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

                                    Form 10-K

                    ANNUAL REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the Fiscal Year Ended September 30, 1997
                          Commission File Number 1-8893

                            ROYAL PALM BEACH COLONY,
                               LIMITED PARTNERSHIP
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

        DELAWARE                                            59-2501059
--------------------------------------------------------------------------------
(State or other jurisdiction                           (I.R.S. Employer 
of incorporation or organization)                      Identification Number)

     2501 S. Ocean Drive
     Hollywood, Florida                                      33019
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(Address of principal executive offices)                   (Zip Code)

        Registrant's telephone number, including area code (305) 927-3080 

           Securities registered pursuant to Section 12(b) of the Act: 

                                                       Name of Each Exchange
               Title of Each Class                     on which Registered

          Limited Partnership Units                           None

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by checkmark  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     [    ]
                                
Indicate by checkmark if disclosure of delinquent filers pursuant to item 405 of
Regulation S-K (ss. 229.405 of this chapter) is not contained  herein,  and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information statement incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K. [XX]

The  aggregate   market  value  of  the  limited   partnership   units  held  by
non-affiliates  of  Registrant  computed by reference  to the last reported sale
price of the Units  over-the-counter  on  December  31,  1997 was  approximately
$1,858,000.
<PAGE>  
Item 1. Business

(a) General Development Of Business

         Royal Palm Beach Colony,  Limited Partnership (the "Partnership" or the
"Registrant")   was  organized  under  the  Delaware   Revised  Uniform  Limited
Partnership  Act. The  Partnership  is a successor  to Royal Palm Beach  Colony,
Inc.,  (the  "Predecessor  Company") a Florida  corporation  organized  in 1963.
Pursuant to a Plan of Complete Liquidation (the "Plan"), the Predecessor Company
transferred  all of its  assets,  subject  to  all  of its  liabilities,  to the
Partnership  in exchange for a number of  partnership  units  ("Units")  exactly
equal to the  number  of  shares  of  common  stock of the  Predecessor  Company
outstanding on July 11, 1985 (the "Effective Date").

          On the  Effective  Date,  the Units  were  distributed  to the  former
holders of common stock of the Predecessor  Company on the basis of one (1) Unit
for each share of common stock of the Predecessor Company. The Partnership, as a
successor to the Predecessor  Company, has registered its Units under Section 12
(b) of the  Securities  Exchange  Act of 1934.  Under the Amended  Agreement  of
Limited  Partnership  of the  Registrant,  the term of the  Partnership  expires
December  31,  2005,  unless  extended by vote of a majority of the  partnership
units.   Trading  in   Partnership   Units  The  Units  are  currently   trading
over-the-counter under the symbol "RPAMZ."

Results of Liquidation Activities

         The Partnership's  principal  business has been to operate,  manage and
dispose of the assets which were  transferred to it on the Effective Date by the
Predecessor  Company.  Since the  Effective  Date of the  Predecessor  Company's
liquidation,  the  Partnership  has  engaged in a program  of asset  disposition
resulting  in the  sale  of  assets  for an  aggregate  gross  consideration  of
$68,172,020.  As of December  31,  1997,  the  Partnership  had  distributed  an
aggregate  of  $29,156,000,  or $6.50  per  Unit,  to the  general  and  limited
partners.  See Item 5 Market for the  Registrant's  Common  Equity  and  Related
Stockholder  Matters  "Prior  Distributions."  As of  September  30,  1997,  the
Partnership's  remaining  assets  consisted  principally of; (1) 154 residential
lots plus commercial property and multifamily-zoned land in the Village of Royal
Palm Beach (the  "Village"),  a portion of which is now under  development  (see
Item 2 --  Properties  --  "Village  of  Royal  Palm  Beach"),  which  land  was
reacquired in January,  1992 by  foreclosure of a mortgage and which is included
in the balance sheet at $3,948,208 (this tract is hereinafter referred to as the
"Crestwood"  tract),  (2) unsold  land in Palm Beach  County,  Florida  which is
included in the balance  sheet at its book value of $503,005 (3) a tract of land
in the Village  reacquired  by  foreclosure  in 1993 and included in the balance
sheet at  $288,726,  (4)  contingent  receivables  relating  to a prior  sale of
utility assets with a maximum  future  undiscounted  value of $5,476,000  (which
amount,  other than $228,660  earned as of September 30, 1997 but not payable to
the Partnership until January,  1998, has not been included in the balance sheet
due to its contingent  nature -- see Note 10 to the Financial  Statements),  and
(5) a mortgage  note  receivable  in the amount of $101,250  and (7) cash in the
amount of $48,738. Through December 31, 1997, there had been no material changes
in the Partnership's  real estate assets,  except for the closing of sales of 17
residential  lots  for  aggregate  gross  proceeds  of  $484,500.  See  Item 2 -
"Residential Lots Within the Crestwood Tract."

          Factors Affecting Future Operations and Distributions

         The  availability  of cash for  distribution  in the future will depend
upon a variety of factors not currently determinable.
<PAGE>
          (1) Current Activities

         In early 1992,  a large  portion of the  Partnership's  remaining  land
consisted of the undeveloped 165 acre "Crestwood"  Tract described above,  which
had been sold during the process of the Partnership's liquidation but reacquired
by the Partnership in 1992 when the purchaser was unable to service the interest
and  amortization  payments to the  Partnership  on a $5,039,952  purchase money
mortgage.  Management's attempts to remarket the Crestwood Tract on a bulk basis
were  unsuccessful.  Management  perceived that due to changes in the market for
real estate in  southern  Florida,  the  Crestwood  Tract  would  continue to be
difficult to market at acceptable  prices.  Among other factors  depressing  the
local market was the  "overhang" of large  undeveloped  tracts which were on the
market as the result of bank  insolvencies.  Although  management has considered
several  options  concerning the most  advantageous  manner of disposing of this
tract,  including  possible  business  combinations  with other companies in the
construction  business,  it was  determined  that  unitholder  values could most
effectively be increased if some or all of the Crestwood Tract were  temporarily
withheld from sale and selectively developed. In the judgment of management, the
prospective  incremental  increase  in  selling  prices of  developed  land over
amounts which might  reasonably be anticipated  from the sale of the land in its
raw state  would  substantially  exceed the cost of  developing  such land,  and
warranted   investment  of  a  portion  of  the  Partnership's  cash  assets  in
development  activities.  Management  therefore commenced the development of one
portion of the Crestwood  Tract,  consisting of originally of 170 lots zoned for
single family housing  (increased in a revised  site-plan to 198 lots), in order
to enhance its sale value.  Management's  decision to commence  development  was
influenced,  in part, by an appraisal  obtained in 1992 of the  Crestwood  Tract
which  indicated  that such tract had a then  current  fair market  value in the
approximate amount of $4,500,000 and could have a significantly  higher value if
rezoning and re-permitting work were accomplished. Management was further of the
opinion that the  Crestwood  Tract would have an  indefinite  but  substantially
higher value if developed with roads and a utility infrastructure. See Item 2 --
Properties -"Village of Royal Palm Beach."

         While  management  might  consider  a  business   combination  with  an
appropriate  operating  business,  it is not  presently  actively  seeking  such
transactions.  The  Partnership  is  proceeding  with  the  liquidation  of  its
remaining  assets.  In  connection  therewith,  the  Partnership   substantially
completed  development of the residential lots in the Crestwood tract during the
1997 fiscal year,  and may develop other  properties if such  development  would
enhance   liquidation  values.  The  status  of  real  estate  dispositions  and
development is discussed in Item 2 below.

          (2) Cash Available for Distribution

         Management intends to continue to invest in the development of portions
of the Partnership's remaining land in Palm Beach County as a means of achieving
a higher return upon sale. Because of a substantial  reduction in sales revenues
in 1993 and 1994, and the cash requirements for such land development activities
in 1995,  together  with  cash  expenditures  in  connection  with the  proposed
transaction with Regency Homes, Inc. and normal operating expenses,  no cash has
been  available for  distribution  since  December  1992.  Although at currently
targeted sales prices the Partnership could realize gross cash proceeds from the
sale of the Crestwood lots owned as of the end of the fiscal year  (including 97
<PAGE>
lots then under  contract) in a range of  $4,500,000,  there can be no assurance
that currently targeted prices will be realized, and initial sales proceeds will
be  applied  to  repayment  of  debt,   including  bank  financing   aggregating
approximately  $1,675,972  as of the end of the  fiscal  year.  It is  presently
uncertain whether that cash will be available for distribution in 1998. See Item
2 -  "Development  and Sale of  Residential  Lots;"  and  Item 7 --  "Management
Discussion  and  Analysis  of  Financial  Condition  --  Liquidity  and  Capital
Resources."

          The timing of the resumption of liquidating  distributions will depend
largely  upon the timing of future  sales of the  Partnership's  remaining  land
(developed or  undeveloped)  and future  collections  of contingent  receivables
relating to a prior sale of a utility  plant.  See Item 2 --  Properties,  for a
discussion of other sources of and anticipated  timing of the receipt of revenue
which will affect future distributions.

 (b) Financial Information About Industry Segments

                  Not applicable.

(c) Narrative Description Of The Business

         Regulation

         Development  and sales  operations of the  Partnership  or by potential
purchasers of real estate from the  Partnership  have been subject to regulation
by a number of local,  state and  federal  agencies  concerning  the  nature and
extent of improvements, and compliance with zoning regulations,  building codes,
health requirements and environmental protection.  The Partnership believes that
it has been in substantial  compliance with all such laws and regulations  which
affect its  properties  and that it has developed  the  properties to the extent
required  by  contract  or law.  If such laws or  regulations  are  amended,  in
particular those  concerning  environmental  protection,  the cost of compliance
could be increased. Reference is made to the discussion concerning the impact of
land use regulatory issues affecting  salability of certain properties remaining
in Palm Beach County in Item 2 --  Properties -- "Acreage in the Vicinity of the
Village."

         Competition

         The  real  estate  business  conducted  by the  Partnership  is  highly
competitive.  The  Partnership's  sales of its remaining  land will compete with
surrounding  developments,  and with owners of tracts of land in the area of all
its  properties.  There are  substantial  tracts of vacant  land and land  under
development  in the general  area of most of the  Partnership's  remaining  real
estate. These competitive considerations could affect the decisions of potential
purchasers  of the  Partnership's  remaining  properties.  The  Partnership  has
historically  marketed its properties  through direct mail  advertising to major
brokers and developers,  advertisements in major regional  newspapers and direct
contacts  between  officers  of the  Managing  General  Partner  and real estate
developers and brokers.  The  Partnership  is currently  marketing its remaining
properties through local real estate brokers, including Randy Rieger, who served
as interim  Vice  President  and Chief  Operating  Officer of the  Partnership's
managing  general partner  between  September 1995 and February 1996. Mr. Rieger
currently provides services as an independent  consultant to the Partnership for
management  services in addition to ongoing brokerage  services.  See Item 13 --
"Certain Relationships and Related Transactions."

         Impact of General Economic Conditions

         The  development  and sale of real estate occurs within a  historically
cyclical market, and is significantly influenced by general economic conditions.
<PAGE>
Sales of housing units and sales of tracts to builders are particularly affected
by the costs and  availability  of mortgage  financing  and the rise and fall of
interest  rates in general.  Interest  rates have moved in a narrow range during
1996 and 1997. If  significant  increases  occur in the future,  the real estate
market could suffer as a result.

          Personnel. 

         As of December 31, 1997, Stein Management Company, Inc.  ("Steinco")the
Managing General Partner, employed 1 person, who acts as an an adminstrator. The
balance of the  Partnership's  affairs are carried out by  independent  brokers,
contractors and other  consultants under the direction of the Board of Directors
of Steinco. See Item 10.
          

          Office Facilities The Partnership's executive headquarters are located
at 2501 S. Ocean Drive,  Hollywood,  Florida 33019. The premises are owned by an
affiliate of Hasam Realty Limited  Partnership ("Hasam L.P."), a general partner
of the  Partnership,  and are being  made  available  to the  Partnership  as an
accommodation without charge.

Item 2.  Properties

Palm Beach County, Florida

          The Company originally owned  approximately  2,000 acres in Palm Beach
County,  in  southeastern  Florida,  approximately  4,200 of which were  located
within the Village. The Village of Royal Palm Beach The Village, an incorporated
municipality,  is  approximately  eight miles from the Palm Beach  International
Airport and eleven miles west of Palm Beach.  Two major area highways,  Southern
Boulevard and Okeechobee  Road,  lead directly from Palm Beach through West Palm
Beac to the Village. The Village has a population of approximately 16,000 and is
primarily  residential.  The Village has been  developed  in  accordance  with a
master plan and includes  schools,  shopping  facilities,  community  recreation
areas, and its own police and fire departments.

The Crestwood Tract

          Although the Partnership had previously sold nearly all of its land in
the Village,  it reacquired in 1992, through foreclosure of a defaulted purchase
money mortgage, the 165 acre Crestwood Tract of undeveloped land in the Village.
When reacquired, the Crestwood Tract was zoned and preliminary approval had been
obtained for the development of 172 single-family  homesites (the "Single Family
Tract")  and 625  multi-family  units.  The  Crestwood  Tract is  bisected  by a
principal  Village  road  and has  access  to all  utilities,  but is  otherwise
undeveloped  with the  exception  of the  existence  of  portions  of a drainage
system.

         Commercial Land within the Crestwood Tract

         In order to  enhance  the  market  value of the  Crestwood  Tract,  the
Partnership  obtained the rezoning of a 28 acre portion of the  Crestwood  Tract
previously zoned for multi-family housing to permit the Partnership to develop a
14 acre portion for use as a shopping  center  site.  The  Partnership  received
site-plan  approval in mid-1996.  The  Partnership  has executed an agreement to
sell the entire 28 acre portion to an  unaffiliated  shopping  center  developer
("Purchaser") in four phases.

          The closing on the first phase of the Commercial Site, consisting of a
11.8-acre shopping center site, occurred in February,  1997,  resulting in gross
proceeds of approximately $1,538,757.
<PAGE>
          The second and third phases consist of two  additional  parcels in the
14 acre portion rezoned as described above, and adjoin the shopping center site,
but  as  to  which  building  permits  are  not  expected  to be  available  for
approximately four years. As to such parcels,  the Partnership has agreed, for a
period ending in February, 2002, to accord an option to the Purchaser to acquire
the  parcels,  with the price to be paid  dependent  on the terms upon which the
Purchaser  leases or sells such parcels to an unaffiliated  third party. In such
event the Purchaser will pay to the Partnership,  (i) in the event of a lease, a
sum equal to the five times the average annual rental under the lease,  and (ii)
in the event of a sale,  50% of the net proceeds of the sale;  provided that the
Partnership  is not required to accept less than $3.50 per square  foot.  If the
Partnership itself obtains an unsolicited offer to lease or purchase the parcels
which the  Partnership  desires to accept,  th Purchaser may exercise a right of
first  refusal in which case the  Partnership  must accept (i) in the event of a
lease,  a sum equal to five times the  average  annual  rental to be paid by the
third party during the first five years of the proposed  lease,  and (ii) in the
event of a sale,  50% of the net  proceeds  to be paid by the third  party.  The
Partnership and the Purchaser are presently seeking approval from the Village to
accelerate the as of which certain of these parcels may be developed with retail
uses;  this  process,  if successful  (as to which there is no assurance)  would
accelerate exercise of the options and payment to the Partnership

          The final phase  relates to a  contiguous  14-acre  parcel as to which
rezoning  from the current  multi-family  to  commercial  use is not  considered
feasible for several years. The Purchaser has been granted an option ending four
years  after the first  closing to acquire  this parcel at $3.50 per square foot
(approximately  $2,129,000 subject to survey). However, after two years from the
first  closing,  the  Partnership  is  entitled  to  market  this  property  for
multi-family residential purposes only. If the Partnership receives an offer for
a price which is less than the option  price,  it must offer to the  Purchaser a
right of first refusal at the same price.

         Randy Rieger, who became  vice-president of the Partnership's  managing
general partner in September,  1995 for an interim period following the death of
its  President,  is entitled to a  commission  of 10% of the net proceeds to the
Partnership on all of the above-described transactions. See Item 13.

          Residential Lots within the Crestwood Tract

          As a result  of  management's  decision  to  develop  portions  of the
Crestwood Tract,  the Partnership has replanned the  configuration of the entire
tract.  This project has included a redesign of the Single Family Tract, and the
Partnership  has now received  final plat approval to increase to 198 the number
of  residential  lots which may be developed for single family use  (hereinafter
the "Residential Tract." "Development," as such term is applied to single-family
lots,  entails the completion of all necessary zoning,  land use,  environmental
and other required regulatory procedures,  the installation of roads and utility
connections to each lot and the provision of drainage facilities.

          Between 1995 and 1997,  the  Partnership  substantially  completed the
off-site and on-site  improvements  required for the development of the 198 lots
in the Crestwood single-family  residential subdivision.  The total construction
cost was financed  partially  through the issuance of bonds and  partially  with
development  financing  obtained  from  Union  Bank of  Florida.  (See Item 13 -
"Certain  Relationships  and Related  Transaction").  A total of $2,355,972  was
borrowed from Union Bank of Florida,  of which  $1,675,972 was outstanding as of
September 30, 1997. The loan, which bears interest at 2%
<PAGE>
above the bank's prime  lending  rate,  was  originally to mature on January 31,
1998 but has been  extended  until June 30,  1998.  As closings of lot sales are
held,  the  Partnership is obligated to pay down the bank at the rate of $20,000
per lot. The remaining cost of the development  has been financed  utilizing the
net proceeds  ($1,074,000)  of bonds  issued by the Indian  Trail Water  Control
District,  a governmental  authority.  The bonds are a direct  obligation of the
District  (and not of the  Partnership)  and are  repayable as to principal  and
interest  from  taxes  levied  on the  lots in the  Crestwood  subdivision.  The
issuance  of the bonds  increased  the  annual  real  estate  tax on the  entire
subdivision by  approximately  $117,000,  or $600 per lot. As lots are sold, the
responsibility  for payment of the taxes passed from the  Partnership to the lot
purchasers.

          Under the Partnership's  agreement with Lennar Homes, Inc. ("Lennar"),
executed in August,  1996, Lennar contracted to purchase 86 lots over a two year
period in Phase II of the  Residential  Tract for an aggregate of $2,451,000.  A
closing on 8 lots  occurred  prior to  September  30,  1997,  resulting in gross
proceeds to the Partnership of  approximately  $225,500 and net proceeds,  after
mandatory loan reductions of $20,000 per lot and brokerage commissions and other
and closing costs, of approximately  $43,000. An additional 17 lots were sold to
Lennar and one lot to another builder during the quarter ended December 31, 1997
for aggregate gross proceeds of $484,500 and net proceeds,  after mandatory loan
reductions  of $20,000 per lot and brokerage  commissions  and other selling and
closing costs, of approximately $96,000.

          During the 1997 fiscal year,  the  Partnership  conveyed a total of 35
(including  the 8 lots sold to Lennar as described  above) for  aggregate  gross
proceeds of $1,014,500.  As of September 30, 1997, a total of 97 additional were
under contract to Lennar and another  homebuilder  as to which,  if all closings
were held  thereunder,  aggregate  gross sale  proceeds of  $2,764,500  would be
generated.  These  contracts  are not  subject to any  contingencies  other than
completion of the on-site  improvements and acceptance thereof by the Village of
Royal Palm Beach, and the Partnership's ability to convey good title.

          The  Company has entered  into a contract  to sell  approximately  7.7
acres in the  multi-family  zoned land to a church for $350,000  subject only to
site plan  approval.  The Company has received an offer from a major real estate
development  firm to  purchase a  substantial  portion of the  remainder  of the
multi-family zoned land (comprising land zoned for approximately 288 residential
units),  subject to a number of contingencies  and the purchaser's  satisfactory
due diligence.

Other Acreage Within the Village

         In March,  1993 the  Partnership  reacquired  a separate  tract of 4.54
acres in the Village by  accepting a deed in lieu of  foreclosure  on a mortgage
with a principal balance of $300,000 (See Item 7 --"Foreclosure  Transactions").
This parcel is bordered by a golf course and a principal  Village road, is zoned
for  approximately  100 multi-family  residential units and is being offered for
sale in its present state without further development. An agreement to sell this
acreage for $325,000 was  terminated  by the purchaser in November  1996 and the
property is currently being remarketed.

Utility Contingent Receivable

         In 1983 the  Partnership's  Predecessor  Company sold to the Village of
Royal Palm Beach a water and sewage  treatment  system  servicing  the  Village.
Pursuant to the agreement of sale ("Utility Contract"),  the Predecessor company
<PAGE>
received $2,510,000 on closing, and was entitled to future payments to a maximum
of $10,900,000 as future connections,  measured by consumption  increases,  were
made to the system over a period ending August,  2001. As of September 30, 1997,
$5,257,000 had not been received or earned.  The Utility  Contract also provided
for contingent  extension  periods  aggregating  not more than three  additional
years to compensate for possible  future  governmental  building  moratoriums or
water use restrictions.  The Partnership's  consultants have advised it that the
term has been  extended  through  2003 as a result of water  usage  restrictions
imposed by the South  Florida  Water  Management  District  in 1990 and 1991 and
moratorium  actions  taken by the  Village of Royal Palm Beach in 1985 and 1986.
The Utility Contract also calls for payments to the Partnership  equal to 25% of
any  "Guaranteed   Revenues"   (payment  by  developers  to  secure   guaranteed
allocations of plant capacity)  collected by the Village to a maximum payment of
$500,000,  of which  $281,000 has already been  received.  It is not possible to
predict the amount or timing of future  revenues to the  Partnership  under this
program.

         To date, the  Partnership has received the following  Utility  Contract
payments:
<TABLE>
<CAPTION>
                                             Amount Received Based On                
       Fiscal Year Ended           ---------------------------------------------         
         September 30               Consumption               Guaranteed Amounts
         ------------               -----------               ------------------
<S>                                <C>                           <C>
             1984                  $  919,000
             1985                     830,000
             1986                     637,000
             1987                     859,000
             1988                     240,000                    $   30,000
             1989                     761,000                        45,000
             1990                         -0-                        35,000
             1991                     293,000                        21,000
             1992                     357,000                        37,000
             1993                     168,000                        47,000
             1994                      58,000                        27,000
             1995                     413,000                        20,000
             1996                     108,000                        19,000
             1997*                       --                            --
             Total                 $5,643,000                    $  281,000
</TABLE>
* The Partnership received $229,000 in January, 1998.



          The Utility Contract with extensions  management believes have already
accumulated  will expire in 2003,  subject to extensions of up to one additional
year.  The ability of the  Partnership to realize the maximum price is dependent
upon the rate at which the population in the Village grows,  and levels of water
consumption  which in turn depends upon  economic,  social and climatic  factors
which cannot be predicted.  Historically,  water  consumption  tends to increase
based upon increases in population.  During most of fiscal 1990, however, due to
drought  conditions  existing in most Southern Florida,  the South Florida Water
Management District imposed mandatory water usage  restrictions.  The imposition
of these  restrictions  resulted in a decrease in aggregate water consumption in
the area from which the  Partnership's  receipts are projected while  population
was increasing.
<PAGE>
         Management  believes  that there remain  sufficient  potential new home
water  hookups in the area  served by the utility to enable the  Partnership  to
realize  the maximum  remaining  $5,257,000  in  contingent  payments  under the
Utility Contract.  Nevertheless,  it is now considered unlikely that the rate of
new construction or water  consumption in such area will be sufficient to enable
the  Partnership  to  receive  the full  amount  of such  payments  prior to the
expiration of the contingent payment term.

         Acreage in the Vicinity of the Village

          Substantially all of the property  previously owned by the Predecessor
Company  in  Palm  Beach  County  outside  of  the  Village  limits,  originally
aggregating approximately 23,800 acres, was sold under the Predecessor Company's
retail installment sales program, which terminated prior to the inception of the
Partnership.  The Partnership  currently retains three tracts in the vicinity of
the Village.

          The first tract  originally  consisted  of 208  one-acre  lots located
approximately  eight  miles  northwest  of the  Village.  These  lots  have been
improved with graded unpaved access roads and drainage facilities.  One lot from
this  tract  was sold  during  1996 for  $12,000,  and 36 were  sold in 1997 for
$190,188, leaving a balance of 171 lots.

          All of such lots are  subject  to  numerous  governmental  regulations
under  which  new  development  may  not be  permitted  unless  adequate  public
facilities (such as roads and drainage) must be in place  concurrently  with the
impacts of such development.  The Indian Trail Water Control District prepared a
drainage  plan which would  result in an  exemption  for such lots from  further
compliance with such  concurrency  requirements  and would allow the issuance of
building  permits  for  single-family  residences  on such  lots.  Such plan was
opposed by other  governmental  agencies,  however,  and the Palm  Beach  County
Health  Department  denied  an  application  for  septic  tank  permits,  due to
inadequate  drainage.  Numerous  additional permits are required before building
can be  commenced,  and there is no  assurance  that all of such  permits can be
obtained.

          Palm Beach County has adopted land development regulations under which
new development will not be permitted unless adequate public facilities (such as
roads) will be in place  concurrently with the impacts of such development.  The
Indian Trail Improvement District (formerly named the Indian Trail Water Control
District (the  "District") is currently  preparing a revised drainage plan which
could result in an exemption  for such lots from  further  compliance  with such
concurrency  requirements  and would allow the issuance of building  permits for
single-family   residences   on  such  lots.   Following  the   institution   of
administrative  proceedings  to compel the issuance of septic tank permits,  the
Partnership was successful in obtaining approval for such permits for 3 of the 4
lots  for  which   application   was  made;   the  4th  lot  was   wetland   and
requiredadditional  mitigation.  A plan  covering  all  lots  and  allowing  for
development  has  been  opposed  by  certain  governmental  agencies,  and it is
uncertain whether the plan will be adopted. If the plan is not approved, not all
of  the  lots  may  be  usable  for  residential  purposes.   Nevertheless,  the
Partnership  believes  that its success in obtaining  some septic  permits could
ultimately  substantially increase the value of such lots and that the aggregate
realizable value of all such lots will be  substantially  above their book value
of $147,981.
<PAGE>
         The second tract, consisting of 470 acres, had been reserved for use by
the District, in part, as a water retention area for such revised drainage plan.
The Partnership is presently evaluating possible alternative uses of this tract,
which  contains a significant  amount of wetlands.  The use of this land is also
dependent on the extension of roads, and development  activity on this tract may
meet with  opposition  from  governmental  agencies  concerned with wildlife and
wetlands  preservation.  In 1996 the Partnership rejected an offer of $1,100,000
for this tract from the Nature  Conservancy on behalf of Palm Beach County,  and
retained  Condemnation  Counsel to negotiate a higher price.  Subsequently,  the
Partnership received an offer to purchase the 470 acre tract for $1,450,000 from
a user wishing to develop the property with a residential school and golf course
(with the Partnership also to retain a potentially  valuable development site of
approximately  20 acres at the  entrance  to the  larger  parcel).  The offer is
contingent upon completing the purchaser's due diligence to its satisfaction and
thereafter the obtaining of necessary land use approvals.  There is no assurance
that this  transaction  will be completed or, if not, that a higher price can be
negotiated with the Nature  Conservancy.  However,  management is of the opinion
that its realizable value is in excess of its current book value of $213,421.

          The timing of future sales of the land discussed  above, the manner in
which they may be developed and the ultimate realizable prices for this land are
dependent  upon a complex  and  interrelated  number of factors  arising  out of
governmental regulations concerning permissible land use.

         The  third  tract  in the  vicinity  of  the  Village  the  Partnership
previously held a disputed claim to approximately 24 acres of undeveloped  land.
This claim had not originally been accorded value on the  Partnership's  balance
sheet and was considered to have little or no value.  During 1994, in connection
with the resolution of this claim with  adjoining  land owners,  and in order to
give value to such claim,  the Partnership  relinquished a portion of its claim,
acquired five  adjoining  acres for $141,879,  and executed a joint  development
agreement with one of such adjoining  landowners  relating to the  Partnership's
acreage and such landowner's acreage  (comprising  approximately 22 acres in the
aggregate  of which  the  Partnership  now owns  approximately  12  acres).  The
Partnership  and the joint  developer have entered into an agreement to sell the
entire combined parcel for a price of $1.90 per square foot,  subject to survey,
which would result in a gross selling price of  approximately  $1,986,000  (less
selling  commissions) of which the  Partnership's  share would be  approximately
$993,000.  The sale is subject to the  purchaser's  ability to have the premises
rezoned for use as a shopping  center,  approval of the premises as a site for a
supermarket by a major supermarket chain, the provision of necessary  utilities,
and the issuance of all necessary  building and other permits.  The closing date
(subject to all of the  foregoing)  was  originally to be no later than June 30,
1997.  The  closing  date has been  extended  until June 30,  1998.  There is no
assurance that such permits will be obtained,  nor can the  Partnership  predict
whether  the  rezoning  process,   which  involves  proceedings  before  several
governmental bodies, or the sale of the aforesaid residence,  could be completed
or obtained within the required time frame.

<PAGE>
Item 3.  Pending Legal Proceedings.

         There  are  no  pending  legal  proceedings,  other  than  routine  and
immaterial  litigation incidental to its business, to which the Partnership is a
party or to which its property is subject.

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

                     Not applicable.

<PAGE>

                                     PART II

Item 5.   Market for the Registrant's  Common Equity and Related  Stockholder
          Matters

         On January 16, 1996 the American Stock  Exchange  halted trading in the
Partnership's Units pending a review of, among other matters,  the Partnership's
inability to meet the Exchange's listing standards.  The Partnership's units did
not resume trading on the Exchange and, following such review,  were delisted on
March 28,  1996.  The Units  thereafter  began to trade on the  over-the-counter
market (Symbol RPAMZ ).

         The  following  table  sets  forth,  for  the  fiscal  periods  of  the
Partnership  indicated,  the  reported  high  and  low  closing  prices  for the
Partnership's  Units as reported on the American Stock Exchange  through January
15,  1996;  information  for  periods  thereafter  relates  to  over-the-counter
trading. The Partnership's Units were held by approximately 629 holders of as of
December 31, 1997. Based on its tax records,  including  beneficial  owners, the
Partnership believes that there were a total of approximately 1,090 unit holders
as of such date.
<TABLE>
<CAPTION>
Fiscal Year Ended:  September 30, 1996

          Quarter            High            Low
          -------            ----            ---
<S>                         <C>              <C>
          First             1 1/2            3/4
          Second              13/16          7/8
          Third               9/16           17/20
          Fourth              9/16           3/4
</TABLE>


Fiscal Year Ended:  September 30, 1997
<TABLE>
<CAPTION>

          Quarter            High            Low
          -------            ----            ---
<S>                         <C>              <C>
          First             1                3/4
          Second            1 1/8            3/4
          Third               7/8            25/32
          Fourth              7/8            11/16
</TABLE>

Prior Distributions

         The  Partnership  Agreement  requires the Managing  General  Partner to
consider  quarterly  whether the Partnership has Cash Available for Distribution
in respect of the Partnership Units, and to make distributions  unless the costs
of the  distribution  would be  disproportionately  high in relation to the Cash
Available for  Distribution.  "Cash Available for Distribution" in general means
the  excess  cash held by the  Partnership  over  anticipated  expenditures  and
reserves for  anticipated or contingent  liabilities.  The  Partnership is not a
party  to any  agreements  which  would  restrict  its  ability  to make  future
distributions.  No  distributions  were made since December of 1992, in light of
management's  judgment that  Partnership cash should be conserved and applied to
<PAGE>
the development  activities  discussed in Item 2, and, during 1994, and 1996, in
light of the fact that the  Partnership was considering the resumption of active
business  operations  as a means to maximize  the values of its  remaining  real
estate.  Distributions  were not feasible in 1997  because of the  Partnership's
obligations to reduce indebtedness with substantial  portions of the proceeds of
sales.  It is  unlikely  that  distributions  will be made during  fiscal  1998,
although  management,  in reviewing the Partnership's use of cash, will consider
the tax effect on partners in the event that the Partnership  generates  taxable
income  from  its  development  and  sale  activities.  See  Item 1 --  "Factors
Affecting Future Operations and Distributions."

         At the  inception of the  Partnership,  its assets were  assigned a tax
basis in the hands of the  Partnership  based upon the net fair market  value of
the assets  transferred from the Predecessor  Company as determined by reference
to the  aggregate  market  value of the Units at the time of original  issuance.
Each Unit's pro rata share of such net fair market  value  resulted in a capital
account of $6.31 per Unit, which also became the original tax basis of each Unit
in the hands of the original Unitholders. As a result of taxable income and loss
and   distributions   since  inception,   the  capital  account  and  tax  basis
attributable  to each  Unit  which  has  remained  in the  hands of an  original
Unitholder  has been  reduced to $1.77 as of  September  30,  1997.  Each person
acquiring a Unit after  inception  has a tax basis in such Unit equal to the net
price paid therefor. Such basis is thereafter increased by such Unit's allocable
share of the  Partnership's  income  and  decreased  by the  allocable  share of
taxable loss and by any cash distributions  made. A distribution itself is not a
taxable  event  except  to  the  extent  that  the   distribution   reduces  the
Unitholder's basis below zero. Section 17-607(a) of the Delaware Revised Uniform
Limited  Partnership Act provides generally that a limited partnership shall not
make a  distribution  to a partner if, after giving effect to the  distribution,
all  liabilities  of the  partnership  exceed  the fair value of its  assets.  A
limited  partner  who  receives  such a  distribution  is liable to the  limited
partnership for the amount thereof, but only if such limited partner knew at the
time of the distribution that distribution  violated said Section 17-607(a).  No
claim based on any such wrongful  distribution may be made more than three years
after such distribution.  In the normal course of events,  however, the Managing
General  Partner does not anticipate  that the  liabilities  of the  Partnership
immediately following any future distribution will ever exceed the fair value of
its net assets. See also "Factors Affecting Future Operations and Distributions"
under Item 1.

         The  Partnership  has  declared  and  paid  the  following  liquidating
distributions:
 
          Payment Date                   Amount Per Unit
          ------------                   ---------------
          April 15, 1986                     $ .25
          August 15, 1986                      .35
          December 15, 1986                    .40
          January 15, 1988                     .50
          July 15, 1988                        .50
          January 15, 1989                     .50
          July 17, 1989                       1.00
          September 29, 1989                   .75
          March 30, 1990                       .75
          July 31, 1990                        .50
          August 30, 1991                      .50
          December 15, 1991                    .25
          December 16, 1992                    .25
                                             -----
                                              6.50
<PAGE>
Item 6. Selected Financial Data

         The following is a summary of selected  financial data (in thousands of
dollars  except as to per unit  amounts) as of and for the periods  ended on the
dates indicated:
<TABLE>
<CAPTION>
                                         Fiscal Years Ended September 30,
                             -------------------------------------------------------- 
                              1997       1996         1995         1994         1993
<S>                          <C>       <C>          <C>          <C>          <C>
Selected Income
Statement Data

Revenues                     3,107     $   397      $   497      $   832      $ 1,717
Net income (loss)              391        (690)        (787)        (554)         773
Income (loss) per unit         .09        (.15)        (.18)        (.12)         .17

Selected Balance
Sheet Data

Total assets                 5,228       5,486        5,425        4,650        5,090
Mortgage notes payable       1,676       2,065        1,511         --           --

Partners' equity             2,761       2,370        3,060        3,847        4,401
Cash distributions
per unit                       -0-         -0-          -0-          .25          .25
</TABLE>


         Since the  Partnership's  sole business has been the disposition of its
assets and the  distribution  of  proceeds  to its  Unitholders,  results in any
period are not  comparable  with any other period and are not  indicative of the
results  which may be  anticipated  in any  future  period.  See Item 5 -- Prior
Distributions (relating to prior returns of capital

 Item 7. Management`s Discussion And Analysis Of Financial Condition And Results
         of Operations

         During the fiscal year, the Partnership  continued to incur substantial
expenses in the planning and development of its properties in addition to normal
ongoing  administrative  costs. The Partnership had withheld its properties from
sale during the fiscal year ended  September  30,  1995,  and during most of the
quarter ended December 31, 1995, in anticipation of a business combination which
was being negotiated  throughout most of that year, but which  negotiations were
terminated in December, 1995. The only revenues for the year ended September 30,
1996, were the proceeds of $182,000  received upon the sale of five  residential
lots  and one  undeveloped  lot,  offset  in part by  approximately  $71,000  of
terminated  merger expense.  In addition,  the Partnership  received $433,000 in
payment of an installment  on a contingent  note held in respect of a prior sale
of the utility system (recognized in the 1995 fiscal year).

         As a result of the recommencement of active marketing activities, sales
increased  substantially  in the fiscal year ended September 30, 1997.  Sales of
real estate during such year produced gross proceeds of approximately $2,873,445
and $129,000 in payment of an installment  on a contingent  note held in respect
of a prior sale of the utility system (recognized in the 1996 fiscal year).
<PAGE>
          On February 28, 1997 the Partnership  repaid a working capital loan in
the  amount of  $527,000  due to Hasam  Realty  Limited  Partnership,  a general
partner of the Partnership,.  See Item 13 -- "Certain  Relationships and Related
Transactions."

In June 13, 1996 the Partnership  obtained an additional working capital loan in
the amount of $300,000 from an affiliate of Jack  Friedland and $25,000 from Mr.
Friedland  directly.  Mr.  Friedland is  affiliated  with Hasam  Realty  Limited
Partnership, a general partner of the Partnership. The loan was originally for a
term ending  October 31, 1996,  at an interest rate of 2% over the prime rate of
Union  Bank..  As a result of the  deferral  of closing on several  transactions
which had been anticipated to produce  substantial  cash proceeds,  the maturity
date of the note was extended and the loan was paid in full in January, 1997.

          The  Partnership's  cash balances  remained at approximately  the same
level at September 30, 1996 and September 30, 1997. See Financial  Information -
Statements of Cash Flows.

          During the current fiscal year, and based upon  management's  judgment
that ordinary operating expenses will not increase, the Partnership  anticipates
that cash flow and  liquidity  requirements  will be satisfied by the Union Bank
financing  described above, land sales,  contingent  utility receipts  described
"Utility Contingent Receipts", below and other bank financing. Sales of land are
subject to conditions which might not be satisfied, although the Partnership has
no  present   knowledge  of   circumstances   which  would  render   likely  the
non-satisfaction of such conditions.

Affect of Land Sales on Future Cash Flow

         The  Partnership's  future revenues will depend solely upon its ability
to develop and/or sell its remaining real estate, and upon receipts from a prior
sale of a utility plant. At September 30, 1997, the Partnership retained and was
holding  for  sale  (1) 154  residential  lots and  commercial  property  in the
"Crestwood" tract in the Village,  (2) multi-family  zoned land in the Crestwood
tract presently  zoned for a total of  approximately  394 units,  (3) a tract of
4.54 acres in the Village zoned for approximately  100 multi-family  residential
units (4) 171 lots in the vicinity of the Village  zoned for single family homes
but  presently  the subject of  litigation  as to the  availability  of building
permits , (5) a 470-acre tract in the vicinity of the Village,  and (6) 12 acres
in the vicinity of the Village being jointly developed with an unrelated party -
see "Acreage in the  Vicinity of the  Village.  The  development  and  marketing
status of these properties is described in Item 2.

          Although the Partnership has contracted to sell  substantial  portions
of its  residential  land  inventory,  the  requirement  to  repay  indebtedness
incurred to finance  necessary on and off-site  development work required by the
terms of sales contracts makes unlikely distributions to partners at least until
the latter part of fiscal 1998.  Distributions in 1999 or thereafter will depend
upon the rate of sales of remaining  land, and the prices  obtainable  therefor,
and collection of Contingent Utilities Receipts See Item 2.

         Total net cash flow which might become  available for  distribution  is
also unpredictable due to uncertain  conditions in the South Florida real estate
market  in which  the  Partnership's  remaining  real  estate  is  located,  and
competition from other owners and developers of real estate in the South Florida
market.  These  conditions  will continue to affect the realizable  value of the
Partnership's  remaining land, including decisions by parties holding options on
<PAGE>
the Partnership's land to exercise such options in whole or in part. The rate of
construction in the Village of Royal Palm Beach could also significantly  affect
future  payments  to the  Partnership  under the  contract  described  under the
caption "Utilities Contingent Receivable" under Item 2 above. As indicated under
such caption, it is now considered unlikely, particularly in view of the decline
in payments from in 1996 and 1997,  that the rate of new  construction  or water
consumption  in such area will increase to a level which is sufficient to enable
the  Partnership  to receive the full amount,  or even a substantial  portion of
such maximum payments prior to the expiration of the contingent payment term.

         Environmental Matters 

          There are no environmental contingencies in respect of the Partnership
or its  properties.  Use of all of the  Partnership's  properties  is subject to
compliance with state and county land use regulations  relating to environmental
matters,  which the Partnership  takes into account in considering the values of
its properties.

Results of Operations
<TABLE>
<CAPTION>
                                              Fiscal Years Ended September 30
                                        ---------------------------------------- 
                                          1997            1996              1995
                                       ---------       ---------       ---------
<S>                                    <C>             <C>             <C>
Sales of land, net                     $2,874,000       $182,000       $     -0-
Recognized profit on
installment and cost
recovery sales (a)                          --             1,000          31,000
Interest income (b)                        5,000           5,000          32,000
Sale of utility system (c)               227,000         129,000         432,000
Other (d)                                  1,000          80,000           2,000
                                       ---------       ---------       ---------

Total revenues                        $3,107,000       $ 397,000       $ 497,000
                                      ==========       =========       =========
</TABLE>

a) Recognized  profit on  installment  and cost recovery  sales has changed from
year to year as  collections  of the  Partnership's  mortgage  notes  receivable
related to sales reported on the installment and cost recovery basis decreased.

b) Interest  income  decreased from 1995 to 1997 as the  Partnership's  mortgage
notes receivable decreased.

c) As discussed in Note 10 to the financial statements, income recognized on the
sale of the utility system varies with water consumption and other factors.

d) Other income in 1996 includes $74,000  received as a foreclosure  settlement,
net of related expenses.

Cost of Sales

Cost of sales relates to the sales of land as discussed above.  This item varies
as a result of dissimilar profit margins and income  recognition  methods on the
various sales of land and buildings as discussed above.
<PAGE>
Selling, Administrative and other expenses

Selling,  general and  administrative  expenses,  have not varied  significantly
during the last three  years.  However,  in 1996 and 1995 the  Company  incurred
$70,720 and $405,261, respectively, in costs related to a proposed merger, as to
which negotiations have been terminated.

Provision for Doubtful Accounts

In 1995 it was determined that this allowance of $48,500 was no longer required.

Income Taxes

The Partnership,  pursuant to the transitional grandfather rules of the Internal
Revenue Code dealing with publicly traded partnerships,  reports its income as a
Partnership. The application of the grandfather rules was scheduled to terminate
for the taxable year  commencing  after  December  31, 1997.  Under the recently
enacted  Taxpayer  Relief Act of 1997,  a publicly  traded  partnership  that is
currently  governed by this provision may elect to continue its  Partnership tax
status beyond December 31, 1997 by agreeing to pay an annual 3.5% Federal Tax on
its gross income for Federal Income Tax purposes  (principally revenues less the
tax basis of land sold) from the conduct of its active trade or business.  These
provisions  will become  operative for the taxable  years  beginning on or after
January 1, 1998.

If the existing  Partnership decides not to make the aforementioned  election by
March 16,  1998,  it will become  taxable as a  corporation  unless it meets the
exception for publicly traded  partnerships with passive income.  Generally,  in
the  absence of any  transaction  changing  the status of the  Partnership,  the
transformation  will be  treated  under  the  operative  Internal  Revenue  Code
provisions as an asset transfer from the  Partnership to a corporation  followed
by  a  liquidation  of  the  Partnership.   The  potential  taxability  of  this
transaction will be governed by the appropriate Internal Revenue Code provisions
and regulations thereunder.

The  Partnership  will determine its income tax status pursuant to the operative
Internal  Revenue  Code  provisions,  regulations  and  rules  thereunder.  This
decision,  which is dependent upon estimates of future results of operations and
other factors will result in the  Partnership  either  retaining its status as a
partnership  and possibly  paying an annual 3.5% Federal Tax as described  above
or, alternatively,  being taxed as a corporation.  Management believes, however,
that an election to retain the Partnership's  income tax status as a partnership
will not have a material adverse affect on the Partnership.

Depreciation and Property Taxes

The increase in property taxes from 1996 to 1997 results from higher assessments
on the  Partnership's  properties  resulting  in  part  from  higher  valuations
ascribed to certain of the Partnership's properties.

Item 8. Financial Statements and Supplementary Data

The financial  statements  and the  supplementary  data are listed under Item 14
herein.

Item 9. Disagreements with Accountants on Accounting and Financial Disclosure

None
<PAGE>
                                    PART III

Item 10. Directors and Executive Officers of the Registrant

The following information is provided with respect to the directors and officers
of each general partner of the Registrant.(l)
<TABLE>
<CAPTION>

                           Age and Present Position
Name                       With the Registrant                  Other Positions
----                       -------------------                  ---------------
<S>                        <C>                                  <C>
Irving Cowan               65; President of Steinco             Private Investor

David B. Simpson           59; Vice President and               Attorney currently in
                           Director of Steinco                  private practice and counsel
                                                                to the  Partnership; formerly  
                                                                partner,  Holtzmann,  Wise &  
                                                                Shepard,  Counsel  to
                                                                Partnership, from September 
                                                                1991 to August 1993

Jack Friedland             72; Member of Friedco,               Private Investor
                           L.C.(1) 

Leonard Friedland          75; Member of Friedco,               Private Investor
                           L.C.(1)

Herbert Tobin              57; Director of Steinco              Director, and Secretary and 
                                                                Treasurer(*)
                                                                of Steinco

Marjorie Cowan             57; Member of Friedco,               Private Investor
                           L.C.(l); 

Harold Friedland           67; Member of Friedco,               Private Investor
                           L.C.(1) 
</TABLE>
----------------- 
(1)  The general partners of the Partnership are Stein Management Company,  Inc.
     ("Steinco")  and Hasam  Realty L.P.  The  general  partner of Hasam L.P. is
     Friedco, L.C., ("Friedco") a Florida limited liability company.  Friedco is
     managed  by its four  members,  Jack,  Harold  and  Leonard  Friedland  and
     Marjorie Cowan, who are brothers and sister. Irving Cowan is the husband of
     Marjorie Cowan.


Compliance with Section 16(a) of the Securities Exchange Act of 1934

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  the
officers and directors of the general partners of the  Partnership,  and persons
who own more than ten percent of the  Partnership's  Units,  to file  reports of
ownership and changes in ownership with the Securities and Exchange  Commission.
Such officers,  directors and greater than ten-percent  Unitholders are required
by SEC regulations to furnish the  Partnership  with copies of all Section 16(a)
forms they file.
<PAGE>
         No such forms were  furnished to the  Partnership  during  fiscal 1997.
Based solely on the foregoing the Partnership  believes that during fiscal 1997,
no purchases or sales of units were made requiring  compliance  with  applicable
Section 16(a) filing requirements.

Item 11. Executive Compensation

         During fiscal 1997 no executive officer of the Managing General Partner
received compensation exceeding $60,000.

         All officers and  directors of Steinco,  as a group (4 persons)  earned
$52,500 in cash compensation.

         The Partnership  Agreement  provides that the Partnership  will provide
and pay for all payroll and other costs of Steinco (to the extent such costs are
not paid  directly by the  Partnership)  in  connection  with the  employment of
personnel,  and the costs of office  space,  outside  clerical and  professional
assistance,  equipment, and other facilities which are ordinary and necessary to
the conduct and management of the Partnership's  affairs.  Since 1994,  however,
for administrative  convenience,  all such reimburseable expenses have been paid
directly by the Partnership. Steinco's sole function is to serve as the Managing
General Partner and it does not conduct any other operations.

         Other than the foregoing,  the Managing General Partner is not entitled
to any  compensation  in respect of the discharge of its  obligations  under the
Partnership Agreement. Hasam L.P., the other General Partner, is not entitled to
compensation  of any nature under the  Partnership  Agreement but is entitled to
reimbursement  for such expenses as it may reasonably  incur in the discharge of
its ordinary and necessary obligations as a General Partner.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management

         The  following  table sets forth as of December  31,  1997  information
concerning  (i) all persons who are known to the Registrant to be the beneficial
owner of more than 5% of the Units and (ii) the beneficial ownership of Units of
directors and officers of each General Partner of the Registrant.
 
<TABLE>
<CAPTION>

Amount Beneficially                 Percent of
Name and Address                    Owned (a)                   Class
------------------                  ---------                   -----
<S>                                 <C>                         <C>
Harold Friedland                      712,417 (1)               15.8%
636 Old York Road #210
Jenkintown, PA 19046

Jack Friedland                      1,160,907 (1)(2)            25.8%
111 Regatta Drive
Jupiter, FL 33477

Leonard Friedland                   1,170,196 (1)(3)            26.1%
6530 Allison Road
Miami Beach, FL 33131

Marjorie Cowan                      1,057,929 (1)(4)            23.6%
3725 S. Ocean Dr.
Hollywood, FL 33019

Samuel Friedland
Family Foundation                     637,417                   14.2%
2501 S. Ocean Dr.
Hollywood, FL 33019

Hasam Realty Limited
Partnership                            75,000                    1.7%
2501 S. Ocean Dr.
Hollywood, FL 33019

Stein Management Company               20,093                   Less than 1%
2501 S. Ocean Drive
Hollywood, FL 33019

David B. Simpson                        1,460 (5)               Less than 1%
2 University Plaza #109
Hackensack, N. J. 07601

All officers and directors          2,361,822                   52.7%
as a group (See footnotes) (6)
</TABLE>
(a)  Includes  all  units as to which  owner  holds  sole or  shared  voting  or
investment power.
<PAGE>
(1) Includes 637,417 units owned by the Samuel  Friedland Family  Foundation and
75,000 units owned by Hasam Realty Limited Partnership, of which this individual
may be deemed a controlling  person.  In the case of Harold  Friedland  does not
include  316,144  Units owned by an adult child and 65,000 Units owned by trusts
for other adult  children of which Jack Friedland is one of three  trustees.  In
the case of Leonard Friedland,  includes Units held for benefit of Mr. Friedland
and adult children of Mr. Friedland.

(2) Does not include 2,500 units owned Jack Friedland's wife.

(3) Does not include 2,500 units owned by Leonard Friedland's ex-wife.

(4) Does not include 96,900 units owned by Mrs. Cowan's  husband,  Irving Cowan.
Includes  16,993  units owned by a trust for a minor child of which Mr. and Mrs.
Cowan are trustees; Includes 21,708 Units owned jointly with Mr. Cowan.

(5) Does not include 20,000 Units owned by Stein  Management  Company,  of which
Mr. Simpson's wife owns 50% of the common stock.

(6) Dr. Ernest Safie,  a director of Steinco who owned 150 Units,  died in early
1998.

Item 13. Certain Relationships and Related Transactions

Borrowing from Related Parties

         In June,  1995, the Company borrowed  $500,000 from Hasam Realty,  L.P.
for  general  working  capital  purposes,  secured  by a first  mortgage  on the
Crestwood  commercial  property referred to in Item 2. In February,  1996, Hasam
agreed to add to principal  $27,249 of interest accrued through January 31, 1996
and unpaid.  The loan  (including said amount added to principal) was originally
payable in full on June 29, 1996 but was  extended  through and paid on February
28, 1997.  The loan bore  interest at a rate equal to two percent over the Prime
Rate, defined as the highest fluctuating rate of interest per annum as published
by the Wall Street Journal. Management believes that the terms of this borrowing
were fair and  reasonable,  and at least as  favorable  as the terms which could
have been obtained from an unaffiliated institutional lender.

         On June 13, 1996, the Partnership  borrowed  $300,000 from an affiliate
of Jack Friedland and $25,000 directly from Mr.  Friedland,  who is an affiliate
of Hasam Realty Limited Partnership, a general partner of the Partnership. These
loans,  originally  due on October 1, 1996,  were  extended  through and paid in
January, 1997.

Indian Trail Water Control District

         The Indian  Trail  Improvement  District,  a public  entity whose seven
supervisors included Martin J. Katz (President and Director of Steinco until his
death in September,  1995) and to which Jack  Friedland was recently  elected in
1996,  has prepared a drainage and  reclamation  plan  covering a portion of the
Company's  acreage  in the  vicinity  of the  Village of Royal  Palm  Beach.  In
November,  1996,  the  District  issued  bonds  to  finance  a  portion  of  the
development of certain of the Partnership's acreage in the Village. Reference is
made to Item 2 - Properties  -- Palm Beach  County  -"The  Village of Royal Palm
Beach" and "Acreage in the Vicinity of the Village."

Herbert Tobin, a Director of Steinco, is Chairman of the Board and Director,  of
Union Bank of Florida,  which made a land development loan to the Partnership in
1994. See Item 2.
<PAGE>
Randy  Rieger  was  elected on an interim  basis as a Vice  President  and Chief
Operating Officer of Stein Management Company,  Inc., the Partnership's managing
general  partner,  in September 1995,  shortly  following Mr. Katz's death.  Mr.
Rieger had been active as a real estate broker,  directly and through affiliated
companies,  in the south Florida real estate market for many years. Prior to his
election in 1995, Mr. Rieger had been serving as a consultant to the Partnership
under  an  arrangement  pursuant  to  which he was  paid  consulting  fees,  and
additional amounts applicable to future brokerage commissions were being paid to
RTL  Realty  Corp.  (50%  owned by Mr.  Rieger)  which had been  engaged  as the
Partnership's  exclusive broker in respect of a substantial  portion of its real
estate  assets.  Under such prior  arrangement,  RTL Realty Corp. is entitled to
substantial  brokerage  commissions  in the event that certain real estate sales
currently under contract relating to a shopping center site are consummated. See
Item 2  Properties  -- "The Village of Royal Palm  Beach." Mr.  Rieger  resigned
following the election of new officers on February 14, 1996; however, Mr. Rieger
has continued to serve the  Partnership  as a consultant  under a consulting and
brokerage  agreement  with Mr.  Rieger and RTL Realty Corp,  dated May 23, 1996,
which was  originally  scheduled  to expire on  December  31,  1996 and has been
extended  through  December  31,  1998  (the  "RTL  Agreement").  Under  the RTL
Agreement,  RTL  receives  $6,000  per month in  consideration  of Mr.  Rieger's
services  to  the  Partnership,  in  addition  to  brokerage  on  sales  of  the
Partnership's  properties at a varying  schedule of rates and  reimbursement  of
approved  expenses.  The Partnership  also reimburses RTL for certain  expenses,
including office expenses, at the rate of $2,500 per month.
<PAGE>


                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

         (a)      The following documents are filed as a part of this report:

                  1. Financial Statements:

                  Independent Auditor's Report

                  Royal  Palm  Beach  Colony,   Limited  Partnership   Financial
                  Statements:

                  Balance sheets as of September 30, 1997 and 1997.

                  Statements  of income for the years ended  September 30, 1997,
                  1996 and 1995.

                  Statements of partners'  equity for the years ended  September
                  30, 1997, 1996 and 1995.

                  Statements  of cash flows for the years  ended  September  30,
                  1997, 1996 and 1995.


         2.       Financial Statement Schedules:

Schedule IX       Valuation and qualifying accounts

Schedule X        Supplementary Income Statement Information


Schedules  other than those listed above have been omitted  because they are not
applicable or the required  information is shown in the financial  statements or
notes thereto.


         (b)      Reports on Form 8-K

                  None.

         (c)      Exhibits

NOTE:     All references in this table of exhibits to  "Registration  Statement"
          relate to the  Registration  Statement of the  Registrant on Form S-14
          (file Number  2-96374) as  originally  filed with the  Securities  and
          Exchange  commission on March 12, 1985, as  supplemented  by Amendment
          No. 1 filed May 23, 1985 and as effective on June 10, 1985.

3(a)  Certificate  and  Agreement  of  Limited  Partnership  of Royal Palm Beach
Colony,   L.P.  filed  as  Exhibit  3(d)  to  the  Registration   Statement  and
incorporated herein by reference.

3(b) Restated  certificate  and Agreement of Limited  Partnership  of Royal Palm
Beach  Colony,  L.P.  included as Appendix B to the  Registration  Statement and
incorporated herein by reference.
<PAGE>
3(c) Amended  Certificate  and  Agreement of Limited  Partnership  of Royal Palm
Beach Colony,  L.P. (filed May 21, 1985 with the Secretary of State of Delaware)
changing name to Royal Palm Beach Colony, Limited Partnership.  Filed as Exhibit
3(g) to Amendment  Number One to the  Registration  Statement  and  incorporated
herein by reference.

3(d)  Restated  Certificate  and  Agreement  of  Limited  Partnership  (revised)
included as Appendix B to  Amendment  No. 1 to the  Registration  Statement  and
filed July 11, 1985 with the  Secretary  of State of Delaware  and  incorporated
herein by reference.

3(e) Restated  Certificate of Limited Partnership dated December 16, 1986. Filed
as Exhibit 3(e) to Report on Form 10-K for the fiscal year ended  September  30,
1986 and incorporated herein by reference.

3(f) Amended and Restated  Agreement of Limited  Partnership  dated December 16,
1986.  Filed as Exhibit  3(f) to Report on Form 10-K for the  fiscal  year ended
September 30, 1986 and incorporated herein by reference.

3(g)  Amendment No. 1 to Amended and Restated  Agreement of Limited  Partnership
dated  December 30,  1986.  Filed as Exhibit 3(g) to Report on Form 10-K for the
fiscal year ended September 30, 1986 and incorporated herein by reference.

3(h) Second  Amended  and  Restated  Certificate  of Limited  Partnership  dated
December 30, 1986.  Filed as Exhibit 3 (h) to Report on Form 10-K for the fiscal
year ended September 30, 1986 and incorporated herein by reference.

4(a) Form of Unit  Certificate  issued to Limited  Partners and Assignees of the
Partnership.   Filed  as  Exhibit  4  (a)  to  the  Registration  Statement  and
incorporated herein by reference.

4(b) Loan Agreement  between Royal Palm Beach Colony,  Limited  Partnership  and
Union Bank of Florida dated October 6, 1994, pertaining to loan in the amount of
$975,000. Filed as Exhibit 4(b) to the Report of the Registrant on Form 10-K for
the fiscal year ended September 30, 1995 and incorporated herein by reference.

4(c)  Correction to  description of Exhibit 4(c) filed with Report of Registrant
on Form 10-K for fiscal year ended  September 30, 1995.  Said Exhibit relates to
is a promissory  note for $27,247.83 of accrued  interest on Promissory  Note in
the amount of $500,000 filed as Exhibit 4(d) to said report on Form 10-K.  Filed
as Exhibit 4(c) to the Report of the Registrant on Form 10-K for the fiscal year
ended September 30, 1996 and incorporated herein by reference.

4(d)  Correction to  description of Exhibit 4(d) filed with Report of Registrant
on Form 10-K for  fiscal  year  ended  September  30,  1995.  Said  Exhibit is a
Promissory  note from  Registrant  to Hasam Realty  Limited  Partnership  in the
amount of  $500,000.  Filed as Exhibit 4(d) to the Report of the  Registrant  on
Form 10-K for the fiscal year ended September 30, 1996 and  incorporated  herein
by reference.

4(e)  Agreement  between  Registrant and Gerald M. Higier dated December 1, 1995
relating to purchase of 10.8 acre commercial tract. Filed as Exhibit 4(e) to the
Report of the  Registrant  on Form 10-K for the fiscal year ended  September 30,
1995 and incorporated herein by reference.

4(f) Agreement between Registrant and Gerald M. Higier dated in 1995 relating to
purchase of 24 acres.  Filed as Exhibit 4(f) to the Report of the  Registrant on
Form 10-K for the fiscal year ended September 30, 1995 and  incorporated  herein
by reference.
<PAGE>
4(g) Agreement executed August 12, 1996 between the Registrant and Lennar Homes,
Inc. relating to sale of 86 single family lots in Crestwood Unit 3 - Plat Three.
Filed as  Exhibit  4(g) to the  Report  of the  Registrant  on Form 10-K for the
fiscal year ended September 30, 1996 and incorporated herein by reference.

4(h) First Mortgage Modification Amendment dated June 26, 1995 to Loan Agreement
referred  to in  Exhibit  4(b).  Filed  as  Exhibit  4(h) to the  Report  of the
Registrant  on Form  10-K for the  fiscal  year  ended  September  30,  1996 and
incorporated herein by reference.

4(i)  Second  Mortgage  Modification  Amendment  dated  October 21, 1996 to Loan
Agreement  referred to in Exhibit  4(b).  Filed as Exhibit 4(i) to the Report of
the  Registrant  on Form 10-K for the fiscal year ended  September  30, 1996 and
incorporated herein by reference.

4 (j) Mortgage dated June 13, 1996 between Crossroads  Associates,  Ltd. and the
Registrant  pertaining to secured loan of $300,000 to the  Registrant.  Filed as
Exhibit  4(j) to the Report of the  Registrant  on Form 10-K for the fiscal year
ended September 30, 1996 and incorporated herein by reference.

4 (k)  Promissory  Note  dated  June 13,  1996 in the  amount of  $300,000  from
Registrant to Crossroads  Associates,  Ltd.  relating to Mortgage referred to in
Exhibit 4(j). Filed as Exhibit 4(k) to the Report of the Registrant on Form 10-K
for the  fiscal  year  ended  September  30,  1996 and  incorporated  herein  by
reference.

4(l) Letter Agreement dated May 23, 1996 between Randy Rieger and the Registrant
relating to  brokerage  and  consulting  services.  Filed as Exhibit 4(l) to the
Report of the  Registrant  on Form 10-K for the fiscal year ended  September 30,
1996 and incorporated herein by reference.
<PAGE>

                                   SIGNATURES



Pursuant  to the  requirements  of  Section 13 and 15(d) of the  Securities  and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                ROYAL PALM BEACH COLONY,
                                                LIMITED PARTNERSHIP

                                            By: Stein Management Company, Inc.
                                                Managing General Partner


Date: __________________, 1998              By: /s/ David B. Simpson
                                                --------------------
                                                David B. Simpson, Vice President


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

Name                           Title                                   Date
----                           -----                                   ----

/s/Irving Cowan                Chairman, President and 
---------------                Director, Stein Management 
Irving Cowan                   Company, Inc.    
                               Director Stein
                               Management Company, Inc.
                                  

/s/David B. Simpson            Vice President and Director, 
-------------------            Stein Management Company, Inc.
David B. Simpson

/s/Herbert Tobin               Director,  Stein  Management 
----------------               Company, Inc.  
Herbert Tobin
<PAGE>













                            ROYAL PALM BEACH COLONY,

                              LIMITED PARTNERSHIP

                              FINANCIAL STATEMENTS

                   YEARS ENDED SEPTEMBER 30, 1997, 1996, 1995

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Partners
Royal Palm Beach Colony, Limited Partnership
Hollywood, Florida




We have  audited the  accompanying  balance  sheets of Royal Palm Beach  Colony,
Limited  Partnership  as of  September  30,  1997  and  1996,  and  the  related
statements of operations, partners' equity, and cash flows for each of the three
years in the period ended September 30, 1997. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Royal Palm Beach  Colony,
Limited  Partnership  as of September 30, 1997 and 1996,  and the results of its
operations  and its cash flows for each of the three  years in the period  ended
September 30, 1997 in conformity with generally accepted accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken as a whole. The schedules listed in item 14(a)2 are
presented  for  purposes  of  complying   with  the   Securities   and  Exchange
Commission's  rules and are not part of the basic  financial  statements.  These
schedules have been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly state in all material
respects the financial  data required to be set forth therein in relation to the
basic financial statements taken as a whole.



/S/LEFCOURT, BILLIG, SARBEY, TIKTIN & YESNER, P.A.
--------------------------------------------------
LEFCOURT, BILLIG, SARBEY, TIKTIN & YESNER, P.A.

Coral Gables, Florida

December 10, 1997
<PAGE>
<TABLE>
<CAPTION>

                     ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                                    BALANCE SHEETS

                             SEPTEMBER 30, 1997 AND 1996


                                                               1997           1996
                                                            ----------     ---------- 
                          ASSETS
<S>                                                         <C>            <C>
Cash ..................................................     $   48,738     $   41,451
Mortgage note and other receivables (Note 2):
    Mortgage note receivable ..........................        101,250
    Other .............................................        275,303        133,318
Property held for sale (Note 3) .......................      4,739,939      5,249,988
Other assets (Note 4) .................................         62,944         61,376
                                                            ----------     ----------

                                                            $5,228,174     $5,486,133
                                                            ==========     ==========


             LIABILITIES AND PARTNERS' EQUITY

Liabilities:
    Mortgage notes payable, bank (Note 5) .............     $1,675,972     $1,212,412
    Mortgage notes payable, general partner (Note 5) ..                       527,249
    Mortgage and note payable, related parties (Note 5)                       325,000
    Accounts payable and other liabilities (Note 6) ...        761,325      1,037,439
    Estimated cost of development of land sold (Note 3)         30,142         14,142
                                                            ----------     ----------

                                                             2,467,439      3,116,242

Commitment (Note 3)

Partners' equity:
    4,485,504 units authorized and outstanding ........      2,760,735      2,369,891
                                                            ----------     ----------

                                                            $5,228,174     $5,486,133
                                                            ==========     ==========


</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>

                          ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                                    STATEMENTS OF OPERATIONS




                                                            Years ended September 30,
                                                 ----------------------------------------------  
                                                     1997             1996             1995
                                                 ------------     -----------      ------------ 
<S>                                              <C>              <C>              <C>
Revenues (Notes 12 and 13) .................     $ 3,106,552      $   396,924      $   497,651
                                                 -----------      -----------      ------------

Costs and expenses:
    Cost of sales ..........................       1,747,627          135,533
    Selling, general and administrative
         expenses (Note 9) .................         768,537          680,239          790,875
    Interest (Note 5) ......................          33,434           72,696           16,630
    Terminated merger costs (Note 7) .......                           70,720          405,261
    Provision for doubtful accounts ........                                           (48,500)
    Depreciation and property taxes ........         166,110          127,979          120,734
                                                 -----------      -----------      ------------

                                                   2,715,708        1,087,167         1,285,000
                                                 -----------      -----------      ------------

Net income (loss) ..........................     $   390,844      $  (690,243)     $  (787,349)
                                                 ===========      ===========      ============


Net income (loss) per unit .................     $      0.09      $     (0.15      $     (0.18)
                                                 ===========      ===========      ============

Weighted average number of units outstanding       4,485,504        4,485,504        4,485,504
                                                 ===========      ===========      ============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>


                          ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                                 STATEMENTS OF PARTNERS' EQUITY




                                 Partnership        General          Limited           Total
                                   Units            Partner          Partners         Equity
                                -----------      -----------      -----------      -----------
<S>                             <C>              <C>              <C>              <C>
Balance, September 30, 1994       4,485,504      $   149,675      $ 3,697,808      $ 3,847,483

Net loss ..................                          (16,691)        (770,658)        (787,349)
                                -----------      -----------      -----------      -----------

Balance, September 30, 1995       4,485,504          132,984        2,927,150        3,060,134

Net loss ..................                          (14,633)        (675,610)        (690,243)
                                -----------      -----------      -----------      -----------

Balance, September 30, 1996       4,485,504          118,351        2,251,540        2,369,891

Net income ................                            8,286          382,558          390,844
                                -----------      -----------      -----------      -----------

Balance, September 30, 1997       4,485,504      $   126,637      $ 2,634,098      $ 2,760,735
                                ===========      ===========      ===========      ===========
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>

                              ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                                        STATEMENTS OF CASH FLOWS


                                                                    Years ended September 30,
                                                        ----------------------------------------------
                                                            1997             1996             1995
                                                        ------------     ------------     ------------ 
<S>                                                     <C>              <C>              <C>
Cash flows from operating activities:
    Cash received:
         Collections on land sales and receivables      $ 2,730,995      $   434,830      $   161,428
         Interest Income ..........................           1,154            7,622           77,207
         Sale of utility system ...................         127,393          432,800           85,800
         Other cash received ......................           1,000            6,398           14,985
                                                        -----------      -----------      -----------
                                                          2,860,542          881,650          339,420
                                                        -----------      -----------      -----------
    Cash expended:
         Selling, general and administrative,
             property taxes and other expenses ....       1,274,637          528,353          845,097
         Interest paid (net of amounts capitalized)          33,434           72,696            4,750
         Acquisition of property held for sale ....                                            18,766
         Improvements to property held for sale ...       1,156,495          848,616        1,439,903
                                                        -----------      -----------      -----------
                                                          2,464,566        1,449,665        2,308,516
                                                        -----------      -----------      -----------

Net cash provided by (used in) operating activities         395,976         (568,015)      (1,969,096)
                                                        -----------      -----------      -----------

Cash flows from investing activities:
    Purchase of property and equipment ............                           (1,335)            (758)
                                                        -----------      -----------      -----------
Cashflows from  financing  activities:
    Proceeds from mortgage  notes payable:
         Bank .....................................       1,043,560          301,899        1,010,513
         General partner ..........................                                           500,000
         Others ...................................                          325,000
    Payments on mortgage payable:
         Bank .....................................        (580,000)        (100,000)
         General partner ..........................        (527,249)
         Other ....................................        (325,000)
                                                        -----------      -----------      -----------

Net cash provided by (used in) financing activities        (388,689)         526,899        1,510,513
                                                        -----------      -----------      -----------

Net increase (decrease) in cash ...................           7,287          (42,451)        (459,341)

Cash at beginning of year .........................          41,451           83,902          543,243
                                                        -----------      -----------      -----------

Cash at end of year ...............................     $    48,738      $    41,451      $    83,902
                                                        ===========      ===========      ===========
</TABLE>
                                             (continued)
<PAGE>
<TABLE>
<CAPTION>

                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                      STATEMENTS OF CASH FLOWS (CONTINUED)

Reconciliation  of net income (loss) to net cash provided by (used in) operating
activities:

                                                                    Years ended September 30,
                                                        ---------------------------------------------
                                                            1997             1996             1995
                                                        -----------      -----------      ----------- 
<S>                                                     <C>              <C>              <C>
Net income (loss) .................................     $   390,844      $  (690,243)     $  (787,349)
                                                        -----------      -----------      -----------
Adjustments to reconcile net income
    to net cash provided by (used in)
    operating activities

    Depreciation and amortization .................           2,754            3,428            4,334
    Provision for doubtful accounts ...............                                           (48,500)
    Sundry (See below) ............................                           27,249            4,227

Change in assets and liabilities 
    Increase in:
         Mortgage notes and other receivables .....        (243,235)                         (158,232)
         Property held for sale ...................                         (642,327)      (1,097,773)
         Other assets .............................          (4,322)          (1,578)
         Accounts payable and accrued liabilities .                          197,037          297,436
         Estimated cost of development of land sold          16,000
    Decrease in:
         Mortgage notes and other receivables .....                          538,718
         Property held for sale ...................         510,049
         Other assets .............................                                            61,740
         Accounts payable and accrued liabilities .        (276,114)
         Estimated cost of development of land sold                             (299)        (244,979)
                                                        -----------      -----------      -----------

Total adjustments .................................           5,132          122,228       (1,181,747)
                                                        -----------      -----------      -----------

Net cash flow used in operating activities ........     $   395,976      $  (568,015)     $(1,969,096)
                                                        ===========      ===========      ===========
</TABLE>

Supplemental  information  concerning  investing  and financing  activities: 

As discussed in Note 5, in fiscal 1996 the Partnership  issued a note payable to
the general partner for unpaid interest in the amount of $27,249.  In connection
with the 1995 recording of an in substance foreclosure of the property described
in Note 3, the Partnership  recorded the property and  concurrently  reduced its
mortgage  notes receivable  by the carrying value of the receivable, $65,064, in
fiscal year 1995.

See notes to financial statements.
<PAGE>


                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                         NOTES TO FINANCIAL STATEMENTS

                 YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


1.     Organization and summary of significant accounting policies:

       The  primary  business  purpose  of the  Partnership  is  the  operation,
       management and orderly disposition of its assets and the distributions of
       the  proceeds  therefrom  to  unitholders.  The  general  partners of the
       Partnership  are Hasam Realty Limited  Partnership  and Stein  Management
       Company, Inc. ("Steinco").  Steinco is the Managing General Partner which
       employs the management and clerical employees  necessary to carry out the
       operation of the  Partnership.  Steinco is reimbursed by the  Partnership
       for related expenses.

       A summary of the Partnership's accounting principles is as follows:

       Land sales:
            Land  sales are  accounted  for under the  accrual  method  when the
            purchaser has made an adequate down payment, generally 20% to 25% of
            the purchase price,  the  Partnership  has no substantial  remaining
            obligations with respect to the property,  and collectibility of the
            related receivable is reasonably predictable.  Otherwise, either the
            installment  or  the  cost  recovery  method  is  used.   Under  the
            installment  method,  portions  of  profit  are  recognized  as cash
            payments are received from the buyer. Under the cost recovery method
            no profit is recognized until cash payments received from the buyer,
            including  interest and  principal,  exceed the seller's cost of the
            property sold.

       Sale of Utility System:
            The  Partnership  recognizes  profit  on the 1983  sale of a Utility
            System  in the  years in which  increases  in  consumption  generate
            amounts due to the Partnership. (See Note 10).

       Cash:
            The Partnership  considers all highly liquid debt  investments  with
            maturities of three months or less to be cash equivalents.

       Mortgage notes receivable:
            Mortgage  notes  receivable  represent  amounts due from the sale of
            properties  and in certain  cases have been  reduced by the deferred
            profit which is being  recognized  under the  installment  method of
            accounting.   The  Partnership  evaluates  the  carrying  amount  of
            delinquent  mortgage notes  receivable to determine that such amount
            is  not  in  excess  of  the  estimated  fair  market  value  of the
            underlying land.

                                  (continued)
<PAGE>


                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995



1. Organization and summary of significant accounting policies (continued):

      Property held for sale:
            Property  held for sale is stated at the lower of cost or  estimated
            net  realizable  value.  The cost of property held for sale includes
            the  original  purchase  price,   cost  of  land  development,   and
            development period real estate taxes and interest.

      Property and equipment:
            Property and equipment are stated at cost.  Depreciation is computed
            over the estimated  useful lives of the assets on the  straight-line
            method for financial  reporting purposes and accelerated methods for
            tax reporting purposes.

      Net income (loss) per unit:
            Net  income  (loss)  per unit is  calculated  based on the  weighted
            average number of units outstanding during the year.

      Concentrations of risk:
            Assets  which  subject the  Partnership  to  concentrations  of risk
            consist  primarily  of  property  held for sale.  The  Partnership's
            property  held for sale is located  in  Florida.  The  Partnership's
            ability to sell its  property is  substantially  dependent  upon the
            Florida real estate economic sector.

      Use of estimates:
            The preparation of financial statements in conformity with generally
            accepted accounting principles requires management to make estimates
            and assumptions  that affect the reported  amounts and  disclosures.
            Actual results could differ from those estimates.

      Reclassifications:
            Certain items in the 1996 and 1995  financial  statements  have been
            reclassified to conform to the 1997 presentation.

<PAGE>



                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
           
2. Mortgage note and other receivables:

Mortgage note receivable of $101,250 at September 30, 1997 bears interest at 10%
per annum and is due in quarterly  installments of $33,750 on December 18, 1997,
March 18, 1998 and June 18, 1998.

In December  1995, the  Partnership  received  $168,962 as full  settlement of a
mortgage  note which had a carrying  value at the date of settlement of $173,513
(mortgage note receivable $222,471 less deferred profit of $48,958). The loss on
this  transaction,  $4,551,  has been  included  in 1996  selling,  general  and
administrative expenses.

Other receivables consist of the following:
<TABLE>
<CAPTION>

                                                 September 30,
                                              ---------------------
                                                 1997        1996
                                              --------     --------
<S>                                           <C>          <C>
             Utility receivable (Note 10)     $228,660     $129,000
             Accrued interest receivable         3,900
             Closing proceeds receivable        41,200
             Other ......................        1,543        4,318
                                              --------     --------

                                              $275,303     $133,318
                                              ========     ========
</TABLE>

3. Property held for sale:

At September 30, 1997, the Partnership estimates that approximately  $408,000 of
development  costs remains to be expended on property being developed,  of which
$30,142 is included  in the  accompanying  balance  sheet as  estimated  cost of
development of land sold.

During 1995,  the net carrying  value of a mortgage  note  receivable in default
which was considered to be an in substance  foreclosure was included in property
held for sale. The Partnership filed an action to foreclose on the mortgage. The
in substance foreclosure was recorded by reclassifying the net carrying value of
the receivable of $65,064,  consisting of a mortgage note receivable of $137,614
less related deferred profit of $72,550, to property held for sale. In September
1996, the  Partnership  received  $155,000 from the purchaser of the property as
part of a joint stipulation  settlement to settle and compromise the litigation.
Proceeds  received  in  excess  of the net  carrying  value of the in  substance
foreclosure  and  related  settlement  expenses  amount to $74,047 and have been
included in revenues (See Note 12).
<PAGE>

                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995

4. Other assets:

           Other assets consist of the following:
<TABLE>
<CAPTION>

                                                   September 30,
                                                --------------------
                                                   1997        1996
                                                -------     ------- 
<S>                                             <C>         <C>
            Furniture and equipment, net of
                 accumulated depreciation .     $ 3,336     $ 6,090
            Prepaid expenses ..............      59,608      55,286
                                                -------     -------

                                                $62,944     $61,376
                                                =======     =======
</TABLE>


5. Mortgages and notes payable:

           Mortgages and notes payable consist of the following:
<TABLE>
<CAPTION>
                                                                                                September 30,           
                                                                                         ----------------------------    
                                                                                             1997             1996    
              Mortgage notes payable, bank:                                              -----------       ----------    
<S>                                                                                      <C>              <C>   
              On October 21, 1996, the Partnership  combined  certain
              construction/development  loans  under a  Consolidation
              Promissory Note,  whereby the Partnership may borrow up
              to  $2,625,000  at 2% over the prime  rate  (10.50%  at
              September  30, 1997).  Interest is payable  monthly and
              the note matures on January 31, 1998. Property held for
              sale  with  a  cost  of  approximately   $2,976,000  is
              collateral  for  this  loan  and the  loan  below.  The
              mortgage requires certain release principal payments as
              land is  sold.  At  September  30,  1997,  $559,180  is
              available to be drawn on this loan.                                        $ 1,485,820      $ 1,212,412
              

              On September 2, 1997,  the  Partnership  entered into a
              Future  Advance for Working  Capital Loan in the amount
              of  $300,000  at 1%  over  the  prime  rate  (9.50%  at
              September  30, 1997).  Interest is payable  monthly and
              the loan matures on September 17, 1999.  The collateral
              described above also collateralizes this obligation.                            190,152
                                                                                          -----------       ---------- 

                                                                                          $ 1,675,972       $ 1,21,412
                                                                                          ===========       ========== 
</TABLE>
                                  (continued)
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
<TABLE>
<CAPTION>



                                                                                                  September 30,
                                                                                          ---------------------------- 
           Mortgages and notes payable (continued)                                            1997             1996
                                                                                          -----------       ----------
<S>                                                                                       <C>               <C>
                      Mortgage notes payable,  general partner: On June 29, 1995
                          the  Partnership  borrowed  $500,000  from its general
                          partner for working capital. The terms of the mortgage
                          note required monthly  interest  payments at a rate of
                          2% over prime with the outstanding  principal  balance
                          due at maturity on June 29,  1996.~  Property held for
                          sale  with  a  cost  of  approximately   $787,000  was
                          collateral  for this  note.  On  February  9, 1996 the
                          Partnership  issued  a note  payable  to  the  general
                          partner  for unpaid  interest in the amount of $27,249
                          and on February 28, 1997 both notes were repaid.                                  $   527,249             
                                                                                                            ===========  
                      Mortgage note payable,  related  party:  On June 13, 1996,                                         
                          the  Partnership  borrowed  $300,000  from  a  related                                         
                          company for working capital. The terms of the mortgage                                         
                          note required monthly  interest  payments at a rate of                                         
                          2% over prime with the outstanding  principal  balance                                         
                          due at maturity. Property held for sale with a cost of                                         
                          approximately  $287,000 was  collateral for this note.                                         
                          On February 28, 1997 the note was repaid.                                         $   300,000  
                                                                                 
                         On September 4, 1996, the Partnership  borrowed $45,000                                         
                         from a unit  holder for working  capital.  The terms of                                         
                         the note required monthly  interest  payments at a rate                                         
                         of 2% over  prime. During  January 1997, the  note  was                                         
                         repaid.                                                                                 25,000  
                                                                                                            -----------  
                                                                                                            $   325,000  
                                                                                                            ===========  
</TABLE>                                                                     
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


5. Mortgages and notes payable (continued):

   Interest is capitalized for property being developed as follows:
<TABLE>
<CAPTION>


                                          Year ended September 30,
                                           ----------------------
                                             1997         1996
                                           --------     -------- 
<S>                                        <C>          <C>

               Capitalized ...........     $191,893     $119,870

               Charged to operations .       33,434       72,696
                                           --------     --------

               Total interest incurred     $225,327     $192,566
                                           ========     ========
</TABLE>

6. Accounts payable and other liabilities:

   Accounts  payable  and other  liabilities  consist  of the following:
<TABLE>
<CAPTION>

                                                September 30,
                                
                                        --------------------------
                                            1997           1996
                                        -----------    ----------- 
<S>                                     <C>            <C>
               Accounts payable ...     $  477,192     $  750,934
               Accrued liabilities:
                   Property taxes .        244,133        130,772
                   Other ..........         40,000         80,733
               Due to landowner ...                        75,000
                                        ----------     ----------

                                        $  761,325     $1,037,439
                                        ==========     ==========
</TABLE>


Property  taxes  related to 1994,  1995 and 1996 in the amount of  $222,746  are
delinquent at September 30, 1997 and are included in accounts payable.

Due  to  landowner  represents   reimbursement  due  for  development  costs  in
connection with common areas. Payment of $75,000 was made November 6, 1996.
<PAGE>

                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


7. Terminated merger costs:

During fiscal year 1995, a potential  affiliation with a  privately-owned  South
Florida  home  builder was  identified  and a memorandum  of  understanding  was
executed for the purpose of merger. However, after protracted  negotiation,  the
attempt to merge was  terminated in December  1995.  Costs  incurred  during the
years ended September 30, 1996 and 1995 in connection with the terminated merger
amounted to  approximately  $71,000 and  $405,000,  respectively,  and have been
expensed in the statement of operation.  Such costs include fees for  financial,
capital and real estate consultants, and attorneys' fees.

8. Income taxes:

The  Partnership  is not subject to income  taxes.  Instead,  the  partners  are
required to include in their income tax returns their share of the Partnership's
income or loss, as adjusted to reflect the effects of certain transactions which
are accorded  different  accounting  treatment for federal  income tax purposes.
Pursuant to the Tax Reform Act of 1986, the Partnership  changed its fiscal year
end, September 30, to a calendar year end for income tax purposes.

The following  analysis  summarizes the major differences  between the financial
reporting and income tax basis of the partner's  equity account at September 30,
1997.
<TABLE>
<CAPTION>
<S>                                                         <C>            <C>
Partners' equity, financial reporting basis ...........                    $ 2,760,735
    Add items recorded for tax purposes only:
    Step-up in basis of property ......................     $ 17,000,000
    Less: Cost of sales - step-up adjusted
         for unamortized additional capitalized
         inventory costs and any adjustments as
         a result of repossessions ....................       11,874,045
                                                            ------------
                                                               5,125,955
    Add items not presently deductible for tax purposes           40,036
                                                            ------------
                                                                             5,165,991
                                                                           -----------

    Partners' equity, income tax basis ................                    $ 7,926,726
                                                                           ===========
</TABLE>
                                  (continued)
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


8. Income taxes (continued):


The Partnership,  pursuant to the transitional grandfather rules of the Internal
Revenue Code dealing with publicly traded  partnership,  reports its income as a
partnership. The application of the grandfather rules was scheduled to terminate
for the taxable year  commencing  after  December  31, 1997.  Under the recently
enacted  Taxpayer  Relief Act of 1997,  a publicly  traded  partnership  that is
currently  governed by this provision may elect to continue its  partnership tax
status beyond December 31, 1997 by agreeing to pay an annual 3.5% Federal Tax on
its gross income for Federal Income Tax purposes (principally revenues less cost
of land sold) from the conduct of its active trade or business.

If the existing partnership decides not to make the aforementioned election by ~
March 16,  1998,  it will become  taxable as a  corporation  unless it meets the
exception for publicly traded  partnerships with passive income.  Generally,  in
the  absence of any  transaction  changing  the status of the  partnership,  the
transformation  will be  treated  under  the  operative  Internal  Revenue  Code
provisions as an asset transfer from the  partnership to a corporation  followed
by  a  liquidation  of  the  partnership.   The  potential  taxability  of  this
transaction will be governed by the appropriate Internal Revenue Code provisions
and regulations thereunder.

Whatever the  Partnership  decides,  it will be required to determine its income
tax  status  pursuant  to  the  operative   Internal  Revenue  Code  provisions,
regulations and rules thereunder.  This decision, which is dependent upon future
results of operations and other factors,  will result in the Partnership  either
retaining its status as a partnership and possibly paying an annual 3.5% Federal
Tax as described above or,  alternatively,  being taxed as a corporation.~ These
provisions will become operative for the taxable year beginning January 1, 1998.

9. Lease information:

The  Partnership  occupies its office  facility in a building owned by an entity
related  by  common  ownership.  The  Partnership  does not pay any rent at this
office  facility.~  Other  long-term  operating  leases  on  real  and  personal
properties are not considered material.
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995

10. Other transactions:

A subsidiary of the Company,  Royal Palm Beach Utilities Company  ("Utilities"),
previously  sold to the  Village  of Royal  Palm  Beach  ("Village")  all of its
assets,  consisting of a water treatment and distribution  system and a sanitary
sewer collection, treatment and disposal system located in the Village. The sale
requires payments to be received by Utilities as future connections (as measured
by increases  in  consumption)  are added to the system,  over a period which is
expected to be extended from August,  2001 through 2003. Should  consumption not
increase  sufficiently,  the Partnership would not receive the full sale amount.
The maximum proceeds to Utilities was approximately $13,410,000,  of which under
the terms of the sale,  approximately $5,257,000 had not yet been received as of
September 30, 1997.~ In addition, the Partnership had the right to receive up to
$500,000,  of which $281,000 has already been received,  as the Village collects
guaranteed  revenues from developers.  Since future increases in consumption and
payment of guaranteed revenues cannot be assured and , therefore,  the extent of
future  payments to the Partnership is uncertain,  the Partnership  accounts for
this  transaction  utilizing  the  cost  recovery  method  of  accounting.   The
Partnership has previously fully recovered its cost and recognizes profit on the
sale as  increases  in  consumption  generate  amounts  due to the  Partnership.
Revenues  related  to the sale of  utility  system of  $227,053,  $129,000,  and
$432,800 were recognized for fiscal years 1997, 1996 and 1995, respectively.
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995

11. Comparative quarterly financial information (unaudited):
<TABLE>
<CAPTION>
                                   First           Second             Third           Fourth
                                 quarter           quarter           quarter          quarter       Full year
                               -----------      -----------      -----------      -----------      -----------
<S>                            <C>              <C>              <C>              <C>              <C>                             
1997:
Revenues: ................     $   320,619      $ 1,659,912      $   327,224      $   798,797      $ 3,106,552
Costs and expenses .......         291,774        1,146,565          459,632          817,737        2,715,708
                               -----------      -----------      -----------      -----------      -----------

Net income (loss) ........     $    28,845      $   513,347      $  (132,408)     $   (18,940)     $   390,844
                               ===========      ===========      ===========      ===========      ===========

Net income (loss) per unit     $      0.01      $      0.11      $     (0.03)     $     (0.00)     $      0.09
                               ===========      ===========      ===========      ===========      ===========

1996:
Revenues: ................     $   144,044      $     7,197      $    12,476      $   233,207      $   396,924
Costs and expenses .......         375,444          283,059          185,668          242,996        1,087,167
                               -----------      -----------      -----------      -----------      -----------

Net loss .................     $  (231,400)     $  (275,862)     $  (173,192)     $    (9,789)     $  (690,243)
                               ===========      ===========      ===========      ===========      ===========

Net loss per unit ........     $     (0.05)     $     (0.06)     $     (0.04)     $     (0.00)     $     (0.15)
                               ===========      ===========      ===========      ===========      ===========

1995:
Revenues: ................     $    19,758      $    36,840      $    10,666      $   430,387      $   497,651
Costs and expenses .......         215,640          282,400          338,582          448,378        1,285,000
                               -----------      -----------      -----------      -----------      -----------

Net loss .................     $  (195,882)     $  (245,560)     $  (327,916)     $   (17,991)     $  (787,349)
                               ===========      ===========      ===========      ===========      ===========

Net loss per unit ........     $     (0.04)     $     (0.06)     $     (0.07)     $     (0.01)     $     (0.18)
                               ===========      ===========      ===========      ===========      ===========
</TABLE>

Year end  adjustments  at September 30, 1995  principally  include  write-off of
terminated  merger costs of  approximately  $220,000,  which had previously been
capitalized.
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


12.    Revenues:

       Revenues consist of the following:
<TABLE>
<CAPTION>


                                               Years ended September 30,
                                      ----------------------------------------- 
                                         1997            1996           1995
                                      ----------     ----------    ------------- 
<S>                                   <C>            <C>           <C>
 Land revenues:
     Net sales of land ..........     $2,873,445     $  182,000
     Recognized profit on
       installment and cost
       recovery sales ...........                           690     $   30,929
 Interest income ................          5,054          4,789         31,916
 Sale of utility system (Note 10)        227,053        129,000        432,800
 Foreclosure settlement, net
   (Note 3) .....................                        74,047
 Other ..........................          1,000          6,398          2,006
                                      ----------     ----------     ----------

                                      $3,106,552     $  396,924     $  497,651
                                      ==========     ==========     ==========
</TABLE>

13. Liquidity:

During the year ended September 30, 1995, the Partnership  incurred  substantial
expenses in the  development  of its  properties  in addition to normal  ongoing
administrative costs incurred in connection with the terminated merger described
in Note 7. In  anticipation  of adding  home  building  operations  through  the
proposed  merger,  management  made a decision  to suspend  land sales  activity
pending the outcome of the merger.  This  suspension  of land sales  resulted in
insufficient   cash  resources   available  for  the  Partnership  to  meet  its
obligations as they become due.

Since the  termination  of the merger in  December  1995,  the  Partnership  has
resumed land sales efforts and has closed  certain sales.  However,  there is no
assurance  that such sales and closings  will  continue to occur,  or that their
timing  will  coincide  with the  Partnership's  cash  requirements.  Management
believes  that the  Partnership  will be able to fund  ongoing  operations  from
future land sales or from short-term  financing,  if needed.  The success of the
sales  efforts or  obtaining  additional  borrowings  is necessary to enable the
Partnership to meet its current obligations.
<PAGE>
<TABLE>
<CAPTION>

                                            ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                                           SCHEDULE IX - VALUATION AND QUALIFYING ACCOUNTS

                                            YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995





                                                                     Column C-
                                                           ---------------------------- 
                                         Column B-            (1)                (2)                                   Column E-
                                        Balance at         Charged to        Charged to                               Balance at
            Column A-                    beginning         costs and            other               Column D-           end of
           Description                   of period          expenses          accounts             deductions           period
           -----------                   ---------          --------          --------             ----------           ------
 
<S>                  <C>                  <C>             <C>                <C>                <C>                      <C>
Deferred profit:

                     1995                 $ 153,127                                             (A) $  (30,929)
                                                                                                (B)    (72,550)          $49,648

                     1996                    49,648                                             (A)       (690)
                                                                                                (D)    (48,958)               0

                     1997                         0                                                                           0

Allowance for
doubtful accounts

                     1995                    48,500                                             (C)    (48,500)               0

                     1996                         0                                                                           0

                     1997                         0                                                                           0
</TABLE>



(A)  Recognized profit on installment and cost recovery sales
(B)  Deferred  profit on receivable - the underlying  property was recorded as
     an in substance foreclosure (See Note 3 to Financial Statements)
(C)  Recovery of reserved receivable
(D) Part of settlement transaction (See Note 2 to Financial Statements)
<PAGE>

                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

             SCHEDULE X - SUPPLEMENTAL INCOME STATEMENT INFORMATION

                  YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995







                                            September 30,
                                ----------------------------------- 
                                   1997         1996         1995
                                --------     --------     --------- 

1. Maintenance and repairs      $    580     $      0     $      0
                                ========     ========     ========


2. Taxes, other than payroll
     and income taxes           $166,837     $128,589     $119,201
                                ========     ========     ========


3.  Advertising                 $    168     $      0     $    600
                                ========     ========     ========