge of $1.7 million
         (which  represents any unamortized  loan costs recorded on the Exchange
         Partnerships  books  that  were in place  at the  time of the  Exchange
         Offering from the syndication of the prior partnership structure) and a
         net loss for the six months ended June 30, 2000 of $9.2 million.

         Operations  for the Six Months  Ended  June 30,  2000  Compared  to Six
         Months Ended June 30, 1999

         Revenues,   real  estate  expenses  and  administrative   expenses  all
         increased  substantially  for the six  months  ended  June 30,  2000 in
         comparison to the six months ended June 30, 1999 due to the  completion
         of the  Exchange  Offering  mentioned  above and the addition of the 26
         Exchange Properties and their related operating costs.

         The Operating Partnership  recognized a one-time charge of $8.4 million
         to operations as a Provision for Property Impairment. This provision is
         the result of  writing  off the  excess of the  exchanged  value of the
         Exchange  Partnerships  over the estimated equity value of the Exchange
         Properties.  The equity value is  calculated  by reducing the appraised
         value of the Exchange  Properties by any mortgages or interest payables
         due on the Exchange Properties.

         Liquidity and Capital Resources

         Net cash used in operating  activities in the six months ended June 30,
         2000 was ($328,890) compared to ($262,862) in the six months ended June
         30, 1999.  The change is due to the  recognition of additional net loss
         over the six months  ended June 30, 1999 offset by increases in certain
         liabilities and decreases in certain assets.


                                       7
<PAGE>

         Net cash provided by investing  activities in the six months ended June
         30, 2000 was $206,512 compared to net cash used in investing activities
         of  ($722,766)  in the six months ended June 30, 1999.  The increase in
         cash for 2000 was due  primarily  to an increase in cash  distributions
         from  the  Exchange  Partnerships  and a  decrease  in  investments  in
         partnerships.

         Net cash provided by financing activities for the six months ended June
         30, 2000 was $219,282  compared to $1,005,358 for 1999. The decrease in
         cash was due to a decrease in partners' capital  contributions with the
         expiration of the Cash Offering in May 2000.

         The  Operating  Partnership  paid $555,515  towards  mortgage and other
         interest during the six months ended June 30, 2000 compared to $144,491
         in the six  months  ended  June  30,  1999 due to the  addition  of the
         Exchange Properties and increase in mortgage debt.

         Since inception, the Trust has contributed to the Operating Partnership
         net cash proceeds of  $5,467,858  from the issuance of Common Shares in
         the Cash Offering in exchange for Units in the  Operating  Partnership.
         Approximately  $230,000 of such amount was contributed in the first six
         months of 2000. The Trust is the sole general  partner of the Operating
         Partnership  and, as of February  12,  2001,  owned  702,076  Operating
         Partnership  Units,  representing   approximately  18.0%  of  the  then
         outstanding Units.

         Because  of the  net  loss  of  $2,641,250  incurred  by the  Operating
         Partnership  in the period ended December 31, 1999, and the $975,305 in
         accounts  payable owed to professionals in connection with the Exchange
         Offering as of December 31, 1999, and its limited  liquid  resources as
         of December 31, 1999, the Operating Partnership's  independent auditors
         qualified   their   auditors'   report  to  reflect  a  going   concern
         contingency.

         The completion in April 2000 of the Exchange  Offering  described above
         has  completed  the first  effort,  in the  opinion of  management,  to
         provide the critical mass  necessary  for  profitable  operations.  The
         Trust is negotiating  with the firms which are owed accounts payable in
         order to extend payment terms and, where  possible,  reduce the amounts
         due.  Distributions  will be made by the Operating  Partnership as cash
         flow allows,  but will be negatively  impacted  until the open accounts
         payable are reduced.  Management does not anticipate that the Operating
         Partnership  will make  distributions  to its unit holders for the next
         several quarters.

         The Trust and the Operating Partnership intend to use securities of the
         Trust  and the  Operating  Partnership  (including  Common  Shares  and
         Units),  proceeds from future sales of such  securities,  and available
         operating  cash  flow and  financing  from  other  sources  to  acquire
         interests in additional  residential  apartment properties or interests
         in other  partnerships  substantially  all of whose  assets  consist of
         residential  apartment  property  interests,  and payment of applicable
         fees and expenses.


                                       8
<PAGE>

         The operating  results of the Trust and the Operating  Partnership will
         depend primarily upon income from the residential  apartment properties
         in which they directly or  indirectly  own or acquire an equity or debt
         interest.  Operating  results in respect  of equity  interests  will be
         substantially  influenced  by the demand for and supply of  residential
         apartment units in their primary market and sub-markets,  and operating
         expense levels. Operating results in respect of mortgage and other debt
         interests  will  depend upon  interest  income,  including,  in certain
         cases,  participation  interest,  whose  payment  will  depend upon the
         operating   performance,   sale  or   refinancing   of  the  underlying
         properties.  The  operating  results  of the  Trust  and the  Operating
         Partnership  will also depend upon the pace and price at which they can
         acquire and improve additional property interests.

         The target  metropolitan  markets and  sub-markets  have  benefited  in
         recent periods from demographic  trends  (including  population and job
         growth)  which  increase the demand for  residential  apartment  units,
         while  financing  constraints  (specifically,  reduced  availability of
         development   capital)   have  limited  new   construction   to  levels
         significantly below construction activity in prior years. Consequently,
         rental rates for residential apartment units have increased at or above
         the inflation  rate for the last two years and are expected to continue
         to  experience  such  increases  for the next 18 months based on market
         statistics made available to management of the Operating Partnership in
         terms of occupancy rates, supply, demographic factors, job growth rates
         and recent  rental  trends.  Expense  levels also  influence  operating
         results,  and  rental  expenses  (other  than real  estate  taxes)  for
         residential   apartment   properties   have   generally   increased  at
         approximately  the rate of  inflation  for the past three years and are
         expected to increase at the rate of  inflation  for the next 18 months.
         Changes  in  interest  rates  are not  expected  to  materially  impact
         operations,  because the  majority of the real  estate  mortgages  have
         fixed interest rates, as do all of the inter-company loans.

         The  Operating  Partnership  believes  that  known  trends,  events  or
         uncertainties  that  will  or  are  reasonably  likely  to  affect  the
         short-term and long-term  liquidity and current and future prospects of
         the Trust and the Operating  Partnership include the performance of the
         economy and the  building of new  apartment  communities.  Although the
         Operating  Partnership  cannot  reliably  predict  the effects of these
         trends,  events and  uncertainties  on the property  investments of the
         Trust and the Operating  Partnership as a whole, some of the reasonably
         anticipated effects might include downward pressure on rental rates and
         occupancy levels.

         Generally, there are no seasonal aspects of the operations of the Trust
         or the Operating Partnership that might have a material effect on their
         financial conditions or results of operation.  However, for the last 36
         months,  one  60-unit  student  housing  property  owned  by one of the
         Exchange  Partnerships  involved in the  Exchange  Offering  has had an
         average  occupancy  rate of 88% for nine months of the year and 61% for
         the remaining three months of the year.


                                       9
<PAGE>

         Subject to the foregoing discussion, management believes that the Trust
         and the  Operating  Partnership  have the ability to satisfy their cash
         requirements  for the foreseeable  future.  However,  management of the
         Operating  Partnership  believes  that it will be  necessary  to  raise
         additional  capital during the next 12 months to make  acquisitions and
         to meet  management's  revenue and cash flow  goals.  The Trust and the
         Operating Partnership intend to investigate making an additional public
         or private  offering of Common  Shares  and/or Units during the next 12
         months.

         As  part  of  the  ongoing  operations  of the  Operating  Partnership,
         management is reviewing the entire portfolio of properties to determine
         the potential for  restructuring or refinancing  various first mortgage
         loans. Additionally, properties whose recent performance has materially
         negatively impacted the Operating  Partnership's  operating results are
         being  evaluated for possible sale.  Certain of these  properties  have
         been  listed  for sale.  The Trust is also in  discussions  with  other
         apartment  owners,  and is exploring  business  combinations  that will
         bring it  economies  of scale  and the size it needs  for  listing  its
         Common  Shares on a recognized  securities  exchange.  Additional  size
         would  also  give  the  Operating   Partnership  the  operating  margin
         necessary  to support  its  valuable  management  team that is believed
         necessary for its long-term growth.

         The Trust and the Operating  Partnership  expect no material  change in
         the number of employees over the next 12 months.

         In an effort to increase  profitability,  the Operating Partnership has
         also entered into agreements with WaKuL, Inc.  (formerly Rapid Transmit
         Technology,  Inc.), a provider of integrated communications services to
         owners,  property  managers  and  residents  of  residential  apartment
         properties, including discounted local and long distance phone service,
         digital  cable TV,  high  speed  Internet  access,  monitored  security
         systems, utility sub-metering and various property management services.
         WaKuL will provide  these  services at no capital cost to the Operating
         Partnership,  and has entered into revenue sharing  relationships  with
         the  Operating  Partnership.  (WaKuL is an affiliate  of the  Operating
         Partnership  by  virtue of the  overlapping  management  and  ownership
         capacities in the Trust, the Operating Partnership and WaKuL of Gregory
         K.  McGrath,  a founder of the Trust,  the  Operating  Partnership  and
         Wakul.)  The WaKuL  services  are  expected  to provide  the  Operating
         Partnership's  properties with a significant  marketing  advantage over
         its competitors,  and to provide  significant rental and other revenues
         that the properties otherwise would not have generated.

         Year 2000

         The computer  systems of the Trust and the Operating  Partnership  have
         been  tested  for year 2000  problems  and the Trust and the  Operating
         Partnership  believe  that such systems are year 2000  compatible.  The
         Trust and the Operating  Partnership  have not experienced any material
         year 2000 problems so far. It is possible,  however,  that the computer
         systems of the Trust and the Operating Partnership and certain computer


                                       10
<PAGE>

         systems or software  products of their suppliers could  experience year
         2000 problems and that such problems could adversely  affect them. With
         respect  to their own  computer  systems,  the Trust and the  Operating
         Partnership have upgraded their principal  operating  computer software
         to the most recent available  revision sold by their software supplier,
         which software the supplier has  represented to be year 2000 compliant.
         The Trust and the Operating  Partnership believe that such upgrade will
         solve  any  year  2000  problems  that  could  affect  their  operating
         software.  The  failure to  identify  and solve all year 2000  problems
         affecting  their business could have an adverse effect on the business,
         financial  condition  and  results of  operations  of the Trust and the
         Operating Partnership.


                                       11
<PAGE>

                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

         The  Registrant  is a claimant  in the  Georgia  Pacific  class  action
         lawsuit. It is not a party to any other legal proceeding.


Item 2.  Changes in Securities and Use of Proceeds


              Not Applicable

Item 3.  Defaults upon Senior Securities

              None

Item 4.  Submission of Matters to a Vote of Security Holders

              None

Item 5.  Other Information

              None

Item 6.  Exhibits and Reports on Form 8-K

         (a)

         Exhibit
         Number          Description


         3.1      Certificate   of  Limited   Partnership   of  the   Registrant
                  (incorporated  herein by  reference to Exhibit 3.1 to the Form
                  S-4  Registration  Statement of the Registrant  filed with the
                  Securities  and  Exchange  Commission  on June 2,  1998).

         3.2      Agreement of Limited  Partnership of Baron Capital Properties,
                  L.P.  dated  as  of  May  15,  1998  (incorporated  herein  by
                  reference to Exhibit 10.6 to Amendment  No. 3 to the Form SB-2
                  Registration  Statement of Baron  Capital Trust filed with the
                  Securities   and   Exchange   Commission   on  May  15,   1998
                  (Registration No. 333-35063)).

         27       Financial Data Schedule


         (b) The Registrant did not file any Current  Reports on Form 8-K during
             the quarter for which this Report is filed.


                                       12
<PAGE>

         In accordance with the requirements of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.

February 27, 2001

                                 BARON CAPITAL PROPERTIES, L.P.

                                 By:      Baron Capital Trust, General Partner

                                 By:        /s/  Gregory K. McGrath
                                          ------------------------------------
                                          Gregory K. McGrath
                                          Chief Executive Officer

                                 By:        /s/  Mark L. Wilso
                                          ------------------------------------
                                          Mark L. Wilson
                                          Chief Financial Officer


                                       13