SECURITIES AND EXCHANGE COMMISSION 
                                                                
                          Washington, D.C.  20549 
 
                                 FORM 10-Q 
 
(Mark One) 
     
  [x]             QUARTERLY REPORT PURSUANT TO SECTION 13 OR                
                 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
 
For the quarterly period ended   September 30, 1996 
                                --------------------
 
                                    OR 
 
     
  [ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  
                OF THE SECURITIES EXCHANGE ACT OF 1934 
 
For the transition period from                  to                         
 
                   Commission file number      1-8594      
                                               ------- 
 
 
                    PRESIDENTIAL REALTY CORPORATION                      
                    ------------------------------- 
          (Exact name of registrant as specified in its charter) 
 
       Delaware                                        13-1954619     
       ---------                                       ----------      
(State or other jurisdiction of                    (I.R.S. Employer  
  incorporation or organization)                   Identification No.) 
 
  180 South Broadway, White Plains, New York              10605 
  ------------------------------------------              ------      
  (Address of principal executive offices)              (Zip Code)     
 
Registrant's telephone number, indicating area code     914-948-1300       
                                                        ------------  
 
Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.  Yes    x      No  
                                                     ------        ------ 
 
The number of shares outstanding of each of the issuer's classes of common 
stock as of the close of business on November 7, 1996 was 478,940 shares of 
Class A common and 3,067,413 shares of Class B common.


 
 


 
 
              PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES 
 
 
 
 
                               Index to 10-Q 
 
                          For the Nine Months Ended 

                              September 30, 1996 
 
 
 
Part I - Financial Information (Unaudited)                        
 
 
     Consolidated Balance Sheets                                    
 
     Consolidated Statements of Operations                           
 
     Consolidated Statements of Cash Flows                           
 
     Notes to Consolidated Financial Statements                       
  
     Management's Discussion and Analysis of 
       Financial Condition and Results of Operations                
 
Part II - Other Information 
 
     Item 6.  Exhibits and Reports on Form 8-K                    
                            
 


<TABLE>
 PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS (Unaudited)
<CAPTION>
 
 
 
 Assets                                                                  September 30,      December 31,
 <S>                                                                        1996                1995
                                                                        -------------       ------------
   Mortgage portfolio (Note 2):                                          <C>                <C>  
     Sold properties, accrual                                            $32,004,782        $34,605,410
     Related parties, accrual                                              1,028,913          1,090,746
     Sold properties, impaired                                            14,673,840         16,080,144
     Related parties, impaired                                             1,573,085          1,639,396
                                                                        -------------       ------------
     Total mortgage portfolio                                             49,280,620         53,415,696
                                                                        -------------       ------------
   Less discounts:
     Sold properties, accrual                                              3,006,505          3,554,902
     Related parties, accrual                                                149,304            162,766
     Sold properties, impaired                                             7,773,380          7,829,694
                                                                        -------------       ------------
     Total discounts                                                      10,929,189         11,547,362
                                                                        -------------       ------------
   Less deferred gains:
     Sold properties, accrual                                             14,057,616         14,830,873
     Sold properties, impaired                                             5,495,696          6,516,474
     Related parties, impaired                                             1,573,085          1,639,396
                                                                        -------------       ------------
     Total deferred gains                                                 21,126,397         22,986,743
                                                                        -------------       ------------
   Net mortgage portfolio (of which $583,875 in 1996
     and $1,878,646 in 1995 are due within one year)                      17,225,034         18,881,591
                                                                        -------------       ------------
 
   Real estate (Note 3)                                                   25,077,635         23,871,618
     Less: accumulated depreciation                                        5,512,758          5,073,887
                                                                        -------------       ------------
   Net real estate                                                        19,564,877         18,797,731
                                                                        -------------       ------------
 
   Foreclosed properties (Note 4)                                            589,832            601,434
   Minority partners' interest (Note 5)                                    3,675,704          3,971,048
   Prepaid expenses and deposits in escrow                                 1,339,247          1,327,000
   Other receivables (net of valuation allowance of
     $117,976 in 1996 and $143,739 in 1995)                                  655,067          1,029,052
   Other receivables (related party)                                          11,306             10,664
   Securities available for sale (Note 6)                                  3,482,052          2,390,346
   Cash and cash equivalents                                               2,025,892          1,306,505
   Other assets                                                            1,096,798          1,197,743
                                                                        -------------       ------------
   Total Assets                                                          $49,665,809        $49,513,114
                                                                        =============       ============
 
 
 
 
 
<FN> 
   See notes to consolidated financial statements.
</TABLE>

 
<TABLE>
 PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS (Unaudited)
<CAPTION>
 
 Liabilities and Stockholders' Equity
 
                                                                         September 30,         December 31, 
                                                                             1996                  1995
<S>                                                                      -------------         -------------
    Liabilities:                                                          <C>                  <C> 
      Mortgage debt:
        Properties owned (Note 7)                                         $26,642,060           $26,977,997
        Wrap mortgage debt on sold properties                               5,726,423             6,060,537
                                                                         -------------         -------------
      Total (of which $1,024,847 in 1996 and $1,002,048
             in 1995 are due within one year)                              32,368,483            33,038,534
 
      Executive pension plan liability (Note 10)                            1,747,861             1,841,859
      Accrued liabilities                                                   2,121,741             1,776,117
      Accrued postretirement cost (Note 11)                                   599,652               617,316
      Deferred income                                                         477,507               560,164
      Accounts payable                                                        404,839               346,522
      Distribution payable on common stock                                    531,948
      Other liabilities                                                       519,213               531,363
                                                                         -------------         -------------
    Total Liabilities                                                      38,771,244            38,711,875
                                                                         -------------         -------------
 
    Stockholders' Equity:
      Common stock; par value $.10 a share (Note 1-C)
        Class A, authorized 700,000 shares, issued and
          outstanding  478,940 shares                                          47,894                47,894
        Class B       September 30, 1996  December 31, 1995                   308,160               306,406
        -----------   ---------------     ---------------
        Authorized:       10,000,000          10,000,000
        Issued:            3,081,600           3,064,056
        Treasury:             14,221              14,221
 
      Additional paid-in capital                                            1,845,209             1,744,933
      Retained earnings                                                     8,936,848             8,905,779
      Net unrealized loss on securities available for sale (Note 6)           (50,978)              (11,205)
      Class B, treasury stock (at cost)                                      (192,568)             (192,568)
                                                                         -------------         -------------
    Total Stockholders' Equity                                             10,894,565            10,801,239
                                                                         -------------         -------------
    Total Liabilities and Stockholders' Equity                            $49,665,809           $49,513,114
                                                                         =============         =============
 

 
<FN> 
      See notes to consolidated financial statements.
</TABLE>
 


<TABLE>
 PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>
 
 
 
                                                                           NINE MONTHS ENDED
                                                                             SEPTEMBER 30,
                                                                     ---------------------------
                                                                         1996           1995
 Income:                                                             ------------   ------------
<S>                                                                  <C>            <C>
   Rental                                                            $6,419,504     $5,986,285
   Interest on mortgages - sold properties                            1,653,430      1,538,401
   Interest on wrap mortgages                                         1,048,207      1,063,242
   Interest on mortgages - related parties                              197,131        186,597
   Investment income                                                    240,630        259,553
   Other                                                                 44,887         51,882
                                                                     ------------   ------------
 Total                                                                9,603,789      9,085,960
                                                                     ------------   ------------
 Costs and Expenses:
   General and administrative                                         1,678,583      1,442,774
   Interest on wrap mortgage debt                                       187,764        202,799
   Other interest                                                       106,278         86,813
   Depreciation on non-rental property                                   19,271         17,190
   Rental property:
     Operating expenses                                               2,857,844      2,529,213
     Interest on mortgages                                            1,651,016      1,712,565
     Real estate taxes                                                  596,620        564,429
     Depreciation on real estate                                        484,302        453,149
     Amortization of mortgage and organization costs                     98,041        102,380
     Minority interest share of partnership income                      655,189        581,046
     Loss from operations of foreclosed properties (Note 4)              27,370         76,774
     Net (gain) loss from sales of foreclosed properties (Note 4)       (22,490)       (52,192)
                                                                     ------------   ------------
 Total                                                                8,339,788      7,716,940
                                                                     ------------   ------------
 
 Income before net gain from sales of properties and securities       1,264,001      1,369,020
 
 Net gain from sales of properties and securities                       890,055         38,150
                                                                     ------------   ------------
 Net Income                                                          $2,154,056     $1,407,170
                                                                     ============   ============
 
 Earnings per Common Share (Note 1-C):
   Income before net gain from sales of properties and securities         $0.36          $0.39
 
   Net gain from sales of properties and securities                        0.25           0.01
                                                                     ------------   ------------
 Net Income per Common Share                                              $0.61          $0.40
                                                                     ============   ============
 Cash Distributions Declared per Common Share                             $0.60          $0.60
                                                                     ============   ============
 Weighted Average Number of Shares Outstanding                        3,535,878      3,515,001
                                                                     ============   ============
 
 
<F> 
 See notes to consolidated financial statements.
</TABLE>
 
 
 
<TABLE>
 PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>
 
 
 
                                                                           THREE MONTHS ENDED 
                                                                              SEPTEMBER 30,
                                                                     ---------------------------
                                                                         1996           1995
 Income:                                                             ------------   ------------
<S>                                                                  <C>            <C>
   Rental                                                            $2,071,259     $2,094,834
   Interest on mortgages - sold properties                              490,978        526,682
   Interest on wrap mortgages                                           348,124        353,182
   Interest on mortgages - related parties                               59,819         61,891
   Investment income                                                     98,445         96,204
   Other                                                                 15,812         14,776
                                                                     ------------   ------------
 Total                                                                3,084,437      3,147,569
                                                                     ------------   ------------
 Costs and Expenses:
   General and administrative                                           533,608        455,191
   Interest on wrap mortgage debt                                        61,310         66,368
   Other interest                                                        35,426         28,937
   Depreciation on non-rental property                                    7,210          5,762
   Rental property:
     Operating expenses                                               1,065,501        832,310
     Interest on mortgages                                              549,779        572,227
     Real estate taxes                                                  195,888        188,143
     Depreciation on real estate                                        164,361        153,950
     Amortization of mortgage and organization costs                     33,906         32,667
     Minority interest share of partnership income                      179,538        258,411
     Loss from operations of foreclosed properties (Note 4)               9,897         45,230
     Net (gain) loss from sales of foreclosed properties (Note 4)       (22,490)        12,413
                                                                     ------------   ------------
 Total                                                                2,813,934      2,651,609
                                                                     ------------   ------------
 
 Income before net gain from sales of  properties and securities        270,503        495,960
 
 Net gain from sales of properties and securities                        33,962          7,953
                                                                     ------------   ------------
 Net Income                                                            $304,465       $503,913
                                                                     ============   ============
 
 Earnings per Common Share (Note 1-C):
   Income before net gain from sales of properties and securities         $0.08          $0.14
 
   Net gain from sales of properties and securities                        0.01           0.00
                                                                     ------------   ------------
 Net Income per Common Share                                              $0.09          $0.14
                                                                     ============   ============
 Cash Distributions Declared per Common Share                             $0.30          $0.30
                                                                     ============   ============
 
 
<FN> 
 See notes to consolidated financial statements.
</TABLE>
 
<TABLE>
 PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)   
<CAPTION>
 
 
                                                                       NINE MONTHS ENDED SEPTEMBER 30,
                                                                    ------------------------------------
                                                                        1996                    1995
 Cash Flows from Operating Activities:                              ------------            ------------
<S>                                                                  <C>                     <C> 
   Cash received from rental properties                              $6,437,570              $5,935,122
   Interest received                                                  2,511,530               2,429,467
   Interest paid on rental property mortgages                        (1,663,178)             (1,710,448)
   Interest paid on wrap mortgage debt                                 (187,764)               (202,799)
   Cash disbursed for rental and foreclosed property operations      (3,163,182)             (3,073,980)
   Cash disbursed for general and administrative costs               (1,216,515)             (1,369,938)
   Miscellaneous disbursements                                          (13,633)                (89,305)
                                                                    ------------            ------------
 Net cash provided by operating activities                            2,704,828               1,918,119
                                                                    ------------            ------------
 
 Cash Flows from Investing Activities:
   Payments received on notes receivable                              2,857,791                 738,575
   Payments disbursed for investments in notes receivable               (25,696)                (12,264)
   Net payments received on sales of foreclosed properties               69,530                 162,710
   Payments disbursed for additions and improvements                   (663,434)               (409,264)
   Proceeds from sales of securities                                    100,496                 113,000
   Purchases of securities                                           (1,231,479)               (387,060)
   Net cash receipts from operations of foreclosed properties             3,223                   3,562
                                                                    ------------            ------------
 Net cash provided by investing activities                            1,110,431                 209,259
                                                                    ------------            ------------
 Cash Flows from Financing Activities:
   Principal payments on mortgage debt:
     Properties owned                                                  (397,756)               (380,024)
     Wrap mortgage debt on sold properties                             (334,114)               (322,357)
   Mortgage debt payment from proceeds of mortgage refinancing         (238,181)
   Mortgage proceeds                                                    300,000
   Mortgage costs                                                       (45,019)
   Cash distributions on common stock                                (2,122,987)             (2,109,971)
   Proceeds from dividend reinvestment and share purchase plan          102,030                  87,533
   Distributions to minority partners                                  (359,845)               (334,345)
                                                                    ------------            ------------
 Net cash used in financing activities                               (3,095,872)             (3,059,164)
                                                                    ------------            ------------
 
 Net Increase (Decrease) in Cash and Cash Equivalents                   719,387                (931,786)
 
 Cash and Cash Equivalents, Beginning of Period                       1,306,505               2,402,211
                                                                    ------------            ------------
 Cash and Cash Equivalents, End of Period                            $2,025,892              $1,470,425
                                                                    ============            ============
 
<FN> 
 See notes to consolidated financial statements.
</TABLE>
 


<TABLE>
 PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)  
<CAPTION>
 
 
                                                                    NINE MONTHS ENDED SEPTEMBER 30,
                                                                 ------------------------------------
                                                                     1996                    1995
                                                                 ------------            ------------

<S>                                                              <C>                     <C>                    
 Reconciliation of Net Income to Net Cash
   Provided by Operating Activities
 
 Net Income                                                       $2,154,056              $1,407,170
                                                                 ------------            ------------
 
 Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation and amortization                                   601,614                 572,719
     Gain from sales of properties and securities                   (890,055)                (38,150)
     Net gain from sales of foreclosed properties                    (22,490)                (52,192)
     Amortization of discounts on notes and fees                    (615,192)               (491,922)
     Decrease (increase) in accounts receivable                       35,153                (187,217)
     Increase (decrease) in accounts payable 
       and accrued liabilities                                       292,279                (379,319)
     Decrease in deferred income                                     (82,657)               (109,517)
     Decrease in prepaid expenses, deposits in
       escrow and deferred charges                                    28,571                 124,497
     Decrease in security deposit liabilities                         (3,752)                (20,149)
     Miscellaneous                                                    20,164                 (17,361)
     Minority share of partnership income                            655,189                 581,046
     Distribution payable on common stock                            531,948                 528,514
                                                                 ------------            ------------
 Total adjustments                                                   550,772                 510,949
                                                                 ------------            ------------
 
 Net cash provided by operating activities                        $2,704,828              $1,918,119
                                                                 ============            ============
 
 Supplemental noncash disclosures:
 
     Notes received from sales of foreclosed properties                                      $80,200
                                                                 ============            ============
 
 
 
 
 
<FN> 
 See notes to consolidated financial statements.
</TABLE>



PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. General - Presidential Realty Corporation ("Presidential" or the "Company"),
a Real Estate Investment Trust ("REIT"), is engaged principally in the holding
of notes and mortgages secured by real estate and in the ownership of income
producing real estate.  

B. Principles of Consolidation - The consolidated financial statements include
the accounts of Presidential Realty Corporation and its wholly owned
subsidiaries.  Additionally, the accompanying consolidated financial statements
include 100% of the account balances of UTB Associates and PDL, Inc. and
Associates Limited Co-Partnership ("Metmor Plaza Associates"), partnerships in
which Presidential is the General Partner and owns a 66-2/3% interest and a 25%
interest, respectively (see Note 5). 

All significant intercompany balances and transactions have been eliminated. 

C. Earnings Per Common Share - Per share data is based on the weighted average
number of shares of Class A and Class B common stock outstanding and common   
stock equivalents during each period.  For the nine months ended September 30, 
1996 and 1995, no dilution in per share earnings would have resulted from the 
exercise of stock options issued under the Company's stock option plans.  

D. Cash and Cash Equivalents - Cash and cash equivalents includes cash on hand,
cash in banks and money market funds.

E. Basis of Presentation - The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information.  In the opinion of management,  
all adjustments (consisting of only normal recurring accruals) considered
necessary for a fair presentation of the results for the respective periods   
have been reflected.  These financial statements and accompanying notes should 
be read in conjunction with the Company's Form 10-K for the year ended December
31, 1995.

F. Management Estimates - In preparing the consolidated financial statements,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the date of the consolidated
balance sheets and income and expense for the period.  Actual results could
differ from those estimates.

2. MORTGAGE PORTFOLIO

The Company's mortgage portfolio includes notes receivable - sold properties  
and notes receivable - related parties and includes both accrual and impaired 
loans. The Company complies with the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment
of a Loan" and, accordingly, has classified loans that are within the scope of
this statement as impaired loans. 

Notes receivable - sold properties consist of: 

(1) Long-term purchase money notes from sales of properties previously owned by
the Company.  These purchase money notes have varying interest rates with     
balloon payments due at maturity. 

(2) Notes receivable from sales of cooperative apartment units.  Substantially
all of these notes were either received from Ivy Properties, Ltd. or its
affiliates (collectively "Ivy") in connection with a settlement agreement     
between the Company and Ivy executed in November, 1991 (the "Settlement
Agreement") or from sales of foreclosed cooperative apartments received from  
Ivy pursuant to the Settlement Agreement (see Note 4).  These notes generally
have market interest rates and the majority of these notes amortize monthly   
with balloon payments due at maturity. 

Notes receivable - related parties are all due from Ivy and consist of: 

(1) Purchase money notes resulting from sales of property or partnership
interests to Ivy. 

(2) Notes receivable relating to loans made by the Company to Ivy in connection
with Ivy's cooperative conversion business.

In June of 1996, the Company received principal prepayments on two of its long- 
term purchase money notes, the Hoboken, New Jersey property note in the amount 
of $1,188,787 and the Town House, Memphis, Tennessee property note in the     
amount of $1,000,000.  As a result, the Company recognized income on the Town
House note from the amortization of discount of $76,473 and gain on sale of
$773,258.

At September 30, 1996, all of the notes in the Company's mortgage portfolio are 
current with the exception of those notes which are classified as impaired    
loans in accordance with SFAS No. 114. 

Two sold property loans, the Kent Terrace and the Fairfield Towers loans, and 
one related party loan, the Ivy Overlook loan, were classified as impaired    
loans at December 31, 1995.  In February, 1996, the Kent Terrace loan was
reclassified to real estate as a result of the Company's foreclosure of its   
loan and at September 30, 1996, the Fairfield Towers loan and the Ivy Overlook
loan remain classified as impaired loans.  These two loans are in the aggregate 
amount of $16,246,925 and have a net carrying value of $1,404,764 after     
deducting discounts of $7,773,380 and deferred gains of $7,068,781.  In 
accordance with SFAS No. 114, the Company has determined that no allowances for
credit losses are required for these loans because the net carrying value of
these loans is less than the fair value of the underlying collateral.

The Company recognizes income on these impaired loans only to the extent that
such income is actually received.  The average recorded investment in these   
loans during the nine months ended September 30, 1996 and September 30, 1995  
was $16,592,845 and $18,059,482, respectively.

The Kent Terrace note, having an outstanding principal balance of $1,300,000
and a net carrying value of $329,212 after deducting a deferred gain of
$970,788, was classified as an impaired loan at December 31, 1995.  This note
had been in default since October of 1994, and in February, 1996, the Company
foreclosed on its mortgage and became the owner of the 112 unit apartment
property in Martinsburg, West Virginia.  As a result, in 1996, the $329,212 net
carrying value of the note and the related deferred interest of $338,190 have
been reclassified to real estate (see Note 3).

With the exception of the Kent Terrace loan discussed above, there have been no
significant changes in the status of the impaired loans since December 31, 1995.
Condominium sales at the Fairfield Towers property have continued and
an additional 44 units were sold during the nine months ended September 30,   
1996. (See Note 12 - Subsequent Event).

The following table reflects the activity in impaired loans. 




<TABLE>
    IMPAIRED LOANS
    ----------------------------                                              
<CAPTION>
                                                                              
                                                Impaired         Additions        Impaired
                                                Loan             (Payments or     Loan
                                                Balance           Adjustments)    Balance
    Loan Description                            12/31/95         1996             9/30/96
    -----------------------------------         -------------    -------------    ------------
<S>                                             <C>              <C> 
    Notes receivable-sold properties:                                         
      Properties previously owned-                                            
          Fairfield Towers                       $14,780,144        ($106,304)    $14,673,840
          Kent Terrace  (1)                        1,300,000       (1,300,000)
                                                                              
    Notes receivable-related parties:                                         
      Sold properties-                                                        
          Overlook                                 1,639,396          (66,311)      1,573,085
                                                -------------    -------------    ------------
    Total                                        $17,719,540      ($1,472,615)    $16,246,925
                                                =============    =============    ============
                                                                              
    
                                                Discount         Deferred         Net
                                                on               Gain on          Carrying
                                                Loans            Loans            Value
    Loan Description                            9/30/96          9/30/96          9/30/96
    -----------------------------------         -------------    -------------    ------------
    Notes receivable-sold properties:                                         
      Properties previously owned-                                            
          Fairfield Towers                       ($7,773,380)     ($5,495,696)     $1,404,764
          Kent Terrace  (1)                                                   
                                                                              
    Notes receivable-related parties:                                         
      Sold properties-                                                        
          Overlook                                                 (1,573,085)
                                                -------------    -------------    ------------
    Total                                        ($7,773,380)     ($7,068,781)     $1,404,764
                                                =============    =============    ============
    
    
    
    
    
    
    
                                                                              
                                                                 Nine months ended September 30,
                                                                 -------------------------------
                                                                     1996             1995
                                                                 -------------    ------------
    Reported Interest Income and                                              
    Amortization of Discount (Cash Basis)                                     
    -----------------------------------                                       
                                                                              
    Fairfield Towers - interest income                               $114,630         $40,820
    Fairfield Towers - amortization of discount                        56,314          26,877
    Kent Terrace - interest income  (1)                                                82,307
    Overlook - interest income                                         73,114          83,678
    Overlook - additional interest income                              28,062 
                                                                 -------------    ------------
    Total                                                            $272,120        $233,682
                                                                 =============    ============
                                                                              
                                                                              
    Recognized Gain from Sale of Property                                     
    -----------------------------------                                       
                                                                              
    Fairfield Towers                                                  $49,990         $23,859
    Kent Terrace  (1)                                            
    Overlook                                                           66,311 
                                                                 -------------    ------------
    Total                                                            $116,301         $23,859
                                                                 =============    ============
                                                                              
                                                                              
    Nonreported Interest Income and Amortization of Discount                  
    --------------------------------------------------------                              
    The following additional amounts would have been reported                 
    if these loans had been fully performing:                                 
                                                                              
    Fairfield Towers - interest income                               $635,514        $709,539
    Fairfield Towers - additional interest income                     191,537          83,517
    Fairfield Towers - amortization of discount                       670,904         590,614
    Kent Terrace - interest income (1)                                                120,737
    Overlook - interest income                                                         37,820
    Overlook - additional interest income                        
                                                                 -------------    ------------
    Total                                                          $1,497,955      $1,542,227
                                                                 =============    ============
                                                                              
<FN>                                                                              
    (1) In February, 1996, the Company completed the foreclosure of its
        $1,300,000 Kent Terrace mortgage and became the owner of the
        property. As a result, the net carrying value of the loan of
        $329,212, after a deferred gain of $970,788, was reclassified to
        real estate.
</TABLE>
                                                                              
    





3. REAL ESTATE 

   Real estate is comprised of the following:

                               September 30,    December 31,                 
                                   1996             1995   
                               -------------    ------------

Land                           $ 3,664,548      $ 3,615,176
Buildings and leaseholds        21,293,839       20,157,963
Furniture and equipment            119,248           98,479
                               -----------      -----------
Total real estate              $25,077,635      $23,871,618
                               ===========      =========== 

As discussed in Note 2, Presidential foreclosed on its Kent Terrace mortgage  
and became the owner of the property in February, 1996.  The Company presently 
intends to hold this property as a rental property and, accordingly,          
reclassified the $329,212 net carrying value of the loan plus deferred       
interest of $338,190 to real estate on its consolidated balance sheet.


4. FORECLOSED PROPERTIES 

At September 30, 1996, Presidential owns 53 cooperative apartment units which
it had received in satisfaction of certain loans due Presidential.  These
cooperative apartment units are located at four locations: 330 W. 72nd St., 
New York, N.Y. (3 units); 6300 Riverdale Avenue, Bronx, N.Y. (8 units); Towne
House, New Rochelle, N.Y. (39 units) and Sherwood House, Long Beach, N.Y.     
(3 units).
         
Cooperative apartment units at three of the above properties were received from
Ivy in 1991 and 1992 in connection with the Settlement Agreement.  The
cooperative apartment units at Long Beach were received from Ivy in 1994 in
payment of the outstanding loan on that property and other amounts due to
Presidential pursuant to the Settlement Agreement.  

These cooperative apartment units are reported as foreclosed properties on
Presidential's consolidated balance sheets and are carried at the lower of cost 
or estimated fair value (net of estimated costs to sell).  Net loss from
operations of foreclosed properties is reported as a separate line item on the
statement of operations, while net cash receipts from operations of foreclosed
properties reduces the Company's carrying value of the foreclosed property.  

In September, 1996, the Company sold the 5 remaining cooperative apartment   
units at Hastings Gardens, Hastings, N.Y. for a purchase price of $75,000 and 
recorded a gain from the sale of $22,490.

The following table presents the Company's foreclosed properties, loss from
operations of foreclosed properties, gain (loss) from sales of foreclosed
properties and number of units sold:




<TABLE>
    Foreclosed properties:
    ------------------
<CAPTION>
                                                                 Property Name and Location
                                                    -------------------------------------------------
                                                                         Hastings      6300 Riverdale
                                                    330 W. 72nd St.      Gardens            Ave.
                                                       New York,        Hastings,          Bronx,
                                                       New York        New York (1)      New York 
                                                    ---------------   --------------   --------------
<S>                                                 <C>               <C>              <C>            
    Balance January 1, 1996                                $53,276          $47,040          $76,196
      Capitalized costs
      Net carrying value of property sold                                   (47,040)
      Net cash receipts from operations (2)                 (3,223)
                                                    ---------------   --------------   --------------
    Balance September 30, 1996                             $50,053          $                $76,196
                                                    ===============   ==============   ==============
 


    Loss from operations of foreclosed properties (2):
    ----------------------------------------------
    
    Nine months ended September 30, 1996                                     $8,357          $11,996
                                                    ===============   ==============   ==============
    Nine months ended September 30, 1995                                    $25,094          $13,542
                                                    ===============   ==============   ==============
    
    
    Gain (loss) from sales of foreclosed properties (2):
    ----------------------------------------------
    
    
    Nine months ended September 30, 1996                                    $22,490
                                                    ===============   ==============   ==============
    Nine months ended September 30, 1995                                    $24,185
                                                    ===============   ==============   ==============
    
    Number of units sold:
    ----------------------
    
    
    Nine months ended September 30, 1996                                          5
                                                    ===============   ==============   ==============
    Nine months ended September 30, 1995                                         13
                                                    ===============   ==============   ==============
    
    
    
    
    
                                                                 Property Name and Location
                                                    -------------------------------------------------
    
                                                      Towne House     Sherwood House       Total
                                                     New Rochelle,     Long Beach,       Foreclosed
                                                       New York         New York         Properties
                                                    ---------------   --------------   --------------
    Balance January 1, 1996                               $365,676          $59,246         $601,434
      Capitalized costs                                     38,661                            38,661
      Net carrying value of property sold                                                    (47,040)
      Net cash receipts from operations (2)                                                   (3,223)
                                                    ---------------   --------------   --------------
    Balance September 30, 1996                            $404,337          $59,246         $589,832
                                                    ===============   ==============   ==============
    
    
    
    Loss from operations of foreclosed properties (2):
    ----------------------------------------------                                       Total Loss
                                                                                       --------------
    Nine months ended September 30, 1996                    $2,081           $4,936          $27,370
                                                    ===============   ==============   ==============
    Nine months ended September 30, 1995                   $23,794          $14,344          $76,774
                                                    ===============   ==============   ==============
    
    
    Gain (loss) from sales of foreclosed properties (2):
    ----------------------------------------------                                         Total
                                                                                        Gain (Loss)
                                                                                       --------------
    Nine months ended September 30, 1996                                                     $22,490
                                                    ===============   ==============   ==============
    Nine months ended September 30, 1995                   $30,882          ($2,875)         $52,192
                                                    ===============   ==============   ==============
    
    Number of units sold:
    ------------------                                                                     Total
                                                                                         Units Sold
                                                                                       --------------
    Nine months ended September 30, 1996                                                           5
                                                    ===============   ==============   ==============
    Nine months ended September 30, 1995                         3                2               18
                                                    ===============   ==============   ==============
    
    
<FN>    
    (1)The remaining Hastings Gardens cooperative apartment units were sold in September, 1996.
    (2) Includes an allocation for home office overhead.
</TABLE>



5. MINORITY PARTNERS' INTEREST

Presidential is the General Partner of UTB Associates and Metmor Plaza
Associates, partnerships in which Presidential has a 66-2/3% interest and a 25%
interest, respectively.  As the General Partner of these partnerships,
Presidential exercises effective control over the business of these           
partnerships, and, accordingly, has included 100% of the account balances of  
these partnerships in the accompanying financial statements (see Note 1-B).   
The minority partners' interest reflects the minority partners' equity in the
partnerships.  

Included in the Company's mortgage debt is a mortgage note payable by the     
Metmor Plaza Associates partnership which is substantially in excess of the
historical cost of the property.  This was due to a refinancing of the original
mortgage note on the building and subsequent distribution of these proceeds to
the partners.  This event resulted in a negative partnership interest for each
partner and a negative minority partners' interest on the Company's books.  The
estimated fair value of the building is significantly greater than the mortgage
debt and the minority partners' interest is expected to be recovered when the
building is sold and the partnership is liquidated.

Minority partners' interest is comprised of the following:

                                    September 30,   December 31,
                                        1996           1995
                                    -------------   ------------        
Metmor Plaza Associates              $3,906,221      $4,218,947  
UTB Associates                         (230,517)       (247,899)
                                     ----------      ----------
Total minority partners' interest    $3,675,704      $3,971,048 
                                     ==========      ==========


6. SECURITIES AVAILABLE FOR SALE

The Company's investments are in marketable equity securities consisting of
stocks of listed corporations. The Company does not acquire securities for
purposes of engaging in trading activities and, as a result, the Company's
investments are classified as securities available for sale in accordance with
SFAS No. 115, "Accounting for Certain Investments in Debt and Equity 
Securities". Disposition of such securities may be appropriate for either
liquidity management or in response to changing economic conditions.  

The cost and fair value of securities available for sale are as follows:

                                   September 30,   December 31,   
                                        1996           1995      
                                   -------------   ------------   
Cost                                $3,533,030      $2,401,551
Gross unrealized gains                 133,110          37,845
Gross unrealized losses               (184,088)        (49,050)
                                    ----------      ----------
Fair value                          $3,482,052      $2,390,346 
                                    ==========      ==========

Net unrealized loss on securities available for sale, which is a separate
component of stockholders' equity on the Company's consolidated balance sheets,
increased by $39,773 from $11,205 at December 31, 1995 to $50,978 at September
30, 1996.

During the nine months ended September 30, 1996, the Company sold securities
available for sale for gross proceeds of $101,500 and a gross (and net) gain of
$496.  During the nine months ended September 30, 1995, the Company sold
securities available for sale for gross proceeds of $113,000 and a gross (and
net) loss of $1,002.  Gains and losses on sales of securities are determined
using the specific identification method.

7. MORTGAGE DEBT

In June of 1996, the Company completed the refinancing of the mortgage on its
Mapletree Industrial Center property in Palmer, Massachusetts.  The prior     
mortgage of $238,181 was paid from the proceeds of the new $300,000 mortgage. 
The interest rate for the first year is 8.25% and will be adjusted annually to
equal the Lender's prime rate on the adjustment date.  The mortgage matures in
June, 2011 and requires monthly payments of principal and interest in the     
initial amount of $2,910.  This mortgage debt is secured by a lien on the
Mapletree property and a guarantee of repayment by Presidential.

8. INCOME TAXES

Presidential elected to qualify as a Real Estate Investment Trust effective
January 1, 1982 under Sections 856-860 of the Internal Revenue Code.  Under   
those sections, a REIT which distributes at least 95% of its real estate
investment trust taxable income to its shareholders each year by the end of   
the following year and which meets certain other conditions will not be taxed
on that portion of its taxable income which is distributed to its shareholders. 

Upon filing the Company's income tax return for the year ended December 31,
1995, Presidential applied its available 1995 stockholders' distributions and
elected to apply (under Section 858 of the Internal Revenue Code) all but
approximately $734,000 of its 1996 stockholders' distributions to reduce its
taxable income for 1995 to zero.

Furthermore, the Company had taxable income (before distributions to
stockholders) for the nine months ended September 30, 1996 of approximately   
$2,055,000 ($.58 per share), which included approximately $1,406,000 ($.40 per 
share) of capital gains.  This amount will be reduced by 1996 distributions   
that were not utilized in reducing the Company's 1995 taxable income and by any
eligible 1997 distributions that the Company may elect to utilize as a      
reduction of its 1996 taxable income.  

Presidential intends to continue to maintain its REIT status and although no
assurances can be given at this time, the Company expects that it will not have
to pay Federal income taxes for 1996 because its present intention is to
distribute all of its 1996 taxable income during 1996 and 1997.  Therefore, no
provision for income taxes has been made at September 30, 1996.

Presidential has, for tax purposes, reported the gain from the sale of certain
of its properties using the installment method.

9. COMMITMENTS AND CONTINGENCIES

The Company has incurred environmental costs for environmental site
investigations and the related response action outcome for potentially        
hazardous drums found at two sites on its Mapletree Industrial Center       
property in Palmer, Massachusetts.  During the year ended December 31, 1995,
the Company expensed $45,536 for the initial investigation and partial cleanup
of one drum disposal site and accrued an additional $38,000 of environmental
expenses for the completion of the response action outcome on this site and a
site investigation at a second site.  As of September 30, 1996, the response
action outcome at the first disposal site has been completed and the site
investigation at the second disposal site has been substantially completed.  As
a result, in the third quarter of 1996, the Company has accrued an additional
$120,500 of environmental costs to complete further site investigations and
cleanup costs at the second disposal site.  This work is scheduled to be
accomplished over the next four years.  The total environmental costs charged
to operations at September 30, 1996 were $124,300.  Actual costs incurred may
vary from these estimates due to the inherent uncertainties involved.

10. PENSION PLANS

Defined Benefit Plan

Effective January 1, 1994, the Company adopted a noncontributory defined      
benefit pension plan, which covers substantially all of its employees.  The   
plan provides monthly retirement benefits commencing at age 65.  The monthly  
benefit is equal to the sum of (1) 6.5% of average monthly compensation       
multiplied by the total number of plan years of service (up to a maximum of 10 
years), plus (2) .62% of such average monthly compensation in excess of one- 
twelfth of covered compensation multiplied by the total number of plan years of 
service (up to a maximum of 10 years).  The Company makes annual contributions 
that meet the minimum funding requirements and the maximum contribution       
limitations under the Internal Revenue Code. 

Periodic pension costs are reflected in general and administrative expenses in
the Company's consolidated statement of operations.

Net periodic pension cost for the nine months ended September 30, 1996,       
included the following components:

Service cost-benefits earned during the period        $209,619 

Interest cost on projected benefit obligation           28,034 

Return on plan assets                                  (32,949)

Net amortization and deferrals                          12,311
                                                      --------  
Net periodic pension cost                             $217,015
                                                      ======== 

The assumptions used in determining net periodic pension cost were 7% for the 
discount rate, 7% for the expected long-term rate of return on assets, and 5% 
for the average increase in compensation.

Executive Pension Plan 

Presidential has employment contracts with several active and retired key
officers and employees.  Such contracts are being accounted for as constituting
pension agreements.  The contracts generally provide for annual benefits in
specified amounts commencing upon retirement for each participant for life,   
with an annual adjustment for an increase in the consumer price index. 
Presidential complies with the provisions of SFAS No. 87, "Employers'         
Accounting for Pensions". The principal assumption used in the accounting was
a discount rate of 7%. Periodic pension costs are reflected in general and
administrative expenses in the Company's consolidated statement of operations.

Net periodic pension cost for the nine months ended September 30, 1996,       
included the following components:

Service cost-benefits earned during the period        $ 10,392

Interest cost on projected benefit obligation          141,811 

Net amortization                                        49,467
                                                      --------  
Net periodic pension cost                             $201,670
                                                      ======== 
 
Presidential has elected not to fund expenses accrued under these contracts.  


11.  POSTRETIREMENT BENEFITS

Presidential has employment contracts with several active and retired key
officers and employees which provide for postretirement benefits other than
pensions (such as health care benefits).  The Company complies with the
provisions of SFAS No. 106,"Employers' Accounting for Postretirement Benefits
Other Than Pensions".  SFAS No. 106 requires the Company to accrue the        
estimated cost of retiree benefit payments during the years the employee      
provides services.  

The components of postretirement benefit cost for the nine months ended       
September 30, 1996, were as follows: 

Service cost - benefits earned                      $ 4,396
Interest cost on accumulated postretirement
  benefit obligation                                 27,390
Net amortization                                     (6,344)
                                                    -------      
Postretirement benefit cost                         $25,442
                                                    =======  


12.  SUBSEQUENT EVENT

Subsequent to September 30, 1996, Presidential acquired a first mortgage loan 
on 1,017 condominium apartment units at Fairfield Towers Apartments in        
Brooklyn, New York (the "First Mortgage") for a purchase price of $11,150,000,
which represents a $3,500,000 discount from the $14,650,000 outstanding       
principal balance of the First Mortgage.  The First Mortgage, which is due on
December 18, 1996, is in good standing and Presidential expects to enter into
an agreement with the owner to extend the maturity date.  Presidential paid
$2,500,000 of the $11,150,000 purchase price for the First Mortgage in cash and
executed an $8,650,000 Purchase Money Note for the balance.  The note, which is
due in five years and is secured by a collateral assignment of the First
Mortgage, is nonrecourse, except for a guaranty of payment in the maximum     
amount of $1,000,000.  All payments of principal received by Presidential under
the First Mortgage will be utilized to repay the $8,650,000 Purchase Money    
Note.

The Company also holds a second mortgage having an outstanding principal      
balance of $14,673,840 on this property.  Until the First Mortgage is repaid
(when approximately 50% of the units have been sold) Presidential will receive 
basic interest on its second mortgage note only out of net cash flow from
operations of the property and release payments, averaging $3,000 per unit,   
upon the sale of each condominium unit.  All unpaid basic interest and        
additional interest (which is based on percentages of gross sales proceeds)  
will be deferred until after repayment of the First Mortgage.  In June of 1994,
the owners of the Fairfield Towers property closed the first sales of the     
condominium units pursuant to the conversion of the property to condominium 
status.  At September 30, 1996, a total of 135 units were sold.    


PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES  
MANAGEMENT'S DISCUSSION AND ANALYSIS OF  
FINANCIAL CONDITION AND RESULTS OF OPERATIONS  
FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995  
  

Results of Operations  
  
Financial Information for the nine months ended September 30, 1996 and 1995:  
----------------------------------------------------------------------------

Income increased by $517,829 from $9,085,960 in 1995 to $9,603,789 in 1996
primarily as a result of increases in rental income and interest on
mortgages-sold properties, partially offset by a decrease in investment
income.    

Rental income increased by $433,219 from $5,986,285 in 1995 to $6,419,504 in  
1996 primarily as a result of additional income of $123,523 received for lease
cancellation penalties at the Metmor Plaza property and rental income of      
$208,728 at the Kent Terrace property, which the Company became the owner of in
February, 1996, as a result of the foreclosure of its mortgage on that        
property.  In addition, rental income increased by $185,158 at the Cambridge
Green and Continental Gardens properties.  These increases were offset by
decreases in rental income of $79,011 at the Palmer Mapletree, Building
Industries Center and Metmor Plaza properties.

Interest on mortgages-sold properties increased by $115,029 from $1,538,401 in 
1995 to $1,653,430 in 1996 primarily due to an increase of $133,610 in the
amortization of discounts on notes, of which $76,473 pertains to the Town House 
note, which was prepaid in June, 1996 and an increase of $73,810 of interest
received on the Fairfield Towers note.  These increases were partially offset
by a $82,307 decrease in the 1996 period for Kent Terrace interest that was
received in the 1995 period.

Investment income decreased by $18,923 from $259,553 in 1995 to $240,630 in  
1996 primarily as a result of decreased interest income on cash and cash
equivalent accounts.  
  
Costs and expenses increased by $622,848 from $7,716,940 in 1995 to $8,339,788
in 1996 primarily due to increases in general and administrative expenses,    
rental property operating expenses and an increase in minority interest share
of partnership income. 
  
General and administrative expenses increased by $235,809 from $1,442,774 in
1995 to $1,678,583 in 1996 primarily due to increases in professional fees of
$82,227, of which approximately $49,800 was incurred in connection with  
proposed acquisitions of properties which were not completed; salary expense of
$62,998, of which $54,841 pertained to bonuses; franchise tax expense of      
$54,031 and an increase of $25,015 in employee pension plan expense.

Rental property operating expenses increased by $328,631 from $2,529,213 in   
1995 to $2,857,844 in 1996.  The addition of the Kent Terrace property resulted
in an increase of $280,550.  In addition, the Palmer Mapletree property       
incurred $124,300 of environmental expenses and the Company wrote off the     
$22,036 carrying value on 4 acres of vacant land in Hartford, Connecticut. 
These increases were offset by decreases of $46,427 in bad debts and $76,544 in
insurance expense at the Palmer Mapletree property.
 
Rental property mortgage interest decreased by $61,549 from $1,712,565 in 1995
to $1,651,016 in 1996.  This decrease is primarily due to a decrease of $54,853
for the Metmor Plaza property as a result of principal payments and lower
interest rates.  The Metmor Plaza mortgage has a variable rate of interest
based on the LIBOR rate and the "Section 936" rate (which is established by
the lender), but cannot exceed 8% per annum.  
  
Real estate tax expense increased by $32,191 from $564,429 in 1995 to $596,620 
in 1996 as a result of increased real estate taxes of $17,626 at the
Continental Gardens property and real estate taxes of $18,519 as a result of
the addition of the Kent Terrace property.    

Minority interest share of partnership income increased by $74,143 from      
$581,046 in 1995 to $655,189 in 1996, as a result of an increase in           
partnership income on the Metmor Plaza property.  

Loss from operations of foreclosed properties decreased by $49,404 from $76,774 
in 1995 to $27,370 in 1996.  This decrease is primarily a result of the sales
of foreclosed properties in 1995 and 1996.

Net gain from sales of foreclosed properties decreased by $29,702 from $52,192
in 1995 to $22,490 in 1996.  The 1996 period reflects the sale of the remaining 
five cooperative apartment units at Hastings Gardens in Hastings, N.Y.

Net gain from sales of properties and securities are sporadic (as they depend
on the timing of sales or the receipt of installments or prepayments on       
purchase money notes).  In 1996, the net gain from sales of properties and
securities was $890,055 compared with $38,150 in 1995.  In the 1996 period, the
Company recognized $773,258 of deferred gain from the sale of the Town House
property as a result of a $1,000,000 principal prepayment received on that    
note.  In addition, the Company recognized deferred gains of $66,311 and
$49,990, respectively, from principal payments received on the Overlook and
Fairfield Towers notes.  The 1995 net gain was primarily a result of the      
receipt of principal payments on the Fairfield Towers note.

Financial Information for the three months ended September 30, 1996 and 1995: 
-----------------------------------------------------------------------------

Income decreased by $63,132 from $3,147,569 in 1995 to $3,084,437 in 1996
primarily as a result of decreases in rental income and interest on
mortgages-sold properties.    

Rental income decreased by $23,575 from $2,094,834 in 1995 to $2,071,259 in 
1996 primarily as a result of decreased rental income of $108,844 at the Metmor
Plaza and Building Industries Center properties, offset by increased rental
income of $41,988 at the Cambridge Green and Continental Gardens properties and
rental income of $44,827 at the Kent Terrace property.  
  
Interest on mortgages-sold properties decreased by $35,704 from $526,682 in 
1995 to $490,978 in 1996 primarily due to the $33,584 decrease in the 1996    
period for Kent Terrace interest that was received in the 1995 period.  In
addition, there was a decrease of $49,873 in the 1996 period on the Town House 
and Hoboken notes which were prepaid in June of 1996.  These decreases were
partially offset by increases of $30,879 in the amortization of discounts on
notes and an increase of $8,029 of interest received on the Fairfield Towers
note. 

Costs and expenses increased by $162,325 from $2,651,609 in 1995 to $2,813,934
in 1996 primarily due to increases in general and administrative expenses and 
rental property operating expenses, offset by a decrease in minority interest
share of partnership income and operations of foreclosed properties. 

General and administrative expenses increased by $78,417 from $455,191 in 1995
to $533,608 in 1996 primarily due to increases in franchise tax expense of
$41,972 and a reduction in reimbursed overhead from foreclosed properties of
$38,628, as a result of sales of foreclosed properties in 1995 and 1996.

Rental property operating expenses increased by $233,191 from $832,310 in 1995
to $1,065,501 in 1996.  This increase was primarily the result of the addition
of the Kent Terrace property which resulted in an increase of $109,857 and
environmental expenses of $120,500 at the Palmer Mapletree property which were
recorded in the 1996 period.

Minority interest share of partnership income decreased by $78,873 from      
$258,411 in 1995 to $179,538 in 1996, as a result of a decrease in           
partnership income on the Metmor Plaza property.  

Loss from operations of foreclosed properties decreased by $35,333 from       
$45,230 in 1995 to $9,897 in 1996.  This decrease is primarily due to the
reduction in reimbursed overhead expenses as a result of sales in 1995 and    
1996.

Net (gain) loss from sales of foreclosed properties changed from a loss of    
$12,413 in 1995 to a gain of $22,490 in 1996.  The 1996 period reflects the   
sale of the remaining five cooperative apartment units at Hastings Gardens in 
Hastings, N.Y.
   
Net gain from sales of properties and securities are sporadic (as they depend
on the timing of sales or the receipt of installments or prepayments on       
purchase money notes).  In 1996, the net gain from sales of properties and
securities was $33,962 compared with $7,953 in 1995.  During 1996, the Company
recognized deferred gains of $5,560 and $28,402 from the sales of the Overlook
and Fairfield Towers properties, respectively, as a result of principal       
payments received on those notes.


Balance Sheet  
 
Net mortgage portfolio decreased by $1,656,557 from $18,881,591 at December 31, 
1995 to $17,225,034 at September 30, 1996.  This decrease was primarily the
result of $2,188,787 of prepayments received on the purchase money notes     
secured by the Town House, Memphis, Tennessee property ($1,000,000) and the
Hoboken, New Jersey property ($1,188,787).  These decreases were partially    
offset by the recognition of $773,258 of deferred gain on the Town House note. 
In addition, the $329,212 net carrying value of the Kent Terrace loan was
reclassified from net mortgage portfolio to real estate.  In February, 1996,  
the Company foreclosed its mortgage and became the owner of the Kent Terrace
property.  
 
Real estate increased by $1,206,017 from $23,871,618 at December 31, 1995 to
$25,077,635 at September 30, 1996.  This increase was primarily the result of
the 667,402 addition of the Kent Terrace property in February, 1996.  Upon
receipt of the property, the Company reclassified the $329,212 net carrying   
value of the loan from net mortgage portfolio and also reclassified the       
$338,190 related deferred interest receivable from other receivables to real
estate.  The  Company also recorded $424,430 in acquisition and improvement   
costs for the Kent Terrace property and $136,221 for additions and improvements
to other properties.  In June, 1996, the Company wrote off to expense the     
$22,036 carrying value on 4 acres of vacant land located in Hartford,
Connecticut.

Other receivables decreased by $373,985 from $1,029,052 at December 31, 1995 to
$655,067 at September 30, 1996 primarily as a result of the reclassification of
the $338,190 deferred interest receivable on Kent Terrace to real estate and  
the receipt of $75,000 of accrued interest on notes receivable - sold
properties.
 
Securities available for sale increased by $1,091,706 from $2,390,346 at
December 31, 1995 to $3,482,052 at September 30, 1996.  This increase was the
result of the purchase of $1,231,479 of securities, offset by a $39,773       
decrease in the fair value of securities and a $100,000 sale of securities.  
  
Other assets decreased by $100,945 from $1,197,743 at December 31, 1995 to
$1,096,798 at September 30, 1996.  This decrease was primarily the result of  
the amortization of $98,041 of mortgage costs.
  
Net unrealized loss on securities available for sale increased by $39,773 from 
$11,205 at December 31, 1995 to $50,978 at September 30, 1996.  This increase
in unrealized loss is a result of the decrease in the fair value of the
securities available for sale for the period.   
  

Liquidity and Capital Resources  
  
Management believes that the Company has sufficient liquidity and capital
resources to carry on its existing business and, barring any unforeseen
circumstances, to pay the dividends required to maintain REIT status in the
foreseeable future. The Company has been actively seeking to expand its       
portfolio of real estate equities and planned to utilize a portion of its
available funds as well as additional funds that the Company may receive in   
order to accomplish this goal.  However, subsequent to September 30, 1996,
the Company utilized approximately $2,500,000 of liquid assets (cash and the
proceeds of sale of marketable securities) to acquire the first mortgage on   
1,017 condominium units at the Fairfield Towers apartment property in Brooklyn,
New York (see "Fairfield Towers" below).  The Company will continue to seek to
expand its portfolio of real estate equities with funds that may become       
available in the future from balloon payments on the Company's notes receivable
as they mature, as well as from funds that may be available from external
sources.  However, the Company's plans to expand its equity portfolio may be
adversely affected by limitations on its ability to obtain funds for investment
on satisfactory terms from external sources.
  
Presidential does not maintain any line of credit or short term financing
arrangement.  At the present time, Presidential obtains funds for working     
capital and investment from its available cash and cash equivalents, from
operating activities and from repayments of its mortgage portfolio.  
  
At September 30, 1996, Presidential had $2,025,892 in available cash and cash
equivalents and $3,482,052 in securities available for sale.  The September 30, 
1996 total of $5,507,944 represents an increase of $1,811,093 from the        
$3,696,851 total at December 31, 1995.  This increase is primarily the result 
of the receipt of $2,188,787 in prepayments on the Town House and Hoboken
purchase money notes and the receipt of $61,819 of net proceeds from the
refinancing of the mortgage on the Palmer Mapletree property.  These increases 
were offset by the $424,430 of acquisition and improvement costs for the Kent
Terrace property.


Operating Activities  
  
Presidential's principal source of cash from operating activities is from
interest on its mortgage portfolio, which was $2,323,766 in 1996, net of
interest payments on wrap mortgage debt.  In 1996, net cash received from
rental property operations was $1,251,365, which is net of distributions to
minority partners but before additions and improvements and mortgage
amortization.  
  
  
Investing Activities  
  
Presidential holds a portfolio of mortgage notes receivable which consist
primarily of notes arising from sales of real properties previously owned by  
the Company.  Some of these notes wrap around underlying mortgage debt (the
"Underlying Debt") which is paid by Presidential only out of funds received on
its mortgage portfolio relating to the Underlying Debt.  During 1996, the     
Company received principal payments of $2,523,677 on its mortgage portfolio   
(net of any principal payments attributable to the Underlying Debt), of which 
$2,411,346 represented prepayments, which are sporadic and cannot be relied   
upon as a regular source of liquidity.  In 1996, the Company also received
$69,530 from sales of foreclosed properties, which are also sporadic.
  
During 1996, the Company invested $663,434 in additions and improvements to
its properties.    


Financing Activities   
   
The Company's indebtedness at September 30, 1996, consisted of $32,368,483 of
mortgages (including $5,726,423 of underlying indebtedness on properties not
owned by the Company but on which the Company holds wraparound mortgages). 
The mortgage debt, which is secured by individual properties, is nonrecourse
to the Company with the exception of the Palmer Mapletree mortgage which was
refinanced in June of 1996, and which is secured by the property and a       
guarantee of repayment by Presidential.  Generally mortgage debt repayment is 
serviced with cash flow from the operations of the individual properties.     
During 1996, the Company made $397,756 of principal payments on mortgage debt 
on properties which it owns.  In addition, the Company refinanced the mortgage
on its Palmer Mapletree property in Palmer, Massachusetts in June of 1996 and 
the prior mortgage of $238,181 was paid from the proceeds of the new $300,000
mortgage.  The mortgage matures in June, 2011, requires monthly payments of
principal and interest in the initial amount of $2,910 and has an interest rate
of 8.25% for the first year, after which the interest rate will be adjusted
annually to equal the Lender's prime rate.  The mortgages on the Company's
properties are self-liquidating at fixed rates of interest with the exception
of the mortgages on Metmor Plaza, Building Industries Center and Continental
Gardens.
  
During 1996, Presidential declared cash distributions of $2,122,987
(including $531,948 payable in the fourth quarter) to its shareholders and
received proceeds from dividend reinvestments of $102,030.


Fairfield Towers  

The Company's financial performance and liquidity in 1996 and subsequent years
will be affected by the results of the condominium conversion of Fairfield
Towers Apartments in Brooklyn, New York by the owner of that property.  The 
Company holds a second mortgage having an outstanding principal balance of
$14,673,840 on the 1,017 condominium apartment units still owned by the 
sponsor at this property, which mortgage is subordinate to a first mortgage
having an outstanding principal balance of $14,650,000 (the "First Mortgage"). 
Until the First Mortgage is repaid (when approximately 50% of the units
have been sold) Presidential will receive basic interest on its note payable  
only out of net cash flow from operations of the property and release payments
upon the sale of each condominium unit averaging $3,000 per unit.  All unpaid
basic interest and additional interest (which is based on percentages of gross
sales proceeds) will be deferred until after repayment of the First Mortgage. 
While the Company's return on the loan during the initial years of the        
conversion has been and will continue to be limited, if the conversion is 
successful and the First Mortgage is repaid, the Company expects to ultimately 
recover the outstanding principal balance of the note and substantial amounts
of basic and additional interest.  In June of 1994, the owners of the Fairfield
Towers property closed the first sales of the condominium units pursuant to the
conversion of the property to condominium status.  At September 30, 1996, a   
total of 135 units were sold.    

Subsequent to September 30, 1996, Presidential acquired the First Mortgage for 
a purchase price of $11,150,000, which represents a $3,500,000 discount from 
the outstanding principal balance of the First Mortgage.  The First Mortgage, 
which is due on December 18, 1996, is in good standing and Presidential expects 
to enter into an agreement with the owner to extend the maturity date. 
Presidential paid $2,500,000 of the $11,150,000 purchase price for the First
Mortgage in cash and executed an $8,650,000 Purchase Money Note for the       
balance.  The note is due in five years and is secured by a collateral        
assignment of the First Mortgage.  Based on the presently outstanding principal
balances and interest rates on the First Mortgage and the Purchase Money Note,
Presidential is entitled to receive approximately $600,000 per annum more in
interest on the First Mortgage than it will pay on the Purchase Money Note.
However, it is likely that interest payments on Presidential's second mortgage
will be substantially reduced in 1997 and subsequent years since cash flow from
the rental operations of the property will be utilized to pay down accrued real
estate taxes and to pay amortization on the First Mortgage (Presidential      
received approximately $115,000 of interest payments on its second mortgage
during the nine month period ended September 30, 1996).  All payments of
principal received by Presidential under the First Mortgage will be utilized to
repay the $8,650,000 Purchase Money Note.


Environmental Matters   
   
The Company is involved in various stages of environmental projects for the
investigation and removal of potentially hazardous drums found at two sites
on its Mapletree Industrial Center property in Palmer, Massachusetts.  Accrued
liabilities for environmental matters have been recorded in operating expenses
when it is probable that a liability has been incurred and the amount of the  
liability can be reasonably estimated.  These estimates are exclusive of 
claims against third parties and have not been discounted.  Actual costs
incurred may vary from these estimates due to the inherent uncertainties
involved.  The Company believes that any additional liability in excess of
amounts provided which may result from the resolution of this matter will not
have a material adverse effect on the financial condition, liquidity or the
cash flow of the Company.  For the year ended December 31, 1995, amounts      
charged to operations for environmental expenses were $83,536.  As of September
30, 1996, the response action outcome at the first disposal site has been
completed and the site investigation at the second disposal site has been
substantially completed.  During the third quarter of 1996, the Company accrued 
an additional $120,500 of environmental costs in order to complete further site
investigations and cleanup costs at the second drum disposal site.  This work
is scheduled to be accomplished over the next four years.  For the nine months
ended September 30, 1996, environmental costs charged to operations were      
$124,300.  



PART II - OTHER INFORMATION



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

(a)  Exhibit 27.  Financial Data Schedule.

(b)  No reports on form 8-K have been filed during the quarter ended 
     September 30, 1996.


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


PRESIDENTIAL REALTY CORPORATION
       (Registrant)


DATE:  November 8, 1996          By:  /s/ Jeffrey F. Joseph                
                                      ---------------------
                                      Jeffrey F. Joseph                       
                                      President 



DATE:  November 8, 1996          By:  /s/ Elizabeth Delgado               
                                      ---------------------
                                      Elizabeth Delgado
                                      Treasurer