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


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



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

                                    FORM 10-K

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995

                         Commission file number 0-14581

                CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                        A CALIFORNIA LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)

              California                              94-2970056
        (State of Organization)         (I.R.S. Employer Identification No.)


                     900 Cottage Grove Road, South Building
                          Bloomfield, Connecticut 06002
                    (Address of principal executive offices)


       Registrant's telephone number, including area code: (860) 726-6000

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

                                      None
                              (Title of Each Class)

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

                      Units of Limited Partnership Interest
                                (Title of Class)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                  Yes  X   No

State the aggregate market value of the voting stock held by  non-affiliates  of
the registrant. Not applicable.


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


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




<PAGE>

<TABLE>
<CAPTION>

                                                          TABLE OF CONTENTS

<S>                                                                                                              <C>
PART I                                                                                                           PAGE

Item  1.      Business                                                                                              3
Item  2.      Properties                                                                                            5
Item  3.      Legal Proceedings                                                                                     7
Item  4.      Submission of Matters to a Vote of Security Holders                                                   7


PART II

Item  5.      Market for Registrant's Common Equity and Related Security Holder Matters                             7
Item  6.      Selected Financial Data                                                                               8
Item  7.      Management's Discussion and Analysis of Financial Condition and
                Results of Operations                                                                               9
Item  8.      Financial Statements and Supplementary Data                                                          17
Item  9.      Changes in and Disagreements with Accountants on Accounting and
                Financial Disclosure                                                                               32


PART III

Item 10.      Directors and Executive Officers of the Registrant                                                   32
Item 11.      Executive Compensation                                                                               35
Item 12.      Security Ownership of Certain Beneficial Owners and Management                                       35
Item 13.      Certain Relationships and Related Transactions                                                       35


PART IV

Item 14.      Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                     37


SIGNATURES                                                                                                         41

                                                                 2
</TABLE>
<PAGE>



                                     PART I



ITEM 1.  BUSINESS

     The  Registrant,   California  Seven  Associates  Limited  Partnership,   a
California limited  partnership (the  "Partnership"),  was formed on January 30,
1985 under the laws of the State of  California  to acquire  and  operate  seven
apartment  complexes located in California.  Pursuant to a private offering,  in
February 1985, the Partnership sold Class B Limited Partnership Interests for an
aggregate purchase price of $500,000.  Commencing in March 1985, the Partnership
sold Class A Limited Partnership  Interests (the "Units") at a price of $150,000
each (362 Units in total), for an aggregate  purchase price of $54,300,000.  The
selling period closed on December 15, 1985 with  $54,800,000  having been raised
from a total of 526 Class A and B investors (the "Interest  Holders" or "Limited
Partners").  On  April  30,  1986,  the  Partnership  filed a  General  Form for
Registration  of  Securities on Form 10 pursuant to the  Securities  Act of 1934
(Registration No. 0-14581), which was amended by Form 8 dated July 25, 1986.

     The  General  Partner  of  the  Partnership  is  CIGNA  Realty   Resources,
Inc.-Seventh (the "General  Partner"),  a Delaware  corporation  qualified to do
business in the States of California and Connecticut which is an indirect wholly
owned  subsidiary of CIGNA  Corporation  ("CIGNA"),  a publicly held corporation
whose stock is traded on the New York Stock Exchange.

     The   Partnership  is  engaged  solely  in  the  business  of  real  estate
investment.  A  presentation  of  information  about  industry  segments  is not
applicable.

     The  Partnership is engaged in passive  activities and therefore  investors
are subject to the applicable  provisions of the Internal  Revenue  Service Code
and  Regulations.  Losses from "passive  activities"  (which  include any rental
activity) may only offset income from "passive  activities."  Passive  losses in
excess of passive income are suspended and are carried over to future years when
they may be deducted against passive income generated by the Partnership in such
year  (including  gain  recognized on the sale of the  Partnership's  assets) or
against  passive income  derived by investors from other sources.  Any suspended
losses remaining subsequent to Partnership  dissolution may be used by investors
to offset ordinary income.

     The Partnership itself has no employees; however, the unaffiliated property
managers contracted and supervised by CIGNA Investments,  Inc. ("CII",  formerly
CIGNA Capital Advisors,  Inc.) on behalf of the Partnership  maintained  on-site
staff. For a description of property  management  services  provided by CII, and
the terms of transactions  between the Partnership and affiliates of the General
Partner, see Item 13 and the Notes to Financial Statements.

     On  January  31,  1985,  the  Partnership  acquired  from  IFD  Properties,
Inc.-First,  ("IFD-First"),  an  affiliate  of the General  Partner,  fee title,
subject to a first  mortgage note and seven deeds of trust,  to seven  apartment
complexes  (the  "Project")  and  related  site  improvements  in the  State  of
California for the aggregate  purchase  price,  excluding  acquisition  fees and
expenses, of $146,000,000.


                                                                 3

<PAGE>



     Although  the cost to the  Partnership  for the  Project  was an  aggregate
purchase price, the General Partner allocated cost, including the assignment fee
and certain  capitalized  fees and expenses,  to each of the properties based on
their appraised values at the time of purchase.  The allocated cost is set forth
in the table below:
<TABLE>
<CAPTION>
                                             Purchase Price, Assignment
      Name of Property                      Fees and Certain Capitalized                  No. of                 Year
      and Location (a)                          Fees and Expenses (b)                      Units               Completed
<S>                                                 <C>                                     <C>                    <C> 
1.   Amberway Apartments
     Anaheim, California                            $   15,691,572                          272                    1983

2.   Pacifica Club
     Huntington Beach, California                       17,619,662                          304                    1971

3.   Oakwood Apartments
     Los Angeles, California                            22,968,097                          363                    1966

4.   Mission Bay East
     San Diego, California                              42,077,743                          564                    1970

5.   Oakwood Apartments
     Sherman Oaks, California (c)                       22,442,254                          372                    1969

6.   The Torrance Property
     Torrance, California (d)                           14,901,734                          248                    1965

7.   Arbor Park Apartments
     Upland, California                                 11,745,533                          260                    1971

<FN>
     (a) Reference is made to Item 7 and the Notes to Financial Statements for a
         description of the long-term  indebtedness secured by the properties in
         aggregate.

     (b) The  Partnership's  total  investment in the Project was  $147,446,595,
         representing the purchase price of $146,000,000 and assignment fees and
         certain capitalized fees and expenses of $l,446,595.

     (c) The  property  was  severely  damaged by the January 17, 1994  Southern
         California   earthquake.   The  property  was   evacuated  and  remains
         unoccupied.

     (d) This property was sold October 25, 1990.
</FN>
     The  Project  was  described  in Form 8 dated July 25,  1986,  under Item 3
thereof, which property descriptions are hereby incorporated by reference.


                                                                 4
</TABLE>
<PAGE>



     The following list details operating revenues for each of the properties as
a percentage of the  Partnership's  operating and interest revenues during 1993,
1994 and 1995.  (In all years,  interest  income  accounted  for less than 2% of
Partnership revenue.):
<TABLE>
<CAPTION>
                                                             1993               1994               1995
                                                             ----               ----               ----
     <S>                                                     <C>                <C>                <C>        
     The Anaheim Property                                     11%                14%                 14%
     The Huntington Beach Property                            14%                18%                 17%
     The West Los Angeles Property                            20%                25%                 25%
     The San Diego Property                                   26%                31%                 31%
     The Sherman Oaks Property (a)                            20%                 1%                  0%
     The Upland Property                                       9%                11%                 11%
</TABLE>
[FN]
     (a) The  property  was  severely  damaged by the January 17, 1994  Southern
         California   earthquake.   The  property  was   evacuated  and  remains
         unoccupied.

     Approximate  occupancy  levels for the properties on a quarterly  basis are
set forth in the table in Item 2.

      The Torrance property was sold October 25, 1990. The Sherman Oaks property
was severely damaged by the January 17, 1994 Southern California earthquake. The
property was evacuated and remains unoccupied.

     On  September  16, 1994,  the  Partnership  filed a voluntary  petition for
reorganization  under  Chapter 11 of the Federal  Bankruptcy  Code in the United
States  Bankruptcy  Court for the Central  District of California (the "Court").
Pursuant to Section 1108 of the Bankruptcy Code, the Partnership is managing its
business  as a debtor in  possession  and will  continue  to do so  pursuant  to
Sections 1107 and 1108 of the Bankruptcy  Code unless  otherwise  ordered by the
Court.

     On  February  1,  1996,  the  Court  denied  the  Second  Amended  Plan  of
Reorganization  (the  "Plan")  filed by the  Partnership  and  granted the first
mortgage holder,  Travelers  Insurance  Company  ("Travelers"),  relief from the
automatic stay. Travelers  immediately posted "Notices of Sale" with a scheduled
foreclosure  sale date of March 8, 1996. On February 23, 1996, the Court entered
the order  denying the Plan and  granting  Travelers  relief  from the stay.  On
February 28, 1996,  Travelers obtained the appointment of a State Court Receiver
to operate  the  properties  and  collect  rents.  On March 8,  1996,  Travelers
foreclosed on the Partnership's six properties.

     The majority of the Partnership's  remaining  assets,  cash collateral bank
accounts,  are subject to Travelers'  security  interest.  The  Partnership  has
insufficient  unencumbered  assets from which to make full  payment to any other
creditors and,  therefore,  has filed a request with the Court to enter an order
dismissing the Partnership's Chapter 11 bankruptcy case. The Court has set April
1, 1996 for a hearing on the motion to dismiss the case.

     Once the Court  executes  the order  dismissing  the  Chapter 11 case,  the
Partnership will complete its liquidation and dissolution  resulting in the loss
of the Class A and Class B Limited  Partnership  Interests  held by the Interest
Holders.  The Limited  Partners  will not be required to provide any  additional
capital   contributions   prior  to  the  liquidation  and  dissolution  of  the
Partnership.  Reference  is  made to Item 7 and  Item 8 for  information  on the
effect of the bankruptcy on the financial condition of the Partnership.

ITEM 2.  PROPERTIES

     At December 31, 1995 the Partnership  owned directly  (subject to first and
second mortgage loans) the properties  described in Item 1 hereof.  The Torrance
property  was sold  October 25,  1990.  The Sherman  Oaks  property was severely
damaged by the January 17, 1994 Southern California earthquake. The property was
evacuated and remains  unoccupied.  Reference is made to Items 1 and 7 regarding
the  Partnership's  Chapter 11  bankruptcy  case.  On March 8,  1996,  the first
mortgage holder foreclosed on the Partnership's properties.

                                                                 5

<PAGE>



     The  following is a listing of  approximate  physical  occupancy  levels by
quarter for the  Partnership's  investment  properties  during 1991, 1992, 1993,
1994 and 1995:
<TABLE>
<CAPTION>
<S>                 <C>              <C>                <C>                  <C>              <C>                 <C>
===============================================================================================================================
                       THE               THE            THE WEST LOS          THE SAN          THE SHERMAN           THE
                     ANAHEIM         HUNTINGTON           ANGELES              DIEGO              OAKS             UPLAND
                    PROPERTY            BEACH             PROPERTY           PROPERTY         PROPERTY (A)        PROPERTY
                                      PROPERTY
===============================================================================================================================
-------------------------------------------------------------------------------------------------------------------------------
     1991
----------------
AT 03/31               85%               93%                87%                 84%                90%               88%

AT 06/30               96%               96%                95%                 97%                94%               92%

AT 09/30               81%               85%                84%                 83%                84%               94%

AT 12/31               72%               72%                74%                 78%                84%               94%
-------------------------------------------------------------------------------------------------------------------------------
     1992
----------------
AT 03/31               84%               83%                89%                 86%                85%               91%

AT 06/30               75%               89%                94%                 93%                90%               94%

AT 09/30               85%               89%                87%                 87%                90%               87%

AT 12/31               90%               85%                83%                 72%                93%               92%
-------------------------------------------------------------------------------------------------------------------------------
     1993
----------------
AT 03/31               91%               91%                85%                 86%                87%               92%

AT 06/30               96%               86%                93%                 92%                88%               90%

AT 09/30               94%               94%                92%                 86%                88%               91%

AT 12/31               91%               96%                83%                 97%                84%               91%
-------------------------------------------------------------------------------------------------------------------------------
     1994
----------------

AT 03/31               83%               95%                87%                 84%                N/A               91%

AT 06/30               81%               98%                92%                 93%                N/A               90%

AT 09/30               89%               99%                87%                 95%                N/A               91%

AT 12/31               95%               94%                83%                 92%                N/A               95%
-------------------------------------------------------------------------------------------------------------------------------
     1995
----------------
AT 03/31               92%               94%                91%                 95%                N/A               85%

AT 06/30               93%               97%                97%                 94%                N/A               87%

AT 09/30               93%               95%                94%                 95%                N/A               90%

AT 12/31               92%               95%                92%                 96%                N/A               90%
===============================================================================================================================
<FN>
     (a) The  property  was  severely  damaged by the January 17, 1994  Southern
         California  earthquake.  The property is currently  not  operating  and
         remains unoccupied.




</TABLE>

                                                                 6

<PAGE>




ITEM 3.  LEGAL PROCEEDINGS

     On  September  16, 1994,  the  Partnership  filed a voluntary  petition for
reorganization  under  Chapter 11 of the Federal  Bankruptcy  Code in the United
States  Bankruptcy  Court for the Central  District of  California.  Pursuant to
Section 1108 of the Bankruptcy Code, the Partnership is managing its business as
a debtor in possession  and will continue to do so pursuant to Sections 1107 and
1108 of the Bankruptcy Code unless otherwise ordered by the Court.  Reference is
made to Item 7 for a  description  of the events prior to and  subsequent to the
bankruptcy filing. The information disclosed in "Notes to Financial Statements",
included herein, is incorporated by reference.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were  submitted to a vote of security  holders during the fourth
quarter of the fiscal year covered by this report.

                                     PART II

ITEM 5.  MARKET FOR  REGISTRANT'S  COMMON  EQUITY AND  RELATED  SECURITY  HOLDER
     MATTERS

     As of December 31, 1995, there were  approximately  535 Interest Holders of
Units,  including the Initial Limited Partner, the Class A Limited Partners, and
the seven Class B Limited Partners.

     On  September  16, 1994,  the  Partnership  filed a voluntary  petition for
reorganization  under  Chapter 11 of the Federal  Bankruptcy  Code in the United
States  Bankruptcy  Court for the Central  District of  California.  Pursuant to
Section 1108 of the Bankruptcy Code, the Partnership is managing its business as
a debtor in possession  and will continue to do so pursuant to Sections 1107 and
1108 of the Bankruptcy Code unless otherwise ordered by the Court.

     On February 1, 1996, the Court denied the Plan filed by the Partnership and
granted the first  mortgage  holder relief from the automatic  stay. On March 8,
1996, Travelers foreclosed on the Partnership's six properties.

     The majority of the Partnership's  remaining  assets,  cash collateral bank
accounts,  are subject to Travelers'  security  interest.  The  Partnership  has
insufficient  encumbered  assets  from  which to make full  payment to any other
creditors and,  therefore,  has filed a request with the Court to enter an order
dismissing the Partnership's Chapter 11 bankruptcy case. The Court has set April
1, 1996 for a hearing on the motion to dismiss the case.

     The Partnership is currently in the process of liquidation. The Partnership
has estimated  that there will be no net assets  available for  distribution  to
Interest  Holders upon completion of liquidation.  As soon as the liquidation is
completed, the Partnership will be dissolved, resulting in the loss of the Class
A and Class B Limited  Partnership  Interests held by the Interest Holders.  The
Limited  Partners  will  not be  required  to  provide  any  additional  capital
contributions prior to the liquidation and dissolution of the Partnership.

      Units of Registrant are not listed or quoted for trading on an established
securities  exchange.  Although secondary market firms exist which may provide a
means for matching  potential  sellers with potential  buyers of various limited
partnerships' interests, there is currently no market for the Partnership Units.
The  Partnership's  Units  will  not  be  transferable  prior  to  the  complete
liquidation and ultimate dissolution of the Partnership.

                                                                 7

<PAGE>

<TABLE>
<CAPTION>

ITEM 6. SELECTED FINANCIAL DATA (A)

                                          CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                                                  A CALIFORNIA LIMITED PARTNERSHIP
                                                       (DEBTOR IN POSSESSION)

                                            DECEMBER 31, 1995, 1994, 1993, 1992 AND 1991
                                      (IN THOUSANDS EXCEPT PER UNIT AND FOOTNOTED INFORMATION)
                                         (NOT COVERED BY REPORT OF INDEPENDENT ACCOUNTANTS)

<S>                                     <C>                 <C>                 <C>                <C>                 <C>
                                               1995                1994               1993                 1992               1991
                                               ----                ----               ----                 ----               ----


Total operating income                  $      14,798       $     14,625        $     17,926       $      18,014       $     18,982
Net income (loss) (a)(b)                       16,679             (3,239)             (6,554)             (6,386)            (5,432)


Net income (loss) per unit (a)(b)
     Class A                                   45,615             (8,859)            (17,924)            (17,465)           (14,856)
     Class B                                       --                 --                  --                  --                 --
Total assets                                  100,577             98,399             101,769             106,512            113,058
Mortgages payable (a)(c)                       99,445            111,984             111,984             111,984            111,984
Net deficiency
 in assets in liquidation (a)                  (5,494)                --                  --                  --                 --
<FN>
     (a) On September 16, 1994, the Partnership  filed a voluntary  petition for
         reorganization  under Chapter 11 of the Federal  Bankruptcy Code in the
         United States  Bankruptcy Court for the Central District of California.
         Pursuant to Section 1108 of the  Bankruptcy  Code,  the  Partnership is
         managing its business as a debtor in possession and will continue to do
         so  pursuant to Sections  1107 and 1108 of the  Bankruptcy  Code unless
         otherwise  ordered by the Court.  On February 1, 1996, the Court denied
         the Plan filed by the Partnership and granted the first mortgage holder
         relief from the automatic  stay. On March 8, 1996,  the first  mortgage
         holder foreclosed on the  Partnership's six properties.  Effective with
         the  foreclosure of the properties,  the Partnership  ceased all of its
         operations and commenced a liquidation of the Partnership. As a result,
         the  Partnership has changed its basis of accounting as of December 31,
         1995 to the  liquidation  basis of accounting.  As a result of changing
         the Partnership's  basis of accounting for its financial  statements at
         December 31, 1995 from going concern basis to the liquidation  basis in
         accordance with generally accepted accounting  principles,  assets have
         been estimated at net realizable value and liabilities are reflected at
         their  estimated   settlement  amounts,   if  determinable,   including
         estimated costs to be incurred for the  liquidation.  The valuations of
         the assets have been estimated by the General Partner as of the date of
         the financial statements.  Due to inherent  uncertainties,  the amounts
         realizable  from the  disposition of remaining  assets and  liabilities
         could be materially different from the amounts indicated.

         The above selected  financial  data should be read in conjunction  with
         the financial  statements  and the related  notes herein.  Reference is
         made to Notes to Financial  Statements for a description of payments to
         the State of Connecticut on behalf of limited partners.  These payments
         are  charged  to limited  partner  capital  accounts  and have not been
         included as part of the above presentation.

     (b) Included in 1995 is an adjustment to  liquidation  basis of $19,369,624
         ($52,972   per  Class  A  Unit).   Included   in  1994  is   $2,000,000
         extraordinary gain ($5,470 per Class A Unit).

     (c) Amounts shown for 1994,  1993,  1992,  and 1991 do not include  accrued
         interest payable.

                                                                 8
</TABLE>
<PAGE>



ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
     OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

     The  Partnership  was formed on January 30, 1985 in the State of California
for the purpose of acquiring  from IFD  Properties,  Inc.-First (an affiliate of
the General  Partner) and operating  seven  apartment  complexes  located in the
state.  CIGNA  Financial  Partners,  Inc.  ("CFP"),  the  parent of the  General
Partner, had entered into a purchase and sale agreement, dated as of January 15,
1985,  with IFD  Properties,  Inc.-First  to  acquire  the fee  interest  in the
Project. On January 30, 1985, CFP assigned all its rights under the agreement to
the  Partnership.  Pursuant  to the  agreement,  the  Partnership  acquired  the
Investment on January 31, 1985 for the aggregate purchase price of $146,000,000.

     The Partnership accepted title to the Project subject to the existing first
mortgage  note and the seven deeds of trust,  held by Travelers  and in February
1985  obtained  from  Brookside  Savings  &  Loan   Association,   Los  Angeles,
California,  a  nine-year  second  mortgage  loan  in the  principal  amount  of
$20,000,000.  The first mortgage note was modified in 1987 and again in 1990. In
1990, the second mortgage was refinanced by a combination of debt forgiveness by
Brookside  Savings and Loan  Association,  Partnership cash reserves,  and a new
$14,000,000  second  mortgage note.  Reference is made to the Notes to Financial
Statements for a description of the mortgage debt,  modifications  and refinance
thereto. In conjunction with the initial modification of the first mortgage, the
Partnership  established a $1 million  escrow  account in the name of the lender
which had earned approximately $206,000 in interest as of the date of the second
modification. As a requirement of the second modification,  $706,000 was applied
to deferred interest.

     In  October  1990,  concurrent  with the second  modification  of the first
mortgage  and second  mortgage  refinance,  the  Partnership  sold the  Torrance
property  for a gross sales  price of  $20,750,000.  After  closing  costs,  the
Partnership netted approximately  $19,787,000.  Of that amount,  $19,000,000 was
required to be paid to the first  mortgage  lender;  $14,000,000  was applied to
principal,  and  $5,000,000 was applied to deferred  interest.  Of the remaining
amount,  $730,000  was  retained by the first  mortgage  lender and added to the
existing escrow account for funding operating deficits and capital expenditures.
Closing  costs for the  Torrance  sale  included a real estate  advisory  fee of
$518,750  earned by CII, an  affiliate  of the  General  Partner.  CII  deferred
payment  of this  fee to  permit  the  Partnership  to  utilize  the  funds  for
operations. The fee remained unpaid at December 31, 1995.

     At the time of the sale of the Torrance property,  the Partnership was owed
some receivables  from rents. The purchaser of the property  collected the rents
receivable after the sale date, but refused to remit the collection  proceeds to
the  Partnership.  The Partnership  filed a lawsuit to recover the rent payments
and during 1994, reached a settlement with SBD Group,  Inc., the purchaser,  for
$184,257,  including interest and fees. The Partnership  received the settlement
proceeds in 1995.

     In April 1986, pursuant to a loan agreement,  the Partnership obtained from
ContiTrade  Services  Corporation  an 8% working  capital loan in the  principal
amount of  $36,649,813  (of which the  Partnership  received  loan  proceeds  of
$35,200,000  after  deducting  a  $1,449,813  discount).  A portion of the loan,
approximately  $32,900,000,  was used to repay interim  indebtedness  secured in
conjunction  with the  acquisition of the Project and the remainder was added to
Partnership cash reserves. The loan served as a vehicle to help fund Partnership
cash needs as limited partners made staged payments on capital contributions. In
1991,  virtually all the limited partners made their last installment payment on
the capital contribution notes and, subsequently, the Partnership paid the final
payment on the working capital loan. The difference  between the limited partner
note  payments  received  and the  final  working  capital  loan  payment  made,
approximately $500,000, was added to reserves and used for the operational needs
of the Partnership. Reference is made to the Notes to Financial Statements for a
description of limited partner capital contributions.

     The mortgage escrow account,  established with the first mortgage lender in
conjunction  with the debt  modifications,  was closed in 1992. The  Partnership
withdrew  $523,000  on April 13,  1992 for  renovation  projects at the West Los
Angeles and Sherman Oak properties.  On October 23, 1992, the remaining balance,
$870,000, was

                                                                 9

<PAGE>



withdrawn for renovation  projects at the San Diego,  Sherman Oaks, and West Los
Angeles properties, and for 1992 operating deficits.

     During 1992 and 1993,  the  Partnership  committed a portion of Partnership
cash reserves for renovation projects at the West Los Angeles, Sherman Oaks, and
Mission Bay properties.  In addition, as a result of shortfalls from operations,
the Partnership was utilizing cash reserves to supplement debt service  payments
on the second  mortgage.  During 1993,  the  Partnership's  cash  reserves  were
reduced to very low levels, and in November 1993, the Partnership ceased payment
on the second mortgage.

     One of the Partnership's six properties,  Sherman Oaks, sustained extensive
damage from the Southern California earthquake on January 17, 1994. The property
was evacuated and city inspectors classified the property as unsafe for use. The
Partnership  had insurance for the damage as well as for business  interruption,
subject to a 5% deductible (the "Policies").

     On April 28, 1994, the Partnership  received a $750,000 cash advance on the
business  interruption  portion of the  Policies.  The funds were  utilized  for
working capital needed for the ordinary and necessary  operations of the Project
and ultimately, to fund the first mortgage debt service.

     During  July  1994,  a claim  representing  the  first  six  months of 1994
business interruption was sent to the insurance company carrying the first layer
of  insurance  under  the  Policies.  A short  time  after  the  claim was sent,
Travelers asserted that it had control over the business interruption  insurance
proceeds as well as the property damage proceeds.  As a result,  the Partnership
was delayed in receiving  any further  proceeds  under the  Policies,  including
proceeds  offered as  "undisputed" by the insurance  company  carrying the first
$10,000,000  layer of  insurance.  The  insurance  company  required  Travelers'
consent  prior to the payment of any  insurance  proceeds.  In March  1995,  the
Partnership  submitted a report,  prepared as of January 11, 1995,  representing
the  Partnership's  estimate of the entire business  interruption  claim.  After
Travelers agreed to allow the claim adjuster to begin a review of the claim, the
claim adjuster made an offer to settle the business  interruption  claim. By the
end of October  1995,  the  Partnership  received an  additional  $2,200,000  of
insurance proceeds, of which $1,450,000 was related to the business interruption
claim.

     On February 3, 1995, the insurance  company carrying the first  $10,000,000
layer of coverage,  offered to settle a portion of the loss  resulting  from the
earthquake.  The insurance  company requested that the Partnership and Travelers
jointly  submit a "Proof of Loss" and the  insurance  company  would  settle its
portion of the loss based on the conclusion  that the magnitude of the loss will
require  the  insurance  company  to pay the full  amount of its  coverage.  The
Partnership received an additional partial settlement of $9,250,000 on April 26,
1995.

     Based on analysis performed by the General Partner of the research and data
prepared by various  experts hired by the General  Partner and the  Partnership,
the  General  Partner  concluded  that  it  was  in  the  best  interest  of the
Partnership's  creditors and partners to repair/rebuild  Sherman Oaks. Travelers
contended that applying net insurance and residual sales proceeds to outstanding
first mortgage debt appeared to be the appropriate action.

     As a result of the low level of Partnership  cash reserves,  the additional
strain  from  the  loss  of one of the  Partnership's  larger  income  producing
properties,  and the  Partnership's  inability to collect business  interruption
proceeds, the Partnership  experienced cash flow difficulties.  On September 16,
1994,  the  Partnership  filed a voluntary  petition  for  reorganization  under
Chapter 11 of the Federal  Bankruptcy Code in the United States Bankruptcy Court
for  the  Central  District  of  California.  Pursuant  to  Section  1108 of the
Bankruptcy  Code,  the  Partnership  is  managing  its  business  as a debtor in
possession  and will continue to do so pursuant to Sections 1107 and 1108 of the
Bankruptcy Code unless otherwise ordered by the Court.

     The filing of the voluntary petition under Chapter 11 was the Partnership's
only available alternative while allowing the Partnership the time and resources
to repair Sherman Oaks. The Partnership's goal in the Chapter 11

                                                                 10

<PAGE>



proceeding was to maximize  recovery by creditors and partners by preserving the
Partnership as a viable entity with a going concern value.

     During the two year period prior to the petition  filing,  the  Partnership
made three formal  attempts  (including  one subsequent to the  earthquake)  and
participated  in  numerous  informal  discussions  on  debt  modifications  with
Travelers;   however,   no  agreement  was  reached   despite   these   efforts.
Additionally,  in the  year  prior  to the  petition,  the  Partnership  pursued
non-traditional   opportunities  to  refinance  the  Partnership's  debt,  which
generally  were  not  considered  feasible  due to  loan to  value  constraints,
questions relating to debt coverage ratios or lack of benefit to the partners.

     On September 22, 1994, the Partnership entered into a Letter Agreement with
Travelers  which  defined  and  authorized  the  use  of  cash  collateral.  The
Partnership was granted use of cash collateral  pursuant to the Letter Agreement
with  Travelers  and  extensions  of that  agreement  until March 31,  1996.  In
addition  to  using  revenues  generated  by the  Project  to pay  ordinary  and
necessary  operating  expenses of the Project,  the  Partnership  and  Travelers
agreed that the Partnership would establish  certain  segregated cash collateral
accounts as follows: a tenant security deposit account (equivalent to the tenant
security deposit  liability),  a tax and insurance  account,  and a Sherman Oaks
deductible  account (initial  deposit plus additional  deposits over a period of
time not to exceed  $500,000).  All excess  cash flow from  property  operations
after payment of property operating expenses, allowed capital expenditures,  and
funding of agreed upon  segregated  cash  collateral  accounts,  was remitted to
Travelers monthly.

     As part  of the  Partnership's  Motion  for  Use of  Cash  Collateral,  the
Partnership  requested  all use of property  that may be cash  collateral in the
form of rental  revenues  and  insurance  proceeds  to repair the  Sherman  Oaks
property.  Travelers  objected to the use of cash  collateral  for the repair of
Sherman  Oaks,  asserting  that  its  interest  in  Sherman  Oaks  would  not be
adequately  protected.  On October 17, 1994,  the Court held a status hearing in
connection  with the use of cash collateral to repair Sherman Oaks and the Court
set a trial for  February 1 and 2, 1995.  On February 1, 1995,  the Court held a
hearing  on the use of cash  collateral  to repair  Sherman  Oaks and denied the
Partnership's  Motion without  prejudice after determining that the issue should
be  decided in the  context of the  confirmation  of the  Partnership's  plan of
reorganization.

     On or about  December 6, 1994,  Travelers  commenced a  declaratory  action
against  the  Partnership,   claiming  that  the  second  lien  holder,   Congen
Properties,  Inc.,  was an insider  as defined  under 11 U.S.C.  Sec.  101.  The
Partnership  filed an answer to the  Complaint  denying that Congen  Properties,
Inc.  was an  insider as that term is defined  in the  Bankruptcy  Code.  Congen
Properties  Inc., also filed an answer denying that it was an insider as defined
in the Code.  After  numerous  status  hearings  with the  Court  and  extensive
discovery by Travelers, the Court dismissed the action.

     On or about January 30, 1995, the first mortgage  lender filed a Motion for
Relief from the  Automatic  Stay.  The  Partnership  filed an  Opposition to the
Motion.  At the hearing held on February 21, 1995,  the court set April 18, 1995
as the final evidentiary hearing. After hearing arguments and representations of
counsel,  the Court continued the hearing to July 12, 1995 and then to August 9,
1995. At the Continued Confirmation Hearing on August 9, 1995, the Court allowed
Travelers  limited  relief from the automatic stay to file its Notice of Default
in accordance with California state law. The continued hearing on the Motion for
Relief from the Automatic Stay was set for September 26, 1995 and then continued
to October 18, 1995.

     On  March  17,  1995,   the   Partnership   filed  its  proposed   Plan  of
Reorganization  under  Chapter 11 of the  Bankruptcy  Code dated March 16, 1995,
together with a Disclosure  Statement Pursuant to Section 1125 of the Bankruptcy
Code.  On March  17,  1995,  the  Court  set the  hearing  on the  Partnership's
Disclosure  Statement  for April 18, 1995.  On April 17, 1995,  the  Partnership
filed  with  the  Bankruptcy  Court  certain  Non-material   Amendments  to  the
Disclosure Statement. On April 18, 1995, the Bankruptcy Court held a hearing and
acted upon the approval of the Partnership's  Disclosure Statement together with
the Non-material Amendments.  After considering the Disclosure Statement and the
Non-material  Amendments  thereto,  the  Court  ruled  that  certain  additional
information should be

                                                                 11

<PAGE>



included in the  Partnership's  Disclosure  Statement.  The Court  required  the
Partnership  to file an Amended  Disclosure  Statement  which the Court approved
without further hearing.

     The Partnership filed its Amended Disclosure  Statement and Amended Plan of
Reorganization  (the "Plan") on May 4, 1995.  On May 15, 1995,  the  Partnership
mailed all impaired creditors,  limited partners, and parties in interest a copy
of the Amended Disclosure Statement and Plan, along with a ballot for voting and
other  notices.  All  classes of  creditors,  limited  partners  and  parties in
interest  impaired  under the Plan voted to accept the plan except  Class 1, the
first mortgage lender, Travelers.

     Pursuant to the order approving the Amended Disclosure Statement, the Court
set  July 12,  1995 as the  confirmation  hearing  for the  Partnership's  Plan.
Subsequently, a stipulation was agreed to and approved by the Court to bifurcate
the confirmation hearing to allow additional  pleadings.  Nonfeasibility  issues
were scheduled to be heard on July 12, 1995 and all  feasibility  related issues
would be heard by the Court on August 9, 1995.

     As a result of the  hearing on July 12,  1995,  the Court  ruled on certain
nonfeasibility  related  objections  and issues raised by  Travelers,  including
pricing  of  interest  rates.  Based on the  Court's  rulings,  the  Partnership
proposed  a Third  Modification  to the  Plan.  On  August  9,  1995,  the Court
considered the Plan, the proposed Third  Modification  and all other evidence in
support of the  confirmation  of the Plan, as well as the objections and related
filings  filed by the  Travelers in support of its  objections.  The Court found
that Travelers did not have sufficient  advance notice and disclosure  regarding
the proposed Third  Modification  to the Plan.  Therefore,  the Court denied the
Plan to allow the Partnership to incorporate the Third  Modification to the Plan
into a new plan of  reorganization,  the Second Amended Plan. The Second Amended
Plan was essentially the Plan  incorporating the Third  Modification.  The Court
set a  schedule  of time  requirements  for  the  Partnership  to file a  Second
Disclosure  Statement  and Amended Plan which would allow  appropriate  time for
notice.  The Court set a combined  hearing on the adequacy of the  Partnership's
Second  Disclosure  Statement and  Confirmation  of the Second  Amended Plan for
September 26, 1995.

     On August 25, 1995,  the  Partnership  filed and served its Second  Amended
Plan of Reorganization  ("Amended Plan") and a Second Disclosure Statement.  The
Partnership's  Second  Disclosure  Statement was approved on September 26, 1995.
The Court held the Confirmation  hearing on September 26, 1995 and continued the
hearing to October 18, 1995. The  Confirmation  hearing was concluded on October
18, 1995.

     On November 22, 1995,  the Court orally  communicated  its findings of fact
and conclusions of law regarding the confirmation of the  Partnership's  Amended
Plan. The Court found that the Partnership's  Amended Plan would be feasible and
would provide fair treatment to all classes of creditors,  including the secured
creditor,  Travelers,  provided  that a  higher  claim  amount  could be paid to
Travelers over a five year term.

     On December 22, 1995, the Partnership filed the second  modification to its
Amended Plan  incorporating  changes to Travelers'  claim amount and the term of
the Amended Plan as requested by the Court.  The Court had scheduled a continued
confirmation  hearing  for  January  9, 1996 on the second  modification  to the
Amended Plan. The January 9, 1996 hearing was subsequently  continued to January
30, 1996.

     Travelers  objected  to  the  second  modification  to  the  Amended  Plan,
challenging the validity of the  capitalization  rates used by the Partnership's
independent  appraiser to calculate  residual sales prices of the  Partnership's
six properties.  The capitalization rates were the same rates which were used by
the Partnership's appraiser in the appraisals used by the Court to establish the
value of the  Partnership's  properties.  Travelers  accepted the appraisals for
purposes of this valuation.

     Although the Court  stated that it would not allow a  collateral  attack on
the  appraisals,  it did allow Travelers to present  evidence on  capitalization
rates.  In addition,  although both the  Partnership and Travelers had performed
residual sales price calculations based on operating cash flows projected by the
Partnership,  the Court opined that the residual sales price calculation must be
executed using cash flow projections contained in the Partnership's  appraisals.
Subsequent   to  the   presentation   of  evidence,   the  Court  ruled  on  the
capitalization rates to be used to determine the

                                                                 12

<PAGE>



residual  values for each of the Partnership  properties.  While the Court found
that the  residual  capitalization  rates  were  different  than  those  used to
determine the value of Travelers'  secured claim,  the Court declined to revisit
the valuation  which it had already  determined.  The  confirmation  hearing was
continued to February 1, 1996.

     At the continued  confirmation  hearing, the Partnership informed the Court
that based on the residual  capitalization  rates and cash flows  established by
the  Court,  there  was  insufficient  residual  value  from  the  sale  of  the
Partnership  properties to pay Travelers'  allowed  secured claim as required by
the Court.  On February 1, 1996,  at the  continued  hearing,  the Court  denied
confirmation of the Amended Plan and granted Travelers relief from the automatic
stay  allowing  Travelers to proceed  with a  foreclosure  of the  Partnership's
properties.  Travelers  immediately  posted  "Notices  of Sale" with a scheduled
foreclosure  sale date of March 8, 1996. On February 23, 1996, the Court entered
the order denying the Amended Plan and granting  Travelers relief from the stay.
On February  28,  1996,  Travelers  obtained  the  appointment  of a State Court
Receiver to operate the properties and collect rents.

     The  Partnership  reviewed  all options  available  through the  bankruptcy
proceedings,  including motions for reconsideration of previously decided issues
and an appeal,  and determined  that dismissal of the case was the best route to
pursue.  As a result,  the only  available  option was to negotiate a settlement
with  Travelers  prior  to  foreclosure.   The  Partnership  obtained  financing
alternatives  to be used in  proposing  an offer to  Travelers  to  purchase  or
refinance  the  Travelers'  Note  and  Trust  Deed  positions  relative  to  the
Partnership's   properties;   however,   Travelers  rejected  the  Partnership's
proposals.  As a  result,  Travelers  proceeded  with  the  foreclosure  of  the
Partnership's properties on March 8, 1996.

     The majority of the Partnership's  remaining  assets,  cash collateral bank
accounts,  are subject to Travelers'  security  interest.  The  Partnership  has
insufficient  unencumbered  assets from which to make full  payment to any other
creditors and,  therefore,  has filed a request with the Court to enter an order
dismissing the Partnership's Chapter 11 bankruptcy case. The Court has set April
1, 1996 for a hearing on the motion to dismiss the case.

     Once the Court  executes  the order  dismissing  the  Chapter 11 case,  the
Partnership will complete its liquidation and dissolution  resulting in the loss
of the Class A and Class B Limited  Partnership  Interests  held by the Interest
Holders.  The Limited  Partners  will not be required to provide any  additional
capital   contributions   prior  to  the  liquidation  and  dissolution  of  the
Partnership.

     As a result of the foreclosure, the Partnership has adopted the liquidation
basis of  accounting  as of  December  31,  1995 in  conformity  with  generally
accepted accounting  principles.  The Partnership's change in accounting methods
is  necessary  for  financial  reporting  purposes as required  under  generally
accepted accounting principles. The liquidation method of accounting is not used
for tax reporting and, therefore,  does not impact the 1995 tax basis income and
loss allocations to Limited Partners.  As a result of changing the Partnership's
basis of accounting for its financial statements at December 31, 1995 from going
concern basis to the  liquidation  basis in accordance  with generally  accepted
accounting  principles,  assets have been estimated at net realizable  value and
liabilities   are  reflected  at  their   estimated   settlement   amounts,   if
determinable,  including estimated costs to be incurred for the liquidation. The
valuations  of the assets have been  estimated by the General  Partner  based on
available information as of the date of the financial statements. Actual amounts
realizable  from the disposition of remaining  assets and  liabilities  could be
materially different than the amounts indicated.

     The Court's  rulings have had an impact on 1995 tax  allocations.  Although
the Partnership's Amended Plan included the repair of the Sherman Oaks property,
the Court's  ruling on the Plan has led to a  foreclosure,  and  therefore,  the
Partnership will not repair the property.  During 1995, the Partnership received
$10,000,000 in a partial  settlement of the earthquake  insurance claim. Since a
repair will not occur,  the Internal  Revenue  Service will treat the receipt of
the  insurance  proceeds as a partial  sale of the  property.  Since the net tax
basis of the  Sherman  Oaks  building  and  building  improvements  is less than
insurance  proceeds received in 1995, a tax gain has been recorded on the deemed
partial  sale  for  1995.  The  tax  gain  was  calculated  to be  approximately
$3,500,000. The

                                                                 13

<PAGE>



Partnership  agreement  states  that  the  allocation  first  goes to  eliminate
negative  capital  account  balances  of Class B  limited  partners  and then to
remaining partners in proportion to their negative capital account balances.

     The  allocation  of gain to  Class B  limited  partners  was  approximately
$1,228,000  or $368,000 per $150,000  Class B unit.  The  allocation  of gain to
Class A limited  partners was  approximately  $1,469,000  or $4,058 per $150,000
Class A unit. For 1995,  Class A limited partners also received an allocation of
loss from operations. Class B partners received no other allocations for 1995.

     For 1996 tax reporting,  a foreclosure will result in income allocations to
Class A limited partners. Class B will not receive additional income allocations
in 1996.  The  Class A income  allocation  will  approximate  existing  negative
capital account balances  approximating  $90,100 per $150,000 Class A unit. If a
Class A limited partner's ownership interest in the Partnership is the partner's
only passive  activity and the limited partner has been suspending  passive loss
allocations  as required  by the Tax Reform Act of 1986,  the  suspended  losses
available  are  estimated  to be more  than  the  potential  foreclosure  income
allocation,  resulting in an available  net loss. In a year in which the Project
is disposed of and the Partnership  dissolved,  any accumulative  suspended loss
will be available for use by a limited  partner to offset  ordinary  income.  In
addition, in the case of a Partnership  termination,  each limited partner would
be  allocated  a  pro  rata  share  of   syndication   expenses   equivalent  to
approximately $14,150 which may be deductible.


RESULTS OF OPERATIONS

     Results, exclusive of the Sherman Oaks property, improved slightly in 1995.
When adjusted for Sherman Oaks activity,  net property revenues  increased 1% in
1995 to approximately $7,879,000 from approximately $7,821,000 in 1994.

RESULTS - 1995 COMPARED WITH 1994

     The Sherman Oaks property was severely  damaged by the Southern  California
earthquake on January 17, 1994.  The property was evacuated and city  inspectors
classified  the property as unsafe for use. The property is not operating and is
unoccupied.  As a result,  the property generated no revenue in 1995, and only a
nominal amount in 1994, and has incurred only necessary  operating  expenses and
expenses  related to the  earthquake  since.  Sherman Oaks' results for the year
ended December 31, 1995, as compared with 1994, were affected as follows: Rental
income decreased  approximately  $91,000,  other income decreased  approximately
$8,000,  property  operating  expenses decreased  approximately  $139,000,  real
estate  taxes  decreased   approximately  $54,000,   management  fees  decreased
approximately   $55,000   and   property   administrative   expenses   decreased
approximately  $63,000.  The following  analytical comments have been limited to
the Partnership's five operating properties.

     Rental income increased  approximately $347,000 for the year ended December
31, 1995, as compared with 1994.  Average occupancy was higher by 6% at West Los
Angeles,  4% at Mission Bay East and 6% at Amberway  from the prior year causing
rental  income  to  increase  approximately  $195,000,  $138,000  and  $132,000,
respectively.  The  increase at Mission Bay East was net of a decrease in rental
income in the  first  quarter  of 1995  compared  with  1994,  as 1994  included
carryover corporate business,  which generally commands higher rates, subsequent
to the  property's  conversion  from  OAKWOOD.  A  slight  decrease  in  average
occupancy at Pacifica Club led to a decrease in rental  income of  approximately
$38,000  for the year  ended  December  31,  1995.  Rental  income at Arbor Park
decreased  approximately  $80,000  for the  year  as a  result  of  soft  market
conditions and lower average occupancy.

     Other income  decreased  for the year ended  December 31, 1995, as compared
with 1994, due primarily to decreased  laundry  revenue and cleaning fees earned
at Arbor Park.

     Property operating expenses increased for the year ended December 31, 1995,
as compared to the previous  year.  Insurance  expense  increased  approximately
$265,000 for the five operating  properties.  Other operating  expense increases
for the year  resulted  from costs of termite  treatments  at Pacifica  Club and
utility increases at Mission Bay

                                                                 14

<PAGE>



East,  West Los  Angeles  and Arbor  Park.  Partially  offsetting  increases  in
operating  expenses was a decrease in furniture  rental and  earthquake  related
repairs and  maintenance  expenses at West Los  Angeles.  Decreases in corporate
apartment   expenses  at  Amberway  were  offset  by  increases  in  nonroutine
maintenance for carpet, vinyl and blinds replacements.

     Property tax expense  increased  for the year ended  December 31, 1995,  as
compared  with 1994 as larger tax  refunds  were  recorded in 1994 than in 1995.
Exclusive  of the  refunds,  taxes  decreased  slightly  from  1994 due to lower
assessed values  resulting from  successful  property tax appeals at each of the
Partnership's properties.

     The increase in property administrative expense for the year ended December
31, 1995,  as compared with 1994,  was the result of higher  payroll and related
costs.  In  addition,  an  increase  in the  amount of  advertising  at West Los
Angeles,  Arbor Park and Mission Bay East was partially  offset by a decrease in
advertising at Pacifica Club and Amberway.

     The  decrease  in  partnership  administrative  expense  for the year ended
December 31, 1995,  as compared  with 1994,  was due  primarily to a decrease in
legal fees incurred.

     The increase in interest  income for the year ended  December 31, 1995,  as
compared  with 1994,  was due to the increase in interest  rates  combined  with
higher average cash balances.

RESULTS - 1994 COMPARED WITH 1993

     The Sherman Oaks property was severely  damaged by the Southern  California
earthquake on January 17, 1994.  The property was evacuated and city  inspectors
classified  the property as unsafe for use. The property is not operating and is
unoccupied.  As a result,  the property  generated  virtually no revenue and has
incurred only necessary  operating expenses and expenses directly related to the
earthquake.  Sherman  Oaks'  results for the year ended  December 31,  1994,  as
compared  with  1993,  were  affected  as  follows:   Rental  income   decreased
approximately   $3,295,000,   other  income  decreased  approximately  $110,000,
property operating expenses decreased  approximately $581,000, real estate taxes
decreased  approximately $157,000 and property administrative expenses decreased
approximately  $704,000.  The  following  discussion  has  been  limited  to the
Partnership's five remaining operating properties.

     Total 1994  rental  income,  exclusive  of Sherman  Oaks,  was  $13,972,863
compared with $13,880,354 for 1993.  Increased rental income at West Los Angeles
was  attributable  to  increased  average  occupancy  and  less  corporate  rate
discounting.  Mission Bay East posted a decrease of  approximately  $13,000,  as
conventional  rates are lower than  corporate  rates.  Rental income at Pacifica
Club increased approximately $196,000 as the result of higher average occupancy.
At Arbor Park,  increases in rates and average  occupancy led to an  approximate
$24,000 increase. Lower average occupancy at Amberway resulted in an approximate
$119,000 decrease.

     Other income  decreased in total for the year ended  December 31, 1994,  as
compared  with 1993,  due to  one-time  redecorating  fees  received  from a new
laundry contract in 1993 of $38,000, $40,000, and $30,000 at Amberway,  Pacifica
Club,  and Arbor Park,  respectively.  In addition,  1993 included an offsetting
$66,000  adjustment  for  accounts  receivable  at  Amberway  as a  result  of a
management company change (certain accounts  receivable were recorded as revenue
when collected and the adjustment recorded negated the revenue effect).

     Overall,  property operating expenses decreased for the year ended December
31,  1994,  as compared to 1993.  Amberway  and West Los  Angeles  posted  lower
maintenance  and repair  expenses due, in part, to costs in the first quarter of
1993 from damages caused by heavy rains. Routine maintenance and repair expenses
decreased at both West Los Angeles and Pacifica  Club,  in part,  due to a rehab
performed in past years. In 1993  nonrecurring  painting projects were completed
at  Amberway  and Arbor Park at a cost of  approximately  $69,000  and  $71,000,
respectively. West Los Angeles posted a $43,000 savings in utilities. Offsetting
the  decreases  was an increase in utilities at Mission Bay East, as a result of
lower  reimbursements  for various  utilities  from  corporate  tenants.  As the
property

                                                                 15

<PAGE>



converts to conventional operations from OAKWOOD, utilities will increase as the
Partnership will not charge back certain utilities to its non-corporate tenants.
Additionally,   Mission  Bay  East  and  Arbor  Park  had  increased  nonroutine
maintenance  for  carpet   replacements,   faucets,   and  vinyl.  At  Amberway,
nonroutine  maintenance  expenses  increased  for pool  repairs,  draperies and
linoleum replacement.  At West Los Angeles,  furniture rental expense increased.
Insurance  expense  increased  approximately  $95,000 for the five properties in
total.

     Property taxes  decreased for the year ended December 31, 1994, as compared
to 1993, due to successful  property tax appeals.  Assessed values decreased for
fiscal year 1995 (July 1, 1994 to June 30, 1995) at all the properties. Property
tax refunds were received at West Los Angeles,  Pacifica Club and Arbor Park for
fiscal year 1993 (July 1, 1992 to June 30, 1993). Property tax refunds were also
received  at West Los  Angeles and Arbor Park for fiscal year 1994 (July 1, 1993
to June 30, 1994).  The decreases were partially  offset by consulting fees paid
for the tax appeals and a tax refund received at Mission Bay East in 1993.

     The increase in  management  fees for the year ended  December 31, 1994, as
compared to 1993,  was due to  incentive  management  fees earned at Mission Bay
East,  West Los Angeles and  Pacifica  Club in 1994.  In 1993,  Mission Bay East
earned an incentive management fee.

     The decrease in property administrative expense for the year ended December
31,  1994,  as  compared  with 1993,  was the result of a  reduction  of OAKWOOD
related costs at Mission Bay East. The property had savings primarily in payroll
and advertising costs. Although conventional type advertising increased with the
conversion,   OAKWOOD  related   advertising  dropped  for  the  year.  Property
administrative  expenses  decreased  at Pacifica  Club due to savings in payroll
related costs and advertising.

     The decrease in interest  income for the year ended  December 31, 1994,  as
compared  with  1993,  was  due to the  decrease  in the  average  cash  balance
invested.

     Amortization  decreased  for the year ended  December 31, 1994, as compared
with 1993,  due to deferred loan costs  becoming  fully  amortized  during 1993.
Partially  offsetting  the decrease was an increase in  depreciation  from major
additions in 1992 and 1993.

INFLATION

     Since  inflation  has been at a low rate during  1995,  1994 and 1993,  the
effect inflation and changing prices have had on current revenue and income from
operations has been minimal.




                                                                 16

<PAGE>

<TABLE>
<CAPTION>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                                          CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                                                  A CALIFORNIA LIMITED PARTNERSHIP
                                                       (DEBTOR IN POSSESSION)


                                                                INDEX
<S>                                                                                                                    <C>
                                                                                                                       PAGE

Report of Independent Accountants                                                                                       18
Financial Statements:
     Statement of Net Deficiency in Assets in Liquidation, Pro Forma December 31, 1995
             (Unaudited) and December 31, 1995 (Audited)                                                                19
     Balance Sheet, December 31, 1994                                                                                   20
     Statements of Operations, For the Years Ended December 31, 1995, 1994 and 1993                                     21
     Statements of Partners' Deficit and Net Deficiency in Assets in Liquidation, For the Years
         Ended December 31, 1995, 1994 and 1993                                                                         22
     Statements of Cash Flows, For the Years Ended December 31, 1995, 1994 and 1993                                     23
     Notes to Financial Statements                                                                                      24


Schedules not filed:

     All schedules  other than those indicated in the index have been omitted as
the required  information is inapplicable or the information is presented in the
financial statements or related notes.

                                                                 17
</TABLE>
<PAGE>







                        Report of Independent Accountants

To the Partners of
California Seven Associates Limited Partnership

We have  audited  the  accompanying  statement  of net  deficiency  in assets in
liquidation of California Seven Associates Limited Partnership (the Partnership)
as of December 31, 1995. In addition,  we have audited the accompanying  balance
sheet of California  Seven  Associates  Limited  Partnership  as of December 31,
1994,  and the  related  statements  of  operations,  partners'  deficit and net
deficiency in assets in  liquidation  and cash flows for each of the three years
in the period ended  December  31,  1995.  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.

As more fully described in Note 1 to the financial statements,  on September 16,
1994,  the  Partnership  filed a  petition  for relief  under  Chapter 11 of the
federal  bankruptcy  laws.  On February 1, 1996,  the  bankruptcy  court  denied
confirmation of the plan of reorganization and granted the first mortgage holder
relief from the stay in order to exercise its foreclosure rights with respect to
the  Partnership's  operating  properties.  On March 8, 1996, the first mortgage
holder  exercised its  foreclosure  rights.  As a result,  the  Partnership  has
changed its basis of accounting as of December 31, 1995 to the liquidation basis
of accounting.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the net deficiency in assets in liquidation of 
California Seven Associates Limited Partnership at December 31, 1995, the 
financial  position  of  California  Seven  Associates  Limited Partnership at
December 31, 1994, and the results of its operations and its cash flows for the
each of the three years in the period ended  December 31, 1995, in conformity
with generally accepted accounting principles.

As  more  fully  described  in  Note 1 to the  financial  statements,  it is not
presently  determinable  whether the amounts  realizable from the disposition of
the remaining  assets and  liabilities  will differ  materially from the amounts
shown in the accompanying financial statements.


Price Waterhouse LLP
Hartford, Connecticut
March 29, 1996



                                                                 18

<PAGE>
<TABLE>
<CAPTION>

                                          CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                                                  A CALIFORNIA LIMITED PARTNERSHIP
                                                       (DEBTOR IN POSSESSION)

                                        STATEMENT OF NET DEFICIENCY IN ASSETS IN LIQUIDATION
<S>                                                                               <C>                       <C>
                                                                                      PRO FORMA
                                                                                  DECEMBER 31, 1995         DECEMBER 31, 1995
ASSETS                                                                               (UNAUDITED)                 (AUDITED)

Property and improvements                                                         $            --           $    86,136,000
Cash and cash equivalents                                                                   7,643                13,680,826
Accounts receivable                                                                            --                   228,912
Prepaid expenses and other assets                                                                                   531,095
                                                                                  ---------------           ---------------
                                                                                            7,643               100,576,833
                                                                                  ---------------           ---------------

LIABILITIES

Mortgages payable                                                                              --                99,444,717
Accounts payable and accrued expenses                                                   1,048,356                 1,601,864
Tenants security deposits                                                                      --                   499,720
Unearned income                                                                                --                    71,245
Accounts payable to affiliates                                                          4,453,311                 4,453,311
                                                                                  ---------------           ---------------
                                                                                        5,501,667               106,070,857
                                                                                  ---------------           ---------------

Net deficiency in assets in liquidation                                           $    (5,494,024)          $    (5,494,024)
                                                                                  ===============           ===============

























                             The Notes to Financial  Statements  are an integral part of these statements.
</TABLE>
                                                                 19

<PAGE>

<TABLE>
<CAPTION>
                                          CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                                                  A CALIFORNIA LIMITED PARTNERSHIP
                                                       (DEBTOR IN POSSESSION)

                                                            BALANCE SHEET
                                                        (GOING CONCERN BASIS)
                                                          DECEMBER 31, 1994

                                                               ASSETS
<S>                                                                                                         <C> 
Property and improvements, at cost:
     Land and land improvements                                                                             $    20,562,073
     Buildings                                                                                                  109,890,874
     Furniture and fixtures                                                                                      13,030,382
     Machinery and equipment                                                                                        765,087
                                                                                                            ---------------
                                                                                                                144,248,416
     Less accumulated depreciation                                                                               48,128,827
                                                                                                            ---------------      
            Net property and improvements                                                                        96,119,589

Cash and cash equivalents                                                                                         1,191,015
Accounts receivable                                                                                                 488,885
Prepaid expenses and other assets                                                                                   599,166
                                                                                                            ---------------
            Total                                                                                           $    98,398,655
                                                                                                            ===============

                                                  LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
     Liabilities not subject to compromise:
         Accounts payable and accrued expenses                                                              $       357,719
         Tenant security deposits                                                                                   472,898
         Unearned income                                                                                             79,046
                                                                                                            ---------------
                                                                                                                    909,663
                                                                                                            ---------------
     Postpetition liabilities subject to compromise:
         Fees and reimbursement payable to the General
          Partner and its affiliates                                                                                102,832
                                                                                                            ---------------
     Prepetition liabilities subject to compromise:
         Note and mortgages payable                                                                             111,983,903
         Accrued interest payable                                                                                 2,560,559
         Accounts payable and accrued expenses                                                                      923,957
         Fees and reimbursement payable to the
          General Partner and its affiliates                                                                      4,078,563
                                                                                                            ---------------
                                                                                                                119,546,982
                                                                                                            ---------------
            Total liabilities                                                                                   120,559,477
                                                                                                            ===============  
Partners' deficit:
     General Partner                                                                                               (764,846)
     Limited partners (362 Class A Units and 3 Class B Units)                                                   (21,395,976)
                                                                                                            ---------------
            Total partners' deficit                                                                             (22,160,822)
                                                                                                            ---------------
            Total                                                                                           $    98,398,655
                                                                                                            ===============



                            The Notes to  Financial  Statements  are an integral part of these statements.

                                                                 20
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                          CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                                                  A CALIFORNIA LIMITED PARTNERSHIP
                                                       (DEBTOR IN POSSESSION)

                                                      STATEMENTS OF OPERATIONS
                                                       (GOING CONCERN BASIS)
                                        FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
                                       (ADJUSTMENT TO LIQUIDATION BASIS AT DECEMBER 31, 1995)
<S>                                                                         <C>                 <C>                 <C>
                                                                                  1995                1994                  1993
                                                                                  ----                ----                  ----
Property operating revenues:
     Rental income                                                          $   14,320,083      $   14,063,949      $   17,266,927
     Other                                                                         477,603             561,014             659,373
                                                                            --------------      --------------      --------------
                                                                                14,797,686          14,624,963          17,926,300
                                                                            --------------      --------------      --------------
Property operating expenses:
     Maintenance and repairs, furniture rental,
      insurance, and other property operations                                   2,852,069           2,854,709           3,484,288
     Real estate taxes                                                           1,024,993           1,025,137           1,401,422
     Management fees                                                               587,702             672,578             595,936
     Property administrative                                                     2,735,141           2,723,703           3,739,022
                                                                            --------------      --------------      --------------
                                                                                 7,199,905           7,276,127           9,220,668
                                                                            --------------      --------------      --------------
         Net property revenue                                                    7,597,781           7,348,836           8,705,632
                                                                            --------------      --------------      --------------

Other operating costs and (income) expenses:
     Depreciation and amortization                                               4,180,816           4,220,906           4,411,344
     Management and administrative fees to affiliates                              297,803             296,032             329,118
     Partnership administrative                                                    120,400             124,672             109,978
     Net recovery on business interruption insurance                            (1,234,951)           (299,540)                 --
                                                                            --------------      --------------      --------------
                                                                                 3,364,068           4,342,070           4,850,440
                                                                            --------------      --------------      --------------
         Net partnership operating income                                        4,233,713           3,006,766           3,855,192

Interest income                                                                     51,010              19,875              52,585
Interest expense (contractual interest of $10,461,800 in 1995
  and 1994)                                                                     (6,566,587)         (7,908,417)        (10,461,800)
                                                                            ---------------     ---------------     ---------------
         Net loss before extraordinary gain, reorganization
          items, and adjustment to liquidation basis                            (2,281,864)         (4,881,776)         (6,554,023)

Reorganization items:
     Interest income                                                               232,107               1,768                  --
     United States Trustee fees                                                    (20,000)             (4,800)                 --
     Professional fees                                                            (620,456)           (354,397)                 --
                                                                            --------------      --------------      --------------
         Net loss before extraordinary gain
           and adjustment to liquidation basis                                  (2,690,213)         (5,239,205)         (6,554,023)

Adjustment to liquidation basis                                                 19,369,624                  --                  --
Extraordinary gain - deferred management fees                                           --           2,000,000                  --
                                                                            --------------      --------------      --------------
         Net income (loss)                                                  $   16,679,411      $   (3,239,205)     $   (6,554,023)
                                                                            ==============      ==============      ==============


Income (loss) before extraordinary gain per Class A Unit                    $       45,615      $      (14,328)     $      (17,924)
                                                                            ==============      ==============      ==============
Net income (loss) per Class A Unit:                                         $       45,615      $       (8,859)     $      (17,924)
                                                                            ==============      ==============      ==============



                             The Notes to Financial  Statements  are an integral part of these statements.

                                                                 21
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                          CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                                                  A CALIFORNIA LIMITED PARTNERSHIP
                                                       (DEBTOR IN POSSESSION)

                             STATEMENTS OF PARTNERS' DEFICIT AND NET DEFICIENCY IN ASSETS IN LIQUIDATION

                                        FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993


<S>                                     <C>             <C>                   <C>                   <C>             <C>
                                                                                                                    Net Deficiency
                                            General                           Limited Partners                         in Assets
                                            Partner            Class A             Class B            Original      in Liquidation

Balance, December 31, 1992              $   (666,914)   $    (11,699,571)        $        --        $    (4,623)    $            --

Cash distributions                                --              (2,343)                 --                 --                  --

Contribution - note payment                       --               6,821                  --                 --                  --

Net loss                                     (65,540)         (6,488,483)                 --                 --                  --
                                        ------------    ----------------         -----------        -----------     ---------------

Balance, December 31, 1993                  (732,454)        (18,183,576)                 --             (4,623)                 --
 (going concern basis)

Cash distributions                                --                (964)                 --                 --                  --

Net loss                                     (32,392)         (3,206,813)                 --                 --                  --
                                        ------------    ----------------         -----------        -----------     ---------------

Balance, December 31, 1994                  (764,846)        (21,391,353)                 --             (4,623)                 --
 (going concern basis)

 Cash distributions                               --             (12,613)                 --                 --                  --

 Net income                                  166,794          16,512,617                  --                 --

 Change from going concern to
  liquidation basis of accounting            598,052           4,891,349                  --              4,623          (5,494,024)
                                        ------------    ----------------         -----------        -----------     ---------------

 Net deficiency in
  assets in liquidation as
  of December 31, 1995                  $         --    $             --         $        --        $        --     $    (5,494,024)
                                        ============    ================         ===========        ===========     ===============









                             The Notes to Financial  Statements  are an integral part of these statements.

                                                                 22
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                          CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                                                  A CALIFORNIA LIMITED PARTNERSHIP
                                                       (DEBTOR IN POSSESSION)

                                                      STATEMENTS OF CASH FLOWS
                                                       (GOING CONCERN BASIS)
                                        FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
                                       (ADJUSTMENT TO LIQUIDATION BASIS AT DECEMBER 31, 1995)


<S>                                                               <C>                     <C>                      <C>
                                                                           1995                    1994                     1993
                                                                           ----                    ----                     ----
Cash flows from operating activities:
     Net income (loss)                                            $     16,679,411        $     (3,239,205)        $    (6,554,023)
     Adjustments to reconcile net income (loss) to net
       cash provided by (used in) operating activities:
         Adjustment to liquidation basis                               (19,369,624)                     --                      --
         Extraordinary gain - deferred management fees                          --              (2,000,000)                     --
         Depreciation and amortization                                   4,180,816               4,220,906               4,411,344
         Accounts receivable                                               259,973                (100,713)                  3,809
         Accounts payable and accrued expenses                             233,977                (121,177)                 32,311
         Accrued interest payable                                          570,670                      --                      --
         Other, net                                                         87,092                (804,250)              1,974,032
         Liabilities subject to compromise                                 396,506               2,217,288                      --
                                                                  ----------------        ----------------         ---------------
            Net cash provided by (used in)
              operating activities                                       3,038,821                 172,849                (132,527)
                                                                  ----------------        ----------------         ---------------

Cash flows from investing activities:
     Purchase of property and improvements                                (548,046)               (419,967)               (696,040)
     Proceeds from earthquake insurance                                 10,000,000                      --                      --
                                                                  ----------------        ----------------         ---------------
            Net cash provided by (used in)
              investing activities                                       9,451,954                (419,967)               (696,040)
                                                                  ----------------        ----------------         ---------------

Cash flows from financing activities:
     Cash distribution to limited partners                                    (964)                 (2,343)                 (6,322)
     Proceeds from partners' capital contributions                              --                      --                   6,821
                                                                  ----------------        ----------------         ---------------
            Net cash provided by (used in)
              financing activities                                            (964)                 (2,343)                    499
                                                                  ----------------        ----------------         ---------------

Net increase (decrease) in cash and cash equivalents                    12,489,811                (249,461)               (828,068)
Cash and cash equivalents, beginning of year                             1,191,015               1,440,476               2,268,544
                                                                  ----------------        ----------------         ---------------
Cash and cash equivalents, end of year                            $     13,680,826        $      1,191,015         $     1,440,476
                                                                  ================        ================         ===============

Supplemental disclosure of cash information:
     Accrued purchase of property and improvements                $         22,000        $             --         $            --
                                                                  ================        ================         ===============

     Interest paid during year                                    $      5,995,917        $      6,947,976         $     9,213,683
                                                                  ================        ================         ===============

     Fees paid in connection with reorganization                  $        357,349        $        355,447         $            --
                                                                  ================        ================         ===============



                             The Notes to Financial  Statements  are an integral part of these statements.

                                                                 23
</TABLE>
<PAGE>


                CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                        A CALIFORNIA LIMITED PARTNERSHIP
                             (DEBTOR IN POSSESSION)

                          NOTES TO FINANCIAL STATEMENTS

1.   ORGANIZATION AND BASIS OF ACCOUNTING

     California  Seven  Associates  Limited  Partnership,  a California  limited
partnership,  (the  "Partnership")  was formed to acquire and operate  apartment
complexes located in California.

     The  general  partner  of  the  Partnership  is  CIGNA  Realty   Resources,
Inc.-Seventh (the "General  Partner"),  a Delaware  corporation  qualified to do
business in the States of  California  and  Connecticut  and an indirect  wholly
owned subsidiary of CIGNA Corporation.

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

     On  September  16, 1994,  the  Partnership  filed a voluntary  petition for
reorganization  under  Chapter 11 of the Federal  Bankruptcy  Code in the United
States  Bankruptcy  Court for the Central  District of California (the "Court").
Pursuant to Section 1108 of the Bankruptcy Code, the Partnership is managing its
business  as a debtor in  possession  and will  continue  to do so  pursuant  to
Sections 1107 and 1108 of the Bankruptcy  Code unless  otherwise  ordered by the
Court.

     Under Chapter 11, certain  claims against the Debtor in existence  prior to
the filing of the  petitions  for relief under the Federal  bankruptcy  laws are
stayed while the Debtor continues  business  operations as Debtor in Possession.
These claims are reflected in the December 31, 1994  accompanying  balance sheet
as "prepetition liabilities subject to compromise."

     Generally,  in Chapter 11 cases,  additional claims may arise subsequent to
the filing date resulting from the rejection of executory contracts and from the
determination  by the  Court of  allowed  claims  for  contingencies  and  other
disputed amounts.  Claims secured against a debtor's assets are stayed, although
the  holders of such claims have the right to move the court for relief from the
stay.   Secured  claims  are  secured  by  liens  on  a  debtor's  property  and
improvements.

     On September 22, 1994, the Partnership entered into a Letter Agreement with
the  first  mortgage  lender  which  defined  and  authorized  the  use of  cash
collateral. The Partnership was granted use of collateral pursuant to the Letter
Agreement  and  extensions  of the Letter  Agreement  until March 31, 1996.  All
excess cash flow from property  operations  after payment of property  operating
expenses,  allowed capital  expenditures,  and funding of agreed upon segregated
cash collateral accounts, is remitted to the first mortgage lender monthly.

     On  February  1,  1996,  the  Court  denied  the  Second  Amended  Plan  of
Reorganization  (the  "Plan")  filed by the  Partnership  and  granted the first
mortgage holder,  Travelers  Insurance  Company  ("Travelers"),  relief from the
automatic stay. Travelers  immediately posted "Notices of Sale" with a scheduled
foreclosure  sale date of March 8, 1996. On February 23, 1996, the Court entered
the order  denying the Plan and  granting  Travelers  relief  from the stay.  On
February 28, 1996,  Travelers obtained the appointment of a State Court Receiver
to operate  the  properties  and  collect  rents.  On March 8,  1996,  Travelers
foreclosed on the Partnership's properties.

     Effective with the  foreclosure of the properties,  the Partnership  ceased
all of its  operations  and commenced a  liquidation  of the  Partnership.  As a
result, the Partnership has changed its basis of accounting as of December 31,

                                                                 24

<PAGE>


                CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                        A CALIFORNIA LIMITED PARTNERSHIP
                             (DEBTOR IN POSSESSION)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

1995 to the  liquidation  basis of  accounting.  As a  result  of  changing  the
Partnership's  basis of accounting for its financial  statements at December 31,
1995 from  going  concern  basis to the  liquidation  basis in  accordance  with
generally  accepted  accounting  principles,  assets have been  estimated at net
realizable  value and liabilities  are reflected at their  estimated  settlement
amounts,  if  determinable,  including  estimated  costs to be incurred  for the
liquidation.  The  valuation  of the assets has been  estimated  by the  General
Partner  as  of  the  date  of  the  financial   statements.   Due  to  inherent
uncertainties,  actual  realization  of the assets and settlement of liabilities
could be materially different from the amounts indicated.

     The unaudited pro forma balance sheet presents the  Partnership's  position
as though  the  foreclosure  of the  Partnership's  properties  and the  related
liquidation of certain assets and liabilities had occurred on December 31, 1995.

     The Partnership's records are maintained on the accrual basis of accounting
in  accordance  with  generally  accepted  accounting  principles  for financial
reporting  purposes and are adjusted for federal income tax  reporting.  The net
effect of the  adjustments as of December 31, 1995,  1994 and 1993,  principally
relating to differences in liquidation  accounting and depreciation methods, are
summarized as follows:
<TABLE>
<CAPTION>

                                          1995                                  1994                                1993
                                          ----                                  ----                                ----
                                Financial           Tax              Financial           Tax             Financial           Tax
                                Reporting        Reporting           Reporting        Reporting          Reporting        Reporting
<S>                       <C>              <C>                 <C>               <C>              <C>               <C>
Total assets (a)          $   100,576,833  $     69,082,686    $    98,398,655   $   68,092,407   $    101,769,008  $    73,208,025
Partners' deficit (a):
     General Partner                   --       (20,036,499)          (764,846)     (20,779,181)          (732,454)     (20,703,414)
     Limited partners:
         Class A                       --       (32,613,030)       (21,391,353)     (30,371,092)       (18,183,576)     (25,236,476)
         Class B                       --                --                 --       (1,227,911)                --       (1,227,911)
         Original                      --            (9,842)            (4,623)          (9,842)            (4,623)          (9,842)
Net deficiency in
 assets in liquidation         (5,494,024)               --                 --               --                 --               --
Net income (loss) (a)(b):
     General Partner              166,794           742,682            (32,392)         (75,767)           (65,540)      (2,252,898)
     Limited partners:
         Class A               16,512,617        (2,229,325)        (3,206,813)      (5,133,652)        (6,488,483)      (5,956,956)
         Class B                       --         1,227,911                 --               --                 --               --
Net income (loss)
 per Class A Unit (a)(b):          45,615            (6,159)            (8,859)         (14,182)           (17,924)         (16,456)
<FN>
     (a) On  March  8,  1996,  the  first  mortgage  holder  foreclosed  on  the
         Partnership's  six  properties.  Effective with the  foreclosure of the
         properties,  the Partnership ceased all of its operations and commenced
         a liquidation of the  Partnership.  As a result,  the  Partnership  has
         changed  its  basis  of  accounting  as of  December  31,  1995  to the
         liquidation   basis  of  accounting.   As  a  result  of  changing  the
         Partnership's  basis of  accounting  for its  financial  statements  at
         December 31, 1995 from going concern basis to the liquidation  basis in
         accordance with generally accepted accounting  principles,  assets have
         been estimated at net realizable value and liabilities are reflected at
         their  estimated   settlement  amounts,   if  determinable,   including
         estimated costs to be incurred for the  liquidation.  The valuations of
         the assets have been estimated by the General Partner as of the date of
         the  financial  statements.   Actual  realization  of  the  assets  and
         settlement  of  liabilities  could  be  materially  different  than the
         amounts estimated.


                                                                 25
</TABLE>
<PAGE>


                CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                        A CALIFORNIA LIMITED PARTNERSHIP
                             (DEBTOR IN POSSESSION)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

     (b) Included in 1995 is $3,476,919  gain due to the deemed  partial sale of
         Sherman Oaks for tax reporting only ($1,227,911 or $368,410 per Class B
         Unit and  $1,468,969  or $4,058 per Class A Unit).  Included in 1994 is
         $2,000,000  extraordinary gain ($5,470 per Class A Unit) for financial
         reporting and tax reporting.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A) PROPERTY AND IMPROVEMENTS: Property and improvements at December 31, 1995 are
stated at estimated net realizable value under  liquidation basis of accounting.
At December 31, 1994,  under the going concern basis,  property and improvements
were carried at cost less  accumulated  depreciation.  The cost  represents  the
initial  purchase  price and subsequent  capitalized  costs,  including  certain
acquisition expenses. Property and improvements were pledged as security for the
mortgages  payable.  Depreciation on property and  improvements is calculated on
the  straight-line  method  based on the  estimated  useful lives of the various
components  (5 to 30 years).  Repair and  maintenance  expenses  are  charged to
operations as incurred.

B) CASH AND CASH  EQUIVALENTS:  Short-term  investments with a maturity of three
months  or  less  at the  time  of  purchase  are  generally  reported  as  cash
equivalents.  At December 31, 1995 the Partnership had cash and cash equivalents
classified as cash  collateral  used for operations of the properties  totalling
$760,589 (net of outstanding  checks).  In addition,  at December 31, 1995, cash
and cash  equivalents  included amounts the Partnership was required to maintain
in  segregated  cash  collateral  accounts  for  security  deposits,  taxes  and
insurance  and the Sherman Oaks  deductible.  The balances of these  accounts at
December  31, 1995 were  $493,108,  $269,219  and  $507,902,  respectively.  The
Partnership had  unencumbered  cash and cash equivalents at December 31, 1995 of
$7,276. Cash and cash equivalents at December 31, 1995 also includes $11,642,732
held in a cash collateral account relating to a partial insurance settlement for
the Sherman Oaks earthquake claim. At December 31, 1994 the Partnership had cash
and cash  equivalents  classified as cash  collateral used for operations of the
properties  totalling  $(149,946) (net of outstanding  checks). In addition,  at
December 31, 1994, cash and cash equivalents  include amounts the Partnership is
required  to  maintain in  segregated  cash  collateral  accounts  for  security
deposits,  taxes and insurance and the Sherman Oaks deductible.  The balances of
these  accounts  at December  31, 1994 were  $467,777,  $374,095  and  $351,931,
respectively.  The Partnership  had  unencumbered  cash and cash  equivalents at
December 31, 1994 of $147,158. At December 31, 1995 and 1994, the first mortgage
lender  had a  security  interest  in cash  and  cash  equivalents  held in cash
collateral accounts.

C)   PREPAID  EXPENSES AND OTHER  ASSETS:  Prepaid  expenses  consist of prepaid
     insurance at each  property.  Other assets  consist of utility  deposits at
     various properties.

D)   PARTNERS' DEFICIT:  Offering costs comprised of sales commissions and other
     issuance  expenses have been charged to the partners'  capital  accounts as
     incurred.

E)   INCOME TAXES:  No provision for income taxes has been made as the liability
     for such taxes is that of the partners rather than the Partnership.

3.   LIQUIDATION BASIS OF ACCOUNTING

     As a result of the events described in Note 1, the Partnership's properties
were  foreclosed  by Travelers on March 8, 1996 and the  Partnership  ceased its
operations as a going concern. Consequently the Partnership is in the process of
liquidation. In accordance with the liquidation basis of accounting, assets were
adjusted to their estimated net

                                                                 26

<PAGE>


                CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                        A CALIFORNIA LIMITED PARTNERSHIP
                             (DEBTOR IN POSSESSION)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

realizable  values and liabilities  were adjusted to their estimated  settlement
amounts,  including the estimated costs of  professional  fees for the period of
the  liquidation.  The  adjustment  required to convert  from the going  concern
(historical  cost) basis to the liquidation  basis of accounting was an increase
in  carrying  value  of  $19,369,624  which  is  included  in the  Statement  of
Operations.  Adjustments to the carrying value of the assets and liabilities are
as follows:
<TABLE>
<CAPTION>
<S>                                                                                       <C>
                                                                                               Increase
                                                                                              (Decrease)

Adjust property and improvements to estimated
  net realizable value                                                                    $      3,627,181
Adjust first mortgage to estimated settlement amount                                            (1,081,811)
Adjust second mortgage to estimated settlement amount                                           15,699,892
Adjust accounts payable to General Partner to estimated
  settlement amount                                                                              1,251,316
Estimated professional fees from January 1, 1996 through liquidation                              (126,954)
                                                                                          ----------------
Net increase in carrying value to adjust to liquidation basis of accounting               $     19,369,624
                                                                                          ================

The valuation of the assets and liabilities  was based on the General  Partner's
estimates and  assumptions  as of the date of the financial  statements.  Due to
inherent  uncertainties,  actual amounts  realizable from the disposition of the
remaining assets and liabilities could be materially  different from the amounts
indicated.

</TABLE>
4.   PROPERTY AND IMPROVEMENTS

     At December  31,  1995,  the  Partnership  owned five  operating  apartment
properties located in California totalling 1,763 units with leases generally for
a term of one  year or  less.  The  Partnership  owned  a  sixth  property  (372
apartment  units)  which was severely  damaged by the January 17, 1994  Southern
California earthquake. The property is not operating and remains unoccupied.

     All  properties  were pledged as security for the mortgages  payable.  As a
result of the events  described in Note 1, the first mortgage  lender  exercised
its option to foreclose and took title to the  Partnership's  six  properties on
March 8, 1996.

     The Partnership's properties are covered by insurance, including earthquake
and business interruption although the policy carries a 5% deductible.  On April
28,  1994,  the  Partnership   received  a  $750,000  advance  on  the  business
interruption  policy for the earthquake  damaged property.  In October 1995, the
Partnership   received  an  additional   $1,450,000  in  business   interruption
insurance.  Included in the statement of operations as "Net recovery on business
interruption" is the insurance proceeds less costs specifically  associated with
the earthquake.


5.   NOTES, MORTGAGES AND LOAN MODIFICATIONS

     As a result  of  events  described  in Note 1, the  first  mortgage  lender
foreclosed on the Partnership's six properties on March 8, 1996.  Effective with
the foreclosure of the properties,  the Partnership ceased all of its operations
and commenced a liquidation of the Partnership. As a result, the Partnership has
changed its basis of accounting as of December 31, 1995 from going concern basis
to the liquidation basis in accordance with generally accepted

                                                                 27

<PAGE>


                CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                        A CALIFORNIA LIMITED PARTNERSHIP
                             (DEBTOR IN POSSESSION)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

accounting  principles.  The  mortgages  payable at December  31, 1995 have been
estimated by the General Partner based on the estimated settlement amounts.

     The General Partner has estimated the settlement amount for the nonrecourse
first  mortgage  payable as the estimated  net value of the assets  acquired and
liabilities  assumed  by  Travelers  as a result of the  foreclosure.  Since the
second  mortgage note was  nonrecourse,  the second mortgage note holder's claim
has been reduced to zero  effective  with the  foreclosure by the first mortgage
lender.

     The following table summarizes outstanding debt as of December 31, 1994:
<TABLE>
<CAPTION>
<S>                                                                                                         <C>

First mortgage loan (including cumulative
deferred interest of $11,433,903)                                                                           $    97,433,903

Second mortgage loan                                                                                             14,000,000

Assignment note, which bears interest at 16%
per annum, payable to an affiliate of the
General Partner.  As of December 31, 1994,
the balance remained deferred and unpaid.                                                                           550,000
                                                                                                            ---------------

     Total notes and mortgages payable                                                                      $   111,983,903
                                                                                                            ===============
</TABLE>
     Although the first and second mortgages payable  represented secured claims
under the bankruptcy proceedings, there was uncertainty as to whether the claims
were  undersecured  or would be  impaired  under a plan of  reorganization.  The
mortgages  payable,   therefore,  were  classified  as  liabilities  subject  to
compromise in the accompanying December 31, 1994 balance sheet. Interest expense
was  recorded  postpetition  to the  extent  paid  during  the  proceeding.  The
Partnership  entered into a cash  collateral  agreement  with the first mortgage
lender  which  called for the payment of cash flow from  operations,  rents less
operating expenses and capital, on a monthly basis.

     Partnership  property  was  held  subject  to a first  mortgage  loan  from
Travelers, with an original principal balance of $100,000,000.  Interest thereon
initially  accrued and  compounded at 12.75% per annum.  Pursuant to an eighteen
month  payment  modification  agreement  negotiated  during 1987,  interest only
payments  calculated  at 10% were due  monthly  through  January  1,  1989.  The
difference  between  the pay rate and the coupon  rate  accumulated  as deferred
interest.  Interest was charged on accumulated  deferred  interest at 12.75% per
annum.  In conjunction  with the  modification,  a $1 million escrow account was
established  in  the  name  of the  lender  to  provide  the  lender  additional
collateral to secure the Partnership's obligations under the loan.

     Effective with the August 1, 1989 payment, a temporary  arrangement reduced
monthly  payments to interest only at 10.5% and then to 10%  effective  with the
May 1, 1990 payment. The differences between the negotiated rates and the coupon
rate of 12.75% continued to accrue.

     In October 1990, simultaneously with the sale of the Torrance property, the
Partnership completed a permanent modification of the first mortgage loan. Terms
included a reduced  interest rate from the coupon of 12.75% to 10%, an extension
of the due date from December 1993 to May 1995 and a fixing of deferred interest
at  $17,140,361  as of May 1,  1990  with no  additional  interest  accruals  on
deferred interest. As an additional requirement of the modification, $14,000,000
of the sales  proceeds  from the Torrance  property was applied to the principal
and

                                                                 28

<PAGE>


                CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                        A CALIFORNIA LIMITED PARTNERSHIP
                             (DEBTOR IN POSSESSION)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

$5,000,000  was applied to the deferred  interest  balance.  No gain or loss was
recorded on the first mortgage modification. In addition, $706,458 of the escrow
account,  including  accumulated  interest of $206,458,  was applied against the
deferred interest balance. Also, as part of the Torrance property sale, $730,000
of the sales  proceeds was required to be deposited in the escrow  account to be
used for operating deficits and capital expenditures.

   The Partnership's properties were also held subject to a $20,000,000 variable
rate second mortgage loan scheduled to mature on December 31, 1993. The interest
rate was adjusted  monthly to 2% above the Five Year  Treasury  Constant  Matrix
Index as published by the Federal  Reserve Board (the "current  accrual  rate").
Pursuant to debt modification  agreements signed in 1987 and 1989, interest only
payments,  calculated  at 8.64%,  were due  monthly  from  August 1, 1987  until
January 1, 1990.  Beginning February 1, 1990,  interest only payments calculated
at 9% were due monthly until maturity.  The difference between interest accruing
on the note and interest paid during this period was  deferred.  During the term
of the mortgage, the interest rate could not exceed 17.5% per annum.

     On October 26, 1990,  the  Partnership  refinanced its  $20,000,000  second
mortgage loan. At the time of the  refinance,  the  Partnership  was indebted to
Brookside  Savings in the principal  amount of $20,310,706,  including  deferred
interest,  and $419,328 of unpaid  current  interest  payable.  The  Partnership
maintained a $200,000 debt escrow account for the benefit of Brookside  Savings,
established as a result of the 1987 debt modification agreement. The Partnership
negotiated a  discounted  payoff with  Brookside  Savings for  $14,419,328  plus
forfeiture of the debt escrow account of $200,000.  The Partnership utilized the
proceeds from a new second mortgage of $14,000,000  plus $419,328 of Partnership
cash reserves to pay off the Brookside  Savings  mortgage.  The second  mortgage
lender was Congen Properties, Inc., an indirect wholly owned subsidiary of CIGNA
Corporation.  The  difference  between the payoff  amount,  including the escrow
account,  and the total amounts  outstanding  netted a $6,110,706  extraordinary
gain from debt forgiveness in the 1990 Statement of Operations.  The term of the
replacement  second mortgage  require  monthly  interest only payments at 12.67%
with a maturity date concurrent with the first mortgage, as modified.

     Effective  November 1, 1993, the Partnership began withholding the interest
payment on the second mortgage note.


6.   LIMITED PARTNER CAPITAL

     The  initial  Limited  Partner  contributed  $100  to  the  capital  of the
Partnership.  Pursuant  to a private  offering,  the  Partnership  sold  Limited
Partnership  Interests  to  seven  Class B  Limited  Partners  for an  aggregate
purchase price of $500,000.  The  Partnership  also sold 362 Class A partnership
Units at a Unit price of $150,000 each  ($54,300,000 in total).  Of these Units,
1.5 Units were  purchased  for cash,  14.4 Units were  purchased  pursuant  to a
three-year  note option and 346.1 Units were purchased  pursuant to a seven-year
note option.  The three and  seven-year  note  options  provided for the sale of
Units  upon   receipt  at   subscription   of  $45,000  and  $18,343  per  Unit,
respectively,   with  the  balance  due  of  $105,000  and  $131,657  per  Unit,
respectively,  being  evidenced by a secured  recourse  promissory  note bearing
interest at the rate of 12% per annum. Interest payments were due in semi-annual
installments on each March 1 and December 1, beginning on December 1, 1985.

     As a result of the March 8, 1996 foreclosure, the Partnership is in process
of liquidation and dissolution. The dissolution will result in the complete loss
of the  Class A and  Class B  Limited  Partnership  Interests.  There are no net
assets in liquidation  and,  therefore,  will be no distributions to the Limited
Partners upon liquidation.


                                                                 29

<PAGE>


                CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                        A CALIFORNIA LIMITED PARTNERSHIP
                             (DEBTOR IN POSSESSION)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

     During 1991, the State of Connecticut enacted new income tax legislation, a
part of which affects partnerships. The portfolio income allocations made by the
Partnership to the limited partners are considered  Connecticut based income and
subject to Connecticut  tax. The  Partnership  has elected to pay the tax due on
the Limited  Partners' share of portfolio income and, on July 13, 1995, paid tax
due of $964 on its 1994 Form CT-G  Connecticut  Group  Income  Tax  Return.  The
Partnership  also accrued the 1995  estimated  payment of $12,613 as of December
31, 1995.  These  amounts were treated as  reductions  of partners'  capital and
reported as distributions in the accompanying financial statements.

7.   TRANSACTIONS WITH AFFILIATES

     Fees and other expenses  incurred by the Partnership to the General Partner
or its affiliates during the years ended December 31, 1995, 1994 and 1993 are as
follows:
<TABLE>
<CAPTION>
     <S>                                                               <C>                     <C>                     <C>
                                                                           1995                    1994                     1993
                                                                           ----                    ----                     ----
     Interest on assignment note (a)                                   $        --             $    62,333             $    88,000
     Asset management fee                                                  147,803                 146,032                 179,118
     General partner salary                                                150,000                 150,000                 150,000
     Reimbursement (at cost) for
      out-of-pocket expenses                                                77,403                  40,417                  30,508
     Reorganization item:
       Professional fees                                                    95,692                      --                      --
                                                                       -----------             -----------             -----------
                                                                       $   470,898             $  398,782              $   447,626
                                                                       ===========             ==========              ===========
<FN>
     (a) Postpetition   interest  was  recorded  to  the  extent  it  was  paid.
         Contractual  interest on assignment  note was $88,000 for both December
         31, 1995 and 1994.
</TABLE>

8.   MANAGEMENT AGREEMENTS

     On January 31, 1985, the  Partnership  entered into a Management  Agreement
with R & B Apartment  Management Company ("R&B").  The term of the agreement was
approximately  ten years  with  provisions  to extend the term as defined in the
Management Agreement.

     In 1991, the Management  Agreement was  renegotiated for the five remaining
OAKWOOD  format  properties  and one  conventional  property.  For  the  OAKWOOD
properties,  a base  amount was set up using  1991 as a base  year.  For 1992 to
1995,  the fee was to be 5%  provided  R&B  achieved  a 5% annual  growth in net
operating  income from the 1991 base.  If the annual  growth target was not met,
R&B would only receive a 3% fee. In 1991, the base net operating  income was not
reached and R&B's fee was reduced by 40% to 3% of the gross rental receipts. For
the conventional  property,  the Upland property, the fee was set at 4% of gross
revenues.

     On May 1, 1992, the Huntington Beach and Anaheim  properties were converted
from the OAKWOOD  concept to  conventional  apartment  operations.  The Property
management fee for the Huntington Beach property had been changed to 3% of gross
receipts  plus an  additional  1%  incentive  fee based on certain  revenue  and
expense  goals.  The  Partnership  also  renegotiated  the management fee on the
remaining OAKWOOD properties,  West Los Angeles,  Sherman Oaks and San Diego, to
an  incentive  base  fee of 3% of  gross  receipts  with  the  potential  for an
additional 1% if net operating income objectives are met.

                                                                 30

<PAGE>


                CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP,
                        A CALIFORNIA LIMITED PARTNERSHIP
                             (DEBTOR IN POSSESSION)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


     On May 1, 1992, in conjunction with the Anaheim property's conversion,  R&B
was replaced as the property manager by Maxim Management  Group,  formerly known
as Prometheus  Management Group. The management fee is 3% of gross receipts plus
an additional 1% incentive based on certain revenue and expense goals.

     For the period  between 1985 and 1989,  a portion of the annual  management
fee earned by R&B was subject to deferral  based on certain  operating  results.
The  deferral  maximum of  $2,000,000  was  reached in 1989.  During  1994,  R&B
released the  Partnership  from the deferred  management fee obligation and as a
result, the Partnership recorded an extraordinary gain.

9.   PARTNERSHIP AGREEMENT

     Generally,  distribution of operating cash flow,  allocations of net income
or  losses  from  operations,  and  loss on  dispositions,  as  reported  on the
Partnership's  Federal income tax returns,  will be allocated 99% to the Limited
Partners and 1% to the General Partner.

     All  allocations  among the Limited  Partners of net income or loss will be
made in the proportion that the capital contribution made or required to be made
by each  Limited  Partner  bears  to the  total  capital  contributions  made or
required to be made by all Limited  Partners  except as noted in the Partnership
Agreement Section 6(e) and 6(f).

     In general, gains from dispositions shall be allocated first to the Class B
Limited Partners in proportion to their respective negative capital accounts and
then to the other Partners in proportion to their  respective  negative  capital
accounts.  Thereafter,  gains from dispositions shall be allocated in accordance
with Partnership Agreement Section 6(g)(i) through (iv).

     Proceeds from capital  transactions  will be distributed  generally to each
Limited Partner  equivalent to aggregate  capital  contributions;  then, to each
Limited Partner,  equal to 8% per annum of his aggregate  capital  contribution;
then, to the General Partner  equivalent to its aggregate capital  contribution;
then,  of the  balance,  75% to the  Limited  Partners  and  25% to the  General
Partner.

     Paragraph 6(u) of the Partnership Agreement limits the allocation of losses
recognized  for Federal  income tax purposes to partners  where such  allocation
would cause  their  negative  capital  account to be in excess of their share of
minimum gain as defined in such  paragraph.  Those  losses not  allocated to the
Limited Partners are allocated to the General Partner.

     Paragraph  6(v)  contains  minimum  gain charge back and  qualified  income
offset provisions in accordance with Treasury Regulation  1.704-1T(b)(4)(iv)(e),
- 1T(b)(4)(iv)(h)(4), and - 1(b)(2)(ii)(d).

10.  LITIGATION

     [Theodore  D. Cohen,  et al v.  California  Seven  Associates,  et al., No.
657925 (Orange County, CA, May 16, 1991)] Plaintiffs in suit brought against the
Partnership and its General Partner are members of the class  participating in a
federal court action in Chicago [In re VMS Securities Litigation, No. 90 c 2412,
N.D. Ill.] which has concluded in a settlement,  of which  plaintiffs  have been
notified.  Defendant filed a Motion for Summary Judgment which was granted,  and
no appeal was filed  within the time  allowed.  The case has  concluded  with no
liability to the Partnership.

                                                                 31

<PAGE>



ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
     FINANCIAL DISCLOSURE

     Not applicable.

                                                              PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  General   Partner  of  the   Partnership,   CIGNA  Realty   Resources,
Inc.-Seventh, a Delaware corporation, is an indirect, wholly owned subsidiary of
CIGNA Corporation,  a publicly held corporation whose stock is traded on the New
York Stock Exchange. The General Partner has responsibility for and control over
the affairs of the Partnership.

     The directors and executive  officers of the General Partner as of February
15, 1996 are as follows:
<TABLE>
<CAPTION>
     <S>                                         <C>                                             <C>

     Name                                        Office                                          Served Since

     R. Bruce Albro                              Director                                        May 2, 1988

     David Scheinerman                           Director                                        July 25, 1995

     Philip J. Ward                              Director                                        May 2, 1988

     John D. Carey                               President, Controller                           September 7, 1993,
                                                                                                 September 4, 1990

     Verne E. Blodgett                           Vice President, Counsel                         April 2, 1990

     Joseph W. Springman                         Vice President, Assistant Secretary             September 7, 1993

     David C. Kopp                               Secretary                                       September 29, 1989

     Michael M. Sinisgalli                       Treasurer                                       August 1, 1994

</TABLE>
     There is no family  relationship  among any of the  foregoing  directors or
officers.  There are no  arrangements  or  understandings  between or among said
officers  or  directors  and any other  person  pursuant to which any officer or
director was selected as such.

     The foregoing  directors and officers are also officers and/or directors of
various affiliated companies of CIGNA Realty Resources, Inc.-Seventh,  including
CIGNA  Financial   Partners,   Inc.  (the  parent  of  CIGNA  Realty  Resources,
Inc.-Seventh),  CIGNA Investments,  Inc., CIGNA Corporation (the parent of CIGNA
Investments,  Inc.),  and Connecticut  General  Corporation (the parent of CIGNA
Financial Partners, Inc.).











                                                                 32

<PAGE>




     The business  experience of each of the directors and executive officers of
the General Partner of the Partnership is as follows:

                            R. BRUCE ALBRO - DIRECTOR

     Mr.  Albro,  age  53,  a  Senior  Managing  Director  of  CIGNA  Investment
Management (CIM), joined Connecticut  General's Investment Operations in 1971 as
a  Securities  Analyst  in  Paper,  Forest  Products,  Building  and  Machinery.
Subsequently,  he served as a Research  Department  Unit Head,  as an  Assistant
Portfolio  Manager,  then as  Director  of Equity  Research  and a member of the
senior staff of CIGNA Investment  Management  Company and as a Portfolio Manager
in the Fixed Income area. He then headed the Marketing and Merchant Banking area
for CII. Prior to his current assignment of Division Head,  Portfolio Management
Division,  he was an  insurance  portfolio  manager,  and prior to that,  he was
responsible for Individual Investment Product Marketing.  In addition, Mr. Albro
currently  serves  as  President  of the  CIGNA  Funds  Group  and  other  CIGNA
affiliated mutual funds. Mr. Albro received a Master of Arts degree in Economics
from the  University  of California at Berkeley and a Bachelor of Arts degree in
Economics from the University of Massachusetts at Amherst.


                          DAVID SCHEINERMAN - DIRECTOR

     Mr.  Scheinerman,  age 35, was appointed Chief  Financial  Officer of CIGNA
Individual Insurance, a division with more than $77 billion of life insurance in
force,  in July of 1995.  Mr.  Scheinerman  has served in various  actuarial and
business  management  capacities  with  CIGNA.  In  1991 he was  appointed  Vice
President and Pricing Actuary for CIGNA HealthCare. He has more than 12 years of
financial  management  experience and has served as Chief  Financial  Officer of
Crusader  Insurance PLC, a CIGNA  subsidiary life company in the United Kingdom.
Mr.  Scheinerman  holds a BA in Mathematics from Rice University and an MBA from
the University of Pennsylvania Wharton School of Business. He is a fellow of the
Society of Actuaries and a member of the American Academy of Actuaries.


                            PHILIP J. WARD - DIRECTOR

     Mr. Ward,  age 47, is Senior  Managing  Director and Division Head of CIGNA
Investment Management (CIM), in charge of the Real Estate Investment Division of
CIM.  He was  appointed  to that  position  in  December  1985.  Mr. Ward joined
Connecticut  General's Mortgage and Real Estate Department in 1971 and became an
officer in 1976.  Since  joining the company he has held real estate  investment
assignments in Mortgage and Real Estate Production and in Portfolio  Management.
Prior to his current  position,  Mr. Ward held assignments in CIGNA  Investments
Inc.,  responsible for the Real Estate  Production  area, CIGNA Realty Advisors,
Inc. and Congen Realty Advisory Company, all wholly-owned  subsidiaries of CIGNA
Corporation and/or Connecticut General. Mr. Ward has held various positions with
the  General  Partner.   His  experience  includes  all  forms  of  real  estate
investments,  with recent emphasis on acquisitions and joint ventures.  Mr. Ward
is a 1970  graduate  of  Amherst  College  with a  Bachelor  of Arts  degree  in
Economics.  He is a member of the Society of Industrial and Office Realtors, the
National  Association of Industrial  and Office Parks,  the Urban Land Institute
and the International  Council of Shopping Centers.  He is a member of the Board
of Directors of DeBartolo Realty Corporation.










                                                                 33

<PAGE>



                      JOHN D. CAREY - PRESIDENT, CONTROLLER

     Mr.  Carey,  age 32,  joined  CIGNA  Investment  Management-Real  Estate as
Controller of Tax Advantaged  Investments in 1990. In September  1993, Mr. Carey
was appointed President.  Prior to joining CIGNA Investment Management,  he held
the position of manager at KPMG Peat Marwick LLP in the audit department and was
a member of the Real Estate Focus Group. His experiences  include accounting and
financial  reporting  for public and  private  real estate  limited  partnership
syndications.  Mr. Carey is a graduate of Central  Connecticut  State University
with a Bachelor of Science Degree and is a Certified Public Accountant.


                   VERNE E. BLODGETT - VICE PRESIDENT, COUNSEL

     Mr. Blodgett, age 58, is an Assistant General Counsel of CIGNA Corporation.
He joined  Connecticut  General Life Insurance  Company in 1975 as an investment
attorney and has held various  positions  in the Legal  Division of  Connecticut
General Life Insurance  Company prior to his  appointment  as Assistant  General
Counsel in 1981.  Mr.  Blodgett  received a Bachelor  of Arts  degree  from Yale
University and graduated  with honors from the University of Connecticut  School
of Law. He is a member of the Connecticut and the American Bar Associations.


            JOSEPH W. SPRINGMAN - VICE PRESIDENT, ASSISTANT SECRETARY

     Mr. Springman, age 54, is Managing Director and department head responsible
for asset  management.  He joined CIGNA's Real Estate operations in 1970. He has
held  positions as an officer or director of several real estate  affiliates  of
CIGNA.  His  past  real  estate   assignments  have  included   Development  and
Engineering,  Property Management,  Director, Real Estate Operations,  Portfolio
Management and Vice  President,  Real Estate  Production.  Prior to assuming his
asset  management  post, Mr.  Springman was  responsible  for production of real
estate and mortgage  investments.  He received a Bachelor of Science degree from
the U.S. Naval Academy.


                            DAVID C. KOPP - SECRETARY

     Mr. Kopp, age 50, is Secretary of CII,  Corporate  Secretary of Connecticut
General Life Insurance Company and Assistant  Corporate  Secretary and Assistant
General  Counsel,  Insurance and  Investment Law of CIGNA  Corporation.  He also
serves as an officer of various  other CIGNA  Companies.  In August of 1995,  he
also assumed responsibility as chief compliance officer for CIGNA HealthCare,  a
division of CIGNA  Corporation.  He joined  Connecticut  General Life  Insurance
Company in 1974 as a commercial real estate attorney and held various  positions
in the Legal Department of Connecticut  General Life Insurance  Company prior to
his  appointment as Corporate  Secretary in 1977. Mr. Kopp is an honors graduate
of Northern  Illinois  University and served on the law review at the University
of Illinois  College of Law. He is a member of the  Connecticut  Bar Association
and is Past  President of the Hartford  Chapter,  American  Society of Corporate
Secretaries.


                        MICHAEL M. SINISGALLI - TREASURER

     Michael M.  Sinisgalli,  age 37, is Assistant  Director,  Treasury  Process
Management of CIGNA Corporation.  In this capacity his responsibilities  include
the analysis,  design and management of treasury processes  supporting insurance
divisions.  Michael  joined  CIGNA in 1991  after  having  been with Bank of New
England since 1983. He served in a variety of Cash Management  positions,  being
appointed in 1990 as Assistant Vice President, Cash Management  Sales/Marketing.
A  graduate   of  Central   Connecticut   State   University   (B.S.,   Business
Administration,  1981), Mr.  Sinisgalli is a Certified Cash Manager and a member
of Connecticut Cash Manager Association.



                                                                 34

<PAGE>



ITEM 11.  EXECUTIVE COMPENSATION

     Officers  and  directors  of the  General  Partner  receive  no  current or
proposed direct  compensation from the Partnership in such capacities.  However,
certain officers and directors of the General Partner received compensation from
the General  Partner and/or its affiliates  (but not from the  Partnership)  for
services performed for various affiliated  entities,  which may include services
performed for the  Partnership,  but such  compensation  was not material in the
aggregate.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     No person or group is known by the  Partnership  to own  beneficially  more
than 5% of the outstanding Units of interest of the Partnership.

     There exists no  arrangement,  known to the  Partnership,  the operation of
which may at a subsequent date result in a change in control of the Partnership.

     As of February 15, 1996,  the  individual  directors  and the directors and
officers,  as a group, of the General  Partner  beneficially  owned  Partnership
Units  and  shares of the  common  stock of CIGNA,  the  indirect  parent of the
General Partner, as set forth in the following table:
<TABLE>
<CAPTION>
     <S>                                   <C>                   <C>                     <C>   
                                               Units                Shares
                                           Beneficially          Beneficially             Percent
     Name                                    Owned(a)              Owned(b)              of Class

     R. Bruce Albro (c)                           0                   6,653                   *
     Philip J. Ward (d)                           0                  16,491                   *

     All directors and officers
     Group (8) (e)                                0                  29,994                   *


     * Less than 1% of class

(a)  No officer or director of the General Partner  possesses a right to acquire
     beneficial ownership of additional Units of interest of the Partnership.
(b)  The directors and officers have sole voting and  investment  power over all
     the shares of CIGNA common stock they own beneficially.
(c)  Shares beneficially owned includes options to acquire 4,487 shares and 1,432 shares which are restricted as to
     disposition.
(d)  Shares beneficially owned includes options to acquire 8,826 shares and 2,400 shares which are restricted as to
     disposition.
(e)  Shares  beneficially  owned by directors and officers include 15,318 shares
     of CIGNA common stock which may be acquired  upon exercise of stock options
     and 8,126 shares which are restricted as to disposition.
</TABLE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In  consideration  for the  assignment to the  Partnership  of the right to
acquire the Project  pursuant to the agreement of sale, the Partnership paid CFP
the sum of  $l,400,000,  $300,000  of which was paid to CFP during  1985 in cash
from the  first  available  cash of the  Partnership,  which  was the  Partners'
Capital  Contributions,  and  $l,100,000  of  which  was paid by  executing  and
delivering to CFP an assignment  note.  The  assignment  note bears  interest at
16.0% per annum. No interest was earned during 1995.  Interest earned since 1989
of $502,334 and the principal  balance of $550,000  remained  unpaid at December
31, 1995.

                                                                 35

<PAGE>




     The  Partnership  and CFP have entered into an agreement (the  "Partnership
Administration and Management Service Agreement") pursuant to which CFP performs
administrative and management  services for the Partnership for an aggregate fee
(the "Partnership Administration and Management Fee") of $543,000,  representing
one percent (l.0%) of the equity raised from the Class A Limited Partners.  This
fee was to be paid over the course of the seven-year  investor note option which
concluded in 1991.  The  Partnership  Administration  and Management Fee was for
monitoring the payments of the Limited Partners on the Limited  Partners' notes.
The amounts due for 1990 and 1991 of $260,050  remained  unpaid at December  31,
1995.

     In addition,  pursuant to the  Partnership  Administration  and  Management
Services Agreement,  the General Partner earned a salary of $200,000 in 1985 and
$150,000  annually  thereafter  for managing the  day-to-day  operations  of the
Partnership  and for  performing  administrative  services for the  Partnership,
including, without limitation,  mailing tax information to the Limited Partners,
and  soliciting  their  consents  when  required  under the Limited  Partnership
Agreement and other investor communications,  managing the Partnership's banking
arrangements, balancing the Partners' capital accounts, filing the Partnership's
tax returns, and exposing its assets to creditors as a general partner. In 1995,
the  General  Partner  earned a salary of  $150,000.  The  amounts  due for 1989
through 1995 of  $1,050,000  remained  unpaid at December 31, 1995.  The General
Partner's claims will be discharged.

     The  Partnership  has entered into an agreement with CFP (the  "Partnership
Incentive Management  Agreement") pursuant to which CFP will attempt to maximize
cash  flow  to the  Limited  Partners  by  increasing  revenues  and  minimizing
expenses. Pursuant to the Partnership Incentive Management Agreement, commencing
in 1991, CFP will be paid an annual fee (the "Incentive Management Fee") of nine
percent  (9.0%) of the cash flow,  but only to the extent  that actual cash flow
exceeds projected cash flow. No such fee will be paid.

     Pursuant to an agreement  between the Partnership and CII (the "Real Estate
Advisory Services  Agreement"),  on the sale of the Project,  CII will receive a
real estate advisory fee equal to 3.5% of the gross sales price of the property,
from which amount third party brokerage commissions to the extent of one percent
(l.0%) may be paid. In 1990,  CII earned a 2.5% real estate  advisory fee on the
gross sales price of the Torrance  Property.  The amount of the fee was $518,750
(which remained unpaid at December 31, 1995).

     The Partnership has entered into an asset management  agreement (the "Asset
Management Agreement") with CII pursuant to which CII performs certain functions
relating to the  supervision of the management of the assets of the  Partnership
and  supervision  of  unaffiliated  property  management  companies.  For  these
services,  CII earned a fee (the  "Asset  Management  Fee") equal to two percent
(2.0%) per annum of gross revenue for the years  1985-1990  (inclusive)  and one
percent (l.0%) per annum of gross revenues  thereafter.  CII earned $147,803 for
its services in 1995. At December 31, 1995 the  Partnership  owed CII $2,612,880
for the 1987 through 1995 fees.

     The General  Partner and its  affiliates may be reimbursed for their direct
expenses  incurred  in the  offering,  organization  and  administration  of the
Partnership.   In  1995,  the  General  Partner  and  its  affiliates  were  due
reimbursement  for such out of pocket  administrative  expenses in the amount of
$173,095.  At December 31,  1995,  $210,613  was unpaid.  The General  Partner's
claims will be discharged.

                                                                 36

<PAGE>



                                                               PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

         (a)  1.  Financial Statements.  See Index to Financial Statements in
                  Item 8.

              2.  Financial Statement Schedules

              (a) Real Estate and Accumulated Depreciation.  See Index to 
                  Financial Statements in Item 8.

              3.  Exhibits

                  2.1      Plan of Reorganization under Chapter 11 of the 
                           Bankruptcy Code for California Seven Associates 
                           Limited Partnership, Debtor and Debtor in Possession,
                           Proposed by the Debtor dated March 16, 1994.

                  2.2      Amended Plan of Reorganization under Chapter 11 of 
                           the Bankruptcy Code for California Seven Associates
                           Limited Partnership, Debtor and Debtor in Possession,
                           Proposed by the Debtor, dated April 25, 1995.

                  2.3      Third Modification to Amended Plan of Reorganization 
                           under Chapter 11 of the Bankruptcy Code for 
                           California Seven Associates Limited Partnership,
                           Debtor and Debtor in Possession, Proposed by the 
                           Debtor, dated April 25, 1995.

                  3.1      Form 8, Amendment No. 1 to Form 10 Registration 
                           Statement dated July 25, 1986.

                  3.2      Certificate  of  Limited  Partnership  of  California
                           Seven Associates Limited  Partnership,  dated January
                           30, 1985, incorporated by reference to Exhibit 3.1 to
                           Form 10  Registration  Statement under the Securities
                           Act of 1934, File No. 0-13458.

                  3.3      Second  Amended  and  Restated  Limited   Partnership
                           Agreement  of  California  Seven  Associates  Limited
                           Partnership,   dated  as  of   February   14,   1985,
                           incorporated  by  reference to Exhibit 3.2 to Form 10
                           Registration  Statement  under the  Securities Act of
                           1934, File No. 0-13458.

                  4.1      Form of Seven-Year  Negotiable Promissory Note of the
                           Class A Limited Partner, incorporated by reference to
                           Exhibit 4.2 to Form 10  Registration  Statement under
                           the Securities Act of 1934, File No. 0-13458.

                  4.2      Second  Amended  and  Restated  Limited   Partnership
                           Agreement   defining   the  rights  of  the   Limited
                           Partners, dated as of February 14, 1985 (See pp. 3-18
                           - 3-26 of Exhibit 3.2),  incorporated by reference to
                           Exhibit 4.6 to Form 10  Registration  Statement under
                           the Securities Act of 1934, File No. 0-13458.

                  10.1     Mortgage Note from IFD Properties,  Inc.-First to The
                           Travelers Insurance Company,  as Mortgagee,  dated as
                           of December  20, 1984,  incorporated  by reference to
                           Exhibit 10.1 to Form 10 Registration  Statement under
                           the Securities Act of 1934, File No. 0-13458.

                  10.2     Deed of Trust from IFD Properties,  Inc.-First to The
                           Travelers Insurance Company, dated as of December 20,
                           1984,   relating   to  the  Los   Angeles   Property,
                           incorporated  by reference to Exhibit 10.2 to Form 10
                           Registration  Statement  under the  Securities Act of
                           1934, File No.
                           0-13458.


                                                                 37

<PAGE>



                  10.3     Security Agreement between IFD Properties, Inc.-First
                           and The  Travelers  Insurance  Company,  dated  as of
                           December  20,  1984,  incorporated  by  reference  to
                           Exhibit 10.3 to Form 10 Registration  Statement under
                           the Securities Act of 1934, File No. 0-13458.

                  10.4     Purchase and Sale Agreement  between IFD  Properties,
                           Inc.-First and CIGNA Financial Partners,  Inc., dated
                           as of January 15, 1985,  incorporated by reference to
                           Exhibit 10.4 to Form 10 Registration  Statement under
                           the Securities Act of 1934, File No. 0-13458.

                  10.5     Assignment and Assumption Agreement between CIGNA 
                           Financial Partners, Inc. and the Registrant, dated 
                           January 30, 1985, incorporated by reference to 
                           Exhibit 10.5 to Form 10 Registration Statement under 
                           the Securities Act of 1934, File No. 0-13458.

                  10.6     Transfer and Assignment Agreement between CIGNA 
                           Financial Partners, Inc. and the Registrant, dated 
                           January 30, 1985, incorporated by reference to 
                           Exhibit 10.6 to Form 10 Registration Statement under
                           the Securities Act of 1934, File No. 0-13458.

                  10.7     Mortgage  Note  from  the   Registrant  to  Brookside
                           Savings  &  Loan  Association,  as  Mortgagee,  dated
                           February  15,  1985,  incorporated  by  reference  to
                           Exhibit 10.7 to Form 10 Registration  Statement under
                           the Securities Act of 1934, File No. 0-13458.

                  10.8     Deed of  Trust  and  Assignment  of  Rents  from  the
                           Registrant to Brookside  Savings & Loan  Association,
                           dated February 15, 1985, incorporated by reference to
                           Exhibit 10.8 to Form 10 Registration  Statement under
                           the Securities Act of 1934, File No. 0-13458.

                  10.9     Real Estate Advisory  Services  Agreement between the
                           Registrant and CIGNA Capital Advisers, Inc., dated as
                           of February 1, 1985,  incorporated  by  reference  to
                           Exhibit 10.9 to Form 10 Registration  Statement under
                           the Securities Act of 1934, File No. 0-13458.

                  10.10    Promissory   Note  from  the   Registrant   to  CIGNA
                           Financial  Partners,  Inc.,  dated as of January  30,
                           1985,  incorporated  by reference to Exhibit 10.10 to
                           Form 10  Registration  Statement under the Securities
                           Act of 1934, File No. 0-13458.

                  10.11    Partnership  Administration  and Management  Services
                           Fee  Agreement   between  the  Registrant  and  CIGNA
                           Financial Partners,  Inc., dated as of March 1, 1985,
                           incorporated by reference to Exhibit 10.13 to Form 10
                           Registration  Statement  under the  Securities Act of
                           1934, File No.
                           0-13458.

                  10.12    Agreement  between the Registrant and CIGNA Financial
                           Partners,   Inc.,  dated  as  of  December  1,  1985,
                           incorporated by reference to Exhibit 10.14 to Form 10
                           Registration  Statement  under the  Securities Act of
                           1934, File No. 0-13458.

                  10.13    Incentive Management Agreement between the Registrant
                           and CIGNA Financial Partners, Inc., dated as of March
                           1, 1985,  incorporated  by reference to Exhibit 10.15
                           to  Form  10   Registration   Statement   under   the
                           Securities Act of 1934, File No. 0-13458.

                  10.14    Asset Management Agreement between the Registrant and
                           CIGNA Capital  Advisers,  Inc.,  dated as of March 1,
                           1985,  incorporated  by reference to Exhibit 10.16 to
                           Form 10  Registration  Statement under the Securities
                           Act of 1934, File No. 0-13458.

                  10.15    Organization  Agreement  between the  Registrant  and
                           CIGNA Financial Partners,  Inc., dated as of March 1,
                           1985,  incorporated  by reference to Exhibit 10.17 to
                           Form 10  Registration  Statement under the Securities
                           Act of 1934, File No. 0-13458.

                                                                 38

<PAGE>




                  10.16    Working Capital Loan  Arrangement  Agreement  between
                           the Registrant and CIGNA  Financial  Partners,  Inc.,
                           dated as of March 1, 1985,  incorporated by reference
                           to Exhibit  10.18 to Form 10  Registration  Statement
                           under the Securities Act of 1934, File No. 0-13458.

                  10.17    Management    Agreement   between   IFD   Properties,
                           Inc.-First and R&B  Enterprises,  dated as of January
                           30, 1985,  incorporated by reference to Exhibit 10.19
                           to  Form  10   Registration   Statement   under   the
                           Securities Act of 1934, File No. 0-13458.

                  10.18    Assignment  and  Assumption of  Management  Agreement
                           between   IFD   Properties,    Inc.-First   and   the
                           Registrant,  dated January 31, 1985,  incorporated by
                           reference  to Exhibit  10.20 to Form 10  Registration
                           Statement  under the Securities Act of 1934, File No.
                           0-13458.

                  10.19    Inducement  Agreement  between  Industrial  Indemnity
                           Company and the Registrant, incorporated by reference
                           to Exhibit  10.21 to Form 10  Registration  Statement
                           under the Securities Act of 1934, File No. 0-13458.

                  10.20    Surety  Bonds  of   Industrial   Indemnity   Company,
                           incorporated by reference to Exhibit 10.22 to Form 10
                           Registration  Statement  under the  Securities Act of
                           1934, File No. 0-13458.

                  10.21    Indemnification  Agreement  between  the  Registrant,
                           CIGNA Realty Resources,  Inc.,-Seventh and Industrial
                           Indemnity Company, dated March 21, 1986, incorporated
                           by reference to Exhibit 10.23 to Form 10 Registration
                           Statement under the Securities Act of 1934, File No.
                           0-13458.

                  10.22    Loan Agreement  between the Registrant and ContiTrade
                           Services  Corporation,  dated as of April  10,  1986,
                           incorporated by reference to Exhibit 10.24 to Form 10
                           Registration  Statement  under the  Securities Act of
                           1934, File No. 0-13458.

                  10.23    Promissory  Note from the  Registrant  to  ContiTrade
                           Services  Corporation,  dated as of April  10,  1986,
                           incorporated by reference to Exhibit 10.25 to Form 10
                           Registration  Statement  under the  Securities Act of
                           1934, File No. 0-13458.

                  10.24    Pledge   and   Assignment   Agreement   between   the
                           Registrant and ContiTrade Services Corporation, dated
                           as of April 10,  1986,  incorporated  by reference to
                           Exhibit 10.26 to Form 10 Registration Statement under
                           the Securities Act of 1934, File No. 0-13458.

                  10.25    Letter   Agreement   between   the   Registrant   and
                           ContiTrade  Services  Corporation,  dated as of April
                           10, 1986,  incorporated by reference to Exhibit 10.27
                           to  Form  10   Registration   Statement   under   the
                           Securities Act of 1934, File No. 0-13458.

                  10.26    Modification  Agreement  between the Registrant,  IFD
                           Properties,  Inc.-First  and The Travelers  Insurance
                           Company, dated as of August 1, 1987,  incorporated by
                           reference  to Exhibit  10.26 to  Registrant's  Annual
                           Report  on  Form  10-K  for  the  fiscal  year  ended
                           December 31, 1987.

                  10.27    Security  Agreement  between the  Registrant  and The
                           Travelers  Insurance Company,  effective as of August
                           1, 1987,  incorporated  by reference to Exhibit 10.27
                           to  Registrant's  Annual  Report on Form 10-K for the
                           fiscal year ended December 31, 1987.

                  10.28    Agreement  for  purchase  and sale dated  October 26,
                           1990  between the  Registrant  and SBD Group Inc. for
                           the  sale  of  the  Registrant's  Torrance  Property,
                           incorporated   by  reference  to  Exhibit   10.28  to
                           Registrants   Annual  Report  on  Form  10Q  for  the
                           quarterly period ended September 30, 1990.

                                                                 39

<PAGE>




                  10.29    Second  Note   Modification   Agreement  between  IFD
                           Properties,  Inc.,  -First,  the  Registrant  and the
                           Travelers Insurance Company, dated May 1, 1990.

                  10.30   Promissory Note between the Registrant and Congen 
                          Properties, Inc. as Mortgagee, dated October 26, 1990.

                  20.1     Investor letter dated  September 16, 1994,  reporting
                           the   Partnership's   September  16,  1994  voluntary
                           petition for  reorganization  under Chapter 11 of the
                           United  States   Bankruptcy  Code,   incorporated  by
                           reference to Form 8-K dated September 30, 1994.

                  27       Financial Data Schedules

     (b) Reports on Form 8-K:

     On February 23, 1996, the Partnership  filed a report on Form 8-K reporting
     the  conclusion  of the  confirmation  hearing  for  the  proposed  Plan of
     Reorganization.  An Order  Denying  Confirmation  and  Granting  Travelers'
     Motion for Relief  from Stay was  entered by the United  States  Bankruptcy
     Court.

                                                                 40

<PAGE>



                                   SIGNATURES


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


                              California Seven Associates Limited Partnership
                              a California Limited Partnership



                              By:      CIGNA Realty Resources, Inc.-Seventh,
                                       General Partner



Date:  March 29, 1996         By:      /s/   John D. Carey
                                       -------------------
                                       John D. Carey, President



     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report has been signed by the following  persons on behalf of the Registrant and
in  the  capacities  (with  respect  to the  General  Partner)  and on the  date
indicated.


     /s/    R. Bruce Albro                                Date:   March 29, 1996
     ------------------------------------------
     R. Bruce Albro, Director



     /s/   David Scheinerman                              Date:   March 29, 1996
     ------------------------------------------
     David Scheinerman, Director



     /s/   Philip J. Ward                                 Date:   March 29, 1996
     ------------------------------------------
     Philip J. Ward, Director



     /s/   John D. Carey                                  Date:   March 29, 1996
     ------------------------------------------
     John D. Carey, President, Controller
     (Principal Executive Officer)
     (Principal Accounting Officer)



     /s/   Michael M. Sinisgalli                          Date:   March 29, 1996
     ------------------------------------------
     Michael M. Sinisgalli, Treasurer
     (Principal Financial Officer)

                                                                 41

<PAGE>